LOANS AND ALLOWANCE (Tables)

3 Months Ended

Mar. 31, 2017

LOANS AND ALLOWANCE

Schedule of loans

	March 31,		December 31,
	2017		2016
Commercial
Commercial and industrial	$	458,019	$	461,092
Agricultural		70,147		73,467
Commercial Real Estate
Farm		108,037		111,807
Hotel		101,685		91,213
Construction and development		84,939		102,598
Other		848,552		857,078
Residential
1-4 family		601,338		608,366
Home equity		279,465		284,147
Consumer
Direct		62,132		61,574
Indirect		296		331
Total loans		2,614,610		2,651,673
Allowance for loan losses		(22,369)		(22,499)
Net loans	$	2,592,241	$	2,629,174

Schedule of loans acquired through purchase

	March 31,		December 31,
	2017		2016
Commercial and industrial	$	11,656	$	13,875
Agricultural		820		872
Construction and development		16,374		16,634
Farm real estate		389		389
Hotel		2,983		2,983
Other real estate		141,659		164,505
1-4 family		194,868		206,044
Home equity		12,673		14,342
Direct		2,283		2,517
	$	383,705	$	422,161

Schedule of activity in the allowance for loan losses

Activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016 was as follows:

			Commercial
2017	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, January 1	$	9,654	$	7,706	$	4,247	$	892	$	22,499
Provision charged to expense		(30)		(160)		(249)		439		—
Losses charged off		(474)		(205)		(183)		(886)		(1,748)
Recoveries		70		596		172		780		1,618
Balance, March 31	$	9,220	$	7,937	$	3,987	$	1,225	$	22,369

			Commercial
2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, January 1	$	6,511	$	10,702	$	3,859	$	948	$	22,020
Provision charged to expense		(110)		(587)		1,084		113		500
Losses charged off		(562)		(503)		(503)		(874)		(2,442)
Recoveries		150		56		113		682		1,001
Balance, March 31	$	5,989	$	9,668	$	4,553	$	869	$	21,079

Schedule of balance in the allowance for loan losses and the recorded investment by portfolio segment and impairment method

			Commercial
March 31, 2017	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Ending Balance individually evaluated for impairment	$	749	$	875	$	146	$	—	$	1,770
Ending Balance collectively evaluated for impairment		8,471		6,827		3,841		1,225		20,364
Ending Balance acquired with deteriorated credit quality		—		235		—		—		235
Total ending allowance balance	$	9,220	$	7,937	$	3,987	$	1,225	$	22,369
Loans
Ending Balance individually evaluated for impairment	$	2,303	$	10,824	$	9,891	$	1,031	$	24,049
Ending Balance collectively evaluated for impairment		525,863		1,125,400		869,458		61,397		2,582,118
Ending Balance acquired with deteriorated credit quality		—		6,989		1,454		—		8,443
Total ending loan balance excludes $7,211 of accrued interest	$	528,166	$	1,143,213	$	880,803	$	62,428	$	2,614,610

			Commercial
December 31, 2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Ending Balance individually evaluated for impairment	$	898	$	755	$	147	$	—	$	1,800
Ending Balance collectively evaluated for impairment		8,756		6,951		4,100		892		20,699
Total ending allowance balance	$	9,654	$	7,706	$	4,247	$	892	$	22,499
Loans
Ending Balance individually evaluated for impairment	$	2,705	$	7,904	$	10,458	$	130	$	21,197
Ending Balance collectively evaluated for impairment		531,854		1,147,536		880,357		61,775		2,621,522
Ending Balance acquired with deteriorated credit quality		—		7,256		1,698		—		8,954
Total ending loan balance excludes $7,342 of accrued interest	$	534,559	$	1,162,696	$	892,513	$	61,905	$	2,651,673

Schedule of loans individually evaluated for impairment by class of loans

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
March 31, 2017	Balance		Investment		Allocated
With an allowance recorded
Commercial
Commercial and industrial	$	329	$	295	$	73
Agricultural		1,595		1,595		676
Commercial Real Estate
Farm		1,372		1,371		528
Hotel		4,196		2,983		201
Construction and development		—		—		—
Other		1,887		1,765		381
Residential
1-4 Family		1,082		1,038		145
Home Equity		103		103		1
Consumer
Direct		—		—		—
Indirect		—		—		—
Subtotal — impaired with allowance recorded		10,564		9,150		2,005
With no related allowance recorded
Commercial
Commercial and industrial	$	853	$	140	$	—
Agricu ltural		273		273		—
Commercial Real Estate
Farm		582		320		—
Hotel		—		—		—
Construction and development		1,926		1,564		—
Other		3,224		2,424		—
Residential
1-4 Family		8,517		6,838		—
Home Equity		2,183		1,912		—
Consumer
Direct		1,118		1,031		—
Indirect		—		—		—
Subtotal — impaired with no allowance recorded		18,676		14,502		—
Total impaired loans	$	29,240	$	23,652	$	2,005

					Allowance
	Unpaid				for Loan
	Principal		Recorded		Losses
December 31, 2016	Balance		Investment		Allocated
With an allowance recorded
Commercial
Commercial and industrial	$	719	$	689	$	429
Agricultural		1,441		1,441		469
Commercial Real Estate
Farm		1,106		1,105		360
Hotel		—		—		—
Construction and development		—		—		—
Other		1,900		1,755		395
Residential
1-4 Family		1,091		1,046		146
Home Equity		15		105		1
Consumer
Direct		—		—		—
Indirect		—		—		—
Subtotal — impaired with allowance recorded		6,272		6,141		1,800
With no related allowance recorded
Commercial
Commercial and industrial	$	1,028	$	322	$	—
Agricultural		254		253		—
Commercial Real Estate
Farm		506		241		—
Hotel		64		64		—
Construction and development		239		162		—
Other		3,558		2,652		—
Residential
1-4 Family		9,215		7,432		—
Home Equity		2,233		1,875		—
Consumer
Direct		139		130		—
Indirect		—		—		—
Subtotal — impaired with no allowance recorded		17,236		13,131		—
Total impaired loans	$	23,508	$	19,272	$	1,800

Schedule of average balance of impaired loans and interest income and cash basis interest recognized

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the three months ending March 31, 2017 and March 31, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40.

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  March 31, 2017	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	723	$	92	$	92
Agricultural		1,781		—		—
Commercial Real Estate
Farm		1,518		—		—
Hotel		1,524		—		—
Construction and development		863		—		—
Other		4,298		127		127
Residential
1-4 family		8,177		40		40
Home equity		1,998		24		24
Consumer
Direct		581		3		3
Indirect		—		—		—
Total loans	$	21,463	$	286	$	286

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  March 31, 2016	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	781	$	13	$	13
Agricultural		7		—		—
Commercial Real Estate
Farm		302		—		—
Hotel		—		—		—
Construction and development		185		—		—
Other		5,006		26		26
Residential
1-4 family		6,568		10		10
Home equity		2,458		5		5
Consumer
Direct		115		4		4
Indirect		1		1		1
Total loans	$	15,423	$	59	$	59

Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans

					Past due over
					90 days and
	Non-accrual				still accruing
	March 31, 2017		December 31, 2016		March 31, 2017		December 31, 2016
Commercial
Commercial and industrial	$	431	$	882	$	—	$	—
Agricultural		1,805		1,631		—		—
Commercial Real Estate
Farm		1,691		1,347		—		—
Hotel		2,983		64		—		—
Construction and development		1,525		122		—		2,135
Other		3,015		3,219		—		—
Residential
1-4 Family		6,399		7,163		—		—
Home Equity		1,323		1,273		—		—
Consumer
Direct		1,009		107		—		—
Indirect		—		—		—		—
Total	$	20,181	$	15,808	$	—	$	2,135

Schedule of aging of the recorded investment in past due loans

							Greater than
	Total		30-59 Days		60-89 Days		90 Days		Total		Loans Not
March 31, 2017	Loans		Past Due		Past Due		Past Due		Past Due		Past Due
Commercial
Commercial and industrial	$	458,019	$	21	$	10	$	103	$	134	$	457,885
Agricultural		70,147		130		39		1,612		1,781		68,366
Commercial Real Estate
Farm		108,037		2		—		1,568		1,570		106,467
Hotel		101,685		—		—		—		—		101,685
Construction and development		84,939		—		—		1,506		1,506		83,433
Other		848,552		1,967		188		1,229		3,384		845,168
Residential
1-4 Family		601,338		4,874		636		2,628		8,138		593,200
Home Equity		279,465		394		44		911		1,349		278,116
Consumer
Direct		62,132		38		—		978		1,016		61,116
Indirect		296		—		—		—		—		296
Total — excludes $7,211 of accrued interest	$	2,614,610	$	7,426	$	917	$	10,535	$	18,878	$	2,595,732

							Greater than
	Total		30-59 Days		60-89 Days		90 Days		Total		Loans Not
December 31, 2016	Loans		Past Due		Past Due		Past Due		Past Due		Past Due
Commercial
Commercial and industrial	$	461,092	$	—	$	—	$	176	$	176	$	460,916
Agricultural		73,467		215		—		1,606		1,821		71,646
Commercial Real Estate
Farm		111,807		81		—		1,243		1,324		110,483
Hotel		91,213		—		—		63		63		91,150
Construction and development		102,598		1,416		—		2,223		3,639		98,959
Other		857,078		1,268		90		1,812		3,170		853,908
Residential
1-4 Family		608,366		4,884		2,002		3,262		10,148		598,218
Home Equity		284,147		830		137		914		1,881		282,266
Consumer
Direct		61,574		936		—		66		1,002		60,572
Indirect		331		10		—		—		10		321
Total — excludes $7,342 of accrued interest	$	2,651,673	$	9,640	$	2,229	$	11,365	$	23,234	$	2,628,439

Schedule of loans by class modified as troubled debt restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending March 31, 2017:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the three months ended March 31, 2017	Number of Loans	Investment		Investment
Commercial Real Estate
Other	1		53		53
Residential
1-4 Family	1		330		330
Total	2	$	383	$	383

The following table presents loans by class modified as troubled debt restructurings that occurred during the three month period ending March 31, 2016:

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the three months ended March 31, 2016	Number of Loans	Investment		Investment
Residential
Home Equity	4		76		76
Total	4	$	76	$	76

Schedule of loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification

There were no troubled debt restructurings where there was a payment default within twelve months following the modification during the three month periods ending March 31, 2017 or 2016.

Schedule of risk category of loans by class of loans

As of March 31, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special
March 31, 2017	Pass		Mention		Substandard		Non-accrual
Commercial
Commercial and industrial	$	413,011	$	4,076	$	4,033	$	367
Agricultural		61,333		383		—		1,595
Commercial Real Estate
Farm		86,076		2,147		680		1,540
Hotel		98,702		—		—		2,983
Construction and development		61,177		3,605		652		1,441
Other		753,249		5,321		7,496		1,961
Total	$	1,473,548	$	15,532	$	12,861	$	9,887

At December 31, 2016, the risk category of loans by class of loans was as follows:

			Special
December 31, 2016	Pass		Mention		Substandard		Non-accrual
Commercial
Commercial and industrial	$	415,064	$	3,347	$	5,297	$	827
Agricultural		61,637		2,283		—		1,441
Commercial Real Estate
Farm		89,297		2,209		694		1,340
Hotel		88,166		—		2,983		64
Construction and development		74,811		3,600		2,287		31
Other		752,063		9,087		7,365		2,141
Total	$	1,481,038	$	20,526	$	18,626	$	5,844

Schedule of performing/non performing loans by category of loans

March 31, 2017	Performing		Watch		Substandard
Commercial
Commercial and industrial	$	36,468	$	—	$	64
Agricultural		6,626		—		210
Commercial Real Estate
Farm		17,443		—		151
Construction and development		17,980		—		84
Other		79,471		—		1,054
Total	$	157,988	$	—	$	1,563

December 31, 2016	Performing		Watch		Substandard
Commercial
Commercial and industrial	$	36,502	$	—	$	55
Agricultural		7,916		—		190
Commercial Real Estate
Farm		18,260		—		7
Construction and development		21,778		—		91
Other		85,254		90		1,078
Total	$	169,710	$	90	$	1,421

March 31, 2017	Performing		Watch		Substandard
Residential
1-4 family	$	598,074	$	636	$	2,628
Home equity		278,510		44		911
Total	$	876,584	$	680	$	3,539

March 31, 2017	Performing		Substandard		Loss
Consumer
Direct	$	61,154	$	949	$	29
Indirect		296		—		—
Total	$	61,450	$	949	$	29

December 31, 2016	Performing		Watch		Substandard
Residential
1-4 family	$	603,102	$	2,002	$	3,262
Home equity		283,096		137		914
Total	$	886,198	$	2,139	$	4,176

December 31, 2016	Performing		Substandard		Loss
Consumer
Direct	$	61,508	$	4	$	62
Indirect		331		—		—
Total	$	61,839	$	4	$	62

Purchased credit impaired loans for which it was probable that all contractually required payments would not be collected

		March 31,		December 31,
		2017		2016
Commercial	$	10,447	$	10,817
1-4 Family		2,066		2,399
Outstanding Balance	$	12,513	$	13,216
Carrying amount, net of allowance of $235 and $0	$	8,209	$	8,954