ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY | NOTE 4. ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total Three Months Ended September 30, 2017 Beginning balance, July 1 $ 20,219 $ 13,775 $ 3,870 $ 568 $ 2,689 $ 389 $ 3,053 $ 44,563 Provision for loan losses (612) 426 425 108 30 15 58 450 Loans charged-off (44) 0 0 0 (40) (86) 0 (170) 364 246 7 0 11 26 0 654 Net loan recoveries 320 246 7 0 (29) (60) 0 484 Ending balance $ 19,927 $ 14,447 $ 4,302 $ 676 $ 2,690 $ 344 $ 3,111 $ 45,497 Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total Three Months Ended September 30, 2016 Beginning balance, July 1 $ 20,935 $ 12,637 $ 3,047 $ 365 $ 2,934 $ 333 $ 2,996 $ 43,247 Provision for loan losses (715) 650 56 18 72 70 (151) 0 Loans charged-off (168) (331) 0 0 (224) (50) 0 (773) Recoveries 268 17 5 0 69 20 0 379 Net loans charged-off 100 (314) 5 0 (155) (30) 0 (394) Ending balance $ 20,320 $ 12,973 $ 3,108 $ 383 $ 2,851 $ 373 $ 2,845 $ 42,853 The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2017 and 2016: Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total Nine Months Ended September 30, 2017 Beginning balance, January 1 $ 20,272 $ 13,452 $ 3,532 $ 461 $ 2,827 $ 387 $ 2,787 $ 43,718 Provision for loan losses (791) 744 753 215 (170) 75 324 1,150 Loans charged-off (430) (259) 0 0 (53) (192) 0 (934) 876 510 17 0 86 74 0 1,563 Net loan recoveries 446 251 17 0 33 (118) 0 629 Ending balance $ 19,927 $ 14,447 $ 4,302 $ 676 $ 2,690 $ 344 $ 3,111 $ 45,497 Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total Nine Months Ended September 30, 2016 Beginning balance, January 1 $ 21,564 $ 12,473 $ 2,445 $ 574 $ 3,395 $ 319 $ 2,840 $ 43,610 Provision for loan losses (1,057) 771 649 (191) (295) 118 5 0 Loans charged-off (542) (499) 0 0 (354) (140) 0 (1,535) Recoveries 355 228 14 0 105 76 0 778 Net loans charged-off (187) (271) 14 0 (249) (64) 0 (757) Ending balance $ 20,320 $ 12,973 $ 3,108 $ 383 $ 2,851 $ 373 $ 2,845 $ 42,853 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2017 and December 31, 2016: Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total September 30, 2017 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 2,750 $ 688 $ 0 $ 0 $ 320 $ 43 $ 0 $ 3,801 Collectively evaluated for impairment 17,177 13,759 4,302 676 2,370 301 3,111 41,696 Total ending allowance balance $ 19,927 $ 14,447 $ 4,302 $ 676 $ 2,690 $ 344 $ 3,111 $ 45,497 Loans: Loans individually evaluated for impairment $ 7,859 $ 6,896 $ 310 $ 0 $ 1,563 $ 51 $ 0 $ 16,679 Loans collectively evaluated for impairment 1,354,186 1,401,366 317,647 114,705 363,361 67,308 0 3,618,573 Total ending loans balance $ 1,362,045 $ 1,408,262 $ 317,957 $ 114,705 $ 364,924 $ 67,359 $ 0 $ 3,635,252 Commercial Real Estate Commercial and Agri-business Consumer and Multifamily and Other 1-4 Family Other (dollars in thousands) Industrial Residential Agricultural Commercial Mortgage Consumer Unallocated Total December 31, 2016 Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 3,191 $ 576 $ 0 $ 0 $ 296 $ 51 $ 0 $ 4,114 Collectively evaluated for impairment 17,081 12,876 3,532 461 2,531 336 2,787 39,604 Total ending allowance balance $ 20,272 $ 13,452 $ 3,532 $ 461 $ 2,827 $ 387 $ 2,787 $ 43,718 Loans: Loans individually evaluated for impairment $ 9,776 $ 9,151 $ 283 $ 0 $ 1,427 $ 55 $ 0 $ 20,692 Loans collectively evaluated for impairment 1,258,682 1,290,131 394,621 98,265 347,408 61,128 0 3,450,235 Total ending loans balance $ 1,268,458 $ 1,299,282 $ 394,904 $ 98,265 $ 348,835 $ 61,183 $ 0 $ 3,470,927 Unpaid Allowance for Principal Recorded Loan Losses (dollars in thousands) Balance Investment Allocated With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 18 $ 18 $ 0 Non-working capital loans 2,689 1,295 0 Commercial real estate and multi-family residential loans: Construction and land development loans 88 88 0 Owner occupied loans 2,447 2,200 0 Nonowner occupied loans 2,778 2,778 0 Agri-business and agricultural loans: Loans secured by farmland 630 310 0 Consumer 1-4 family loans: Closed end first mortgage loans 424 356 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 2,515 2,514 1,072 Non-working capital loans 4,032 4,032 1,678 Commercial real estate and multi-family residential loans: Owner occupied loans 1,830 1,830 688 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 963 964 278 Open end and junior lien loans 243 243 42 Other consumer loans 51 51 43 Total $ 18,708 $ 16,679 $ 3,801 The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2016: Unpaid Allowance for Principal Recorded Loan Losses (dollars in thousands) Balance Investment Allocated With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 951 $ 494 $ 0 Non-working capital loans 3,007 1,358 0 Commercial real estate and multi-family residential loans: Construction and land development loans 126 126 0 Owner occupied loans 2,868 2,620 0 Nonowner occupied loans 4,632 4,633 0 Agri-business and agricultural loans: Loans secured by farmland 603 283 0 Consumer 1-4 family loans: Closed end first mortgage loans 161 147 0 Open end and junior lien loans 408 195 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 1,100 1,099 465 Non-working capital loans 6,827 6,825 2,726 Commercial real estate and multi-family residential loans: Owner occupied loans 1,773 1,772 576 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 1,152 1,085 296 Other consumer loans 55 55 51 Total $ 23,663 $ 20,692 $ 4,114 The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2017: Cash Basis Average Interest Interest Recorded Income Income (dollars in thousands) Investment Recognized Recognized With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 315 $ 14 $ 11 Non-working capital loans 1,321 18 18 Commercial real estate and multi-family residential loans: Construction and land development loans 100 3 3 Owner occupied loans 2,222 2 2 Nonowner occupied loans 2,784 152 152 Agri-business and agricultural loans: Loans secured by farmland 301 0 0 Consumer 1-4 family loans: Closed end first mortgage loans 342 3 3 Open end and junior lien loans 101 0 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 2,529 22 22 Non-working capital loans 5,700 74 74 Commercial real estate and multi-family residential loans: Owner occupied loans 1,714 9 9 Agri-business and agricultural loans: Loans secured by farmland 10 0 0 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 969 13 13 Open end and junior lien loans 81 0 0 Other consumer loans 52 1 1 Total $ 18,541 $ 311 $ 308 The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2016: Cash Basis Average Interest Interest Recorded Income Income (dollars in thousands) Investment Recognized Recognized With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 387 $ 8 $ 0 Non-working capital loans 1,473 8 5 Commercial real estate and multi-family residential loans: Construction and land development loans 275 0 0 Owner occupied loans 2,475 2 2 Nonowner occupied loans 4,690 88 88 Multifamily loans 17 0 0 Agri-business and agricultural loans: Loans secured by farmland 346 0 0 Loans for ag production 676 0 0 Other commercial loans 4 0 0 Consumer 1-4 family loans: Closed end first mortgage loans 82 0 0 Open end and junior lien loans 52 0 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 1,336 11 11 Non-working capital loans 4,538 35 33 Commercial real estate and multi-family residential loans: Construction and land development loans 55 1 3 Owner occupied loans 1,150 0 0 Multifamily loans 254 2 1 Other commercial loans 8 0 1 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 1,378 5 4 Open end and junior lien loans 247 0 0 Other consumer loans 57 1 1 Total $ 19,500 $ 161 $ 149 The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2017: Cash Basis Average Interest Interest Recorded Income Income (dollars in thousands) Investment Recognized Recognized With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 485 $ 22 $ 19 Non-working capital loans 1,337 27 27 Commercial real estate and multi-family residential loans: Construction and land development loans 117 4 4 Owner occupied loans 2,395 4 4 Nonowner occupied loans 3,397 222 222 Agri-business and agricultural loans: Loans secured by farmland 289 0 0 Consumer 1-4 family loans: Closed end first mortgage loans 249 5 5 Open end and junior lien loans 137 0 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 2,090 33 33 Non-working capital loans 6,418 116 116 Commercial real estate and multi-family residential loans: Owner occupied loans 1,641 12 11 Agri-business and agricultural loans: Loans secured by farmland 3 0 0 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 1,023 18 16 Open end and junior lien loans 27 0 0 Other consumer loans 53 2 2 Total $ 19,661 $ 465 $ 459 The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2016: Cash Basis Average Interest Interest Recorded Income Income (dollars in thousands) Investment Recognized Recognized With no related allowance recorded: Commercial and industrial loans: Working capital lines of credit loans $ 300 $ 8 $ 8 Non-working capital loans 901 8 5 Commercial real estate and multi-family residential loans: Construction and land development loans 92 0 0 Owner occupied loans 2,578 2 2 Nonowner occupied loans 4,760 205 200 Multifamily loans 6 0 0 Agri-business and agricultural loans: Loans secured by farmland 429 0 0 Loans for ag production 902 5 4 Other commercial loans 1 0 0 Consumer 1-4 family loans: Closed end first mortgage loans 93 0 0 Open end and junior lien loans 17 0 0 With an allowance recorded: Commercial and industrial loans: Working capital lines of credit loans 1,176 21 21 Non-working capital loans 4,417 103 101 Commercial real estate and multi-family residential loans: Construction and land development loans 230 8 8 Owner occupied loans 1,023 0 0 Nonowner occupied loans 26 0 0 Multifamily loans 341 12 11 Other commercial loans 10 0 1 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 1,456 31 29 Open end and junior lien loans 221 0 0 Other consumer loans 58 3 3 Total $ 19,037 $ 406 $ 393 The following table presents the ageing of the recorded investment in past due loans as of September 30, 2017 by class of loans: Total 30-89 Greater than Past Due Loans Not Days 90 Days And (dollars in thousands) Past Due Past Due Past Due Nonaccrual Nonaccrual Total Commercial and industrial loans: Working capital lines of credit loans $ 701,635 $ 475 $ 0 $ 1,883 $ 2,358 $ 703,993 Non-working capital loans 653,885 310 0 3,857 4,167 658,052 Commercial real estate and multi-family residential loans: Construction and land development loans 286,895 0 0 0 0 286,895 Owner occupied loans 495,576 0 0 3,753 3,753 499,329 Nonowner occupied loans 456,451 0 0 98 98 456,549 Multifamily loans 165,489 0 0 0 0 165,489 Agri-business and agricultural loans: Loans secured by farmland 161,248 0 0 311 311 161,559 Loans for agricultural production 156,398 0 0 0 0 156,398 Other commercial loans 114,705 0 0 0 0 114,705 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 170,467 920 73 134 1,127 171,594 Open end and junior lien loans 182,394 189 0 243 432 182,826 Residential construction loans 10,504 0 0 0 0 10,504 Other consumer loans 67,314 45 0 0 45 67,359 Total $ 3,622,961 $ 1,939 $ 73 $ 10,279 $ 12,291 $ 3,635,252 The following table presents the ageing of the recorded investment in past due loans as of December 31, 2016 by class of loans: Total 30-89 Greater than Past Due Loans Not Days 90 Days And (dollars in thousands) Past Due Past Due Past Due Nonaccrual Nonaccrual Total Commercial and industrial loans: Working capital lines of credit loans $ 624,213 $ 9 $ 0 $ 140 $ 149 $ 624,362 Non-working capital loans 642,014 0 0 2,082 2,082 644,096 Commercial real estate and multi-family residential loans: Construction and land development loans 244,411 0 0 0 0 244,411 Owner occupied loans 465,789 0 0 3,598 3,598 469,387 Nonowner occupied loans 457,880 0 0 122 122 458,002 Multifamily loans 127,482 0 0 0 0 127,482 Agri-business and agricultural loans: Loans secured by farmland 172,349 0 0 283 283 172,632 Loans for agricultural production 222,272 0 0 0 0 222,272 Other commercial loans 98,265 0 0 0 0 98,265 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 161,499 1,072 53 213 1,338 162,837 Open end and junior lien loans 170,372 448 0 195 643 171,015 Residential construction loans 14,983 0 0 0 0 14,983 Other consumer loans 61,119 64 0 0 64 61,183 Total $ 3,462,648 $ 1,593 $ 53 $ 6,633 $ 8,279 $ 3,470,927 Troubled Debt Restructurings: Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $2.7 million and $2.7 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2017 and December 31, 2016, respectively. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring. September 30 December 31 (dollars in thousands) 2017 2016 Accruing troubled debt restructured loans $ 5,601 $ 10,351 Nonaccrual troubled debt restructured loans 7,946 5,633 Total troubled debt restructured loans $ 13,547 $ 15,984 During the three months ended September 30, 2017, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. Additional concessions were granted to borrowers with previously identified troubled debt restructured loans during the period. The loans to two of the borrowers are for commercial real estate buildings where the collateral value and cash flows from the companies occupying the buildings do not support the loans with recorded investments of $1,409,000. The loans to three other borrowers are for commercial and industrial non-working capital loans with recorded investments of $1,784,000. These concessions are not included in the table below. During the three months ended June 30, 2017, no loans were modified as troubled debt restructurings. During the three months ended March 31, 2017, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. Additional concessions were granted to borrowers with previously identified troubled debt restructured loans during the three months ended March 31, 2017. The loans to two of the borrowers are for commercial real estate buildings where the collateral value and cash flows from the companies occupying the buildings do not support the loans with recorded investments of $500,000. The loans to two other borrowers are for commercial and industrial non-working capital loans with recorded investments of $690,000. These concessions are not included in table below. Modified Repayment Terms Pre-Modification Post-Modification Extension Outstanding Outstanding Period or Number of Recorded Recorded Number of Range (dollars in thousands) Loans Investment Investment Loans (in months) Troubled Debt Restructurings Commercial and industrial loans: Working capital lines of credit loans 1 $ 1,324 $ 1,324 1 9 Non-working capital loans 2 210 210 2 0-6 Consumer 1-4 family loans: Closed end first mortgage loans 1 76 76 1 198 Total 4 $ 1,610 $ 1,610 4 0-198 The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 30, 2017: Modified Repayment Terms Pre-Modification Post-Modification Extension Outstanding Outstanding Period or Number of Recorded Recorded Number of Range (dollars in thousands) Loans Investment Investment Loans (in months) Troubled Debt Restructurings Commercial and industrial loans: Working capital lines of credit loans 1 $ 1,324 $ 1,324 1 9 Non-working capital loans 4 1,922 1,922 4 0-6 Commercial real estate and multi- family residential loans: Owner occupied loans 1 486 486 1 6 Consumer 1-4 family loans: Closed end first mortgage loans 2 120 122 2 198-350 Total 8 $ 3,852 $ 3,854 8 0-350 For the three-month period ended September 30, 2017, the commercial and industrial troubled debt restructurings described above decreased the allowance for loan losses by $94,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above decreased the allowance for loan losses by $8,000. For the nine-month period ended September 30, 2017, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $583,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $36,000. No charge-offs resulted from any troubled debt restructurings described above during the three- or nine-month periods ended September 30, 2017. During the period ended September 30, 2016, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. During the three months ended September 30, 2016, there were renewal terms, which are considered additional concessions, offered to six borrowers under financial duress with previously identified troubled debt restructured loans which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing a similar risk profile. In these instances, it was determined that a concession had been granted. The loans to five of the borrowers were for commercial real estate buildings where the collateral value and cash flows from the companies occupying the buildings do not support the loans with recorded investments of $2,309,000. The loan to the other borrower was a commercial and industrial non-working capital loan with a recorded investment of $36,000. These concessions are not included in the table below. During the three months ended June 30, 2016, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal. During the three months ended June 30, 2016, there were renewal terms, which are considered additional concessions, offered to three borrowers under financial duress with previously identified troubled debt restructured loans which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing a similar risk profile. In these instances, it was determined that a concession had been granted. The loan to one of the borrowers was for a commercial real estate building where the collateral value and cash flows from the company occupying the building does not support the loan with a recorded investment of $374,000. The loans to the other two borrowers are for commercial and industrial non-working capital loans with recorded investments of $574,000. These concessions are not included in the table below. Additional concessions were granted to borrowers with previously identified troubled debt restructured loans during the three-months ended March 31, 2016. The loans to two of the borrowers are for commercial real estate buildings where the collateral value and cash flows from the companies occupying the buildings do not support the loans with recorded investments of $542,000. The other loans were to a borrower engaged in land development, where the aggregate recorded investment totaled $484,000. These concessions are not included in table below. The following table presents loans by class modified as new troubled debt restructurings that occurred during the three months ended September 30, 2016: Modified Repayment Terms Pre-Modification Post-Modification Extension Outstanding Outstanding Period or Number of Recorded Recorded Number of Range (dollars in thousands) Loans Investment Investment Loans (in months) Troubled Debt Restructurings Commercial and industrial loans: Non-working capital loans 2 $ 1,066 $ 1,066 2 60-356 Total 2 $ 1,066 $ 1,066 2 60-356 The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 30, 2016: Modified Repayment Terms Pre-Modification Post-Modification Extension Outstanding Outstanding Period or Number of Recorded Recorded Number of Range (dollars in thousands) Loans Investment Investment Loans (in months) Troubled Debt Restructurings Commercial and industrial loans: Non-working capital loans 5 $ 1,841 $ 1,842 5 9-356 Commercial real estate and multi- family residential loans: Owner occupied loans 2 640 640 2 13-15 Total 7 $ 2,481 $ 2,482 7 9-356 For the three-month period ended September 30, 2016, the commercial and industrial troubled debt restructurings described above decreased the allowance for loan losses by $342,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $111,000. For the nine-month period ended September 30, 2016, the commercial and industrial troubled debt restructurings described above decreased the allowance for loan losses by $221,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $126,000. No charge-offs resulted from any troubled debt restructurings described above during the three- or nine-month periods ended September 30, 2016. There were no troubled debt restructurings that had payment defaults within the twelve months following modification during the three- or nine-month periods ended September 30, 2017 and 2016. Credit Quality Indicators: The Company 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 Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $150,000. The Company uses the following definitions for risk ratings: Special Mention. Substandard. Doubtful. Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be Pass rated loans with the exception of consumer troubled debt restructurings which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with Not Rated loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. Special Not (dollars in thousands) Pass Mention Substandard Doubtful Rated Total Commercial and industrial loans: Working capital lines of credit loans $ 652,780 $ 30,041 $ 20,997 $ 0 $ 175 $ 703,993 Non-working capital loans 612,991 14,922 26,041 0 4,098 658,052 Commercial real estate and multi- family residential loans: Construction and land development loans 285,629 1,266 0 0 0 286,895 Owner occupied loans 459,858 15,124 24,347 0 0 499,329 Nonowner occupied loans 451,049 4,697 803 0 0 456,549 Multifamily loans 165,243 246 0 0 0 165,489 Agri-business and agricultural loans: Loans secured by farmland 149,474 7,682 4,403 0 0 161,559 Loans for agricultural production 146,190 9,293 915 0 0 156,398 Other commercial loans 114,700 0 0 0 5 114,705 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 45,220 0 1,320 0 125,054 171,594 Open end and junior lien loans 8,265 0 243 0 174,318 182,826 Residential construction loans (1) 0 0 0 10,505 10,504 Other consumer loans 14,820 0 51 0 52,488 67,359 Total $ 3,106,218 $ 83,271 $ 79,120 $ 0 $ 366,643 $ 3,635,252 As of December 31, 2016, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: Special Not (dollars in thousands) Pass Mention Substandard Doubtful Rated Total Commercial and industrial loans: Working capital lines of credit loans $ 577,208 $ 17,636 $ 29,396 $ 0 $ 122 $ 624,362 Non-working capital loans 583,135 32,587 24,405 0 3,969 644,096 Commercial real estate and multi- family residential loans: Construction and land development loans 242,964 1,447 0 0 0 244,411 Owner occupied loans 444,143 10,285 14,959 0 0 469,387 Nonowner occupied loans 451,390 4,550 2,062 0 0 458,002 Multifamily loans 127,219 263 0 0 0 127,482 Agri-business and agricultural loans: Loans secured by farmland 168,660 3,689 283 0 0 172,632 Loans for agricultural production 218,581 3,691 0 0 0 222,272 Other commercial loans 98,261 0 0 0 4 98,265 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 44,687 126 1,232 0 116,792 162,837 Open end and junior lien loans 7,028 0 0 0 163,987 171,015 Residential construction loans 0 0 0 0 14,983 14,983 Other consumer loans 17,717 0 55 0 43,411 61,183 Total $ 2,980,993 $ 74,274 $ 72,392 $ 0 $ 343,268 $ 3,470,927 |