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FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2019

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, 2019
Financial assets:
Cash and due from banks	$	87,395	$	87,395	$	87,395	$	—	$	—
Interest-bearing deposits in other banks	7,803		7,803		7,803		—		—
Investment securities	1,187,933		1,187,933		1,058		1,175,373		11,502
Loans held for sale	7,016		7,016		—		7,016		—
Net loans and leases	4,319,695		4,328,177		—		9,752		4,318,425
Accrued interest receivable	16,220		16,220		16,220		—		—

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,399,200		1,399,200		1,399,200		—		—
Interest-bearing demand and savings and money market	2,591,775		2,591,775		2,591,775		—		—
Time	1,046,684		1,043,147		—		—		1,043,147
Short-term borrowings	205,000		205,000		—		205,000		—
Long-term debt	101,547		97,324		—		97,324		—
Accrued interest payable (included in other liabilities)	5,402		5,402		5,402				—



									Fair Value Measurement Using
(dollars in thousands)	Notional Amount		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, 2019
Derivatives:
Interest rate lock commitments	$	1,569	$	49		$	49		$	—	$	49		$	—
Forward sale commitments	8,412		(3		)	(3		)	—		(3		)	—

Off-balance sheet financial instruments:
Commitments to extend credit	1,106,657		1,295			1,295			—		1,295			—
Standby letters of credit and financial guarantees written	11,275		169			169			—		169			—



					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, 2018
Financial assets:
Cash and due from banks	$	80,569	$	80,569	$	80,569	$	—	$	—
Interest-bearing deposits in other banks	21,617		21,617		21,617		—		—
Investment securities	1,354,812		1,350,576		826		1,338,581		11,169
Loans held for sale	6,647		6,647		—		6,647		—
Net loans and leases	4,030,450		3,938,380		—		—		3,938,380
Accrued interest receivable	17,000		17,000		17,000		—		—

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,436,967		1,436,967		1,436,967		—		—
Interest-bearing demand and savings and money market	2,402,268		2,402,268		2,402,268		—		—
Time	1,107,255		1,099,560		—		—		1,099,560
Short-term borrowings	197,000		197,000		—		197,000		—
Long-term debt	122,166		118,057		—		118,057		—
Accrued interest payable (included in other liabilities)	5,051		5,051		5,051		—		—

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

The following tables present the fair value of assets and liabilities measured on a recurring basis as of September 30, 2019 and December 31, 2018:



			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, 2019
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	124,711	$	—	$	113,209	$	11,502
Corporate securities	30,713		—		30,713		—
U.S. Treasury obligations and direct obligations of U.S Government agencies	42,897		—		42,897		—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	723,644		—		723,644		—
Commercial - U.S. Government agencies and sponsored entities	87,742		—		87,742		—
Residential - Non-government agencies	39,109		—		39,109		—
Commercial - Non-government agencies	138,059		—		138,059		—
Total available-for-sale securities	1,186,875		—		1,175,373		11,502

Equity securities	1,058		1,058		—		—

Derivatives: Interest rate lock and forward sale commitments	46		—		46		—
Total	$	1,187,979	$	1,058	$	1,175,419	$	11,502



				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, 2018
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	173,674		$	—	$	162,505		$	11,169
Corporate securities	54,849			—		54,849			—
U.S. Treasury obligations and direct obligations of U.S Government agencies	32,574			—		32,574			—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	717,052			—		717,052			—
Commercial - U.S. Government agencies and sponsored entities	41,118			—		41,118			—
Residential - Non-government agencies	51,483			—		51,483			—
Commercial - Non-government agencies	134,728			—		134,728			—
Total available-for-sale securities	1,205,478			—		1,194,309			11,169

Equity securities	826			826		—			—

Derivatives: Interest rate lock and forward sale commitments	(84		)	—		(84		)	—
Total	$	1,206,220		$	826	$	1,194,225		$	11,169

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

For the nine months ended September 30, 2019 and 2018, 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, 2018	$	11,169
Principal payments received	(285		)
Unrealized net gain included in other comprehensive income	618
Balance at September 30, 2019	$	11,502

Balance at December 31, 2017	$	11,794
Principal payments received	(280		)
Unrealized net loss included in other comprehensive income	(370		)
Balance at September 30, 2018	$	11,144

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

the level of valuation assumptions used to determine the respective fair values as of September 30, 2019 and December 31, 2018:



			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, 2019
Other real estate ⁽¹⁾	$	466	$	—	$	466	$	—

December 31, 2018
Other real estate ⁽¹⁾	$	414	$	—	$	414	$	—


⁽¹⁾	Represents other real estate that is carried at fair value less costs to sell. Fair value is generally based upon independent market prices or appraised values of the collateral.