10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

LAKELAND FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Indiana	0-11487	35-1559596
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation or Organization)		Identification No.)

202 East Center Street, P.O. Box 1387, Warsaw, Indiana 46581-1387

(Address of Principal Executive Offices)(Zip Code)

(574) 267-6144

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes X    No _

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes X   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer _     Accelerated filer X    Non-accelerated filer _ (do not check if a smaller reporting company)   Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes _    No X

Number of shares of common stock outstanding at October 31, 2013:  16,465,316

LAKELAND FINANCIAL CORPORATION

Form 10-Q Quarterly Report

Table of Contents

PART I.

		Page Number
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of
	Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	65

PART II.

		Page Number
Item 1.	Legal Proceedings	66
Item 1A.	Risk Factors	66
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults Upon Senior Securities	66
Item 4.	Mine Safety Disclosures	67
Item 5.	Other Information	67
Item 6.	Exhibits	67
Form 10-Q	Signature Page	68

PART I

LAKELAND FINANCIAL CORPORATION

ITEM 1 – FINANCIAL STATEMENTS

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of September 30, 2013 and December 31, 2012

(in thousands except for share data)

(Page 1 of 2)

	September 30,	December 31,
	2013	2012
	(Unaudited)
ASSETS
Cash and due from banks	$             72,982	$           156,666
Short-term investments	8,358	75,571
Total cash and cash equivalents	81,340	232,237
Securities available for sale (carried at fair value)	463,070	467,021
Real estate mortgage loans held for sale	1,047	9,452
Loans, net of allowance for loan losses of $49,804 and $51,445	2,342,911	2,206,075
Land, premises and equipment, net	38,514	34,840
Bank owned life insurance	62,397	61,112
Accrued income receivable	8,333	8,491
Goodwill	4,970	4,970
Other intangible assets	12	47
Other assets	38,643	39,899
Total assets	$        3,041,237	$        3,064,144

(continued)

1

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

As of September 30, 2013 and December 31, 2012

(in thousands except for share data)

(Page 2 of 2)

	September 30,	December 31,
	2013	2012
	(Unaudited)
LIABILITIES AND EQUITY
LIABILITIES
Noninterest bearing deposits	$           449,590	$           407,926
Interest bearing deposits	1,995,236	2,173,830
Total deposits	2,444,826	2,581,756
Short-term borrowings
Federal funds purchased	57,000	0
Securities sold under agreements to repurchase	103,959	121,883
Other short-term borrowings	75,000	0
Total short-term borrowings	235,959	121,883
Accrued expenses payable	12,766	15,321
Other liabilities	2,177	1,390
Long-term borrowings	37	15,038
Subordinated debentures	30,928	30,928
Total liabilities	2,726,693	2,766,316
EQUITY
Common stock:  90,000,000 shares authorized, no par value
16,459,156 shares issued and 16,361,411 outstanding as of September 30, 2013
16,377,247 shares issued and 16,290,136 outstanding as of December 31, 2012	92,229	90,039
Retained earnings	225,648	203,654
Accumulated other comprehensive income (loss)	(1,452)	5,689
Treasury stock, at cost (2013 - 97,745 shares, 2012 - 87,111 shares)	(1,970)	(1,643)
Total stockholders' equity	314,455	297,739
Noncontrolling interest	89	89
Total equity	314,544	297,828
Total liabilities and equity	$        3,041,237	$        3,064,144

The accompanying notes are an integral part of these consolidated financial statements.

2

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Nine Months Ended September 30, 2013 and 2012

(in thousands except for share and per share data)

(Unaudited)

(Page 1 of 2)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
NET INTEREST INCOME
Interest and fees on loans
Taxable	$        24,595	$        25,803	$        73,469	$        77,789
Tax exempt	100	109	304	333
Interest and dividends on securities
Taxable	1,463	2,034	3,560	7,425
Tax exempt	802	698	2,307	2,094
Interest on short-term investments	10	16	46	43
Total interest income	26,970	28,660	79,686	87,684
Interest on deposits	3,589	5,989	12,365	19,352
Interest on borrowings
Short-term	146	112	349	329
Long-term	263	399	831	1,198
Total interest expense	3,998	6,500	13,545	20,879
NET INTEREST INCOME	22,972	22,160	66,141	66,805
Provision for loan losses	0	0	0	1,299
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES	22,972	22,160	66,141	65,506
NONINTEREST INCOME
Wealth advisory fees	980	959	2,895	2,770
Investment brokerage fees	1,503	695	3,449	2,435
Service charges on deposit accounts	2,325	2,045	6,548	5,937
Loan, insurance and service fees	1,524	1,421	4,792	4,062
Merchant card fee income	356	297	925	902
Other income	856	669	2,937	1,614
Mortgage banking income	159	590	1,206	1,574
Net securities gains (losses)	106	(380)	107	(377)
Other than temporary impairment loss on available-for-sale securities:
Total impairment losses recognized on securities	0	(67)	0	(1,052)
Loss recognized in other comprehensive income	0	0	0	26
Net impairment loss recognized in earnings	0	(67)	0	(1,026)
Total noninterest income	7,809	6,229	22,859	17,891

(continued)

3

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

For the Three Months and Nine Months Ended September 30, 2013 and 2012

(in thousands except for share and per share data)

(Unaudited)

(Page 2 of 2)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
NONINTEREST EXPENSE
Salaries and employee benefits	9,437	8,569	27,493	26,007
Net occupancy expense	813	803	2,532	2,519
Equipment costs	758	641	2,021	1,854
Data processing fees and supplies	1,443	1,143	4,115	3,044
Other expense	3,815	3,146	10,089	9,807
Total noninterest expense	16,266	14,302	46,250	43,231
INCOME BEFORE INCOME TAX EXPENSE	14,515	14,087	42,750	40,166
Income tax expense	4,746	4,740	14,499	13,374
NET INCOME	$          9,769	$          9,347	$        28,251	$        26,792
BASIC WEIGHTED AVERAGE COMMON SHARES	16,451,199	16,340,425	16,427,060	16,312,896
BASIC EARNINGS PER COMMON SHARE	$            0.59	$            0.57	$            1.72	$            1.64
DILUTED WEIGHTED AVERAGE COMMON SHARES	16,634,933	16,490,390	16,581,089	16,470,485
DILUTED EARNINGS PER COMMON SHARE	$            0.59	$            0.57	$            1.70	$            1.63

The accompanying notes are an integral part of these consolidated financial statements.

4

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Three Months and Nine Months Ended September 30, 2013 and 2012

(in thousands)

(Unaudited)

			Three months ended September 30,		Nine months ended September 30,
			2013	2012	2013	2012
Net income			$            9,769	$            9,347	$          28,251	$          26,792
Other comprehensive income (loss)
	Change in securities available for sale:
		Unrealized holding gain (loss) on securities available for sale
		arising during the period	(1,242)	(251)	(11,642)	818
		Reclassification adjustment for (gains) losses included in net income	(106)	380	(107)	377
		Reclassification adjustment for other than temporary impairment	0	67	0	1,026
		Net securities gain (loss) activity during the period	(1,348)	196	(11,749)	2,221
		Tax effect	484	(76)	4,589	(880)
		Net of tax amount	(864)	120	(7,160)	1,341
	Defined benefit pension plans:
		Net gain (loss) on defined benefit pension plans	0	0	(151)	110
		Amortization of net actuarial loss	62	55	183	164
		Net gain activity during the period	62	55	32	274
		Tax effect	(25)	(22)	(13)	(110)
		Net of tax amount	37	33	19	164
		Total other comprehensive income (loss), net of tax	(827)	153	(7,141)	1,505
Comprehensive income			$            8,942	$            9,500	$          21,110	$          28,297

The accompanying notes are an integral part of these consolidated financial statements.

5

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Nine Months Ended September 30, 2013 and 2012

(in thousands except for share and per share data)

(Unaudited)

			Accumulated
			Other		Total
	Common	Retained	Comprehensive	Treasury	Stockholders'
	Stock	Earnings	Income (Loss)	Stock	Equity
Balance at January 1, 2012	$           87,380	$         181,903	$                    5,139	$           (1,222)	$          273,200
Net income		26,792			26,792
Other comprehensive income (loss), net of tax			1,505		1,505
Common stock cash dividends declared, $0.495 per share		(8,080)			(8,080)
Treasury shares purchased under deferred directors' plan
(14,741 shares)	391			(391)	0
Stock activity under stock compensation plans (129,228 shares)	323				323
Stock compensation expense	1,161				1,161
Balance at September 30, 2012	$           89,255	$         200,615	$                    6,644	$           (1,613)	$          294,901
Balance at January 1, 2013	$           90,039	$         203,654	$                    5,689	$           (1,643)	$          297,739
Net income		28,251			28,251
Other comprehensive income (loss), net of tax			(7,141)		(7,141)
Common stock cash dividends declared, $0.38 per share		(6,257)			(6,257)
Treasury shares purchased under deferred directors' plan
(13,652 shares)	381			(381)	0
Treasury stock sold and distributed under deferred directors' plan
(3,018 shares)	(54)			54	0
Stock activity under stock compensation plans, net of taxes (81,909 shares)	498				498
Stock compensation expense	1,365				1,365
Balance at September 30, 2013	$           92,229	$         225,648	$                   (1,452)	$           (1,970)	$          314,455

The accompanying notes are an integral part of these consolidated financial statements

6

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2013 and 2012

(in thousands)

(Unaudited)

(Page 1 of 2)

	2013	2012
Cash flows from operating activities:
Net income	$            28,251	$            26,792
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation	2,174	2,029
Provision for loan losses	0	1,299
Loss on sale and write down of other real estate owned	8	214
Amortization of intangible assets	35	39
Amortization of loan servicing rights	453	541
Net change in loan servicing rights valuation allowance	(39)	84
Loans originated for sale	(68,378)	(89,595)
Net gain on sales of loans	(2,193)	(1,926)
Proceeds from sale of loans	78,221	87,180
Net loss on sales of premises and equipment	12	4
Net (gain) loss  on sales and calls of securities available for sale	(107)	377
Impairment on available for sale securities	0	1,026
Net securities amortization	7,097	5,210
Stock compensation expense	1,365	1,161
Earnings on life insurance	(1,168)	(708)
Tax benefit of stock option exercises	(77)	(535)
Net change:
Accrued income receivable	158	(123)
Accrued expenses payable	(2,536)	2,027
Other assets	5,740	2,322
Other liabilities	1,168	(615)
Total adjustments	21,933	10,011
Net cash from operating activities	50,184	36,803
Cash flows from investing activities:
Proceeds from sale of securities available for sale	29,996	27,492
Proceeds from maturities, calls and principal paydowns of
securities available for sale	97,229	82,499
Purchases of securities available for sale	(142,011)	(128,249)
Purchase of life insurance	(117)	(210)
Net (increase) decrease in total loans	(136,944)	27,238
Proceeds from sales of land, premises and equipment	1	2
Purchases of land, premises and equipment	(5,861)	(2,268)
Proceeds from sales of other real estate	621	1,698
Net cash from investing activities	(157,086)	8,202

(Continued)

7

LAKELAND FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2013 and 2012

(in thousands)

(Unaudited)

(Page 2 of 2)

	2013	2012
Cash flows from financing activities:
Net increase (decrease) in total deposits	(136,930)	63,401
Net increase (decrease) in short-term borrowings	114,076	(23,438)
Payments on long-term borrowings	(15,001)	(2)
Common dividends paid	(6,244)	(8,067)
Preferred dividends paid	(13)	(13)
Proceeds from stock option exercise	498	323
Purchase of treasury stock	(381)	(391)
Net cash from financing activities	(43,995)	31,813
Net change in cash and cash equivalents	(150,897)	76,818
Cash and cash equivalents at beginning of the period	232,237	104,584
Cash and cash equivalents at end of the period	$            81,340	$          181,402
Cash paid during the period for:
Interest	$            14,673	$            19,937
Income taxes	13,180	11,028
Supplemental non-cash disclosures:
Loans transferred to other real estate	108	296

The accompanying notes are an integral part of these consolidated financial statements.

8

LAKELAND FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2013

(Table amounts in thousands except for share and per share data)

(Unaudited)

NOTE 1. BASIS OF PRESENTATION

This report is filed for Lakeland Financial Corporation (the “Company”) and its wholly owned subsidiaries, Lake City Bank (the “Bank”), and LCB Risk Management, a captive insurance company. All significant inter-company balances and transactions have been eliminated in consolidation. Also included is the Bank’s wholly owned subsidiary, LCB Investments II, Inc. (“LCB Investments”). LCB Investments also owns LCB Funding, Inc. (“LCB Funding”), a real estate investment trust.

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and are unaudited. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ending September 30, 2013 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2013. The 2012 Lakeland Financial Corporation Annual Report on Form 10-K should be read in conjunction with these statements.

NOTE 2. EARNINGS PER SHARE

Basic earnings per common share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, stock awards and warrants.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Weighted average shares outstanding for basic earnings per common share	16,451,199	16,340,425	16,427,060	16,312,896
Dilutive effect of stock options, awards and warrants	183,734	149,965	154,029	157,589
Weighted average shares outstanding for diluted earnings per common share	16,634,933	16,490,390	16,581,089	16,470,485
Basic earnings per common share	$              0.59	$              0.57	$              1.72	$              1.64
Diluted earnings per common share	$              0.59	$              0.57	$              1.70	$              1.63

9

NOTE 3. LOANS

	September 30,			December 31,
	2013			2012
Commercial and industrial loans:
Working capital lines of credit loans	$   462,098	19.3	%	$   439,638	19.5	%
Non-working capital loans	435,968	18.2		407,184	18.0
Total commercial and industrial loans	898,066	37.5		846,822	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans	117,733	4.9		82,494	3.7
Owner occupied loans	371,500	15.5		358,617	15.9
Nonowner occupied loans	392,538	16.4		314,889	13.9
Multifamily loans	37,279	1.6		45,011	2.0
Total commercial real estate and multi-family residential loans	919,050	38.4		801,011	35.5
Agri-business and agricultural loans:
Loans secured by farmland	104,807	4.4		109,147	4.8
Loans for agricultural production	95,330	4.0		115,572	5.1
Total agri-business and agricultural loans	200,137	8.4		224,719	10.0
Other commercial loans	55,797	2.3		56,807	2.5
Total commercial loans	2,073,050	86.6		1,929,359	85.5
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	119,788	5.0		109,823	4.9
Open end and junior lien loans	151,726	6.3		161,366	7.1
Residential construction and land development loans	4,705	0.2		11,541	0.5
Total consumer 1-4 family mortgage loans	276,219	11.5		282,730	12.5
Other consumer loans	44,091	1.8		45,755	2.0
Total consumer loans	320,310	13.4		328,485	14.5
Subtotal	2,393,360	100.0	%	2,257,844	100.0	%
Less:  Allowance for loan losses	(49,804)			(51,445)
Net deferred loan fees	(645)			(324)
Loans, net	$2,342,911			$2,206,075

10

NOTE 4. ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2013, and 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, 2013:

		Commercial
		Real Estate			Consumer
	Commercial	and Multifamily	Agri-business	Other	1-4 Family	Other
	and Industrial	Residential	and Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2013
Balance July 1,	$               21,879	$               20,098	$                 1,517	$                    264	$                 2,823	$                    587	$                 3,467	$               50,635
Provision for loan losses	138	(544)	(185)	(23)	409	179	26	0
Loans charged-off	(595)	(455)	0	0	(126)	(120)	0	(1,296)
Recoveries	75	73	201	0	71	45	0	465
Net loans charged-off	(520)	(382)	201	0	(55)	(75)	0	(831)
Balance September 30,	$               21,497	$               19,172	$                 1,533	$                    241	$                 3,177	$                    691	$                 3,493	$               49,804
Nine Months Ended September 30, 2013
Balance January 1,	$               22,342	$               20,812	$                 1,403	$                    240	$                 2,682	$                    609	$                 3,357	$               51,445
Provision for loan losses	(569)	(627)	125	1	709	225	136	0
Loans charged-off	(738)	(1,361)	(200)	0	(315)	(257)	0	(2,871)
Recoveries	462	348	205	0	101	114	0	1,230
Net loans charged-off	(276)	(1,013)	5	0	(214)	(143)	0	(1,641)
Balance September 30,	$               21,497	$               19,172	$                 1,533	$                    241	$                 3,177	$                    691	$                 3,493	$               49,804
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$                 4,345	$                 5,731	$                      45	$                        0	$                    390	$                      32	$                        0	$               10,543
Collectively evaluated for impairment	17,152	13,441	1,488	241	2,787	659	3,493	39,261
Total ending allowance balance	$               21,497	$               19,172	$                 1,533	$                    241	$                 3,177	$                    691	$                 3,493	$               49,804
Loans:
Loans individually evaluated for impairment	$               16,493	$               26,127	$                 1,147	$                        0	$                 3,494	$                      97	$                        0	$               47,358
Loans collectively evaluated for impairment	881,826	891,635	199,091	55,792	273,067	43,946	0	2,345,357
Total ending loans balance	$             898,319	$             917,762	$             200,238	$               55,792	$             276,561	$               44,043	$                        0	$          2,392,715

The recorded investment in loans does not include accrued interest.

11

The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2012:

		Commercial
		Real Estate			Consumer
	Commercial	and Multifamily	Agri-business	Other	1-4 Family	Other
	and Industrial	Residential	and Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2012
Balance July 1,	$               19,696	$               24,083	$                 1,419	$                    176	$                 2,412	$                    523	$                 3,508	$               51,817
Provision for loan losses	1,532	(1,236)	(76)	(207)	356	114	(483)	0
Loans charged-off	(98)	(112)	0	0	(196)	(77)	0	(483)
Recoveries	224	120	1	182	21	30	0	578
Net loans charged-off	126	8	1	182	(175)	(47)	0	95
Balance September 30,	$               21,354	$               22,855	$                 1,344	$                    151	$                 2,593	$                    590	$                 3,025	$               51,912
Nine Months Ended September 30, 2012
Balance January 1,	$               22,830	$               23,489	$                    695	$                      65	$                 2,322	$                    645	$                 3,354	$               53,400
Provision for loan losses	380	158	648	(100)	417	125	(329)	1,299
Loans charged-off	(2,552)	(959)	0	0	(288)	(268)	0	(4,067)
Recoveries	696	167	1	186	142	88	0	1,280
Net loans charged-off	(1,856)	(792)	1	186	(146)	(180)	0	(2,787)
Balance September 30,	$               21,354	$               22,855	$                 1,344	$                    151	$                 2,593	$                    590	$                 3,025	$               51,912

The recorded investment in loans does not include accrued interest.

12

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2012:

		Commercial
		Real Estate			Consumer
	Commercial	and Multifamily	Agri-business	Other	1-4 Family	Other
	and Industrial	Residential	and Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$                 5,542	$                 8,559	$                      63	$                        0	$                    607	$                      34	$                        0	$               14,805
Collectively evaluated for impairment	16,800	12,253	1,340	240	2,075	575	3,357	36,640
Total ending allowance balance	$               22,342	$               20,812	$                 1,403	$                    240	$                 2,682	$                    609	$                 3,357	$               51,445
Loans:
Loans individually evaluated for impairment	$               18,281	$               36,919	$                    797	$                        0	$                 2,853	$                      92	$                        0	$               58,942
Loans collectively evaluated for impairment	828,728	763,279	224,008	56,810	280,141	45,612	0	2,198,578
Total ending loans balance	$             847,009	$             800,198	$             224,805	$               56,810	$             282,994	$               45,704	$                        0	$          2,257,520

The recorded investment in loans does not include accrued interest.

The allowance for loan losses to total loans at September 30, 2013 and 2012 was 2.08% and 2.36%, respectively.  The allowance for loan losses to total loans at December 31, 2012 was 2.28%.

13

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2013:

				Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
						Cash Basis			Cash Basis
	Unpaid		Allowance for	Average	Interest	Interest	Average	Interest	Interest
	Principal	Recorded	Loan Losses	Recorded	Income	Income	Recorded	Income	Income
	Balance	Investment	Allocated	Investment	Recognized	Recognized	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                      64	$                      64	$                        0	$                      64	$                        0	$                        0	$                      65	$                        0	$                        0
Non-working capital loans	0	0	0	0	0	0	11	0	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,072	476	0	616	0	0	575	0	0
Agri-business and agricultural loans:
Loans secured by farmland	612	613	0	479	0	0	480	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	1,158	1,054	0	719	0	0	275	0	0
Open end and junior lien loans	41	41	0	27	0	0	23	0	0
Other consumer loans	1	1	0	1	0	0	1	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	5,196	2,587	1,024	2,988	12	14	3,019	39	41
Non-working capital loans	15,695	13,842	3,321	14,017	120	126	14,081	391	402
Commercial real estate and multi-family residential loans:
Construction and land development loans	2,569	2,569	595	2,848	11	20	3,860	63	67
Owner occupied loans	3,946	3,906	505	3,707	20	20	3,592	88	96
Nonowner occupied loans	19,166	19,176	4,631	19,183	87	86	20,960	255	258
Multifamily loans	0	0	0	0	0	0	64	0	0
Agri-business and agricultural loans:
Loans secured by farmland	1,033	534	45	536	0	0	418	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	3,355	2,384	385	2,347	5	6	2,461	28	43
Open end and junior lien loans	15	15	5	22	0	0	40	0	0
Other consumer loans	96	96	32	99	0	0	86	1	1
Total	$               54,019	$               47,358	$               10,543	$               47,653	$                    255	$                    272	$               50,010	$                    865	$                    908

The recorded investment in loans does not include accrued interest.

14

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2012:

				Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
						Cash Basis			Cash Basis
	Unpaid		Allowance for	Average	Interest	Interest	Average	Interest	Interest
	Principal	Recorded	Loan Losses	Recorded	Income	Income	Recorded	Income	Income
	Balance	Investment	Allocated	Investment	Recognized	Recognized	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Non-working capital loans	$                      70	$                      70	$                        0	$                      70	$                        0	$                        0	$                    136	$                        0	$                        0
Commercial real estate and multi-family residential loans:
Owner occupied loans	781	601	0	611	0	0	513	0	0
Nonowner occupied loans	385	385	0	385	10	13	217	10	13
Agri-business and agricultural loans:
Loans secured by farmland	666	487	0	489	0	0	252	0	0
Loans for ag production	0	0	0	0	0	0	68	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	277	276	0	417	1	0	432	1	0
Open end and junior lien loans	0	0	0	0	0	0	20	0	0
Other consumer loans	1	1	0	0	0	0	0	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	5,915	3,074	1,417	3,059	13	10	4,420	42	38
Non-working capital loans	19,357	17,175	5,154	17,072	171	168	17,353	528	528
Commercial real estate and multi-family residential loans:
Construction and land development loans	3,786	3,396	672	2,436	18	13	1,814	35	30
Owner occupied loans	6,900	6,287	1,527	5,702	30	19	4,859	48	35
Nonowner occupied loans	27,957	27,255	6,670	27,382	78	77	28,115	280	281
Agri-business and agricultural loans:
Loans secured by farmland	654	333	67	343	0	0	437	0	0
Loans for agricultural production	0	0	0	63	0	0	91	0	0
Other commercial loans	0	0	0	0	0	0	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,562	1,564	267	1,730	12	10	1,787	32	32
Open end and junior lien loans	354	354	192	353	0	0	340	0	0
Other consumer loans	45	45	18	30	1	1	14	1	1
Total	$               68,710	$               61,303	$               15,984	$               60,142	$                    334	$                    311	$               60,866	$                    977	$                    958

The recorded investment in loans does not include accrued interest.

15

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

	Unpaid		Allowance for
	Principal	Recorded	Loan Losses
	Balance	Investment	Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                      61	$                      61	$                        0
Non-working capital loans	0	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans	754	574	0
Nonowner occupied loans	385	385	0
Multifamily loans	410	286	0
Agri-business and agricultural loans:
Loans secured by farmland	645	466	0
Loans for ag production	0	0	0
Other commercial loans	0	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	59	59	0
Open end and junior lien loans	41	41	0
Residential construction loans
Other consumer loans	1	1	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	5,833	3,224	1,516
Non-working capital loans	16,763	14,996	4,026
Commercial real estate and multi-family residential loans:
Construction and land development loans	3,352	2,960	934
Owner occupied loans	5,869	5,869	1,476
Nonowner occupied loans	26,835	26,845	6,149
Multifamily loans	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland	651	331	63
Loans for agricultural production	0	0	0
Other commercial loans	0	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	3,387	2,403	415
Open end and junior lien loans	379	350	192
Residential construction loans	0	0	0
Other consumer loans	91	91	34
Total	$               65,516	$               58,942	$               14,805

The recorded investment in loans does not include accrued interest.

16

The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
		Loans Past Due		Loans Past Due
		Over 90 Days		Over 90 Days
		Still		Still
	Nonaccrual	Accruing	Nonaccrual	Accruing
Commercial and industrial loans:
Working capital lines of credit loans	$                 1,765	$                         0	$                 1,899	$                        0
Non-working capital loans	3,895	0	4,812	50
Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	398	0
Owner occupied loans	2,646	0	2,461	0
Nonowner occupied loans	11,633	0	19,200	0
Multifamily loans	0	0	286	0
Agri-business and agricultural loans:
Loans secured by farmland	1,147	0	797	0
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	1,607	239	504	0
Open end and junior lien loans	56	126	391	0
Residential construction loans	0	0	0	0
Other consumer loans	83	0	77	0
Total	$               22,832	$                     365	$               30,825	$                      50

The recorded investment in loans does not include accrued interest.

17

The following table presents the aging of the recorded investment in past due loans as of September 30, 2013 by class of loans:

	30-89	Greater than
	Days	90 Days	Total	Loans Not
	Past Due	Past Due	Past Due	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$                   596	$                  1,765	$                2,361	$           459,989	$          462,350
Non-working capital loans	872	3,895	4,767	431,202	435,969
Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	0	117,323	117,323
Owner occupied loans	45	2,646	2,691	368,521	371,212
Nonowner occupied loans	0	11,633	11,633	380,360	391,993
Multifamily loans	0	0	0	37,234	37,234
Agri-business and agricultural loans:
Loans secured by farmland	0	1,147	1,147	103,665	104,812
Loans for agricultural production	90	0	90	95,336	95,426
Other commercial loans	0	0	0	55,792	55,792
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,167	1,846	3,013	116,516	119,529
Open end and junior lien loans	233	182	415	151,921	152,336
Residential construction loans	162	0	162	4,534	4,696
Other consumer loans	102	83	185	43,858	44,043
Total	$                3,267	$                23,197	$              26,464	$        2,366,251	$       2,392,715

The recorded investment in loans does not include accrued interest.

18

The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:

	30-89	Greater than
	Days	90 Days	Total	Loans Not
	Past Due	Past Due	Past Due	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$                   233	$                  1,899	$                2,132	$           437,705	$          439,837
Non-working capital loans	48	4,862	4,910	402,262	407,172
Commercial real estate and multi-family residential loans:
Construction and land development loans	998	398	1,396	80,954	82,350
Owner occupied loans	1,023	2,461	3,484	354,921	358,405
Nonowner occupied loans	38	19,200	19,238	295,243	314,481
Multifamily loans	0	286	286	44,676	44,962
Agri-business and agricultural loans:
Loans secured by farmland	0	797	797	108,359	109,156
Loans for agricultural production	0	0	0	115,649	115,649
Other commercial loans	0	0	0	56,810	56,810
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,475	504	1,979	107,583	109,562
Open end and junior lien loans	361	391	752	161,172	161,924
Residential construction loans	0	0	0	11,508	11,508
Other consumer loans	81	77	158	45,546	45,704
Total	$                4,257	$                30,875	$              35,132	$        2,222,388	$       2,257,520

The recorded investment in loans does not include accrued interest.

19

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $9.8 million and $12.5 million of specific reserves to loans whose terms have been modified in troubled debt restructurings as of September 30, 2013 and December 31, 2012. The Company is not committed to lending additional funds to customers whose loans have been modified in a troubled debt restructuring.

	September 30	December 31,
	2013	2012
Accruing troubled debt restructured loans	$             22,888	$              22,332
Nonaccrual troubled debt restructured loans	18,691	28,506
Total troubled debt restructured loans	$             41,579	$              50,838

During the quarter ending June 30, 2013, loans totaling $328,000 were modified as troubled debt restructured loans. Concessions granted during the modifications included reduction in the interest rates to rates that would not be readily available in the marketplace for borrowers with a similar risk profile and/or capitalizing past due interest and other expenses into the principal balance of the loan. The troubled debt restructured loans during the quarter were all granted to consumer mortgage borrowers.

During the quarter ending March 31, 2013, loans totaling $2.2 million were modified as troubled debt restructurings. The modified terms of the loans included reductions in the interest rates to one that would not be readily available in the marketplace for borrowers with a similar risk profile and modifications of the repayment terms. These restructured loans were provided to related borrowers who are engaged in land development.

20

No loans were modified as troubled debt restructurings during the three month period ended September 30, 2013.  The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month periods ending September 30, 2013:

		Modifications
		Nine Months Ended September 30, 2013
		All Modifications
			Pre-Modification	Post-Modification
			Outstanding	Outstanding
		Number of	Recorded	Recorded
		Loans	Investment	Investment
Troubled Debt Restructurings
	Commercial real estate and multi-family residential loans:
	Construction and land development loans	6	$                 2,198	$                    2,198
	Consumer 1-4 family loans:
	Closed end first mortgage loans	4	317	328
	Total	10	$                 2,515	$                    2,526

		Interest Rate Reductions			Principal and Interest Forgiveness					Modified Repayment Terms
			Interest at	Interest at				Interest at	Interest at		Extension
		Number of	Pre-Modification	Post-Modification	Number of	Principal at	Principal at	Pre-Modification	Post-Modification	Number of	Period or
		Loans	Rate	Rate	Loans	Pre-Modification	Post-Modification	Rate	Rate	Loans	Range
											(in months)
Troubled Debt Restructurings
	Commercial real estate and:
	multi-family residential loans
	Construction and land development loans	6	$                       85	$                          63	0	$                            0	$                            0	$                            0	$                            0	0	0
	Consumer 1-4 family loans:
	Closed end first mortgage loans	2	142	158	2	156	161	164	149	0	0
	Total	8	$                     227	$                        221	2	$                        156	$                        161	$                        164	$                        149	0	0

21

For the three month period ending September 30, 2013 the commercial real estate and multi-family residential loan troubled debt restructuring described above decreased the allowance for loan losses by $11,000 and the consumer 1-4 family loan troubled debt restructurings described above decreased the allowance for loan losses by $4,000

For the nine month period ending September 30, 2013 the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $384,000 and the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $61,000.

The troubled debt restructurings described above had charge-offs of $0 and $365,000, respectively, during the three-month and nine-month periods ending September 30, 2013.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month and three-month periods ending September 30, 2012:

		Modifications
		Nine Months Ended September 30, 2012
		All Modifications
			Pre-Modification	Post-Modification
			Outstanding	Outstanding
		Number of	Recorded	Recorded
		Loans	Investment	Investment
Troubled Debt Restructurings
	Commercial and industrial loans:
	Non-working capital loans	1	$                    942	$                    1,060
	Commercial real estate and multi-family residential loans:
	Construction and land development loans	5	1,638	1,638
	Owner occupied loans	2	2,260	2,260
	Nonowner occupied loans	1	385	385
	Consumer 1-4 family loans:
	Closed end first mortgage loans	1	39	39
	Other consumer loans	1	17	17
	Total	11	$                 5,281	$                    5,399

22

		Interest Rate Reductions			Modified Repayment Terms
			Interest at	Interest at		Extension
		Number of	Pre-Modification	Post-Modification	Number of	Period or
		Loans	Rate	Rate	Loans	Range
						(in months)
Troubled Debt Restructurings
	Commercial and industrial loans:
	Non-working capital loans	0	$                         0	$                            0	0	0
	Commercial real estate and multi-family residential loans:
	Construction and land development loans
	Owner occupied loans	1	440	117	1	18
	Nonowner occupied loans	0	0	0	1	14
	Consumer 1-4 family loans:
	Closed end first mortgage loans	1	76	15	0	0
	Other consumer loans	0	0	0	0	0
	Total	2	$                     516	$                        132	2	14-18

		Modifications
		Three Months Ended September 30, 2012
		All Modifications
			Pre-Modification	Post-Modification
			Outstanding	Outstanding
		Number of	Recorded	Recorded
		Loans	Investment	Investment
Troubled Debt Restructurings
	Commercial real estate and multi-family residential loans:
	Owner occupied loans	1	$                1,411	$                1,411
	Other consumer loans	1	17	17
	Total	2	$                 1,428	$                    1,428

23

		Modified Repayment Terms
			Extension
		Number of	Period or
		Loans	Range
			(in months)
Troubled Debt Restructurings
	Commercial real estate and multi-family residential loans:
	Owner occupied loans	1	18
	Other consumer loans	0	0
	Total	1	18

For the three month period ending September 30, 2012, the commercial and industrial loan troubled debt restructurings described above decreased the allowance for loan losses by $15,000, the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $11,000, the consumer 1-4 family loan troubled debt restructurings described above decreased the allowance for loan losses by $1,000 and the other consumer loan troubled debt restructuring described above increased the allowance for loan losses by $4,000.

For the nine month period ending September 30, 2012, the commercial and industrial loan troubled debt restructurings described above decreased the allowance for loan losses by $534,000, the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $18,000, the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $5,000 and other consumer loan trouble debt restructuring described above increased the allowance for loan losses by $4,000.

No charge offs resulted from any troubled debt restructurings described above during the three and nine month periods ending September 30, 2012.

24

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2013:

		Modifications
		Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
		Number of	Recorded	Number of		Recorded
		Loans	Investment	Loans		Investment
Troubled Debt Restructurings that Subsequently Defaulted
	Consumer 1-4 family loans:
	Closed end first mortgage loans	0	$                    0	1		$                912
	Total	0	$                    0	1		$                912

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The troubled debt restructurings described above that subsequently defaulted made a large principal payment during the second quarter of 2013, which decreased the allowance for loan losses by $85,000 and did not result in any charge offs during the three and nine month periods ending September 30, 2013.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2012:

		Modifications
		Three months ended September 30, 2012		Nine months ended September 30, 2012
		Number of	Recorded	Number of	Recorded
		Loans	Investment	Loans	Investment
Troubled Debt Restructurings that Subsequently Defaulted
	Consumer 1-4 family loans:
	Closed end first mortgage loans	0	$                            0	1	$                          65
	Total	0	$                            0	1	$                          65

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

The troubled debt restructurings that subsequently defaulted described above increased the allowance for loan losses by $17,000 and did not result in any charge offs during the three and nine month periods ending September 30, 2012.

25

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 $250,000.

The Company 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 paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

26

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 grade loans.  Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.  As of September 30, 2013 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
	Pass	Mention	Substandard	Doubtful	Rated
Commercial and industrial loans:
Working capital lines of credit loans	$            427,576	$            21,129	$              13,645	$                        0	$                       0
Non-working capital loans	387,047	29,779	19,143	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	107,363	549	9,411	0	0
Owner occupied loans	333,148	25,536	12,528	0	0
Nonowner occupied loans	363,712	9,476	18,805	0	0
Multifamily loans	36,904	330	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland	103,083	0	1,729	0	0
Loans for agricultural production	95,426	0	0	0	0
Other commercial loans	55,674	0	118	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	29,422	549	1,824	0	87,734
Open end and junior lien loans	7,099	1,949	0	0	143,288
Residential construction loans	0	0	0	0	4,696
Other consumer loans	8,699	467	292	0	34,585
Total	$         1,955,153	$            89,764	$              77,495	$                        0	$            270,303

The recorded investment in loans does not include accrued interest.

27

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 grade loans.  Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.  As of December 31, 2012 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
	Pass	Mention	Substandard	Doubtful	Rated
Commercial and industrial loans:
Working capital lines of credit loans	$            403,778	$            22,591	$              13,468	$                        0	$                       0
Non-working capital loans	355,772	23,192	26,857	66	1,285
Commercial real estate and multi-family residential loans:
Construction and land development loans	67,002	4,595	10,753	0	0
Owner occupied loans	315,672	24,589	18,144	0	0
Nonowner occupied loans	282,108	6,345	26,028	0	0
Multifamily loans	43,425	345	1,192	0	0
Agri-business and agricultural loans:
Loans secured by farmland	107,734	0	1,404	0	18
Loans for agricultural production	115,649	0	0	0	0
Other commercial loans	56,692	0	118	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	18,685	343	729	0	89,805
Open end and junior lien loans	7,932	300	0	0	153,692
Residential construction loans	0	0	0	0	11,508
Other consumer loans	10,168	378	497	0	34,661
Total	$         1,784,617	$            82,678	$              99,190	$                      66	$            290,969

The recorded investment in loans does not include accrued interest.

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NOTE 5. SECURITIES

Information related to the fair value and amortized cost of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the tables below.

		Gross	Gross
	Fair	Unrealized	Unrealized	Amortized
	Value	Gain	Losses	Cost
September 30, 2013
U.S. Treasury securities	$           1,022	$                20	$                  0	$           1,002
Agency residential mortgage-backed securities	369,311	5,613	(6,183)	369,881
State and municipal securities	92,737	2,810	(1,816)	91,743
Total	$       463,070	$           8,443	$         (7,999)	$       462,626
December 31, 2012
U.S. Treasury securities	$           1,037	$                35	$                  0	$           1,002
U.S. government sponsored agencies	5,304	278	0	5,026
Agency residential mortgage-backed securities	365,644	7,813	(1,495)	359,326
Non-agency residential mortgage-backed securities	6,453	242	0	6,211
State and municipal securities	88,583	5,509	(189)	83,263
Total	$       467,021	$         13,877	$         (1,684)	$       454,828

Information regarding the fair value and amortized cost of available for sale debt securities by maturity as of September 30, 2013 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.

	Amortized	Fair
	Cost	Value
Due in one year or less	$              4,168	$           4,238
Due after one year through five years	15,691	16,618
Due after five years through ten years	40,061	40,987
Due after ten years	32,825	31,916
	92,745	93,759
Mortgage-backed securities	369,881	369,311
Total debt securities	$          462,626	$       463,070

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Security proceeds, gross gains and gross losses are presented below.

	Nine months ended September 30,
	2013	2012
Sales of securities available for sale
Proceeds	$             29,996	$             27,493
Gross gains	1,078	823
Gross losses	(972)	(1,203)
	Three months ended September 30,
	2013	2012
Sales of securities available for sale
Proceeds	$             29,996	$             27,493
Gross gains	1,078	823
Gross losses	(972)	(1,203)

The Company sold twelve securities with a total book value of $29.9 million and a total fair value of $30.0 million during the first nine months of 2013.  The sales included the four remaining non-agency residential mortgage backed securities.  The remaining gains during the first nine months of 2013 were from calls.  The Company sold eleven securities with a total book value of $27.9 million and a total fair value of $27.5 million during the first nine months of 2012.  The sales in 2012 included nine non-agency residential mortgage backed securities.  The securities sales in both 2013 and 2012 were related to a strategic realignment of the securities portfolio.

Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives for mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date.

Securities with carrying values of $154.1 million and $199.3 million were pledged as of September 30, 2013 and 2012, as collateral for deposits of public funds, securities sold under agreements to repurchase, borrowings from the Federal Home Loan Bank and for other purposes as permitted or required by law.

Information regarding securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below. The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

	Less than 12 months		12 months or more		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
September 30, 2013
Agency residential mortgage-backed
securities	$        163,795	$         (5,825)	$      17,358	$          (358)	$       181,153	$         (6,183)
State and municipal securities	25,130	(1,816)	0	0	25,130	(1,816)
Total temporarily impaired	$        188,925	$         (7,641)	$      17,358	$          (358)	$       206,283	$         (7,999)
December 31, 2012
Agency residential mortgage-backed
securities	$          92,974	$         (1,066)	$      20,422	$          (429)	$       113,396	$         (1,495)
State and municipal securities	10,791	(188)	50	(1)	10,841	(189)
Total temporarily impaired	$        103,765	$         (1,254)	$      20,472	$          (430)	$       124,237	$         (1,684)

30

The number of securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2013
Agency residential mortgage-backed securities	45	7	52
State and municipal securities	56	0	56
Total temporarily impaired	101	7	108
	Less than	12 months
	12 months	or more	Total
December 31, 2012
Agency residential mortgage-backed securities	29	9	38
State and municipal securities	29	1	30
Total temporarily impaired	58	10	68

The following factors are considered to determine whether or not the impairment of these securities is other-than-temporary. Ninety-nine percent of the securities are backed by the U.S. government, government agencies, government sponsored agencies or are A- rated or better by Moody’s, S&P or Fitch, except for certain non-local or local municipal securities, which are not rated. All mortgage-backed securities are backed by government agencies.  The Company does not currently have any non-agency mortgage backed securities in its securities portfolio.  None of the securities have call provisions (with the exception of the municipal securities) and all payments as originally agreed are being received on their original terms. For the government, government-sponsored agency and municipal securities, management did not have concerns of credit losses, and there was nothing to indicate that full principal will not be received. Management considered the unrealized losses on these securities to be primarily interest rate driven and does not expect material losses given current market conditions unless the securities are sold. However, at this time management does not have the intent to sell, and it is more likely than not that the Company will not be required to sell these securities before the recovery of their amortized cost basis.

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The following table provides information about debt securities for which only a credit loss was recognized in income and for which other losses are recorded in other comprehensive income.  There were no securities with other than temporary impairment during the three and nine months ended September 30, 2013.  All securities with other than temporary impairment were sold during 2012.  The table represents the three months and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,
	2013	2012
Balance July 1,	$                      0	$                1,318
Additions related to other-than-temporary impairment losses
not previously recognized	0	0
Additional increases to the amount of credit loss for which
other-than-temporary impairment was previously recognized	0	67
Reductions for previous credit losses realized on
securities sold during the year	0	(1,385)
Balance September 30,	$                      0	$                       0

	Nine Months Ended September 30,
	2013	2012
Balance January 1,	$                      0	$                   359
Additions related to other-than-temporary impairment losses
not previously recognized	0	747
Additional increases to the amount of credit loss for which
other-than-temporary impairment was previously recognized	0	279
Reductions for previous credit losses realized on
securities sold during the year	0	(1,385)
Balance September 30,	$                      0	$                       0

The Company does not have a history of actively trading securities but continues to hold securities available for sale should liquidity or other needs develop that would warrant the sale of securities. While these securities are held in the available for sale portfolio, it is management’s current intent to hold them until a recovery in fair value or maturity.

NOTE 6. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost:

	Nine Months Ended September 30,
	Pension Benefits		SERP Benefits
	2013	2012	2013	2012
Interest cost	$          87	$          95	$          34	$          38
Expected return on plan assets	(90)	(102)	(56)	(56)
Recognized net actuarial (gain) loss	113	102	70	62
Net pension expense (benefit)	$        110	$          95	$          48	$          44

	Three Months Ended September 30,
	Pension Benefits		SERP Benefits
	2013	2012	2013	2012
Interest cost	$          29	$          31	$          11	$          12
Expected return on plan assets	(30)	(34)	(19)	(18)
Recognized net actuarial (gain) loss	38	35	24	20
Net pension expense (benefit)	$          37	$          32	$          16	$          14

The Company previously disclosed in its financial statements for the year ended December 31, 2012 that it expected to contribute $211,000 to its pension plan and $80,000 to its Supplemental Executive Retirement Plan (“SERP”) in 2013.  The Company has contributed $160,000 to its pension plan and $80,000 to its SERP as of September 30, 2013.  The Company does not expect to make any additional contributions to its pension or SERP during the remainder of 2013.

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NOTE 7.  NEW ACCOUNTING PRONOUNCEMENTS

In February 2013, the Financial Accounting Standards Board (“FASB”) issued updated guidance related to disclosure of reclassification amounts out of other comprehensive income. The standard requires that companies present, either in a single note or parenthetically on the face of their financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. The new requirements will take effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013.  Adopting this standard did not have a significant impact on the Company’s financial condition or results of operations.

NOTE 8.  FAIR VALUE DISCLOSURES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1	Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2	Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities:  Securities available for sale are valued primarily by a third party pricing service. The fair values of securities available for sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). These models utilize the market approach with standard inputs that include, but are not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain non-agency residential mortgage-backed securities where observable inputs about the specific issuer are not available, fair values are estimated using observable data from other non-agency residential mortgage-backed securities presumed to be similar or other market data on other non-agency residential mortgage-backed securities (Level 3 inputs). For certain municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs). There were no transfers between Level 1and Level 2 during the first nine months of 2013.

33

Mortgage banking derivatives:  The fair value of mortgage banking derivatives are based on observable market data as of the measurement date (Level 2).

Interest rate swap derivatives:  The Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Currently, none of the Company’s derivatives are designated in qualifying hedging relationships, as the derivatives are not used to manage risks within the Company’s assets or liabilities. As such, all changes in fair value of the Company’s derivatives are recognized directly in earnings.  The fair value of interest rate swap derivatives is determined by pricing or valuation models using observable market data as of the measurement date (Level 2).

Impaired loans:  Impaired loans with specific allocations of the allowance for loan losses are generally based on the fair value of the underlying collateral if repayment is expected solely from the collateral.  Fair value is determined using several methods.  Generally, the fair value of real estate is based on appraisals by qualified third party appraisers.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.  Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and result in a Level 3 classification of the inputs for determining fair value. In addition, the Company’s management routinely applies internal discount factors to the value of appraisals used in the fair value evaluation of impaired loans.  The deductions to the appraisals take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions.  Commercial real estate is generally discounted from its appraised value by 0-50% with the higher discounts applied to real estate that is determined to have a thin trading market or to be specialized collateral.  In addition to real estate, the Company’s management evaluates other types of collateral as follows: Raw and finished inventory is discounted from its cost or book value by 35-65%, depending on the marketability of the goods.  Finished goods are generally discounted by 30-60%, depending on the ease of marketability, cost of transportation or scope of use of the finished good.  Work in process inventory is typically discounted by 50-100%, depending on the length of manufacturing time, types of components used in the completion process, and the breadth of the user base.  Equipment is valued at a percentage of depreciated book value or recent appraised value, if available, and is typically discounted at 30-70% after various considerations including age and condition of the equipment, marketability, breadth of use, and whether the equipment includes unique components or add-ons.  Accounts receivable are discounted by 60-90%, depending on age and estimated collectability.  Marketable securities are discounted by 10-30%, depending on the type of investment, age of valuation report and general market conditions.  This methodology is based on a market approach and typically results in a Level 3 classification of the inputs for determining fair value.

Mortgage servicing rights:  As of September 30, 2013 the fair value of the Company’s Level 3 servicing assets for residential mortgage loans was $3.3 million, some of which are not currently impaired and therefore carried at amortized cost.  These residential mortgage loans have a weighted average interest rate of 4.12%, a weighted average maturity of 19 years and are secured by homes generally within the Company’s market area, which is primarily Northern Indiana.  A valuation model is used to estimate fair value, which is based on an income approach.  The inputs used include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees, and float income.  The most significant assumption used to value mortgage servicing rights is prepayment rate.  Prepayment rates are estimated based on published industry consensus prepayment rates.  The most significant unobservable assumption is the discount rate.  At September 30, 2013, the constant prepayment speed (PSA) used was 189 and the discount rate used was 9.3%.  At December 31, 2012, the PSA used was 392 and the discount rate used was 9.2%.

34

Other real estate owned:  Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property and are reviewed by the Company’s internal appraisal officer.  Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales.  Such adjustments are usually significant and result in a Level 3 classification.   In addition, the Company’s management may apply discount factors to the appraisals to take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions.  In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Real estate mortgage loans held for sale:  Real estate mortgage loans held for sale are carried at the lower of cost or fair value, as determined by outstanding commitments, from third party investors, and result in a Level 2 classification.

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

	September 30, 2013
	Fair Value Measurements Using			Assets
	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$             1,022	$                      0	$                     0	$              1,022
U.S. Government sponsored agencies	0	0	0	0
Mortgage-backed securities	0	369,311	0	369,311
Non-agency residential mortgage-backed securities	0	0	0	0
State and municipal securities	0	91,760	977	92,737
Total securities	1,022	461,071	977	463,070
Mortgage banking derivative	0	263	0	263
Interest rate swap derivative	0	297	0	297
Total assets	$             1,022	$           461,631	$                 977	$          463,630
Liabilities
Mortgage banking derivative	0	109	0	109
Interest rate swap derivative	0	267	0	267
Total liabilities	$                    0	$                  376	$                     0	$                 376

35

	December 31, 2012
	Fair Value Measurements Using			Assets
	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$             1,037	$                      0	$                     0	$              1,037
U.S. Government sponsored agencies	0	5,304	0	5,304
Mortgage-backed securities	0	365,644	0	365,644
Non-agency residential mortgage-backed securities	0	3,594	2,859	6,453
State and municipal securities	0	87,595	988	88,583
Total securities	1,037	462,137	3,847	467,021
Mortgage banking derivative	0	739	0	739
Total assets	$             1,037	$           462,876	$              3,847	$          467,760
Liabilities
Mortgage banking derivative	$                    0	$                    12	$                     0	$                   12

There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2013 and there were no transfers between Level 1 and Level 2 during 2012.

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 nine months ended September 30, 2013 and 2012:

	Non-Agency Residential
	Mortgage-Backed Securities		State and Municipal Securities
	2013	2012	2013	2012
Balance of recurring Level 3 assets at January 1	$            2,859	$                   0	$               988	$               686
Transfers into Level 3	3,334	0	0	0
Changes in fair value of securities	(181)	0	(11)	(4)
Principal payments	(2,160)	0	0	(45)
Sales	(3,852)	0	0	0
Balance of recurring Level 3 assets at September 30	$                   0	$                   0	$               977	$               637

The fair value of two non-agency residential mortgage-backed securities with a fair value of $3.3 million as of March 31, 2013 were transferred out of Level 2 and into Level 3 because of a lack of observable market data for these investments.  The Company’s policy is to recognize transfers as of the end of the reporting period. As a result, the fair value for these non-agency residential mortgage-backed securities and state and municipal securities was transferred into Level 3 on March 31, 2013.  The securities were subsequently sold in the third quarter of 2013.  The Company no longer owns any non-agency residential mortgage backed securities.

The state and municipal securities measured at fair value included below are non-rated Indiana municipal revenue bonds and are not actively traded.

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at			Range of Inputs
	9/30/2013	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$                     977	Price to type, par, call	Discount to benchmark index	1-7%
				(2.57%)

36

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at			Range of Inputs
	December 31, 2012	Valuation Technique	Unobservable Input	(Average)
Non-agency residential mortgage-backed securities	$                  2,859	Discounted cash flow	Constant prepayment rate	5.00-9.00
				(6.00)
			Average life (years)	0.20-2.86
				(2.70)
			Swap/EDSF spread	297-339
				(328)
State and municipal securities	$                     988	Price to type, par, call	Discount to benchmark index	1-11%
				(4%)

The Company’s Controlling Department, which is responsible for all accounting and SEC compliance, and the Company’s Treasury Department, which is responsible for investment portfolio management and asset/liability modeling, are the two areas that decide the Company’s valuation policies and procedures.  Both of these areas report directly to the President and Chief Financial Officer of the Company.  For assets or liabilities that may be considered for Level 3 fair value measurement on a recurring basis, these two departments and the President and Chief Financial Officer determine the appropriate level of the assets or liabilities under consideration.  If there are assets or liabilities that are determined to be Level 3 by this group, the Risk Management Committee of the Company and the Audit Committee of the Board of Directors are made aware of such assets at their next scheduled meeting.

Securities pricing is obtained from a third party pricing service and is tested at least annually against prices from another third party provider and reviewed with a market value tolerance variance of 3%.  If any securities fall above this tolerance threshold, they are reviewed in more detail to determine why the variance exists.  Changes in market value are reviewed monthly in aggregate yield by security type and any material differences are reviewed to determine why they exist.  At least annually, the pricing methodology of the pricing service is received and reviewed to support the fair value levels used by the Company. A detailed pricing evaluation is requested and reviewed on any security determined to be fair valued using unobservable inputs by the pricing service.

The significant unobservable inputs used in the fair value measurement of the Company’s non-agency residential mortgage-backed securities classified as Level 3 are constant prepayment rates, average life, and a Swap/EDSF spread. Significant increases/(decreases) in any of those inputs in isolation would result in a significantly lower/(higher) fair value measurement.

The primary methodology used in the fair value measurement of the Company’s state and municipal securities classified as Level 3 is a discount to the AAA municipal benchmark index. Significant increases or (decreases) in this index as well as the degree to which the security differs in ratings, coupon, call and duration will result in a higher or (lower) fair value measurement for those securities that are not callable. For those securities that are continuously callable, a slight premium to par is used.

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

	September 30, 2013
	Fair Value Measurements Using			Assets
Assets	Level 1	Level 2	Level 3	at Fair Value
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$                    0	$                      0	$                 801	$                 801
Non-working capital loans	0	0	3,234	3,234
Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	1,974	1,974
Owner occupied loans	0	0	3,401	3,401
Nonowner occupied loans	0	0	12,306	12,306
Multifamily loans	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland	0	0	489	489
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	366	366
Open end and junior lien loans	0	0	10	10
Residential construction loans	0	0	0	0
Other consumer loans	0	0	53	53
Total impaired loans	$                    0	$                      0	$            22,634	$            22,634
Mortgage servicing rights	0	0	8	8
Other real estate owned	0	0	75	75
Total assets	$                    0	$                      0	$            22,717	$            22,717

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The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2013:

	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired Loans:
Commercial and industrial	$       4,035	Collateral based	Discount to reflect	32%	(4% - 91%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	17,681	Collateral based	Discount to reflect	23%	(5% - 46%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Agri-business and agricultural	489	Collateral based	Discount to reflect	8%	(7% - 9%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	376	Collateral based	Discount to reflect	27%	(8% - 51%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	53	Collateral based	Discount to reflect	35%	(28% - 61%)
		measurements	current market conditions
			and ultimate collectability
Mortgage servicing rights	8	Discounted cash flows	Discount rate	9.50%
Other real estate owned	75	Appraisal	Discount to reflect	49%
			current market conditions

39

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2012:

	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired Loans:
Commercial and industrial	$     3,980	Collateral based	Discount to reflect	35%	(10% - 99%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	24,560	Collateral based	Discount to reflect	23%	(4% - 57%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Agri-business and agricultural	268	Collateral based	Discount to reflect	19%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	510	Collateral based	Discount to reflect	39%	(8% - 100%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	46	Collateral based	Discount to reflect	40%	(29% - 100%)
		measurements	current market conditions
			and ultimate collectability
Mortgage servicing rights	1,906	Discounted cash flows	Discount rate	9.20%	(9.10% - 9.50%)
Other real estate owned	75	Appraisals	Discount to reflect	49%
			current market conditions

40

	December 31, 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	$                 990	$                 990
Non-working capital loans	0	0	2,990	2,990
Commercial real estate and multi-family residential loans:
Construction and land development loans	0	0	2,026	2,026
Owner occupied loans	0	0	3,892	3,892
Nonowner occupied loans	0	0	18,642	18,642
Multifamily loans	0	0	0	0
Agri-business and agricultural loans:
Loans secured by farmland	0	0	268	268
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	352	352
Open end and junior lien loans	0	0	158	158
Residential construction loans	0	0	0	0
Other consumer loans	0	0	46	46
Total impaired loans	$                    0	$                      0	$            29,364	$            29,364
Mortgage servicing rights	0	0	1,906	1,906
Other real estate owned	0	0	75	75
Total assets	$                    0	$                      0	$            31,345	$            31,345

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a gross carrying amount of $30.0 million, with a valuation allowance of $7.3 million at September 30, 2013, resulting in a net recovery in the provision for loan losses of $2.7 million and $200,000, respectively, for the nine months and three months ended September 30, 2013.  At September 30, 2012, impaired loans had a carrying amount of had a gross carrying amount of $50.2 million, with a valuation allowance of $14.5 million, resulting in a net recovery in the provision for loan losses of $200,000 and $3.8 million, respectively, for the three months and nine months ended September 30, 2012.

Mortgage servicing rights, which are carried at the lower of cost or fair value, included a portion carried at their fair value of $8,000, which is made up of the outstanding balance of $11,000, net of a valuation allowance of $3,000 at September 30, 2013, resulting in a net recovery of $39,000 in impairment for the nine months ended September 30, 2013.  The Company realized impairment of $84,000 for the nine months ended September 30, 2012.

41

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.

	September 30, 2013
	Carrying	Estimated Fair Value
	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$         81,340	$         81,340	$                  0	$                  0	$      81,340
Securities available for sale	463,070	1,022	461,071	977	463,070
Real estate mortgages held for sale	1,047	0	1,066	0	1,066
Loans, net	2,342,911	0	0	2,347,776	2,347,776
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	8,328	0	1,968	6,360	8,328
Financial Liabilities:
Certificates of deposit	(782,684)	0	(792,444)	0	(792,444)
All other deposits	(1,662,142)	(1,662,142)	0	0	(1,662,142)
Securities sold under agreements to repurchase	(103,959)	0	(103,959)	0	(103,959)
Federal funds purchased	(57,000)	0	(57,000)	0	(57,000)
Other short-term borrowings	(75,000)	0	(75,000)	0	(75,000)
Long-term borrowings	(37)	0	(44)	0	(44)
Subordinated debentures	(30,928)	0	0	(31,149)	(31,149)
Standby letters of credit	(288)	0	0	(288)	(288)
Accrued interest payable	(3,629)	(121)	(3,505)	(3)	(3,629)

	December 31, 2012
	Carrying	Estimated Fair Value
	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$       232,237	$       232,237	$                  0	$                  0	$    232,237
Securities available for sale	467,021	1,037	462,137	3,847	467,021
Real estate mortgages held for sale	9,452	0	9,663	0	9,663
Loans, net	2,206,075	0	0	2,230,993	2,230,993
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	8,485	6	2,215	6,264	8,485
Financial Liabilities:
Certificates of deposit	(907,505)	0	(922,397)	0	(922,397)
All other deposits	(1,674,251)	(1,674,251)	0	0	(1,674,251)
Securities sold under agreements to repurchase	(121,883)	0	(121,883)	0	(121,883)
Long-term borrowings	(15,038)	0	(15,607)	0	(15,607)
Subordinated debentures	(30,928)	0	0	(31,223)	(31,223)
Standby letters of credit	(262)	0	0	(262)	(262)
Accrued interest payable	(4,757)	(298)	(4,456)	(3)	(4,757)

42

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and cash equivalents - The carrying amount of cash and cash equivalents approximate fair value and are classified as Level 1.

Loans, net – Fair values of loans, excluding loans held for sale, are estimated as follows:  For variable rate loans, fair values are based on carrying values resulting in a Level 3 classification.  Fair values for other loans are estimated using discounted cash flow analyses, using current market rates applied to the estimated life resulting in a Level 3 classification.  Impaired loans are valued at the lower of cost or fair value as described previously.  The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Federal Home Loan Bank stock and Federal Reserve Bank stock– It is not practical to determine the fair value of Federal Home Loan Bank stock and Federal Reserve Bank stock due to restrictions placed on its transferability.

Certificates of deposit - Fair values of certificates of deposit are estimated using discounted cash flow analyses using current market rates applied to the estimated life resulting in a Level 2 classification.

All other deposits- The fair values for all other deposits other than certificates of deposit are equal to the amount payable on demand (the carrying value) resulting in a Level 1 classification.

Securities sold under agreements to repurchase – The carrying amount of borrowings under repurchase agreements approximates their fair values resulting in a Level 2 classification.

Federal funds purchased – The carrying amount of federal funds purchased approximates their fair values resulting in a Level 2 classification.

Other short-term borrowings – The fair value of other short-term borrowings approximates their fair values resulting in a Level 2 classification.

Long-term borrowings – The fair value of long-term borrowings is estimated using discounted cash flow analyses based on current borrowing rates resulting in a Level 2 classification.

Subordinated debentures - The fair value of subordinated debentures is based on the rates currently available to the Company with similar term and remaining maturity and credit spread resulting in a Level 3 classification.

Standby letters of credit – The fair value of off-balance sheet items is based on the current fees and costs that would be charged to enter into or terminate such arrangements resulting in a Level 3 classification.

Accrued interest receivable/payable – The carrying amounts of accrued interest approximates fair value resulting in a Level 1, Level 2 or Level 3 classification which is consistent with its associated asset/liability.

43

NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the nine months ended September 30, 2013 and 2012:

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT(a)
	Unrealized
	Gains and
	Losses on	Defined
	Available-	Benefit
	for-Sales	Pension
	Securities	Items	Total
Balance at December 31, 2012	$                 7,517	$  (1,828)	$             5,689
Other comprehensive income (loss)
before reclassification	(7,096)	(90)	(7,186)
Amounts reclassified from
accumulated other
comprehensive income (loss)	(64)	109	45
Net current period other
comprehensive income (loss)	(7,160)	19	(7,141)
Balance at September 30, 2013	$                    357	$  (1,809)	$           (1,452)
(a) All amounts are net of tax.  Amounts in parenthesis indicate a decrease in other comprehensive income.

		Current
	Balance	Period	Balance
	at December 31, 2011	Change	at September 30, 2012
Unrealized loss on securities available for sale
without other than temporary impairment	$                           7,688	$            818	$                     8,506
Unrealized loss on securities available for sale
with other than temporary impairment	(523)	523	0
Total unrealized loss on securities available for sale	7,165	1,341	8,506
Unrealized loss on defined benefit pension plans	(2,026)	164	(1,862)
Total	$                           5,139	$         1,505	$                     6,644

44

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2013 are as follows:

RELCASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME(a)
Details about	Amount		Affected Line Item
Accumulated Other	Reclassified From		in the Statement
Comprehensive	Accumulated Other		Where Net
Income Components	Comprehensive Income		Income is Presented
	(in thousands)
Unrealized gains and losses on
available-for-sale securities
	$                                      107		Net securities gains (losses)
	(43)		Income tax expense
	$                                        64		Net of tax
Amortization of defined benefit
pension items
	$                                    (183)	(b)	Salaries and employee benefits
	74		Income tax expense
	$                                    (109)		Net of tax
Total reclassifications for the period	$                                      (45)		Net of tax
(a) Amounts in parenthesis indicate a decrease in net income.
(b) Included in the computation of net periodic benefit cost (see employee benefit plans footnote for additional details).

NOTE 10. OFFSETTING ASSETS AND LIABILITIES

On January 1, 2013, the Company adopted changes issued by the FASB to the disclosure of offsetting assets and liabilities. These changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The enhanced disclosures will enable users of an entity’s financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. Other than the additional disclosure requirements, the adoption of these changes had no impact on the Consolidated Financial Statements.

Offsetting of Financial Assets and Derivative Assets
	September 30, 2013
				Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets	Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Assets presented in the Statement of Financial Position	Financial Instruments	Cash Collateral Received	Net Amount
Description
Interest Rate Swap Derivatives	$              297	$                              0	$                          297	$                      0	$                    (270)	$          27
Total	$              297	$                              0	$                          297	$                      0	$                    (270)	$          27

45

Offsetting of Financial Liabilities and Derivative Liabilities
	September 30, 2013
				Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities	Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Liabilities presented in the Statement of Financial Position	Financial Instruments	Cash Collateral Pledged	Net Amount
Description
Interest Rate Swap Derivatives	$              267	$                              0	$                          267	$                      0	$                           0	$        267
Repurchase Agreements	103,959	0	103,959	(103,959)	0	0
Total	$      104,226	$                              0	$                 104,226	$       (103,959)	$                           0	$        267

Offsetting of Financial Liabilities and Derivative Liabilities
	December 31, 2012
				Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities	Gross Amounts Offset in the Statement of Financial Position	Net Amounts of Liabilities presented in the Statement of Financial Position	Financial Instruments	Cash Collateral Pledged	Net Amount
Description
Repurchase Agreements	$      121,883	$                              0	$                 121,883	$       (121,883)	$                           0	$             0
Total	$      121,883	$                              0	$                 121,883	$       (121,883)	$                           0	$             0
There were no interest rate swap derivatives as of December 31, 2012.

If an event of default occurs causing an early termination of an interest rate swap derivative, any early termination amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party.  If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions.

NOTE 11. SUBSEQUENT EVENTS

There were no subsequent events that would have a material impact on the financial statements presented in this Form 10-Q.

NOTE 12. RECLASSIFICATIONS

Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or stockholders’ equity as previously reported.

46

Part 1

LAKELAND FINANCIAL CORPORATION

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

and

RESULTS OF OPERATIONS

September 30, 2013

OVERVIEW

Lakeland Financial Corporation is the holding company for Lake City Bank. The Company is headquartered in Warsaw, Indiana and operates 45 offices in 13 counties in Northern and Central Indiana. The Company earned $28.3 million for the first nine months of 2013, versus $26.8 million in the same period of 2012, an increase of 5.5%.  Net income was positively impacted by an increase in noninterest income of $5.0 million and a $1.3 million decrease in the provision for loan losses.  Offsetting these positive impacts were an increase of $3.0 million in noninterest expense and a decrease in net interest income of $664,000.  Basic earnings per common share for the first nine months of 2013 were $1.72 per share versus $1.64 per share for the first nine months of 2012, an increase of 4.9%.  Diluted earnings per common share reflect the potential dilutive impact of stock options, stock awards and warrants.  Diluted earnings per common share for the first nine months of 2013 were $1.70 per share versus $1.63 for the first nine months of 2012, an increase of 4.3%.

Net income for the third quarter of 2013 was $9.8 million, an increase of 4.5%, versus $9.3 million for the comparable period of 2012.  The increase was driven by a $1.6 million increase in noninterest income and a $812,000 increase in net interest income.  Offsetting this positive impact was an increase in noninterest expense of $2.0 million.  Basic and diluted earnings per common share for the third quarter of 2013 were $0.59 per share, versus $0.57 per share for the third quarter of 2012, an increase of 3.5%.

Earnings for the nine month period ended September 30, 2013 were negatively impacted by a $465,000 provision for state income tax expense due to a revaluation of the Company’s deferred tax items relating to state income tax.  During the second quarter of 2013, the Indiana legislature approved new, lower tax rates for financial institutions, which will take effect beginning in 2014.  One effect of the lower, future rates is to reduce the benefit that will be provided by the Company’s existing deferred tax items requiring the non-cash adjustment.  Excluding the effect of the adjustment, net income for the nine months ended September 30, 2013 would have been $28.7 million, representing an increase of 7.1% over the comparable period of 2012.

RESULTS OF OPERATIONS

Net Interest Income

For the nine-month period ended September 30, 2013, net interest income totaled $66.1 million, a decrease of 1.0%, or $664,000, versus the first nine months of 2012.  This decrease was primarily due to a twelve basis point decrease in the Company’s net interest margin to 3.22% for the nine month period ended September 30, 2013, versus 3.34% for the comparable period of 2012.  During the nine-month period ended September 30, 2013, average earning assets increased by $79.3 million, or 2.9%, to $2.797 billion.  For the third quarter of 2013, net interest income totaled $23.0 million, an increase of 3.7%, or $812,000, versus the third quarter of 2012.  This increase was primarily due to a $107.2 million, or 3.9%, increase in average earning assets in the third quarter of 2013, versus the third quarter of 2012.  The Company’s net interest margin was virtually unchanged at 3.29% for the third quarter of 2013 versus 3.30% for the third quarter of 2012.

47

Given the Company’s mix of interest earning assets and interest bearing liabilities at September 30, 2013, the Company would generally be considered to have a relatively neutral balance sheet structure.  The Company’s balance sheet structure would normally be expected to produce a stable or declining net interest margin in a declining rate environment.  As the Company’s balance sheet has become more neutral in structure, management believes rate movements and other factors such as deposit mix, market deposit rate pricing and non-bank deposit products could have an impact on net interest margin.  As a result of the prolonged and unprecedented low interest rate environment, and given ongoing indications by the Federal Reserve Bank regarding its intentions to maintain current target rate levels, the Company expects to experience continued pressure on its net interest margin.  Also contributing to this net interest margin compression is a recent trend of aggressive loan pricing by the Company’s competitors in its markets on both variable and fixed rate commercial loans.  As a result of this competitive pricing influence, the Company believes that its yields on the commercial loan portfolio will continue to experience downward pressure.  Over time, the Company’s mix of deposits has shifted to more reliance on transaction accounts such as Rewards Checking, as well as Rewards Savings and corporate and public fund money market and repurchase agreements, which generally carry a higher interest rate cost than other types of interest bearing deposits.  The Company believes that this deposit strategy provides for an appropriate funding strategy.

During the first nine months of 2013, total interest and dividend income decreased by $8.0 million, or 9.1%, to $79.7 million versus $87.7 million during the first nine months of 2012.  This decrease was primarily the result of a 50 basis point decrease in the tax equivalent yield on average earning assets to 3.9%, versus 4.4% for the same period of 2012.  Average earning assets increased by $79.3 million, or 2.9%, during the first nine months of 2013 versus the same period of 2012.  During the third quarter of 2013, total interest and dividend income decreased by $1.7 million, or 5.9%, to $27.0 million, versus $28.7 million during the third quarter of 2012.  This decrease was primarily the result of a 40 basis point decrease in the tax equivalent yield on average earning assets to 3.9% in the third quarter of 2013, versus 4.3% for the same period of 2012.  Average earning assets increased by $107.2 million, or 3.9%, in the third quarter of 2013 versus the same period of 2012.

During the first nine months of 2013, loan interest income decreased by $4.3 million, or 5.6%, to $73.8 million versus $78.1 million during the first nine months of 2012.  The decrease was driven by a 43 basis point decrease in the tax equivalent yield on loans, to 4.3%, versus 4.7% in the first nine months of 2012.  During the third quarter of 2013, loan interest income decreased by $1.2 million, or 4.7%, to $24.7 million, versus $25.9 million during the third quarter of 2012.  The decrease was driven by a 48 basis point decrease in the tax equivalent yield on loans, to 4.2%, versus 4.7% in the third quarter of 2012.

The average daily securities balances for the first nine months of 2013 increased $49,000 to $475.1 million, versus $475.0 million for the same period of 2012. During the same periods, income from securities decreased by $3.7 million, or 38.4%, to $5.9 million versus $9.5 million during the first nine months of 2012.  The decrease was primarily the result of a 99 basis point decrease in the tax equivalent yield on securities, to 2.0%, versus 3.0% in the first nine months of 2012.  The average daily securities balances for the third quarter of 2013 decreased $11.2 million, or 2.4%, to $464.7 million, versus $475.9 million for the same period of 2012.  During the same periods, income from securities decreased by $467,000, or 17.1%, to $2.3 million versus $2.7 million during the third quarter of 2012.  The decrease was primarily the result of a 29 basis point decrease in the tax equivalent yield on securities, to 2.3%, versus 2.6% in the third quarter of 2012.  The prolonged low interest rate environment has reduced the income from securities since securities payments, including prepayments on mortgage-backed securities, must then be reinvested in securities at current, lower market yields.  Due to the unprecedented low interest rate environment, the Company is actively considering and implementing changes in its investment strategy.  The plan includes considering the purchase of good quality, higher yielding alternative investments.  Given the strength of the Company’s balance sheet and the likelihood of the low interest rate environment persisting into the future, the Company believes that this would be an appropriate and prudent strategy although the Company does not expect this will result in a significant change in strategy.

48

Total interest expense decreased $7.3 million, or 35.1%, to $13.5 million for the nine-month period ended September 30, 2013, from $20.9 million for the comparable period in 2012.  The decrease was primarily the result of a 36 basis point decrease in the Company’s daily cost of funds to 0.7% versus 1.1% for the same period of 2012.  Total interest expense decreased $2.5 million, or 38.5%, to $4.0 million for the third quarter of 2013, versus $6.5 million for the third quarter of 2012.  The decrease was primarily the result of a 39 basis point decrease in the Company’s cost of funds to 0.6% from 1.0% for the same period of 2012.

On an average daily basis, total deposits (including demand deposits) decreased $10.3 million, or 0.4%, to $2.481 billion for the nine-month period ended September 30, 2013, versus $2.491 billion during the same period in 2012.  The average daily balances for the third quarter of 2013 decreased $6.0 million, or 0.3%, to $2.479 billion from $2.486 billion during the third quarter of 2012.  On an average daily basis, noninterest bearing demand deposits were $401.0 million for the nine-month period ended September 30, 2013, versus $348.3 million for the same period in 2012.  The average daily noninterest bearing demand deposit balances for the third quarter of 2013 were $434.5 million versus $364.6 million for the third quarter of 2012.  On an average daily basis, interest bearing transaction accounts increased $26.9 million, or 2.7%, to $1.019 billion for the nine-month period ended September 30, 2013, versus the same period in 2012.  Average daily interest bearing transaction accounts increased $33.5 million, or 3.4%, to $1.015 billion for the third quarter of 2013 versus $981.8 million for the third quarter of 2012.  When comparing the nine months ended September 30, 2013 with the same period of 2012, the average daily balance of time deposits, which pay a higher rate of interest compared to demand deposits and non-Rewards Checking transaction accounts, decreased $124.5 million.  The average rate paid on time deposit accounts decreased 40 basis points to 1.2% for the nine-month period ended September 30, 2013, versus the same period in 2012.  During the third quarter of 2013, the average daily balance of time deposits decreased $153.9 million and the rate paid decreased 37 basis points to 1.2%, versus the third quarter of 2012.  Despite the low interest rate environment, the Company has been able to attract and retain retail deposit customers through offering innovative deposit products such as Rewards Checking and Savings.  These products pay somewhat higher interest rates but also encourage certain customer behaviors such as using debit cards and electronic statements, which have the effect of generating additional related fee income and reducing the Company’s processing costs.

The Company’s funding strategy is generally focused on leveraging its retail branch network to grow traditional retail deposits and on its presence with commercial customers and public fund entities in its Indiana markets to generate deposits.  In addition, the Company has utilized the Certificate of Deposit Account Registry Service (“CDARS”) program and out-of-market brokered certificates of deposit.  Due to the Company’s historical loan growth, the Company sought these deposits and has expanded its funding strategy over time to include these types of non-core deposit programs although its reliance on these types of deposits has reduced significantly over the past several years.  The Company believes that these deposit programs represent an appropriate tool in the overall liquidity and funding strategy but will continue to focus on funding loan and investment growth with in-market deposits whenever possible.  On an average daily basis, total brokered certificates of deposit decreased $30.3 million to $12.2 million for the nine-month period ended September 30, 2013, versus $42.5 million for the same period in 2012.  During the third quarter of 2013, there were no brokered certificates of deposit, versus an average daily balance of $30.4 million in brokered certificates of deposit during the third quarter of 2012.  On an average daily basis, total public fund certificates of deposit increased $30.7 million to $128.5 million for the nine-month period ended September 30, 2013, versus $97.9 million for the same period in 2012.  During the third quarter of 2013, average daily public fund certificates of deposit were $139.7 million versus $108.2 million during the third quarter of 2012.  In addition, the Company had average public fund interest bearing transaction accounts of $208.2 million and $238.9 million, respectively, in the nine months and three months ended September 30, 2013, versus $190.5 million and $189.5 million for the comparable periods of 2012.  Availability of public fund deposits can be cyclical, primarily due to the timing differences between when real estate property taxes are collected versus when those tax revenues are spent, and the intense competition for these funds.

49

Average daily balances of borrowings were $171.3 million during the nine months ended September 30, 2013, versus $163.0 million during the same period of 2012, and the rate paid on borrowings decreased 33 basis points to 0.9%.  During the third quarter of 2013, the average daily balances of borrowings increased $38.4 million to $197.1 million versus $158.7 million for the same period of 2012, and the rate paid on borrowings decreased 46 basis points to 0.8%.  On an average daily basis, total deposits (including demand deposits) and purchased funds increased 0.1% and 1.2%, respectively, during the nine-month and three-month periods ended September 30, 2013 versus the same periods in 2012.

The Company’s Board of Directors and management recognize the importance of liquidity during times of normal operations and in times of stress.  In 2010, the Company formalized and expanded upon its extensive Contingency Funding Plan (“CFP”).  The formal CFP was developed to help ensure that the multiple liquidity sources available to the Company are detailed. The CFP identifies the potential funding sources, which include the Federal Home Loan Bank of Indianapolis, the Federal Reserve Bank, brokered certificates of deposit, money market deposits, certificates of deposit available from the CDARS program, repurchase agreements, and Fed Funds. The CFP also addresses the role of the securities portfolio in liquidity.

Further, the plan identifies CFP team members and expressly details their respective roles. Potential risk scenarios are identified and the CFP includes multiple scenarios, including short-term and long-term funding crisis situations. Under the long-term funding crisis, two additional scenarios are identified: a moderate risk scenario and a highly stressed scenario. The CFP indicates the responsibilities and the actions to be taken by the CFP team under each scenario. Monthly reports to management and the Board of Directors under the CFP include an early warning indicator matrix and pro forma cash flows for the various scenarios.  The Company will continue to carefully monitor its liquidity planning and will consider adjusting its plans as circumstances warrant.

The following tables set forth consolidated information regarding average balances and rates:

50

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
(in thousands of dollars)
	Nine Months Ended September 30,
		2013				2012
	Average	Interest			Average	Interest
	Balance	Income	Yield (1)		Balance	Income	Yield (1)
ASSETS
Earning assets:
Loans:
Taxable (2)(3)	$    2,295,352	$         73,469	4.28	%	$    2,207,594	$         77,789	4.71	%
Tax exempt (1)	8,651	459	7.10		9,634	498	6.91
Investments: (1)
Available for sale	475,077	7,036	1.98		475,028	10,562	2.97
Short-term investments	6,972	4	0.08		22,891	16	0.09
Interest bearing deposits	10,611	42	0.53		2,178	27	1.66
Total earning assets	2,796,663	81,010	3.87	%	2,717,325	88,892	4.37	%
Nonearning assets:
Cash and due from banks	83,945	0			162,385	0
Premises and equipment	35,692	0			34,995	0
Other nonearning assets	110,922	0			94,853	0
Less allowance for loan losses	(50,944)	0			(53,076)	0
Total assets	$    2,976,278	$         81,010			$    2,956,482	$         88,892

(1) Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2013 and 2012. The tax equivalent rate for tax exempt loans and tax exempt securities included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses.

(2) Loan fees, which are immaterial in relation to total taxable loan interest income for the nine months ended September 30, 2013 and 2012, are included as taxable loan interest income.

(3) Nonaccrual loans are included in the average balance of taxable loans.

51

DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL (Cont.)
(in thousands of dollars)
	Nine Months Ended September 30,
		2013				2012
	Average	Interest			Average	Interest
	Balance	Expense	Yield		Balance	Expense	Yield
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest bearing liabilities:
Savings deposits	$       227,522	$              493	0.29	%	$       192,969	$              530	0.37	%
Interest bearing checking accounts	1,018,904	4,179	0.55		992,045	7,139	0.96
Time deposits:
In denominations under $100,000	336,495	3,607	1.43		395,807	5,384	1.82
In denominations over $100,000	497,003	4,086	1.10		562,157	6,299	1.50
Miscellaneous short-term borrowings	138,383	349	0.34		117,002	329	0.38
Long-term borrowings
and subordinated debentures	32,888	831	3.38		45,966	1,198	3.48
Total interest bearing liabilities	2,251,195	13,545	0.80	%	2,305,946	20,879	1.21	%
Noninterest bearing liabilities
and stockholders' equity:
Demand deposits	401,006	0			348,280	0
Other liabilities	16,481	0			17,760	0
Stockholders' equity	307,596	0			284,496	0
Total liabilities and stockholders'
equity	$    2,976,278	$         13,545			$    2,956,482	$         20,879
Net interest differential - yield on
average daily earning assets		$         67,465	3.22	%		$         68,013	3.34	%

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DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
(in thousands of dollars)
	Three Months Ended September 30,
		2013				2012
	Average	Interest			Average	Interest
	Balance	Income	Yield (1)		Balance	Income	Yield (1)
ASSETS
Earning assets:
Loans:
Taxable (2)(3)	$    2,342,527	$         24,595	4.17	%	$    2,206,051	$         25,803	4.65	%
Tax exempt (1)	8,456	152	7.11		9,406	164	6.93
Investments: (1)
Available for sale	464,652	2,670	2.28		475,899	3,074	2.57
Short-term investments	6,344	1	0.06		24,595	6	0.10
Interest bearing deposits	3,524	9	1.01		2,367	10	1.68
Total earning assets	2,825,503	27,427	3.85	%	2,718,318	29,057	4.25	%
Nonearning assets:
Cash and due from banks	77,947	0			165,790	0
Premises and equipment	37,754	0			35,043	0
Other nonearning assets	111,535	0			93,258	0
Less allowance for loan losses	(50,466)	0			(52,046)	0
Total assets	$    3,002,273	$         27,427			$    2,960,363	$         29,057

(1) Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2013 and 2012. The tax equivalent rate for tax exempt loans and tax exempt securities included the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) adjustment applicable to nondeductible interest expenses.

(2) Loan fees, which are immaterial in relation to total taxable loan interest income for the three months ended September 30, 2013 and 2012, are included as taxable loan interest income.

(3) Nonaccrual loans are included in the average balance of taxable loans.

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DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL (Cont.)
(in thousands of dollars)
	Three Months Ended September 30,
		2013				2012
	Average	Interest			Average	Interest
	Balance	Expense	Yield		Balance	Expense	Yield
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest bearing liabilities:
Savings deposits	$       235,190	$              143	0.24	%	$       197,322	$              160	0.32	%
Interest bearing checking accounts	1,015,298	1,121	0.44		981,770	2,174	0.88
Time deposits:
In denominations under $100,000	320,314	1,108	1.37		388,516	1,684	1.72
In denominations over $100,000	474,173	1,217	1.02		559,855	1,971	1.40
Miscellaneous short-term borrowings	166,132	146	0.35		112,722	112	0.40
Long-term borrowings
and subordinated debentures	30,965	263	3.37		45,966	399	3.45
Total interest bearing liabilities	2,242,072	3,998	0.71	%	2,286,151	6,500	1.13	%
Noninterest bearing liabilities
and stockholders' equity:
Demand deposits	434,476	0			364,579	0
Other liabilities	15,654	0			18,120	0
Stockholders' equity	310,071	0			291,513	0
Total liabilities and stockholders'
equity	$    3,002,273	$           3,998			$    2,960,363	$           6,500
Net interest differential - yield on
average daily earning assets		$         23,429	3.29	%		$         22,557	3.30	%

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Provision for Loan Losses

Based on management’s review of the adequacy of the allowance for loan losses, no provisions for loan losses were recorded during the nine-month and three-month periods ended September 30, 2013, versus provisions of $1.3 million and $0 recorded during the same periods of 2012.  Factors impacting the provision included the amount and status of classified and watch list credits, the level of charge-offs, management’s overall view on current credit quality and the regional and national economic conditions impacting credit quality, the amount and status of impaired loans, the amount and status of past due accruing loans (90 days or more), and overall loan growth as discussed in more detail below in the analysis relating to the Company’s financial condition.

Noninterest Income

Noninterest income categories for the nine-month and three-month periods ended September 30, 2013 and 2012 are shown in the following table:

	Nine Months Ended
	September 30,
			Percent
	2013	2012	Change
Wealth advisory fees	$   2,895	$   2,770	4.5	%
Investment brokerage fees	3,449	2,435	41.6
Service charges on deposit accounts	6,548	5,937	10.3
Loan, insurance and service fees	4,792	4,062	18.0
Merchant card fee income	925	902	2.5
Other income	2,937	1,614	82.0
Mortgage banking income	1,206	1,574	(23.4)
Net securities gains (losses)	107	(377)	128.4
Impairment on available-for-sale securities (includes total losses of $0 and $1,026,
net of $0 and $0 recognized in other comprehensive income, pre-tax)	0	(1,026)	N/A
Total noninterest income	$ 22,859	$ 17,891	27.8	%

	Three Months Ended
	September 30,
			Percent
	2013	2012	Change
Wealth advisory fees	$      980	$      959	2.2	%
Investment brokerage fees	1,503	695	116.3
Service charges on deposit accounts	2,325	2,045	13.7
Loan, insurance and service fees	1,524	1,421	7.2
Merchant card fee income	356	297	19.9
Other income	856	669	28.0
Mortgage banking income	159	590	(73.1)
Net securities gains (losses)	106	(380)	127.9
Impairment on available-for-sale securities (includes total losses of $0 and $67,
net of $0 and $0 recognized in other comprehensive income, pre-tax)	0	(67)	N/A
Total noninterest income	$   7,809	$   6,229	25.4	%

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Noninterest income increased $5.0 million and $1.6 million, respectively, for the nine-month and three-month periods ended September 30, 2013 versus the same periods in 2012.  Investment brokerage fees increased $1.0 million and $808,000, respectively, driven by higher trading volumes and improvements in the product mix. Other income increased by $1.3 million and $187,000, respectively, driven by income on bank owned life insurance as well as fees related to the Company’s interest rate swap program for clients.  During the first quarter, the Company introduced a new swap derivative product, which is offered to certain commercial banking customers.  Loan, insurance and service fees increased by $730,000 and $103,000, respectively, and were driven by higher fee income on increased debit card activity.  In addition, noninterest income in the nine-months and three-months ended June 30, 2012 was negatively impacted by $1.1 million and $67,000, respectively, in other-than-temporary impairment on several non-agency mortgage backed securities.

Noninterest Expense

Noninterest expense categories for the nine-month and three-month periods ended September 30, 2013 and 2012 are shown in the following table:

	Nine Months Ended
	September 30,
			Percent
	2013	2012	Change
Salaries and employee benefits	$ 27,493	$ 26,007	5.7	%
Occupancy expense	2,532	2,519	0.5
Equipment costs	2,021	1,854	9.0
Data processing fees and supplies	4,115	3,044	35.2
Other expense	10,089	9,807	2.9
Total noninterest expense	$ 46,250	$ 43,231	7.0	%

	Three Months Ended
	September 30,
			Percent
	2013	2011	Change
Salaries and employee benefits	$   9,437	$   8,569	10.1	%
Occupancy expense	813	803	1.2
Equipment costs	758	641	18.3
Data processing fees and supplies	1,443	1,143	26.2
Other expense	3,815	3,146	21.3
Total noninterest expense	$ 16,266	$ 14,302	13.7	%

The Company's noninterest expense increased $3.0 million and $1.6 million, respectively, in the nine-month and three-month periods ended June 30, 2013 versus the same periods of 2012.  Salaries and employee benefits increased by $1.5 million and $868,000, respectively.  For the nine month period, the $1.5 million increase was driven by $1.1 million in salaries, which resulted from staff additions and normal merit increases and a $366,000 increase in health insurance expense.  The $868,000 increase in the three months was driven by a $556,000 in salaries and a $139,000 increase in health insurance expense.  Data processing fees increased by $1.1 million and $300,000, respectively, driven by a larger customer base as well as greater utilization of services from the Company’s core processor, which the Company believes will improve marketing and cross-selling initiatives.  Other expenses increased by $282,000 and $669,000, respectively, driven by higher advertising expenses as well as higher professional fees.  The third quarter increase was driven by advertising and consulting expenses specific to programs that the Company made investments in during the third quarter, and is not expected to be recurring levels of spending.

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Income Tax Expense

Income tax expense increased $1.1 million, or 8.4%, for the first nine months of 2013, compared to the same period in 2012.  The combined state franchise tax expense and the federal income tax expense, as a percentage of income before income tax expense, increased to 33.9% during the first nine months of 2013 compared to 33.3% during the same period of 2012.  The increase was driven by a $465,000 provision for state income tax expense due to a revaluation of the Company’s deferred tax items relating to state income tax.  During the second quarter of 2013, the Indiana legislature enacted new, lower tax rates for financial institutions, which will take effect beginning in 2014.  One effect of the lower, future rates is to reduce the benefit which will be provided by the Company’s existing deferred tax items requiring the non-cash adjustment.  Excluding the effect of the adjustment, income taxes for the nine months ended September 30, 2013 would have been $14.0 million, representing 32.9% of pretax net income.  The combined tax expense decreased to 32.7% in the third quarter of 2013, versus 33.6% during the same period of 2012.  The decrease in the third quarter of 2013 was driven by an increase in the percentage of revenue derived from tax advantaged sources versus the third quarter of 2012.

CRITICAL ACCOUNTING POLICIES

Certain of the Company’s accounting policies are important to the portrayal of the Company’s financial condition, since they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Some of the facts and circumstances which could affect these judgments include changes in interest rates, in the performance of the economy or in the financial condition of borrowers. Management believes that its critical accounting policies include determining the allowance for loan losses, the valuation of mortgage servicing rights and the valuation and other-than-temporary impairment of investment securities. The Company’s critical accounting policies are discussed in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

FINANCIAL CONDITION

Total assets of the Company were $3.041 billion as of September 30, 2013, a decrease of $22.9 million, or 0.8%, when compared to $3.064 billion as of December 31, 2012.

Total cash and cash equivalents decreased by $150.9 million, or 65.0%, to $81.3 million at September 30, 2013 from $232.2 million at December 31, 2012.  The decrease resulted from a decrease in total deposits as well as loan growth.  Historically, the Company maintained higher compensating balances with correspondent financial institutions in order to avoid certain service fees.  During a periodic review of this strategy during the first quarter of 2013, the Company determined that it would be more beneficial to maintain lower compensating balances although this may result in paying slightly higher service fees.  The reduction in the compensating balances resulted in a lower level of cash and cash equivalents at September 30, 2013 compared to December 31, 2012.

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Total securities available-for-sale decreased by $4.0 million, or 0.9%, to $463.1 million at September 30, 2013 from $467.0 million at December 31, 2012. The decrease was a result of a number of transactions in the securities portfolio.  Securities purchases totaled $142.0 million.  Offsetting this increase were securities paydowns totaling $89.8 million, sales of securities totaling $30.0 million, maturities and calls of securities totaling $7.4 million and securities amortization net of accretion totaling $7.1 million.  In addition, the net unrealized gain of the securities portfolio decreased by $11.7 million.  The decrease in fair market value was primarily driven by rising interest rates during the second quarter, which led to lower market values for agency residential mortgage-backed securities and state and municipal securities.  The investment portfolio is generally managed to limit the Company’s exposure to credit risk by containing mostly mortgage-backed securities backed by the federal government, other securities which are either directly or indirectly backed by the federal government or a local municipal government.  The securities sales referenced earlier included the remaining four non-agency residential mortgage backed securities in the Company’s securities portfolio.

Real estate mortgage loans held-for-sale decreased by $8.4 million, or 88.9%, to $1.0 million at September 30, 2013, from $9.5 million at December 31, 2012.  The balance of this asset category is subject to a high degree of variability depending on, among other things, recent mortgage loan rates and the timing of loan sales into the secondary market.  During the nine months ended September 30, 2013, $68.4 million in real estate mortgages were originated for sale and $76.0 million in mortgages were sold.

Total loans, excluding real estate mortgage loans held for sale, increased by $135.2 million to $2.393 billion at September 30, 2013 from $2.258 billion at December 31, 2012.  Management expects loan growth to be moderate as the economic recovery moves along.  The loan portfolio at September 30, 2013 consisted of 87% commercial and industrial, including commercial real estate and agri-business, 11% residential real estate and home equity and 2% consumer loans, versus 85% commercial and industrial, including commercial real estate and agri-business, 13% residential real estate and home equity and 2% consumer loans at December 31, 2012.

The Company has a relatively high percentage of commercial and commercial real estate loans, most of which are extended to small or medium-sized businesses from a wide variety of industries. Commercial loans represent higher dollar amount loans to fewer customers and therefore higher credit risk than other types of loans. Pricing is adjusted to manage the higher credit risk associated with these types of loans. The majority of fixed-rate residential mortgage loans, which represent increased interest rate risk, are sold in the secondary market, as well as some variable rate residential mortgage loans. The remainder of the variable rate residential mortgage loans and a small number of fixed-rate residential mortgage loans are retained. Management believes the allowance for loan losses is at a level commensurate with the overall risk exposure of the loan portfolio. However, if economic conditions do not continue to improve, certain borrowers may experience difficulty and the level of nonperforming loans, charge-offs and delinquencies could rise and require further increases in the provision for loan losses.

Loans are charged against the allowance for loan losses when management believes that the principal is uncollectible. Subsequent recoveries, if any, are credited to the allowance. The allowance is an amount that management believes will be adequate to absorb probable incurred credit losses relating to specifically identified loans based on an evaluation of the loans by management, as well as other probable incurred losses inherent in the loan portfolio. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans and current economic conditions that may affect the borrower’s ability to repay. Management also considers trends in adversely classified loans based upon a monthly review of those credits. An appropriate level of general allowance is determined after considering the following factors:  application of historical loss percentages, emerging market risk, commercial loan focus and large credit concentrations, new industry lending activity and current economic conditions. Federal regulations require insured institutions to classify their own assets on a regular basis. The regulations provide for three categories of classified loans – Substandard, Doubtful and Loss. The regulations also contain a Special Mention category. Special Mention is defined as loans that do not currently expose an insured institution to a sufficient degree of risk to warrant classification as Substandard, Doubtful or Loss but do possess credit deficiencies or potential weaknesses deserving management’s close attention. The Company’s policy is to establish a specific allowance for loan losses for any assets where management has identified conditions or circumstances that indicate an asset is impaired. If an asset or portion thereof is classified as loss, the Company’s policy is to either establish specified allowances for loan losses in the amount of 100% of the portion of the asset classified loss or charge-off such amount.

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At September 30, 2013, on the basis of management’s review of the loan portfolio, the Company had 98 credits totaling $167.3 million on the classified loan list versus 104 credits totaling $181.9 million on December 31, 2012. As of September 30, 2013, the Company had $89.8 million of assets classified as Special Mention, $77.5 million classified as Substandard, $0 classified as Doubtful and $0 classified as Loss as compared to $82.7 million, $99.2 million, $66,000 and $0, respectively at December 31, 2012.  As of September 30, 2013, the Company had 33 loans totaling $41.6 million accounted for as troubled debt restructurings. Included in the classified loan amounts above were 17 mortgage loans totaling $1.6 million with total allocations of $308,000, and 16 commercial loans totaling $39.9 million with total allocations of $9.5 million. The Company has no commitments to lend additional funds to any of the borrowers. At December 31, 2012, the Company had 41 loans totaling $50.8 million accounted for as troubled debt restructurings - one installment loan totaling $16,000 with an allocation of $4,000, 12 mortgage loans totaling $1.4 million with total allocations of $247,000, and 28 commercial loans totaling $49.4 million with total allocations of $12.2 million. The $9.3 million decrease of loans accounted for as troubled debt restructurings at September 30, 2013, as compared to December 31, 2012, was primarily due to the removal of two commercial credits totaling $8.4 million since these loans were modified at a market rate and were performing as of December 31, 2012.

Allowance estimates are developed by management taking into account actual loss experience, adjusted for current economic conditions. The Company generally has regular discussions regarding this methodology with regulatory authorities.  Allowance estimates are considered a prudent measurement of the risk in the Company’s loan portfolio and are applied to individual loans based on loan type. In accordance with current accounting guidance, the allowance is provided for losses that have been incurred as of the balance sheet date and is based on past events and current economic conditions and does not include the effects of expected losses on specific loans or groups of loans that are related to future events or expected changes in economic conditions.

Net charge-offs totaled $831,000 in the third quarter of 2013, versus net recoveries of $96,000 during the third quarter of 2012 and net charge-offs of $183,000 during the second quarter of 2013.

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The allowance for loan losses decreased 3.2%, or $1.6 million, from $51.4 million at December 31, 2012 to $49.8 million at September 30, 2013.  Pooled loan allocations increased from $36.6 million at December 31, 2012 to $39.3 million at September 30, 2013, which was primarily a result of loan growth as well as management’s overall view on current credit quality and the current economic environment, which included a change at March 31, 2013 in the lookback period for the determination of the qualitative factors from a three year lookback to a higher of a three year or five year lookback.  Management believes it is prudent when determining the qualitative factors to consider the higher historical loss periods included in the five year lookback period that are now running off in the three year lookback period, due to the current macroeconomic and political uncertainty.  Impaired loan allocations decreased $4.3 million from $14.8 million at December 31, 2012 to $10.5 million at September 30, 2013.  This decrease in impaired allocations was primarily due to decreases in the allocations of existing impaired loans as well as reductions to the impaired loans category.  The unallocated component of the allowance for loan losses was virtually unchanged at $3.5 million at September 30, 2013 compared to $3.4 million at December 31, 2012.  While general trends in credit quality were stable or favorable, the Company believes that the unallocated component is appropriate given the uncertainty that exists regarding near term economic conditions, including the slow economic recovery.  Management believes the allowance for loan losses at September 30, 2013 was at a level commensurate with the overall risk exposure of the loan portfolio. However, if economic conditions do not continue to improve, certain borrowers may experience difficulty and the level of nonperforming loans, charge-offs and delinquencies could rise and require further increases in the provision for loan losses.

Total impaired loans decreased by $11.4 million, or 19.3%, to $47.4 million at September 30, 2013 from $58.9 million at December 31, 2012.  A loan is impaired when full payment under the original loan terms is not expected. Impairment is evaluated in the aggregate for smaller-balance loans of similar nature such as residential mortgage, and consumer loans, and on an individual loan basis for other loans. If a loan is impaired, a portion of the allowance may be allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  The decrease in the impaired loans category was primarily due to the removal of three commercial credits totaling $10.5 million from the impaired category.  The following table summarizes nonperforming assets at September 30, 2013 and December 31, 2012.

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	September 30,	December 31,
	2013	2012
	(in thousands)
NONPERFORMING ASSETS:
Nonaccrual loans including nonaccrual troubled debt restructured loans	$         22,833	$         30,829
Loans past due over 90 days and still accruing	364	50
Total nonperforming loans	$         23,197	$         30,879
Other real estate owned	117	667
Repossessions	10	23
Total nonperforming assets	$         23,324	$         31,569
Impaired loans including troubled debt restructurings	$         47,347	$         58,935
Nonperforming loans to total loans	0.97%	1.37%
Nonperforming assets to total assets	0.77%	1.03%
Nonperforming troubled debt restructured loans (included in nonaccrual loans)	$          19,398	$          28,506
Performing troubled debt restructured loans	23,017	22,332
Total troubled debt restructured loans	$         42,415	$          50,838

Total nonperforming assets decreased by $8.2 million, or 26.1%, to $23.3 million during the nine-month period ended September 30, 2013.  The decrease was primarily due to the aforementioned reclassification of three commercial credits from impaired to non-impaired.  The loan upgrades also shifted two of the loans from the troubled debt restructured loan category.  The third loan was never a troubled debt restructuring.  In addition, the Company sold $592,000 in other real estate owned during the nine-month period ended September 30, 2013.

Three commercial relationships represented 67.6% of total nonperforming loans.  A commercial relationship consisting of three loans totaling $6.8 million represented the largest exposure in the nonperforming category.  These loans were classified as nonperforming in the fourth quarter of 2011.  The borrower is engaged in commercial real estate development.  Borrower collateral, including real estate and the personal guarantees of its principals, support the credit.  The Company has not taken any charge-offs related to this credit.

A $5.0 million commercial relationship consisting of three loans represents the second largest exposure in the nonperforming category.  These loans were classified as nonperforming in the fourth quarter of 2009.  The borrower is engaged in real estate development.   Borrower collateral, including real estate and the personal guarantees of its principals, support the credit.  The Company took a $1.7 million charge-off related to this credit in the fourth quarter of 2009, and no charge-offs were taken in 2010 or 2011.  The Company took a $601,000 charge-off related to this credit in the first quarter of 2012.  The Company has not taken any charge-offs on this credit since then.

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A $3.6 million credit to a manufacturer tied to the housing industry represented the third largest exposure in the nonperforming category.  This loan was classified as nonperforming in the second quarter of 2008.  The credit is accounted for as a troubled debt restructuring.  Borrower collateral including receivables, inventory and equipment support the credit; however, there are no guarantors.  The Company took a $906,000 charge-off related to this credit in 2008, a $1.7 million charge-off related to this credit in 2012 and an $88,000 charge-off related to this credit in the first quarter of 2013.

There can be no assurances that full repayment of the loans discussed above will occur.  Although economic conditions in the Company’s markets have stabilized and in some areas improved, management has not observed a rapid recovery in certain industries, including residential and commercial real estate development and recreational vehicle and mobile home manufacturing, although each of these sectors has improved.  The Company’s growth strategy has promoted diversification among industries as well as a continued focus on enforcement of a strong credit environment and an aggressive position on loan work-out situations.  While the Company believes that the impact on the Company of these industry-specific issues will be somewhat mitigated by the Company’s overall growth strategy, the economic factors impacting its entire geographic market will continue to present challenges.  Additionally, the Company’s overall asset quality position can be influenced by a small number of credits due to the focus on commercial lending activity and the granularity inherent in this strategy.

The Company has begun offering a new derivative product to certain commercial banking customers. This product allows the commercial banking customers to enter into an agreement with the Company to swap a variable rate loan to a fixed rate. These derivative products are designed to reduce, eliminate or modify the borrower's interest rate exposure.  The extension of credit incurred in connection with these derivative products is subject to the same approval and underwriting standards as traditional credit products. The Company limits its risk exposure by simultaneously entering into a similar, offsetting swap agreement with a separate, well-capitalized and highly rated counterparty previously approved by the Company’s Asset Liability Committee. By using these interest rate swap arrangements, the Company is also better insulated from the interest rate risk associated with underwriting fixed-rate loans and is better able to meet customer demand for fixed rate loans. These derivative contracts are not designated against specific assets or liabilities and, therefore, do not qualify for hedge accounting. The derivatives are recorded as assets and liabilities on the balance sheet at fair value with changes in fair value recorded in non-interest income for both the commercial banking customer swaps and the related offsetting swaps.

Total deposits decreased by $136.9 million, or 5.3%, to $2.445 billion at September 30, 2013 from $2.582 billion at December 31, 2012. The decrease resulted from decreases of $101.3 million in interest bearing transaction accounts, $49.4 million in other certificates of deposit, $43.6 million in certificates of deposit of $100,000 and over, $28.0 million in brokered certificates of deposit and $19.5 in CDARS certificates of deposit.  The decrease in interest bearing transaction accounts was driven by a $66.4 million decline in Rewards Checking.  The Company proactively made changes in the Rewards program, including lowering the rate and lowering the cap on the level which earns the highest rate.  The Company believes that the decline in certificates of deposit are reflective of the ongoing low interest rate environment and the consumers’ desire to seek the highest rate in the market, which the Company sometimes does not match.  Offsetting these decreases were increases of $41.7 million in demand deposits, $23.8 million in money market accounts and $23.7 million in savings accounts and $15.7 million in public fund certificates of deposit of $100,000 or more.  The increase in demand deposits occurred as a result of a $46.2 million increase in commercial demand deposits.

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Total short-term borrowings increased by $114.1 million, or 93.6%, to $236.0 million at September 30, 2013 from $121.9 million at December 31, 2012.  The increase resulted from increases of $75.0 million in other short-term borrowings, primarily advances from the Federal Home Loan Bank of Indianapolis as well as increases of $57.0 million in federal funds purchased offset by decreases of $17.9 million in securities sold under agreements to repurchase.

Total equity increased by $16.7 million, or 5.6%, to $314.5 million at September 30, 2013 from $297.8 million at December 31, 2012.  The increase in total equity resulted from net income of $28.3 million, minus the decrease in the accumulated other comprehensive income of $7.2 million, minus dividends of $6.3 million, plus $1.4 million in stock compensation expense, plus $498,000 related to stock options exercises (including tax benefit).

The FDIC’s risk-based capital regulations require that all insured banking organizations maintain an 8.0% total risk-based capital ratio. The FDIC has also established definitions of “well capitalized” as a 5.0% Tier I leverage capital ratio, a 6.0% Tier I risk-based capital ratio and a 10.0% total risk-based capital ratio.  As of September 30, 2013, the Bank had regulatory capital in excess of these minimum requirements with a Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio of 10.8%, 13.1% and 14.4%, respectively, versus ratios of 10.3%, 12.7% and 14.0% as of December 31, 2012.  The Federal Reserve also has established minimum “well capitalized” regulatory capital requirements for bank holding companies.  As of September 30, 2013, the Company had a Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio of 11.0%, 13.4% and 14.7%, respectively, versus ratios of 10.5%, 13.0% and 14.3% as of December 31, 2012.  These ratios exceeded the Federal Reserve’s “well capitalized” minimums of 5.0%, 6.0% and 10.0%, respectively

Beginning January 1, 2015 the Company and Bank will be subject to the new capital regulations of Basel III.  The new regulations establish higher minimum risk-based capital ratio requirements, a new common equity Tier 1 risk-based capital ratio and a new capital conservation buffer.  The new regulations also include revisions to the definition of capital and changes in the risk-weighting of certain assets.  The new regulations establish definitions of “well-capitalized” including the capital conservation buffer as a 7.0%  common equity Tier 1 risk-based capital ratio, an 8.5% Tier 1 risk-based capital ratio and a 10.5% total risk-based capital ratio.  The capital conservation buffer is being phased-in and will be in full effect beginning January 1, 2019.  Under the new regulations, all financial institutions must maintain a Tier 1 leverage ratio of 4% to be considered “adequately capitalized” and 5% to be considered “well-capitalized.”  Management has completed a preliminary analysis of the impact of these new regulations to the capital ratios of both the Company and the Bank and estimates that the ratios for both the Company and the Bank will comfortably exceed the new minimum capital ratio requirements for “well-capitalized” including the capital conservation buffer under Basel III if they were effective at September 30, 2013.

63

FORWARD-LOOKING STATEMENTS

This document (including information incorporated by reference) contains, and future oral and written statements of the Company and its management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events.

The Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. The factors, which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries, are detailed in the “Risk Factors” section included under Item 1A. of Part I of our Form 10-K. In addition to the risk factors described in that section, there are other factors that may impact any public company, including ours, which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries.  These additional factors include, but are not limited to, the following:

·   Legislative or regulatory changes or actions, including the “Dodd-Frank Wall Street Reform and Consumer Protection Act” and the regulations required to be promulgated thereunder, as well as rules recently implemented by the federal banking regulatory agencies concerning certain increased capital requirements, among other items, which may adversely affect the business of the Company and its subsidiaries.

·   The costs, effects and outcomes of existing or future litigation.

·   Changes in accounting policies and practices, as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board.

·   The ability of the Company to manage risks associated with the foregoing as well as anticipated.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk represents the Company’s primary market risk exposure. The Company does not have a material exposure to foreign currency exchange risk, does not have any material amount of derivative financial instruments and does not maintain a trading portfolio. The Board of Directors annually reviews and approves the policy used to manage interest rate risk. The policy was last reviewed and approved in May 2013. The policy sets guidelines for balance sheet structure, which are designed to protect the Company from the impact that interest rate changes could have on net income but does not necessarily indicate the effect on future net interest income. The Company, through its Asset and Liability Committee, manages interest rate risk by monitoring the computer simulated earnings impact of various rate scenarios and general market conditions. The Company then modifies its long-term risk parameters by attempting to generate the types of loans, investments, and deposits that currently fit the Company’s needs, as determined by the Asset and Liability Committee. This computer simulation analysis measures the net interest income impact of various interest rate scenario changes during the next twelve months. If the change in net interest income is less than 3% of primary capital, the balance sheet structure is considered to be within acceptable risk levels. As of September 30, 2013, the Company’s potential pretax exposure was within the Company’s policy limit and not significantly different from the potential pretax exposure from December 31, 2012.

64

ITEM 4 – CONTROLS AND PROCEDURES

As required by Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, management has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of September 30, 2013.  Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.  These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

During the quarter ended September 30, 2013, there were no changes to the Company’s internal control over financial reporting that have materially affected or are reasonably likely to materially affect its internal control over financial reporting.

65

LAKELAND FINANCIAL CORPORATION

FORM 10-Q

September 30, 2013

Part II - Other Information

Item 1. Legal proceedings

There are no material pending legal proceedings to which the Company or its subsidiaries is a party other than ordinary routinelitigation incidental to their respective businesses.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A. of Part I of the Company’s 2012 Form 10-K.  Please refer to that section of the Company’s Form 10-K for disclosures regarding the risks and uncertainties related to the Company’s business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information as of September 30, 2013 with respect to shares of common stock repurchased by the Company during the quarter then ended:

Issuer Purchases of Equity Securities(a)

				Maximum Number (or
			Total Number of	Appropriate Dollar
			Shares Purchased as	Value) of Shares that
			Part of Publicly	May Yet Be Purchased
	Total Number of	Average Price	Announced Plans or	Under the Plans or
Period	Shares Purchased	Paid per Share	Programs	Programs
July 1-31	5,989	$                28.72	0	$                                          0
August 1-31	572	32.24	0	0
September 1-30	0	0	0	0
Total	6,561	$                29.03	0	$                                          0

(a)	The shares purchased during the periods were credited to the deferred share accounts of
	non-employee directors under the Company’s directors’ deferred compensation plan.  These shares were purchased in the ordinary course of business and consistent with past practice.

Item 3. Defaults Upon Senior Securities

            None

66

Item 4. Mine Safety Disclosures

 N/A

Item 5. Other Information

            None

Item 6. Exhibits

31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File
	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2013 and September 30, 2012; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and September 30, 2012; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and September 30, 2012; and (v) Notes to Unaudited Consolidated Financial Statements.

67

LAKELAND FINANCIAL CORPORATION

FORM 10-Q

September 30, 2013

Part II - Other Information

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

LAKELAND FINANCIAL CORPORATION

(Registrant)

Date: November 12, 2013	/s/ Michael L. Kubacki
	Michael L. Kubacki – Chief Executive Officer

Date: November 12, 2013	/s/ David M. Findlay
	David M. Findlay –President
	and Chief Financial Officer

Date: November 12, 2013	/s/ Teresa A. Bartman
	Teresa A. Bartman – Senior Vice President-
	Finance and Controller

68

EX-31.1

Exhibit 31.1

I, Michael L. Kubacki, Chief Executive Officer of Lakeland Financial Corporation, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Lakeland Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 12, 2013	/s/Michael L. Kubacki
	Michael L. Kubacki
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, David M. Findlay, Chief Financial Officer of Lakeland Financial Corporation, certify that:

1.           I have reviewed this quarterly report on Form 10-Q of Lakeland Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting, and;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November 12, 2013	/s/ David M. Findlay
	David M. Findlay
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lakeland Financial Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, Michael L. Kubacki, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael L. Kubacki

Michael L. Kubacki

Chief Executive Officer

November 12, 2013

A signed original of this written statement required by Section 906 has been provided to Lakeland Financial Corporation and will be retained by Lakeland Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lakeland Financial Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, David M. Findlay, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David M. Findlay

David M. Findlay

Chief Financial Officer

November 12, 2013

A signed original of this written statement required by Section 906 has been provided to Lakeland Financial Corporation and will be retained by Lakeland Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 9. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the nine months ended September 30, 2013 and 2012:

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT^(a)

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
	Securities		Items		Total
Balance at December 31, 2012	$	7,517	$	(1,828)	$	5,689
Other comprehensive income (loss)
before reclassification		(7,096)		(90)		(7,186)
Amounts reclassified from
accumulated other
comprehensive income (loss)		(64)		109		45
Net current period other
comprehensive income (loss)		(7,160)		19		(7,141)
Balance at September 30, 2013	$	357	$	(1,809)	$	(1,452)

(a) All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

			Current
	Balance		Period		Balance
	at December 31, 2011		Change		at September 30, 2012
Unrealized loss on securities available for sale
without other than temporary impairment	$	7,688	$	818	$	8,506
Unrealized loss on securities available for sale
with other than temporary impairment		(523)		523		0
Total unrealized loss on securities available for sale		7,165		1,341		8,506
Unrealized loss on defined benefit pension plans		(2,026)		164		(1,862)
Total	$	5,139	$	1,505	$	6,644

 

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2013 are as follows:

RELCASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME^(a)

Details about	Amount			Affected Line Item
Accumulated Other	Reclassified From			in the Statement
Comprehensive	Accumulated Other			Where Net
Income Components	Comprehensive Income			Income is Presented
	(in thousands)
Unrealized gains and losses on
available-for-sale securities
	$	107		Net securities gains (losses)
		(43)		Income tax expense
	$	64		Net of tax
Amortization of defined benefit
pension items
	$	(183)	(b)	Salaries and employee benefits
		74		Income tax expense
	$	(109)		Net of tax
Total reclassifications for the period	$	(45)		Net of tax

(a) Amounts in parenthesis indicate a decrease in net income.

(b) Included in the computation of net periodic benefit cost (see employee benefit plans footnote for additional details).

XML

FAIR VALUE DISCLOSURES (Valuation Methodology and Unobservable Inputs for Level 3 Assets) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Mortgage servicing rights	$ 3,300
Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	22,634	29,364
Mortgage servicing rights	8	1,906
Other real estate owned	75	75
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	4,035	3,980
Valuation Technique	Collateral based measurements	Collateral based measurements
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	4.00%	10.00%
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	91.00%	99.00%
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	32.00%	35.00%
Commercial Real Estate and Multi-Family Residential Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	17,681	24,560
Valuation Technique	Collateral based measurements	Collateral based measurements
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Commercial Real Estate and Multi-Family Residential Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	5.00%	4.00%
Commercial Real Estate and Multi-Family Residential Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	46.00%	57.00%
Commercial Real Estate and Multi-Family Residential Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	23.00%	23.00%
Agri-business and Agricultural Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	489	268
Valuation Technique	Collateral based measurements	Collateral based measurements
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Agri-business and Agricultural Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	7.00%
Agri-business and Agricultural Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	9.00%
Agri-business and Agricultural Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	8.00%	19.00%
Consumer 1-4 Family Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	376	510
Valuation Technique	Collateral based measurements	Collateral based measurements
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Consumer 1-4 Family Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	8.00%	8.00%
Consumer 1-4 Family Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	51.00%	100.00%
Consumer 1-4 Family Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	27.00%	39.00%
Other Consumer Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	53	46
Valuation Technique	Collateral based measurements	Collateral based measurements
Unobservable Inputs	Discount to reflect current market conditions and ultimate collectability	Discount to reflect current market conditions and ultimate collectability
Other Consumer Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	28.00%	29.00%
Other Consumer Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	61.00%	100.00%
Other Consumer Loans [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	35.00%	40.00%
Mortgage Servicing Rights [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Mortgage servicing rights	8	1,906
Valuation Technique	Discounted cash flows	Discounted cash flows
Unobservable Inputs	Discount rate	Discount rate
Mortgage Servicing Rights [Member] | Fair Value, Measurements, Nonrecurring [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs		9.10%
Mortgage Servicing Rights [Member] | Fair Value, Measurements, Nonrecurring [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs		9.50%
Mortgage Servicing Rights [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	9.50%	9.20%
Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Other real estate owned	$ 75	$ 75
Valuation Technique	Appraisal	Appraisals
Unobservable Inputs	Discount to reflect current market conditions	Discount to reflect current market conditions
Other Real Estate Owned [Member] | Fair Value, Measurements, Nonrecurring [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs	49.00%	49.00%

XML

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest and fees on loans
Taxable	$ 24,595	$ 25,803	$ 73,469	$ 77,789
Tax exempt	100	109	304	333
Interest and dividends on securities
Taxable	1,463	2,034	3,560	7,425
Tax exempt	802	698	2,307	2,094
Interest on short-term investments	10	16	46	43
Total interest income	26,970	28,660	79,686	87,684
Interest on deposits	3,589	5,989	12,365	19,352
Interest on borrowings
Short-term	146	112	349	329
Long-term	263	399	831	1,198
Total interest expense	3,998	6,500	13,545	20,879
NET INTEREST INCOME	22,972	22,160	66,141	66,805
Provision for loan losses	0	0	0	1,299
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	22,972	22,160	66,141	65,506
NONINTEREST INCOME
Wealth advisory fees	980	959	2,895	2,770
Investment brokerage fees	1,503	695	3,449	2,435
Service charges on deposit accounts	2,325	2,045	6,548	5,937
Loan, insurance and service fees	1,524	1,421	4,792	4,062
Merchant card fee income	356	297	925	902
Other income	856	669	2,937	1,614
Mortgage banking income	159	590	1,206	1,574
Net securities gains (losses)	106	(380)	107	(377)
Other than temporary impairment loss on available-for-sale securities:
Total impairment losses recognized on securities	0	(67)	0	(1,052)
Loss recognized in other comprehensive income	0	0	0	26
Net impairment loss recognized in earnings	0	(67)	0	(1,026)
Total noninterest income	7,809	6,229	22,859	17,891
NONINTEREST EXPENSE
Salaries and employee benefits	9,437	8,569	27,493	26,007
Net occupancy expense	813	803	2,532	2,519
Equipment costs	758	641	2,021	1,854
Data processing fees and supplies	1,443	1,143	4,115	3,044
Other expense	3,815	3,146	10,089	9,807
Total noninterest expense	16,266	14,302	46,250	43,231
INCOME BEFORE INCOME TAX EXPENSE	14,515	14,087	42,750	40,166
Income tax expense	4,746	4,740	14,499	13,374
NET INCOME	$ 9,769	$ 9,347	$ 28,251	$ 26,792
BASIC WEIGHTED AVERAGE COMMON SHARES	16,451,199	16,340,425	16,427,060	16,312,896
BASIC EARNINGS PER COMMON SHARE	$ 0.59	$ 0.57	$ 1.72	$ 1.64
DILUTED WEIGHTED AVERAGE COMMON SHARES	16,634,933	16,490,390	16,581,089	16,470,485
DILUTED EARNINGS PER COMMON SHARE	$ 0.59	$ 0.57	$ 1.70	$ 1.63

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 2. EARNINGS PER SHARE

Basic earnings per common share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, stock awards and warrants.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Weighted average shares outstanding for basic earnings per common share		16,451,199		16,340,425		16,427,060		16,312,896
Dilutive effect of stock options, awards and warrants		183,734		149,965		154,029		157,589
Weighted average shares outstanding for diluted earnings per common share		16,634,933		16,490,390		16,581,089		16,470,485
Basic earnings per common share	$	0.59	$	0.57	$	1.72	$	1.64
Diluted earnings per common share	$	0.59	$	0.57	$	1.70	$	1.63

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SECURITIES (Tables)

9 Months Ended

Sep. 30, 2013

Securities [Abstract]

Summary of available-for-sale securities

Information related to the fair value and amortized cost of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the tables below.

			Gross		Gross
	Fair		Unrealized		Unrealized		Amortized
	Value		Gain		Losses		Cost
September 30, 2013
U.S. Treasury securities	$	1,022	$	20	$	0	$	1,002
Agency residential mortgage-backed securities		369,311		5,613		(6,183)		369,881
State and municipal securities		92,737		2,810		(1,816)		91,743
Total	$	463,070	$	8,443	$	(7,999)	$	462,626
December 31, 2012
U.S. Treasury securities	$	1,037	$	35	$	0	$	1,002
U.S. government sponsored agencies		5,304		278		0		5,026
Agency residential mortgage-backed securities		365,644		7,813		(1,495)		359,326
Non-agency residential mortgage-backed securities		6,453		242		0		6,211
State and municipal securities		88,583		5,509		(189)		83,263
Total	$	467,021	$	13,877	$	(1,684)	$	454,828

Schedule of available-for-sale securities by maturity

Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	4,168	$	4,238
Due after one year through five years		15,691		16,618
Due after five years through ten years		40,061		40,987
Due after ten years		32,825		31,916
		92,745		93,759
Mortgage-backed securities		369,881		369,311
Total debt securities	$	462,626	$	463,070

Schedule of sales of securities available for sale

Security proceeds, gross gains and gross losses are presented below.

	Nine months ended September 30,
	2013		2012
Sales of securities available for sale
Proceeds	$	29,996	$	27,493
Gross gains		1,078		823
Gross losses		(972)		(1,203)

	Three months ended September 30,
	2013		2012
Sales of securities available for sale
Proceeds	$	29,996	$	27,493
Gross gains		1,078		823
Gross losses		(972)		(1,203)

Schedule of available-for-sale securities continuous unrealized loss position

Information regarding securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below. The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2013
Agency residential mortgage-     backed securities	$	163,795	$	(5,825)	$	17,358	$	(358)	$	181,153	$	(6,183)
State and municipal securities		25,130		(1,816)		0		0		25,130		(1,816)
Total temporarily impaired	$	188,925	$	(7,641)	$	17,358	$	(358)	$	206,283	$	(7,999)
December 31, 2012
Agency residential mortgage-     backed securities	$	92,974	$	(1,066)	$	20,422	$	(429)	$	113,396	$	(1,495)
State and municipal securities		10,791		(188)		50		(1)		10,841		(189)
Total temporarily impaired	$	103,765	$	(1,254)	$	20,472	$	(430)	$	124,237	$	(1,684)

Quantitative disclosure of available-for-sale securities

The number of securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2013
Agency residential mortgage-backed securities	45	7	52
State and municipal securities	56	0	56
Total temporarily impaired	101	7	108

	Less than	12 months
	12 months	or more	Total
December 31, 2012
Agency residential mortgage-backed securities	29	9	38
State and municipal securities	29	1	30
Total temporarily impaired	58	10	68

Schedule of debt securities credit loss recognized

The table represents the three months and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,
	2013		2012
Balance July 1,	$	0	$	1,318
Additions related to other-than-temporary impairment losses not previously recognized		0		0
Additional increases to the amount of credit loss for which other-than-temporary impairment was previously recognized		0		67
Reductions for previous credit losses realized on securities sold during the year		0		(1,385)
Balance September 30,	$	0	$	0

	Nine Months Ended September 30,
	2013		2012
Balance January 1,	$	0	$	359
Additions related to other-than-temporary impairment losses not previously recognized		0		747
Additional increases to the amount of credit loss for which other-than-temporary impairment was previously recognized		0		279
Reductions for previous credit losses realized on securities sold during the year		0		(1,385)
Balance September 30,	$	0	$	0

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Changes in Accumulated Other Comprehensive Income By Component) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax [Abstract]
Unrealized Gains and Losses on Available- for-Sales Securities, Opening Balance				$ 7,517	[1]
Unrealized Gains and Losses on Available- for-Sales Securities, Other comprehensive income before reclassification				(7,096)	[1]
Unrealized Gains and Losses on Available- for-Sales Securities, Amounts reclassified from accumulated other comprehensive income				(64)	[1]
Unrealized Gains and Losses on Available- for-Sales Securities,Net current period other comprehensive income				(7,160)	[1]
Unrealized Gains and Losses on Available- for-Sales Securities, Ending Balance	357	[1]		357	[1]
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax [Abstract]
Defined Benefit Pension Items, Opening Balance				(1,828)	[1]
Defined Benefit Pension Items, Other comprehensive income before reclassification				(90)	[1]
Defined Benefit Pension Items, Amounts reclassified from accumulated other comprehensive income				109	[1]
Defined Benefit Pension Items, Net current period other comprehensive income				19	[1]
Defined Benefit Pension Items, Ending Balance	(1,809)	[1]		(1,809)	[1]
Accumulated other comprehensive income, Opening Balance				5,689	[1]	5,139
Other comprehensive income (loss) before reclassification				(7,186)	[1]
Amounts reclassified from accumulated other comprehensive income (loss)				45	[1]
Net current period other comprehensive income (loss)	(827)		153	(7,141)	[1]	1,505
Accumulated other comprehensive income, Ending Balance	(1,452)	[1]	6,644	(1,452)	[1]	6,644
Unrealized loss on securities available for sale without other than temporary impairment Balance						7,688
Unrealized loss on securities available for sale without other than temporary impairment Current Period Change						818
Unrealized gain on securities available for sale without other than temporary impairment, Balance			8,506			8,506
Unrealized loss on securities available for sale with other than temporary impairment, Balance						(523)
Unrealized loss on securities available for sale with other than temporary impairment, Current Period Change						523
Unrealized loss on securities available for sale with other than temporary impairment, Balance			0			0
Total unrealized gain on securities available for sale, Opening Balance						7,165
Total unrealized gain on securities available for sale, Current Period Change						1,341
Total unrealized gain on securities available for sale, Ending Balance			8,506			8,506
Unrealized loss on defined benefit pension plans, Opening Balance						(2,026)
Unrealized loss on defined benefit pension plans, Current Period Change						164
Unrealized loss on defined benefit pension plans, Ending Balance			$ (1,862)			$ (1,862)

[1] All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

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OFFSETTING ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2013

Offsetting Assets and Liabilities [Abstract]

OFFSETTING ASSETS AND LIABILITIES

NOTE 10. OFFSETTING ASSETS AND LIABILITIES

On January 1, 2013, the Company adopted changes issued by the FASB to the disclosure of offsetting assets and liabilities. These changes require an entity to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The enhanced disclosures will enable users of an entity’s financial statements to understand and evaluate the effect or potential effect of master netting arrangements on an entity’s financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. Other than the additional disclosure requirements, the adoption of these changes had no impact on the Consolidated Financial Statements.

Offsetting of Financial Assets and Derivative Assets

	September 30, 2013
								Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
Description
Interest Rate Swap Derivatives	$	297	$	0	$	297	$	0	$	(270)	$	27
Total	$	297	$	0	$	297	$	0	$	(270)	$	27

Offsetting of Financial Liabilities and Derivative Liabilities

	September 30, 2013
							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Pledged		Net Amount
Description
Interest Rate Swap Derivatives	$	267	$	0	$	267	$	0	$	0	$	267
Repurchase Agreements		103,959		0		103,959		(103,959)		0		0
Total	$	104,226	$	0	$	104,226	$	(103,959)	$	0	$	267

Offsetting of Financial Liabilities and Derivative Liabilities

	December 31, 2012
							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Pledged		Net Amount
Description
Repurchase Agreements	$	121,883	$	0	$	121,883	$	(121,883)	$	0	$	0
Total	$	121,883	$	0	$	121,883	$	(121,883)	$	0	$	0

There were no interest rate swap derivatives as of December 31, 2012.

If an event of default occurs causing an early termination of an interest rate swap derivative, any early termination amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party. If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions.

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EMPLOYEE BENEFIT PLANS (Additional Information) (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Pension Plan, Defined Benefit [Member]
Estimated future employer contributions in next fiscal year	$ 160,000	$ 211,000
Supplemental Employee Retirement Plan, Defined Benefit [Member]
Estimated future employer contributions in next fiscal year	$ 80,000	$ 80,000

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclassification Adjustment) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012
Unrealized gains and losses on available-for-sale securities
Income tax expense	$ (7,096)	[1]
Net of tax			1,341
Amount Reclassified From Accumulated Other Comprehensive Income [Member]
Unrealized gains and losses on available-for-sale securities
Net securities gains (losses)	107	[2]
Income tax expense	(43)	[2]
Net of tax	64	[2]
Amortization of defined benefit pension items
Salaries and employee benefits	(183)	[2],[3]
Income tax expense	74	[2]
Net of tax	(109)	[2]
Total reclassifications for the period	$ (45)	[2]

[1] All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

[2] Amounts in parenthesis indicate a decrease in net income.

[3] Included in the computation of net periodic benefit cost (see employee benefit plans footnote for additional details).

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Credit Quality Indicators) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	$ 2,392,715	$ 2,257,520
Commercial and Industrial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	898,319	847,009
Commercial Real Estate and Multi-family Residential Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	917,762	800,198
Agri-business and Agricultural Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	200,238	224,805
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	276,561	282,994
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	1,955,153	1,784,617
Pass [Member] | Other Commerical Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	55,674	56,692
Pass [Member] | Other Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	8,699	10,168
Pass [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	427,576	403,778
Pass [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	387,047	355,772
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	107,363	67,002
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	333,148	315,672
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	363,712	282,108
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	36,904	43,425
Pass [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	103,083	107,734
Pass [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	95,426	115,649
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	29,422	18,685
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	7,099	7,932
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	89,764	82,678
Special Mention [Member] | Other Commerical Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Special Mention [Member] | Other Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	467	378
Special Mention [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	21,129	22,591
Special Mention [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	29,779	23,192
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	549	4,595
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	25,536	24,589
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	9,476	6,345
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	330	345
Special Mention [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Special Mention [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Special Mention [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	549	343
Special Mention [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	1,949	300
Special Mention [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	77,495	99,190
Substandard [Member] | Other Commerical Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	118	118
Substandard [Member] | Other Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	292	497
Substandard [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	13,645	13,468
Substandard [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	19,143	26,857
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	9,411	10,753
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	12,528	18,144
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	18,805	26,028
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	1,192
Substandard [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	1,729	1,404
Substandard [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Substandard [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	1,824	729
Substandard [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Substandard [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	66
Doubtful [Member] | Other Commerical Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Other Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	66
Doubtful [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0
Doubtful [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Doubtful [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	270,303	290,969
Not Rated [Member] | Other Commerical Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Other Consumer Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	34,585	34,661
Not Rated [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	1,285
Not Rated [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	18
Not Rated [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	0	0
Not Rated [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	87,734	89,805
Not Rated [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	143,288	153,692
Not Rated [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loan balance	$ 4,696	$ 11,508

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Schedule of changes in accumulated other comprehensive income

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the nine months ended September 30, 2013 and 2012:

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME BY COMPONENT^(a)

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
	Securities		Items		Total
Balance at December 31, 2012	$	7,517	$	(1,828)	$	5,689
Other comprehensive income (loss)
before reclassification		(7,096)		(90)		(7,186)
Amounts reclassified from
accumulated other
comprehensive income (loss)		(64)		109		45
Net current period other
comprehensive income (loss)		(7,160)		19		(7,141)
Balance at September 30, 2013	$	357	$	(1,809)	$	(1,452)

(a) All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

			Current
	Balance		Period		Balance
	at December 31, 2011		Change		at September 30, 2012
Unrealized loss on securities available for sale
without other than temporary impairment	$	7,688	$	818	$	8,506
Unrealized loss on securities available for sale
with other than temporary impairment		(523)		523		0
Total unrealized loss on securities available for sale		7,165		1,341		8,506
Unrealized loss on defined benefit pension plans		(2,026)		164		(1,862)
Total	$	5,139	$	1,505	$	6,644

Reclassification Accumulated Other Comprehensive Income

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2013 are as follows:

RELCASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME^(a)

Details about	Amount			Affected Line Item
Accumulated Other	Reclassified From			in the Statement
Comprehensive	Accumulated Other			Where Net
Income Components	Comprehensive Income			Income is Presented
	(in thousands)
Unrealized gains and losses on
available-for-sale securities
	$	107		Net securities gains (losses)
		(43)		Income tax expense
	$	64		Net of tax
Amortization of defined benefit
pension items
	$	(183)	(b)	Salaries and employee benefits
		74		Income tax expense
	$	(109)		Net of tax
Total reclassifications for the period	$	(45)		Net of tax

(a) Amounts in parenthesis indicate a decrease in net income.

(b) Included in the computation of net periodic benefit cost (see employee benefit plans footnote for additional details).

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FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

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:

	September 30, 2013
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,022	$	0	$	0	$	1,022
U.S. Government sponsored agencies		0		0		0		0
Mortgage-backed securities		0		369,311		0		369,311
Non-agency residential mortgage-backed securities		0		0		0		0
State and municipal securities		0		91,760		977		92,737
Total securities		1,022		461,071		977		463,070
Mortgage banking derivative		0		263		0		263
Interest rate swap derivative		0		297		0		297
Total assets	$	1,022	$	461,631	$	977	$	463,630
Liabilities
Mortgage banking derivative		0		109		0		109
Interest rate swap derivative		0		267		0		267
Total liabilities	$	0	$	376	$	0	$	376

	December 31, 2012
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,037	$	0	$	0	$	1,037
U.S. Government sponsored agencies		0		5,304		0		5,304
Mortgage-backed securities		0		365,644		0		365,644
Non-agency residential mortgage-backed securities		0		3,594		2,859		6,453
State and municipal securities		0		87,595		988		88,583
Total securities		1,037		462,137		3,847		467,021
Mortgage banking derivative		0		739		0		739
Total assets	$	1,037	$	462,876	$	3,847	$	467,760
Liabilities
Mortgage banking derivative	$	0	$	12	$	0	$	12

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 nine months ended September 30, 2013 and 2012:

	Non-Agency Residential
	Mortgage-Backed Securities					State and Municipal Securities
	2013		2012		2013		2012
Balance of recurring Level 3 assets at January 1	$	2,859	$	0	$	988	$	686
Transfers into Level 3		3,334		0		0		0
Changes in fair value of securities		(181)		0		(11)		(4)
Principal payments		(2,160)		0		0		(45)
Sales		(3,852)		0		0		0
Balance of recurring Level 3 assets at September 30	$	0	$	0	$	977	$	637

Fair Value Measurements, Recurring, Valuation Techniques

The state and municipal securities measured at fair value included below are non-rated Indiana municipal revenue bonds and are not actively traded.

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at				Range of Inputs
	9/30/2013		Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$	977	Price to type, par, call	Discount to benchmark index	1-7	%
					(2.57)	%

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at				Range of Inputs
	December 31, 2012		Valuation Technique	Unobservable Input	(Average)
Non-agency residential mortgage-backed securities	$	2,859	Discounted cash flow	Constant prepayment rate	5.00-9.00
					(6.00)
				Average life (years)	0.20-2.86
					(2.70)
				Swap/EDSF spread	297-339
					(328)
State and municipal securities	$	988	Price to type, par, call	Discount to benchmark index	1-11	%
					(4%)

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:

	September 30, 2013
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	801	$	801
Non-working capital loans		0		0		3,234		3,234
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		1,974		1,974
Owner occupied loans		0		0		3,401		3,401
Nonowner occupied loans		0		0		12,306		12,306
Multifamily loans		0		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		0		0		489		489
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		366		366
Open end and junior lien loans		0		0		10		10
Residential construction loans		0		0		0		0
Other consumer loans		0		0		53		53
Total impaired loans	$	0	$	0	$	22,634	$	22,634
Mortgage servicing rights		0		0		8		8
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	22,717	$	22,717

Fair Value Measured On Nonrecurring Basis Valuation Techniques

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2013:

	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired Loans:
Commercial and industrial	$	4,035	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	32	%	(4% - 91%)
Impaired loans:
Commercial real estate		17,681	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	23	%	(5% - 46%)
Impaired loans:
Agri-business and agricultural		489	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	8	%	(7% - 9%)
Impaired loans:
Consumer 1-4 family mortgage		376	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	27	%	(8% - 51%)
Impaired loans:
Other consumer		53	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	35	%	(28% - 61%)
Mortgage servicing rights		8	Discounted cash flows	Discount rate	9.50	%
Other real estate owned		75	Appraisal	Discount to reflect current market conditions	49	%

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2012:

	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired Loans:
Commercial and industrial	$	3,980	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	35	%	(10% - 99%)
Impaired loans:
Commercial real estate		24,560	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	23	%	(4% - 57%)
Impaired loans:
Agri-business and agricultural		268	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	19	%
Impaired loans:
Consumer 1-4 family mortgage		510	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	39	%	(8% - 100%)
Impaired loans:
Other consumer		46	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	40	%	(29% - 100%)
Mortgage servicing rights		1,906	Discounted cash flows	Discount rate	9.20	%	(9.10% - 9.50%)
Other real estate owned		75	Appraisals	Discount to reflect current market conditions	49	%

	December 31, 2012
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
	(in thousands)
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	990	$	990
Non-working capital loans		0		0		2,990		2,990
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		2,026		2,026
Owner occupied loans		0		0		3,892		3,892
Nonowner occupied loans		0		0		18,642		18,642
Multifamily loans		0		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		0		0		268		268
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		352		352
Open end and junior lien loans		0		0		158		158
Residential construction loans		0		0		0		0
Other consumer loans		0		0		46		46
Total impaired loans	$	0	$	0	$	29,364	$	29,364
Mortgage servicing rights		0		0		1,906		1,906
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	31,345	$	31,345

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.

	September 30, 2013
	Carrying		Estimated Fair Value
	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	81,340	$	81,340	$	0	$	0	$	81,340
Securities available for sale		463,070		1,022		461,071		977		463,070
Real estate mortgages held for sale		1,047		0		1,066		0		1,066
Loans, net		2,342,911		0		0		2,347,776		2,347,776
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		8,328		0		1,968		6,360		8,328
Financial Liabilities:
Certificates of deposit		(782,684)		0		(792,444)		0		(792,444)
All other deposits		(1,662,142)		(1,662,142)		0		0		(1,662,142)
Securities sold under agreements to repurchase		(103,959)		0		(103,959)		0		(103,959)
Federal funds purchased		(57,000)		0		(57,000)		0		(57,000)
Other short-term borrowings		(75,000)		0		(75,000)		0		(75,000)
Long-term borrowings		(37)		0		(44)		0		(44)
Subordinated debentures		(30,928)		0		0		(31,149)		(31,149)
Standby letters of credit		(288)		0		0		(288)		(288)
Accrued interest payable		(3,629)		(121)		(3,505)		(3)		(3,629)

	December 31, 2012
	Carrying		Estimated Fair Value
	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	232,237	$	232,237	$	0	$	0	$	232,237
Securities available for sale		467,021		1,037		462,137		3,847		467,021
Real estate mortgages held for sale		9,452		0		9,663		0		9,663
Loans, net		2,206,075		0		0		2,230,993		2,230,993
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		8,485		6		2,215		6,264		8,485
Financial Liabilities:
Certificates of deposit		(907,505)		0		(922,397)		0		(922,397)
All other deposits		(1,674,251)		(1,674,251)		0		0		(1,674,251)
Securities sold under agreements to repurchase		(121,883)		0		(121,883)		0		(121,883)
Long-term borrowings		(15,038)		0		(15,607)		0		(15,607)
Subordinated debentures		(30,928)		0		0		(31,223)		(31,223)
Standby letters of credit		(262)		0		0		(262)		(262)
Accrued interest payable		(4,757)		(298)		(4,456)		(3)		(4,757)

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SECURITIES (Addiotional information) (Details) (USD $) In Millions, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Information related to available for sale securities [Abstract]
Available-for-sale Securities pledged as collateral	$ 154.1	$ 199.3
Number Of Securities Sold	12	11
Available-for-sale Equity Securities, Amortized Cost Basis	29.9	27.9
Available-for-sale Securities, Debt Securities	$ 30.0	$ 27.5

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Aging Of The Recorded Investment In Past Due Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	$ 3,267	$ 4,257
Greater than 90 Days Past Due	23,197	30,875
Total Past Due	26,464	35,132
Loans Not Past Due	2,366,251	2,222,388
Total	2,392,715	2,257,520
Other Commerical Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Loans Not Past Due	55,792	56,810
Total	55,792	56,810
Commercial and Industrial Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	898,319	847,009
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	596	233
Greater than 90 Days Past Due	1,765	1,899
Total Past Due	2,361	2,132
Loans Not Past Due	459,989	437,705
Total	462,350	439,837
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	872	48
Greater than 90 Days Past Due	3,895	4,862
Total Past Due	4,767	4,910
Loans Not Past Due	431,202	402,262
Total	435,969	407,172
Commercial Real Estate and Multi-Family Residential Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	917,762	800,198
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	0	998
Greater than 90 Days Past Due	0	398
Total Past Due	0	1,396
Loans Not Past Due	117,323	80,954
Total	117,323	82,350
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	45	1,023
Greater than 90 Days Past Due	2,646	2,461
Total Past Due	2,691	3,484
Loans Not Past Due	368,521	354,921
Total	371,212	358,405
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	0	38
Greater than 90 Days Past Due	11,633	19,200
Total Past Due	11,633	19,238
Loans Not Past Due	380,360	295,243
Total	391,993	314,481
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	0	0
Greater than 90 Days Past Due	0	286
Total Past Due	0	286
Loans Not Past Due	37,234	44,676
Total	37,234	44,962
Agri-business and Agricultural Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	200,238	224,805
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	0	0
Greater than 90 Days Past Due	1,147	797
Total Past Due	1,147	797
Loans Not Past Due	103,665	108,359
Total	104,812	109,156
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	90	0
Greater than 90 Days Past Due	0	0
Total Past Due	90	0
Loans Not Past Due	95,336	115,649
Total	95,426	115,649
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	276,561	282,994
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	1,167	1,475
Greater than 90 Days Past Due	1,846	504
Total Past Due	3,013	1,979
Loans Not Past Due	116,516	107,583
Total	119,529	109,562
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	233	361
Greater than 90 Days Past Due	182	391
Total Past Due	415	752
Loans Not Past Due	151,921	161,172
Total	152,336	161,924
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	162	0
Greater than 90 Days Past Due	0	0
Total Past Due	162	0
Loans Not Past Due	4,534	11,508
Total	4,696	11,508
Other consumer loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
30 to 89 Days Past Due	102	81
Greater than 90 Days Past Due	83	77
Total Past Due	185	158
Loans Not Past Due	43,858	45,546
Total	$ 44,043	$ 45,704

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SECURITIES (Summary Of Available Sale Of Securities) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Information related to available for sale securities [Abstract]
Fair Value	$ 463,070	$ 467,021
Gross Unrealized Gain	8,443	13,877
Gross Unrealized Losses	(7,999)	(1,684)
Amortized Cost	462,626	454,828
Us Treasury Securities [Member]
Information related to available for sale securities [Abstract]
Fair Value	1,022	1,037
Gross Unrealized Gain	20	35
Gross Unrealized Losses	0	0
Amortized Cost	1,002	1,002
Us Government Sponsored Agencies [Member]
Information related to available for sale securities [Abstract]
Fair Value		5,304
Gross Unrealized Gain		278
Gross Unrealized Losses		0
Amortized Cost		5,026
Agency Residential Mortgage-Backed Securities [Member]
Information related to available for sale securities [Abstract]
Fair Value	369,311	365,644
Gross Unrealized Gain	5,613	7,813
Gross Unrealized Losses	(6,183)	(1,495)
Amortized Cost	369,881	359,326
Non-Agency Residential Mortgage Backed Securities [Member]
Information related to available for sale securities [Abstract]
Fair Value		6,453
Gross Unrealized Gain		242
Gross Unrealized Losses		0
Amortized Cost		6,211
State and Municipal Securities [Member]
Information related to available for sale securities [Abstract]
Fair Value	92,737	88,583
Gross Unrealized Gain	2,810	5,509
Gross Unrealized Losses	(1,816)	(189)
Amortized Cost	$ 91,743	$ 83,263

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FAIR VALUE DISCLOSURES (Assets and Liabilities Measured At Fair Value on a Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets [Abstract]
Mortgage-backed securities	$ 369,311
Total Securities	463,070	467,021
Mortgage banking derivative	27
Liabilities
Mortgage banking derivative	267	0
Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	1,022	1,037
U.S. Government sponsored agencies	0	5,304
Mortgage-backed securities	369,311	365,644
Non-agency residential mortgage-backed securities	0	6,453
State and municipal securities	92,737	88,583
Total Securities	463,070	467,021
Mortgage banking derivative	263	739
Interest rate swap derivative	297
Total assets	463,630	467,760
Liabilities
Mortgage banking derivative	109	12
Interest rate swap derivative	267
Total liabilities	376
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	1,022	1,037
U.S. Government sponsored agencies	0	0
Mortgage-backed securities	0	0
Non-agency residential mortgage-backed securities	0	0
State and municipal securities	0	0
Total Securities	1,022	1,037
Mortgage banking derivative	0	0
Interest rate swap derivative	0
Total assets	1,022	1,037
Liabilities
Mortgage banking derivative	0	0
Interest rate swap derivative	0
Total liabilities	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	0	0
U.S. Government sponsored agencies	0	5,304
Mortgage-backed securities	369,311	365,644
Non-agency residential mortgage-backed securities	0	3,594
State and municipal securities	91,760	87,595
Total Securities	461,071	462,137
Mortgage banking derivative	263	739
Interest rate swap derivative	297
Total assets	461,631	462,876
Liabilities
Mortgage banking derivative	109	12
Interest rate swap derivative	267
Total liabilities	376
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	0	0
U.S. Government sponsored agencies	0	0
Mortgage-backed securities	0	0
Non-agency residential mortgage-backed securities	0	2,859
State and municipal securities	977	988
Total Securities	977	3,847
Mortgage banking derivative	0	0
Interest rate swap derivative	0
Total assets	977	3,847
Liabilities
Mortgage banking derivative	0	0
Interest rate swap derivative	0
Total liabilities	$ 0

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Balance In The Allowance For Loan Losses And The Recorded Investment In Loans By Portfolio Management) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	$ 50,635	$ 51,817	$ 51,445	$ 53,400
Provision for loan losses	0	0	0	1,299
Loans charged-off	(1,296)	(483)	(2,871)	(4,067)
Recoveries	465	578	1,230	1,280
Net loans charged-off	(831)	95	(1,641)	(2,787)
Balance, closing	49,804	51,912	49,804	51,912
Ending allowance balance attributable to loans:
Individually evaluated for impairment	10,543	15,984	10,543	15,984	14,805
Collectively evaluated for impairment	39,261		39,261		36,640
Total ending allowance balance	49,804	51,912	49,804	51,912
Loans:
Loans individually evaluated for impairment	47,358		47,358		58,942
Loans collectively evaluated for impairment	2,345,357		2,345,357		2,198,578
Total ending loan balance	2,392,715		2,392,715		2,257,520
Commercial and Industrial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	21,879	19,696	22,342	22,830
Provision for loan losses	138	1,532	(569)	380
Loans charged-off	(595)	(98)	(738)	(2,552)
Recoveries	75	224	462	696
Net loans charged-off	(520)	126	(276)	(1,856)
Balance, closing	21,497	21,354	21,497	21,354
Ending allowance balance attributable to loans:
Individually evaluated for impairment	4,345		4,345		5,542
Collectively evaluated for impairment	17,152		17,152		16,800
Total ending allowance balance	21,497	21,354	21,497	21,354
Loans:
Loans individually evaluated for impairment	16,493		16,493		18,281
Loans collectively evaluated for impairment	881,826		881,826		828,728
Total ending loan balance	898,319		898,319		847,009
Commercial Real Estate and Multi-Family Residential Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	20,098	24,083	20,812	23,489
Provision for loan losses	(544)	(1,236)	(627)	158
Loans charged-off	(455)	(112)	(1,361)	(959)
Recoveries	73	120	348	167
Net loans charged-off	(382)	8	(1,013)	(792)
Balance, closing	19,172	22,855	19,172	22,855
Ending allowance balance attributable to loans:
Individually evaluated for impairment	5,731		5,731		8,559
Collectively evaluated for impairment	13,441		13,441		12,253
Total ending allowance balance	19,172	22,855	19,172	22,855
Loans:
Loans individually evaluated for impairment	26,127		26,127		36,919
Loans collectively evaluated for impairment	891,635		891,635		763,279
Total ending loan balance	917,762		917,762		800,198
Agri-business and Agricultural Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	1,517	1,419	1,403	695
Provision for loan losses	(185)	(76)	125	648
Loans charged-off	0	0	(200)	0
Recoveries	201	1	205	1
Net loans charged-off	201	1	5	1
Balance, closing	1,533	1,344	1,533	1,344
Ending allowance balance attributable to loans:
Individually evaluated for impairment	45		45		63
Collectively evaluated for impairment	1,488		1,488		1,340
Total ending allowance balance	1,533	1,344	1,533	1,344
Loans:
Loans individually evaluated for impairment	1,147		1,147		797
Loans collectively evaluated for impairment	199,091		199,091		224,008
Total ending loan balance	200,238		200,238		224,805
Other Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	264	176	240	65
Provision for loan losses	(23)	(207)	1	(100)
Loans charged-off	0	0	0	0
Recoveries	0	182	0	186
Net loans charged-off	0	182	0	186
Balance, closing	241	151	241	151
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0		0		0
Collectively evaluated for impairment	241		241		240
Total ending allowance balance	241	151	241	151
Loans:
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	55,792		55,792		56,810
Total ending loan balance	55,792		55,792		56,810
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	2,823	2,412	2,682	2,322
Provision for loan losses	409	356	709	417
Loans charged-off	(126)	(196)	(315)	(288)
Recoveries	71	21	101	142
Net loans charged-off	(55)	(175)	(214)	(146)
Balance, closing	3,177	2,593	3,177	2,593
Ending allowance balance attributable to loans:
Individually evaluated for impairment	390		390		607
Collectively evaluated for impairment	2,787		2,787		2,075
Total ending allowance balance	3,177	2,593	3,177	2,593
Loans:
Loans individually evaluated for impairment	3,494		3,494		2,853
Loans collectively evaluated for impairment	273,067		273,067		280,141
Total ending loan balance	276,561		276,561		282,994
Other Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	587	523	609	645
Provision for loan losses	179	114	225	125
Loans charged-off	(120)	(77)	(257)	(268)
Recoveries	45	30	114	88
Net loans charged-off	(75)	(47)	(143)	(180)
Balance, closing	691	590	691	590
Ending allowance balance attributable to loans:
Individually evaluated for impairment	32		32		34
Collectively evaluated for impairment	659		659		575
Total ending allowance balance	691	590	691	590
Loans:
Loans individually evaluated for impairment	97		97		92
Loans collectively evaluated for impairment	43,946		43,946		45,612
Total ending loan balance	44,043		44,043		45,704
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Balance, opening	3,467	3,508	3,357	3,354
Provision for loan losses	26	(483)	136	(329)
Loans charged-off	0	0	0	0
Recoveries	0	0	0	0
Net loans charged-off	0	0	0	0
Balance, closing	3,493	3,025	3,493	3,025
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0		0		0
Collectively evaluated for impairment	3,493		3,493		3,357
Total ending allowance balance	3,493	3,025	3,493	3,025
Loans:
Loans individually evaluated for impairment	0		0		0
Loans collectively evaluated for impairment	0		0		0
Total ending loan balance	$ 0		$ 0		$ 0

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SECURITIES (Schedule Of Available Sale Of Securities Continous Unrealized Loss Position) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Securities with unrealized losses [Abstract]
Less than 12 months, Fair Value	$ 188,925	$ 103,765
Less than 12 months, Unrealized Losses	(7,641)	(1,254)
12 months or more, Fair Value	17,358	20,472
12 months or more, Unrealized Losses	(358)	(430)
Total Fair Value	206,283	124,237
Total Unrealized Losses	(7,999)	(1,684)
Agency Residential Mortgage-Backed Securities [Member]
Securities with unrealized losses [Abstract]
Less than 12 months, Fair Value	163,795	92,974
Less than 12 months, Unrealized Losses	(5,825)	(1,066)
12 months or more, Fair Value	17,358	20,422
12 months or more, Unrealized Losses	(358)	(429)
Total Fair Value	181,153	113,396
Total Unrealized Losses	(6,183)	(1,495)
State and Municipal Securities [Member]
Securities with unrealized losses [Abstract]
Less than 12 months, Fair Value	25,130	10,791
Less than 12 months, Unrealized Losses	(1,816)	(188)
12 months or more, Fair Value	0	50
12 months or more, Unrealized Losses	0	(1)
Total Fair Value	25,130	10,841
Total Unrealized Losses	$ (1,816)	$ (189)

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EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2013

Employee Benefit Plans [Abstract]

Components of net periodic benefit cost

Components of net periodic benefit cost:

	Nine Months Ended September 30,
	Pension Benefits				SERP Benefits
	2013		2012		2013		2012
Interest cost	$	87	$	95	$	34	$	38
Expected return on plan assets		(90)		(102)		(56)		(56)
Recognized net actuarial (gain) loss		113		102		70		62
Net pension expense (benefit)	$	110	$	95	$	48	$	44

	Three Months Ended September 30,
	Pension Benefits				SERP Benefits
	2013		2012		2013		2012
Interest cost	$	29	$	31	$	11	$	12
Expected return on plan assets		(30)		(34)		(19)		(18)
Recognized net actuarial (gain) loss		38		35		24		20
Net pension expense (benefit)	$	37	$	32	$	16	$	14

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) In Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at Dec. 31, 2011	$ 273,200	$ 87,380	$ 181,903	$ 5,139	$ (1,222)
Net income	26,792		26,792
Other comprehensive income (loss), net of tax	1,505			1,505
Common stock cash dividends declared	(8,080)		(8,080)
Treasury shares purchased under deferred directors' plan	0	391			(391)
Stock activity under stock compensation plans, net of taxes	323	323
Stock compensation expense	1,161	1,161
Balance at Sep. 30, 2012	294,901	89,255	200,615	6,644	(1,613)
Balance at Dec. 31, 2012	297,739	90,039	203,654	5,689	(1,643)
Net income	28,251		28,251
Other comprehensive income (loss), net of tax	(7,141)			(7,141)
Common stock cash dividends declared	(6,257)		(6,257)
Treasury shares purchased under deferred directors' plan	0	381			(381)
Treasury stock sold and distributed under deferred directors' plan	0	(54)			54
Stock activity under stock compensation plans, net of taxes	498	498
Stock compensation expense	1,365	1,365
Balance at Sep. 30, 2013	$ 314,455	$ 92,229	$ 225,648	$ (1,452)	$ (1,970)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 28,251	$ 26,792
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	2,174	2,029
Provision for loan losses	0	1,299
Loss on sale and write down of other real estate owned	8	214
Amortization of intangible assets	35	39
Amortization of loan servicing rights	453	541
Net change in loan servicing rights valuation allowance	(39)	84
Loans originated for sale	(68,378)	(89,595)
Net gain on sales of loans	(2,193)	(1,926)
Proceeds from sale of loans	78,221	87,180
Net loss on sales of premises and equipment	12	4
Net (gain) loss on sales and calls of securities available for sale	(107)	377
Impairment on available for sale securities	0	1,026
Net securities amortization	7,097	5,210
Stock compensation expense	1,365	1,161
Earnings on life insurance	(1,168)	(708)
Tax benefit of stock option exercises	(77)	(535)
Net change:
Accrued income receivable	158	(123)
Accrued expenses payable	(2,536)	2,027
Other assets	5,740	2,322
Other liabilities	1,168	(615)
Total adjustments	21,933	10,011
Net cash from operating activities	50,184	36,803
Cash flows from investing activities:
Proceeds from sale of securities available for sale	29,996	27,492
Proceeds from maturities, calls and principal paydowns of securities available for sale	97,229	82,499
Purchases of securities available for sale	(142,011)	(128,249)
Purchase of life insurance	(117)	(210)
Net (increase) decrease in total loans	(136,944)	27,238
Proceeds from sales of land, premises and equipment	1	2
Purchases of land, premises and equipment	(5,861)	(2,268)
Proceeds from sales of other real estate	621	1,698
Net cash from investing activities	(157,086)	8,202
Cash flows from financing activities:
Net increase (decrease) in total deposits	(136,930)	63,401
Net increase (decrease) in short-term borrowings	114,076	(23,438)
Payments on long-term borrowings	(15,001)	(2)
Common dividends paid	(6,244)	(8,067)
Preferred dividends paid	(13)	(13)
Proceeds from stock option exercise	498	323
Purchase of treasury stock	(381)	(391)
Net cash from financing activities	(43,995)	31,813
Net change in cash and cash equivalents	(150,897)	76,818
Cash and cash equivalents at beginning of the period	232,237	104,584
Cash and cash equivalents at end of the period	81,340	181,402
Cash paid during the period for:
Interest	14,673	19,937
Income taxes	13,180	11,028
Supplemental non-cash disclosures:
Loans transferred to other real estate	$ 108	$ 296

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LOANS

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

LOANS

NOTE 3. LOANS

	September 30,				December 31,
	2013				2012
Commercial and industrial loans:
Working capital lines of credit loans	$	462,098	19.3	%	$	439,638	19.5	%
Non-working capital loans		435,968	18.2			407,184	18.0
Total commercial and industrial loans		898,066	37.5			846,822	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans		117,733	4.9			82,494	3.7
Owner occupied loans		371,500	15.5			358,617	15.9
Nonowner occupied loans		392,538	16.4			314,889	13.9
Multifamily loans		37,279	1.6			45,011	2.0
Total commercial real estate and multi-family residential loans		919,050	38.4			801,011	35.5
Agri-business and agricultural loans:
Loans secured by farmland		104,807	4.4			109,147	4.8
Loans for agricultural production		95,330	4.0			115,572	5.1
Total agri-business and agricultural loans		200,137	8.4			224,719	10.0
Other commercial loans		55,797	2.3			56,807	2.5
Total commercial loans		2,073,050	86.6			1,929,359	85.5
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		119,788	5.0			109,823	4.9
Open end and junior lien loans		151,726	6.3			161,366	7.1
Residential construction and land development loans		4,705	0.2			11,541	0.5
Total consumer 1-4 family mortgage loans		276,219	11.5			282,730	12.5
Other consumer loans		44,091	1.8			45,755	2.0
Total consumer loans		320,310	13.4			328,485	14.5
Subtotal		2,393,360	100.0	%		2,257,844	100.0	%
Less: Allowance for loan losses		(49,804)				(51,445)
Net deferred loan fees		(645)				(324)
Loans, net	$	2,342,911			$	2,206,075

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

BASIS OF PRESENTATION

NOTE 1. BASIS OF PRESENTATION

This report is filed for Lakeland Financial Corporation (the “Company”) and its wholly owned subsidiaries, Lake City Bank (the “Bank”), and LCB Risk Management, a captive insurance company. All significant inter-company balances and transactions have been eliminated in consolidation. Also included is the Bank’s wholly owned subsidiary, LCB Investments II, Inc. (“LCB Investments”). LCB Investments also owns LCB Funding, Inc. (“LCB Funding”), a real estate investment trust.

The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and are unaudited. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ending September 30, 2013 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2013. The 2012 Lakeland Financial Corporation Annual Report on Form 10-K should be read in conjunction with these statements.

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SECURITIES (Schedule Of Available Sale Of Securities By Maturity) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Maturities of Available-for-sale Debt Securities [Abstract]
Due in one year or less	$ 4,168
Due after one year through five years	15,691
Due after five years through ten years	40,061
Due after ten years	32,825
Available for sale securities with maturities amortized cost	92,745
Mortgage-backed securities	369,881
Total debt securities	462,626
Due in one year or less	4,238
Due after one year through five years	16,618
Due after five years through ten years	40,987
Due after ten years	31,916
Available for sale securities with maturities fair value	93,759
Mortgage-backed securities	369,311
Securities available for sale (carried at fair value)	$ 463,070	$ 467,021

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OFFSETTING ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2013

Offsettings [Abstract]

Offsetting Assets and Liability

Offsetting of Financial Assets and Derivative Assets

	September 30, 2013
								Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Assets presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Received		Net Amount
Description
Interest Rate Swap Derivatives	$	297	$	0	$	297	$	0	$	(270)	$	27
Total	$	297	$	0	$	297	$	0	$	(270)	$	27

Offsetting of Financial Liabilities and Derivative Liabilities

	September 30, 2013
							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Pledged		Net Amount
Description
Interest Rate Swap Derivatives	$	267	$	0	$	267	$	0	$	0	$	267
Repurchase Agreements		103,959		0		103,959		(103,959)		0		0
Total	$	104,226	$	0	$	104,226	$	(103,959)	$	0	$	267

Offsetting of Financial Liabilities and Derivative Liabilities

	December 31, 2012
							Gross Amounts Not Offset in the Statement of Financial Position
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Position		Net Amounts of Liabilities presented in the Statement of Financial Position		Financial Instruments		Cash Collateral Pledged		Net Amount
Description
Repurchase Agreements	$	121,883	$	0	$	121,883	$	(121,883)	$	0	$	0
Total	$	121,883	$	0	$	121,883	$	(121,883)	$	0	$	0

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Loans Individualy Evaluated For Impairment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Loans Individually Evaluated for Impairment [Abstract]
Unpaid Principal Balance	$ 54,019	$ 68,710	$ 54,019	$ 68,710	$ 65,516
Recorded Investment	47,358	61,303	47,358	61,303	58,942
Allowance for loans losses allocated	10,543	15,984	10,543	15,984	14,805
Average Recorded Investment	47,653	60,142	50,010	60,866
Interest Income Recognized	255	334	865	977
Cash Basis Interest Income Recogonized	272	311	908	958
Other Commerical Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded					0
Unpaid principal balance with an allowance recorded		0		0	0
Recorded Investment with no related allowance recorded					0
Recorded investment with an allowance recorded		0		0	0
Allowance for loan losses allocated with no related allowance recorded					0
Allowance for loans losses allocated with an allowance recorded		0		0	0
Average recorded investment with an allowance recorded		0		0
Interest income recognized with an allowance recorded		0		0
Cash basis interest income recognized with an allowance recorded		0		0
Other Consumer Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	1	1	1	1	1
Unpaid principal balance with an allowance recorded	96	45	96	45	91
Recorded Investment with no related allowance recorded	1	1	1	1	1
Recorded investment with an allowance recorded		45		45	91
Recorded Investment	96		96
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	32	18	32	18	34
Average recorded investment with no related allowance recorded	1	0	1	0
Average recorded investment with an allowance recorded	99	30	86	14
Interest income recognized with no related allowance recorded	0	0	0	0
Interest income recognized with an allowance recorded	0	1	1	1
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	0	1	1	1
Commercial and Industrial Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for loans losses allocated	4,345		4,345		5,542
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	64		64		61
Unpaid principal balance with an allowance recorded	5,196	5,915	5,196	5,915	5,833
Recorded Investment with no related allowance recorded	64		64		61
Recorded investment with an allowance recorded	2,587	3,074	2,587	3,074	3,224
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	1,024	1,417	1,024	1,417	1,516
Average recorded investment with no related allowance recorded	64		65
Average recorded investment with an allowance recorded	2,988	3,059	3,019	4,420
Interest income recognized with no related allowance recorded	0		0
Interest income recognized with an allowance recorded	12	13	39	42
Cash basis interest income recognized with no related allowance recorded	0		0
Cash basis interest income recognized with an allowance recorded	14	10	41	38
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	0	70	0	70	0
Unpaid principal balance with an allowance recorded	15,695	19,357	15,695	19,357	16,763
Recorded Investment with no related allowance recorded	0	70	0	70	0
Recorded investment with an allowance recorded	13,842	17,175	13,842	17,175	14,996
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	3,321	5,154	3,321	5,154	4,026
Average recorded investment with no related allowance recorded	0	70	11	136
Average recorded investment with an allowance recorded	14,017	17,072	14,081	17,353
Interest income recognized with no related allowance recorded	0	0	0	0
Interest income recognized with an allowance recorded	120	171	391	528
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	126	168	402	528
Commercial Real Estate and Multi-Family Residential Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for loans losses allocated	5,731		5,731		8,559
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with an allowance recorded	2,569	3,786	2,569	3,786	3,352
Recorded investment with an allowance recorded	2,569	3,396	2,569	3,396	2,960
Allowance for loans losses allocated with an allowance recorded	595	672	595	672	934
Average recorded investment with an allowance recorded	2,848	2,436	3,860	1,814
Interest income recognized with an allowance recorded	11	18	63	35
Cash basis interest income recognized with an allowance recorded	20	13	67	30
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	1,072	781	1,072	781	754
Unpaid principal balance with an allowance recorded	3,946	6,900	3,946	6,900	5,869
Recorded Investment with no related allowance recorded	476	601	476	601	574
Recorded investment with an allowance recorded	3,906	6,287	3,906	6,287	5,869
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	505	1,527	505	1,527	1,476
Average recorded investment with no related allowance recorded	616	611	575	513
Average recorded investment with an allowance recorded	3,707	5,702	3,592	4,859
Interest income recognized with no related allowance recorded	0	0	0	0
Interest income recognized with an allowance recorded	20	30	88	48
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	20	19	96	35
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded		385		385	385
Unpaid principal balance with an allowance recorded	19,166	27,957	19,166	27,957	26,835
Recorded Investment with no related allowance recorded		385		385	385
Recorded investment with an allowance recorded	19,176	27,255	19,176	27,255	26,845
Allowance for loan losses allocated with no related allowance recorded		0		0	0
Allowance for loans losses allocated with an allowance recorded	4,631	6,670	4,631	6,670	6,149
Average recorded investment with no related allowance recorded		385		217
Average recorded investment with an allowance recorded	19,183	27,382	20,960	28,115
Interest income recognized with no related allowance recorded		10		10
Interest income recognized with an allowance recorded	87	78	255	280
Cash basis interest income recognized with no related allowance recorded		13		13
Cash basis interest income recognized with an allowance recorded	86	77	258	281
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded					410
Unpaid principal balance with an allowance recorded	0		0		0
Recorded Investment with no related allowance recorded					286
Recorded investment with an allowance recorded	0		0		0
Allowance for loan losses allocated with no related allowance recorded					0
Allowance for loans losses allocated with an allowance recorded	0		0		0
Average recorded investment with an allowance recorded	0		64
Interest income recognized with an allowance recorded	0		0
Cash basis interest income recognized with an allowance recorded	0		0
Agri-business and Agricultural Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for loans losses allocated	45		45		63
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	612	666	612	666	645
Unpaid principal balance with an allowance recorded	1,033	654	1,033	654	651
Recorded Investment with no related allowance recorded	613	487	613	487	466
Recorded investment with an allowance recorded		333		333	331
Recorded Investment	534		534
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	45	67	45	67	63
Average recorded investment with no related allowance recorded	479	489	480	252
Average recorded investment with an allowance recorded	536	343	418	437
Interest income recognized with no related allowance recorded	0	0	0	0
Interest income recognized with an allowance recorded	0	0	0	0
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	0	0	0	0
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded		0		0	0
Unpaid principal balance with an allowance recorded		0		0	0
Recorded Investment with no related allowance recorded		0		0	0
Recorded investment with an allowance recorded		0		0	0
Allowance for loan losses allocated with no related allowance recorded		0		0	0
Allowance for loans losses allocated with an allowance recorded		0		0	0
Average recorded investment with no related allowance recorded		0		68
Average recorded investment with an allowance recorded		63		91
Interest income recognized with no related allowance recorded		0		0
Interest income recognized with an allowance recorded		0		0
Cash basis interest income recognized with no related allowance recorded		0		0
Cash basis interest income recognized with an allowance recorded		0		0
Consumer 1-4 Family Mortgage Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for loans losses allocated	390		390		607
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with an allowance recorded					0
Recorded investment with an allowance recorded					0
Allowance for loans losses allocated with an allowance recorded					0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	1,158	277	1,158	277	59
Unpaid principal balance with an allowance recorded	3,355	1,562	3,355	1,562	3,387
Recorded Investment with no related allowance recorded	1,054	276	1,054	276	59
Recorded investment with an allowance recorded		1,564		1,564	2,403
Recorded Investment	2,384		2,384
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	385	267	385	267	415
Average recorded investment with no related allowance recorded	719	417	275	432
Average recorded investment with an allowance recorded	2,347	1,730	2,461	1,787
Interest income recognized with no related allowance recorded	0	1	0	1
Interest income recognized with an allowance recorded	5	12	28	32
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	6	10	43	32
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	41	0	41	0	41
Unpaid principal balance with an allowance recorded	15	354	15	354	379
Recorded Investment with no related allowance recorded	41	0	41	0	41
Recorded investment with an allowance recorded		354		354	350
Recorded Investment	15		15
Allowance for loan losses allocated with no related allowance recorded	0	0	0	0	0
Allowance for loans losses allocated with an allowance recorded	5	192	5	192	192
Average recorded investment with no related allowance recorded	27	0	23	20
Average recorded investment with an allowance recorded	22	353	40	340
Interest income recognized with no related allowance recorded	0	0	0	0
Interest income recognized with an allowance recorded	0	0	0	0
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	$ 0	$ 0	$ 0	$ 0

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Troubled Debt Restructuring Subsequently Defaulted) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013 Numbers	Sep. 30, 2012 Numbers	Sep. 30, 2013 Numbers	Sep. 30, 2012 Numbers
Troubled Debt Restructurings that Subsequently Defaulted [Abstract]
Number of Loans	0	0	1	1
Recorded Investment	$ 0	$ 0	$ 912	$ 65
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Troubled Debt Restructurings that Subsequently Defaulted [Abstract]
Number of Loans	0	0	1	1
Recorded Investment	$ 0	$ 0	$ 912	$ 65

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FAIR VALUE DISCLOSURES (Additional Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended				3 Months Ended	9 Months Ended																		3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2011	Mar. 31, 2013 Non Agency Residential Mortgage Backed Securities [Member]	Sep. 30, 2013 Non-Agency Residential Mortgage-Backed Securities [Member]	Sep. 30, 2012 Non-Agency Residential Mortgage-Backed Securities [Member]	Sep. 30, 2013 State and Municipal Securities [Member]	Sep. 30, 2012 State and Municipal Securities [Member]	Sep. 30, 2013 Commercial Real Estates [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Commercial Real Estates [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Inventory Finished Goods [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Inventory Finished Goods [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Finished Goods [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Finished Goods [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Inventory Work In Process [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Inventory Work In Process [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Equipment [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Equipment [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Marketable Securities [Member]	Sep. 30, 2012 Marketable Securities [Member]	Sep. 30, 2013 Marketable Securities [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Marketable Securities [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]	Sep. 30, 2013 Impaired Loans [Member]	Sep. 30, 2012 Impaired Loans [Member]	Sep. 30, 2013 Impaired Loans [Member]	Sep. 30, 2012 Impaired Loans [Member]
Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.
Mortgage servicing rights	$ 3,300		$ 3,300
Percentage of discount from appraised value (in hundredths)														0.00%	50.00%	35.00%	65.00%	30.00%	60.00%	50.00%	100.00%	30.00%	70.00%			10.00%	30.00%
Weighted average interest rate, residential mortgages (in hundredths)			4.12%
Weighted average maturity of residential mortgages			19 years
Discount rate used to estimate fair value (in hundredths)			9.30%		9.20%
Loans at fair value																								8
Subtotal	2,393,360		2,393,360		2,257,844																			11				30,000	50,200	30,000	50,200
Valuation allowance	49,804	51,912	49,804	51,912	51,445	50,635	51,817	53,400																3				7,300	14,500	7,300	14,500
Recoveries	465	578	1,230	1,280																				39	84			200	200	2,700	3,800
Prepayment Speed used in unobservable assumptions			189		392
Fair Value, Measurement With Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3									$ 3,300	$ 3,334	$ 0	$ 0	$ 0
Market Value Tolerance Variance Rate			3.00%

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FAIR VALUE DISCLOSURES (Reconciliation of All Assets Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs (Level 3) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Non-Agency Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance	$ 2,859	$ 0
Transfers into Level 3	3,334	0
Changes in fair value of securities	(181)	0
Principal payments	(2,160)	0
Sales	(3,852)	0
Balance	0	0
State and Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance	988	686
Transfers into Level 3	0	0
Changes in fair value of securities	(11)	(4)
Principal payments	0	(45)
Sales	0	0
Balance	$ 977	$ 637

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SECURITIES (Schedule Of Debt Securities Credit Loss Recognised) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Other Than Temporary Impairment, Credit Losses Recognized In Earnings [Roll Forward]
Balance, Opening	$ 0	$ 1,318	$ 0	$ 359
Additions related to other-than-temporary impairment losses not previously recognized	0	0	0	747
Additional increases to the amount of credit loss for which other-than-temporary impairment was previously recognized	0	67	0	279
Reductions for previous credit losses realized on securities sold during the year	0	(1,385)	0	(1,385)
Balance, Closing	$ 0	$ 0	$ 0	$ 0

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Valuation allowance	$ 49,804	$ 51,445
EQUITY
Common stock, shares authorized (in shares)	90,000,000	90,000,000
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares issued (in shares)	16,459,156	16,377,247
Common stock, shares outstanding (in shares)	16,361,411	16,290,136
Treasury stock, at cost	97,745	87,111

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2013

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS

NOTE 6. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost:

	Nine Months Ended September 30,
	Pension Benefits				SERP Benefits
	2013		2012		2013		2012
Interest cost	$	87	$	95	$	34	$	38
Expected return on plan assets		(90)		(102)		(56)		(56)
Recognized net actuarial (gain) loss		113		102		70		62
Net pension expense (benefit)	$	110	$	95	$	48	$	44

	Three Months Ended September 30,
	Pension Benefits				SERP Benefits
	2013		2012		2013		2012
Interest cost	$	29	$	31	$	11	$	12
Expected return on plan assets		(30)		(34)		(19)		(18)
Recognized net actuarial (gain) loss		38		35		24		20
Net pension expense (benefit)	$	37	$	32	$	16	$	14

                The Company previously disclosed in its financial statements for the year ended December 31, 2012 that it expected to contribute $211,000 to its pension plan and $80,000 to its Supplemental Executive Retirement Plan (“SERP”) in 2013.  The Company has contributed $160,000 to its pension plan and $80,000 to its SERP as of September 30, 2013.  The Company does not expect to make any additional contributions to its pension or SERP during the remainder of 2013.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Net income	$ 9,769	$ 9,347	$ 28,251		$ 26,792
Change in securities available for sale:
Unrealized holding gain (loss) on securities available for sale arising during the period	(1,242)	(251)	(11,642)		818
Reclassification adjustment for (gains) losses included in net income	(106)	380	(107)		377
Reclassification adjustment for other than temporary impairment	0	67	0		1,026
Net securities gain (loss) activity during the period	(1,348)	196	(11,749)		2,221
Tax effect	484	(76)	4,589		(880)
Net of tax amount	(864)	120	(7,160)		1,341
Defined benefit pension plans:
Net gain (loss) on defined benefit pension plans	0	0	(151)		110
Amortization of net actuarial loss	62	55	183		164
Net gain activity during the period	62	55	32		274
Tax effect	(25)	(22)	(13)		(110)
Net of tax amount	37	33	19		164
Total other comprehensive income (loss), net of tax	(827)	153	(7,141)	[1]	1,505
Comprehensive income	$ 8,942	$ 9,500	$ 21,110		$ 28,297

[1] All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

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OFFSETTING ASSETS AND LIABILITIES (Derivatives Assets And Liability) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Off Setting Derivative Assets [Abstract]
Gross Amounts of Recognized Assets	$ 297
Gross Amounts Offset in the Statement of Financial Position	0
Net Amounts of Assets presented in the Statement of Financial Position	297
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	(270)
Net Amount	27
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	104,226	121,883
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities presented in the Statement of Financial Position	104,226	121,883
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	(103,959)	(121,883)
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Pledged	0	0
Net Amount	267	0
Interest Rate Swap [Member]
Off Setting Derivative Assets [Abstract]
Gross Amounts of Recognized Assets	297
Gross Amounts Offset in the Statement of Financial Position	0
Net Amounts of Assets presented in the Statement of Financial Position	297
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Received	(270)
Net Amount	27
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	267
Gross Amounts Offset in the Statement of Financial Position	0
Net Amounts of Liabilities presented in the Statement of Financial Position	267
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Pledged	0
Net Amount	267
Repurchase Agreements [Member]
Offsetting Derivative Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	103,959	121,883
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities presented in the Statement of Financial Position	103,959	121,883
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	(103,959)	(121,883)
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral Pledged	0	0
Net Amount	$ 0	$ 0

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
ASSETS
Cash and due from banks	$ 72,982		$ 156,666
Short-term investments	8,358		75,571
Total cash and cash equivalents	81,340		232,237
Securities available for sale (carried at fair value)	463,070		467,021
Real estate mortgage loans held for sale	1,047		9,452
Loans, net of allowance for loan losses of $49,804 and $51,445	2,342,911		2,206,075
Land, premises and equipment, net	38,514		34,840
Bank owned life insurance	62,397		61,112
Accrued income receivable	8,333		8,491
Goodwill	4,970		4,970
Other intangible assets	12		47
Other assets	38,643		39,899
Total assets	3,041,237		3,064,144
LIABILITIES
Noninterest bearing deposits	449,590		407,926
Interest bearing deposits	1,995,236		2,173,830
Total deposits	2,444,826		2,581,756
Short-term borrowings
Federal funds purchased	57,000		0
Securities sold under agreements to repurchase	103,959		121,883
Other short-term borrowings	75,000		0
Total short-term borrowings	235,959		121,883
Accrued expenses payable	12,766		15,321
Other liabilities	2,177		1,390
Long-term borrowings	37		15,038
Subordinated debentures	30,928		30,928
Total liabilities	2,726,693		2,766,316
EQUITY
Common stock: 90,000,000 shares authorized, no par value 16,459,156 shares issued and 16,361,411 outstanding as of September 30, 2013 16,377,247 shares issued and 16,290,136 outstanding as of December 31, 2012	92,229		90,039
Retained earnings	225,648		203,654
Accumulated other comprehensive income (loss)	(1,452)	[1]	5,689	[1]
Treasury stock, at cost (2013 - 97,745 shares, 2012 - 87,111 shares)	(1,970)		(1,643)
Total stockholders' equity	314,455		297,739
Noncontrolling interest	89		89
Total equity	314,544		297,828
Total liabilities and equity	$ 3,041,237		$ 3,064,144

[1] All amounts are net of tax. Amounts in parenthesis indicate a decrease in other comprehensive income.

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FAIR VALUE DISCLOSURES (Quantitative Information about Level 3 Fair Value Measurements) (Details) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Non Agency Residential Mortgage Backed Securities [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Total assets		$ 2,859
Valuation Technique		Discounted cash flow
Non Agency Residential Mortgage Backed Securities [Member] | Constant Prepayment Rate [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		5.00%
Non Agency Residential Mortgage Backed Securities [Member] | Constant Prepayment Rate [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		9.00%
Non Agency Residential Mortgage Backed Securities [Member] | Constant Prepayment Rate [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		(6.00%)
Non Agency Residential Mortgage Backed Securities [Member] | Average Life [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		0.20%
Non Agency Residential Mortgage Backed Securities [Member] | Average Life [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		2.86%
Non Agency Residential Mortgage Backed Securities [Member] | Average Life [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		(2.70%)
Non Agency Residential Mortgage Backed Securities [Member] | Swap/EDSF Spread [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		297.00%
Non Agency Residential Mortgage Backed Securities [Member] | Swap/EDSF Spread [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		339.00%
Non Agency Residential Mortgage Backed Securities [Member] | Swap/EDSF Spread [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs		(328.00%)
State and Municipal Securities [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Total assets	$ 977	$ 988
Valuation Technique	Price to type, par, call	Price to type, par, call
State and Municipal Securities [Member] | Discount To Benchmark Index [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs	1.00%	1.00%
State and Municipal Securities [Member] | Discount To Benchmark Index [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs	7.00%	11.00%
State and Municipal Securities [Member] | Discount To Benchmark Index [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs	(2.57%)	(4.00%)

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EARNINGS PER SHARE (Earnings Per Share Computations) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Weighted average shares outstanding for basic earnings per common share	16,451,199	16,340,425	16,427,060	16,312,896
Dilutive effect of stock options, awards and warrants	183,734	149,965	154,029	157,589
Weighted average shares outstanding for diluted earnings per common share	16,634,933	16,490,390	16,581,089	16,470,485
Basic earnings per common share	$ 0.59	$ 0.57	$ 1.72	$ 1.64
Diluted earnings per common share	$ 0.59	$ 0.57	$ 1.70	$ 1.63

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

In Allowance For Loan Losses and Recorded Investment In Loans By Portfolio Segment

                 The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2013, and 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, 2013:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2013
Balance July 1,	$	21,879	$	20,098	$	1,517	$	264	$	2,823	$	587	$	3,467	$	50,635
Provision for loan losses		138		(544)		(185)		(23)		409		179		26		0
Loans charged-off		(595)		(455)		0		0		(126)		(120)		0		(1,296)
Recoveries		75		73		201		0		71		45		0		465
Net loans charged-off		(520)		(382)		201		0		(55)		(75)		0		(831)
Balance September 30,	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Nine Months Ended September 30, 2013
Balance January 1,	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445
Provision for loan losses		(569)		(627)		125		1		709		225		136		0
Loans charged-off		(738)		(1,361)		(200)		0		(315)		(257)		0		(2,871)
Recoveries		462		348		205		0		101		114		0		1,230
Net loans charged-off		(276)		(1,013)		5		0		(214)		(143)		0		(1,641)
Balance September 30,	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	4,345	$	5,731	$	45	$	0	$	390	$	32	$	0	$	10,543
Collectively evaluated for impairment		17,152		13,441		1,488		241		2,787		659		3,493		39,261
Total ending allowance balance	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Loans:
Loans individually evaluated for impairment	$	16,493	$	26,127	$	1,147	$	0	$	3,494	$	97	$	0	$	47,358
Loans collectively evaluated for impairment		881,826		891,635		199,091		55,792		273,067		43,946		0		2,345,357
Total ending loans balance	$	898,319	$	917,762	$	200,238	$	55,792	$	276,561	$	44,043	$	0	$	2,392,715

                The recorded investment in loans does not include accrued interest.

                The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2012:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2012
Balance July 1,	$	19,696	$	24,083	$	1,419	$	176	$	2,412	$	523	$	3,508	$	51,817
Provision for loan losses		1,532		(1,236)		(76)		(207)		356		114		(483)		0
Loans charged-off		(98)		(112)		0		0		(196)		(77)		0		(483)
Recoveries		224		120		1		182		21		30		0		578
Net loans charged-off		126		8		1		182		(175)		(47)		0		95
Balance September 30,	$	21,354	$	22,855	$	1,344	$	151	$	2,593	$	590	$	3,025	$	51,912
Nine Months Ended September 30, 2012
Balance January 1,	$	22,830	$	23,489	$	695	$	65	$	2,322	$	645	$	3,354	$	53,400
Provision for loan losses		380		158		648		(100)		417		125		(329)		1,299
Loans charged-off		(2,552)		(959)		0		0		(288)		(268)		0		(4,067)
Recoveries		696		167		1		186		142		88		0		1,280
Net loans charged-off		(1,856)		(792)		1		186		(146)		(180)		0		(2,787)
Balance September 30,	$	21,354	$	22,855	$	1,344	$	151	$	2,593	$	590	$	3,025	$	51,912

                The recorded investment in loans does not include accrued interest.

                The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2012:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	5,542	$	8,559	$	63	$	0	$	607	$	34	$	0	$	14,805
Collectively evaluated for impairment		16,800		12,253		1,340		240		2,075		575		3,357		36,640
Total ending allowance balance	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445
Loans:
Loans individually evaluated for impairment	$	18,281	$	36,919	$	797	$	0	$	2,853	$	92	$	0	$	58,942
Loans collectively evaluated for impairment		828,728		763,279		224,008		56,810		280,141		45,612		0		2,198,578
Total ending loans balance	$	847,009	$	800,198	$	224,805	$	56,810	$	282,994	$	45,704	$	0	$	2,257,520

                The recorded investment in loans does not include accrued interest.

Loans individually evaluated for impairment

   The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2013:

							Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
											Cash Basis						Cash Basis
	Unpaid				Allowance for		Average		Interest		Interest		Average		Interest		Interest
	Principal		Recorded		Loan Losses		Recorded		Income		Income		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	64	$	64	$	0	$	64	$	0	$	0	$	65	$	0	$	0
Non-working capital loans		0		0		0		0		0		0		11		0		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,072		476		0		616		0		0		575		0		0
Agri-business and agricultural loans:
Loans secured by farmland		612		613		0		479		0		0		480		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		1,158		1,054		0		719		0		0		275		0		0
Open end and junior lien loans		41		41		0		27		0		0		23		0		0
Other consumer loans		1		1		0		1		0		0		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,196		2,587		1,024		2,988		12		14		3,019		39		41
Non-working capital loans		15,695		13,842		3,321		14,017		120		126		14,081		391		402
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,569		2,569		595		2,848		11		20		3,860		63		67
Owner occupied loans		3,946		3,906		505		3,707		20		20		3,592		88		96
Nonowner occupied loans		19,166		19,176		4,631		19,183		87		86		20,960		255		258
Multifamily loans		0		0		0		0		0		0		64		0		0
Agri-business and agricultural loans:
Loans secured by farmland		1,033		534		45		536		0		0		418		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,355		2,384		385		2,347		5		6		2,461		28		43
Open end and junior lien loans		15		15		5		22		0		0		40		0		0
Other consumer loans		96		96		32		99		0		0		86		1		1
Total	$	54,019	$	47,358	$	10,543	$	47,653	$	255	$	272	$	50,010	$	865	$	908

                The recorded investment in loans does not include accrued interest.

                The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2012:

							Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
												Cash Basis						Cash Basis
		Unpaid				Allowance for		Average		Interest		Interest		Average		Interest		Interest
		Principal		Recorded		Loan Losses		Recorded		Income		Income		Recorded		Income		Income
		Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Non-working capital loans	$	70	$	70	$	0	$	70	$	0	$	0	$	136	$	0	$	0
Commercial real estate and multi-family residential loans:
Owner occupied loans		781		601		0		611		0		0		513		0		0
Nonowner occupied loans		385		385		0		385		10		13		217		10		13
Agri-business and agricultural loans:
Loans secured by farmland		666		487		0		489		0		0		252		0		0
Loans for ag production		0		0		0		0		0		0		68		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		277		276		0		417		1		0		432		1		0
Open end and junior lien loans		0		0		0		0		0		0		20		0		0
Other consumer loans		1		1		0		0		0		0		0		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,915		3,074		1,417		3,059		13		10		4,420		42		38
Non-working capital loans		19,357		17,175		5,154		17,072		171		168		17,353		528		528
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,786		3,396		672		2,436		18		13		1,814		35		30
Owner occupied loans		6,900		6,287		1,527		5,702		30		19		4,859		48		35
Nonowner occupied loans		27,957		27,255		6,670		27,382		78		77		28,115		280		281
Agri-business and agricultural loans:
Loans secured by farmland		654		333		67		343		0		0		437		0		0
Loans for agricultural production		0		0		0		63		0		0		91		0		0
Other commercial loans		0		0		0		0		0		0		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,562		1,564		267		1,730		12		10		1,787		32		32
Open end and junior lien loans		354		354		192		353		0		0		340		0		0
Other consumer loans		45		45		18		30		1		1		14		1		1
Total	$	68,710	$	61,303	$	15,984	$	60,142	$	334	$	311	$	60,866	$	977	$	958

                The recorded investment in loans does not include accrued interest.

                 The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	61	$	61	$	0
Non-working capital loans		0		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans		754		574		0
Nonowner occupied loans		385		385		0
Multifamily loans		410		286		0
Agri-business and agricultural loans:
Loans secured by farmland		645		466		0
Loans for ag production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		59		59		0
Open end and junior lien loans		41		41		0
Residential construction loans
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,833		3,224		1,516
Non-working capital loans		16,763		14,996		4,026
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,352		2,960		934
Owner occupied loans		5,869		5,869		1,476
Nonowner occupied loans		26,835		26,845		6,149
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		651		331		63
Loans for agricultural production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,387		2,403		415
Open end and junior lien loans		379		350		192
Residential construction loans		0		0		0
Other consumer loans		91		91		34
Total	$	65,516	$	58,942	$	14,805

                The recorded investment in loans does not include accrued interest.

Schedule of Impaired loans

                The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013				December 31, 2012
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Commercial and industrial loans:
Working capital lines of credit loans	$	1,765	$	0	$	1,899	$	0
Non-working capital loans		3,895		0		4,812		50
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		398		0
Owner occupied loans		2,646		0		2,461		0
Nonowner occupied loans		11,633		0		19,200		0
Multifamily loans		0		0		286		0
Agri-business and agricultural loans:
Loans secured by farmland		1,147		0		797		0
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		1,607		239		504		0
Open end and junior lien loans		56		126		391		0
Residential construction loans		0		0		0		0
Other consumer loans		83		0		77		0
Total	$	22,832	$	365	$	30,825	$	50

Aging of the recorded investment in past due loans

                The following table presents the aging of the recorded investment in past due loans as of September 30, 2013 by class of loans:

	30-89		Greater than
	Days		90 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	596	$	1,765	$	2,361	$	459,989	$	462,350
Non-working capital loans		872		3,895		4,767		431,202		435,969
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		0		117,323		117,323
Owner occupied loans		45		2,646		2,691		368,521		371,212
Nonowner occupied loans		0		11,633		11,633		380,360		391,993
Multifamily loans		0		0		0		37,234		37,234
Agri-business and agricultural loans:
Loans secured by farmland		0		1,147		1,147		103,665		104,812
Loans for agricultural production		90		0		90		95,336		95,426
Other commercial loans		0		0		0		55,792		55,792
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,167		1,846		3,013		116,516		119,529
Open end and junior lien loans		233		182		415		151,921		152,336
Residential construction loans		162		0		162		4,534		4,696
Other consumer loans		102		83		185		43,858		44,043
Total	$	3,267	$	23,197	$	26,464	$	2,366,251	$	2,392,715

                The recorded investment in loans does not include accrued interest.

                The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:

	30-89		Greater than
	Days		90 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	233	$	1,899	$	2,132	$	437,705	$	439,837
Non-working capital loans		48		4,862		4,910		402,262		407,172
Commercial real estate and multi-family residential loans:
Construction and land development loans		998		398		1,396		80,954		82,350
Owner occupied loans		1,023		2,461		3,484		354,921		358,405
Nonowner occupied loans		38		19,200		19,238		295,243		314,481
Multifamily loans		0		286		286		44,676		44,962
Agri-business and agricultural loans:
Loans secured by farmland		0		797		797		108,359		109,156
Loans for agricultural production		0		0		0		115,649		115,649
Other commercial loans		0		0		0		56,810		56,810
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,475		504		1,979		107,583		109,562
Open end and junior lien loans		361		391		752		161,172		161,924
Residential construction loans		0		0		0		11,508		11,508
Other consumer loans		81		77		158		45,546		45,704
Total	$	4,257	$	30,875	$	35,132	$	2,222,388	$	2,257,520

                The recorded investment in loans does not include accrued interest.

Troubled debt restructuring

                Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $9.8 million and $12.5 million of specific reserves to loans whose terms have been modified in troubled debt restructurings as of September 30, 2013 and December 31, 2012. The Company is not committed to lending additional funds to customers whose loans have been modified in a troubled debt restructuring.

	September 30		December 31,
	2013		2012
Accruing troubled debt restructured loans	$	22,888	$	22,332
Nonaccrual troubled debt restructured loans		18,691		28,506
Total troubled debt restructured loans	$	41,579	$	50,838

Loans by class modified as troubled debt restructurings

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month periods ending September 30, 2013:

	Modifications
	Nine Months Ended September 30, 2013
	All Modifications
		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Construction and land development loans	6	$	2,198	$	2,198
Consumer 1-4 family loans:
Closed end first mortgage loans	4		317		328
Total	10	$	2,515	$	2,526

	Interest Rate Reductions					Principal and Interest Forgiveness									Modified Repayment Terms
		Interest at		Interest at							Interest at		Interest at			Extension
	Number of	Pre-Modification		Post-Modification		Number of	Principal at		Principal at		Pre-Modification		Post-Modification		Number of	Period or
	Loans	Rate		Rate		Loans	Pre-Modification		Post-Modification		Rate		Rate		Loans	Range
																(in months)
Troubled Debt Restructurings
Commercial real estate and:
multi-family residential loans
Construction and land development loans	6	$	85	$	63	0	$	0	$	0	$	0	$	0	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	2		142		158	2		156		161		164		149	0	0
Total	8	$	227	$	221	2	$	156	$	161	$	164	$	149	0	0

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month and three-month periods ending September 30, 2012:

	Modifications
	Nine Months Ended September 30, 2012
	All Modifications
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
	Loans		Investment		Investment
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	1	$	942	$	1,060
Commercial real estate and multi-family residential loans:
Construction and land development loans	5		1,638		1,638
Owner occupied loans	2		2,260		2,260
Nonowner occupied loans	1		385		385
Consumer 1-4 family loans:
Closed end first mortgage loans	1		39		39
Other consumer loans	1		17		17
Total	11	$	5,281	$	5,399

	Interest Rate Reductions					Modified Repayment Terms
		Interest at		Interest at			Extension
	Number of	Pre-Modification		Post-Modification		Number of	Period or
	Loans	Rate		Rate		Loans	Range
							(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	0	$	0	$	0	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans	1		440		117	1	18
Nonowner occupied loans	0		0		0	1	14
Consumer 1-4 family loans:
Closed end first mortgage loans	1		76		15	0	0
Other consumer loans	0		0		0	0	0
Total	2	$	516	$	132	2	14-18

	Modifications
	Three Months Ended September 30, 2012
	All Modifications
		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Owner occupied loans	1	$	1,411	$	1,411
Other consumer loans	1		17		17
Total	2	$	1,428	$	1,428

	Modified Repayment Terms
		Extension
	Number of	Period or
	Loans	Range
		(in months)
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Owner occupied loans	1	18
Other consumer loans	0	0
Total	1	18

Troubled debt restructurings subsequently defaulted

                The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2013:

	Modifications
	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	Number of	Recorded		Number of	Recorded
	Loans	Investment		Loans	Investment
Troubled Debt Restructurings that Subsequently Defaulted
Consumer 1-4 family loans:
Closed end first mortgage loans	0	$	0	1	$	912
Total	0	$	0	1	$	912

                A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

                The troubled debt restructurings described above that subsequently defaulted made a large principal payment during the second quarter of 2013, which decreased the allowance for loan losses by $85,000 and did not result in any charge offs during the three and nine month periods ending September 30, 2013.

                The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2012:

	Modifications
	Three months ended September 30, 2012			Nine months ended September 30, 2012
	Number of	Recorded		Number of	Recorded
	Loans	Investment		Loans	Investment
Troubled Debt Restructurings that Subsequently Defaulted
Consumer 1-4 family loans:
Closed end first mortgage loans	0	$	0	1	$	65
Total	0	$	0	1	$	65

Credit quality indicators

  As of September 30, 2013 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial and industrial loans:
Working capital lines of credit loans	$	427,576	$	21,129	$	13,645	$	0	$	0
Non-working capital loans		387,047		29,779		19,143		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		107,363		549		9,411		0		0
Owner occupied loans		333,148		25,536		12,528		0		0
Nonowner occupied loans		363,712		9,476		18,805		0		0
Multifamily loans		36,904		330		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		103,083		0		1,729		0		0
Loans for agricultural production		95,426		0		0		0		0
Other commercial loans		55,674		0		118		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		29,422		549		1,824		0		87,734
Open end and junior lien loans		7,099		1,949		0		0		143,288
Residential construction loans		0		0		0		0		4,696
Other consumer loans		8,699		467		292		0		34,585
Total	$	1,955,153	$	89,764	$	77,495	$	0	$	270,303

                The recorded investment in loans does not include accrued interest.

                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 grade loans.  Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.  As of December 31, 2012 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial and industrial loans:
Working capital lines of credit loans	$	403,778	$	22,591	$	13,468	$	0	$	0
Non-working capital loans		355,772		23,192		26,857		66		1,285
Commercial real estate and multi-family residential loans:
Construction and land development loans		67,002		4,595		10,753		0		0
Owner occupied loans		315,672		24,589		18,144		0		0
Nonowner occupied loans		282,108		6,345		26,028		0		0
Multifamily loans		43,425		345		1,192		0		0
Agri-business and agricultural loans:
Loans secured by farmland		107,734		0		1,404		0		18
Loans for agricultural production		115,649		0		0		0		0
Other commercial loans		56,692		0		118		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		18,685		343		729		0		89,805
Open end and junior lien loans		7,932		300		0		0		153,692
Residential construction loans		0		0		0		0		11,508
Other consumer loans		10,168		378		497		0		34,661
Total	$	1,784,617	$	82,678	$	99,190	$	66	$	290,969

                The recorded investment in loans does not include accrued interest.

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SECURITIES (Quantitative Disclosure Of Available Sale Of Securities) (Details)	Sep. 30, 2013 Numbers	Dec. 31, 2012 Number
Number of securities with unrealized losses [Abstract]
Number of available-for-sale securities in unrealized loss positions, Less than 12 months	101	58
Number of available-for-sale securities in unrealized loss positions, 12 months or more	7	10
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	108	68
Agency Residential Mortgage-Backed Securities [Member]
Number of securities with unrealized losses [Abstract]
Number of available-for-sale securities in unrealized loss positions, Less than 12 months	45	29
Number of available-for-sale securities in unrealized loss positions, 12 months or more	7	9
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	52	38
State and Municipal Securities [Member]
Number of securities with unrealized losses [Abstract]
Number of available-for-sale securities in unrealized loss positions, Less than 12 months	56	29
Number of available-for-sale securities in unrealized loss positions, 12 months or more	0	1
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	56	30

XML

FAIR VALUE DISCLOSURES (Estimated Fair Values And The Related Carrying Values Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financial Assets:
Securities available for sale	$ 463,070	$ 467,021
Financial Liabilities:
Federal funds purchased	57,000	0
Carrying Value [Member]
Financial Assets:
Cash and cash equivalents	81,340	232,237
Securities available for sale	463,070	467,021
Real estate mortgages held for sale	1,047	9,452
Loans, net	2,342,911	2,206,075
Federal Home Loan Bank stock	7,313	7,313
Federal Reserve Bank stock	3,420	3,420
Accrued interest receivable	8,328	8,485
Financial Liabilities:
Certificates of deposit	(782,684)	(907,505)
All other deposits	(1,662,142)	(1,674,251)
Securities sold under agreements to repurchase	(103,959)	(121,883)
Federal funds purchased	(57,000)
Other short-term borrowings	(75,000)
Long-term borrowings	(37)	(15,038)
Subordinated debentures	(30,928)	(30,928)
Standby letters of credit	(288)	(262)
Accrued interest payable	(3,629)	(4,757)
Estimated Fair Value [Member]
Financial Assets:
Cash and cash equivalents	81,340	232,237
Securities available for sale	463,070	467,021
Real estate mortgages held for sale	1,066	9,663
Loans, net	2,347,776	2,230,993
Accrued interest receivable	8,328	8,485
Financial Liabilities:
Certificates of deposit	(792,444)	(922,397)
All other deposits	(1,662,142)	(1,674,251)
Securities sold under agreements to repurchase	(103,959)	(121,883)
Federal funds purchased	(57,000)
Other short-term borrowings	(75,000)
Long-term borrowings	(44)	(15,607)
Subordinated debentures	(31,149)	(31,223)
Standby letters of credit	(288)	(262)
Accrued interest payable	(3,629)	(4,757)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Cash and cash equivalents	81,340	232,237
Securities available for sale	1,022	1,037
Real estate mortgages held for sale	0	0
Loans, net	0	0
Accrued interest receivable	0	6
Financial Liabilities:
Certificates of deposit	0	0
All other deposits	(1,662,142)	(1,674,251)
Securities sold under agreements to repurchase	0	0
Federal funds purchased	0
Other short-term borrowings	0
Long-term borrowings	0	0
Subordinated debentures	0	0
Standby letters of credit	0	0
Accrued interest payable	(121)	(298)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Cash and cash equivalents	0	0
Securities available for sale	461,071	462,137
Real estate mortgages held for sale	1,066	9,663
Loans, net	0	0
Accrued interest receivable	1,968	2,215
Financial Liabilities:
Certificates of deposit	(792,444)	(922,397)
All other deposits	0	0
Securities sold under agreements to repurchase	(103,959)	(121,883)
Federal funds purchased	(57,000)
Other short-term borrowings	(75,000)
Long-term borrowings	(44)	(15,607)
Subordinated debentures	0	0
Standby letters of credit	0	0
Accrued interest payable	(3,505)	(4,456)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Cash and cash equivalents	0	0
Securities available for sale	977	3,847
Real estate mortgages held for sale	0	0
Loans, net	2,347,776	2,230,993
Accrued interest receivable	6,360	6,264
Financial Liabilities:
Certificates of deposit	0	0
All other deposits	0	0
Securities sold under agreements to repurchase	0	0
Federal funds purchased	0
Other short-term borrowings	0
Long-term borrowings	0	0
Subordinated debentures	(31,149)	(31,223)
Standby letters of credit	(288)	(262)
Accrued interest payable	$ (3)	$ (3)

XML

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Additional Information) (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Jun. 30, 2013	Mar. 31, 2013
Troubled Debt Restructuring [Abstract]
Ratio Of Allowance Of Loan Losses To Total Loans			2.08%	2.36%	2.28%
Loans Modified In Troubled Debt Restructured Loans	$ 9,800,000		$ 9,800,000		$ 12,500,000
Amount added to total troubled debt restructured loans						328,000	2,200,000
Charge Off	0		365,000
Financing Receivable, Modifications, Subsequent Default, Recorded Investment	85,000	17,000	85,000	17,000
Loan amount of credit quality analysis			250,000
Commercial and Industrial Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss		15,000		534,000
Commercial Real Estate and Multi-Family Residential Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss	11,000	11,000	384,000	18,000
Consumer 1-4 Family Mortgage Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss	4,000	1,000	61,000	5,000
Other Consumer Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss		$ 4,000		$ 4,000

XML

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Troubled Debt Restructuring) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Troubled Debt Restructuring [Abstract]
Accruing troubled debt restructured loans	$ 22,888	$ 22,332
Nonaccrual troubled debt restructured loans	18,691	28,506
Total troubled debt restructured loans	$ 41,579	$ 50,838

XML

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Loans By Class Modified As Troubled Debt Restructuring) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012 Numbers	Sep. 30, 2013 Numbers	Sep. 30, 2012 Numbers
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	2	10	11
Pre-Modification Outstanding Recorded Investment	$ 1,428	$ 2,515	$ 5,281
Post-Modification Outstanding Recorded Investment	1,428	2,526	5,399
Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		8	2
Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		227	516
Post-Modification Outstanding Recorded Investment		221	132
Principal and Interest Forgiveness [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		2
Principal and Interest Forgiveness [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		164
Post-Modification Outstanding Recorded Investment		149
Principal and Interest Forgiveness [Member] | Principal [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		156
Post-Modification Outstanding Recorded Investment		161
Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1	0	2
Extension period for modified repayment terms	18 months	0 months
Modified Repayment Terms [Member] | Minimum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms			14 months
Modified Repayment Terms [Member] | Maximum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms			18 months
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			1
Pre-Modification Outstanding Recorded Investment			942
Post-Modification Outstanding Recorded Investment			1,060
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment			0
Post-Modification Outstanding Recorded Investment			0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			0
Extension period for modified repayment terms			0 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		6	5
Pre-Modification Outstanding Recorded Investment		2,198	1,638
Post-Modification Outstanding Recorded Investment		2,198	1,638
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		6
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		85
Post-Modification Outstanding Recorded Investment		63
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Principal and Interest Forgiveness [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Principal and Interest Forgiveness [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		0
Post-Modification Outstanding Recorded Investment		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Principal and Interest Forgiveness [Member] | Principal [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		0
Post-Modification Outstanding Recorded Investment		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		0
Extension period for modified repayment terms		0 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1		2
Pre-Modification Outstanding Recorded Investment	1,411		2,260
Post-Modification Outstanding Recorded Investment	1,411		2,260
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			1
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment			440
Post-Modification Outstanding Recorded Investment			117
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1		1
Extension period for modified repayment terms	18 months		18 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			1
Pre-Modification Outstanding Recorded Investment			385
Post-Modification Outstanding Recorded Investment			385
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment			0
Post-Modification Outstanding Recorded Investment			0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			1
Extension period for modified repayment terms			14 months
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		4	1
Pre-Modification Outstanding Recorded Investment		317	39
Post-Modification Outstanding Recorded Investment		328	39
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		2	1
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		142	76
Post-Modification Outstanding Recorded Investment		158	15
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Principal and Interest Forgiveness [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		2
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Principal and Interest Forgiveness [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		164
Post-Modification Outstanding Recorded Investment		149
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Principal and Interest Forgiveness [Member] | Principal [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment		156
Post-Modification Outstanding Recorded Investment		161
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		0	0
Extension period for modified repayment terms		0 months	0 months
Other Consumer Loans [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1		1
Pre-Modification Outstanding Recorded Investment	17		17
Post-Modification Outstanding Recorded Investment	17		17
Other Consumer Loans [Member] | Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			0
Other Consumer Loans [Member] | Interest Rate Reductions [Member] | Interest [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Pre-Modification Outstanding Recorded Investment			0
Post-Modification Outstanding Recorded Investment			$ 0
Other Consumer Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	0		0
Extension period for modified repayment terms	0 months		0 months

XML

SECURITIES

9 Months Ended

Sep. 30, 2013

Securities [Abstract]

SECURITIES

NOTE 5. SECURITIES

Information related to the fair value and amortized cost of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the tables below.

			Gross		Gross
	Fair		Unrealized		Unrealized		Amortized
	Value		Gain		Losses		Cost
September 30, 2013
U.S. Treasury securities	$	1,022	$	20	$	0	$	1,002
Agency residential mortgage-backed securities		369,311		5,613		(6,183)		369,881
State and municipal securities		92,737		2,810		(1,816)		91,743
Total	$	463,070	$	8,443	$	(7,999)	$	462,626
December 31, 2012
U.S. Treasury securities	$	1,037	$	35	$	0	$	1,002
U.S. government sponsored agencies		5,304		278		0		5,026
Agency residential mortgage-backed securities		365,644		7,813		(1,495)		359,326
Non-agency residential mortgage-backed securities		6,453		242		0		6,211
State and municipal securities		88,583		5,509		(189)		83,263
Total	$	467,021	$	13,877	$	(1,684)	$	454,828

Information regarding the fair value and amortized cost of available for sale debt securities by maturity as of September 30, 2013 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	4,168	$	4,238
Due after one year through five years		15,691		16,618
Due after five years through ten years		40,061		40,987
Due after ten years		32,825		31,916
		92,745		93,759
Mortgage-backed securities		369,881		369,311
Total debt securities	$	462,626	$	463,070

Security proceeds, gross gains and gross losses are presented below.

	Nine months ended September 30,
	2013		2012
Sales of securities available for sale
Proceeds	$	29,996	$	27,493
Gross gains		1,078		823
Gross losses		(972)		(1,203)

	Three months ended September 30,
	2013		2012
Sales of securities available for sale
Proceeds	$	29,996	$	27,493
Gross gains		1,078		823
Gross losses		(972)		(1,203)

The Company sold twelve securities with a total book value of $29.9 million and a total fair value of $30.0 million during the first nine months of 2013. The sales included the four remaining non-agency residential mortgage backed securities. The remaining gains during the first nine months of 2013 were from calls. The Company sold eleven securities with a total book value of $27.9 million and a total fair value of $27.5 million during the first nine months of 2012. The sales in 2012 included nine non-agency residential mortgage backed securities. The securities sales in both 2013 and 2012 were related to a strategic realignment of the securities portfolio.

Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives for mortgage-backed securities. Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date.

Securities with carrying values of $154.1 million and $199.3 million were pledged as of September 30, 2013 and 2012, as collateral for deposits of public funds, securities sold under agreements to repurchase, borrowings from the Federal Home Loan Bank and for other purposes as permitted or required by law.

Information regarding securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below. The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
September 30, 2013
Agency residential mortgage-     backed securities	$	163,795	$	(5,825)	$	17,358	$	(358)	$	181,153	$	(6,183)
State and municipal securities		25,130		(1,816)		0		0		25,130		(1,816)
Total temporarily impaired	$	188,925	$	(7,641)	$	17,358	$	(358)	$	206,283	$	(7,999)
December 31, 2012
Agency residential mortgage-     backed securities	$	92,974	$	(1,066)	$	20,422	$	(429)	$	113,396	$	(1,495)
State and municipal securities		10,791		(188)		50		(1)		10,841		(189)
Total temporarily impaired	$	103,765	$	(1,254)	$	20,472	$	(430)	$	124,237	$	(1,684)

The number of securities with unrealized losses as of September 30, 2013 and December 31, 2012 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2013
Agency residential mortgage-backed securities	45	7	52
State and municipal securities	56	0	56
Total temporarily impaired	101	7	108

	Less than	12 months
	12 months	or more	Total
December 31, 2012
Agency residential mortgage-backed securities	29	9	38
State and municipal securities	29	1	30
Total temporarily impaired	58	10	68

  

The following factors are considered to determine whether or not the impairment of these securities is other-than-temporary. Ninety-nine percent of the securities are backed by the U.S. government, government agencies, government sponsored agencies or are A- rated or better by Moody’s, S&P or Fitch, except for certain non-local or local municipal securities, which are not rated. All mortgage-backed securities are backed by government agencies. The Company does not currently have any non-agency mortgage backed securities in its securities portfolio. None of the securities have call provisions (with the exception of the municipal securities) and all payments as originally agreed are being received on their original terms. For the government, government-sponsored agency and municipal securities, management did not have concerns of credit losses, and there was nothing to indicate that full principal will not be received. Management considered the unrealized losses on these securities to be primarily interest rate driven and does not expect material losses given current market conditions unless the securities are sold. However, at this time management does not have the intent to sell, and it is more likely than not that the Company  will not be required to sell these securities before the recovery of their amortized cost basis.

The following table provides information about debt securities for which only a credit loss was recognized in income and for which other losses are recorded in other comprehensive income. There were no securities with other than temporary impairment during the three and nine months ended September 30, 2013. All securities with other than temporary impairment were sold during 2012. The table represents the three months and nine months ended September 30, 2013 and 2012.

	Three Months Ended September 30,
	2013		2012
Balance July 1,	$	0	$	1,318
Additions related to other-than-temporary impairment losses not previously recognized		0		0
Additional increases to the amount of credit loss for which other-than-temporary impairment was previously recognized		0		67
Reductions for previous credit losses realized on securities sold during the year		0		(1,385)
Balance September 30,	$	0	$	0

	Nine Months Ended September 30,
	2013		2012
Balance January 1,	$	0	$	359
Additions related to other-than-temporary impairment losses not previously recognized		0		747
Additional increases to the amount of credit loss for which other-than-temporary impairment was previously recognized		0		279
Reductions for previous credit losses realized on securities sold during the year		0		(1,385)
Balance September 30,	$	0	$	0

The Company does not have a history of actively trading securities but continues to hold securities available for sale should liquidity or other needs develop that would warrant the sale of securities. While these securities are held in the available for sale portfolio, it is management’s current intent to hold them until a recovery in fair value or maturity.

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LOANS (Total Loans Outstanding) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Jun. 30, 2013	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 320,310	$ 328,485
Subtotal	2,393,360	2,257,844
Less: Allowance for loan losses	(49,804)	(51,445)	(50,635)	(51,912)	(51,817)	(53,400)
Net deferred loan fees	(645)	(324)
Loans, net	2,342,911	2,206,075
Percentage of Total consumer loans	13.40%	14.50%
Percentage of Subtotal	100.00%	100.00%
Commercial and Industrial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	898,066	846,822
Less: Allowance for loan losses	(21,497)	(22,342)	(21,879)	(21,354)	(19,696)	(22,830)
Percentage of Total commercial loans	37.50%	37.50%
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	462,098	439,638
Percentage of Total commercial loans	19.30%	19.50%
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	435,968	407,184
Percentage of Total commercial loans	18.20%	18.00%
Commercial Real Estate and Multi-family Residential Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	919,050	801,011
Percentage of Total commercial loans	38.40%	35.50%
Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	117,733	82,494
Percentage of Total commercial loans	4.90%	3.70%
Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	371,500	358,617
Percentage of Total commercial loans	15.50%	15.90%
Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	392,538	314,889
Percentage of Total commercial loans	16.40%	13.90%
Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	37,279	45,011
Percentage of Total commercial loans	1.60%	2.00%
Agri-business and Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	200,137	224,719
Less: Allowance for loan losses	(1,533)	(1,403)	(1,517)	(1,344)	(1,419)	(695)
Percentage of Total commercial loans	8.40%	10.00%
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	104,807	109,147
Percentage of Total commercial loans	4.40%	4.80%
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	95,330	115,572
Percentage of Total commercial loans	4.00%	5.10%
Other Commerical Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	2,073,050	1,929,359
Percentage of Total commercial loans	86.60%	85.50%
Consumer 1-4 Family Mortgage Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	276,219	282,730
Percentage of Total consumer loans	11.50%	12.50%
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	119,788	109,823
Percentage of Total consumer loans	5.00%	4.90%
Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	151,726	161,366
Percentage of Total consumer loans	6.30%	7.10%
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	4,705	11,541
Percentage of Total consumer loans	0.20%	0.50%
Other Consumer Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	55,797	56,807
Total consumer loans	$ 44,091	$ 45,755
Percentage of Total commercial loans	2.30%	2.50%
Percentage of Total consumer loans	1.80%	2.00%

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SECURITIES (Security proceeds , gross gains and gross losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Sales of securities available for sale
Proceeds	$ 29,996	$ 27,493	$ 29,996	$ 27,493
Gross gains	1,078	823	1,078	823
Gross losses	$ (972)	$ (1,203)	$ (972)	$ (1,203)

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FAIR VALUE DISCLOSURES

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

NOTE 8. FAIR VALUE DISCLOSURES

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1	Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2	Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities: Securities available for sale are valued primarily by a third party pricing service. The fair values of securities available for sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). These models utilize the market approach with standard inputs that include, but are not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. For certain non-agency residential mortgage-backed securities where observable inputs about the specific issuer are not available, fair values are estimated using observable data from other non-agency residential mortgage-backed securities presumed to be similar or other market data on other non-agency residential mortgage-backed securities (Level 3 inputs). For certain municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs). There were no transfers between Level 1and Level 2 during the first nine months of 2013.

Mortgage banking derivatives: The fair value of mortgage banking derivatives are based on observable market data as of the measurement date (Level 2).

Interest rate swap derivatives: The Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Currently, none of the Company’s derivatives are designated in qualifying hedging relationships, as the derivatives are not used to manage risks within the Company’s assets or liabilities. As such, all changes in fair value of the Company’s derivatives are recognized directly in earnings. The fair value of interest rate swap derivatives is determined by pricing or valuation models using observable market data as of the measurement date (Level 2).

Impaired loans: Impaired loans with specific allocations of the allowance for loan losses are generally based on the fair value of the underlying collateral if repayment is expected solely from the collateral. Fair value is determined using several methods. Generally, the fair value of real estate is based on appraisals by qualified third party appraisers. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and result in a Level 3 classification of the inputs for determining fair value. In addition, the Company’s management routinely applies internal discount factors to the value of appraisals used in the fair value evaluation of impaired loans. The deductions to the appraisals take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. Commercial real estate is generally discounted from its appraised value by 0-50% with the higher discounts applied to real estate that is determined to have a thin trading market or to be specialized collateral. In addition to real estate, the Company’s management evaluates other types of collateral as follows: Raw and finished inventory is discounted from its cost or book value by 35-65%, depending on the marketability of the goods. Finished goods are generally discounted by 30-60%, depending on the ease of marketability, cost of transportation or scope of use of the finished good. Work in process inventory is typically discounted by 50-100%, depending on the length of manufacturing time, types of components used in the completion process, and the breadth of the user base. Equipment is valued at a percentage of depreciated book value or recent appraised value, if available, and is typically discounted at 30-70% after various considerations including age and condition of the equipment, marketability, breadth of use, and whether the equipment includes unique components or add-ons. Accounts receivable are discounted by 60-90%, depending on age and estimated collectability. Marketable securities are discounted by 10-30%, depending on the type of investment, age of valuation report and general market conditions. This methodology is based on a market approach and typically results in a Level 3 classification of the inputs for determining fair value.

Mortgage servicing rights: As of September 30, 2013 the fair value of the Company’s Level 3 servicing assets for residential mortgage loans was $3.3 million, some of which are not currently impaired and therefore carried at amortized cost. These residential mortgage loans have a weighted average interest rate of 4.12%, a weighted average maturity of 19 years and are secured by homes generally within the Company’s market area, which is primarily Northern Indiana. A valuation model is used to estimate fair value, which is based on an income approach. The inputs used include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees, and float income. The most significant assumption used to value mortgage servicing rights is prepayment rate. Prepayment rates are estimated based on published industry consensus prepayment rates. The most significant unobservable assumption is the discount rate. At September 30, 2013, the constant prepayment speed (PSA) used was 189 and the discount rate used was 9.3%. At December 31, 2012, the PSA used was 392 and the discount rate used was 9.2%.

Other real estate owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at the lower of carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property and are reviewed by the Company’s internal appraisal officer. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales. Such adjustments are usually significant and result in a Level 3 classification. In addition, the Company’s management may apply discount factors to the appraisals to take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Real estate mortgage loans held for sale: Real estate mortgage loans held for sale are carried at the lower of cost or fair value, as determined by outstanding commitments, from third party investors, and result in a Level 2 classification.

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

	September 30, 2013
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,022	$	0	$	0	$	1,022
U.S. Government sponsored agencies		0		0		0		0
Mortgage-backed securities		0		369,311		0		369,311
Non-agency residential mortgage-backed securities		0		0		0		0
State and municipal securities		0		91,760		977		92,737
Total securities		1,022		461,071		977		463,070
Mortgage banking derivative		0		263		0		263
Interest rate swap derivative		0		297		0		297
Total assets	$	1,022	$	461,631	$	977	$	463,630
Liabilities
Mortgage banking derivative		0		109		0		109
Interest rate swap derivative		0		267		0		267
Total liabilities	$	0	$	376	$	0	$	376

	December 31, 2012
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,037	$	0	$	0	$	1,037
U.S. Government sponsored agencies		0		5,304		0		5,304
Mortgage-backed securities		0		365,644		0		365,644
Non-agency residential mortgage-backed securities		0		3,594		2,859		6,453
State and municipal securities		0		87,595		988		88,583
Total securities		1,037		462,137		3,847		467,021
Mortgage banking derivative		0		739		0		739
Total assets	$	1,037	$	462,876	$	3,847	$	467,760
Liabilities
Mortgage banking derivative	$	0	$	12	$	0	$	12

There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2013 and there were no transfers between Level 1 and Level 2 during 2012.

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 nine months ended September 30, 2013 and 2012:

	Non-Agency Residential
	Mortgage-Backed Securities					State and Municipal Securities
	2013		2012		2013		2012
Balance of recurring Level 3 assets at January 1	$	2,859	$	0	$	988	$	686
Transfers into Level 3		3,334		0		0		0
Changes in fair value of securities		(181)		0		(11)		(4)
Principal payments		(2,160)		0		0		(45)
Sales		(3,852)		0		0		0
Balance of recurring Level 3 assets at September 30	$	0	$	0	$	977	$	637

The fair value of two non-agency residential mortgage-backed securities with a fair value of $3.3 million as of March 31, 2013 were transferred out of Level 2 and into Level 3 because of a lack of observable market data for these investments. The Company’s policy is to recognize transfers as of the end of the reporting period. As a result, the fair value for these non-agency residential mortgage-backed securities and state and municipal securities was transferred into Level 3 on March 31, 2013. The securities were subsequently sold in the third quarter of 2013. The Company no longer owns any non-agency residential mortgage backed securities.

The state and municipal securities measured at fair value included below are non-rated Indiana municipal revenue bonds and are not actively traded.

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at				Range of Inputs
	9/30/2013		Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$	977	Price to type, par, call	Discount to benchmark index	1-7	%
					(2.57)	%

Quantitative Information about Level 3 Fair Value Measurements
	Fair Value at				Range of Inputs
	December 31, 2012		Valuation Technique	Unobservable Input	(Average)
Non-agency residential mortgage-backed securities	$	2,859	Discounted cash flow	Constant prepayment rate	5.00-9.00
					(6.00)
				Average life (years)	0.20-2.86
					(2.70)
				Swap/EDSF spread	297-339
					(328)
State and municipal securities	$	988	Price to type, par, call	Discount to benchmark index	1-11	%
					(4%)

The Company’s Controlling Department, which is responsible for all accounting and SEC compliance, and the Company’s Treasury Department, which is responsible for investment portfolio management and asset/liability modeling, are the two areas that decide the Company’s valuation policies and procedures. Both of these areas report directly to the President and Chief Financial Officer of the Company. For assets or liabilities that may be considered for Level 3 fair value measurement on a recurring basis, these two departments and the President and Chief Financial Officer determine the appropriate level of the assets or liabilities under consideration. If there are assets or liabilities that are determined to be Level 3 by this group, the Risk Management Committee of the Company and the Audit Committee of the Board of Directors are made aware of such assets at their next scheduled meeting.

Securities pricing is obtained from a third party pricing service and is tested at least annually against prices from another third party provider and reviewed with a market value tolerance variance of 3%. If any securities fall above this tolerance threshold, they are reviewed in more detail to determine why the variance exists. Changes in market value are reviewed monthly in aggregate yield by security type and any material differences are reviewed to determine why they exist. At least annually, the pricing methodology of the pricing service is received and reviewed to support the fair value levels used by the Company. A detailed pricing evaluation is requested and reviewed on any security determined to be fair valued using unobservable inputs by the pricing service.

The significant unobservable inputs used in the fair value measurement of the Company’s non-agency residential mortgage-backed securities classified as Level 3 are constant prepayment rates, average life, and a Swap/EDSF spread. Significant increases/(decreases) in any of those inputs in isolation would result in a significantly lower/(higher) fair value measurement.

The primary methodology used in the fair value measurement of the Company’s state and municipal securities classified as Level 3 is a discount to the AAA municipal benchmark index. Significant increases or (decreases) in this index as well as the degree to which the security differs in ratings, coupon, call and duration will result in a higher or (lower) fair value measurement for those securities that are not callable. For those securities that are continuously callable, a slight premium to par is used.

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

	September 30, 2013
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	801	$	801
Non-working capital loans		0		0		3,234		3,234
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		1,974		1,974
Owner occupied loans		0		0		3,401		3,401
Nonowner occupied loans		0		0		12,306		12,306
Multifamily loans		0		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		0		0		489		489
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		366		366
Open end and junior lien loans		0		0		10		10
Residential construction loans		0		0		0		0
Other consumer loans		0		0		53		53
Total impaired loans	$	0	$	0	$	22,634	$	22,634
Mortgage servicing rights		0		0		8		8
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	22,717	$	22,717

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2013:

	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired Loans:
Commercial and industrial	$	4,035	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	32	%	(4% - 91%)
Impaired loans:
Commercial real estate		17,681	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	23	%	(5% - 46%)
Impaired loans:
Agri-business and agricultural		489	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	8	%	(7% - 9%)
Impaired loans:
Consumer 1-4 family mortgage		376	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	27	%	(8% - 51%)
Impaired loans:
Other consumer		53	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	35	%	(28% - 61%)
Mortgage servicing rights		8	Discounted cash flows	Discount rate	9.50	%
Other real estate owned		75	Appraisal	Discount to reflect current market conditions	49	%

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2012:

	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired Loans:
Commercial and industrial	$	3,980	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	35	%	(10% - 99%)
Impaired loans:
Commercial real estate		24,560	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	23	%	(4% - 57%)
Impaired loans:
Agri-business and agricultural		268	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	19	%
Impaired loans:
Consumer 1-4 family mortgage		510	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	39	%	(8% - 100%)
Impaired loans:
Other consumer		46	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	40	%	(29% - 100%)
Mortgage servicing rights		1,906	Discounted cash flows	Discount rate	9.20	%	(9.10% - 9.50%)
Other real estate owned		75	Appraisals	Discount to reflect current market conditions	49	%

	December 31, 2012
	Fair Value Measurements Using						Assets
	Level 1		Level 2		Level 3		at Fair Value
	(in thousands)
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	990	$	990
Non-working capital loans		0		0		2,990		2,990
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		2,026		2,026
Owner occupied loans		0		0		3,892		3,892
Nonowner occupied loans		0		0		18,642		18,642
Multifamily loans		0		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		0		0		268		268
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		352		352
Open end and junior lien loans		0		0		158		158
Residential construction loans		0		0		0		0
Other consumer loans		0		0		46		46
Total impaired loans	$	0	$	0	$	29,364	$	29,364
Mortgage servicing rights		0		0		1,906		1,906
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	31,345	$	31,345

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a gross carrying amount of $30.0 million, with a valuation allowance of $7.3 million at September 30, 2013, resulting in a net recovery in the provision for loan losses of $2.7 million and $200,000, respectively, for the nine months and three months ended September 30, 2013. At September 30, 2012, impaired loans had a carrying amount of had a gross carrying amount of $50.2 million, with a valuation allowance of $14.5 million, resulting in a net recovery in the provision for loan losses of $200,000 and $3.8 million, respectively, for the three months and nine months ended September 30, 2012.

Mortgage servicing rights, which are carried at the lower of cost or fair value, included a portion carried at their fair value of $8,000, which is made up of the outstanding balance of $11,000, net of a valuation allowance of $3,000 at September 30, 2013, resulting in a net recovery of $39,000 in impairment for the nine months ended September 30, 2013. The Company realized impairment of $84,000 for the nine months ended September 30, 2012.

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.

	September 30, 2013
	Carrying		Estimated Fair Value
	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	81,340	$	81,340	$	0	$	0	$	81,340
Securities available for sale		463,070		1,022		461,071		977		463,070
Real estate mortgages held for sale		1,047		0		1,066		0		1,066
Loans, net		2,342,911		0		0		2,347,776		2,347,776
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		8,328		0		1,968		6,360		8,328
Financial Liabilities:
Certificates of deposit		(782,684)		0		(792,444)		0		(792,444)
All other deposits		(1,662,142)		(1,662,142)		0		0		(1,662,142)
Securities sold under agreements to repurchase		(103,959)		0		(103,959)		0		(103,959)
Federal funds purchased		(57,000)		0		(57,000)		0		(57,000)
Other short-term borrowings		(75,000)		0		(75,000)		0		(75,000)
Long-term borrowings		(37)		0		(44)		0		(44)
Subordinated debentures		(30,928)		0		0		(31,149)		(31,149)
Standby letters of credit		(288)		0		0		(288)		(288)
Accrued interest payable		(3,629)		(121)		(3,505)		(3)		(3,629)

	December 31, 2012
	Carrying		Estimated Fair Value
	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	232,237	$	232,237	$	0	$	0	$	232,237
Securities available for sale		467,021		1,037		462,137		3,847		467,021
Real estate mortgages held for sale		9,452		0		9,663		0		9,663
Loans, net		2,206,075		0		0		2,230,993		2,230,993
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		8,485		6		2,215		6,264		8,485
Financial Liabilities:
Certificates of deposit		(907,505)		0		(922,397)		0		(922,397)
All other deposits		(1,674,251)		(1,674,251)		0		0		(1,674,251)
Securities sold under agreements to repurchase		(121,883)		0		(121,883)		0		(121,883)
Long-term borrowings		(15,038)		0		(15,607)		0		(15,607)
Subordinated debentures		(30,928)		0		0		(31,223)		(31,223)
Standby letters of credit		(262)		0		0		(262)		(262)
Accrued interest payable		(4,757)		(298)		(4,456)		(3)		(4,757)

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

Cash and cash equivalents - The carrying amount of cash and cash equivalents approximate fair value and are classified as Level 1.

Loans, net – Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using current market rates applied to the estimated life resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Federal Home Loan Bank stock and Federal Reserve Bank stock– It is not practical to determine the fair value of Federal Home Loan Bank stock and Federal Reserve Bank stock due to restrictions placed on its transferability.

Certificates of deposit - Fair values of certificates of deposit are estimated using discounted cash flow analyses using current market rates applied to the estimated life resulting in a Level 2 classification.

All other deposits- The fair values for all other deposits other than certificates of deposit are equal to the amount payable on demand (the carrying value) resulting in a Level 1 classification.

Securities sold under agreements to repurchase – The carrying amount of borrowings under repurchase agreements approximates their fair values resulting in a Level 2 classification.

Federal funds purchased – The carrying amount of federal funds purchased approximates their fair values resulting in a Level 2 classification.

Other short-term borrowings – The fair value of other short-term borrowings approximates their fair values resulting in a Level 2 classification.

Long-term borrowings – The fair value of long-term borrowings is estimated using discounted cash flow analyses based on current borrowing rates resulting in a Level 2 classification.

Subordinated debentures - The fair value of subordinated debentures is based on the rates currently available to the Company with similar term and remaining maturity and credit spread resulting in a Level 3 classification.

Standby letters of credit – The fair value of off-balance sheet items is based on the current fees and costs that would be charged to enter into or terminate such arrangements resulting in a Level 3 classification.

Accrued interest receivable/payable – The carrying amounts of accrued interest approximates fair value resulting in a Level 1, Level 2 or Level 3 classification which is consistent with its associated asset/liability.

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

NOTE 4. ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

                 The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2013, and 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, 2013:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2013
Balance July 1,	$	21,879	$	20,098	$	1,517	$	264	$	2,823	$	587	$	3,467	$	50,635
Provision for loan losses		138		(544)		(185)		(23)		409		179		26		0
Loans charged-off		(595)		(455)		0		0		(126)		(120)		0		(1,296)
Recoveries		75		73		201		0		71		45		0		465
Net loans charged-off		(520)		(382)		201		0		(55)		(75)		0		(831)
Balance September 30,	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Nine Months Ended September 30, 2013
Balance January 1,	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445
Provision for loan losses		(569)		(627)		125		1		709		225		136		0
Loans charged-off		(738)		(1,361)		(200)		0		(315)		(257)		0		(2,871)
Recoveries		462		348		205		0		101		114		0		1,230
Net loans charged-off		(276)		(1,013)		5		0		(214)		(143)		0		(1,641)
Balance September 30,	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	4,345	$	5,731	$	45	$	0	$	390	$	32	$	0	$	10,543
Collectively evaluated for impairment		17,152		13,441		1,488		241		2,787		659		3,493		39,261
Total ending allowance balance	$	21,497	$	19,172	$	1,533	$	241	$	3,177	$	691	$	3,493	$	49,804
Loans:
Loans individually evaluated for impairment	$	16,493	$	26,127	$	1,147	$	0	$	3,494	$	97	$	0	$	47,358
Loans collectively evaluated for impairment		881,826		891,635		199,091		55,792		273,067		43,946		0		2,345,357
Total ending loans balance	$	898,319	$	917,762	$	200,238	$	55,792	$	276,561	$	44,043	$	0	$	2,392,715

                The recorded investment in loans does not include accrued interest.

                The following table presents the activity in the allowance for loan losses by portfolio segment for the three-month and nine-month periods ended September 30, 2012:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2012
Balance July 1,	$	19,696	$	24,083	$	1,419	$	176	$	2,412	$	523	$	3,508	$	51,817
Provision for loan losses		1,532		(1,236)		(76)		(207)		356		114		(483)		0
Loans charged-off		(98)		(112)		0		0		(196)		(77)		0		(483)
Recoveries		224		120		1		182		21		30		0		578
Net loans charged-off		126		8		1		182		(175)		(47)		0		95
Balance September 30,	$	21,354	$	22,855	$	1,344	$	151	$	2,593	$	590	$	3,025	$	51,912
Nine Months Ended September 30, 2012
Balance January 1,	$	22,830	$	23,489	$	695	$	65	$	2,322	$	645	$	3,354	$	53,400
Provision for loan losses		380		158		648		(100)		417		125		(329)		1,299
Loans charged-off		(2,552)		(959)		0		0		(288)		(268)		0		(4,067)
Recoveries		696		167		1		186		142		88		0		1,280
Net loans charged-off		(1,856)		(792)		1		186		(146)		(180)		0		(2,787)
Balance September 30,	$	21,354	$	22,855	$	1,344	$	151	$	2,593	$	590	$	3,025	$	51,912

                The recorded investment in loans does not include accrued interest.

                The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2012:

			Commercial
			Real Estate						Consumer
	Commercial		and Multifamily		Agri-business		Other		1-4 Family		Other
	and Industrial		Residential		and Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	5,542	$	8,559	$	63	$	0	$	607	$	34	$	0	$	14,805
Collectively evaluated for impairment		16,800		12,253		1,340		240		2,075		575		3,357		36,640
Total ending allowance balance	$	22,342	$	20,812	$	1,403	$	240	$	2,682	$	609	$	3,357	$	51,445
Loans:
Loans individually evaluated for impairment	$	18,281	$	36,919	$	797	$	0	$	2,853	$	92	$	0	$	58,942
Loans collectively evaluated for impairment		828,728		763,279		224,008		56,810		280,141		45,612		0		2,198,578
Total ending loans balance	$	847,009	$	800,198	$	224,805	$	56,810	$	282,994	$	45,704	$	0	$	2,257,520

                The recorded investment in loans does not include accrued interest.

The allowance for loan losses to total loans at September 30, 2013 and 2012 was 2.08% and 2.36%, respectively.  The allowance for loan losses to total loans at December 31, 2012 was 2.28%.

                 The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2013:

							Three Months Ended September 30, 2013						Nine Months Ended September 30, 2013
											Cash Basis						Cash Basis
	Unpaid				Allowance for		Average		Interest		Interest		Average		Interest		Interest
	Principal		Recorded		Loan Losses		Recorded		Income		Income		Recorded		Income		Income
	Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	64	$	64	$	0	$	64	$	0	$	0	$	65	$	0	$	0
Non-working capital loans		0		0		0		0		0		0		11		0		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,072		476		0		616		0		0		575		0		0
Agri-business and agricultural loans:
Loans secured by farmland		612		613		0		479		0		0		480		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		1,158		1,054		0		719		0		0		275		0		0
Open end and junior lien loans		41		41		0		27		0		0		23		0		0
Other consumer loans		1		1		0		1		0		0		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,196		2,587		1,024		2,988		12		14		3,019		39		41
Non-working capital loans		15,695		13,842		3,321		14,017		120		126		14,081		391		402
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,569		2,569		595		2,848		11		20		3,860		63		67
Owner occupied loans		3,946		3,906		505		3,707		20		20		3,592		88		96
Nonowner occupied loans		19,166		19,176		4,631		19,183		87		86		20,960		255		258
Multifamily loans		0		0		0		0		0		0		64		0		0
Agri-business and agricultural loans:
Loans secured by farmland		1,033		534		45		536		0		0		418		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,355		2,384		385		2,347		5		6		2,461		28		43
Open end and junior lien loans		15		15		5		22		0		0		40		0		0
Other consumer loans		96		96		32		99		0		0		86		1		1
Total	$	54,019	$	47,358	$	10,543	$	47,653	$	255	$	272	$	50,010	$	865	$	908

                The recorded investment in loans does not include accrued interest.

                The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month and nine-month periods ended September 30, 2012:

							Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
												Cash Basis						Cash Basis
		Unpaid				Allowance for		Average		Interest		Interest		Average		Interest		Interest
		Principal		Recorded		Loan Losses		Recorded		Income		Income		Recorded		Income		Income
		Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Non-working capital loans	$	70	$	70	$	0	$	70	$	0	$	0	$	136	$	0	$	0
Commercial real estate and multi-family residential loans:
Owner occupied loans		781		601		0		611		0		0		513		0		0
Nonowner occupied loans		385		385		0		385		10		13		217		10		13
Agri-business and agricultural loans:
Loans secured by farmland		666		487		0		489		0		0		252		0		0
Loans for ag production		0		0		0		0		0		0		68		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		277		276		0		417		1		0		432		1		0
Open end and junior lien loans		0		0		0		0		0		0		20		0		0
Other consumer loans		1		1		0		0		0		0		0		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,915		3,074		1,417		3,059		13		10		4,420		42		38
Non-working capital loans		19,357		17,175		5,154		17,072		171		168		17,353		528		528
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,786		3,396		672		2,436		18		13		1,814		35		30
Owner occupied loans		6,900		6,287		1,527		5,702		30		19		4,859		48		35
Nonowner occupied loans		27,957		27,255		6,670		27,382		78		77		28,115		280		281
Agri-business and agricultural loans:
Loans secured by farmland		654		333		67		343		0		0		437		0		0
Loans for agricultural production		0		0		0		63		0		0		91		0		0
Other commercial loans		0		0		0		0		0		0		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,562		1,564		267		1,730		12		10		1,787		32		32
Open end and junior lien loans		354		354		192		353		0		0		340		0		0
Other consumer loans		45		45		18		30		1		1		14		1		1
Total	$	68,710	$	61,303	$	15,984	$	60,142	$	334	$	311	$	60,866	$	977	$	958

                The recorded investment in loans does not include accrued interest.

                 The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2012:

	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	61	$	61	$	0
Non-working capital loans		0		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans		754		574		0
Nonowner occupied loans		385		385		0
Multifamily loans		410		286		0
Agri-business and agricultural loans:
Loans secured by farmland		645		466		0
Loans for ag production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		59		59		0
Open end and junior lien loans		41		41		0
Residential construction loans
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,833		3,224		1,516
Non-working capital loans		16,763		14,996		4,026
Commercial real estate and multi-family residential loans:
Construction and land development loans		3,352		2,960		934
Owner occupied loans		5,869		5,869		1,476
Nonowner occupied loans		26,835		26,845		6,149
Multifamily loans		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		651		331		63
Loans for agricultural production		0		0		0
Other commercial loans		0		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		3,387		2,403		415
Open end and junior lien loans		379		350		192
Residential construction loans		0		0		0
Other consumer loans		91		91		34
Total	$	65,516	$	58,942	$	14,805

                The recorded investment in loans does not include accrued interest.

                The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013				December 31, 2012
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Nonaccrual		Accruing		Nonaccrual		Accruing
Commercial and industrial loans:
Working capital lines of credit loans	$	1,765	$	0	$	1,899	$	0
Non-working capital loans		3,895		0		4,812		50
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		398		0
Owner occupied loans		2,646		0		2,461		0
Nonowner occupied loans		11,633		0		19,200		0
Multifamily loans		0		0		286		0
Agri-business and agricultural loans:
Loans secured by farmland		1,147		0		797		0
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		1,607		239		504		0
Open end and junior lien loans		56		126		391		0
Residential construction loans		0		0		0		0
Other consumer loans		83		0		77		0
Total	$	22,832	$	365	$	30,825	$	50

                The recorded investment in loans does not include accrued interest.

                The following table presents the aging of the recorded investment in past due loans as of September 30, 2013 by class of loans:

	30-89		Greater than
	Days		90 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	596	$	1,765	$	2,361	$	459,989	$	462,350
Non-working capital loans		872		3,895		4,767		431,202		435,969
Commercial real estate and multi-family residential loans:
Construction and land development loans		0		0		0		117,323		117,323
Owner occupied loans		45		2,646		2,691		368,521		371,212
Nonowner occupied loans		0		11,633		11,633		380,360		391,993
Multifamily loans		0		0		0		37,234		37,234
Agri-business and agricultural loans:
Loans secured by farmland		0		1,147		1,147		103,665		104,812
Loans for agricultural production		90		0		90		95,336		95,426
Other commercial loans		0		0		0		55,792		55,792
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,167		1,846		3,013		116,516		119,529
Open end and junior lien loans		233		182		415		151,921		152,336
Residential construction loans		162		0		162		4,534		4,696
Other consumer loans		102		83		185		43,858		44,043
Total	$	3,267	$	23,197	$	26,464	$	2,366,251	$	2,392,715

                The recorded investment in loans does not include accrued interest.

                The following table presents the aging of the recorded investment in past due loans as of December 31, 2012 by class of loans:

	30-89		Greater than
	Days		90 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	233	$	1,899	$	2,132	$	437,705	$	439,837
Non-working capital loans		48		4,862		4,910		402,262		407,172
Commercial real estate and multi-family residential loans:
Construction and land development loans		998		398		1,396		80,954		82,350
Owner occupied loans		1,023		2,461		3,484		354,921		358,405
Nonowner occupied loans		38		19,200		19,238		295,243		314,481
Multifamily loans		0		286		286		44,676		44,962
Agri-business and agricultural loans:
Loans secured by farmland		0		797		797		108,359		109,156
Loans for agricultural production		0		0		0		115,649		115,649
Other commercial loans		0		0		0		56,810		56,810
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,475		504		1,979		107,583		109,562
Open end and junior lien loans		361		391		752		161,172		161,924
Residential construction loans		0		0		0		11,508		11,508
Other consumer loans		81		77		158		45,546		45,704
Total	$	4,257	$	30,875	$	35,132	$	2,222,388	$	2,257,520

                The recorded investment in loans does not include accrued interest.

Troubled Debt Restructurings:

                Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $9.8 million and $12.5 million of specific reserves to loans whose terms have been modified in troubled debt restructurings as of September 30, 2013 and December 31, 2012. The Company is not committed to lending additional funds to customers whose loans have been modified in a troubled debt restructuring.

	September 30		December 31,
	2013		2012
Accruing troubled debt restructured loans	$	22,888	$	22,332
Nonaccrual troubled debt restructured loans		18,691		28,506
Total troubled debt restructured loans	$	41,579	$	50,838

During the quarter ending June 30, 2013, loans totaling $328,000 were modified as troubled debt restructured loans. Concessions granted during the modifications included reduction in the interest rates to rates that would not be readily available in the marketplace for borrowers with a similar risk profile and/or capitalizing past due interest and other expenses into the principal balance of the loan. The troubled debt restructured loans during the quarter were all granted to consumer mortgage borrowers.

During the quarter ending March 31, 2013, loans totaling $2.2 million were modified as troubled debt restructurings. The modified terms of the loans included reductions in the interest rates to one that would not be readily available in the marketplace for borrowers with a similar risk profile and modifications of the repayment terms. These restructured loans were provided to related borrowers who are engaged in land development.

                No loans were modified as troubled debt restructurings during the three month period ended September 30, 2013.  The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month periods ending September 30, 2013:

	Modifications
	Nine Months Ended September 30, 2013
	All Modifications
		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Construction and land development loans	6	$	2,198	$	2,198
Consumer 1-4 family loans:
Closed end first mortgage loans	4		317		328
Total	10	$	2,515	$	2,526

	Interest Rate Reductions					Principal and Interest Forgiveness									Modified Repayment Terms
		Interest at		Interest at							Interest at		Interest at			Extension
	Number of	Pre-Modification		Post-Modification		Number of	Principal at		Principal at		Pre-Modification		Post-Modification		Number of	Period or
	Loans	Rate		Rate		Loans	Pre-Modification		Post-Modification		Rate		Rate		Loans	Range
																(in months)
Troubled Debt Restructurings
Commercial real estate and:
multi-family residential loans
Construction and land development loans	6	$	85	$	63	0	$	0	$	0	$	0	$	0	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	2		142		158	2		156		161		164		149	0	0
Total	8	$	227	$	221	2	$	156	$	161	$	164	$	149	0	0

For the three month period ending September 30, 2013 the commercial real estate and multi-family residential loan troubled debt restructuring described above decreased the allowance for loan losses by $11,000 and the consumer 1-4 family loan troubled debt restructurings described above decreased the allowance for loan losses by $4,000

For the nine month period ending September 30, 2013 the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $384,000 and the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $61,000.

                The troubled debt restructurings described above had charge-offs of $0 and $365,000, respectively, during the three-month and nine-month periods ending September 30, 2013.

                The following table presents loans by class modified as troubled debt restructurings that occurred during the nine-month and three-month periods ending September 30, 2012:

	Modifications
	Nine Months Ended September 30, 2012
	All Modifications
			Pre-Modification		Post-Modification
			Outstanding		Outstanding
	Number of		Recorded		Recorded
	Loans		Investment		Investment
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	1	$	942	$	1,060
Commercial real estate and multi-family residential loans:
Construction and land development loans	5		1,638		1,638
Owner occupied loans	2		2,260		2,260
Nonowner occupied loans	1		385		385
Consumer 1-4 family loans:
Closed end first mortgage loans	1		39		39
Other consumer loans	1		17		17
Total	11	$	5,281	$	5,399

	Interest Rate Reductions					Modified Repayment Terms
		Interest at		Interest at			Extension
	Number of	Pre-Modification		Post-Modification		Number of	Period or
	Loans	Rate		Rate		Loans	Range
							(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	0	$	0	$	0	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans
Owner occupied loans	1		440		117	1	18
Nonowner occupied loans	0		0		0	1	14
Consumer 1-4 family loans:
Closed end first mortgage loans	1		76		15	0	0
Other consumer loans	0		0		0	0	0
Total	2	$	516	$	132	2	14-18

	Modifications
	Three Months Ended September 30, 2012
	All Modifications
		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
	Loans	Investment		Investment
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Owner occupied loans	1	$	1,411	$	1,411
Other consumer loans	1		17		17
Total	2	$	1,428	$	1,428

	Modified Repayment Terms
		Extension
	Number of	Period or
	Loans	Range
		(in months)
Troubled Debt Restructurings
Commercial real estate and multi-family residential loans:
Owner occupied loans	1	18
Other consumer loans	0	0
Total	1	18

                For the three month period ending September 30, 2012, the commercial and industrial loan troubled debt restructurings described above decreased the allowance for loan losses by $15,000, the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $11,000, the consumer 1-4 family loan troubled debt restructurings described above decreased the allowance for loan losses by $1,000 and the other consumer loan troubled debt restructuring described above increased the allowance for loan losses by $4,000.

For the nine month period ending September 30, 2012, the commercial and industrial loan troubled debt restructurings described above decreased the allowance for loan losses by $534,000, the commercial real estate and multi-family residential loan troubled debt restructurings described above decreased the allowance for loan losses by $18,000, the consumer 1-4 family loan troubled debt restructurings described above increased the allowance for loan losses by $5,000 and other consumer loan trouble debt restructuring described above increased the allowance for loan losses by $4,000.

                No charge offs resulted from any troubled debt restructurings described above during the three and nine month periods ending September 30, 2012.

                 The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2013:

	Modifications
	Three Months Ended September 30, 2013			Nine Months Ended September 30, 2013
	Number of	Recorded		Number of	Recorded
	Loans	Investment		Loans	Investment
Troubled Debt Restructurings that Subsequently Defaulted
Consumer 1-4 family loans:
Closed end first mortgage loans	0	$	0	1	$	912
Total	0	$	0	1	$	912

                A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

                The troubled debt restructurings described above that subsequently defaulted made a large principal payment during the second quarter of 2013, which decreased the allowance for loan losses by $85,000 and did not result in any charge offs during the three and nine month periods ending September 30, 2013.

                The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within twelve months following the modification which occurred during the three month and nine month periods ending September 30, 2012:

	Modifications
	Three months ended September 30, 2012			Nine months ended September 30, 2012
	Number of	Recorded		Number of	Recorded
	Loans	Investment		Loans	Investment
Troubled Debt Restructurings that Subsequently Defaulted
Consumer 1-4 family loans:
Closed end first mortgage loans	0	$	0	1	$	65
Total	0	$	0	1	$	65

                A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

                The troubled debt restructurings that subsequently defaulted described above increased the allowance for loan losses by $17,000 and did not result in any charge offs during the three and nine month periods ending September 30, 2012.

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 $250,000.

                The Company 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 paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

                Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

                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 grade loans.  Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.  As of September 30, 2013 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial and industrial loans:
Working capital lines of credit loans	$	427,576	$	21,129	$	13,645	$	0	$	0
Non-working capital loans		387,047		29,779		19,143		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		107,363		549		9,411		0		0
Owner occupied loans		333,148		25,536		12,528		0		0
Nonowner occupied loans		363,712		9,476		18,805		0		0
Multifamily loans		36,904		330		0		0		0
Agri-business and agricultural loans:
Loans secured by farmland		103,083		0		1,729		0		0
Loans for agricultural production		95,426		0		0		0		0
Other commercial loans		55,674		0		118		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		29,422		549		1,824		0		87,734
Open end and junior lien loans		7,099		1,949		0		0		143,288
Residential construction loans		0		0		0		0		4,696
Other consumer loans		8,699		467		292		0		34,585
Total	$	1,955,153	$	89,764	$	77,495	$	0	$	270,303

                The recorded investment in loans does not include accrued interest.

                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 grade loans.  Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.  As of December 31, 2012 and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial and industrial loans:
Working capital lines of credit loans	$	403,778	$	22,591	$	13,468	$	0	$	0
Non-working capital loans		355,772		23,192		26,857		66		1,285
Commercial real estate and multi-family residential loans:
Construction and land development loans		67,002		4,595		10,753		0		0
Owner occupied loans		315,672		24,589		18,144		0		0
Nonowner occupied loans		282,108		6,345		26,028		0		0
Multifamily loans		43,425		345		1,192		0		0
Agri-business and agricultural loans:
Loans secured by farmland		107,734		0		1,404		0		18
Loans for agricultural production		115,649		0		0		0		0
Other commercial loans		56,692		0		118		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		18,685		343		729		0		89,805
Open end and junior lien loans		7,932		300		0		0		153,692
Residential construction loans		0		0		0		0		11,508
Other consumer loans		10,168		378		497		0		34,661
Total	$	1,784,617	$	82,678	$	99,190	$	66	$	290,969

                The recorded investment in loans does not include accrued interest.

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Common stock cash dividends declared, per share (in dollars per share)	$ 0.38	$ 0.495
Treasury shares purchased under deferred directors' plan (in shares)	13,652	14,741
Treasury stock sold and distributed under deferred directors' plan (in shares)	3,018
Stock activity under stock compensation plans (in shares)	81,909	129,228

XML

FAIR VALUE DISCLOSURES (Assets Measured at Fair Value on a Nonrecurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Mortgage servicing rights	$ 3,300
Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	22,634	29,364
Mortgage servicing rights	8	1,906
Other real estate owned	75	75
Total assets	22,717	31,345
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Mortgage servicing rights	0	0
Other real estate owned	0	0
Total assets	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Mortgage servicing rights	0	0
Other real estate owned	0	0
Total assets	0	0
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	22,634	29,364
Mortgage servicing rights	8	1,906
Other real estate owned	75	75
Total assets	22,717	31,345
Commercial and Industrial Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	4,035	3,980
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	801	990
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	801	990
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	3,234	2,990
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	3,234	2,990
Commercial Real Estate and Multi-Family Residential Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	17,681	24,560
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,974	2,026
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,974	2,026
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	3,401	3,892
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	3,401	3,892
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	12,306	18,642
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	12,306	18,642
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	489	268
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	489	268
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	489	268
Agri-business and Agricultural Loans [Member] | Loans for Agricultural Production [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Loans for Agricultural Production [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Loans for Agricultural Production [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Agri-business and Agricultural Loans [Member] | Loans for Agricultural Production [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Commerical Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Commerical Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Commerical Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Commerical Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	376	510
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	366	352
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	366	352
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	10	158
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	10	158
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Consumer Loans [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	53	46
Other Consumer Loans [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Consumer Loans [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other Consumer Loans [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	$ 53	$ 46

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EMPLOYEE BENEFIT PLANS (Components of Net Periodic Benefit Cost) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Pension Plans, Defined Benefit [Member]
Interest cost	$ 29	$ 31	$ 87	$ 95
Expected return on plan assets	(30)	(34)	(90)	(102)
Recognized net actuarial (gain) loss	38	35	113	102
Net pension expense (benefit)	37	32	110	95
Supplemental Employee Retirement Plans, Defined Benefit [Member]
Interest cost	11	12	34	38
Expected return on plan assets	(19)	(18)	(56)	(56)
Recognized net actuarial (gain) loss	24	20	70	62
Net pension expense (benefit)	$ 16	$ 14	$ 48	$ 44

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Recorded Investment In Non Accrual And Loans Past Due Over 90 Days Still On Accrual By Class Of Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	$ 22,832	$ 30,825
Loans Past Due Over 90 Days and Still Accruing	365	50
Other Commerical Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	0	0
Loans Past Due Over 90 Days and Still Accruing	0	0
Other Consumer Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	83	77
Loans Past Due Over 90 Days and Still Accruing	0	0
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	1,765	1,899
Loans Past Due Over 90 Days and Still Accruing	0	0
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	3,895	4,812
Loans Past Due Over 90 Days and Still Accruing	0	50
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	0	398
Loans Past Due Over 90 Days and Still Accruing	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	2,646	2,461
Loans Past Due Over 90 Days and Still Accruing	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	11,633	19,200
Loans Past Due Over 90 Days and Still Accruing	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	0	286
Loans Past Due Over 90 Days and Still Accruing	0	0
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	1,147	797
Loans Past Due Over 90 Days and Still Accruing	0	0
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	0	0
Loans Past Due Over 90 Days and Still Accruing	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	0	0
Loans Past Due Over 90 Days and Still Accruing	0	0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	1,607	504
Loans Past Due Over 90 Days and Still Accruing	239	0
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member]
Recorded Investment in Nonaccrual and Loans Past Due Over 90 Days Still on Accrual by Class of Loans [Abstract]
Nonaccrual	56	391
Loans Past Due Over 90 Days and Still Accruing	$ 126	$ 0

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11. SUBSEQUENT EVENTS

There were no subsequent events that would have a material impact on the financial statements presented in this Form 10-Q.

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes In Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

NOTE 7.  NEW ACCOUNTING PRONOUNCEMENTS

                In February 2013, the Financial Accounting Standards Board  (“FASB”) issued updated guidance related to disclosure of reclassification amounts out of other comprehensive income. The standard requires that companies present, either in a single note or parenthetically on the face of their financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. The new requirements will take effect for public companies in fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company adopted this standard on January 1, 2013.  Adopting this standard did not have a significant impact on the Company’s financial condition or results of operations.

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LOANS (Tables)

9 Months Ended

Sep. 30, 2013

Loans [Abstract]

Schedule of loans

NOTE 3.  LOANS

	September 30,				December 31,
	2013				2012
Commercial and industrial loans:
Working capital lines of credit loans	$	462,098	19.3	%	$	439,638	19.5	%
Non-working capital loans		435,968	18.2			407,184	18.0
Total commercial and industrial loans		898,066	37.5			846,822	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans		117,733	4.9			82,494	3.7
Owner occupied loans		371,500	15.5			358,617	15.9
Nonowner occupied loans		392,538	16.4			314,889	13.9
Multifamily loans		37,279	1.6			45,011	2.0
Total commercial real estate and multi-family residential loans		919,050	38.4			801,011	35.5
Agri-business and agricultural loans:
Loans secured by farmland		104,807	4.4			109,147	4.8
Loans for agricultural production		95,330	4.0			115,572	5.1
Total agri-business and agricultural loans		200,137	8.4			224,719	10.0
Other commercial loans		55,797	2.3			56,807	2.5
Total commercial loans		2,073,050	86.6			1,929,359	85.5
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		119,788	5.0			109,823	4.9
Open end and junior lien loans		151,726	6.3			161,366	7.1
Residential construction and land development loans		4,705	0.2			11,541	0.5
Total consumer 1-4 family mortgage loans		276,219	11.5			282,730	12.5
Other consumer loans		44,091	1.8			45,755	2.0
Total consumer loans		320,310	13.4			328,485	14.5
Subtotal		2,393,360	100.0	%		2,257,844	100.0	%
Less: Allowance for loan losses		(49,804)				(51,445)
Net deferred loan fees		(645)				(324)
Loans, net	$	2,342,911			$	2,206,075

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RECLASSIFICATIONS

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

RECLASSIFICATIONS

NOTE 12. RECLASSIFICATIONS

Certain amounts appearing in the financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation. The reclassification had no effect on net income or stockholders’ equity as previously reported.

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document Information [Line Items]
Entity Registrant Name	LAKELAND FINANCIAL CORP
Entity Central Index Key	0000721994
Trading Symbol	LKFN
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Entity Common Stock, Shares Outstanding		16,465,316

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of weighted average number of shares

Basic earnings per common share is net income available to common shareholders divided by the weighted average number of common shares outstanding during the period.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, stock awards and warrants.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Weighted average shares outstanding for basic earnings per common share		16,451,199		16,340,425		16,427,060		16,312,896
Dilutive effect of stock options, awards and warrants		183,734		149,965		154,029		157,589
Weighted average shares outstanding for diluted earnings per common share		16,634,933		16,490,390		16,581,089		16,470,485
Basic earnings per common share	$	0.59	$	0.57	$	1.72	$	1.64
Diluted earnings per common share	$	0.59	$	0.57	$	1.70	$	1.63