Allowance for Loan Losses | The following table presents the activity of the allowance for loan losses by portfolio segment for the three months ended June 30. Allowance for Loan Losses: June 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 9,377 $ 1,496 $ 6,334 $ 2,188 $ 19,395 Provision for loan losses 917 (231 ) 817 (463 ) 1,040 Loans charged -off (360 ) (203 ) (1,527 ) — (2,090 ) Recoveries 289 452 594 — 1,335 Ending Balance $ 10,223 $ 1,514 $ 6,218 $ 1,725 $ 19,680 Allowance for Loan Losses: June 30, 2016 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 11,168 $ 1,769 $ 5,106 $ 1,883 $ 19,926 Provision for loan losses (816 ) (22 ) 749 524 435 Loans charged -off (555 ) (232 ) (1,055 ) — (1,842 ) Recoveries 447 80 458 — 985 Ending Balance $ 10,244 $ 1,595 $ 5,258 $ 2,407 $ 19,504 The following table presents the activity of the allowance for loan losses by portfolio segment for the six months ended June 30. Allowance for Loan Losses: June 30, 2017 Beginning balance $ 9,731 $ 1,553 $ 5,767 $ 1,722 $ 18,773 Provision for loan losses 403 (180 ) 2,410 3 2,636 Loans charged -off (778 ) (464 ) (3,122 ) — (4,364 ) Recoveries 867 605 1,163 — 2,635 Ending Balance $ 10,223 $ 1,514 $ 6,218 $ 1,725 $ 19,680 Allowance for Loan Losses: June 30, 2016 Beginning balance $ 11,482 $ 1,834 $ 4,945 $ 1,685 $ 19,946 Provision for loan losses (1,091 ) 103 1,536 722 1,270 Loans charged -off (822 ) (471 ) (2,189 ) — (3,482 ) Recoveries 675 129 966 — 1,770 Ending Balance $ 10,244 $ 1,595 $ 5,258 $ 2,407 $ 19,504 The following table presents the allocation of the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method at June 30, 2017 and December 31, 2016 . Allowance for Loan Losses June 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Individually evaluated for impairment $ 359 $ 48 $ — $ — $ 407 Collectively evaluated for impairment 9,864 1,466 6,218 1,725 19,273 Acquired with deteriorated credit quality — — — — — Ending Balance $ 10,223 $ 1,514 $ 6,218 $ 1,725 $ 19,680 Loans: June 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Total Individually evaluated for impairment $ 6,865 $ 506 $ — $ 7,371 Collectively evaluated for impairment 1,104,804 430,487 317,753 1,853,044 Acquired with deteriorated credit quality 1,933 — — 1,933 Ending Balance $ 1,113,602 $ 430,993 $ 317,753 $ 1,862,348 Allowance for Loan Losses: December 31, 2016 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Individually evaluated for impairment 242 89 — — 331 Collectively evaluated for impairment 9,489 1,464 5,767 1,722 18,442 Acquired with deteriorated credit quality — — — — — Ending Balance $ 9,731 $ 1,553 $ 5,767 $ 1,722 $ 18,773 Loans December 31, 2016 (Dollar amounts in thousands) Commercial Residential Consumer Total Individually evaluated for impairment 8,051 549 — 8,600 Collectively evaluated for impairment 1,101,269 423,099 307,226 1,831,594 Acquired with deteriorated credit quality 3,415 1,431 — 4,846 Ending Balance $ 1,112,735 $ 425,079 $ 307,226 $ 1,845,040 In the second quarter of 2017, the Corporation revised its historical loss period from four years to seven years as the Corporation believes the longer period is more appropriate as net charge-offs have been lower in recent years. The impact of this change was not material to the overall allowance for loan losses balance, however the unallocated portion was reduced by the change. The following tables present loans individually evaluated for impairment by class of loans. June 30, 2017 Unpaid Principal Recorded Allowance for Loan Losses Average Recorded Interest Income Cash Basis Interest (Dollar amounts in thousands) Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Commercial Commercial & Industrial $ 968 $ 968 $ — $ 1,079 $ — $ — Farmland 930 930 — 585 — — Non Farm, Non Residential 2,773 2,773 — 2,927 — — Agriculture — — — 286 — — All Other Commercial 1,311 1,311 — 1,339 — — Residential First Liens 23 23 — 24 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 513 513 154 525 — — Farmland — — — — — — Non Farm, Non Residential — — — 219 — — Agriculture 571 370 205 123 — — All Other Commercial — — — — — — Residential First Liens 483 483 48 503 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 7,572 $ 7,371 $ 407 $ 7,610 $ — $ — December 31, 2016 Unpaid Principal Recorded Allowance for Loan Losses Average Recorded Interest Income Cash Basis Interest Income (Dollar amounts in thousands) Balance Investment Allocated Investment Recognized Recognized With no related allowance recorded: Commercial Commercial & Industrial $ 1,181 $ 1,181 $ — $ 981 $ — $ — Farmland 826 826 — 770 — — Non Farm, Non Residential 3,368 2,996 — 3,096 — — Agriculture 622 487 — 351 — — All Other Commercial 1,367 1,367 — 1,477 — — Residential First Liens 25 25 — 27 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 537 537 36 819 — — Farmland — — — — — — Non Farm, Non Residential 657 657 206 1,016 — Agriculture — — — 114 — — All Other Commercial — — — 45 — — Residential First Liens 524 524 89 647 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 9,107 $ 8,600 $ 331 $ 9,343 $ — $ — Three Months Ended Six Months Ended Average Interest Cash Basis Average Interest Cash Basis (Dollar amounts in thousands) Investment Recognized Recognized Investment Recognized Recognized With no related allowance recorded: Commercial & Industrial $ 1,029 $ — $ — $ 1,079 $ — $ — Farmland 465 — — 585 — — Non Farm, Non Residential 2,893 — — 2,927 — — Agriculture 185 — — 286 — — All Other Commercial 1,325 — — 1,339 — — Residential First Liens 24 — — 24 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 519 — — 525 — — Farmland — — — — — — Non Farm, Non Residential — — — 219 — — Agriculture 185 — — 123 — — All Other Commercial — — — — — — Residential First Liens 493 — — 503 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 7,118 $ — $ — $ 7,610 $ — $ — Three Months Ended Six Months Ended Average Interest Cash Basis Average Interest Cash Basis (Dollar amounts in thousands) Investment Recognized Recognized Investment Recognized Recognized With no related allowance recorded: Commercial Commercial & Industrial $ 650 $ — $ — $ 841 $ — $ — Farmland 733 — — 488 — — Non Farm, Non Residential 3,119 — — 3,147 — — Agriculture 318 — — 212 — — All Other Commercial 1,431 — — 1,540 — — Residential First Liens 28 — — 28 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 797 — — 864 — — Farmland — — — — — — Non Farm, Non Residential 1,153 — — 1,240 — — Agriculture — — — — — — All Other Commercial — — — 75 — — Residential First Liens 646 — — 722 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 8,875 $ — $ — $ 9,157 $ — $ — The tables below presents the recorded investment in non-performing loans. June 30, 2017 Loans Past Due Over 90 Day Still Troubled Debt Nonaccrual Excluding (Dollar amounts in thousands) Accruing Accruing Nonaccrual TDR Commercial Commercial & Industrial $ — $ 3 $ 327 $ 1,928 Farmland 20 — — 1,032 Non Farm, Non Residential — 2 2,730 371 Agriculture 64 — — 578 All Other Commercial — — — 1,330 Residential First Liens 748 3,464 806 4,573 Home Equity 14 — — 272 Junior Liens 28 — — 160 Multifamily — — — — All Other Residential 13 — — 86 Consumer Motor Vehicle 298 16 — 233 All Other Consumer — 166 540 692 TOTAL $ 1,185 $ 3,651 $ 4,403 $ 11,255 Subsequent to June 30, 2017, the Corporation place a $2.8 million loan on nonaccrual that is not included in the table above. December 31, 2016 Loans Past Due Over 90 Day Still Troubled Debt Nonaccrual Excluding (Dollar amounts in thousands) Accruing Accruing Nonaccrual TDR Commercial Commercial & Industrial $ 45 $ 3 $ 383 $ 2,405 Farmland — — — 978 Non Farm, Non Residential — 60 2,941 1,027 Agriculture — — — 744 All Other Commercial — — — 1,380 Residential First Liens 276 3,525 995 5,496 Home Equity — — — 285 Junior Liens 55 — — 202 Multifamily — — — — All Other Residential — — — 94 Consumer Motor Vehicle 293 60 — 140 All Other Consumer — 150 517 741 TOTAL $ 669 $ 3,798 $ 4,836 $ 13,492 There were $121 thousand of loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual at June 30, 2017 and there were $80 thousand at December 31, 2016 . There were $66 thousand of covered loans included in non-accrual loans at June 30, 2017 and there were $112 thousand at December 31, 2016 . There were no covered loans at June 30, 2017 or December 31, 2016 that were deemed impaired. Non-performing loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. The following tables presents the aging of the recorded investment in loans by past due category and class of loans. June 30, 2017 30-59 Days 60-89 Days Greater than 90 days Total (Dollar amounts in thousands) Past Due Past Due Past Due Past Due Current Total Commercial Commercial & Industrial $ 605 $ 77 $ 938 $ 1,620 $ 461,790 $ 463,410 Farmland 678 2,309 950 3,937 105,852 109,789 Non Farm, Non Residential 152 — — 152 203,835 203,987 Agriculture 287 — 434 721 147,025 147,746 All Other Commercial 1 — 19 20 188,650 188,670 Residential First Liens 725 910 1,542 3,177 257,853 261,030 Home Equity 93 46 25 164 35,265 35,429 Junior Liens 235 145 100 480 37,730 38,210 Multifamily — — — — 83,053 83,053 All Other Residential — — 13 13 13,258 13,271 Consumer Motor Vehicle 2,639 525 311 3,475 289,787 293,262 All Other Consumer 83 7 1 91 24,400 24,491 TOTAL $ 5,498 $ 4,019 $ 4,333 $ 13,850 $ 1,848,498 $ 1,862,348 December 31, 2016 30-59 Days 60-89 Days Greater than 90 days Total (Dollar amounts in thousands) Past Due Past Due Past Due Past Due Current Total Commercial Commercial & Industrial $ 370 $ 114 $ 1,199 $ 1,683 $ 474,406 $ 476,089 Farmland 235 22 46 303 110,897 111,200 Non Farm, Non Residential 153 — 215 368 195,120 195,488 Agriculture 246 — 467 713 151,059 151,772 All Other Commercial 15 — — 15 178,171 178,186 Residential First Liens 3,862 954 1,516 6,332 264,446 270,778 Home Equity 186 64 27 277 35,782 36,059 Junior Liens 271 — 224 495 36,912 37,407 Multifamily — — — — 67,799 67,799 All Other Residential 42 12 — 54 12,982 13,036 Consumer Motor Vehicle 4,048 732 313 5,093 277,604 282,697 All Other Consumer 143 22 3 168 24,361 24,529 TOTAL $ 9,571 $ 1,920 $ 4,010 $ 15,501 $ 1,829,539 $ 1,845,040 During the three and six months ended June 30, 2017 and 2016 , the terms of certain loans were modified as troubled debt restructurings (TDRs). The following tables present the activity for TDR's. 2017 (Dollar amounts in thousands) Commercial Residential Consumer Total April 1, $ 3,302 $ 4,068 $ 788 $ 8,158 Added — 227 41 268 Charged Off — (7 ) (48 ) (55 ) Payments (241 ) (90 ) (56 ) (387 ) June 30, $ 3,061 $ 4,198 $ 725 $ 7,984 2017 (Dollar amounts in thousands) Commercial Residential Consumer Total January 1, $ 3,386 $ 4,447 $ 732 $ 8,565 Added — 227 209 436 Charged Off — (40 ) (71 ) (111 ) Payments (325 ) (436 ) (145 ) (906 ) June 30, $ 3,061 $ 4,198 $ 725 $ 7,984 2016 (Dollar amounts in thousands) Commercial Residential Consumer Total April 1, 3,529 5,285 695 9,509 Added — 43 62 105 Charged Off — (125 ) (6 ) (131 ) Payments (76 ) (170 ) (82 ) (328 ) June 30, 3,453 5,033 669 9,155 2016 (Dollar amounts in thousands) Commercial Residential Consumer Total January 1, 3,584 5,593 683 9,860 Added — 123 150 273 Charged Off — (181 ) (26 ) (207 ) Payments (131 ) (502 ) (138 ) (771 ) June 30, 3,453 5,033 669 9,155 Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modification in 2017 or 2016 resulted in the permanent reduction of the recorded investment in the loan. Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from twelve months to five years. Modifications involving an extension of the maturity date were for periods ranging from twelve months to ten years. Troubled debt restructurings during the three and six months ended June 30, 2017 and 2016 did not result in any material charge-offs or additional provision expense. The Corporation has no allocations as of June 30, 2017 and has allocated $ 7 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings at June 30, 2016. The Corporation has not committed to lend additional amounts as of June 30, 2017 and 2016 to customers with outstanding loans that are classified as troubled debt restructurings. None of the charge-offs during the three and six months ended June 30, 2017 and 2016 were of restructurings that had occurred in the previous 12 months. Credit Quality Indicators: The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes non-homogeneous loans, such as commercial loans, with an outstanding balance greater than $100 thousand . Any consumer loans outstanding to a borrower who had commercial loans analyzed will be similarly risk rated. This analysis is performed on a quarterly basis. The Corporation uses the following definitions for risk ratings: Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and debt service capacity of the borrower or of any pledged collateral. These loans have a well-defined weakness or weaknesses which have clearly jeopardized repayment of principal and interest as originally intended. They are characterized by the distinct possibility that the institution will sustain some future loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those graded substandard, with the added characteristic that the severity of the weaknesses makes collection or liquidation in full highly questionable or improbable based upon currently existing facts, conditions, and values. Furthermore, non-homogeneous loans which were not individually analyzed, but are 90+ days past due or on non-accrual are classified as substandard. Loans included in homogeneous pools, such as residential or consumer may be classified as substandard due to 90+ days delinquency, non-accrual status, bankruptcy, or loan restructuring. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 thousand or are included in groups of homogeneous loans. As of June 30, 2017 and December 31, 2016 , and based on the most recent analysis performed, the risk category of loans by class of loans are as follows: June 30, 2017 (Dollar amounts in thousands) Pass Special Mention Substandard Doubtful Not Rated Total Commercial Commercial & Industrial $ 423,394 $ 9,541 $ 21,668 $ 339 $ 7,123 $ 462,065 Farmland 89,607 9,108 9,511 — 11 108,237 Non Farm, Non Residential 185,767 2,924 14,858 — — 203,549 Agriculture 117,685 12,637 15,358 — 384 146,064 All Other Commercial 177,635 372 7,869 — 1,867 187,743 Residential First Liens 44,650 1,613 3,909 13 210,014 260,199 Home Equity 375 — 89 — 34,902 35,366 Junior Liens 1,750 81 328 101 35,869 38,129 Multifamily 82,793 — — — 101 82,894 All Other Residential — — 31 — 13,208 13,239 Consumer Motor Vehicle — — 435 — 291,716 292,151 All Other Consumer — — 34 — 24,357 24,391 TOTAL $ 1,123,656 $ 36,276 $ 74,090 $ 453 $ 619,552 $ 1,854,027 December 31, 2016 (Dollar amounts in thousands) Pass Special Mention Substandard Doubtful Not Rated Total Commercial Commercial & Industrial $ 427,262 $ 16,286 $ 25,177 $ 449 $ 5,730 $ 474,904 Farmland 95,115 8,300 5,238 — 532 109,185 Non Farm, Non Residential 172,739 5,745 16,601 — — 195,085 Agriculture 121,983 13,885 12,301 — 1,366 149,535 All Other Commercial 163,492 596 10,058 76 3,251 177,473 Residential First Liens 43,674 1,541 4,466 18 220,249 269,948 Home Equity 363 — 86 — 35,554 36,003 Junior Liens 1,826 85 401 26 34,977 37,315 Multifamily 66,133 1,430 15 — 65 67,643 All Other Residential — — — — 13,002 13,002 Consumer Motor Vehicle — — 331 — 281,134 281,465 All Other Consumer — — 25 — 24,391 24,416 TOTAL $ 1,092,587 $ 47,868 $ 74,699 $ 569 $ 620,251 $ 1,835,974 |