FAIR VALUE DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of assets measured at fair value on a recurring basis

The table below presents the balances of assets measured at fair value on a recurring basis:

	June 30, 2012
	Fair Value Measurements Using			Assets
Assets	Level 1	Level 2	Level 3	at Fair Value

U.S. Treasury securities	$ 1,046	$ 0	$ 0	$ 1,046
U.S. Government sponsored agencies	0	5,298	0	5,298
Residential mortgage-backed securities	0	362,009	0	362,009
Non-agency residential mortgage-backed securities	0	28,207	0	28,207
State and municipal securities	0	81,239	641	81,880
Total Securities	1,046	476,753	641	478,440

Mortgage banking derivative	0	535	0	535

Total assets	$ 1,046	$ 477,288	$ 641	$ 478,975

Liabilities

Mortgage banking derivative	$ 0	$ (42)	$ 0	$ (42)

	December 31, 2011
	Fair Value Measurements Using			Assets
Assets	Level 1	Level 2	Level 3	at Fair Value

U.S. Treasury securities	$ 1,055	$ 0	$ 0	$ 1,055
U.S. Government sponsored agencies	0	5,277	0	5,277
Residential mortgage-backed securities	0	350,102	0	350,102
Non-agency residential mortgage-backed securities	0	32,207	0	32,207
State and municipal securities	0	78,064	686	78,750
Total Securities	1,055	465,650	686	467,391

Mortgage banking derivative	0	406	0	406

Total assets	$ 1,055	$ 466,056	$ 686	$ 467,797

Liabilities

Mortgage banking derivative	$ 0	$ (81)	$ 0	$ (81)

Schedule of reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2012:

							State and
							Municipal
							Securities
							June 30, 2012

Balance or recurring Level 3 assets at January 1							$ 686
Change in fair value of securities							0
Principal payments							(45)
Balance or recurring Level 3 assets at June 30							$ 641

Schedule of valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis

The securities measured at fair value included below are nonrated Indiana municipal revenue bonds and are not actively traded.

Quantitative Information about Level 3 Fair Value Measurements

	Fair Value at			Range
	6/30/2012	Valuation Technique	Unobservable Input	(Weighted Average)
	(in thousands)

State and municipal securities	$ 641	Price to type, par, call	Discount to benchmark index	1%

Schedule of assets measured at fair value on a nonrecurring basis

The table below presents the balances of assets measured at fair value on a nonrecurring basis:

	June 30, 2012
	Fair Value Measurements Using			Assets
Assets	Level 1	Level 2	Level 3	at Fair Value
		(in thousands)
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$ 0	$ 0	$ 1,539	$ 1,539
Non-working capital loans	0	0	5,102	5,102

Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	1,486	1,486
Owner occupied loans	0	0	3,136	3,136
Nonowner occupied loans	0	0	20,646	20,646
Multifamily loans	0	0	0	0

Agri-business and agricultural loans:
Loans secured by farmland	0	0	266	266
Loans for agricultural production	0	0	0	0

Other commercial loans	0	0	0	0

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	514	514
Open end and junior lien loans	0	0	141	141
Residential construction loans	0	0	0	0

Other consumer loans	0	0	1	1

Total impaired loans	$ 0	$ 0	$ 32,831	$ 32,831

Mortgage servicing rights	0	0	1,838	1,838
Other real estate owned	0	0	805	805

Total assets	$ 0	$ 0	$ 35,474	$ 35,474

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at June 30, 2012:

				Range of Inputs
	Fair Value	Valuation Methodology	Unobservable Inputs	(Average)

Impaired Loans:
Commercial and industrial:	$ 6,641	Collateral based	Discount to reflect	0% - 83%
		measurements	current market conditions	(25%)
			and ultimate collectability

Impaired loans:
Commercial real estate:	25,268	Collateral based	Discount to reflect	0% - 88%
		measurements	current market conditions	(40%)
			and ultimate collectability

Impaired loans:
Agri-business and agricultural:	266	Collateral based	Discount to reflect	9% - 24%
		measurements	current market conditions	(16%)
			and ultimate collectability

Impaired loans:
Consumer 1-4 family mortgage	655	Collateral based	Discount to reflect	0% - 20%
		measurements	current market conditions	(8%)
			and ultimate collectability
Impaired loans:
Other consumer	1	Collateral based	Discount to reflect	83%
		measurements	current market conditions
			and ultimate collectability

Mortgage servicing rights	1,838	Discounted cash flows	Discount rate	9.1% - 9.5%
				(9.3%)

Other real estate owned	805	Appraisals	Discount to reflect	31% - 61%
			current market conditions	(46%)

	December 31, 2011
	Fair Value Measurements Using			Assets
Assets	Level 1	Level 2	Level 3	at Fair Value
		(in thousands)
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$ 0	$ 0	$ 2,762	$ 2,762
Non-working capital loans	0	0	11,885	11,885

Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	303	303
Owner occupied loans	0	0	3,515	3,515
Nonowner occupied loans	0	0	23,591	23,591
Multifamily loans	0	0	0	0

Agri-business and agricultural loans:
Loans secured by farmland	0	0	433	433
Loans for agricultural production	0	0	207	207

Other commercial loans	0	0	0	0

Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	878	878
Open end and junior lien loans	0	0	406	406
Residential construction loans	0	0	0	0

Other consumer loans	0	0	0	0

Total impaired loans	$ 0	$ 0	$ 43,980	$ 43,980

Mortgage servicing rights	0	0	1,734	1,734
Other real estate owned	0	0	730	730

Total assets	$ 0	$ 0	$ 46,444	$ 46,444

Schedule of fair values and the related carrying values of financial instruments

The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Items which are not financial instruments are not included.

	June 30, 2012
	Carrying	Estimated Fair Value
	Value	Level 1	Level 2	Level 3	Total

Financial Assets:
Cash and cash equivalents	$ 194,949	$ 194,949	$ 0	$ 0	$ 194,949
Securities available for sale	478,440	1,046	476,753	641	478,440
Real estate mortgages held for sale	5,124	0	5,211	0	5,211
Loans, net	2,162,583	0	0	2,180,124	2,180,124
Federal Home Loan Bank stock	7,313	N/A	N/A	N/A	N/A
Federal Reserve Bank stock	3,420	N/A	N/A	N/A	N/A
Accrued interest receivable	9,441	4	1,708	7,729	9,441
Financial Liabilities:
Certificates of deposit	(955,215)	0	(972,320)	0	(972,320)
All other deposits	(1,570,270)	(1,570,270)	0	0	(1,570,270)
Securities sold under agreements to repurchase	(98,696)	0	(98,696)	0	(98,696)
Long-term borrowings	(15,038)	0	(15,837)	0	(15,837)
Subordinated debentures	(30,928)	0	0	(31,238)	(31,238)
Standby letters of credit	(383)	0	0	(383)	(383)
Accrued interest payable	(6,834)	(351)	(6,480)	(3)	(6,834)

	December 31, 2011
	Carrying	Estimated
	Value	Fair Value

Financial Assets:
Cash and cash equivalents	$ 104,584	$ 104,584
Securities available for sale	467,391	467,391
Real estate mortgages held for sale	2,953	2,998
Loans, net	2,180,309	2,141,459
Federal Home Loan Bank stock	7,313	N/A
Federal Reserve Bank stock	3,420	N/A
Accrued interest receivable	9,604	9,604
Financial Liabilities:
Certificates of deposit	(910,381)	(925,619)
All other deposits	(1,502,315)	(1,502,315)
Securities sold under agreements to repurchase	(131,990)	(131,990)
Other short-term borrowings	(10,000)	(10,000)
Long-term borrowings	(15,040)	(16,079)
Subordinated debentures	(30,928)	(31,240)
Standby letters of credit	(247)	(247)
Accrued interest payable	(5,574)	(5,574)

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

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-Section 50

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-Topic 825

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