LOANS AND ALLOWANCE (Tables)

6 Months Ended

Jun. 30, 2017

LOANS AND ALLOWANCE

Schedule of loans

	June 30,		December 31,
	2017		2016
Commercial
Commercial and industrial	$	492,942	$	461,092
Agricultural		62,687		73,467
Commercial Real Estate
Farm		101,859		111,807
Hotel		117,027		91,213
Construction and development		123,521		102,598
Other		1,081,508		857,078
Residential
1-4 family		684,187		608,366
Home equity		299,728		284,147
Consumer
Direct		64,958		61,574
Indirect		269		331
Total loans		3,028,686		2,651,673
Allowance for loan losses		(22,306)		(22,499)
Net loans	$	3,006,380	$	2,629,174

Schedule of loans acquired through purchase

	June 30,		December 31,
	2017		2016
Commercial and industrial	$	22,074	$	13,875
Agricultural		848		872
Construction and development		41,013		16,634
Farm real estate		1,944		389
Hotel		13,201		2,983
Other real estate		391,582		164,505
1-4 family		271,059		206,044
Home equity		28,880		14,342
Direct		3,424		2,517
	$	774,025	$	422,161

Schedule of activity in the allowance for loan losses

Activity in the allowance for loan losses for the three months ended June 30, 2017 and 2016 was as follows:

			Commercial
2017	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, April 1	$	9,220	$	7,937	$	3,987	$	1,225	$	22,369
Provision charged to expense		(107)		(89)		260		36		100
Losses charged off		(123)		(252)		(270)		(765)		(1,410)
Recoveries		358		270		44		575		1,247
Balance, June 30	$	9,348	$	7,866	$	4,021	$	1,071	$	22,306

			Commercial
2016	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Balance, April 1	$	5,989	$	9,668	$	4,553	$	869	$	21,079
Provision charged to expense		937		(1,502)		387		383		205
Losses charged off		(65)		(78)		(342)		(843)		(1,328)
Recoveries		79		692		79		662		1,512
Balance, June 30	$	6,940	$	8,780	$	4,677	$	1,071	$	21,468

Activity in the allowance for loan losses for the six months ended June 30, 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		(137)		(249)		11		475		100
Losses charged off		(597)		(457)		(453)		(1,651)		(3,158)
Recoveries		428		866		216		1,355		2,865
Balance, June 30	$	9,348	$	7,866	$	4,021	$	1,071	$	22,306

			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		827		(2,089)		1,471		496		705
Losses charged off		(627)		(581)		(845)		(1,717)		(3,770)
Recoveries		229		748		192		1,344		2,513
Balance, June 30	$	6,940	$	8,780	$	4,677	$	1,071	$	21,468

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

			Commercial
June 30, 2017	Commercial		Real Estate		Residential		Consumer		Total
Allowance for loan losses
Ending Balance individually evaluated for impairment	$	769	$	1,019	$	144	$	—	$	1,932
Ending Balance collectively evaluated for impairment		8,579		6,612		3,877		1,071		20,139
Ending Balance acquired with deteriorated credit quality		—		235		—		—		235
Total ending allowance balance	$	9,348	$	7,866	$	4,021	$	1,071	$	22,306
Loans
Ending Balance individually evaluated for impairment	$	2,124	$	6,163	$	7,997	$	986	$	17,270
Ending Balance collectively evaluated for impairment		553,505		1,404,920		974,271		64,241		2,996,937
Ending Balance acquired with deteriorated credit quality		—		12,832		1,647		—		14,479
Total ending loan balance excludes $8,060 of accrued interest	$	555,629	$	1,423,915	$	983,915	$	65,227	$	3,028,686

			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
June 30, 2017	Balance		Investment		Allocated
With an allowance recorded
Commercial
Commercial and industrial	$	179	$	142	$	68
Agricultural		1,488		1,488		701
Commercial Real Estate
Farm		1,347		1,345		550
Hotel		4,196		2,950		201
Construction and development		—		—		—
Other		1,858		1,752		503
Residential
1-4 Family		1,071		1,026		143
Home Equity		101		101		1
Consumer
Direct		—		—		—
Indirect		—		—		—
Subtotal — impaired with allowance recorded		10,240		8,804		2,167
With no related allowance recorded
Commercial
Commercial and industrial	$	850	$	350	$	—
Agricultural		144		144		—
Commercial Real Estate
Farm		577		314		—
Hotel		—		—		—
Construction and development		1,758		1,454		—
Other		5,077		2,951		—
Residential
1-4 Family		7,840		6,172		—
Home Equity		1,871		1,569		—
Consumer
Direct		1,088		986		—
Indirect		—		—		—
Subtotal — impaired with no allowance recorded		19,205		13,940		—
Total impaired loans	$	29,445	$	22,744	$	2,167

					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 June 30, 2017 and June 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40.

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  June 30, 2017	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	464		30		30
Agricultural		1,750		—		—
Commercial Real Estate
Farm		1,675		—		—
Hotel		2,966		—		—
Construction and development		1,509		—		—
Other		4,319		35		35
Residential
1-4 family		7,512		5		5
Home equity		1,842		5		5
Consumer
Direct		1,009		1		1
Indirect		—		—		—
Total loans	$	23,046	$	76	$	76

	Average		Interest		Cash Basis
	Balance		Income		Income
Three months ended  June 30, 2016	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	756	$	18	$	18
Agricultural		827		—		—
Commercial Real Estate
Farm		829		—		—
Hotel		—		—		—
Construction and development		175		—		—
Other		4,760		91		91
Residential
1-4 family		7,467		17		17
Home equity		2,317		12		12
Consumer
Direct		124		2		2
Indirect		1		—		—
Total loans	$	17,256	$	140	$	140

The following tables present the average balance of impaired loans and interest income and cash basis interest recognized for the six months ending June 30, 2017 and June 30, 2016, excluding performing troubled debt restructurings as allowed by ASC 310-40.

	Average		Interest		Cash Basis
	Balance		Income		Income
Six months ended June 30, 2017	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	646	$	62		62
Agricultural		1,731		—		—
Commercial Real Estate
Farm		1,565		—		—
Hotel		1,999		—		—
Construction and development		1,060		—		—
Other		4,348		74		74
Residential
1-4 family		7,834		9		9
Home equity		1,888		10		10
Consumer
Direct		716		2		2
Indirect		—		—		—
Total loans	$	21,787	$	157	$	157

	Average		Interest		Cash Basis
	Balance		Income		Income
Six months ended June 30, 2016	Impaired Loans		Recognized		Recognized
Commercial
Commercial and industrial	$	772	$	31	$	31
Agricultural		554		—		—
Commercial Real Estate
Farm		656		—		—
Hotel		—		—		—
Construction and development		178		—		—
Other		5,058		117		117
Residential
1-4 family		7,211		27		27
Home equity		2,363		16		16
Consumer
Direct		121		6		6
Indirect		1		1		1
Total loans	$	16,914	$	198	$	198

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
	June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Commercial
Commercial and industrial	$	490	$	882	$	—	$	—
Agricultural		1,569		1,631		—		—
Commercial Real Estate
Farm		1,659		1,347		—		—
Hotel		2,950		64		—		—
Construction and development		1,416		122		—		2,135
Other		3,543		3,219		—		—
Residential
1-4 Family		5,854		7,163		—		—
Home Equity		992		1,273		—		—
Consumer
Direct		963		107		—		—
Indirect		—		—		—		—
Total	$	19,436	$	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
June 30, 2017	Loans		Past Due		Past Due		Past Due		Past Due		Past Due
Commercial
Commercial and industrial	$	492,942	$	56	$	—	$	174	$	230	$	492,712
Agricultural		62,687		15		15		1,548		1,578		61,109
Commercial Real Estate
Farm		101,859		6		22		1,539		1,567		100,292
Hotel		117,027		—		—		—		—		117,027
Construction and development		123,521		—		—		1,416		1,416		122,105
Other		1,081,508		817		224		2,080		3,121		1,078,387
Residential
1-4 Family		684,187		911		2,102		2,897		5,910		678,277
Home Equity		299,728		421		214		519		1,154		298,574
Consumer
Direct		64,958		104		20		952		1,076		63,882
Indirect		269		—		—		—		—		269
Total — excludes $8,060 of accrued interest	$	3,028,686	$	2,330	$	2,597	$	11,125	$	16,052	$	3,012,634

							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 June 30, 2016  There were no loans classified as troubled debt restructurings during the three month period ending June 30, 2017.

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the three months ended June 30, 2016	Number of Loans	Investment		Investment
Commercial
Agricultural	1	$	89	$	89
Residential
1-4 Family	1		124		124
Total	2	$	213	$	213

The following table presents loans by class modified as troubled debt restructurings that occurred during the six month period ending June 30, 2017.

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the six months ended June 30, 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 six month period ending June 30, 2016

		Pre-Modification		Post-Modification
		Outstanding Recorded		Outstanding Recorded
For the six months ended June 30, 2016	Number of Loans	Investment		Investment
Commercial
Agricultural	1	$	89	$	89
Residential
1-4 Family	1		124		124
Home Equity	4		76		76
Total	6	$	289	$	289

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 and six month periods ending June 30, 2017.  The following table presents loans where there was a payment default within twelve months following the modification during both the three and six month periods ending June 30, 2016.

For the three and six months ended June 30, 2016	Number of Loans	Recorded Investment
Commercial real estate
Other	1	$	125
Residential
1-4 Family	1		146
Total	2	$	271

Schedule of risk category of loans by class of loans

As of June 30, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special
June 30, 2017	Pass		Mention		Substandard		Non-accrual
Commercial
Commercial and industrial	$	444,240	$	3,805	$	4,112	$	440
Agricultural		52,895		532		287		1,488
Commercial Real Estate
Farm		78,852		2,550		2,376		1,508
Hotel		114,077		—		—		2,950
Construction and development		93,126		4,467		56		1,416
Other		923,352		44,842		12,020		2,904
Total	$	1,706,542	$	56,196	$	18,851	$	10,706

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

June 30, 2017	Performing		Watch		Substandard
Commercial
Commercial and industrial	$	40,295	$	—	$	50
Agricultural		7,389		15		81
Commercial Real Estate
Farm		16,422		—		151
Construction and development		24,456		—		—
Other		97,723		28		639
Total	$	186,285	$	43	$	921

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

June 30, 2017	Performing		Watch		Substandard
Residential
1-4 family	$	679,188	$	2,102	$	2,897
Home equity		298,995		214		519
Total	$	978,183	$	2,316	$	3,416

June 30, 2017	Performing		Substandard		Loss
Consumer
Direct	$	63,986	$	28	$	944
Indirect		269		—		—
Total	$	64,255	$	28	$	944

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

		June 30,		December 31,
		2017		2016
Commercial	$	17,287	$	10,817
1-4 Family		2,450		2,399
Outstanding Balance	$	19,737	$	13,216
Carrying amount, net of allowance of $235 and $0	$	14,244	$	8,954