Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2016

Loans and Allowance for Loan and Lease Losses

Summary of outstanding loan balances

	June 30, 2016						December 31, 2015
	Non-PCI		PCI		Total Loans		Non-PCI		PCI		Total Loans
	Loans		Loans		Receivable		Loans		Loans		Receivable
	(dollars in thousands)
Real Estate Secured
Commercial	$	612,766	$	5,634	$	618,400	$	573,559	$	5,685	$	579,244
Residential 1 to 4 family	183,976		121		184,097		165,256		573		165,829
Farmland	131,574		-		131,574		120,566		-		120,566
Multi-family residential	85,254		-		85,254		79,381		-		79,381
Construction and land	36,494		259		36,753		35,387		282		35,669
Home equity lines of credit	27,991		-		27,991		31,387		-		31,387
Total real estate secured	1,078,055		6,014		1,084,069		1,005,536		6,540		1,012,076
Commercial
Commercial and industrial	182,102		543		182,645		164,025		783		164,808
Agriculture	60,601		1,460		62,061		62,911		1,452		64,363
Total commercial	242,703		2,003		244,706		226,936		2,235		229,171
Consumer	4,944		-		4,944		6,033		-		6,033
Total loans held for investment	1,325,702		8,017		1,333,719		1,238,505		8,775		1,247,280
Deferred loan fees	(1,181)		-		(1,181)		(1,132)		-		(1,132)
Allowance for loan and lease losses	(17,371)		(77)		(17,448)		(17,373)		(79)		(17,452)
Total net loans held for investment	$	1,307,150	$	7,940	$	1,315,090	$	1,220,000	$	8,696	$	1,228,696
Loans held for sale	$	8,534	$	-	$	8,534	$	9,755	$	-	$	9,755

Schedule of carrying amount and unpaid principal balance of PCI loans

	June 30, 2016				December 31, 2015
	Unpaid Principal Balance		Carrying Amount		Unpaid Principal Balance		Carrying Amount
	(dollars in thousands)
Real Estate Secured
Commercial	$	7,006	$	5,634	$	7,139	$	5,685
Construction and land	345		259		382		282
Residential 1 to 4 family	196		121		875		573
Total real estate secured	7,547		6,014		8,396		6,540
Commercial
Agriculture	1,500		1,460		1,500		1,452
Commercial and industrial	846		543		1,211		783
Total commercial	2,346		2,003		2,711		2,235
Total PCI loans	$	9,893	$	8,017	$	11,107	$	8,775

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

	For the Three Months Ended,				For the Six Months Ended,
	June 30,				June 30,
	2016		2015		2016		2015
	(dollars in thousands)
Beginning balance	$	3,718	$	4,243	$	3,821	$	4,374
Accretion of income	(439)		(254)		(655)		(932)
Reclassifications (to) from nonaccretable difference (1)	(10)		475		103		1,022
Ending balance	$	3,269	$	4,464	$	3,269	$	4,464

(1) Reclassification (to) from nonaccretable difference is attributed to changes in expected future cash flows on PCI loans.

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

							For the Three Months Ended				For the Six Months Ended
	June 30, 2016						June 30, 2016				June 30, 2016
			Unpaid		Specific		Average		Interest		Average		Interest
	Recorded		Principal		Allowance for		Recorded		Income		Recorded		Income
	Investment		Balance		Impaired Loans		Investment		Recognized		Investment		Recognized
	(dollars in thousands)
Non-PCI Loans
Without Related Allowance
Real Estate Secured
Construction and land	$	4,838	$	9,438	$	-	$	5,067	$	19	$	5,091	$	42
Commercial	2,429		3,531		-		3,179		31		3,451		62
Farmland	401		406		-		673		11		644		23
Residential 1 to 4 family	274		426		-		278		5		416		10
Home equity lines of credit	84		86		-		65		-		72		-
Commercial
Commercial and industrial	2,931		3,171		-		2,913		38		2,750		82
Agriculture	1,369		1,459		-		1,112		12		983		21
Consumer	226		242		-		184		2		172		3
Total	12,552		18,759		-		13,471		118		13,579		243
With Related Allowance
Real Estate Secured
Commercial	283		303		36		286		4		289		8
Commercial
Commercial and industrial	2,191		2,246		185		2,257		24		2,110		53
Agriculture	363		369		88		373		-		382		3
Total	2,837		2,918		309		2,916		28		2,781		64
Total Non-PCI impaired loans	$	15,389	$	21,677	$	309	$	16,387	$	146	$	16,360	$	307

							For the Three Months Ended				For the Six Months Ended
	June 30, 2016						June 30, 2016				June 30, 2016
			Unpaid		Specific		Average		Interest		Average		Interest
	Recorded		Principal		Allowance for		Recorded		Income		Recorded		Income
	Investment		Balance		Impaired Loans		Investment		Recognized		Investment		Recognized
	(dollars in thousands)
PCI Loans
Without Related Allowance
Real Estate Secured
Commercial	$	5,116	$	6,486	$	-	$	5,126	$	124	$	5,136	$	246
Residential 1 to 4 family	121		196		-		349		231		423		249
Construction and land	59		145		-		58		9		56		18
Commercial
Agriculture	1,460		1,500		-		1,457		30		1,455		57
Commercial and industrial	127		429		-		185		26		231		45
Total	6,883		8,756		-		7,175		420		7,301		615
With Related Allowance
Real Estate Secured
Commercial	518		520		40		521		9		524		19
Construction and land	200		200		5		206		3		213		7
Commercial
Commercial and industrial	416		417		32		428		7		439		14
Total	1,134		1,137		77		1,155		19		1,176		40
Total PCI loans	$	8,017	$	9,893	$	77	$	8,330	$	439	$	8,477	$	655

							For the Three Months Ended				For the Six Months Ended
	December 31, 2015						June 30, 2015				June 30, 2015
			Unpaid		Specific		Average		Interest		Average		Interest
	Recorded		Principal		Allowance for		Recorded		Income		Recorded		Income
	Investment		Balance		Impaired Loans		Investment		Recognized		Investment		Recognized
	(dollars in thousands)
Non-PCI Loans
Without Related Allowance
Real Estate Secured
Construction and land	$	5,138	$	9,615	$	-	$	1,496	$	24	$	1,570	$	47
Commercial	3,855		5,328		-		4,263		38		4,211		75
Residential 1 to 4 family	694		860		-		680		1		540		1
Farmland	587		588		-		725		3		578		19
Home equity lines of credit	85		86		-		66		-		130		-
Commercial
Commercial and industrial	2,295		2,510		-		3,993		12		3,680		34
Agriculture	724		815		-		657		1		678		1
Consumer	146		204		-		160		1		144		3
Total	13,524		20,006		-		12,040		80		11,531		180
With Related Allowance
Real Estate Secured
Commercial	435		665		59		476		-		483		-
Land	-		-		-		4,637		-		4,666		-
Commercial
Commercial and industrial	1,944		1,972		156		980		16		967		29
Agriculture	400		400		39		-		-		-		-
Total	2,779		3,037		254		6,093		16		6,116		29
Total Non-PCI impaired loans	$	16,303	$	23,043	$	254	$	18,133	$	96	$	17,647	$	209

							For the Three Months Ended				For the Six Months Ended
	December 31, 2015						June 30, 2015				June 30, 2015
			Unpaid		Specific		Average		Interest		Average		Interest
	Recorded		Principal		Allowance for		Recorded		Income		Recorded		Income
	Investment		Balance		Impaired Loans		Investment		Recognized		Investment		Recognized
	(dollars in thousands)
PCI Loans
Without Related Allowance
Real Estate Secured
Commercial	$	5,156	$	6,601	$	-	$	4,951	$	125	$	5,073	$	665
Residential 1 to 4 family	573		875		-		449		13		450		24
Construction and land	53		152		-		555		20		556		38
Commercial
Agriculture	1,452		1,500		-		1,435		29		1,433		58
Commercial and industrial	297		712		-		552		30		602		60
Total	7,531		9,840		-		7,942		217		8,114		845
With Related Allowance
Real Estate Secured
Commercial	529		538		41		806		19		800		49
Construction and land	229		230		5		274		5		280		10
Residential 1 to 4 family	-		-		-		115		3		114		6
Commercial
Commercial and industrial	486		499		33		661		11		671		22
Total	1,244		1,267		79		1,856		38		1,865		87
Total PCI loans	$	8,775	$	11,107	$	79	$	9,798	$	255	$	9,979	$	932

Summary of loans classified as TDRs

	June 30, 2016						December 31, 2015
	Accrual		Non-accrual		Total		Accrual		Non-accrual		Total
	(dollars in thousands)
Non-PCI loans
Real estate secured
Construction and land	$	791	$	3,836	$	4,627	$	1,171	$	3,968	$	5,139
Commercial	2,480		123		2,603		2,395		435		2,830
Farmland	324		77		401		504		82		586
Residential 1 to 4 family	274		-		274		613		81		694
Commercial
Commercial and industrial	3,297		1,554		4,851		2,698		1,515		4,213
Agriculture	1,369		363		1,732		1,124		-		1,124
Consumer	109		9		118		114		10		124
Total non-PCI loans	8,644		5,962		14,606		8,619		6,091		14,710
PCI loans
Real estate secured
Commercial	910		31		941		922		46		968
Construction and land	59		-		59		54		-		54
Commercial
Commercial and industrial	417		38		455		461		66		527
Total PCI loans	1,386		69		1,455		1,437		112		1,549
Total TDRs	$	10,030	$	6,031	$	16,061	$	10,056	$	6,203	$	16,259

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

	For the Three Months Ended					For the Six Months Ended
	June 30, 2016					June 30, 2016
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	TDRs	Investment		Investment		TDRs	Investment		Investment
	(dollars in thousands)
Non-PCI Loans
Commercial
Commercial and industrial	5	$	183	$	183	13	$	1,528	$	1,528
Agriculture	-	-		-		1	10		10
Total TDRs	5	$	183	$	183	14	$	1,538	$	1,538

	For the Three Months Ended					For the Six Months Ended
	June 30, 2015					June 30, 2015
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	TDRs	Investment		Investment		TDRs	Investment		Investment
	(dollars in thousands)
Non-PCI Loans
Real Estate Secured
Farmland	1	$	498	$	498	1	$	498	$	498
Commercial	1	106		106		4	670		670
Land	1	97		97		1	97		97
Residential 1 to 4 family	1	90		90		3	624		624
Commercial
Commercial and industrial	5	1,926		1,926		9	2,113		2,113
Agriculture	-	-		-		1	898		898
Consumer	-	-		-		1	57		57
Total non-PCI loans	9	2,717		2,717		20	4,957		4,957
PCI Loans
Real Estate Secured
Commercial	4	645		645		4	645		645
Land	1	50		50		1	50		50
Total PCI loans	5	695		695		5	695		695
Total TDRs	14	$	3,412	$	3,412	25	$	5,652	$	5,652

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 Three Months Ended			For the Six Months Ended
	June 30, 2016			June 30, 2016
	Number of	Recorded		Number of	Recorded
	TDRs	Investment		TDRs	Investment
Non-PCI Loans	(dollars in thousands)
Real Estate Secured
Farmland	-	$	-	1	$	80
Total	-	$	-	1	$	80

	For the Three Months Ended			For the Six Months Ended
	June 30, 2015			June 30, 2015
	Number of TDRs	Recorded Investment		Number of TDRs	Recorded Investment
Non-PCI Loans	(dollars in thousands)
Commercial
Commercial and industrial	-	$	-	1	$	18
Total	-	$	-	1	$	18

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

	For the Three Months Ended June 30, 2016
	Balance March 31, 2016		Charge-offs		Recoveries		Provision for Loan and Lease Losses		Balance June 30, 2016
	(dollars in thousands)
Other real estate secured	$	10,831	$	-	$	621	$	(798)	$	10,654
Commercial	5,592		(4)		129		(108)		5,609
Construction and land	558		-		131		(198)		491
Consumer	159		(2)		8		17		182
Unallocated	425						87		512
Total	$	17,565	$	(6)	$	889	$	(1,000)	$	17,448

	For the Six Months Ended June 30, 2016
	Balance December 31, 2015		Charge-offs			Recoveries		Provision for Loan and Lease Losses		Balance June 30, 2016
	(dollars in thousands)
Other real estate secured	$	11,161			-	$	626	$	(1,133)	$	10,654
Commercial	5,372		(12)			230		19		5,609
Construction and land	623		-			144		(276)		491
Consumer	173		(4)			12		1		182
Unallocated	123							389		512
Total	$	17,452	$	(16)		$	1,012	$	(1,000)	$	17,448

	For the Three Months Ended June 30, 2015
	Balance March 31, 2015		Charge-offs		Recoveries		Provision for Loan and Lease Losses		Balance June 30, 2015
	(dollars in thousands)
Other real estate secured	$	9,374	$	(16)	$	73	$	204	$	9,635
Commercial	4,495		(143)		142		499		4,993
Construction and land	2,044		-		13		(117)		1,940
Consumer	190		(5)		5		(19)		171
Unallocated	810						(567)		243
Total	$	16,913	$	(164)	$	233	$	-	$	16,982

	For the Six Months Ended June 30, 2015
	Balance December 31, 2014		Charge-offs		Recoveries		Provision for Loan and Lease Losses		Balance June 30, 2015
	(dollars in thousands)
Other real estate secured	$	9,129	$	(55)	$	76	$	485	$	9,635
Commercial	5,125		(143)		309		(298)		4,993
Construction and land	2,000		(34)		24		(50)		1,940
Consumer	202		(5)		8		(34)		171
Unallocated	346						(103)		243
Total	$	16,802	$	(237)	$	417	$	-	$	16,982

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

	June 30, 2016
	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	$	36	$	10,578	$	40	$	3,471	$	1,038,090	$	5,755
Commercial	273		5,304		32		6,854		235,849		2,003
Construction and land	-		486		5		4,838		31,656		259
Consumer	-		182		-		226		4,718		-
Unallocated	-		512		-		-		-		-
Total	$	309	$	17,062	$	77	$	15,389	$	1,310,313	$	8,017

	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

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

	June 30, 2016
	Credit Risk Grades
			Special
	Pass		Mention		Substandard		Doubtful		Total
	(dollars in thousands)
Non-PCI loans
Real estate secured
Commercial	$	593,942	$	4,007	$	14,817	$	-	$		612,766
Residential 1 to 4 family	183,370		105		501		-		183,976
Farmland	129,820		470		1,284		-		131,574
Multi-family residential	85,254		-		-		-		85,254
Construction and land	32,309		-		4,185		-		36,494
Home equity lines of credit	27,774		-		217		-		27,991
Commercial
Commercial and industrial	171,385		702		10,015		-		182,102
Agriculture	53,941		1,062		5,598		-		60,601
Consumer	4,749		12		183		-		4,944
Total non-PCI loans	1,282,544		6,358		36,800		-		1,325,702
PCI loans
Real estate secured
Commercial	152		2,234		3,248		-		5,634
Construction and land	259		-		-		-		259
Residential 1 to 4 family	-		121		-		-		121
Commercial
Agriculture	-		-		1,460		-		1,460
Commercial and industrial	57		11		475		-		543
Total PCI loans	468		2,366		5,183		-		8,017
Total loans held for investment	$	1,283,012	$	8,724	$	41,983	$	-	$	1,333,719

	December 31, 2015
	Credit Risk Grades
			Special
	Pass		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

Summary of the aging of loans held for investment

	June 30, 2016
			Days Past Due
							90+ and Still		Non-
	Current		30-59		60-89		Accruing		Accruing (1)		Total
	(dollars in thousands)
Non-PCI loans
Real Estate Secured
Commercial	$	612,533	$	-	$	-	$	-	$	233	$	612,766
Residential 1 to 4 family	183,976		-		-		-		-		183,976
Farmland	131,497		-		-		-		77		131,574
Multi-family residential	85,254		-		-		-		-		85,254
Construction and land	32,448		-		-		-		4,046		36,494
Home equity lines of credit	27,907		-		-		-		84		27,991
Commercial
Commercial and industrial	180,276		-		-		-		1,826		182,102
Agriculture	59,760		97		381		-		363		60,601
Consumer	4,827		-		-		-		117		4,944
Total non-PCI loans	1,318,478		97		381		-		6,746		1,325,702
PCI loans
Real estate secured
Commercial	5,603		-		-		-		31		5,634
Construction and land	259		-		-		-		-		259
Residential 1 to 4 family	121		-		-		-		-		121
Commercial
Agriculture	1,460		-		-		-		-		1,460
Commercial and industrial	503		-		-		-		40		543
Total PCI loans	7,946		-		-		-		71		8,017
Total loans held for investment	$	1,326,424	$	97	$	381	$	-	$	6,817	$	1,333,719

(1) At June 30, 2016, $6.1 million of non-accruing loans were current, $0.1 million were 30-59 days past due, $0.1 million were 60-89 days past due, and $0.5 million were 90+ days past due.

	December 31, 2015
			Days Past Due
							90+ and Still		Non-
	Current		30-59		60-89		Accruing		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.