Allowance for Loan Losses | The following table presents the activity of the allowance for loan losses by portfolio segment for the three months ended September 30. Allowance for Loan Losses: September 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 10,223 $ 1,514 $ 6,218 $ 1,725 $ 19,680 Provision for loan losses (227 ) 14 1,415 (17 ) 1,185 Loans charged -off (281 ) (100 ) (1,583 ) — (1,964 ) Recoveries 222 91 588 — 901 Ending Balance $ 9,937 $ 1,519 $ 6,638 $ 1,708 $ 19,802 Allowance for Loan Losses: September 30, 2016 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 10,244 $ 1,595 $ 5,258 $ 2,407 $ 19,504 Provision for loan losses 571 40 1,275 (795 ) 1,091 Loans charged -off (1,029 ) (211 ) (1,484 ) — (2,724 ) Recoveries 479 154 570 — 1,203 Ending Balance $ 10,265 $ 1,578 $ 5,619 $ 1,612 $ 19,074 The following table presents the activity of the allowance for loan losses by portfolio segment for the nine months ended September 30. Allowance for Loan Losses: September 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 9,731 $ 1,553 $ 5,767 $ 1,722 $ 18,773 Provision for loan losses 176 (166 ) 3,825 (14 ) 3,821 Loans charged -off (1,059 ) (564 ) (4,705 ) — (6,328 ) Recoveries 1,089 696 1,751 — 3,536 Ending Balance $ 9,937 $ 1,519 $ 6,638 $ 1,708 $ 19,802 Allowance for Loan Losses: September 30, 2016 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Beginning balance $ 11,482 $ 1,834 $ 4,945 $ 1,685 $ 19,946 Provision for loan losses (520 ) 143 2,811 (73 ) 2,361 Loans charged -off (1,851 ) (682 ) (3,673 ) — (6,206 ) Recoveries 1,154 283 1,536 — 2,973 Ending Balance $ 10,265 $ 1,578 $ 5,619 $ 1,612 $ 19,074 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 September 30, 2017 and December 31, 2016 . Allowance for Loan Losses September 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Unallocated Total Individually evaluated for impairment $ 409 $ 27 $ — $ — $ 436 Collectively evaluated for impairment 9,528 1,492 6,638 1,708 19,366 Acquired with deteriorated credit quality — — — — — Ending Balance $ 9,937 $ 1,519 $ 6,638 $ 1,708 $ 19,802 Loans: September 30, 2017 (Dollar amounts in thousands) Commercial Residential Consumer Total Individually evaluated for impairment $ 9,915 $ 484 $ — $ 10,399 Collectively evaluated for impairment 1,104,154 430,101 326,356 1,860,611 Acquired with deteriorated credit quality 1,897 — — 1,897 Ending Balance $ 1,115,966 $ 430,585 $ 326,356 $ 1,872,907 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. September 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 $ 813 $ 813 $ — $ 1,013 $ — $ — Farmland 3,639 3,639 — 1,349 — — Non Farm, Non Residential 2,662 2,662 — 2,861 — — Agriculture 214 214 — 268 — — All Other Commercial 1,283 1,283 — 1,325 — — Residential First Liens 22 22 — 24 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 502 502 150 519 — — Farmland 312 312 54 78 — — Non Farm, Non Residential — — — 164 — — Agriculture 691 490 205 215 — — All Other Commercial — — — — — — Residential First Liens 462 462 27 493 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 10,600 $ 10,399 $ 436 $ 8,309 $ — $ — 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 Nine 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 $ 891 $ — $ — $ 1,013 $ — $ — Farmland 2,285 — — 1,349 — — Non Farm, Non Residential 3,218 — — 2,861 — — Agriculture 107 — — 268 — — All Other Commercial 1,297 — — 1,325 — — Residential First Liens 23 — — 24 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 508 — — 519 — — Farmland 156 — — 78 — — Non Farm, Non Residential — — — 164 — — Agriculture 430 — — 215 — — All Other Commercial — — — — — — Residential First Liens 473 — — 493 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 9,388 $ — $ — $ 8,309 $ — $ — Three Months Ended Nine 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 $ 719 $ — $ — $ 931 $ — $ — Farmland 1,513 — — 757 — — Non Farm, Non Residential 3,064 — — 3,121 — — Agriculture 635 — — 318 — — All Other Commercial 1,410 — — 1,504 — — Residential First Liens 27 — — 28 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — With an allowance recorded: Commercial Commercial & Industrial 980 — — 890 — — Farmland — — — — — — Non Farm, Non Residential 915 — — 1,105 — — Agriculture 286 — — 143 — — All Other Commercial — — — 56 — — Residential First Liens 576 — — 677 — — Home Equity — — — — — — Junior Liens — — — — — — Multifamily — — — — — — All Other Residential — — — — — — Consumer Motor Vehicle — — — — — — All Other Consumer — — — — — — TOTAL $ 10,125 $ — $ — $ 9,530 $ — $ — The tables below presents the recorded investment in non-performing loans. September 30, 2017 Loans Past Due Over 90 Day Still Troubled Debt Nonaccrual Excluding (Dollar amounts in thousands) Accruing Accruing Nonaccrual TDR Commercial Commercial & Industrial $ — $ 2 $ 212 $ 1,900 Farmland — — — 4,145 Non Farm, Non Residential — 1 2,694 185 Agriculture — — — 890 All Other Commercial — — — 1,310 Residential First Liens 997 3,262 630 4,161 Home Equity 44 — — 268 Junior Liens 26 — — 167 Multifamily — — — — All Other Residential — — — 94 Consumer Motor Vehicle 390 12 — 255 All Other Consumer 7 211 470 590 TOTAL $ 1,464 $ 3,488 $ 4,006 $ 13,965 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 $141 thousand of loans covered by loss share agreements with the FDIC included in loans past due over 90 days still on accrual at September 30, 2017 and there were $80 thousand at December 31, 2016 . There were $63 thousand of covered loans included in non-accrual loans at September 30, 2017 and there were $112 thousand at December 31, 2016 . There were no covered loans at September 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. September 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 $ 289 $ 403 $ 815 $ 1,507 $ 463,408 $ 464,915 Farmland — — 3,639 3,639 105,088 108,727 Non Farm, Non Residential — — — — 198,916 198,916 Agriculture 502 87 671 1,260 147,209 148,469 All Other Commercial — — 27 27 194,912 194,939 Residential First Liens 608 872 1,440 2,920 255,766 258,686 Home Equity 116 10 56 182 36,059 36,241 Junior Liens 200 136 113 449 40,111 40,560 Multifamily — — — — 82,828 82,828 All Other Residential — — 12 12 12,258 12,270 Consumer Motor Vehicle 3,287 602 427 4,316 296,607 300,923 All Other Consumer 107 15 8 130 25,303 25,433 TOTAL $ 5,109 $ 2,125 $ 7,208 $ 14,442 $ 1,858,465 $ 1,872,907 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 nine months ended September 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 July 1, $ 3,061 $ 4,198 $ 725 $ 7,984 Added — — 42 42 Charged Off — (155 ) (17 ) (172 ) Payments (153 ) (222 ) (55 ) (430 ) September 30, $ 2,908 $ 3,821 $ 695 $ 7,424 2017 (Dollar amounts in thousands) Commercial Residential Consumer Total January 1, $ 3,386 $ 4,447 $ 732 $ 8,565 Added — 227 251 478 Charged Off — (195 ) (88 ) (283 ) Payments (478 ) (658 ) (200 ) (1,336 ) September 30, $ 2,908 $ 3,821 $ 695 $ 7,424 2016 (Dollar amounts in thousands) Commercial Residential Consumer Total July 1, 3,453 5,033 669 9,155 Added — — 109 109 Charged Off — — (13 ) (13 ) Payments (71 ) (239 ) (55 ) (365 ) September 30, 3,382 4,794 710 8,886 2016 (Dollar amounts in thousands) Commercial Residential Consumer Total January 1, 3,584 5,593 683 9,860 Added — 123 259 382 Charged Off — (181 ) (39 ) (220 ) Payments (202 ) (741 ) (193 ) (1,136 ) September 30, 3,382 4,794 710 8,886 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 nine months ended September 30, 2017 and 2016 did not result in any material charge-offs or additional provision expense. The Corporation has no allocations of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2017 and 2016. The Corporation has not committed to lend additional amounts as of September 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 nine months ended September 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 those with an outstanding balance less than $100 thousand or are included in groups of homogeneous loans. As of September 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: September 30, 2017 (Dollar amounts in thousands) Pass Special Mention Substandard Doubtful Not Rated Total Commercial Commercial & Industrial $ 424,500 $ 12,758 $ 17,983 $ 203 $ 8,095 $ 463,539 Farmland 87,650 11,537 7,528 — 26 106,741 Non Farm, Non Residential 174,709 9,529 14,240 — — 198,478 Agriculture 112,100 21,831 12,113 — 288 146,332 All Other Commercial 182,009 2,819 7,673 — 1,507 194,008 Residential First Liens 44,959 881 3,979 8 207,990 257,817 Home Equity 324 — 117 — 35,726 36,167 Junior Liens 1,954 79 239 101 38,094 40,467 Multifamily 82,552 — — — 77 82,629 All Other Residential — — 49 — 12,182 12,231 Consumer Motor Vehicle — — 542 — 299,173 299,715 All Other Consumer — — 63 — 25,257 25,320 TOTAL $ 1,110,757 $ 59,434 $ 64,526 $ 312 $ 628,415 $ 1,863,444 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 |