FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of carrying amount and estimated fair value of financial instruments



						Fair Value Measurement Using
(dollars in thousands)	Carrying Amount		Estimated Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
September 30, 2016
Financial assets
Cash and due from banks	$	79,647	$	79,647		$	79,647	$	—		$	—
Interest-bearing deposits in other banks	23,727		23,727			23,727		—			—
Investment securities	1,488,797		1,492,753			784		1,478,936			13,033
Loans held for sale	12,755		12,755			—		12,755			—
Net loans and leases	3,380,270		3,373,145			—		35,056			3,338,089
Federal Home Loan Bank stock	12,173		12,173			12,173		—			—
Accrued interest receivable	14,554		14,554			14,554		—			—

Financial liabilities
Deposits:
Noninterest-bearing demand	1,194,557		1,194,557			1,194,557		—			—
Interest-bearing demand and savings and money market	2,228,612		2,228,612			2,228,612		—			—
Time	1,095,409		1,096,107			—		—			1,096,107
Short-term borrowings	150,000		150,000			—		150,000			—
Long-term debt	92,785		66,210			—		66,210			—
Accrued interest payable (included in other liabilities)	1,449		1,449			1,449		—			—

Off-balance sheet financial instruments
Commitments to extend credit	846,660		1,095			—		1,095			—
Standby letters of credit and financial guarantees written	15,644		235			—		235			—
Derivatives:
Interest rate lock commitments	20,414		90			—		90			—
Forward sale commitments	32,399		(127		)	—		(127		)	—



					Fair Value Measurement Using
(dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015
Financial assets
Cash and due from banks	$	71,797	$	71,797	$	71,797	$	—	$	—
Interest-bearing deposits in other banks	8,397		8,397		8,397		—		—
Investment securities	1,520,172		1,516,391		916		1,502,996		12,479
Loans held for sale	14,109		14,109		—		14,109		—
Net loans and leases	3,148,218		3,094,404		—		38,205		3,056,199
Federal Home Loan Bank stock	8,606		8,606		8,606		—		—
Accrued interest receivable	14,898		14,898		14,898		—		—

Financial liabilities
Deposits:
Noninterest-bearing demand	1,145,244		1,145,244		1,145,244		—		—
Interest-bearing demand and savings and money market	2,223,988		2,223,988		2,223,988		—		—
Time	1,064,207		1,064,255		—		—		1,064,255
Short-term borrowings	69,000		69,000		—		69,000		—
Long-term debt	92,785		67,421		—		67,421		—
Accrued interest payable (included in other liabilities)	1,072		1,072		1,072		—		—

Off-balance sheet financial instruments
Commitments to extend credit	801,835		1,014		—		1,014		—
Standby letters of credit and financial guarantees written	13,434		202		—		202		—
Derivatives:
Interest rate lock commitments	24,009		43		—		43		—
Forward sale commitments	9,973		15		—		15		—

Schedule of balances of assets and liabilities measured at fair value on a recurring basis

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:



				Fair Value at Reporting Date Using
(dollars in thousands)	Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
September 30, 2016
Available for sale securities:
Debt securities:
States and political subdivisions	$	191,778		$	—	$	178,745		$	13,033
Corporate securities	109,608			—		109,608			—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	759,203			—		759,203			—
Residential - Non-government agencies	57,622			—		57,622			—
Commercial - Non-government agencies	143,229			—		143,229			—
Other	784			784		—			—
Total available for sale securities	1,262,224			784		1,248,407			13,033
Derivatives - Interest rate lock and forward sale commitments	(37		)	—		(37		)	—
Total	$	1,262,187		$	784	$	1,248,370		$	13,033



			Fair Value at Reporting Date Using
(dollars in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015
Available for sale securities:
Debt securities:
States and political subdivisions	$	190,473	$	—	$	177,994	$	12,479
Corporate securities	108,571		—		108,571		—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	771,909		—		771,909		—
Residential - Non-government agencies	64,032		—		64,032		—
Commercial - Non-government agencies	136,354		—		136,354		—
Other	916		916		—		—
Total available for sale securities	1,272,255		916		1,258,860		12,479
Derivatives - Interest rate lock and forward sale commitments	59		—		59		—
Total	$	1,272,314	$	916	$	1,258,919	$	12,479

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

For the nine months ended September 30, 2016 and 2015, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows:



(dollars in thousands)	Available for Sale Debt Securities: States and Political Subdivisions
Balance at December 31, 2015	$	12,479
Principal payments received	(268		)
Unrealized net gain included in other comprehensive income	822
Balance at September 30, 2016	$	13,033

Balance at December 31, 2014	$	13,095
Principal payments received	(897		)
Unrealized net gain included in other comprehensive income	554
Balance at September 30, 2015	$	12,752

Schedule of level of valuation assumptions used to determine the fair value of assets measured on a nonrecurring basis

For assets measured at fair value on a nonrecurring basis that were recorded at fair value on our balance sheet at September 30, 2016 and December 31, 2015, the following table provides the level of valuation assumptions used to determine the respective fair values:



			Fair Value Measurements Using
(dollars in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2016
Impaired loans (1)	$	35,051	$	—	$	35,051	$	—
Other real estate (2)	791		—		791		—

December 31, 2015
Impaired loans (1)	$	38,153	$	—	$	38,153	$	—
Other real estate (2)	1,962		—		1,962		—


(1)	Represents carrying value and related write-downs of loans for which adjustments are based on agreed upon purchase prices for the loans or the appraised value of the collateral.


(2)	Represents other real estate that is carried at the lower of carrying value or fair value less costs to sell. Fair value is generally based upon independent market prices or appraised values of the collateral.