Loans and Allowance for Loan and Lease Losses (Tables)

12 Months Ended

Dec. 31, 2015

Loans and Allowance for Loan and Lease Losses

Summary of outstanding loan balances

	December 31, 2015									December 31, 2014
	Non-PCI Loans			PCI Loans			Total Loans Receivable			Non-PCI Loans			PCI Loans		Total Loans Receivable
		(dollars in thousands)
Real Estate Secured
Commercial	$	573,559		$	5,685		$	579,244		$	584,056		$	4,416	$	588,472
Residential 1 to 4 family		165,256			573			165,829			126,640			561		127,201
Farmland		120,566			-			120,566			96,708			1,665		98,373
Multi-family residential		79,381			-			79,381			78,645			-		78,645
Construction and land		35,387			282			35,669			43,809			851		44,660
Home equity lines of credit		31,387			-			31,387			38,252			-		38,252
Total real estate secured		1,005,536			6,540			1,012,076			968,110			7,493		975,603
Commercial
Commercial and industrial		164,025			783			164,808			153,403			1,384		154,787
Agriculture		62,911			1,452			64,363			53,678			1,423		55,101
Other		-			-			-			14			-		14
Total commercial		226,936			2,235			229,171			207,095			2,807		209,902
Consumer		6,033			-			6,033			7,978			-		7,978
Total gross loans held for investment		1,238,505			8,775			1,247,280			1,183,183			10,300		1,193,483
Net deferred loan fees		(1,132	)		-			(1,132	)		(1,445	)		-		(1,445	)
Allowance for loan and lease losses		(17,373	)		(79	)		(17,452	)		(16,802	)		-		(16,802	)
Total net loans held for investment	$	1,220,000		$	8,696		$	1,228,696		$	1,164,936		$	10,300	$	1,175,236
Loans held for sale	$	9,755		$	-		$	9,755		$	2,586		$	-	$	2,586

Schedule of unpaid principal balance and carrying amount of PCI loans

	December 31, 2015				December 31, 2014
	Unpaid Principal Balance		Carrying Amount		Unpaid Principal Balance		Carrying Amount
		(dollars in thousands)
Real Estate Secured
Commercial	$	7,139	$	5,685	$	6,109	$	4,416
Residential 1 to 4 family		875		573		886		561
Construction and land		382		282		993		851
Farmland		-		-		2,027		1,665
Total real estate secured		8,396		6,540		10,015		7,493
Commercial
Agriculture		1,500		1,452		1,492		1,423
Commercial and industrial		1,211		783		1,883		1,384
Total commercial		2,711		2,235		3,375		2,807
Total PCI loans	$	11,107	$	8,775	$	13,390	$	10,300

Schedule of purchased credit impaired loans with probability at acquisition that not all contractually required payments would be collected

	February 28, 2014
	(dollars in thousands)
Contractually required payments including interest	$ 19,827
Nonaccretable difference	(2,320	)
Cash flows expected to be collected	17,507
Accretable difference	(4,673	)
Fair value at acquisition	$ 12,834

Schedule of accretable yield, or income expected to be collected on PCI loans

		For the Year Ended December 31,
		2015			2014
			(dollars in thousands)
Beginning balance		$	4,374		$	-
Additions (1)			-			4,673
Accretion of income			(1,431	)		(1,362	)
Reclassifications from nonaccretable difference (2)			878			1,063
Ending balance		$	3,821		$	4,374
(1)	Attributable to loans acquired in the MISN Transaction.
(2)	Reclassification from nonaccretable difference is attributed to positive changes in expected future cash flows on certain PCI loans.

Summary of the recorded investment in non-PCI and PCI impaired loans

	For the Year Ended December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
		(dollars in thousands)
Non-PCI Loans
Without Related Allowance
Real Estate Secured
Construction and land	$	5,138	$	9,615	$	-	$	5,784	$	72
Commercial		3,855		5,328		-		4,097		141
Residential 1 to 4 family		694		860		-		620		12
Farmland		587		588		-		564		34
Home equity lines of credit		85		86		-		112		-
Commercial
Commercial and industrial		2,295		2,510		-		3,292		46
Agriculture		724		815		-		682		9
Consumer		146		204		-		148		5
Total		13,524		20,006		-		15,299		319
With Related Allowance
Real Estate Secured
Commercial		435		665		59		468		-
Commercial
Commercial and industrial		1,944		1,972		156		1,300		66
Agriculture		400		400		39		80		3
Total		2,779		3,037		254		1,848		69
Total Non-PCI impaired loans	$	16,303	$	23,043	$	254	$	17,147	$	388

	For the Year Ended December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
		(dollars in thousands)
PCI Loans
Without Related Allowance
Real Estate Secured
Commercial	$	5,156	$	6,601	$	-	$	5,269	$	934
Residential 1 to 4 family		573		875		-		567		68
Construction and land		53		152		-		455		75
Commercial
Agriculture		1,452		1,500		-		1,440		116
Commercial and industrial		297		712		-		573		127
Total		7,531		9,840		-		8,304		1,320
With Related Allowance
Real Estate Secured
Commercial		529		538		41		535		48
Construction and land		229		230		5		263		20
Commercial
Commercial and industrial		486		499		33		528		44
Total		1,244		1,267		79		1,326		112
Total PCI loans	$	8,775	$	11,107	$	79	$	9,630	$	1,432

	For the Year Ended December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
		(dollars in thousands)
Non-PCI Loans
Without Related Allowance
Real Estate Secured
Commercial	$	4,000	$	6,255	$	-	$	3,814	$	132
Construction and land		1,470		2,355		-		2,190		135
Farmland		283		282		-		291		16
Residential 1 to 4 family		260		383		-		349		18
Home equity lines of credit		258		340		-		258		-
Commercial
Commercial and industrial		2,875		3,967		-		3,994		162
Agriculture		720		760		-		724		-
Consumer		112		201		-		117		4
Total		9,978		14,543		-		11,737		467
With Related Allowance
Real Estate Secured
Construction and land		4,876		8,499		1,472		5,268		3
Commercial		498		688		148		502		-
Commercial
Commercial and industrial		1,043		1,054		151		1,272		64
Total		6,417		10,241		1,771		7,042		67
Total Non-PCI impaired loans	$	16,395	$	24,784	$	1,771	$	18,779	$	534

	For the Year Ended December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Specific Allowance for Impaired Loans		Average Recorded Investment		Interest Income Recognized
		(dollars in thousands)
PCI Loans
Without Related Allowance
Real Estate Secured
Commercial	$	4,432	$	6,109	$	-	$	4,978	$	673
Farmland		1,673		2,027		-		1,698		98
Construction and land		853		993		-		921		69
Residential 1 to 4 family		564		886		-		580		43
Home equity lines of credit		-		-		-		61		21
Commercial
Agriculture		1,431		1,492		-		1,326		92
Commercial and industrial		1,388		1,883		-		2,089		366
Total PCI loans	$	10,341	$	13,390	$	-	$	11,653	$	1,362

	For the Year Ended December 31, 2013
	Average Recorded Investment		Interest Income Recognized
		(dollars in thousands)
Non-PCI Loans
Without Related Allowance
Real Estate Secured
Construction and land	$	1,320	$	49
Residential 1 to 4 family		870		16
Commercial		775		5
Home equity lines of credit		28		-
Commercial
Commercial and industrial		2,162		27
Agriculture		936		-
Consumer		68		-
Total		6,159		97
With Related Allowance
Real Estate Secured
Construction and land		6,558		44
Commercial
Commercial and industrial		2,522		25
Total		9,080		69
Total Non-PCI impaired loans	$	15,239	$	166

Summary of loans classified as TDRs

	December 31, 2015						December 31, 2014
	Accrual		Non-accrual		Total		Accrual		Non-accrual		Total
		(dollars in thousands)
Non-PCI loans
Real estate secured
Construction and land	$	1,171	$	3,968	$	5,139	$	1,109	$	5,149	$	6,258
Commercial		2,395		435		2,830		2,449		78		2,527
Farmland		504		82		586		283		-		283
Residential 1 to 4 family		613		81		694		130		130		260
Commercial
Commercial and industrial		2,698		1,515		4,213		2,177		1,593		3,770
Agriculture		1,124		-		1,124		34		-		34
Consumer		114		10		124		69		-		69
Total non-PCI loans		8,619		6,091		14,710		6,251		6,950		13,201
PCI loans
Real estate secured
Commercial		922		46		968		223		-		223
Construction and land		54		-		54		-		-		-
Commercial
Commercial and industrial		461		66		527		37		107		144
Total PCI loans		1,437		112		1,549		260		107		367
Total TDRs	$	10,056	$	6,203	$	16,259	$	6,511	$	7,057	$	13,568

Schedule of loan modifications resulted in TDRs for non-PCI and PCI loans

	For the Year Ended December 31, 2015
	Number of TDRs		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
		(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Commercial		6	$	1,102	$	1,102
Farmland		3		814		814
Residential 1 to 4 family		4		753		753
Construction and land		1		97		97
Commercial
Commercial and industrial		15		3,414		3,414
Agriculture		6		2,085		2,085
Consumer		2		68		68
PCI Loans
Real Estate Secured
Commercial		5		993		993
Construction and land		1		50		50
Commercial
Commercial and industrial		1		497		497
Total		44	$	9,873	$	9,873

	For the Year Ended December 31, 2014
	Number of TDRs		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
		(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Construction and land		4	$	811	$	811
Commercial		2		312		312
Residential 1 to 4 family		1		39		39
Commercial
Commercial and industrial		20		2,132		2,132
Agriculture		1		662		662
Consumer		1		73		73
PCI Loans
Real Estate Secured
Commercial		1		230		230
Commercial
Commercial and industrial		3		177		177
Total		33	$	4,436	$	4,436

	For the Year Ended December 31, 2013
	Number of TDRs		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
		(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Construction and land		1	$	1,254	$	1,254
Commercial		2		339		339
Residential 1 to 4 family		1		139		139
Commercial
Commercial and industrial		10		2,141		2,141
Agriculture		2		67		67
Total		16	$	3,940	$	3,940

Schedule of loans that were modified as troubled debt restructurings within the twelve months prior to the balance sheet date indicated for which there was a payment default

	For the Years Ended December 31,
	2015				2014				2013
	Number of TDRs		Recorded Investment		Number of TDRs		Recorded Investment		Number of TDRs		Recorded Investment
		(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Residential 1 to 4 family		-	$	-		-	$	-		1	$	97
Commercial
Commercial and industrial		1		18		2		233		3		843
Agriculture		-		-		-		-		1		18
Total		1	$	18		2	$	233		5	$	958

Summary of the activity in the allowance for loan and lease losses by portfolio segment

	For the Year Ended December 31, 2015
	Balance December 31, 2014		Charge-offs			Recoveries		Provision for Loan and Lease Losses			Balance December 31, 2015
		(dollars in thousands)
Other real estate secured	$	9,129	$	(218	)	$	99	$	2,151		$	11,161
Commercial		5,125		(190	)		919		(482	)		5,372
Construction and land		2,000		(34	)		67		(1,410	)		623
Consumer		202		(7	)		14		(36	)		173
Unallocated		346		-			-		(223	)		123
Total	$	16,802	$	(449	)	$	1,099	$	-		$	17,452

	For the Year Ended December 31, 2014
	Balance December 31, 2013		Charge-offs			Recoveries		Provision for Loan and Lease Losses			Balance December 31, 2014
		(dollars in thousands)
Other real estate secured	$	9,025	$	(1,119	)	$	37	$	1,186		$	9,129
Commercial		4,781		(758	)		765		337			5,125
Construction and land		3,660		(29	)		42		(1,673	)		2,000
Consumer		131		(8	)		13		66			202
Unallocated		262		-			-		84			346
Total	$	17,859	$	(1,914	)	$	857	$	-		$	16,802

	For the Year Ended December 31, 2013
	Balance December 31, 2012		Charge-offs			Recoveries		Provision for Loan and Lease Losses			Balance December 31, 2013
		(dollars in thousands)
Other real estate secured	$	7,147	$	(131	)	$	361	$	1,648		$	9,025
Commercial		6,115		(1,281	)		1,112		(1,165	)		4,781
Construction and land		4,641		(203	)		226		(1,004	)		3,660
Consumer		102		(411	)		68		372			131
Unallocated		113		-			-		149			262
Total	$	18,118	$	(2,026	)	$	1,767	$	-		$	17,859

Schedule of allowance for loan and lease losses and the recorded investment in loans by impairment methodology

	December 31, 2015
	Allowance for Loan and Lease Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans Acquired with Deteriorated Credit Quality		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans Acquired with Deteriorated Credit Quality
		(dollars in thousands)
Other real estate secured	$	59	$	11,061	$	41	$	5,656	$	964,493	$	6,258
Commercial		195		5,144		33		5,363		221,573		2,235
Construction and land		-		618		5		5,138		30,249		282
Consumer		-		173		-		146		5,887		-
Unallocated		-		123		-		-		-		-
Total	$	254	$	17,119	$	79	$	16,303	$	1,222,202	$	8,775

	December 31, 2014
	Allowance for Loan and Lease Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans Acquired with Deteriorated Credit Quality		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans Acquired with Deteriorated Credit Quality
		(dollars in thousands)
Other real estate secured	$	148	$	8,981	$	-	$	5,299	$	918,975	$	6,669
Commercial		151		4,974		-		4,633		202,450		2,819
Construction and land		1,472		528		-		6,346		37,461		853
Consumer		-		202		-		112		7,866		-
Unallocated		-		346		-		-		-		-
Total	$	1,771	$	15,031	$	-	$	16,390	$	1,166,752	$	10,341

Schedule of loan portfolio by the Company's internal risk grading system

	December 31, 2015
	Credit Risk Grades
	Pass		Special Mention		Substandard		Doubtful		Total
		(dollars in thousands)
Non-PCI loans
Real estate secured
Commercial	$	545,614	$	4,402	$	23,543	$	-	$	573,559
Residential 1 to 4 family		164,226		405		625		-		165,256
Farmland		118,740		245		1,581		-		120,566
Multi-family residential		79,381		-		-		-		79,381
Construction and land		30,219		939		4,229		-		35,387
Home equity lines of credit		31,103		-		284		-		31,387
Commercial
Commercial and industrial		152,979		4,730		6,316		-		164,025
Agriculture		61,340		98		1,473		-		62,911
Consumer		5,922		-		111		-		6,033
Total non-PCI loans		1,189,524		10,819		38,162		-		1,238,505
PCI loans
Real estate secured
Commercial		-		1,094		4,591		-		5,685
Residential 1 to 4 family		455		-		118		-		573
Construction and land		228		54		-		-		282
Commercial
Agriculture		-		-		1,452		-		1,452
Commercial and industrial		75		81		627		-		783
Total PCI loans		758		1,229		6,788		-		8,775
Total loans held for investment	$	1,190,282	$	12,048	$	44,950	$	-	$	1,247,280

	December 31, 2014
	Credit Risk Grades
	Pass		Special Mention		Substandard		Doubtful		Total
		(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Commercial	$	560,478	$	3,010	$	20,568	$	-	$	584,056
Residential 1 to 4 family		125,733		199		708		-		126,640
Farmland		92,481		2,665		1,562		-		96,708
Multi-family residential		78,023		-		622		-		78,645
Construction and land		37,422		-		6,387		-		43,809
Home equity lines of credit		37,638		-		614		-		38,252
Commercial
Commercial and industrial		138,202		2,943		12,104		154		153,403
Agriculture		52,678		280		720		-		53,678
Other		-		-		14		-		14
Consumer		7,873		-		105		-		7,978
Total non-PCI loans		1,130,528		9,097		43,404		154		1,183,183
PCI Loans
Real Estate Secured
Commercial		126		680		3,610		-		4,416
Farmland		-		-		1,665		-		1,665
Construction and land		294		-		557		-		851
Residential 1 to 4 family		-		-		561		-		561
Commercial
Agriculture		-		-		1,423		-		1,423
Commercial and industrial		36		97		1,175		76		1,384
Total PCI loans		456		777		8,991		76		10,300
Total loans held for investment	$	1,130,984	$	9,874	$	52,395	$	230	$	1,193,483

Summary of the aging of loans held for investment

		December 31, 2015
				Days Past Due
		Current		30-59		60-89		90+ and Still Accruing		Non- Accruing (1)		Total
			(dollars in thousands)
Non-PCI loans
Real Estate Secured
Commercial		$	571,665	$	-	$	-	$	-	$	1,894	$	573,559
Residential 1 to 4 family			165,176		-		-		-		80		165,256
Farmland			120,483		-		-		-		83		120,566
Multi-family residential			79,381		-		-		-		-		79,381
Construction and land			31,419		-		-		-		3,968		35,387
Home equity lines of credit			31,303		-		-		-		84		31,387
Commercial
Commercial and industrial			162,223		66		195		-		1,541		164,025
Agriculture			62,911		-		-		-		-		62,911
Consumer			6,000		-		-		-		33		6,033
Total non-PCI loans			1,230,561		66		195		-		7,683		1,238,505
PCI loans
Real estate secured
Commercial			5,639		-		-		-		46		5,685
Residential 1 to 4 family			573		-		-		-		-		573
Construction and land			282		-		-		-		-		282
Commercial
Agriculture			1,452		-		-		-		-		1,452
Commercial and industrial			694		-		-		-		89		783
Total PCI loans			8,640		-		-		-		135		8,775
Total loans held for investment		$	1,239,201	$	66	$	195	$	-	$	7,818	$	1,247,280
(1)	At December 31, 2015, $6.4 million of non-accruing loans were current, $28 thousand were 30-59 days past due, $26 thousand were 60-89 days past due, and $1.4 million were 90+ days past due.

		December 31, 2014
				Days Past Due
		Current		30-59		60-89		90+ and Still Accruing		Non- Accruing (1)		Total
			(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Commercial		$	581,971	$	-	$	-	$	-	$	2,085	$	584,056
Residential 1 to 4 family			126,516		-		-		-		124		126,640
Farmland			96,708		-		-		-		-		96,708
Multi-family residential			78,645		-		-		-		-		78,645
Construction and land			38,572		-		-		-		5,237		43,809
Home equity lines of credit			37,994		-		-		-		258		38,252
Commercial
Commercial and industrial			151,656		-		21		-		1,726		153,403
Agriculture			52,992		-		-		-		686		53,678
Other			14		-		-		-		-		14
Consumer			7,876		56		3		-		43		7,978
Total non-PCI loans			1,172,944		56		24		-		10,159		1,183,183
PCI Loans
Real Estate Secured
Commercial			4,416		-		-		-		-		4,416
Farmland			1,665		-		-		-		-		1,665
Construction and land			851		-		-		-		-		851
Residential 1 to 4 family			561		-		-		-		-		561
Commercial
Agriculture			1,423		-		-		-		-		1,423
Commercial and industrial			1,008		-		-		-		376		1,384
Total PCI loans			9,924		-		-		-		376		10,300
Total loans held for investment		$	1,182,868	$	56	$	24	$	-	$	10,535	$	1,193,483
(1)	At December 31, 2014, $8.5 million of non-accruing loans were current, $0.2 million were 30-59 days past due, $0.8 million were 60-89 days past due, and $1.0 million were 90+ days past due.