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, 2015

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, 2015:  16,636,069

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets — September 30, 2015 and December 31, 2014	1
	Consolidated Statements of Income — three months and nine months ended September 30, 2015 and 2014	2
	Consolidated Statements of Comprehensive Income — three months and nine months ended September 30, 2015 and 2014	3
	Consolidated Statements of Shareholders’ Equity — nine months ended September 30, 2015 and 2014	4
	Consolidated Statements of Cash Flows — nine months ended September 30, 2015 and 2014	5
	Notes to the Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51
SIGNATURES		52

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (in thousands except share data)
	September 30,	December 31,
	2015	2014
	(Unaudited)
ASSETS
Cash and due from banks	$86,586	$75,381
Short-term investments	11,485	15,257
Total cash and cash equivalents	98,071	90,638
Securities available for sale (carried at fair value)	477,699	475,911
Real estate mortgage loans held for sale	3,132	1,585
Loans, net of allowance for loan losses of $44,694 and $46,262	2,927,586	2,716,058
Land, premises and equipment, net	44,013	41,983
Bank owned life insurance	67,693	66,612
Federal Reserve and Federal Home Loan Bank stock	7,668	9,413
Accrued interest receivable	9,330	8,662
Goodwill	4,970	4,970
Other assets	26,088	27,452
Total assets	$3,666,250	$3,443,284
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Noninterest bearing deposits	$630,789	$579,495
Interest bearing deposits	2,516,745	2,293,625
Total deposits	3,147,534	2,873,120
Short-term borrowings
Federal funds purchased	0	500
Securities sold under agreements to repurchase	80,414	54,907
Other short-term borrowings	0	105,000
Total short-term borrowings	80,414	160,407
Long-term borrowings	34	35
Subordinated debentures	30,928	30,928
Accrued interest payable	3,712	2,946
Other liabilities	16,928	14,463
Total liabilities	3,279,550	3,081,899
STOCKHOLDERS' EQUITY
Common stock:  90,000,000 shares authorized, no par value
16,636,069 shares issued and 16,540,957 outstanding as of September 30, 2015
16,550,324 shares issued and 16,465,621 outstanding as of December 31, 2014	98,216	96,121
Retained earnings	285,792	263,345
Accumulated other comprehensive income	5,035	3,830
Treasury stock, at cost (2015 - 95,112 shares, 2014 - 84,703 shares)	(2,432)	(2,000)
Total stockholders' equity	386,611	361,296
Noncontrolling interest	89	89
Total equity	386,700	361,385
Total liabilities and equity	$3,666,250	$3,443,284

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

1

CONSOLIDATED STATEMENTS OF INCOME (unaudited - in thousands except share and per share data)
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2015	2014	2015	2014
NET INTEREST INCOME
Interest and fees on loans
Taxable	$27,981	$26,713	$81,553	$78,317
Tax exempt	116	125	350	348
Interest and dividends on securities
Taxable	2,009	2,075	6,459	6,114
Tax exempt	844	820	2,515	2,455
Interest on short-term investments	16	12	43	31
Total interest income	30,966	29,745	90,920	87,265
Interest on deposits	3,973	3,424	11,551	9,946
Interest on borrowings
Short-term	43	96	138	351
Long-term	239	260	756	769
Total interest expense	4,255	3,780	12,445	11,066
NET INTEREST INCOME	26,711	25,965	78,475	76,199
Provision for loan losses	0	0	0	0
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES	26,711	25,965	78,475	76,199
NONINTEREST INCOME
Wealth advisory fees	1,103	1,030	3,393	3,046
Investment brokerage fees	405	699	1,208	2,739
Service charges on deposit accounts	2,806	2,474	7,753	6,973
Loan, insurance and service fees	2,147	1,972	5,616	5,187
Merchant card fee income	485	407	1,332	1,137
Bank owned life insurance income	221	372	956	1,082
Other income	455	881	2,090	2,442
Mortgage banking income	280	264	1,020	508
Net securities gains/(losses)	0	(228)	42	(224)
Total noninterest income	7,902	7,871	23,410	22,890
NONINTEREST EXPENSE
Salaries and employee benefits	9,854	9,856	29,021	29,310
Net occupancy expense	919	872	2,918	2,885
Equipment costs	870	812	2,699	2,346
Data processing fees and supplies	1,950	1,557	5,655	4,541
Corporate and business development	780	726	2,284	2,052
FDIC insurance and other regulatory fees	521	481	1,518	1,446
Professional fees	694	705	2,111	2,241
Other expense	1,619	1,651	4,643	4,713
Total noninterest expense	17,207	16,660	50,849	49,534
INCOME BEFORE INCOME TAX EXPENSE	17,406	17,176	51,036	49,555
Income tax expense	5,841	5,665	16,955	16,820
NET INCOME	$11,565	$11,511	$34,081	$32,735
BASIC WEIGHTED AVERAGE COMMON SHARES	16,629,378	16,547,551	16,610,689	16,531,411
BASIC EARNINGS PER COMMON SHARE	$0.70	$0.70	$2.05	$1.98
DILUTED WEIGHTED AVERAGE COMMON SHARES	16,847,983	16,775,770	16,808,833	16,769,079
DILUTED EARNINGS PER COMMON SHARE	$0.69	$0.69	$2.03	$1.95

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

2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited - in thousands)
			Three months ended September 30,		Nine months ended September 30,
			2015	2014	2015	2014
Net income			$11,565	$11,511	$34,081	$32,735
Other comprehensive income (loss)
	Change in securities available for sale:
		Unrealized holding gain (loss) on securities available for sale
		arising during the period	3,764	(1,573)	2,196	7,979
		Reclassification adjustment for (gains) losses included in net income	0	228	(42)	224
		Net securities gain (loss) activity during the period	3,764	(1,345)	2,154	8,203
		Tax effect	(1,488)	551	(884)	(3,241)
		Net of tax amount	2,276	(794)	1,270	4,962
	Defined benefit pension plans:
		Net gain (loss) on defined benefit pension plans	0	0	(276)	64
		Amortization of net actuarial loss	61	49	183	148
		Net gain (loss) activity during the period	61	49	(93)	212
		Tax effect	(24)	(20)	28	(93)
		Net of tax amount	37	29	(65)	119
		Total other comprehensive income (loss), net of tax	2,313	(765)	1,205	5,081
Comprehensive income			$13,878	$10,746	$35,286	$37,816

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

3

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited - in thousands except share and per share data)
				Accumulated
				Other		Total
	Common Stock		Retained	Comprehensive	Treasury	Stockholders'
	Shares	Stock	Earnings	Income (Loss)	Stock	Equity
Balance at January 1, 2014	16,377,449	$93,249	$233,108	$(2,494)	$(1,988)	$321,875
Comprehensive income:
Net income			32,735			32,735
Other comprehensive income (loss), net of tax				5,081		5,081
Cash dividends declared, $0.61 per share			(10,092)			(10,092)
Treasury shares purchased under deferred
directors' plan	(11,042)	427			(427)	0
Treasury stock sold and distributed under deferred
directors' plan	25,031	(432)			432
Stock activity under equity compensation plans	72,358	(6)				(6)
Stock based compensation expense		2,267				2,267
Balance at September 30, 2014	16,463,796	$95,505	$255,751	$2,587	$(1,983)	$351,860
Balance at January 1, 2015	16,465,621	$96,121	$263,345	$3,830	$(2,000)	$361,296
Comprehensive income:
Net income			34,081			34,081
Other comprehensive income (loss), net of tax				1,205		1,205
Cash dividends declared, $0.70 per share			(11,634)			(11,634)
Treasury shares purchased under deferred
directors' plan	(10,409)	432			(432)	0
Stock activity under equity compensation plans	85,745	(138)				(138)
Stock based compensation expense		1,801				1,801
Balance at September 30, 2015	16,540,957	$98,216	$285,792	$5,035	$(2,432)	$386,611

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

4

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited - in thousands)
Nine Months Ended September 30	2015	2014
Cash flows from operating activities:
Net income	$34,081	$32,735
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation	2,848	2,507
Net gain on sale of other real estate owned	(27)	(85)
Amortization of loan servicing rights	416	392
Loans originated for sale	(58,035)	(38,682)
Net gain on sales of loans	(1,299)	(826)
Proceeds from sale of loans	57,224	39,254
Net loss on sales of premises and equipment	8	11
Net (gain) loss on sales and calls of securities available for sale	(42)	224
Net securities amortization	3,446	4,199
Stock based compensation expense	1,801	2,267
Earnings on life insurance	(956)	(1,082)
Tax benefit of stock option exercises	(126)	(36)
Net change:
Interest receivable and other assets	65	(1,664)
Interest payable and other liabilities	3,703	436
Total adjustments	9,026	6,915
Net cash from operating activities	43,107	39,650
Cash flows from investing activities:
Proceeds from sale of securities available for sale	7,787	13,766
Proceeds from maturities, calls and principal paydowns of
securities available for sale	59,403	44,562
Purchases of securities available for sale	(70,228)	(58,655)
Purchase of life insurance	(260)	(157)
Proceeds from loans sold to others	0	4,307
Net increase in total loans	(212,329)	(174,553)
Proceeds from sales of land, premises and equipment	699	6
Purchases of land, premises and equipment	(5,585)	(3,712)
Proceeds from redemption of Federal Home Loan Bank stock	1,745	0
Proceeds from sales of other real estate	878	1,326
Distribution from life insurance	0	778
Net cash from investing activities	(217,890)	(172,332)
Cash flows from financing activities:
Net increase in total deposits	274,414	343,604
Net decrease in short-term borrowings	(79,993)	(193,298)
Payments on long-term borrowings	(1)	(2)
Common dividends paid	(11,621)	(10,079)
Preferred dividends paid	(13)	(13)
Payments related to equity incentive plans	(138)	(6)
Purchase of treasury stock	(432)	(427)
Net cash from financing activities	182,216	139,779
Net change in cash and cash equivalents	7,433	7,097
Cash and cash equivalents at beginning of the period	90,638	63,105
Cash and cash equivalents at end of the period	$98,071	$70,202
Cash paid during the period for:
Interest	$11,679	$11,235
Income taxes	15,416	16,535
Supplemental non-cash disclosures:
Loans transferred to other real estate owned	801	1,011

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

5

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. Also included in this report is the Bank’s wholly owned subsidiary, LCB Investments II, Inc. (“LCB Investments”), which manages a portion of the Bank’s investment portfolio.  LCB Investments also owns LCB Funding, Inc. (“LCB Funding”), a real estate investment trust.  All significant inter-company balances and transactions have been eliminated in consolidation.

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, 2015 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2015. The Company’s 2014 Annual Report on Form 10-K should be read in conjunction with these statements.

NOTE 2. 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
	Amortized	Unrealized	Unrealized	Fair
(dollars in thousands)	Cost	Gain	Losses	Value
September 30, 2015
U.S. Treasury securities	$987	$34	$0	$1,021
Agency residential mortgage-backed securities	361,571	8,763	(643)	369,691
State and municipal securities	104,057	3,396	(466)	106,987
Total	$466,615	$12,193	$(1,109)	$477,699
December 31, 2014
U.S. Treasury securities	$986	$18	$0	$1,004
Agency residential mortgage-backed securities	366,596	7,178	(1,679)	372,095
State and municipal securities	99,399	3,857	(444)	102,812
Total	$466,981	$11,053	$(2,123)	$475,911

Information regarding the fair value and amortized cost of available for sale debt securities by maturity as of September 30, 2015 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
(dollars in thousands)	Cost	Value
Due in one year or less	$2,273	$2,293
Due after one year through five years	20,576	21,310
Due after five years through ten years	46,325	48,214
Due after ten years	35,870	36,191
	105,044	108,008
Mortgage-backed securities	361,571	369,691
Total debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$466,615	$477,699

6

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

	Nine months ended September 30,		Three months ended September 30,
(dollars in thousands)	2015	2014	2015	2014
Sales of securities available for sale
Proceeds	$7,787	$13,766	$0	$13,766
Gross gains	42	3	0	3
Gross losses	0	231	0	231

The Company sold two securities with a total book value of $7.7 million and a total fair value of $7.8 million during the first nine months of 2015.  The Company sold twelve securities with a total book value of $14.0 million and a total fair value of $13.8 million during the first nine months of 2014.

Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives of 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 $178.9 million and $202.4 million were pledged as of September 30, 2015 and December 31, 2014, 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, 2015 and December 31, 2014 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
(dollars in thousands)	Value	Losses	Value	Losses	Value	Losses
September 30, 2015
Agency residential mortgage-backed
securities	$28,944	$(204)	$26,970	$(439)	$55,914	$(643)
State and municipal securities	17,941	(200)	7,919	(266)	25,860	(466)
Total temporarily impaired	$46,885	$(404)	$34,889	$(705)	$81,774	$(1,109)
December 31, 2014
Agency residential mortgage-backed
securities	$33,420	$(148)	$102,512	$(1,531)	$135,932	$(1,679)
State and municipal securities	2,458	(28)	16,391	(416)	18,849	(444)
Total temporarily impaired	$35,878	$(176)	$118,903	$(1,947)	$154,781	$(2,123)

7

The total number of securities with unrealized losses as of September 30, 2015 and December 31, 2014 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2015
Agency residential mortgage-backed securities	12	8	20
State and municipal securities	35	12	47
Total temporarily impaired	47	20	67
December 31, 2014
Agency residential mortgage-backed securities	9	27	36
State and municipal securities	8	29	37
Total temporarily impaired	17	56	73

The following factors are considered in determining whether or not the impairment of these securities is other-than-temporary. In making this determination, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer, as well as the underlying fundamentals of the relevant market and the outlook for such market in the near future.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  Credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. As of September 30, 2015 and December 31, 2014, ninety-nine percent of the securities in the Company’s portfolio are backed by the U.S. government, government agencies, government sponsored agencies or are A-rated or better, except for certain non-local or local municipal securities, which are not rated. For the government, government-sponsored agency and municipal securities, management did not believe that there would be credit losses or that full principal would 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.

8

NOTE 3. LOANS

	September 30,			December 31,
(dollars in thousands)	2015			2014
Commercial and industrial loans:
Working capital lines of credit loans	$593,780	20.0	%	$544,043	19.7	%
Non-working capital loans	577,536	19.4		491,330	17.8
Total commercial and industrial loans	1,171,316	39.4		1,035,373	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans	176,945	6.0		156,636	5.7
Owner occupied loans	409,004	13.8		403,154	14.6
Nonowner occupied loans	417,790	14.1		394,458	14.3
Multifamily loans	93,075	3.1		71,811	2.6
Total commercial real estate and multi-family residential loans	1,096,814	36.9		1,026,059	37.1
Agri-business and agricultural loans:
Loans secured by farmland	155,106	5.2		137,407	5.0
Loans for agricultural production	93,964	3.2		136,380	4.9
Total agri-business and agricultural loans	249,070	8.4		273,787	9.9
Other commercial loans	82,976	2.8		75,715	2.7
Total commercial loans	2,600,176	87.5		2,410,934	87.3
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	154,019	5.2		145,167	5.3
Open end and junior lien loans	160,485	5.4		150,220	5.4
Residential construction and land development loans	8,445	0.3		6,742	0.2
Total consumer 1-4 family mortgage loans	322,949	10.9		302,129	10.9
Other consumer loans	49,169	1.7		49,541	1.8
Total consumer loans	372,118	12.5		351,670	12.7
Subtotal	2,972,294	100.0	%	2,762,604	100.0	%
Less:  Allowance for loan losses	(44,694)			(46,262)
Net deferred loan fees	(14)			(284)
Loans, net	$2,927,586			$2,716,058

The recorded investment in loans does not include accrued interest.

The Company had $151,000 in residential real estate loans in process of foreclosure as of September 30, 2015.

9

NOTE 4. ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month periods ended September 30, 2015 and 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2015
Beginning balance, July 1	$22,360	$13,112	$1,881	$358	$3,473	$392	$3,240	$44,816
Provision for loan losses	(88)	(235)	103	11	14	(13)	208	0
Loans charged-off	(2)	0	0	0	(152)	(74)	0	(228)
Recoveries	43	14	5	0	21	23	0	106
Net loans charged-off	41	14	5	0	(131)	(51)	0	(122)
Ending balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2014
Beginning balance, July 1	$20,922	$15,975	$1,404	$234	$3,275	$487	$3,308	$45,605
Provision for loan losses	919	(1,275)	(34)	76	179	68	67	0
Loans charged-off	(147)	0	0	0	(60)	(62)	0	(269)
Recoveries	291	670	5	0	59	26	0	1,051
Net loans charged-off	144	670	5	0	(1)	(36)	0	782
Ending balance	$21,985	$15,370	$1,375	$310	$3,453	$519	$3,375	$46,387

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2015 and 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Nine Months Ended September 30, 2015
Beginning balance, January 1	$22,785	$14,153	$1,790	$276	$3,459	$483	$3,316	$46,262
Provision for loan losses	240	(856)	184	215	149	(64)	132	0
Loans charged-off	(878)	(459)	0	(122)	(292)	(180)	0	(1,931)
Recoveries	166	53	15	0	40	89	0	363
Net loans charged-off	(712)	(406)	15	(122)	(252)	(91)	0	(1,568)
Ending balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Nine Months Ended September 30, 2014
Beginning balance, January 1	$21,005	$18,557	$1,682	$391	$3,045	$608	$3,509	$48,797
Provision for loan losses	1,296	(1,334)	(323)	(81)	587	(11)	(134)	0
Loans charged-off	(660)	(2,553)	0	0	(282)	(180)	0	(3,675)
Recoveries	344	701	16	0	102	102	0	1,265
Net loans charged-off	(316)	(1,852)	16	0	(180)	(78)	0	(2,410)
Ending balance	$21,985	$15,371	$1,375	$310	$3,452	$519	$3,375	$46,387

10

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2015 and December 31, 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
September 30, 2015
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,129	$783	$0	$0	$333	$59	$0	$4,304
Collectively evaluated for impairment	19,184	12,108	1,989	369	3,023	269	3,448	40,390
Total ending allowance balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694
Loans:
Loans individually evaluated for impairment	$9,140	$10,530	$472	$0	$2,434	$90	$0	$22,666
Loans collectively evaluated for impairment	1,162,373	1,085,215	248,678	82,971	321,393	48,984	0	2,949,614
Total ending loans balance	$1,171,513	$1,095,745	$249,150	$82,971	$323,827	$49,074	$0	$2,972,280
		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
December 31, 2014
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,306	$1,531	$14	$15	$482	$73	$0	$5,421
Collectively evaluated for impairment	19,479	12,622	1,776	261	2,977	410	3,316	40,841
Total ending allowance balance	$22,785	$14,153	$1,790	$276	$3,459	$483	$3,316	$46,262
Loans:
Loans individually evaluated for impairment	$14,702	$13,005	$486	$30	$3,614	$127	$0	$31,964
Loans collectively evaluated for impairment	1,020,897	1,011,858	273,388	75,684	299,189	49,340	0	2,730,356
Total ending loans balance	$1,035,599	$1,024,863	$273,874	$75,714	$302,803	$49,467	$0	$2,762,320

11

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2015:

	Unpaid		Allowance for
	Principal	Recorded	Loan Losses
(dollars in thousands)	Balance	Investment	Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$20	$20	$0
Non-working capital loans	2,431	665	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,441	2,261	0
Nonowner occupied loans	5,272	5,276	0
Agri-business and agricultural loans:
Loans secured by farmland	971	472	0
Consumer 1-4 family loans:
Closed end first mortgage loans	535	383	0
Open end and junior lien loans	128	128	0
Other consumer loans	3	3	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,916	1,915	822
Non-working capital loans	8,732	6,540	2,307
Commercial real estate and multi-family residential loans:
Construction and land development loans	340	339	40
Owner occupied loans	2,684	2,654	743
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,999	1,923	333
Other consumer loans	87	87	59
Total	$27,559	$22,666	$4,304

12

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2014:

	Unpaid		Allowance for
	Principal	Recorded	Loan Losses
(dollars in thousands)	Balance	Investment	Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$21	$21	$0
Non-working capital loans	1,673	279	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	526	526	0
Owner occupied loans	554	374	0
Nonowner occupied loans	3,030	3,036	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	724	712	0
Open end and junior lien loans	317	317	0
Residential construction loans	129	129	0
Other consumer loans	1	1	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,409	1,408	837
Non-working capital loans	15,557	12,994	2,469
Commercial real estate and multi-family residential loans:
Construction and land development loans	449	448	107
Owner occupied loans	5,298	5,297	1,213
Nonowner occupied loans	3,324	3,324	211
Agri-business and agricultural loans:
Loans secured by farmland	381	203	14
Other commercial loans	30	30	15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,505	2,375	474
Open end and junior lien loans	81	81	8
Other consumer loans	126	126	73
Total	$36,738	$31,964	$5,421

13

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2015:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                     20	$                       0	$                       0
Non-working capital loans	709	1	1
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,442	0	0
Nonowner occupied loans	5,404	26	27
Agri-business and agricultural loans:
Loans secured by farmland	474	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	415	0	0
Open end and junior lien loans	130	0	0
Other consumer loans	5	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,202	3	4
Non-working capital loans	6,092	47	43
Commercial real estate and multi-family residential loans:
Construction and land development loans	351	4	2
Owner occupied loans	2,682	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,125	15	14
Other consumer loans	99	1	2
Total	$             22,150	$                     97	$                     93

14

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2014:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$22	$0	$0
Non-working capital loans	290	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	533	0	0
Owner occupied loans	160	0	0
Nonowner occupied loans	327	0	0
Agri-business and agricultural loans:
Loans secured by farmland	284	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	695	0	0
Open end and junior lien loans	286	0	0
Residential construction loans	135	0	0
Other consumer loans	1	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,680	22	18
Non-working capital loans	13,662	127	126
Commercial real estate and multi-family residential loans:
Construction and land development loans	1,679	7	5
Owner occupied loans	3,241	26	29
Nonowner occupied loans	6,485	35	36
Agri-business and agricultural loans:
Loans secured by farmland	203	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,568	17	17
Open end and junior lien loans	48	0	0
Other consumer loans	89	1	1
Total	$32,388	$235	$232

15

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2015:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                     21	$                       0	$                       0
Non-working capital loans	613	2	2
Commercial real estate and multi-family residential loans:
Construction and land development loans	175	0	0
Owner occupied loans	1,950	0	0
Nonowner occupied loans	4,504	80	83
Agri-business and agricultural loans:
Loans secured by farmland	412	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	301	0	0
Open end and junior lien loans	238	0	0
Residential construction loans	14	0	0
Other consumer loans	3	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,069	19	18
Non-working capital loans	9,443	281	290
Commercial real estate and multi-family residential loans:
Construction and land development loans	391	12	11
Owner occupied loans	3,695	21	22
Nonowner occupied loans	1,090	0	0
Agri-business and agricultural loans:
Loans secured by farmland	67	0	0
Other commercial loans	3	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,608	48	44
Open end and junior lien loans	23	0	0
Other consumer loans	110	3	4
Total	$             26,730	$                  466	$                  474

16

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2014:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$186	$1	$1
Non-working capital loans	133	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	178	0	0
Owner occupied loans	215	0	0
Nonowner occupied loans	341	0	0
Agri-business and agricultural loans:
Loans secured by farmland	226	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	691	0	0
Open end and junior lien loans	170	0	0
Residential construction loans	141	0	0
Other consumer loans	1	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,893	55	47
Non-working capital loans	13,762	387	388
Commercial real estate and multi-family residential loans:
Construction and land development loans	2,341	37	36
Owner occupied loans	2,956	45	43
Nonowner occupied loans	8,507	104	105
Agri-business and agricultural loans:
Loans secured by farmland	411	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,740	50	53
Open end and junior lien loans	66	0	0
Other consumer loans	87	1	1
Total	$35,045	$680	$674

17

The following table presents the aging of the recorded investment in past due loans as of September 30, 2015 by class of loans:

		30-89	Greater than
	Loans Not	Days	90 Days		Total
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$591,700	$0	$0	$1,566	$1,566	$593,266
Non-working capital loans	574,413	252	0	3,582	3,834	578,247
Commercial real estate and multi-family
residential loans:
Construction and land development loans	176,615	0	0	0	0	176,615
Owner occupied loans	403,775	0	0	4,915	4,915	408,690
Nonowner occupied loans	414,336	0	0	3,115	3,115	417,451
Multifamily loans	92,989	0	0	0	0	92,989
Agri-business and agricultural loans:
Loans secured by farmland	154,639	0	0	471	471	155,110
Loans for agricultural production	93,937	103	0	0	103	94,040
Other commercial loans	82,971	0	0	0	0	82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	151,857	1,367	0	512	1,879	153,736
Open end and junior lien loans	161,375	163	0	128	291	161,666
Residential construction loans	8,425	0	0	0	0	8,425
Other consumer loans	48,951	103	0	20	123	49,074
Total	$2,955,983	$1,988	$0	$14,309	$16,297	$2,972,280

The following table presents the aging of the recorded investment in past due loans as of December 31, 2014 by class of loans:

		30-89	Greater than
	Loans Not	Days	90 Days		Total
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$543,613	$0	$0	$632	$632	$544,245
Non-working capital loans	487,655	0	101	3,598	3,699	491,354
Commercial real estate and multi-family
residential loans:
Construction and land development loans	155,711	0	0	526	526	156,237
Owner occupied loans	399,028	800	0	3,049	3,849	402,877
Nonowner occupied loans	390,394	31	0	3,629	3,660	394,054
Multi-family loans	71,695	0	0	0	0	71,695
Agri-business and agricultural loans:
Loans secured by farmland	136,923	0	0	485	485	137,408
Loans for agricultural production	136,466	0	0	0	0	136,466
Other commercial loans	75,684	0	0	30	30	75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	142,615	1,198	20	1,051	2,269	144,884
Open end and junior lien loans	150,551	235	9	398	642	151,193
Residential construction loans	6,597	0	0	129	129	6,726
Other consumer loans	49,308	108	0	51	159	49,467
Total	$2,746,240	$2,372	$130	$13,578	$16,080	$2,762,320

18

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $2.5 million and $3.4 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2015 and December 31, 2014. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

	September 30	December 31,
(dollars in thousands)	2015	2014
Accruing troubled debt restructured loans	$7,605	$16,492
Nonaccrual troubled debt restructured loans	10,934	9,161
Total troubled debt restructured loans	$18,539	$25,653

           Certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

During the quarter ending September 30, 2015, there were renewal terms offered to one borrower under financial duress with a previously identified troubled debt restructured loan which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for a loan bearing a similar risk profile. In this instance, it was determined that a concession had been granted. The loan to the borrower is for a commercial and industrial working capital loan with a recorded investment of $2.5 million.  This concession is not included in the table below.

During the quarter ending June 30, 2015, there were renewal terms offered to two borrowers under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In these instances, it was determined that a concession had been granted. It is difficult to quantify the concessions granted due to an absence of readily available market terms to be used for comparison. These loans were both commercial and industrial working capital loans with recorded investments of $379,000 and $185,000, respectively.

During the quarter ending March 31, 2015, there were renewal terms offered to one borrower under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In this instance, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The loan to the borrower is for a commercial real estate building where the collateral value and cash flows from the company occupying the building did not support the loan with a recorded investment of $788,000.

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the three month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Consumer 1-4 family loans:
Closed end first mortgage loans	1	$65	$65	1	208
Total	1	$65	$65	1	208

19

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the nine month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	2	$                  564	$                     564
Non-working capital loans	1	783	783	1	12
Commercial real estate and multi-
family residential loans:
Owner occupied loans	2	855	855	1	6
Consumer 1-4 family loans:
Closed end first mortgage loans	1	65	78	1	208
Total	6	$               2,267	$                  2,280	3	6-208

For the three month period ending September 30, 2015, the commercial and industrial troubled debt restructurings described above decreased the allowance for loan losses by $68,000, the commercial real estate and multi-family residential loan troubled debt restructurings increased the allowance for loan losses by $9,000 and the consumer 1-4 family loan troubled debt restructuring described above increased the allowance by $13,000.  For the nine month period ending September 30, 2015, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $102,000, the commercial real estate and multi-family residential loan troubled debt restructurings decreased the allowance for loan losses by $13,000 and the consumer 1-4 family loan troubled debt restructuring increased the allowance by $11,000.

No charge-offs resulted from any troubled debt restructurings described above during the three and nine month period ending September 30, 2015.

During the nine months ending September 30, 2014 certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

During the quarter ending June 30, 2014 one loan previously identified as a troubled debt restructure was rewritten under terms that are not readily available in the marketplace.  Terms in the current loan agreement include an amortization period that exceeds those of similar type loans for a borrower enduring financial hardship.  This concession was granted without additional compensation.  This loan had a balance of $173,000 as of June 30, 2014.

During the quarter ending March 31, 2014, there were restructure terms offered to one borrower under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In this instance, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The restructure was granted to a borrower engaged in retail sales where the collateral and cash flow did not support the loan with a recorded investment of $159,000.

An additional concession was granted to a borrower with a previously restructured loan.  The new concession includes further forgiveness of principal if the terms of the restructured loan are met during the life of the loan. This borrower had a recorded investment of $2.7 million as of March 31, 2014.

20

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ending September 30, 2014:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Owner occupied loans	1	$929	$1,000	1	24
Total	1	$929	$1,000	1	24

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ending September 30, 2014:

	All Modifications			Interest Rate Reductions			Modified Repayment Terms
		Pre-Modification	Post-Modification					Extension
		Outstanding	Outstanding		Interest at	Interest at		Period or
	Number of	Recorded	Recorded	Number of	Pre-Modification	Post-Modification	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	Rate	Rate	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	2	$433	$433	0	$0	$0	2	12-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	3	2,639	2,710	1	89	95	2	12-24
Total	5	$3,072	$3,143	1	$89	$95	4	12-24

For the quarter ending September 30, 2014, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $74,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $53,000.  For the nine month period ending September 30, 2014, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $211,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $152,000.

No charge-offs resulted from any of the troubled debt restructurings described above during the three-month and nine-month periods ending September 30, 2014.

There were no troubled debt restructurings that had payment defaults within the twelve months following modification during the three or nine month periods ended September 30, 2015 and the three month or nine-month periods ended September 30, 2014.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $150,000.

The Company uses the following definitions for risk ratings:

Special Mention. 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.

21

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be Pass rated loans with the exception of consumer troubled debt restructurings which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with Not Rated loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. As of September 30, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$552,709	$32,373	$8,184	$0	$0	$593,266
Non-working capital loans	528,158	35,536	11,911	0	2,642	578,247
Commercial real estate and multi-
family residential loans:
Construction and land development loans	172,372	2,009	2,234	0	0	176,615
Owner occupied loans	376,411	22,632	9,647	0	0	408,690
Nonowner occupied loans	404,063	8,158	5,230	0	0	417,451
Multifamily loans	92,989	0	0	0	0	92,989
Agri-business and agricultural loans:
Loans secured by farmland	154,638	0	472	0	0	155,110
Loans for agricultural production	94,040	0	0	0	0	94,040
Other commercial loans	82,966	0	0	0	5	82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	43,051	126	1,906	0	108,653	153,736
Open end and junior lien loans	8,230	0	1,625	0	151,811	161,666
Residential construction loans	0	0	0	0	8,425	8,425
Other consumer loans	14,080	0	61	0	34,933	49,074
Total	$2,523,707	$100,834	$41,270	$0	$306,469	$2,972,280

22

As of December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$504,806	$28,485	$10,343	$611	$0	$544,245
Non-working capital loans	436,735	31,781	20,324	0	2,514	491,354
Commercial real estate and multi-
family residential loans:
Construction and land
development loans	150,442	1,033	4,762	0	0	156,237
Owner occupied loans	369,520	20,960	12,397	0	0	402,877
Nonowner occupied loans	375,702	12,512	5,840	0	0	394,054
Multi-family loans	71,695	0	0	0	0	71,695
Agri-business and agricultural loans:
Loans secured by farmland	136,923	0	485	0	0	137,408
Loans for agricultural production	136,466	0	0	0	0	136,466
Other commercial loans	75,680	0	30	0	4	75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	39,156	0	2,199	0	103,529	144,884
Open end and junior lien loans	8,400	291	2,015	0	140,487	151,193
Residential construction loans	0	0	0	0	6,726	6,726
Other consumer loans	15,879	290	75	0	33,223	49,467
Total	$2,321,404	$95,352	$58,470	$611	$286,483	$2,762,320

NOTE 5.  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 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).

23

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 determine the Company’s valuation policies and procedures. Both of these areas report directly to the Executive Vice 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 Executive Vice 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 price tolerance variance of +/-3%, an individual security market value tolerance of +/-$50,000 and an aggregate market value tolerance of +/-$500,000 for all securities. If any securities fall outside any of these tolerance thresholds, 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.

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:  Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. 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: (a) raw and finished inventory is discounted from its cost or book value by 35-65%, depending on the marketability of the goods; (b) 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; (c) 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; (d) 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; and (e) 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, 2015 the fair value of the Company’s Level 3 servicing assets for residential mortgage loans was $3.3 million, none of which are currently impaired and therefore are carried at amortized cost.  These residential mortgage loans have a weighted average interest rate of 3.97%, 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, 2015, the constant prepayment speed (PSA) used was 189 and the discount rate used was 9.4%.  At December 31, 2014, the PSA used was 212 and the discount rate used was 9.4%.

24

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 properties used to determine value.  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.

25

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

	September 30, 2015
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$           1,021	$                     0	$                    0	$             1,021
Mortgage-backed securities	0	369,691	0	369,691
State and municipal securities	0	106,180	807	106,987
Total Securities	1,021	475,871	807	477,699
Mortgage banking derivative	0	283	0	283
Interest rate swap derivative	0	2,592	0	2,592
Total assets	$           1,021	$         478,746	$               807	$        480,574
Liabilities
Mortgage banking derivative	0	61	0	61
Interest rate swap derivative	0	2,646	0	2,646
Total liabilities	$                   0	$             2,707	$                    0	$             2,707
	December 31, 2014
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$             1,004	$                      0	$                     0	$              1,004
Mortgage-backed securities	0	372,095	0	372,095
State and municipal securities	0	101,962	850	102,812
Total Securities	1,004	474,057	850	475,911
Mortgage banking derivative	0	96	0	96
Interest rate swap derivative	0	1,191	0	1,191
Total assets	$             1,004	$           475,344	$                 850	$          477,198
Liabilities
Mortgage banking derivative	0	11	0	11
Interest rate swap derivative	0	1,242	0	1,242
Total liabilities	$                    0	$               1,253	$                     0	$              1,253

There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2015 and there were no transfers between Level 1 and Level 2 during 2014.

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, 2015 and 2014:

	State and Municipal Securities
(dollars in thousands)	2015	2014
Balance of recurring Level 3 assets at January 1	$             850	$               975
Changes in fair value of securities
included in other comprehensive income	(3)	11
Principal payments	(40)	(125)
Balance of recurring Level 3 assets at September 30	$             807	$               861

26

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
				Range of
	Fair Value at			Inputs
(dollars in thousands)	9/30/2015	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$              807	Price to type, par, call	Discount to benchmark index	0-5%
				(2.24%)
Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	12/31/2014	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$                850	Price to type, par, call	Discount to benchmark index	0-6%
				(2.49%)

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,  2015
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$                 0	$                 0	$         1,059	$         1,059
Non-working capital loans	0	0	2,223	2,223
Commercial real estate and multi-family
residential loans:
Construction and land development loans	0	0	300	300
Owner occupied loans	0	0	1,911	1,911
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	235	235
Other consumer loans	0	0	8	8
Total impaired loans	$                 0	$                 0	$         5,736	$         5,736
Other real estate owned	0	0	75	75
Total assets	$                 0	$                 0	$         5,811	$         5,811

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	December 31, 2014
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$                  0	$                  0	$              531	$              531
Non-working capital loans	0	0	2,257	2,257
Commercial real estate and multi-family
residential loans:
Construction and land development loans	0	0	341	341
Owner occupied loans	0	0	4,084	4,084
Nonowner occupied loans	0	0	3,113	3,113
Agri-business and agricultural loans:
Loans secured by farmland	0	0	189	189
Other commercial loans	0	0	15	15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	399	399
Residential construction loans	0	0	73	73
Other consumer loans	0	0	29	29
Total impaired loans	$                  0	$                  0	$         11,031	$         11,031
Other real estate owned	0	0	75	75
Total assets	$                  0	$                  0	$         11,106	$         11,106

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, 2015:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$     3,282	Collateral based	Discount to reflect	39%	(7% - 100%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	2,211	Collateral based	Discount to reflect	26%	(2% - 89%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	235	Collateral based	Discount to reflect	30%	(20% - 40%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	8	Collateral based	Discount to reflect	53%
		measurements	current market conditions
			and ultimate collectability
Other real estate owned	75	Appraisals	Discount to reflect	49%
			current market conditions

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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 December 31, 2014:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$       2,788	Collateral based	Discount to reflect	40%	(11% - 68%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	7,538	Collateral based	Discount to reflect	25%	(6% - 50%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Agri-business and agricultural	189	Collateral based	Discount to reflect	7%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other commercial	15	Collateral based	Discount to reflect	50%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	472	Collateral based	Discount to reflect	32%	(3% - 77%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	29	Collateral based	Discount to reflect	43%	(33% - 50%)
		measurements	current market conditions
			and ultimate collectability
Other real estate owned	75	Appraisals	Discount to reflect	49%
			current market conditions

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a gross carrying amount of $8.7 million, with a valuation allowance of $3.0 million at September 30, 2015, resulting in a net increase in the provision for loan losses of $800,000 in the three months ended September 30, 2015, and a net reduction in the provision for loan losses of $500,000 in the nine months ended September 30, 2015.  At September 30, 2014, impaired loans had a gross carrying amount of $16.5 million, with a valuation allowance of $4.2 million, resulting in a net increase in the provision for loan losses of $100,000 in the three months ended September 30, 2014, and a net reduction in the provision for loan losses of $2.1 million for the nine months ended September 30, 2014.

Other real estate owned measured at fair value less costs to sell, at both September 30, 2015 and September 30, 2014, had a net carrying amount of $75,000, which is made up of the outstanding balance of $147,000, net of a valuation allowance of $72,000, all of which was written down during 2012.

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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, 2015
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$    98,071	$    98,071	$               0	$              0	$    98,071
Securities available for sale	477,699	1,021	475,871	807	477,699
Real estate mortgages held for sale	3,132	0	3,203	0	3,203
Loans, net	2,927,586	0	0	2,914,190	2,914,190
Federal Home Loan Bank stock	4,248	N/A	N/A	N/A	N/A
Federal Reserve Bank stock	3,420	N/A	N/A	N/A	N/A
Accrued interest receivable	9,330	8	1,976	7,346	9,330
Financial Liabilities:
Certificates of deposit	(1,056,484)	0	1,061,877	0	1,061,877
All other deposits	(2,091,050)	(2,091,050)	0	0	(2,091,050)
Securities sold under agreements
to repurchase	(80,414)	0	(80,414)	0	(80,414)
Long-term borrowings	(34)	0	(38)	0	(38)
Subordinated debentures	(30,928)	0	0	(31,218)	(31,218)
Standby letters of credit	(350)	0	0	(350)	(350)
Accrued interest payable	(3,712)	(176)	(3,533)	(3)	(3,712)
	December 31, 2014
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$      90,638	$      90,638	$               0	$              0	$      90,638
Securities available for sale	475,911	1,004	474,057	850	475,911
Real estate mortgages held for sale	1,585	0	1,612	0	1,612
Loans, net	2,716,058	0	0	2,698,767	2,698,767
Federal Home Loan Bank stock	5,993	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	8,662	3	2,312	6,347	8,662
Financial Liabilities:
Certificates of deposit	(870,590)	0	(876,953)	0	(876,953)
All other deposits	(2,002,530)	(2,002,530)	0	0	(2,002,530)
Securities sold under agreements
to repurchase	(54,907)	0	(54,907)	0	(54,907)
Federal funds purchased	(500)	0	(500)	0	(500)
Other short-term borrowings	(105,000)	0	(105,001)	0	(105,001)
Long-term borrowings	(35)	0	(40)	0	(40)
Subordinated debentures	(30,928)	0	0	(31,212)	(31,212)
Standby letters of credit	(379)	0	0	(379)	(379)
Accrued interest payable	(2,946)	(109)	(2,834)	(3)	(2,946)

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.

30

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 of the loan 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 is estimated using discounted cash flow analysis based on current borrowing rates 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.

NOTE 6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase represent collateralized borrowings with customers located primarily within the Company’s service area. These repurchase liabilities are not covered by federal deposit insurance and are secured by securities owned. The Company retains the right to substitute similar type securities and has the right to withdraw all excess collateral applicable to the repurchase liabilities whenever the collateral values are in excess of the related repurchase liabilities. However, as a means of mitigating market risk, the Company maintains excess collateral to cover normal changes in the repurchase liability by monitoring daily usage. The Company maintains control of the securities through the use of third-party safekeeping arrangements.

Securities sold under agreements to repurchase of $80.4 million and $54.9 million, which mature on demand, are secured by mortgage-backed securities with a carrying amount of $91.6 million and $94.2 million at September 30, 2015 and December 31, 2014.  Additional information concerning recognition of these liabilities is disclosed in Note 8.

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NOTE 7. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost:

	Nine Months Ended September 30,				Three Months Ended September 30,
	Pension Benefits		SERP Benefits		Pension Benefits		SERP Benefits
(dollars in thousands)	2015	2014	2015	2014	2015	2014	2015	2014
Interest cost	$    77	$    90	$    34	$    38	$    25	$    30	$    11	$    13
Expected return on plan assets	(104)	(94)	(57)	(55)	(34)	(31)	(18)	(19)
Recognized net actuarial (gain) loss	121	88	62	60	40	29	21	20
Net pension expense (benefit)	$    94	$    84	$    39	$    43	$    31	$    28	$    14	$    14

The Company previously disclosed in its financial statements for the year ended December 31, 2014 that it expected to contribute $318,000 to its pension plan and $110,000 to its Supplemental Executive Retirement Plan (“SERP”) in 2015.  The Company has contributed $238,000 to its pension plan and $110,000 to its SERP as of September 30, 2015.  The Company expects to contribute $80,000 to its pension plan during the remainder of 2015.  The Company does not expect to make any additional contributions to its SERP during the remainder of 2015.

NOTE 8. OFFSETTING ASSETS AND LIABILITIES

The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at September 30, 2015 and December 31, 2014.

	September 30, 2015
		Gross	Net Amounts
	Gross	Amounts	of Assets	Gross Amounts Not
	Amounts of	Offset in the	presented in	Offset in the Statement
	Recognized	Statement of	the Statement	of Financial Position
	Assets/	Financial	of Financial	Financial	Cash Collateral
(dollars in thousands)	Liabilities	Position	Position	Instruments	Received	Net Amount
Assets
Interest Rate Swap Derivatives	$2,592	$0	$2,592	$0	$0	$2,592
Total Assets	$2,592	$0	$2,592	$0	$0	$2,592
Liabilities
Interest Rate Swap Derivatives	$2,646	$0	$2,646	$0	$(2,460)	$186
Repurchase Agreements	80,414	0	80,414	(80,414)	0	0
Total Liabilities	$83,060	$0	$83,060	$(80,414)	$(2,460)	$186
	December 31, 2014
		Gross	Net Amounts
	Gross	Amounts	of Assets	Gross Amounts Not
	Amounts of	Offset in the	presented in	Offset in the Statement
	Recognized	Statement of	the Statement	of Financial Position
	Assets/	Financial	of Financial	Financial	Cash Collateral
(dollars in thousands)	Liabilities	Position	Position	Instruments	Received	Net Amount
Assets
Interest Rate Swap Derivatives	$1,191	$0	$1,191	$0	$0	$1,191
Total Assets	$1,191	$0	$1,191	$0	$0	$1,191
Liabilities
Interest Rate Swap Derivatives	$1,242	$0	$1,242	$0	$(1,242)	$0
Repurchase Agreements	54,907	0	54,907	(54,907)	0	0
Total Liabilities	$56,149	$0	$56,149	$(54,907)	$(1,242)	$0

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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 9. 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, none of which were antidilutive.

	Three Months Ended September 30,		Nine Months Ended September 30,
	2015	2014	2015	2014
Weighted average shares outstanding for basic earnings per common share	16,629,378	16,547,551	16,610,689	16,531,411
Dilutive effect of stock options, awards and warrants	218,605	228,219	198,144	237,668
Weighted average shares outstanding for diluted earnings per common share	16,847,983	16,775,770	16,808,833	16,769,079
Basic earnings per common share	$0.70	$0.70	$2.05	$1.98
Diluted earnings per common share	$0.69	$0.69	$2.03	$1.95

NOTE 10. 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, 2015 and the year ended December 31, 2014:

	Unrealized
	Gains and
	Losses on	Defined
	Available-	Benefit
	for-Sales	Pension
(dollars in thousands)	Securities	Items	Total
Balance at December 31, 2014	$5,467	$(1,637)	$3,830
Other comprehensive income before reclassification	1,295	(175)	1,120
Amounts reclassified from accumulated other comprehensive income (loss)	(25)	110	85
Net current period other comprehensive income	1,270	(65)	1,205
Balance at September 30, 2015	$6,737	$(1,702)	$5,035

	Unrealized
	Gains and
	Losses on	Defined
	Available-	Benefit
	for-Sales	Pension
(dollars in thousands)	Securities	Items	Total
Balance at December 31, 2013	$(1,138)	$(1,356)	$(2,494)
Other comprehensive income before reclassification	6,471	(399)	6,072
Amounts reclassified from accumulated other comprehensive income (loss)	134	118	252
Net current period other comprehensive income	6,605	(281)	6,324
Balance at December 31, 2014	$5,467	$(1,637)	$3,830

33

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$0	Net securities gains (losses)
Tax effect	0	Income tax expense
	0	Net of tax
Amortization of defined benefit pension items	(61)	Salaries and employee benefits
Tax effect	25	Income tax expense
	(36)	Net of tax
Total reclassifications for the period	$(36)	Net of tax

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$(228)	Net securities gains (losses)
Tax effect	90	Income tax expense
	(138)	Net of tax
Amortization of defined benefit pension items	(49)	Salaries and employee benefits
Tax effect	20	Income tax expense
	(29)	Net of tax
Total reclassifications for the period	$(167)	Net of tax

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$42	Net securities gains (losses)
Tax effect	(17)	Income tax expense
	25	Net of tax
Amortization of defined benefit pension items	(183)	Salaries and employee benefits
Tax effect	73	Income tax expense
	(110)	Net of tax
Total reclassifications for the period	$(85)	Net of tax

34

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$(224)	Net securities gains (losses)
Tax effect	90	Income tax expense
	(134)	Net of tax
Amortization of defined benefit pension items	(148)	Salaries and employee benefits
Tax effect	60	Income tax expense
	(88)	Net of tax
Total reclassifications for the period	$(222)	Net of tax

NOTE 11.  NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Management is evaluating the impact of adopting this new accounting standard on our financial statements.

NOTE 12. SUBSEQUENT EVENTS

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

NOTE 13. 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.

35

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

OPERATIONS

OVERVIEW

Net income in the first nine months of 2015 was $34.1 million, up 4.1% from $32.7 million for the comparable period of 2014.  Diluted income per common share was $2.03 in the first nine months of 2015, up 4.1% from $1.95 in the comparable period of 2014.  Return on average total assets was 1.29% in the first nine months of 2015 versus 1.33% in the comparable period of 2014.  The equity to average assets ratio was 10.55% in the first nine months of 2015 versus 10.29% in the comparable period of 2014.

Net income in the third quarter of 2015 was $11.6 million, up 0.5% from $11.5 million for the comparable period of 2014.  Diluted income per common share was $0.69 in the third quarter of 2015, unchanged from $0.69 in the comparable period of 2014.  Return on average total assets was 1.26% in the third quarter of 2015 versus 1.36% in the comparable period of 2014.  The equity to average assets ratio was 10.46% in the third quarter of 2015 versus 10.39% in the comparable period of 2014.

Total assets were $3.666 billion as of September 30, 2015 versus $3.443 billion as of December 31, 2014, an increase of $223.0 million, or 6.5%. This increase was primarily due to a $210.0 million increase in total loans.

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 and the valuation and other-than-temporary impairment of investment securities.

Allowance for Loan Losses

The Company maintains an allowance for loan losses to provide for probable incurred credit losses. Loan losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for loan losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the loan loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

The level of loan loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the allocation for specific watch list credits in determining the appropriate level of the loan loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision.

The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for loan losses that generally includes consideration of the following factors: changes in the nature and volume of the loan portfolio, overall portfolio quality and current economic conditions that may affect the borrowers’ ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. With respect to specific allocation levels for individual credits, management considers the amounts and timing of expected future cash flows and the current valuation of collateral as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, allocations are assigned based upon historical experience unless the rate of loss is expected to be greater than historical losses as noted below. A detailed analysis is performed on loans that are classified but determined not to be impaired which incorporates probability of default with a loss given default scenario to develop non-specific allocations for the loan pool. These allocations may be adjusted based on the other factors cited above. An appropriate level of general allowance for pooled loans is determined after considering the following: application of historical loss percentages, emerging market risk, commercial loan focus and large credit concentration, new industry lending activity and general economic conditions. It is also possible that the following could affect the overall process: social, political, economic and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for loan losses deemed adequate to cover probable losses inherent in the loan portfolio.

36

Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate the loan is impaired. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) does the customer’s cash flow or net worth appear insufficient to repay the loan; (b) is there adequate collateral to repay the loan; (c) has the loan been criticized in a regulatory examination; (d) is the loan impaired; (e) are there other reasons where the ultimate collectability of the loan is in question; or (f) are there unique loan characteristics that require special monitoring.

Allocations are also applied to categories of loans considered not to be individually impaired, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. In addition, general allocations are made for other pools of loans, including non-classified loans. These general pooled loan allocations are performed for portfolio segments of commercial and industrial, commercial real estate and multi-family, agri-business and agricultural, other commercial, consumer 1-4 family mortgage and other consumer loans, and loans within certain industry categories believed to present unique risk of loss. General allocations of the allowance are primarily made based on a three-year historical average for loan losses for these portfolios, subjectively adjusted for economic factors and portfolio trends.

Due to the imprecise nature of estimating the allowance for loan losses, the Company’s allowance for loan losses includes an unallocated component. The unallocated component of the allowance for loan losses incorporates the Company’s judgmental determination of inherent losses that may not be fully reflected in other allocations, including factors such as the level of classified credits, economic uncertainties, industry trends impacting specific portfolio segments, broad portfolio quality trends and trends in the composition of the Company’s large commercial loan portfolio and related large dollar exposures to individual borrowers.

Valuation and Other-Than-Temporary Impairment of Investment Securities

The fair values of securities available for sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges 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. Different judgments and assumptions used in pricing could result in different estimates of value. The fair value of certain securities is determined using unobservable inputs, primarily observable inputs of similar securities.

At the end of each reporting period, securities held in the investment portfolio are evaluated on an individual security level for other-than-temporary impairment in accordance with current accounting guidance. Impairment is other-than-temporary if the decline in the fair value of the security is below its amortized cost and it is probable that all amounts due according to the contractual terms of a debt security will not be received.

Significant judgments are required in determining impairment, which includes making assumptions regarding the estimated prepayments, loss assumptions and the change in interest rates.

We consider the following factors when determining other-than-temporary impairment for a security or investment:

· the length of time and the extent to which the market value has been less than amortized cost;

· the financial condition and near-term prospects of the issuer;

· the underlying fundamentals of the relevant market and the outlook for such market for the near future; and

· our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in market value.

If, in management’s judgment, other-than-temporary impairment exists, the cost basis of the security will be written down to the computed net present value, and the unrealized loss will be transferred from accumulated other comprehensive loss as an immediate reduction of current earnings (as if the loss had been realized in the period of other-than-temporary impairment). In addition, discount accretion will be discontinued on any bond that meets one or both of the following: (1) the rating by S&P, Moody’s or Fitch decreases to below “A” and/or (2) the cash flow analysis on a security indicates that, under any scenario modeled by the third party, there is a potential to not receive the full amount invested in the security.

37

RESULTS OF OPERATIONS

Overview

Selected income statement information for the three months and nine months ended September 30, 2015 and 2014 is presented in the following table:

	Three Months Ended September 30,		Nine Months Ended September 30,
(dollars in thousands)	2015	2014	2015	2014
Income Statement Summary:
Net interest income	$26,711	$25,965	$78,475	$76,199
Provision for loan losses	0	0	0	0
Noninterest income	7,902	7,871	23,410	22,890
Noninterest expense	17,207	16,660	50,849	49,534
Other Data:
Efficiency ratio	49.71%	49.24%	49.91%	49.99%
Dilutive EPS	$0.69	$0.69	$2.03	$1.95
Tangible capital ratio	10.47%	10.40%	10.47%	10.40%
Net charge-offs(recoveries) to average loans	0.02%	(0.12)%	0.07%	0.12%
Net interest margin	3.16%	3.31%	3.21%	3.34%
Noninterest income to total revenue	22.83%	23.26%	22.98%	23.10%

Net Income

Net income was $34.1 million in the first nine months of 2015, an increase of $1.3 million, or 4.1%, versus net income of $32.7 million in the first nine months of 2014. Net interest income increased $2.3 million, or 3.0%, to $78.5 million versus $76.2 million in the first nine months of 2014. Net interest income increased primarily due to a 7.2% increase in average earning assets.  Significantly affecting average earning assets during 2015 was an increase of 8.4% in the commercial loan portfolio, which reflects our continuing strategic focus on commercial lending.  The net interest margin was 3.21% in the first nine months of 2015 versus 3.34% in 2014. The lower margin reflected a decline in loan yields, and a modest increase in the cost of funds offset by increased security yields.

Net income was $11.6 million in the third quarter of 2015, an increase of $54,000, or 0.5%, versus net income of $11.5 million in the third quarter of 2014. Net interest income increased $746,000, or 2.9%, to $26.7 million versus $26.0 million in the third quarter of 2014. Net interest income increased primarily due to a 7.5% increase in average earning assets, driven by an increase of 8.9% in the commercial loan portfolio.  The net interest margin was 3.16% in the third quarter of 2015 versus 3.31% in 2014. The lower margin reflected a decline in loan yields and a modest increase in funding costs.

38

Net Interest Income

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

	Nine Months Ended September 30,
	2015				2014
	Average	Interest	Yield (1)/		Average	Interest	Yield (1)/
(fully tax equivalent basis, dollars in thousands)	Balance	Income	Rate		Balance	Income	Rate
Earning assets
Loans:
Taxable (2)(3)	$2,831,339	$81,553	3.85	%	$2,611,722	$78,317	4.01	%
Tax exempt (1)	12,740	521	5.47		11,800	522	5.91
Investments: (1)
Available for sale	474,876	10,254	2.89		474,809	9,837	2.77
Short-term investments	5,195	3	0.08		5,239	3	0.08
Interest bearing deposits	9,260	40	0.58		4,913	28	0.76
Total earning assets	$3,333,410	$92,371	3.71	%	$3,108,483	$88,707	3.82	%
Less:  Allowance for loan losses	(45,490)				(46,886)
Nonearning Assets
Cash and due from banks	100,022				73,007
Premises and equipment	43,091				39,842
Other nonearning assets	114,324				112,290
Total assets	$3,545,357				$3,286,736
Interest bearing liabilities
Savings deposits	$230,253	$338	0.20	%	$236,342	$389	0.22	%
Interest bearing checking accounts	1,226,863	3,637	0.40		1,150,904	3,423	0.40
Time deposits:
In denominations under $100,000	284,260	2,533	1.19		279,890	2,380	1.14
In denominations over $100,000	712,663	5,043	0.95		603,135	3,754	0.83
Miscellaneous short-term borrowings	77,722	138	0.24		151,786	351	0.31
Long-term borrowings and
subordinated debentures	30,962	756	3.26		30,964	769	3.32
Total interest bearing liabilities	$2,562,723	$12,445	0.65	%	$2,453,021	$11,066	0.60	%
Noninterest bearing liabilities
Demand deposits	590,030				480,356
Other liabilities	18,587				15,241
Stockholders' equity	374,017				338,118
Total liabilities and stockholders' equity	$3,545,357				$3,286,736
Interest Margin Recap
Interest income/average earning assets		92,371	3.71			88,707	3.82
Interest expense/average earning assets		12,445	0.50			11,066	0.48
Net interest income and margin		$79,926	3.21	%		$77,641	3.34	%

(1)	Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2015 and 2014. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 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, 2015 and 2014, are included as taxable loan interest income.
(3)	Nonaccrual loans are included in the average balance of taxable loans.

39

	Three Months Ended September 30,
	2015				2014
	Average	Interest	Yield (1)/		Average	Interest	Yield (1)/
(fully tax equivalent basis, dollars in thousands)	Balance	Income	Rate		Balance	Income	Rate
Earning assets
Loans:
Taxable (2)(3)	$2,910,663	$27,981	3.81	%	$2,671,249	$26,713	3.97	%
Tax exempt (1)	12,496	170	5.40		13,418	186	5.49
Investments: (1)
Available for sale	471,641	3,269	2.75		476,643	3,320	2.76
Short-term investments	5,836	1	0.07		4,987	1	0.08
Interest bearing deposits	8,809	15	0.68		6,126	11	0.71
Total earning assets	$3,409,445	$31,436	3.66	%	$3,172,423	$30,231	3.78	%
Less:  Allowance for loan losses	(44,751)				(45,994)
Nonearning Assets
Cash and due from banks	117,986				73,481
Premises and equipment	44,240				40,098
Other nonearning assets	113,849				111,466
Total assets	$3,640,769				$3,351,474
Interest bearing liabilities
Savings deposits	$234,360	$115	0.19	%	$230,635	$125	0.22	%
Interest bearing checking accounts	1,221,190	1,225	0.40		1,159,009	1,167	0.40
Time deposits:
In denominations under $100,000	279,734	846	1.20		277,719	791	1.13
In denominations over $100,000	756,206	1,787	0.94		650,281	1,341	0.82
Miscellaneous short-term borrowings	83,015	43	0.21		137,372	96	0.28
Long-term borrowings and
subordinated debentures	30,962	239	3.06		30,963	260	3.33
Total interest bearing liabilities	$2,605,467	$4,255	0.65	%	$2,485,979	$3,780	0.60	%
Noninterest bearing liabilities
Demand deposits	634,982				501,594
Other liabilities	19,455				15,747
Stockholders' equity	380,865				348,154
Total liabilities and stockholders' equity	$3,640,769				$3,351,474
Interest Margin Recap
Interest income/average earning assets		31,436	3.66			30,231	3.78
Interest expense/average earning assets		4,255	0.50			3,780	0.47
Net interest income and margin		$27,181	3.16	%		$26,451	3.31	%

(1)	Tax exempt income was converted to a fully taxable equivalent basis at a 35 percent tax rate for 2015 and 2014. The tax equivalent rate for tax exempt loans and tax exempt securities acquired after January 1, 1983 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, 2015 and 2014, are included as taxable loan interest income.
(3)	Nonaccrual loans are included in the average balance of taxable loans.

Net interest income increased $2.3 million, or 3.0%, for the nine months ended September 30, 2015 compared with the first nine months of 2014. The increased level of net interest income during the first nine months of 2015 compared with the first nine months of 2014 was largely driven by an increase in net earning assets of $224.9 million as well as a deceleration in the amortization of premiums on agency mortgage-backed securities.  The deceleration was primarily the result of rising long-term mortgage interest rates which have reduced prepayments in the loans underlying the securities.  Average loans outstanding increased $220.6 million during the nine months ended September 30, 2015 compared with the same period of 2014, with most of the growth being in commercial loans.  The tax equivalent net interest margin was 3.21% for the first nine months of 2015 compared to 3.34% during the first nine months of 2014.  The yield on earning assets totaled 3.71% during the nine months ended September 30, 2015 compared to 3.82% in the same period of 2014 while the cost of funds (expressed as a percentage of average earning assets) totaled 0.50% during the first nine months of 2015 compared to 0.48% in the same period of 2014.  Net interest income increased $746,000, or 2.9%, for the third quarter of 2015 compared to the third quarter of 2014.  The increase was driven by an increase in net earning assets.  The tax equivalent net interest margin was 3.16% for the third quarter of 2015 compared to 3.31% during the third quarter of 2014.

Average earning assets increased by $237.0 million for the three months ended September 30, 2015 compared with the same period of 2014.  Average loans outstanding increased $238.5 million during the three months ended September 30, 2015 compared with the same period of 2014, with most of the growth being in commercial loans.  During the three months ended September 30, 2015, earning assets yields declined by 12 basis points and interest bearing liabilities increased by 5 basis points due primarily to lower loan yields on new and renewed loans increased time deposit rates.

40

Provision for Loan Losses

No provisions for loan loss expense were recorded during the nine month and three month periods ended September 30, 2015 and 2014.  The allowance for loan losses at September 30, 2015 represented 1.50% of the loan portfolio, versus 1.67% at December 31, 2014 and 1.72% at September 30, 2014.  Factors impacting the decision not to record a provision in the first nine months of 2015 included the stabilization or improvement in key loan quality metrics including strong reserve coverage of nonperforming loans, a decrease in historical loss percentages, stable economic conditions in the Company’s markets and sustained signs of improvement in borrower performance and future prospects. In addition, management gave consideration to changes in the allocation for specific watch list credits in determining the appropriate level of the loan loss provision. Management’s overall view on current credit quality was also a factor in the determination of the provision for loan losses. The Company’s management continues to monitor the adequacy of the provision based on loan levels, asset quality, economic conditions and other factors that may influence the assessment of the collectability of loans.

Noninterest Income

Noninterest income categories for the nine-month and three-month periods ended September 30, 2015 and 2014 are shown in the following tables:

	Nine Months Ended
	September 30,
			Percent
(dollars in thousands)	2015	2014	Change
Wealth advisory fees	$3,393	$3,046	11.4	%
Investment brokerage fees	1,208	2,739	(55.9)
Service charges on deposit accounts	7,753	6,973	11.2
Loan, insurance and service fees	5,616	5,187	8.3
Merchant card fee income	1,332	1,137	17.2
Bank owned life insurance	956	1,082	(11.6)
Other income	2,090	2,442	(14.4)
Mortgage banking income	1,020	508	100.8
Net securities gains (losses)	42	(224)	(118.8)
Total noninterest income	$23,410	$22,890	2.3	%
Noninterest income to total revenue	22.98%	23.10%
	Three Months Ended
	September 30,
			Percent
(dollars in thousands)	2015	2014	Change
Wealth advisory fees	$1,103	$1,030	7.1	%
Investment brokerage fees	405	699	(42.1)
Service charges on deposit accounts	2,806	2,474	13.4
Loan, insurance and service fees	2,147	1,972	8.9
Merchant card fee income	485	407	19.2
Bank owned life insurance	221	372	(40.6)
Other income	455	881	(48.4)
Mortgage banking income	280	264	6.1
Net securities gains (losses)	0	(228)	NA
Total noninterest income	$7,902	$7,871	0.4	%
Noninterest income to total revenue	22.83%	23.26%

41

The Company’s noninterest income increased 2.3% to $23.4 million for the first nine months of 2015 versus $22.9 million for the same period of 2014.  Noninterest income increased 0.4% for three month period ending September 30, 2015 versus the same period of 2014.  Noninterest income for first nine months of 2015 and three month period ending September 30, 2015 were positively impacted by increases in mortgage banking income due to higher production volumes, as well as increases in merchant card fees, service charges on deposit accounts, wealth advisory fees and loan, insurance and service fees.  The increases were driven by higher fees on commercial deposit accounts as well as fees related to new wealth advisory client relationships.  In addition, many wealth advisory fees are performance based and have been positively impacted by rising financial markets.  Offsetting these increases was a decrease in investment brokerage fees driven by lower production volumes and the Company modifying product mix in order to provide a more consistent revenue stream by focusing less on front end income loaded products.

Noninterest Expense

Noninterest expense categories for the nine-month and three-month periods ended September 30, 2015 and 2014 are shown in the following tables:

	Nine Months Ended
	September 30,
			Percent
(dollars in thousands)	2015	2014	Change
Salaries and employee benefits	$29,021	$29,310	(1.0)	%
Net occupancy expense	2,918	2,885	1.1
Equipment costs	2,699	2,346	15.0
Data processing fees and supplies	5,655	4,541	24.5
Corporate and business development	2,284	2,052	11.3
FDIC insurance and other regulatory fees	1,518	1,446	5.0
Professional fees	2,111	2,241	(5.8)
Other expense	4,643	4,713	(1.5)
Total noninterest expense	$50,849	$49,534	2.7	%
	Three Months Ended
	September 30,
			Percent
(dollars in thousands)	2015	2014	Change
Salaries and employee benefits	$9,854	$9,856	0.0	%
Net occupancy expense	919	872	5.4
Equipment costs	870	812	7.1
Data processing fees and supplies	1,950	1,557	25.2
Corporate and business development	780	726	7.4
FDIC insurance and other regulatory fees	521	481	8.3
Professional fees	694	705	(1.6)
Other expense	1,619	1,651	(1.9)
Total noninterest expense	$17,207	$16,660	3.3	%

The Company’s noninterest expense increased $1.3 million and $547,000, respectively, in the nine-month and three-month periods ended September 30, 2015 versus the same periods in 2014.  Salaries and employee benefits decreased by $289,000 and $2,000, respectively.  The decrease in salary and employee benefits was driven by lower employee benefit costs including lower incentive-based compensation accruals and lower commissions paid on investment brokerage fees as a result of lower production.  Data processing fees increased by $1.1 million and $393,000, respectively, due to increased technology and software related expenditures with the Company’s core processor which are volume and product driven to enhance the delivery of electronic banking channels and enhance commercial product solutions.  Equipment costs increased $353,000 and $58,000, respectively, driven by higher depreciation expenses primarily due to branch upgrades and expansion.  Professional fees decreased by $130,000 and $11,000, respectively, driven by lower legal fees.  Corporate and business development expense increased due to higher advertising and marketing expenses.  The Company’s efficiency ratio was 49.9% and 49.7%, respectively, for the nine-month and three-month periods ended September 30, 2015 compared to 50.0% and 49.2% for the comparable periods in 2014.

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Income Taxes

Income tax expense increased $135,000 and $176,000, respectively, in the nine month and three month periods ended September 30, 2015, compared to the same period in 2014.  The combined state franchise tax expense and the federal income tax expense, as a percentage of income before income tax expense, was 33.2% and 33.6%, respectively, in the nine month and three month periods ended September 30, 2015, compared to 33.9% and 33.0% for the comparable periods of 2014.  Income tax expense for the first quarter of 2014 was impacted by a $431,000 provision for state income tax due to a revaluation of the Company’s state deferred tax items.  During the first quarter of 2014, the Indiana legislature approved new tax rates for financial institutions.  The tax rate, currently 7.5%, is scheduled to drop to 6.5% for 2017.  The new legislation further reduces the rate to 4.9%, phased-in beginning in 2019.  The lowering of future rates reduces the benefit that will be provided by the Company’s existing net deferred tax asset items thereby requiring the non-cash income tax expense adjustment in 2014.

FINANCIAL CONDITION

Overview

Total assets of the Company were $3.666 billion as of September 30, 2015, an increase of $223.0 million, or 6.5%, when compared to $3.443 billion as of December 31, 2014.  Total loans increased by $210.0 million, or 7.6%, to $2.972 billion at September 30, 2015 from $2.762 billion at December 31, 2014.  Funding for the loan growth came from a $274.4 million increase in deposits offset by an $80.0 million decrease in short-term borrowings.

Uses of Funds

Total Cash and Cash Equivalents

Total cash and cash equivalents increased by $7.4 million, or 8.2%, to $98.1 million at September 30, 2015, from $90.6 million at December 31, 2014.

Investment Portfolio

The amortized cost and the fair value of securities as of September 30, 2015 and December 31, 2014 were as follows:

	September 30, 2015		December 31, 2014
	Amortized	Fair	Amortized	Fair
(dollars in thousands)	Cost	Value	Cost	Value
U.S. Treasury securities	$987	$1,021	$986	$1,004
Agency residential mortgage-backed securities	361,571	369,691	366,596	372,095
State and municipal securities	104,057	106,987	99,399	102,812
Total	$466,615	$477,699	$466,981	$475,911

At September 30, 2015 and December 31, 2014, there were no holdings of securities of any one issuer, other than the U.S. government, government agencies and government sponsored agencies, in an amount greater than 10% of stockholders’ equity.

Purchases of securities available for sale totaled $70.2 million in the first nine months of 2015.  Paydowns from prepayments and scheduled payments of $48.2 million were received in the first nine months of 2015, and the amortization of premiums, net of the accretion of discounts, was $3.4 million.  Sales of securities totaled $7.8 million in the first nine months of 2015.  Maturities and calls of securities totaled $11.2 million in the first nine months of 2015.  No other-than-temporary impairment was recognized in the first nine months of 2015. The investment portfolio is managed to provide for an appropriate balance between, liquidity, credit risk and investment return and to limit the Company’s exposure to risk to an acceptable level.  The Company does not trade or invest in or sponsor certain unregistered investment companies defined as hedge funds and private equity funds in the so called “Volcker Rule” of the Dobb-Frank Wall Street Reform and Consumer Protection Act.

43

Real Estate Mortgage Loans HFS

Real estate mortgage loans held-for-sale increased by $1.5 million, or 97.6%, to $3.1 million at September 30, 2015, from $1.6 million at December 31, 2014.  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.  The Company generally sells all of the mortgage loans it originates on the secondary market.  Proceeds from sales totaled $57.2 million in the first nine months of 2015 compared to $39.3 million in the first nine months of 2014.

Loan Portfolio

The loan portfolio by class as of September 30, 2015 and December 31, 2014 is summarized as follows:

							Current
	September 30,			December 31,			Period
(dollars in thousands)	2015			2014			Change
Commercial and industrial loans	$1,171,316	39.4	%	$1,035,373	35.6	%	$135,943
Commercial real estate and multi-family residential loans	1,096,814	36.9		1,026,059	38.9		70,755
Agri-business and agricultural loans	249,070	8.4		273,787	10.0		(24,717)
Other commercial loans	82,976	2.8		75,715	2.8		7,261
Consumer 1-4 family mortgage loans	322,949	10.9		302,129	10.9		20,820
Other consumer loans	49,169	1.7		49,541	1.8		(372)
Subtotal	2,972,294	100.0	%	2,762,604	100.0	%	209,690
Less:  Allowance for loan losses	(44,694)			(46,262)			1,568
Net deferred loan fees	(14)			(284)			270
Loans, net	$2,927,586			$2,716,058			$211,528

Total loans, excluding real estate mortgage loans held for sale, increased by $209.7 million to $2.972 billion at September 30, 2015 from $2.763 billion at December 31, 2014.  The increase was concentrated in the commercial and commercial real estate categories and reflected the Company’s long standing strategic plan that is focused on expanding and growing the commercial lending business throughout our market areas.  The increase was partially offset by seasonal declines in agri-business loans.

The following table summarizes the Company’s non-performing assets as of September 30, 2015 and December 31, 2014:

	September 30,	December 31,
(dollars in thousands)	2015	2014
Nonaccrual loans including nonaccrual troubled debt restructured loans	$14,308	$13,577
Loans past due over 90 days and still accruing	0	130
Total nonperforming loans	$14,308	$13,707
Other real estate owned	231	284
Repossessions	0	9
Total nonperforming assets	$14,539	$14,000
Impaired loans including troubled debt restructurings	$22,660	$31,957
Nonperforming loans to total loans	0.48%	0.50%
Nonperforming assets to total assets	0.40%	0.41%
Performing troubled debt restructured loans	$7,605	$16,492
Nonperforming troubled debt restructured loans (included in nonaccrual loans)	10,934	9,160
Total troubled debt restructured loans	$18,539	$25,652

Total nonperforming assets increased by $539,000, or 3.9%, to $14.5 million during the nine-month period ended September 30, 2015.  The increase in nonperforming assets primarily resulted from placing six commercial credits on nonaccrual status.  Offsetting the increase in nonperforming assets was the removal of two loans from nonaccrual status.

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Net charge-offs totaled $122,000 in the third quarter of 2015, versus net recoveries of $782,000 during the third quarter of 2014 and net charge-offs of $861,000 during the second quarter of 2015.

A loan is impaired when full payment under the original loan terms is not expected.  Impairment for smaller loans that are similar in nature and which are not in nonaccrual or troubled debt restructured status, such as residential mortgage, consumer, and credit card loans, is determined based on the class of loans and impairment is determined 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 or at the fair value of collateral if repayment is expected solely from the collateral.

Total impaired loans decreased by $9.3 million, or 29.1%, to $22.7 million at September 30, 2015 from $32.0 million at December 31, 2014.  The decrease in the impaired loans category was primarily due to the removal of a $5.8 million commercial loan from impaired status due to improved condition.  The loan was previously accounted for as a troubled debt restructuring.  Additional decreases in the impaired loans category were from payments received and charge-offs on several impaired commercial credits.

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 a 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.

At September 30, 2015, the allowance for loan losses was 1.50% of total loans outstanding, versus 1.67% of total loans outstanding at December 31, 2014.  At September 30, 2015, management believed the allowance for loan losses 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 increases in the allowance for loan losses. The process of identifying probable credit losses is a subjective process. Therefore, the Company maintains a general allowance to cover probable incurred credit losses within the entire portfolio. The methodology management uses to determine the adequacy of the loan loss reserve includes the considerations below.

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. Generally, this type of lending has more credit risk than other types of lending because of the size and diversity of the credits. The Company manages this risk by adjusting its pricing to the perceived risk of each individual credit and by diversifying the portfolio by customer, product, industry and market area.

As of September 30, 2015, on the basis of management’s review of the loan portfolio, the Company had 77 credits totaling $142.8 million on the classified loan list versus 92 credits totaling $155.6 million on December 31, 2014. As of September 30, 2015, the Company had $100.8 million of assets classified as Special Mention, $41.3 million classified as Substandard, $0 classified as Doubtful and $0 classified as Loss as compared to $95.4 million, $58.5 million, $611,000 and $0, respectively at December 31, 2014.

Allowance estimates are developed by management after taking into account actual loss experience adjusted for current economic conditions. The Company 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.  For a more thorough discussion of the allowance for loan losses methodology see the Critical Accounting Policies section of this Item 2.

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The allowance for loan losses decreased 3.4%, or $1.6 million, from $46.3 million at December 31, 2014 to $44.7 million at September 30, 2015.  Pooled loan allocations decreased from $40.8 million at December 31, 2014 to $40.4 million at September 30, 2015, which was primarily due to management’s view of current credit quality and the current economic environment.  Impaired loan allocations decreased $1.1 million from $5.4 million at December 31, 2014 to $4.3 million at September 30, 2015 due primarily to a charge-off loan that was specifically reserved for prior to September 30, 2015, as well as decreases in the allocations of existing impaired loans and reductions to the impaired loans category.  The unallocated component of the allowance for loan losses was $3.4 million at September 30, 2015 and $3.3 million at December 31, 2014.  While general trends in the overall economy and 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.

Most of the Company’s loan growth has been concentrated in the commercial loan portfolio, which can result in overall asset quality being influenced by a small number of credits. Management has historically considered growth and portfolio composition when determining loan loss allocations. Management believes that it is prudent to continue to provide for loan losses in a manner consistent with its historical approach due to the loan growth described above and current economic conditions.

Economic conditions in the Company’s markets have generally continued to improve and stabilize, and management is cautiously optimistic that the recovery is positively impacting its borrowers.  While the Company has seen indications of improved economic conditions in its markets, including commercial real estate activity and manufacturing growth, they are not wide spread or particularly strong improvements.  The Company’s continued growth strategy promotes diversification among industries as well as continued focus on enforcement of a strong credit environment and an aggressive position in loan work-out situations. Although the Company believes that historical industry-specific issues in the Company’s markets have improved, the economic environment impacting the Company’s entire geographic footprint will continue to present challenges.

Sources of Funds

The following table summarizes deposits and borrowings as of September 30, 2015 and December 31, 2014:

			Current
	September 30,	December 31,	Period
(dollars in thousands)	2015	2014	Change
Non-interest bearing demand deposits	$630,789	$579,495	$51,294
Interest bearing demand, savings & money market accounts	1,460,261	1,423,035	37,226
Time deposits under $100,000	273,378	285,379	(12,001)
Time deposits of $100,000 or more	783,106	585,211	197,895
Total deposits	3,147,534	2,873,120	274,414
Short-term borrowings	80,414	160,407	(79,993)
Long-term borrowings	34	35	(1)
Subordinated debentures	30,928	30,928	0
Total borrowings	111,376	191,370	(79,994)
Total funding sources	$3,258,910	$3,064,490	$194,420

Deposits and Borrowings

Total deposits increased by $274.4 million, or 9.6%, from December 31, 2014.  The growth in deposits consisted of $283.0 million in core deposit growth and a decrease of $8.6 million in brokered deposits.  Core deposit growth was concentrated in public fund certificates of deposit of $100,000 or more, other time deposits of $100,000 or more and non-interest bearing demand deposits.   Total brokered deposits were $133.8 million at September 30, 2015 compared to $142.4 million at December 31, 2014.  Total public funds deposits, including public funds transaction accounts, were $930.2 million at September 30, 2015 compared to $758.2 at December 31, 2014.

Total borrowings decreased by $80.0 million, or 49.9%, from December 31, 2014.  Most of the decrease was from a decrease in short-term advances from the Federal Home Loan Bank of Indianapolis.  The Company used wholesale funding, including brokered deposits and Federal Home Loan Bank advances, to fund part of its loan growth and to help maintain its desired interest rate risk position.

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Capital

As of September 30, 2015, total stockholders’ equity was $386.6 million, an increase of $25.3 million, or 7.0%, from $361.3 million at December 31, 2014.  In addition to net income of $34.1 million, other significant changes in equity during the first nine months of 2015 included $11.6 million of dividends paid and $1.8 million in stock based compensation expense. The accumulated other comprehensive income component of equity increased $1.2 million during the nine months ended September 30, 2015, driven by changes in the fair values of available-for-sale securities.  The impact on equity by other comprehensive income is not included in regulatory capital.  The banking regulators have established guidelines for leverage capital requirements, expressed in terms of Tier 1, or core capital, as a percentage of average assets, to measure the soundness of a financial institution. In addition, banking regulators have established risk-based capital guidelines for U.S. banking organizations. The final rules implementing the Basel Committee on Banking Supervision's (“BCBS”) capital guidelines for U.S. banks (the “Basel III rules”) became effective for the Company on January 1, 2015, with full compliance with all of the final rule's requirements phased in over a multi-year schedule, to be fully phased-in by January 1, 2019.  As of September 30, 2015, the Company's capital levels remained characterized as "well-capitalized" under the new rules.  The actual capital amounts and ratios of the Company and the Bank as of September 30, 2015 and December 31, 2014, are presented in the table below.  Capital amounts and ratios for September 30, 2015 are calculated using the Basel III rules and capital amounts and ratios for December 31, 2014 are calculated using the Basel I rules:

					Minimum Required to
			Minimum Required		Be Well Capitalized
			For Capital		Under Prompt Corrective
	Actual		Adequacy Purposes		Action Regulations
(dollars in thousands)	Amount	Ratio	Amount	Ratio	Amount	Ratio
As of September 30, 2015:
Total Capital (to Risk
Weighted Assets)
Consolidated	$447,295	13.79%	$259,495	8.00%	$324,369	10.00%
Bank	$435,726	13.45%	$259,074	8.00%	$323,843	10.00%
Tier I Capital (to Risk
Weighted Assets)
Consolidated	$406,606	12.54%	$194,621	6.00%	$259,495	8.00%
Bank	$395,101	12.20%	$194,306	6.00%	$259,074	8.00%
Common Equity Tier 1 (CET1)
Consolidated	$376,606	11.61%	$145,966	4.50%	$210,840	6.50%
Bank	$395,101	12.20%	$145,729	4.50%	$210,498	6.50%
Tier I Capital (to Average Assets)
Consolidated	$406,606	11.18%	$145,432	4.00%	$181,790	5.00%
Bank	$395,101	10.92%	$144,660	4.00%	$180,825	5.00%
As of December 31, 2014:
Total Capital (to Risk
Weighted Assets)
Consolidated	$418,827	14.36%	$233,286	8.00%	$291,607	10.00%
Bank	$403,454	13.87%	$232,787	8.00%	$290,984	10.00%
Tier I Capital (to Risk
Weighted Assets)
Consolidated	$382,254	13.11%	$116,643	4.00%	$174,964	6.00%
Bank	$366,958	12.61%	$116,394	4.00%	$174,591	6.00%
Common Equity Tier 1 (CET1)
Consolidated	N/A	N/A	N/A	N/A	N/A	N/A
Bank	N/A	N/A	N/A	N/A	N/A	N/A
Tier I Capital (to Average Assets)
Consolidated	$382,254	11.22%	$136,265	4.00%	$170,332	5.00%
Bank	$366,958	10.84%	$135,420	4.00%	$169,276	5.00%

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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 the Company’s Annual Report on 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:

· the effects of future economic, business and market conditions and changes, both domestic and foreign, including seasonality;

· governmental monetary and fiscal policies;

· legislative and regulatory changes, including changes in banking, securities and tax laws and regulations and their application by our regulators;

· changes in accounting policies, rules and practices;

· the risks of changes in interest rates on the levels, composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities and other interest sensitive assets and liabilities;

· the failure of assumptions and estimates underlying the establishment of reserves for possible loan losses and other estimates;

· changes in borrowers’ credit risks and payment behaviors;

· changes in the availability and cost of credit and capital in the financial markets;

· changes in the prices, values and sales volumes of residential and commercial real estate;

· the effects of competition from a wide variety of local, regional, national and other providers of financial, investment and insurance services;

· the risks of mergers, acquisitions and divestitures, including, without limitation, the related time and costs of implementing such transactions, integrating operations as part of these transactions and possible failures to achieve expected gains, revenue growth and/or expense savings from such transactions;

· changes in technology or products that may be more difficult, costly or less effective than anticipated;

· the effects of war or other conflicts, acts of terrorism or other catastrophic events, including storms, droughts, tornados and flooding, that may affect general economic conditions, including agricultural production and demand and prices for agricultural goods and land used for agricultural purposes, generally and in our markets;

· the failure of assumptions and estimates used in our reviews of our loan portfolio and our analysis of our capital position; and

· cyber-security risks and or cyber-security damage that could result from attacks on networks or data of the Company.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  Additional information concerning the company and its business, including factors that could materially affect the company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K

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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 Corporate Risk Committee of the Board of Directors annually reviews and approves the policy used to manage interest rate risk. The policy was last reviewed and approved in July 2015. 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 its 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. The Company continually evaluates the assumptions used in the model.  The balance sheet structure is considered to be within acceptable risk levels.

Results for the base, falling 100 basis points, rising 25 basis points, rising 50 basis points, rising 100 basis points, and rising 300 basis points interest rate scenarios are listed below based upon the Company’s rate sensitive assets and liabilities at September 30, 2015. The net interest income shown represents cumulative net interest income over a twelve-month time horizon. Balance sheet assumptions used for the base scenario are the same for the rising and falling simulations.

		Falling		Rising		Rising		Rising		Rising
(dollars in thousands)	Base	(100 Basis Points)		25 Basis Points		50 Basis Points		100 Basis Points		300 Basis Points
Net interest income	$110,963	$108,517		$112,917		$114,906		$119,320		$137,157
Variance from Base		($2,446)		$1,954		$3,943		$8,357		$26,194
Percent of change from Base		-2.20	%	1.76	%	3.55	%	7.53	%	23.61	%

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, 2015.  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, 2015, 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.

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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 routine litigation 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 2014 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, 2015 with respect to shares of common stock repurchased by the Company during the quarter then ended:

ISSUER PURCHASES OF EQUITY SECURITIES
				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	4,583	$42.66	0	$0
August 1-31	538	43.18	0	0
September 1-30	0	0	0	0
Total	5,121	$42.71	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

Item 4. Mine Safety Disclosures

 N/A

Item 5. Other Information

            None

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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, 2015 and December 31, 2014; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2015 and September 30, 2014; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2015 and September 30, 2014; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and September 30, 2014; and (v) Notes to Unaudited Consolidated Financial Statements.

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LAKELAND FINANCIAL CORPORATION

FORM 10-Q

September 30, 2015

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 9, 2015	/s/ David M. Findlay
	David M. Findlay – President and
	Chief Executive Officer

Date: November 9, 2015	/s/ Lisa M. O’Neill
	Lisa M. O’Neill – Executive Vice President and
	Chief Financial Officer

Date: November 9, 2015	/s/ Teresa A. Bartman
	Teresa A. Bartman – Senior Vice President-
	Finance and Controller

52

Exhibit Index

Exhibit Number
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, 2015 and December 31, 2014; (ii) Consolidated Statements of Income for the three and nine months ended September 30, 2015 and September 30, 2014; (iii) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2015 and September 30, 2014; (iv) Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and September 30, 2014; and (v) Notes to Unaudited Consolidated Financial Statements.

53

EX-31.1

Exhibit 31.1

I, David M. Findlay, 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 9, 2015	/s/David M. Findlay
	David M. Findlay
	Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Lisa M. O’Neill, 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 9, 2015	/s/ Lisa M. O’Neill
	Lisa M. O’Neill
	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, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, David M. Findlay, 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/ David M. Findlay

David M. Findlay

Chief Executive Officer

November 9, 2015

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, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report), I, Lisa M. O’Neill, 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/ Lisa M. O’Neill

Lisa M. O’Neill

Chief Financial Officer

November 9, 2015

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

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	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$ 4,304		$ 5,421
Collectively evaluated for impairment	40,390		40,841
Total ending allowance balance	44,694	$ 44,816	46,262	$ 46,387	$ 45,605	$ 48,797
Loans:
Loans individually evaluated for impairment	22,666		31,964
Loans collectively evaluated for impairment	2,949,614		2,730,356
Total ending loans balance	2,972,280		2,762,320
Commercial and Industrial Loans [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	3,129		3,306
Collectively evaluated for impairment	19,184		19,479
Total ending allowance balance	22,313	22,360	22,785	21,985	20,922	21,005
Loans:
Loans individually evaluated for impairment	9,140		14,702
Loans collectively evaluated for impairment	1,162,373		1,020,897
Total ending loans balance	1,171,513		1,035,599
Commercial Real Estate and Multi-Family Residential Loans [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	783		1,531
Collectively evaluated for impairment	12,108		12,622
Total ending allowance balance	12,891	13,112	14,153	15,370	15,975	18,557
Loans:
Loans individually evaluated for impairment	10,530		13,005
Loans collectively evaluated for impairment	1,085,215		1,011,858
Total ending loans balance	1,095,745		1,024,863
Agri Business and Agricultural Loans [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0		14
Collectively evaluated for impairment	1,989		1,776
Total ending allowance balance	1,989	1,881	1,790	1,375	1,404	1,682
Loans:
Loans individually evaluated for impairment	472		486
Loans collectively evaluated for impairment	248,678		273,388
Total ending loans balance	249,150		273,874
Other Commercial [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0		15
Collectively evaluated for impairment	369		261
Total ending allowance balance	369	358	276	310	234	391
Loans:
Loans individually evaluated for impairment	0		30
Loans collectively evaluated for impairment	82,971		75,684
Total ending loans balance	82,971		75,714
Consumer 1-4 Family Mortgage Loans [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	333		482
Collectively evaluated for impairment	3,023		2,977
Total ending allowance balance	3,356	3,473	3,459	3,453	3,275	3,045
Loans:
Loans individually evaluated for impairment	2,434		3,614
Loans collectively evaluated for impairment	321,393		299,189
Total ending loans balance	323,827		302,803
Other Consumer [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	59		73
Collectively evaluated for impairment	269		410
Total ending allowance balance	328	392	483	519	487	608
Loans:
Loans individually evaluated for impairment	90		127
Loans collectively evaluated for impairment	48,984		49,340
Total ending loans balance	49,074		49,467
Unallocated [Member]
Ending allowance balance attributable to loans:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	3,448		3,316
Total ending allowance balance	3,448	$ 3,240	3,316	$ 3,375	$ 3,308	$ 3,509
Loans:
Loans individually evaluated for impairment	0		0
Loans collectively evaluated for impairment	0		0
Total ending loans balance	$ 0		$ 0

XML

EMPLOYEE BENEFIT PLANS (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Pension Plans, Defined Benefit [Member]
Net pension expense:
Interest cost	$ 25	$ 30	$ 77	$ 90
Expected return on plan assets	(34)	(31)	(104)	(94)
Recognized net actuarial loss	40	29	121	88
Net pension expense	31	28	94	84
Supplemental Employee Retirement Plans, Defined Benefit [Member]
Net pension expense:
Interest cost	11	13	34	38
Expected return on plan assets	(18)	(19)	(57)	(55)
Recognized net actuarial loss	21	20	62	60
Net pension expense	$ 14	$ 14	$ 39	$ 43

XML

FAIR VALUE DISCLOSURES (Quantitative Information about Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Discount To Benchmark Index [Member] | Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs (Average) (in hundredths)	0.00%	0.00%
Discount To Benchmark Index [Member] | Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs (Average) (in hundredths)	5.00%	6.00%
Discount To Benchmark Index [Member] | Weighted Average [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Range of Inputs (Average) (in hundredths)	2.24%	2.49%
State and Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Total assets	$ 807	$ 850
Valuation Technique	Price to type, par, call	Price to type, par, call

XML

EMPLOYEE BENEFIT PLANS (Additional Information) (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Expected Future Benefit Payments, Remainder of Fiscal Year	$ 80,000
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year	238,000	$ 318,000
Supplemental Employee Retirement Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plans, Estimated Future Employer Contributions in Next Fiscal Year	$ 110,000	$ 110,000

XML

FAIR VALUE DISCLOSURES (Assets and Liabilities Measured At Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets [Abstract]
Mortgage-backed securities	$ 369,691
Total Securities	477,699	$ 475,911
Mortgage banking derivative	2,592	1,191
Liabilities
Mortgage banking derivative	186	0
Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	1,021	1,004
Mortgage-backed securities	369,691	372,095
State and municipal securities	106,987	102,812
Total Securities	477,699	475,911
Mortgage banking derivative	283	96
Interest rate swap derivative	2,592	1,191
Total assets	480,574	477,198
Liabilities
Mortgage banking derivative	61	11
Interest rate swap derivative	2,646	1,242
Total liabilities	2,707	1,253
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	1,021	1,004
Mortgage-backed securities	0	0
State and municipal securities	0	0
Total Securities	1,021	1,004
Mortgage banking derivative	0	0
Interest rate swap derivative	0	0
Total assets	1,021	1,004
Liabilities
Mortgage banking derivative	0	0
Interest rate swap derivative	0	0
Total liabilities	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	0	0
Mortgage-backed securities	369,691	372,095
State and municipal securities	106,180	101,962
Total Securities	475,871	474,057
Mortgage banking derivative	283	96
Interest rate swap derivative	2,592	1,191
Total assets	478,746	475,344
Liabilities
Mortgage banking derivative	61	11
Interest rate swap derivative	2,646	1,242
Total liabilities	2,707	1,253
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Assets [Abstract]
U.S. Treasury securities	0	0
Mortgage-backed securities	0	0
State and municipal securities	807	850
Total Securities	807	850
Mortgage banking derivative	0	0
Interest rate swap derivative	0	0
Total assets	807	850
Liabilities
Mortgage banking derivative	0	0
Interest rate swap derivative	0	0
Total liabilities	$ 0	$ 0

XML

SECURITIES (Schedule Of Available Sale Of Securities Continuous Unrealized Loss Position) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Securities with unrealized losses [Abstract]
Less than twelve months, fair value	$ 46,885	$ 35,878
12 months or more, fair value	34,889	118,903
Total fair value	81,774	154,781
Less than 12 Months, Unrealized losses	(404)	(176)
12 Months or more, Unrealized losses	(705)	(1,947)
Total Unrealized losses	(1,109)	(2,123)
Agency Residential Mortgage-Backed Securities [Member]
Securities with unrealized losses [Abstract]
Less than twelve months, fair value	28,944	33,420
12 months or more, fair value	26,970	102,512
Total fair value	55,914	135,932
Less than 12 Months, Unrealized losses	(204)	(148)
12 Months or more, Unrealized losses	(439)	(1,531)
Total Unrealized losses	(643)	(1,679)
State and Municipal Securities [Member]
Securities with unrealized losses [Abstract]
Less than twelve months, fair value	17,941	2,458
12 months or more, fair value	7,919	16,391
Total fair value	25,860	18,849
Less than 12 Months, Unrealized losses	(200)	(28)
12 Months or more, Unrealized losses	(266)	(416)
Total Unrealized losses	$ (466)	$ (444)

XML

EARNINGS PER SHARE (Earnings Per Share Computations) (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Weighted average shares outstanding for basic earnings per common share	16,629,378	16,547,551	16,610,689	16,531,411
Dilutive effect of stock options, awards and warrants	218,605	228,219	198,144	237,668
Weighted average shares outstanding for diluted earnings per common share	16,847,983	16,775,770	16,808,833	16,769,079
Basic earnings per common share	$ 0.7	$ 0.7	$ 2.05	$ 1.98
Diluted earnings per common share	$ 0.69	$ 0.69	$ 2.03	$ 1.95

XML

FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015
		Fair Value Measurements Using						Assets
(dollars in thousands)		Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,021	$	0	$	0	$	1,021
Mortgage-backed securities		0		369,691		0		369,691
State and municipal securities		0		106,180		807		106,987
Total Securities		1,021		475,871		807		477,699
Mortgage banking derivative		0		283		0		283
Interest rate swap derivative		0		2,592		0		2,592
Total assets	$	1,021	$	478,746	$	807	$	480,574
Liabilities
Mortgage banking derivative		0		61		0		61
Interest rate swap derivative		0		2,646		0		2,646
Total liabilities	$	0	$	2,707	$	0	$	2,707
		December 31, 2014
		Fair Value Measurements Using						Assets
(dollars in thousands)		Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,004	$	0	$	0	$	1,004
Mortgage-backed securities		0		372,095		0		372,095
State and municipal securities		0		101,962		850		102,812
Total Securities		1,004		474,057		850		475,911
Mortgage banking derivative		0		96		0		96
Interest rate swap derivative		0		1,191		0		1,191
Total assets	$	1,004	$	475,344	$	850	$	477,198
Liabilities
Mortgage banking derivative		0		11		0		11
Interest rate swap derivative		0		1,242		0		1,242
Total liabilities	$	0	$	1,253	$	0	$	1,253

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, 2015 and 2014:

	State and Municipal Securities
(dollars in thousands)	2015	2014
Balance of recurring Level 3 assets at January 1	$             850	$               975
Changes in fair value of securities
included in other comprehensive income	(3)	11
Principal payments	(40)	(125)
Balance of recurring Level 3 assets at September 30	$             807	$               861

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
				Range of
	Fair Value at			Inputs
(dollars in thousands)	9/30/2015	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$              807	Price to type, par, call	Discount to benchmark index	0-5%
				(2.24%)
Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	12/31/2014	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$                850	Price to type, par, call	Discount to benchmark index	0-6%
				(2.49%)

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,  2015
	Fair Value Measurements Using							Assets
(dollars in thousands)		Level 1		Level 2		Level 3		at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	1,059	$	1,059
Non-working capital loans		0		0		2,223		2,223
Commercial real estate and multi-family
residential loans:
Construction and land development loans		0		0		300		300
Owner occupied loans		0		0		1,911		1,911
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		0		0		235		235
Other consumer loans		0		0		8		8
Total impaired loans	$	0	$	0	$	5,736	$	5,736
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	5,811	$	5,811

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, 2015:

	December 31, 2014
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	531	$	531
Non-working capital loans		0		0		2,257		2,257
Commercial real estate and multi-family
residential loans:
Construction and land development loans		0		0		341		341
Owner occupied loans		0		0		4,084		4,084
Nonowner occupied loans		0		0		3,113		3,113
Agri-business and agricultural loans:
Loans secured by farmland		0		0		189		189
Other commercial loans		0		0		15		15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		0		0		399		399
Residential construction loans		0		0		73		73
Other consumer loans		0		0		29		29
Total impaired loans	$	0	$	0	$	11,031	$	11,031
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	11,106	$	11,106

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, 2015:

(dollars in thousands)		Fair Value	Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired loans:
Commercial and industrial	$	3,282	Collateral based	Discount to reflect	39	%	(7% - 100%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Commercial real estate		2,211	Collateral based	Discount to reflect	26	%	(2% - 89%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage		235	Collateral based	Discount to reflect	30	%	(20% - 40%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Other consumer		8	Collateral based	Discount to reflect	53	%
			measurements	current market conditions
				and ultimate collectability
Other real estate owned		75	Appraisals	Discount to reflect	49	%
				current market conditions

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, 2014:

(dollars in thousands)		Fair Value	Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Impaired loans:
Commercial and industrial	$	2,788	Collateral based	Discount to reflect	40	%	(11% - 68%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Commercial real estate		7,538	Collateral based	Discount to reflect	25	%	(6% - 50%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Agri-business and agricultural		189	Collateral based	Discount to reflect	7	%
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Other commercial		15	Collateral based	Discount to reflect	50	%
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage		472	Collateral based	Discount to reflect	32	%	(3% - 77%)
			measurements	current market conditions
				and ultimate collectability
Impaired loans:
Other consumer		29	Collateral based	Discount to reflect	43	%	(33% - 50%)
			measurements	current market conditions
				and ultimate collectability
Other real estate owned		75	Appraisals	Discount to reflect	49	%
				current market conditions

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, 2015
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$    98,071	$    98,071	$               0	$              0	$    98,071
Securities available for sale	477,699	1,021	475,871	807	477,699
Real estate mortgages held for sale	3,132	0	3,203	0	3,203
Loans, net	2,927,586	0	0	2,914,190	2,914,190
Federal Home Loan Bank stock	4,248	N/A	N/A	N/A	N/A
Federal Reserve Bank stock	3,420	N/A	N/A	N/A	N/A
Accrued interest receivable	9,330	8	1,976	7,346	9,330
Financial Liabilities:
Certificates of deposit	(1,056,484)	0	1,061,877	0	1,061,877
All other deposits	(2,091,050)	(2,091,050)	0	0	(2,091,050)
Securities sold under agreements
to repurchase	(80,414)	0	(80,414)	0	(80,414)
Long-term borrowings	(34)	0	(38)	0	(38)
Subordinated debentures	(30,928)	0	0	(31,218)	(31,218)
Standby letters of credit	(350)	0	0	(350)	(350)
Accrued interest payable	(3,712)	(176)	(3,533)	(3)	(3,712)
	December 31, 2014
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$      90,638	$      90,638	$               0	$              0	$      90,638
Securities available for sale	475,911	1,004	474,057	850	475,911
Real estate mortgages held for sale	1,585	0	1,612	0	1,612
Loans, net	2,716,058	0	0	2,698,767	2,698,767
Federal Home Loan Bank stock	5,993	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	8,662	3	2,312	6,347	8,662
Financial Liabilities:
Certificates of deposit	(870,590)	0	(876,953)	0	(876,953)
All other deposits	(2,002,530)	(2,002,530)	0	0	(2,002,530)
Securities sold under agreements
to repurchase	(54,907)	0	(54,907)	0	(54,907)
Federal funds purchased	(500)	0	(500)	0	(500)
Other short-term borrowings	(105,000)	0	(105,001)	0	(105,001)
Long-term borrowings	(35)	0	(40)	0	(40)
Subordinated debentures	(30,928)	0	0	(31,212)	(31,212)
Standby letters of credit	(379)	0	0	(379)	(379)
Accrued interest payable	(2,946)	(109)	(2,834)	(3)	(2,946)

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FAIR VALUE DISCLOSURES (Valuation Methodology and Unobservable Inputs for Level 3 Assets) (Details) - Non-Recurring [Member] - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 5,736	$ 11,031
Commercial and Industrial Loans [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 3,282	$ 2,788
Valuation Methodology	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] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	7.00%	11.00%
Commercial and Industrial Loans [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	100.00%	68.00%
Commercial and Industrial Loans [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	39.00%	40.00%
Commercial Real Estate and Multi-Family Residential Loans [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 2,211	$ 7,538
Valuation Methodology	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] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	2.00%	6.00%
Commercial Real Estate and Multi-Family Residential Loans [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	89.00%	50.00%
Commercial Real Estate and Multi-Family Residential Loans [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	26.00%	25.00%
Agri-business and Agricultural Loans [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans		$ 189
Valuation Methodology		Collateral based measurements
Unobservable Inputs		Discount to reflect current market conditions and ultimate collectability
Agri-business and Agricultural Loans [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)		7.00%
Other Commercial Loans [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans		$ 15
Valuation Methodology		Collateral based measurements
Unobservable Inputs		Discount to reflect current market conditions and ultimate collectability
Other Commercial Loans [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)		50.00%
Consumer 1-4 Family Mortgage Loans [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 235	$ 472
Valuation Methodology	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] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	20.00%	3.00%
Consumer 1-4 Family Mortgage Loans [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	40.00%	77.00%
Consumer 1-4 Family Mortgage Loans [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	30.00%	32.00%
Other Consumer [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 8	$ 29
Valuation Methodology	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 [Member] | Minimum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)		33.00%
Other Consumer [Member] | Maximum [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)		50.00%
Other Consumer [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	53.00%	43.00%
Other Real Estate Owned [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Impaired loans	$ 75	$ 75
Valuation Methodology	Appraisals	Appraisals
Unobservable Inputs	Discount to reflect current market conditions	Discount to reflect current market conditions
Other Real Estate Owned [Member] | Weighted Average [Member]
Valuation Methodology and Unobservable Inputs For Level 3 Assets Measured At Fair Value [Line Items]
Range of Inputs (Average) (in hundredths)	49.00%	49.00%

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Troubled Debt Restructuring) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Troubled Debt Restructuring [Abstract]
Accruing troubled debt restructured loans	$ 7,605	$ 16,492
Nonaccrual troubled debt restructured loans	10,934	9,161
Total troubled debt restructured loans	$ 18,539	$ 25,653

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LOANS (Additional information) (Details)	Sep. 30, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage Loans in Process of Foreclosure, Amount	$ 151,000

XML

FAIR VALUE DISCLOSURES (Additional Information) (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2013
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	$ 3,300,000		$ 3,300,000
Weighted average interest rate, residential mortgages (in hundredths)			3.97%
Weighted average maturity of residential mortgages			19 years
Prepayment Speed used in unobservable assumptions			189		212
Discount rate used to estimate fair value (in hundredths)			9.40%		9.40%
Subtotal	2,972,294,000		$ 2,972,294,000		$ 2,762,604,000
Valuation allowance	44,694,000	$ 46,387,000	44,694,000	$ 46,387,000	$ 46,262,000	$ 44,816,000	$ 45,605,000	$ 48,797,000
Recoveries	106,000	1,051,000	$ 363,000	1,265,000
Market Value Price Variance Tolerance Percentage			3.00%
Market Value Tolerable Value Individual Security Increase Decrease			$ 50,000
Market Value Tolerable Value Increase Decrease			$ 500,000
Commercial Real Estates [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			0.00%
Commercial Real Estates [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			50.00%
Inventory Finished Goods [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			35.00%
Inventory Finished Goods [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			65.00%
Finished Goods [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			30.00%
Finished Goods [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			60.00%
Inventory Work In Process [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			50.00%
Inventory Work In Process [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			100.00%
Equipment [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			30.00%
Equipment [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			70.00%
Marketable Securities [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			10.00%
Marketable Securities [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [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.
Percentage of discount from appraised value (in hundredths)			30.00%
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.
Subtotal	8,700,000	16,500,000	$ 8,700,000	16,500,000
Valuation allowance	3,000,000	4,200,000	3,000,000	4,200,000
Recoveries	800,000	100,000	500,000	2,100,000
Other Real Estate Owned [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.
Other Real Estate	147,000		147,000
Real Estate Owned, Valuation Allowance	72,000	$ 16,500,000	72,000	$ 16,500,000
Impaired Loans Fair Value Disclosure	$ 75,000		$ 75,000

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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) - State and Municipal Securities [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Balance	$ 850	$ 975
Changes in fair value of securities included in other comprehensive income	(3)	11
Principal payments	(40)	(125)
Balance	$ 807	$ 861

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2015

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. Also included in this report is the Bank’s wholly owned subsidiary, LCB Investments II, Inc. (“LCB Investments”), which manages a portion of the Bank’s investment portfolio.  LCB Investments also owns LCB Funding, Inc. (“LCB Funding”), a real estate investment trust.  All significant inter-company balances and transactions have been eliminated in consolidation.

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, 2015 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2015. The Company’s 2014 Annual Report on Form 10-K should be read in conjunction with these statements.

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Loans By Class Modified As Troubled Debt Restructuring) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($) Number	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)
Interest Rate Reductions [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans				1
Pre-Modification Outstanding Recorded Investment				$ 89
Post-Modification Outstanding Recorded Investment				$ 95
Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1	1	3	4
Extension period for modified repayment terms	208 months	24 months
Modified Repayment Terms [Member] | Minimum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms			6 months	12 months
Modified Repayment Terms [Member] | Maximum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms			208 months	24 months
All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1	1	6	5
Pre-Modification Outstanding Recorded Investment	$ 65	$ 929	$ 2,267	$ 3,072
Post-Modification Outstanding Recorded Investment	$ 78	$ 1,000	$ 2,280	$ 3,143
Owner Occupied Loans [Member] | Modified Repayment Terms [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		1
Extension period for modified repayment terms		24 months
Owner Occupied Loans [Member] | All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans		1
Pre-Modification Outstanding Recorded Investment		$ 929
Post-Modification Outstanding Recorded Investment		$ 1,000
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member] | All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			2
Pre-Modification Outstanding Recorded Investment			$ 564
Post-Modification Outstanding Recorded Investment			$ 564
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
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			1	2
Extension period for modified repayment terms			12 months
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Modified Repayment Terms [Member] | Minimum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms				12 months
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Modified Repayment Terms [Member] | Maximum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms				15 months
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			1	2
Pre-Modification Outstanding Recorded Investment			$ 783	$ 433
Post-Modification Outstanding Recorded Investment			$ 783	$ 433
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
Pre-Modification Outstanding Recorded Investment				$ 89
Post-Modification Outstanding Recorded Investment				$ 95
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	2
Extension period for modified repayment terms			6 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Modified Repayment Terms [Member] | Minimum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms				12 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Modified Repayment Terms [Member] | Maximum [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Extension period for modified repayment terms				24 months
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans			2	3
Pre-Modification Outstanding Recorded Investment			$ 855	$ 2,639
Post-Modification Outstanding Recorded Investment			$ 855	$ 2,710
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	1		1
Extension period for modified repayment terms	208 months		208 months
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | All Modifications [Member]
Troubled Debt Restructurings Modified During Period [Abstract]
Number of Loans	1		1
Pre-Modification Outstanding Recorded Investment	$ 65		$ 65
Post-Modification Outstanding Recorded Investment	$ 78		$ 78

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015 and the year ended December 31, 2014:

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
(dollars in thousands)	Securities		Items		Total
Balance at December 31, 2014	$	5,467	$	(1,637)	$	3,830
Other comprehensive income before reclassification		1,295		(175)		1,120
Amounts reclassified from accumulated other comprehensive income (loss)		(25)		110		85
Net current period other comprehensive income		1,270		(65)		1,205
Balance at September 30, 2015	$	6,737	$	(1,702)	$	5,035

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
(dollars in thousands)	Securities		Items		Total
Balance at December 31, 2013	$	(1,138)	$	(1,356)	$	(2,494)
Other comprehensive income before reclassification		6,471		(399)		6,072
Amounts reclassified from accumulated other comprehensive income (loss)		134		118		252
Net current period other comprehensive income		6,605		(281)		6,324
Balance at December 31, 2014	$	5,467	$	(1,637)	$	3,830

Reclassification Accumulated Other Comprehensive Income

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	0	Net securities gains (losses)
Tax effect		0	Income tax expense
		0	Net of tax
Amortization of defined benefit pension items		(61)	Salaries and employee benefits
Tax effect		25	Income tax expense
		(36)	Net of tax
Total reclassifications for the period	$	(36)	Net of tax

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	(228)	Net securities gains (losses)
Tax effect		90	Income tax expense
		(138)	Net of tax
Amortization of defined benefit pension items		(49)	Salaries and employee benefits
Tax effect		20	Income tax expense
		(29)	Net of tax
Total reclassifications for the period	$	(167)	Net of tax

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	42	Net securities gains (losses)
Tax effect		(17)	Income tax expense
		25	Net of tax
Amortization of defined benefit pension items		(183)	Salaries and employee benefits
Tax effect		73	Income tax expense
		(110)	Net of tax
Total reclassifications for the period	$	(85)	Net of tax

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	(224)	Net securities gains (losses)
Tax effect		90	Income tax expense
		(134)	Net of tax
Amortization of defined benefit pension items		(148)	Salaries and employee benefits
Tax effect		60	Income tax expense
		(88)	Net of tax
Total reclassifications for the period	$	(222)	Net of tax

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Schedule of weighted average number of shares

Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options, stock awards and warrants, none of which were antidilutive.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Weighted average shares outstanding for basic earnings per common share		16,629,378		16,547,551		16,610,689		16,531,411
Dilutive effect of stock options, awards and warrants		218,605		228,219		198,144		237,668
Weighted average shares outstanding for diluted earnings per common share		16,847,983		16,775,770		16,808,833		16,769,079
Basic earnings per common share	$	0.70	$	0.70	$	2.05	$	1.98
Diluted earnings per common share	$	0.69	$	0.69	$	2.03	$	1.95

XML

OFFSETTING ASSETS AND LIABILITIES (Schedule of Offsetting of Assets and Liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
OffSetting Derivative Asset [Abstract]
Gross Amounts of Recognized Assets	$ 2,592	$ 1,191
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets presented in the Statement of Financial Position	2,592	1,191
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Received	0	0
Net	2,592	1,191
Offsetting Derivatives Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	83,060	56,149
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities presented in the Statement of Financial Position	83,060	56,149
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	(80,414)	(54,907)
Gross Amounts Not Offset in the Statement of Financial Position, Cash Received	(2,460)	(1,242)
Net	186	0
Interest Rate Swap [Member]
OffSetting Derivative Asset [Abstract]
Gross Amounts of Recognized Assets	2,592	1,191
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Assets presented in the Statement of Financial Position	2,592	1,191
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Received	0	0
Net	2,592	1,191
Offsetting Derivatives Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	2,646	1,242
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities presented in the Statement of Financial Position	2,646	1,242
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	0	0
Gross Amounts Not Offset in the Statement of Financial Position, Cash Received	(2,460)	(1,242)
Net	186	0
Repurchase Agreements [Member]
Offsetting Derivatives Liabilities [Abstract]
Gross Amounts of Recognized Liabilities	80,414	54,907
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts of Liabilities presented in the Statement of Financial Position	80,414	54,907
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments	(80,414)	(54,907)
Gross Amounts Not Offset in the Statement of Financial Position, Cash Received	0	0
Net	$ 0	$ 0

XML

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Credit Quality Indicators) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	$ 2,972,280	$ 2,762,320
Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	82,971	75,714
Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	49,074	49,467
Commercial and Industrial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	1,171,513	1,035,599
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	593,266	544,245
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	578,247	491,354
Commercial Real Estate and Multi-family Residential Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	1,095,745	1,024,863
Commercial Real Estate and Multi-family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	176,615	156,237
Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	408,690	402,877
Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	417,451	394,054
Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	92,989	71,695
Agri-business and Agricultural Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	249,150	273,874
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	155,110	137,408
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	94,040	136,466
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	323,827	302,803
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	153,736	144,884
Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	161,666	151,193
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	8,425	6,726
Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	2,523,707	2,321,404
Pass [Member] | Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	82,966	75,680
Pass [Member] | Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	14,080	15,879
Pass [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	552,709	504,806
Pass [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	528,158	436,735
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 loans balance	172,372	150,442
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	376,411	369,520
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	404,063	375,702
Pass [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	92,989	71,695
Pass [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	154,638	136,923
Pass [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	94,040	136,466
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	43,051	39,156
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	8,230	8,400
Pass [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	100,834	95,352
Special Mention [Member] | Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Special Mention [Member] | Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	290
Special Mention [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	32,373	28,485
Special Mention [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	35,536	31,781
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 loans balance	2,009	1,033
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	22,632	20,960
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	8,158	12,512
Special Mention [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Special Mention [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans 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 loans 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 loans balance	126	0
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 loans balance	0	291
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 loans balance	0	0
Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	41,270	58,470
Substandard [Member] | Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	30
Substandard [Member] | Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	61	75
Substandard [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	8,184	10,343
Substandard [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	11,911	20,324
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 loans balance	2,234	4,762
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	9,647	12,397
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	5,230	5,840
Substandard [Member] | Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Substandard [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	472	485
Substandard [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans 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 loans balance	1,906	2,199
Substandard [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	1,625	2,015
Substandard [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	611
Doubtful [Member] | Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Doubtful [Member] | Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans 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 loans balance	0	611
Doubtful [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
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 loans 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 loans 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 loans 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 loans balance	0	0
Doubtful [Member] | Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Doubtful [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Doubtful [Member] | Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans 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 loans 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 loans balance	0	0
Not Rated [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	306,469	286,483
Not Rated [Member] | Other Commercial Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	5	4
Not Rated [Member] | Other Consumer loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	34,933	33,223
Not Rated [Member] | Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	0	0
Not Rated [Member] | Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans balance	2,642	2,514
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 loans 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 loans 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 loans 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 loans 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 loans balance	0	0
Not Rated [Member] | Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment [Line Items]
Total ending loans 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 loans balance	108,653	103,529
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 loans balance	151,811	140,487
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 loans balance	$ 8,425	$ 6,726

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SECURITIES (Summary Of Available Sale Of Securities) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Information related to available for sale securities [Abstract]
Amortized Cost	$ 466,615	$ 466,981
Gross Unrealized Gain	12,193	11,053
Gross Unrealized Losses	(1,109)	(2,123)
Fair Value	477,699	475,911
US Treasury Securities [Member]
Information related to available for sale securities [Abstract]
Amortized Cost	987	986
Gross Unrealized Gain	34	18
Gross Unrealized Losses	0	0
Fair Value	1,021	1,004
Agency Residential Mortgage-Backed Securities [Member]
Information related to available for sale securities [Abstract]
Amortized Cost	361,571	366,596
Gross Unrealized Gain	8,763	7,178
Gross Unrealized Losses	(643)	(1,679)
Fair Value	369,691	372,095
State and Municipal Securities [Member]
Information related to available for sale securities [Abstract]
Amortized Cost	104,057	99,399
Gross Unrealized Gain	3,396	3,857
Gross Unrealized Losses	(466)	(444)
Fair Value	$ 106,987	$ 102,812

XML

SECURITIES (Schedule Of Available Sale Of Securities By Maturity) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Maturities of Available-for-sale Debt Securities [Abstract]
Amortized Cost, Due in one year or less	$ 2,273
Amortized Cost, Due after one year through five years	20,576
Amortized Cost, Due after five years through ten years	46,325
Amortized Cost, Due after ten years	35,870
Amortized Cost, Available for sale securities with maturities amortized cost	105,044
Amortized Cost, Mortgage-backed securities	361,571
Amortized Cost, Total debt securities	466,615	$ 466,981
Fair Value, Due in one year or less	2,293
Fair Value, Due after one year through five years	21,310
Fair Value, Due after five years through ten years	48,214
Fair Value, Due after ten years	36,191
Fair Value, Available for sale securities with maturities fair value	108,008
Fair Value, Mortgage-backed securities	369,691
Fair Value, Total debt securities	$ 477,699	$ 475,911

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 34,081	$ 32,735
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	2,848	2,507
Net gain on sale of other real estate owned	(27)	(85)
Amortization of loan servicing rights	416	392
Loans originated for sale	(58,035)	(38,682)
Net gain on sales of loans	(1,299)	(826)
Proceeds from sale of loans	57,224	39,254
Net loss on sales of premises and equipment	8	11
Net (gain) loss on sales and calls of securities available for sale	(42)	224
Net securities amortization	3,446	4,199
Stock based compensation expense	1,801	2,267
Earnings on life insurance	(956)	(1,082)
Tax benefit of stock option exercises	(126)	(36)
Net change:
Interest receivable and other assets	65	(1,664)
Interest payable and other liabilities	3,703	436
Total adjustments	9,026	6,915
Net cash from operating activities	43,107	39,650
Cash flows from investing activities:
Proceeds from sale of securities available for sale	7,787	13,766
Proceeds from maturities, calls and principal paydowns of securities available for sale	59,403	44,562
Purchases of securities available for sale	(70,228)	(58,655)
Purchase of life insurance	(260)	(157)
Proceeds from loans sold to others	0	4,307
Net increase in total loans	(212,329)	(174,553)
Proceeds from sales of land, premises and equipment	699	6
Purchases of land, premises and equipment	(5,585)	(3,712)
Proceeds from redemption of Federal Home Loan Bank stock	1,745	0
Proceeds from sales of other real estate	878	1,326
Distribution from life insurance	0	778
Net cash from investing activities	(217,890)	(172,332)
Cash flows from financing activities:
Net increase in total deposits	274,414	343,604
Net decrease in short-term borrowings	(79,993)	(193,298)
Payments on long-term borrowings	(1)	(2)
Common dividends paid	(11,621)	(10,079)
Preferred dividends paid	(13)	(13)
Payments related to equity incentive plans	(138)	(6)
Purchase of treasury stock	(432)	(427)
Net cash from financing activities	182,216	139,779
Net change in cash and cash equivalents	7,433	7,097
Cash and cash equivalents at beginning of the period	90,638	63,105
Cash and cash equivalents at end of the period	98,071	70,202
Cash paid during the period for:
Interest	11,679	11,235
Income taxes	15,416	16,535
Supplemental non-cash disclosures:
Loans transferred to other real estate owned	$ 801	$ 1,011

XML

SECURITIES (Schedule Of Sales Of Securities Available For Sale) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Sales of Securities Available for Sale [Abstract]
Proceeds	$ 0	$ 13,766	$ 7,787	$ 13,766
Gross gains	0	3	42	3
Gross losses	$ 0	$ 231	$ 0	$ 231

XML

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Loans Individually Evaluated For Impairment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Loans Individually Evaluated for Impairment [Abstract]
Unpaid Principal Balance	$ 27,559		$ 27,559		$ 36,738
Recorded Investment	22,666		22,666		31,964
Allowance for Loan Losses Allocated	4,304		4,304		5,421
Average Recorded Investment	22,150	$ 32,388	26,730	$ 35,045
Interest Income Recognized	97	235	466	680
Cash Basis Interest Income Recogonized	93	232	474	674
Other Commercial Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with an allowance recorded					30
Recorded investment with an allowance recorded					30
Allowance for loans losses allocated with an allowance recorded					15
Average Recorded Investment with an allowance recorded			3
Interest Income Recognized with an allowance recorded			0
Cash basis interest income recognized with an allowance recorded			0
Other Consumer [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	3		3		1
Unpaid principal balance with an allowance recorded	87		87		126
Recorded Investment with no related allowance recorded	3		3		1
Recorded investment with an allowance recorded	87		87		126
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	59		59		73
Average Recorded Investment with no related allowance recorded	5	1	3	1
Average Recorded Investment with an allowance recorded	99	89	110	87
Interest Income Recognized with no related allowance recorded	0	0	0	0
Interest Income Recognized with an allowance recorded	1	1	3	1
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	2	1	4	1
Commercial and Industrial Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for Loan Losses Allocated	3,129		3,129		3,306
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	20		20		21
Unpaid principal balance with an allowance recorded	1,916		1,916		1,409
Recorded Investment with no related allowance recorded	20		20		21
Recorded investment with an allowance recorded	1,915		1,915		1,408
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	822		822		837
Average Recorded Investment with no related allowance recorded	20	22	21	186
Average Recorded Investment with an allowance recorded	1,202	1,680	1,069	1,893
Interest Income Recognized with no related allowance recorded	0	0	0	1
Interest Income Recognized with an allowance recorded	3	22	19	55
Cash basis interest income recognized with no related allowance recorded	0	0	0	1
Cash basis interest income recognized with an allowance recorded	4	18	18	47
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded	2,431		2,431		1,673
Unpaid principal balance with an allowance recorded	8,732		8,732		15,557
Recorded Investment with no related allowance recorded	665		665		279
Recorded investment with an allowance recorded	6,540		6,540		12,994
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	2,307		2,307		2,469
Average Recorded Investment with no related allowance recorded	709	290	613	133
Average Recorded Investment with an allowance recorded	6,092	13,662	9,443	13,762
Interest Income Recognized with no related allowance recorded	1	0	2	0
Interest Income Recognized with an allowance recorded	47	127	281	387
Cash basis interest income recognized with no related allowance recorded	1	0	2	0
Cash basis interest income recognized with an allowance recorded	43	126	290	388
Commercial Real Estate and Multi-Family Residential Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for Loan Losses Allocated	783		783		1,531
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 no related allowance recorded					526
Unpaid principal balance with an allowance recorded	340		340		449
Recorded Investment with no related allowance recorded					526
Recorded investment with an allowance recorded	339		339		448
Allowance for loan losses allocated with no related allowance recorded					0
Allowance for loans losses allocated with an allowance recorded	40		40		107
Average Recorded Investment with no related allowance recorded		533	175	178
Average Recorded Investment with an allowance recorded	351	1,679	391	2,341
Interest Income Recognized with no related allowance recorded		0	0	0
Interest Income Recognized with an allowance recorded	4	7	12	37
Cash basis interest income recognized with no related allowance recorded		0	0	0
Cash basis interest income recognized with an allowance recorded	2	5	11	36
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	2,441		2,441		554
Unpaid principal balance with an allowance recorded	2,684		2,684		5,298
Recorded Investment with no related allowance recorded	2,261		2,261		374
Recorded investment with an allowance recorded	2,654		2,654		5,297
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	743		743		1,213
Average Recorded Investment with no related allowance recorded	2,442	160	1,950	215
Average Recorded Investment with an allowance recorded	2,682	3,241	3,695	2,956
Interest Income Recognized with no related allowance recorded	0	0	0	0
Interest Income Recognized with an allowance recorded	0	26	21	45
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	0	29	22	43
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	5,272		5,272		3,030
Unpaid principal balance with an allowance recorded					3,324
Recorded Investment with no related allowance recorded	5,276		5,276		3,036
Recorded investment with an allowance recorded					3,324
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded					211
Average Recorded Investment with no related allowance recorded	5,404	327	4,504	341
Average Recorded Investment with an allowance recorded		6,485	1,090	8,507
Interest Income Recognized with no related allowance recorded	26	0	80	0
Interest Income Recognized with an allowance recorded		35	0	104
Cash basis interest income recognized with no related allowance recorded	27	0	83	0
Cash basis interest income recognized with an allowance recorded		36	0	105
Agri-business and Agricultural Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for Loan Losses Allocated	0		0		14
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	971		971		603
Unpaid principal balance with an allowance recorded					381
Recorded Investment with no related allowance recorded	472		472		283
Recorded investment with an allowance recorded					203
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded					14
Average Recorded Investment with no related allowance recorded	474	284	412	226
Average Recorded Investment with an allowance recorded		203	67	411
Interest Income Recognized with no related allowance recorded	0	0	0	0
Interest Income Recognized with an allowance recorded		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
Consumer 1-4 Family Mortgage Loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Allowance for Loan Losses Allocated	333		333		482
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	535		535		724
Unpaid principal balance with an allowance recorded	1,999		1,999		2,505
Recorded Investment with no related allowance recorded	383		383		712
Recorded investment with an allowance recorded	1,923		1,923		2,375
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded	333		333		474
Average Recorded Investment with no related allowance recorded	415	695	301	691
Average Recorded Investment with an allowance recorded	2,125	2,568	2,608	2,740
Interest Income Recognized with no related allowance recorded	0	0	0	0
Interest Income Recognized with an allowance recorded	15	17	48	50
Cash basis interest income recognized with no related allowance recorded	0	0	0	0
Cash basis interest income recognized with an allowance recorded	14	17	44	53
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	128		128		317
Unpaid principal balance with an allowance recorded					81
Recorded Investment with no related allowance recorded	128		128		317
Recorded investment with an allowance recorded					81
Allowance for loan losses allocated with no related allowance recorded	0		0		0
Allowance for loans losses allocated with an allowance recorded					8
Average Recorded Investment with no related allowance recorded	130	286	238	170
Average Recorded Investment with an allowance recorded		48	23	66
Interest Income Recognized with no related allowance recorded	0	0	0	0
Interest Income Recognized with an allowance recorded		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
Consumer 1-4 Family Mortgage Loans [Member] | Residential constructions loans [Member]
Loans Individually Evaluated for Impairment [Abstract]
Unpaid principal balance with no related allowance recorded					129
Recorded Investment with no related allowance recorded					129
Allowance for loan losses allocated with no related allowance recorded					$ 0
Average Recorded Investment with no related allowance recorded		135	14	141
Interest Income Recognized with no related allowance recorded		0	0	0
Cash basis interest income recognized with no related allowance recorded		$ 0	$ 0	$ 0

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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Additional Information) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Securities Sold Under Agreements To Repurchase	$ 80,414	$ 54,907
Collateralized Mortgage Backed Securities [Member]
Securities Sold under Agreements to Repurchase, Fair Value of Collateral	$ 91,600	$ 94,200

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from banks	$ 86,586	$ 75,381
Short-term investments	11,485	15,257
Total cash and cash equivalents	98,071	90,638
Securities available for sale (carried at fair value)	477,699	475,911
Real estate mortgage loans held for sale	3,132	1,585
Loans, net of allowance for loan losses of $44,694 and $46,262	2,927,586	2,716,058
Land, premises and equipment, net	44,013	41,983
Bank owned life insurance	67,693	66,612
Federal Reserve and Federal Home Loan Bank stock	7,668	9,413
Accrued interest receivable	9,330	8,662
Goodwill	4,970	4,970
Other assets	26,088	27,452
Total assets	3,666,250	3,443,284
LIABILITIES
Noninterest bearing deposits	630,789	579,495
Interest bearing deposits	2,516,745	2,293,625
Total deposits	3,147,534	2,873,120
Short-term borrowings
Federal funds purchased	0	500
Securities sold under agreements to repurchase	80,414	54,907
Other short-term borrowings	0	105,000
Total short-term borrowings	80,414	160,407
Long-term borrowings	34	35
Subordinated debentures	30,928	30,928
Accrued interest payable	3,712	2,946
Other liabilities	16,928	14,463
Total liabilities	3,279,550	3,081,899
STOCKHOLDERS' EQUITY
Common stock: 90,000,000 shares authorized, no par value16,636,069 shares issued and 16,540,957 outstanding as of September 30, 2015 16,550,324 shares issued and 16,465,621 outstanding as of December 31, 2014	98,216	96,121
Retained earnings	285,792	263,345
Accumulated other comprehensive income	5,035	3,830
Treasury stock, at cost (2015 - 95,112 shares, 2014 - 84,703 shares)	(2,432)	(2,000)
Total stockholders' equity	386,611	361,296
Noncontrolling interest	89	89
Total equity	386,700	361,385
Total liabilities and equity	$ 3,666,250	$ 3,443,284

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Additional Information) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014
Troubled Debt Restructuring [Abstract]
Loans Modified In Troubled Debt Restructured Loans	$ 2,500,000		$ 2,500,000			$ 3,400,000	$ 173,000
Loan amount of credit quality analysis			150,000
Financing Receivable, Modifications, Recorded Investment					$ 788,000			$ 159,000
Loans Not Past Due	2,955,983,000		2,955,983,000			$ 2,746,240,000
Commercial and Industrial Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss	68,000	$ 74,000	102,000	$ 211,000
Commercial and Industrial Loans [Member] | Working Capital Loan [Member]
Troubled Debt Restructuring [Abstract]
Loans Not Past Due	2,500,000		2,500,000
Commercial Real Estate and Multi-Family Residential Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss	9,000	$ 53,000	13,000	$ 152,000
Consumer 1-4 Family Mortgage Loans [Member]
Troubled Debt Restructuring [Abstract]
Increase (decrease) in allowance for loan loss	13,000		11,000
Commercial Loans [Member]
Troubled Debt Restructuring [Abstract]
Loans Not Past Due	379,000		379,000
Industrial Working Capital Loan [Member]
Troubled Debt Restructuring [Abstract]
Loans Not Past Due	$ 185,000		$ 185,000
Borrower [Member]
Troubled Debt Restructuring [Abstract]
Financing Receivable, Modifications, Recorded Investment								$ 2,700,000

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]
Balance at Dec. 31, 2013	$ 321,875	$ 93,249	$ 233,108	$ (2,494)	$ (1,988)
Balance (in shares) at Dec. 31, 2013		16,377,449
Comprehensive income:
Net income	32,735		32,735
Other comprehensive income (loss), net of tax	5,081			5,081
Cash dividends declared	(10,092)		(10,092)
Treasury shares purchased under deferred directors' plan	0	$ 427			(427)
Treasury shares purchased under deferred directors' plan (in shares)		(11,042)
Treasury stock sold and distributed under deferred directors' plan		$ (432)			432
Treasury stock sold and distributed under deferred directors' plan (in shares)		25,031
Stock activity under equity compensation plans	(6)	$ (6)
Stock activity under equity compensation plans (in shares)		72,358
Stock based compensation expense	2,267	$ 2,267
Balance at Sep. 30, 2014	351,860	$ 95,505	255,751	2,587	(1,983)
Balance (in shares) at Sep. 30, 2014		16,463,796
Balance at Dec. 31, 2014	361,296	$ 96,121	263,345	3,830	(2,000)
Balance (in shares) at Dec. 31, 2014		16,465,621
Comprehensive income:
Net income	34,081		34,081
Other comprehensive income (loss), net of tax	1,205			1,205
Cash dividends declared	(11,634)		(11,634)
Treasury shares purchased under deferred directors' plan	0	$ 432			(432)
Treasury shares purchased under deferred directors' plan (in shares)		(10,409)
Stock activity under equity compensation plans	(138)	$ (138)
Stock activity under equity compensation plans (in shares)		85,745
Stock based compensation expense	1,801	$ 1,801
Balance at Sep. 30, 2015	$ 386,611	$ 98,216	$ 285,792	$ 5,035	$ (2,432)
Balance (in shares) at Sep. 30, 2015		16,540,957

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclassification Adjustment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Unrealized gains and losses on available-for-sale securities
Net securities gains (losses)	$ 0	$ (228)	$ 42	$ (224)
Income tax expense	0	90	(17)	90
Net of tax	0	(138)	25	(134)
Amortization of defined benefit pension items
Salaries and employee benefits	(61)	(49)	(183)	(148)
Income tax expense	25	20	73	60
Net of tax	(36)	(29)	(110)	(88)
Total reclassifications for the period	$ (36)	$ (167)	$ (85)	$ (222)

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SECURITIES (Additional information) (Details) - USD ($) $ in Millions	Sep. 30, 2015	Dec. 31, 2014
Information related to available for sale securities [Abstract]
Cost basis of securities sold	$ 7.7	$ 14.0
Fair Value of securities slold	7.8	13.8
Available-for-sale Securities pledged as collateral	$ 178.9	$ 202.4

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SECURITIES (Tables)

9 Months Ended

Sep. 30, 2015

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
		Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)		Cost		Gain		Losses		Value
September 30, 2015
U.S. Treasury securities	$	987	$	34	$	0	$	1,021
Agency residential mortgage-backed securities		361,571		8,763		(643)		369,691
State and municipal securities		104,057		3,396		(466)		106,987
Total	$	466,615	$	12,193	$	(1,109)	$	477,699
December 31, 2014
U.S. Treasury securities	$	986	$	18	$	0	$	1,004
Agency residential mortgage-backed securities		366,596		7,178		(1,679)		372,095
State and municipal securities		99,399		3,857		(444)		102,812
Total	$	466,981	$	11,053	$	(2,123)	$	475,911

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
(dollars in thousands)		Cost		Value
Due in one year or less	$	2,273	$	2,293
Due after one year through five years		20,576		21,310
Due after five years through ten years		46,325		48,214
Due after ten years		35,870		36,191
		105,044		108,008
Mortgage-backed securities		361,571		369,691
Total debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	466,615	$	477,699

Schedule of Sales of Securities Available For Sale

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

		Nine months ended September 30,			Three months ended September 30,
(dollars in thousands)		2015		2014		2015		2014
Sales of securities available for sale
Proceeds	$	7,787	$	13,766	$	0	$	13,766
Gross gains		42		3		0		3
Gross losses		0		231		0		231

Schedule of Available-For-Sale Securities Continuous Unrealized Loss Position

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
(dollars in thousands)	Value	Losses	Value	Losses	Value	Losses
September 30, 2015
Agency residential mortgage-backed
securities	$28,944	$(204)	$26,970	$(439)	$55,914	$(643)
State and municipal securities	17,941	(200)	7,919	(266)	25,860	(466)
Total temporarily impaired	$46,885	$(404)	$34,889	$(705)	$81,774	$(1,109)
December 31, 2014
Agency residential mortgage-backed
securities	$33,420	$(148)	$102,512	$(1,531)	$135,932	$(1,679)
State and municipal securities	2,458	(28)	16,391	(416)	18,849	(444)
Total temporarily impaired	$35,878	$(176)	$118,903	$(1,947)	$154,781	$(2,123

Quantitative Disclosure of Available-For-Sale Securities

The total number of securities with unrealized losses as of September 30, 2015 and December 31, 2014 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2015
Agency residential mortgage-backed securities	12	8	20
State and municipal securities	35	12	47
Total temporarily impaired	47	20	67
December 31, 2014
Agency residential mortgage-backed securities	9	27	36
State and municipal securities	8	29	37
Total temporarily impaired	17	56	73

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LOANS (Total Loans Outstanding) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Jun. 30, 2015	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 2,600,176	$ 2,410,934
Total consumer loans	372,118	351,670
Subtotal	$ 2,972,294	$ 2,762,604
Percentage of Subtotal	100.00%	100.00%
Less: Allowance for loan losses	$ (44,694)	$ (46,262)	$ (44,816)	$ (46,387)	$ (45,605)	$ (48,797)
Net deferred loan fees	(14)	(284)
Loans, net	$ 2,927,586	$ 2,716,058
Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of Total commercial loans	87.50%	87.30%
Other consumer loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of Total consumer loans	1.70%	1.80%
Consumer Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of Total consumer loans	12.50%	12.70%
Commercial and Industrial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 1,171,316	$ 1,035,373
Percentage of Total commercial loans	39.40%	37.50%
Less: Allowance for loan losses	$ (22,313)	$ (22,785)	(22,360)	(21,985)	(20,922)	(21,005)
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 593,780	$ 544,043
Percentage of Total commercial loans	20.00%	19.70%
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 577,536	$ 491,330
Percentage of Total commercial loans	19.40%	17.80%
Commercial Real Estate and Multi-family Residential Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 1,096,814	$ 1,026,059
Percentage of Total commercial loans	36.90%	37.10%
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	$ 176,945	$ 156,636
Percentage of Total commercial loans	6.00%	5.70%
Commercial Real Estate and Multi-family Residential Loans [Member] | Owner Occupied Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 409,004	$ 403,154
Percentage of Total commercial loans	13.80%	14.60%
Commercial Real Estate and Multi-family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 417,790	$ 394,458
Percentage of Total commercial loans	14.10%	14.30%
Commercial Real Estate and Multi-family Residential Loans [Member] | Multifamily Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 93,075	$ 71,811
Percentage of Total commercial loans	3.10%	2.60%
Agri-business and Agricultural Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 249,070	$ 273,787
Percentage of Total commercial loans	8.40%	9.90%
Less: Allowance for loan losses	$ (1,989)	$ (1,790)	$ (1,881)	$ (1,375)	$ (1,404)	$ (1,682)
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 155,106	$ 137,407
Percentage of Total commercial loans	5.20%	5.00%
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 93,964	$ 136,380
Percentage of Total commercial loans	3.20%	4.90%
Other Commercial Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total commercial loans	$ 82,976	$ 75,715
Percentage of Total commercial loans	2.80%	2.70%
Total Consumer 1 To 4 Family Mortgage Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 322,949	$ 302,129
Percentage of Total consumer loans	10.90%	10.90%
Total Consumer 1 To 4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 154,019	$ 145,167
Percentage of Total consumer loans	5.20%	5.30%
Total Consumer 1 To 4 Family Mortgage Loans [Member] | Open End And Junior Lien Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 160,485	$ 150,220
Percentage of Total consumer loans	5.40%	5.40%
Total Consumer 1 To 4 Family Mortgage Loans [Member] | Residential Construction and Land Development Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 8,445	$ 6,742
Percentage of Total consumer loans	0.30%	0.20%
Other Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 49,169	$ 49,541

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Tables)

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

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

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month periods ended September 30, 2015 and 2014:

				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2015
Beginning balance, July 1	$	22,360	$	13,112	$	1,881	$	358	$	3,473	$	392	$	3,240	$	44,816
Provision for loan losses		(88)		(235)		103		11		14		(13)		208		0
Loans charged-off		(2)		0		0		0		(152)		(74)		0		(228)
Recoveries		43		14		5		0		21		23		0		106
Net loans charged-off		41		14		5		0		(131)		(51)		0		(122)
Ending balance	$	22,313	$	12,891	$	1,989	$	369	$	3,356	$	328	$	3,448	$	44,694

				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended September 30, 2014
Beginning balance, July 1	$	20,922	$	15,975	$	1,404	$	234	$	3,275	$	487	$	3,308	$	45,605
Provision for loan losses		919		(1,275)		(34)		76		179		68		67		0
Loans charged-off		(147)		0		0		0		(60)		(62)		0		(269)
Recoveries		291		670		5		0		59		26		0		1,051
Net loans charged-off		144		670		5		0		(1)		(36)		0		782
Ending balance	$	21,985	$	15,370	$	1,375	$	310	$	3,453	$	519	$	3,375	$	46,387

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2015 and 2014:

				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Nine Months Ended September 30, 2015
Beginning balance, January 1	$	22,785	$	14,153	$	1,790	$	276	$	3,459	$	483	$	3,316	$	46,262
Provision for loan losses		240		(856)		184		215		149		(64)		132		0
Loans charged-off		(878)		(459)		0		(122)		(292)		(180)		0		(1,931)
Recoveries		166		53		15		0		40		89		0		363
Net loans charged-off		(712)		(406)		15		(122)		(252)		(91)		0		(1,568)
Ending balance	$	22,313	$	12,891	$	1,989	$	369	$	3,356	$	328	$	3,448	$	44,694

				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Nine Months Ended September 30, 2014
Beginning balance, January 1	$	21,005	$	18,557	$	1,682	$	391	$	3,045	$	608	$	3,509	$	48,797
Provision for loan losses		1,296		(1,334)		(323)		(81)		587		(11)		(134)		0
Loans charged-off		(660)		(2,553)		0		0		(282)		(180)		0		(3,675)
Recoveries		344		701		16		0		102		102		0		1,265
Net loans charged-off		(316)		(1,852)		16		0		(180)		(78)		0		(2,410)
Ending balance	$	21,985	$	15,371	$	1,375	$	310	$	3,452	$	519	$	3,375	$	46,387

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2015 and December 31, 2014:

				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
September 30, 2015
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,129	$	783	$	0	$	0	$	333	$	59	$	0	$	4,304
Collectively evaluated for impairment		19,184		12,108		1,989		369		3,023		269		3,448		40,390
Total ending allowance balance	$	22,313	$	12,891	$	1,989	$	369	$	3,356	$	328	$	3,448	$	44,694
Loans:
Loans individually evaluated for impairment	$	9,140	$	10,530	$	472	$	0	$	2,434	$	90	$	0	$	22,666
Loans collectively evaluated for impairment		1,162,373		1,085,215		248,678		82,971		321,393		48,984		0		2,949,614
Total ending loans balance	$	1,171,513	$	1,095,745	$	249,150	$	82,971	$	323,827	$	49,074	$	0	$	2,972,280
				Commercial
				Real Estate
		Commercial		and		Agri-business				Consumer
		and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)		Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
December 31, 2014
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	3,306	$	1,531	$	14	$	15	$	482	$	73	$	0	$	5,421
Collectively evaluated for impairment		19,479		12,622		1,776		261		2,977		410		3,316		40,841
Total ending allowance balance	$	22,785	$	14,153	$	1,790	$	276	$	3,459	$	483	$	3,316	$	46,262
Loans:
Loans individually evaluated for impairment	$	14,702	$	13,005	$	486	$	30	$	3,614	$	127	$	0	$	31,964
Loans collectively evaluated for impairment		1,020,897		1,011,858		273,388		75,684		299,189		49,340		0		2,730,356
Total ending loans balance	$	1,035,599	$	1,024,863	$	273,874	$	75,714	$	302,803	$	49,467	$	0	$	2,762,320

Loans individually evaluated for impairment

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2015:

		Unpaid				Allowance for
		Principal		Recorded		Loan Losses
(dollars in thousands)		Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	20	$	20	$	0
Non-working capital loans		2,431		665		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,441		2,261		0
Nonowner occupied loans		5,272		5,276		0
Agri-business and agricultural loans:
Loans secured by farmland		971		472		0
Consumer 1-4 family loans:
Closed end first mortgage loans		535		383		0
Open end and junior lien loans		128		128		0
Other consumer loans		3		3		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,916		1,915		822
Non-working capital loans		8,732		6,540		2,307
Commercial real estate and multi-family residential loans:
Construction and land development loans		340		339		40
Owner occupied loans		2,684		2,654		743
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		1,999		1,923		333
Other consumer loans		87		87		59
Total	$	27,559	$	22,666	$	4,304

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2014:

		Unpaid				Allowance for
		Principal		Recorded		Loan Losses
(dollars in thousands)		Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	21	$	21	$	0
Non-working capital loans		1,673		279		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		526		526		0
Owner occupied loans		554		374		0
Nonowner occupied loans		3,030		3,036		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Consumer 1-4 family loans:
Closed end first mortgage loans		724		712		0
Open end and junior lien loans		317		317		0
Residential construction loans		129		129		0
Other consumer loans		1		1		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,409		1,408		837
Non-working capital loans		15,557		12,994		2,469
Commercial real estate and multi-family residential loans:
Construction and land development loans		449		448		107
Owner occupied loans		5,298		5,297		1,213
Nonowner occupied loans		3,324		3,324		211
Agri-business and agricultural loans:
Loans secured by farmland		381		203		14
Other commercial loans		30		30		15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,505		2,375		474
Open end and junior lien loans		81		81		8
Other consumer loans		126		126		73
Total	$	36,738	$	31,964	$	5,421

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2015:

						Cash Basis
		Average		Interest		Interest
		Recorded		Income		Income
(dollars in thousands)		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	20	$	0	$	0
Non-working capital loans		709		1		1
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,442		0		0
Nonowner occupied loans		5,404		26		27
Agri-business and agricultural loans:
Loans secured by farmland		474		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		415		0		0
Open end and junior lien loans		130		0		0
Other consumer loans		5		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,202		3		4
Non-working capital loans		6,092		47		43
Commercial real estate and multi-family residential loans:
Construction and land development loans		351		4		2
Owner occupied loans		2,682		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,125		15		14
Other consumer loans		99		1		2
Total	$	22,150	$	97	$	93

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2014:

						Cash Basis
		Average		Interest		Interest
		Recorded		Income		Income
(dollars in thousands)		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	22	$	0	$	0
Non-working capital loans		290		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		533		0		0
Owner occupied loans		160		0		0
Nonowner occupied loans		327		0		0
Agri-business and agricultural loans:
Loans secured by farmland		284		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		695		0		0
Open end and junior lien loans		286		0		0
Residential construction loans		135		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,680		22		18
Non-working capital loans		13,662		127		126
Commercial real estate and multi-family residential loans:
Construction and land development loans		1,679		7		5
Owner occupied loans		3,241		26		29
Nonowner occupied loans		6,485		35		36
Agri-business and agricultural loans:
Loans secured by farmland		203		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,568		17		17
Open end and junior lien loans		48		0		0
Other consumer loans		89		1		1
Total	$	32,388	$	235	$	232

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2015:

						Cash Basis
		Average		Interest		Interest
		Recorded		Income		Income
(dollars in thousands)		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	21	$	0	$	0
Non-working capital loans		613		2		2
Commercial real estate and multi-family residential loans:
Construction and land development loans		175		0		0
Owner occupied loans		1,950		0		0
Nonowner occupied loans		4,504		80		83
Agri-business and agricultural loans:
Loans secured by farmland		412		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		301		0		0
Open end and junior lien loans		238		0		0
Residential construction loans		14		0		0
Other consumer loans		3		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,069		19		18
Non-working capital loans		9,443		281		290
Commercial real estate and multi-family residential loans:
Construction and land development loans		391		12		11
Owner occupied loans		3,695		21		22
Nonowner occupied loans		1,090		0		0
Agri-business and agricultural loans:
Loans secured by farmland		67		0		0
Other commercial loans		3		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,608		48		44
Open end and junior lien loans		23		0		0
Other consumer loans		110		3		4
Total	$	26,730	$	466	$	474

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2014:

						Cash Basis
		Average		Interest		Interest
		Recorded		Income		Income
(dollars in thousands)		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	186	$	1	$	1
Non-working capital loans		133		0		0
Commercial real estate and multi-family residential loans:
Construction and land development loans		178		0		0
Owner occupied loans		215		0		0
Nonowner occupied loans		341		0		0
Agri-business and agricultural loans:
Loans secured by farmland		226		0		0
Consumer 1-4 family loans:
Closed end first mortgage loans		691		0		0
Open end and junior lien loans		170		0		0
Residential construction loans		141		0		0
Other consumer loans		1		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		1,893		55		47
Non-working capital loans		13,762		387		388
Commercial real estate and multi-family residential loans:
Construction and land development loans		2,341		37		36
Owner occupied loans		2,956		45		43
Nonowner occupied loans		8,507		104		105
Agri-business and agricultural loans:
Loans secured by farmland		411		0		0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		2,740		50		53
Open end and junior lien loans		66		0		0
Other consumer loans		87		1		1
Total	$	35,045	$	680	$	674

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, 2015 by class of loans:

				30-89		Greater than
		Loans Not		Days		90 Days				Total
(dollars in thousands)		Past Due		Past Due		Past Due		Nonaccrual		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	591,700	$	0	$	0	$	1,566	$	1,566	$	593,266
Non-working capital loans		574,413		252		0		3,582		3,834		578,247
Commercial real estate and multi-family
residential loans:
Construction and land development loans		176,615		0		0		0		0		176,615
Owner occupied loans		403,775		0		0		4,915		4,915		408,690
Nonowner occupied loans		414,336		0		0		3,115		3,115		417,451
Multifamily loans		92,989		0		0		0		0		92,989
Agri-business and agricultural loans:
Loans secured by farmland		154,639		0		0		471		471		155,110
Loans for agricultural production		93,937		103		0		0		103		94,040
Other commercial loans		82,971		0		0		0		0		82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		151,857		1,367		0		512		1,879		153,736
Open end and junior lien loans		161,375		163		0		128		291		161,666
Residential construction loans		8,425		0		0		0		0		8,425
Other consumer loans		48,951		103		0		20		123		49,074
Total	$	2,955,983	$	1,988	$	0	$	14,309	$	16,297	$	2,972,280

The following table presents the aging of the recorded investment in past due loans as of December 31, 2014 by class of loans:

				30-89		Greater than
		Loans Not		Days		90 Days				Total
(dollars in thousands)		Past Due		Past Due		Past Due		Nonaccrual		Past Due		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	543,613	$	0	$	0	$	632	$	632	$	544,245
Non-working capital loans		487,655		0		101		3,598		3,699		491,354
Commercial real estate and multi-family
residential loans:
Construction and land development loans		155,711		0		0		526		526		156,237
Owner occupied loans		399,028		800		0		3,049		3,849		402,877
Nonowner occupied loans		390,394		31		0		3,629		3,660		394,054
Multi-family loans		71,695		0		0		0		0		71,695
Agri-business and agricultural loans:
Loans secured by farmland		136,923		0		0		485		485		137,408
Loans for agricultural production		136,466		0		0		0		0		136,466
Other commercial loans		75,684		0		0		30		30		75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		142,615		1,198		20		1,051		2,269		144,884
Open end and junior lien loans		150,551		235		9		398		642		151,193
Residential construction loans		6,597		0		0		129		129		6,726
Other consumer loans		49,308		108		0		51		159		49,467
Total	$	2,746,240	$	2,372	$	130	$	13,578	$	16,080	$	2,762,320

Troubled Debt Restructuring

The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

	September 30	December 31,
(dollars in thousands)	2015	2014
Accruing troubled debt restructured loans	$7,605	$16,492
Nonaccrual troubled debt restructured loans	10,934	9,161
Total troubled debt restructured loans	$18,539	$25,653

Loans by Class Modified as Troubled Debt Restructurings

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the three month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Consumer 1-4 family loans:
Closed end first mortgage loans	1	$65	$78	1	208
Total	1	$65	$78	1	208

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the nine month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	2	$                  564	$                     564
Non-working capital loans	1	783	783	1	12
Commercial real estate and multi-
family residential loans:
Owner occupied loans	2	855	855	1	6
Consumer 1-4 family loans:
Closed end first mortgage loans	1	65	78	1	208
Total	6	$               2,267	$                  2,280	3	6-208

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ending September 30, 2014:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Owner occupied loans	1	$929	$1,000	1	24
Total	1	$929	$1,000	1	24

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ending September 30, 2014:

	All Modifications			Interest Rate Reductions			Modified Repayment Terms
		Pre-Modification	Post-Modification					Extension
		Outstanding	Outstanding		Interest at	Interest at		Period or
	Number of	Recorded	Recorded	Number of	Pre-Modification	Post-Modification	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	Rate	Rate	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	2	$433	$433	0	$0	$0	2	12-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	3	2,639	2,710	1	89	95	2	12-24
Total	5	$3,072	$3,143	1	$89	$95	4	12-24

Credit Quality Indicators

As of September 30, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$552,709	$32,373	$8,184	$0	$0	$593,266
Non-working capital loans	528,158	35,536	11,911	0	2,642	578,247
Commercial real estate and multi-
family residential loans:
Construction and land development loans	172,372	2,009	2,234	0	0	176,615
Owner occupied loans	376,411	22,632	9,647	0	0	408,690
Nonowner occupied loans	404,063	8,158	5,230	0	0	417,451
Multifamily loans	92,989	0	0	0	0	92,989
Agri-business and agricultural loans:
Loans secured by farmland	154,638	0	472	0	0	155,110
Loans for agricultural production	94,040	0	0	0	0	94,040
Other commercial loans	82,966	0	0	0	5	82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	43,051	126	1,906	0	108,653	153,736
Open end and junior lien loans	8,230	0	1,625	0	151,811	161,666
Residential construction loans	0	0	0	0	8,425	8,425
Other consumer loans	14,080	0	61	0	34,933	49,074
Total	$2,523,707	$100,834	$41,270	$0	$306,469	$2,972,280

As of December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$504,806	$28,485	$10,343	$611	$0	$544,245
Non-working capital loans	436,735	31,781	20,324	0	2,514	491,354
Commercial real estate and multi-
family residential loans:
Construction and land
development loans	150,442	1,033	4,762	0	0	156,237
Owner occupied loans	369,520	20,960	12,397	0	0	402,877
Nonowner occupied loans	375,702	12,512	5,840	0	0	394,054
Multi-family loans	71,695	0	0	0	0	71,695
Agri-business and agricultural loans:
Loans secured by farmland	136,923	0	485	0	0	137,408
Loans for agricultural production	136,466	0	0	0	0	136,466
Other commercial loans	75,680	0	30	0	4	75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	39,156	0	2,199	0	103,529	144,884
Open end and junior lien loans	8,400	291	2,015	0	140,487	151,193
Residential construction loans	0	0	0	0	6,726	6,726
Other consumer loans	15,879	290	75	0	33,223	49,467
Total	$2,321,404	$95,352	$58,470	$611	$286,483	$2,762,320

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Common Stock, Dividends, Per Share, Declared	$ 0.70	$ 0.61

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Valuation allowance	$ 44,694	$ 46,262
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)	16,636,069	16,550,324
Common stock, shares outstanding (in shares)	16,540,957	16,465,621
Treasury stock, at cost	95,112	84,703

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NOTE 9. 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, none of which were antidilutive.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Weighted average shares outstanding for basic earnings per common share		16,629,378		16,547,551		16,610,689		16,531,411
Dilutive effect of stock options, awards and warrants		218,605		228,219		198,144		237,668
Weighted average shares outstanding for diluted earnings per common share		16,847,983		16,775,770		16,808,833		16,769,079
Basic earnings per common share	$	0.70	$	0.70	$	2.05	$	1.98
Diluted earnings per common share	$	0.69	$	0.69	$	2.03	$	1.95

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 31, 2015
Document Information [Line Items]
Entity Registrant Name	LAKELAND FINANCIAL CORP
Entity Central Index Key	0000721994
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	LKFN
Entity Common Stock, Shares Outstanding		16,636,069
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

9 Months Ended

Sep. 30, 2015

Stockholders Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

NOTE 10. 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, 2015 and the year ended December 31, 2014:

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
(dollars in thousands)	Securities		Items		Total
Balance at December 31, 2014	$	5,467	$	(1,637)	$	3,830
Other comprehensive income before reclassification		1,295		(175)		1,120
Amounts reclassified from accumulated other comprehensive income (loss)		(25)		110		85
Net current period other comprehensive income		1,270		(65)		1,205
Balance at September 30, 2015	$	6,737	$	(1,702)	$	5,035

	Unrealized
	Gains and
	Losses on		Defined
	Available-		Benefit
	for-Sales		Pension
(dollars in thousands)	Securities		Items		Total
Balance at December 31, 2013	$	(1,138)	$	(1,356)	$	(2,494)
Other comprehensive income before reclassification		6,471		(399)		6,072
Amounts reclassified from accumulated other comprehensive income (loss)		134		118		252
Net current period other comprehensive income		6,605		(281)		6,324
Balance at December 31, 2014	$	5,467	$	(1,637)	$	3,830

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	0	Net securities gains (losses)
Tax effect		0	Income tax expense
		0	Net of tax
Amortization of defined benefit pension items		(61)	Salaries and employee benefits
Tax effect		25	Income tax expense
		(36)	Net of tax
Total reclassifications for the period	$	(36)	Net of tax

Reclassifications out of accumulated comprehensive income for the three months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	(228)	Net securities gains (losses)
Tax effect		90	Income tax expense
		(138)	Net of tax
Amortization of defined benefit pension items		(49)	Salaries and employee benefits
Tax effect		20	Income tax expense
		(29)	Net of tax
Total reclassifications for the period	$	(167)	Net of tax

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2015 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	42	Net securities gains (losses)
Tax effect		(17)	Income tax expense
		25	Net of tax
Amortization of defined benefit pension items		(183)	Salaries and employee benefits
Tax effect		73	Income tax expense
		(110)	Net of tax
Total reclassifications for the period	$	(85)	Net of tax

Reclassifications out of accumulated comprehensive income for the nine months ended September 30, 2014 are as follows:

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
(dollars in thousands)
Unrealized gains and losses on available-for-sale securities	$	(224)	Net securities gains (losses)
Tax effect		90	Income tax expense
		(134)	Net of tax
Amortization of defined benefit pension items		(148)	Salaries and employee benefits
Tax effect		60	Income tax expense
		(88)	Net of tax
Total reclassifications for the period	$	(222)	Net of tax

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Interest and fees on loans
Taxable	$ 27,981	$ 26,713	$ 81,553	$ 78,317
Tax exempt	116	125	350	348
Interest and dividends on securities
Taxable	2,009	2,075	6,459	6,114
Tax exempt	844	820	2,515	2,455
Interest on short-term investments	16	12	43	31
Total interest income	30,966	29,745	90,920	87,265
Interest on deposits	3,973	3,424	11,551	9,946
Interest on borrowings
Short-term	43	96	138	351
Long-term	239	260	756	769
Total interest expense	4,255	3,780	12,445	11,066
NET INTEREST INCOME	26,711	25,965	78,475	76,199
Provision for loan losses	0	0	0	0
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	26,711	25,965	78,475	76,199
NONINTEREST INCOME
Wealth advisory fees	1,103	1,030	3,393	3,046
Investment brokerage fees	405	699	1,208	2,739
Service charges on deposit accounts	2,806	2,474	7,753	6,973
Loan, insurance and service fees	2,147	1,972	5,616	5,187
Merchant card fee income	485	407	1,332	1,137
Bank owned life insurance income	221	372	956	1,082
Other income	455	881	2,090	2,442
Mortgage banking income	280	264	1,020	508
Net securities gains/(losses)	0	(228)	42	(224)
Total noninterest income	7,902	7,871	23,410	22,890
NONINTEREST EXPENSE
Salaries and employee benefits	9,854	9,856	29,021	29,310
Net occupancy expense	919	872	2,918	2,885
Equipment costs	870	812	2,699	2,346
Data processing fees and supplies	1,950	1,557	5,655	4,541
Corporate and business development	780	726	2,284	2,052
FDIC insurance and other regulatory fees	521	481	1,518	1,446
Professional fees	694	705	2,111	2,241
Other expense	1,619	1,651	4,643	4,713
Total noninterest expense	17,207	16,660	50,849	49,534
INCOME BEFORE INCOME TAX EXPENSE	17,406	17,176	51,036	49,555
Income tax expense	5,841	5,665	16,955	16,820
NET INCOME	$ 11,565	$ 11,511	$ 34,081	$ 32,735
BASIC WEIGHTED AVERAGE COMMON SHARES	16,629,378	16,547,551	16,610,689	16,531,411
BASIC EARNINGS PER COMMON SHARE	$ 0.7	$ 0.7	$ 2.05	$ 1.98
DILUTED WEIGHTED AVERAGE COMMON SHARES	16,847,983	16,775,770	16,808,833	16,769,079
DILUTED EARNINGS PER COMMON SHARE	$ 0.69	$ 0.69	$ 2.03	$ 1.95

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

NOTE 4. ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month periods ended September 30, 2015 and 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2015
Beginning balance, July 1	$22,360	$13,112	$1,881	$358	$3,473	$392	$3,240	$44,816
Provision for loan losses	(88)	(235)	103	11	14	(13)	208	0
Loans charged-off	(2)	0	0	0	(152)	(74)	0	(228)
Recoveries	43	14	5	0	21	23	0	106
Net loans charged-off	41	14	5	0	(131)	(51)	0	(122)
Ending balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Three Months Ended September 30, 2014
Beginning balance, July 1	$20,922	$15,975	$1,404	$234	$3,275	$487	$3,308	$45,605
Provision for loan losses	919	(1,275)	(34)	76	179	68	67	0
Loans charged-off	(147)	0	0	0	(60)	(62)	0	(269)
Recoveries	291	670	5	0	59	26	0	1,051
Net loans charged-off	144	670	5	0	(1)	(36)	0	782
Ending balance	$21,985	$15,370	$1,375	$310	$3,453	$519	$3,375	$46,387

The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month periods ended September 30, 2015 and 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Nine Months Ended September 30, 2015
Beginning balance, January 1	$22,785	$14,153	$1,790	$276	$3,459	$483	$3,316	$46,262
Provision for loan losses	240	(856)	184	215	149	(64)	132	0
Loans charged-off	(878)	(459)	0	(122)	(292)	(180)	0	(1,931)
Recoveries	166	53	15	0	40	89	0	363
Net loans charged-off	(712)	(406)	15	(122)	(252)	(91)	0	(1,568)
Ending balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
Nine Months Ended September 30, 2014
Beginning balance, January 1	$21,005	$18,557	$1,682	$391	$3,045	$608	$3,509	$48,797
Provision for loan losses	1,296	(1,334)	(323)	(81)	587	(11)	(134)	0
Loans charged-off	(660)	(2,553)	0	0	(282)	(180)	0	(3,675)
Recoveries	344	701	16	0	102	102	0	1,265
Net loans charged-off	(316)	(1,852)	16	0	(180)	(78)	0	(2,410)
Ending balance	$21,985	$15,371	$1,375	$310	$3,452	$519	$3,375	$46,387

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2015 and December 31, 2014:

		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
September 30, 2015
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,129	$783	$0	$0	$333	$59	$0	$4,304
Collectively evaluated for impairment	19,184	12,108	1,989	369	3,023	269	3,448	40,390
Total ending allowance balance	$22,313	$12,891	$1,989	$369	$3,356	$328	$3,448	$44,694
Loans:
Loans individually evaluated for impairment	$9,140	$10,530	$472	$0	$2,434	$90	$0	$22,666
Loans collectively evaluated for impairment	1,162,373	1,085,215	248,678	82,971	321,393	48,984	0	2,949,614
Total ending loans balance	$1,171,513	$1,095,745	$249,150	$82,971	$323,827	$49,074	$0	$2,972,280
		Commercial
		Real Estate
	Commercial	and	Agri-business		Consumer
	and	Multifamily	and	Other	1-4 Family	Other
(dollars in thousands)	Industrial	Residential	Agricultural	Commercial	Mortgage	Consumer	Unallocated	Total
December 31, 2014
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$3,306	$1,531	$14	$15	$482	$73	$0	$5,421
Collectively evaluated for impairment	19,479	12,622	1,776	261	2,977	410	3,316	40,841
Total ending allowance balance	$22,785	$14,153	$1,790	$276	$3,459	$483	$3,316	$46,262
Loans:
Loans individually evaluated for impairment	$14,702	$13,005	$486	$30	$3,614	$127	$0	$31,964
Loans collectively evaluated for impairment	1,020,897	1,011,858	273,388	75,684	299,189	49,340	0	2,730,356
Total ending loans balance	$1,035,599	$1,024,863	$273,874	$75,714	$302,803	$49,467	$0	$2,762,320

The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2015:

	Unpaid		Allowance for
	Principal	Recorded	Loan Losses
(dollars in thousands)	Balance	Investment	Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$20	$20	$0
Non-working capital loans	2,431	665	0
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,441	2,261	0
Nonowner occupied loans	5,272	5,276	0
Agri-business and agricultural loans:
Loans secured by farmland	971	472	0
Consumer 1-4 family loans:
Closed end first mortgage loans	535	383	0
Open end and junior lien loans	128	128	0
Other consumer loans	3	3	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,916	1,915	822
Non-working capital loans	8,732	6,540	2,307
Commercial real estate and multi-family residential loans:
Construction and land development loans	340	339	40
Owner occupied loans	2,684	2,654	743
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	1,999	1,923	333
Other consumer loans	87	87	59
Total	$27,559	$22,666	$4,304

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2014:

	Unpaid		Allowance for
	Principal	Recorded	Loan Losses
(dollars in thousands)	Balance	Investment	Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$21	$21	$0
Non-working capital loans	1,673	279	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	526	526	0
Owner occupied loans	554	374	0
Nonowner occupied loans	3,030	3,036	0
Agri-business and agricultural loans:
Loans secured by farmland	603	283	0
Consumer 1-4 family loans:
Closed end first mortgage loans	724	712	0
Open end and junior lien loans	317	317	0
Residential construction loans	129	129	0
Other consumer loans	1	1	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,409	1,408	837
Non-working capital loans	15,557	12,994	2,469
Commercial real estate and multi-family residential loans:
Construction and land development loans	449	448	107
Owner occupied loans	5,298	5,297	1,213
Nonowner occupied loans	3,324	3,324	211
Agri-business and agricultural loans:
Loans secured by farmland	381	203	14
Other commercial loans	30	30	15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,505	2,375	474
Open end and junior lien loans	81	81	8
Other consumer loans	126	126	73
Total	$36,738	$31,964	$5,421

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2015:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                     20	$                       0	$                       0
Non-working capital loans	709	1	1
Commercial real estate and multi-family residential loans:
Owner occupied loans	2,442	0	0
Nonowner occupied loans	5,404	26	27
Agri-business and agricultural loans:
Loans secured by farmland	474	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	415	0	0
Open end and junior lien loans	130	0	0
Other consumer loans	5	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,202	3	4
Non-working capital loans	6,092	47	43
Commercial real estate and multi-family residential loans:
Construction and land development loans	351	4	2
Owner occupied loans	2,682	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,125	15	14
Other consumer loans	99	1	2
Total	$             22,150	$                     97	$                     93

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2014:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$22	$0	$0
Non-working capital loans	290	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	533	0	0
Owner occupied loans	160	0	0
Nonowner occupied loans	327	0	0
Agri-business and agricultural loans:
Loans secured by farmland	284	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	695	0	0
Open end and junior lien loans	286	0	0
Residential construction loans	135	0	0
Other consumer loans	1	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,680	22	18
Non-working capital loans	13,662	127	126
Commercial real estate and multi-family residential loans:
Construction and land development loans	1,679	7	5
Owner occupied loans	3,241	26	29
Nonowner occupied loans	6,485	35	36
Agri-business and agricultural loans:
Loans secured by farmland	203	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,568	17	17
Open end and junior lien loans	48	0	0
Other consumer loans	89	1	1
Total	$32,388	$235	$232

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2015:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$                     21	$                       0	$                       0
Non-working capital loans	613	2	2
Commercial real estate and multi-family residential loans:
Construction and land development loans	175	0	0
Owner occupied loans	1,950	0	0
Nonowner occupied loans	4,504	80	83
Agri-business and agricultural loans:
Loans secured by farmland	412	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	301	0	0
Open end and junior lien loans	238	0	0
Residential construction loans	14	0	0
Other consumer loans	3	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,069	19	18
Non-working capital loans	9,443	281	290
Commercial real estate and multi-family residential loans:
Construction and land development loans	391	12	11
Owner occupied loans	3,695	21	22
Nonowner occupied loans	1,090	0	0
Agri-business and agricultural loans:
Loans secured by farmland	67	0	0
Other commercial loans	3	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,608	48	44
Open end and junior lien loans	23	0	0
Other consumer loans	110	3	4
Total	$             26,730	$                  466	$                  474

The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2014:

			Cash Basis
	Average	Interest	Interest
	Recorded	Income	Income
(dollars in thousands)	Investment	Recognized	Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$186	$1	$1
Non-working capital loans	133	0	0
Commercial real estate and multi-family residential loans:
Construction and land development loans	178	0	0
Owner occupied loans	215	0	0
Nonowner occupied loans	341	0	0
Agri-business and agricultural loans:
Loans secured by farmland	226	0	0
Consumer 1-4 family loans:
Closed end first mortgage loans	691	0	0
Open end and junior lien loans	170	0	0
Residential construction loans	141	0	0
Other consumer loans	1	0	0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	1,893	55	47
Non-working capital loans	13,762	387	388
Commercial real estate and multi-family residential loans:
Construction and land development loans	2,341	37	36
Owner occupied loans	2,956	45	43
Nonowner occupied loans	8,507	104	105
Agri-business and agricultural loans:
Loans secured by farmland	411	0	0
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	2,740	50	53
Open end and junior lien loans	66	0	0
Other consumer loans	87	1	1
Total	$35,045	$680	$674

The following table presents the aging of the recorded investment in past due loans as of September 30, 2015 by class of loans:

		30-89	Greater than
	Loans Not	Days	90 Days		Total
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$591,700	$0	$0	$1,566	$1,566	$593,266
Non-working capital loans	574,413	252	0	3,582	3,834	578,247
Commercial real estate and multi-family
residential loans:
Construction and land development loans	176,615	0	0	0	0	176,615
Owner occupied loans	403,775	0	0	4,915	4,915	408,690
Nonowner occupied loans	414,336	0	0	3,115	3,115	417,451
Multifamily loans	92,989	0	0	0	0	92,989
Agri-business and agricultural loans:
Loans secured by farmland	154,639	0	0	471	471	155,110
Loans for agricultural production	93,937	103	0	0	103	94,040
Other commercial loans	82,971	0	0	0	0	82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	151,857	1,367	0	512	1,879	153,736
Open end and junior lien loans	161,375	163	0	128	291	161,666
Residential construction loans	8,425	0	0	0	0	8,425
Other consumer loans	48,951	103	0	20	123	49,074
Total	$2,955,983	$1,988	$0	$14,309	$16,297	$2,972,280

The following table presents the aging of the recorded investment in past due loans as of December 31, 2014 by class of loans:

		30-89	Greater than
	Loans Not	Days	90 Days		Total
(dollars in thousands)	Past Due	Past Due	Past Due	Nonaccrual	Past Due	Total
Commercial and industrial loans:
Working capital lines of credit loans	$543,613	$0	$0	$632	$632	$544,245
Non-working capital loans	487,655	0	101	3,598	3,699	491,354
Commercial real estate and multi-family
residential loans:
Construction and land development loans	155,711	0	0	526	526	156,237
Owner occupied loans	399,028	800	0	3,049	3,849	402,877
Nonowner occupied loans	390,394	31	0	3,629	3,660	394,054
Multi-family loans	71,695	0	0	0	0	71,695
Agri-business and agricultural loans:
Loans secured by farmland	136,923	0	0	485	485	137,408
Loans for agricultural production	136,466	0	0	0	0	136,466
Other commercial loans	75,684	0	0	30	30	75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	142,615	1,198	20	1,051	2,269	144,884
Open end and junior lien loans	150,551	235	9	398	642	151,193
Residential construction loans	6,597	0	0	129	129	6,726
Other consumer loans	49,308	108	0	51	159	49,467
Total	$2,746,240	$2,372	$130	$13,578	$16,080	$2,762,320

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for impaired loans. The Company has allocated $2.5 million and $3.4 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2015 and December 31, 2014. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

	September 30	December 31,
(dollars in thousands)	2015	2014
Accruing troubled debt restructured loans	$7,605	$16,492
Nonaccrual troubled debt restructured loans	10,934	9,161
Total troubled debt restructured loans	$18,539	$25,653

           Certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

During the quarter ending September 30, 2015, there were renewal terms offered to one borrower under financial duress with a previously identified troubled debt restructured loan which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for a loan bearing a similar risk profile. In this instance, it was determined that a concession had been granted. The loan to the borrower is for a commercial and industrial working capital loan with a recorded investment of $2.5 million.  This concession is not included in the table below.

During the quarter ending June 30, 2015, there were renewal terms offered to two borrowers under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In these instances, it was determined that a concession had been granted. It is difficult to quantify the concessions granted due to an absence of readily available market terms to be used for comparison. These loans were both commercial and industrial working capital loans with recorded investments of $379,000 and $185,000, respectively.

During the quarter ending March 31, 2015, there were renewal terms offered to one borrower under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In this instance, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The loan to the borrower is for a commercial real estate building where the collateral value and cash flows from the company occupying the building did not support the loan with a recorded investment of $788,000.

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the three month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Consumer 1-4 family loans:
Closed end first mortgage loans	1	$65	$78	1	208
Total	1	$65	$78	1	208

The following table presents loans, not previously discussed, by class modified as new troubled debt restructurings that occurred during the nine month period ending September 30, 2015:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	2	$                  564	$                     564
Non-working capital loans	1	783	783	1	12
Commercial real estate and multi-
family residential loans:
Owner occupied loans	2	855	855	1	6
Consumer 1-4 family loans:
Closed end first mortgage loans	1	65	78	1	208
Total	6	$               2,267	$                  2,280	3	6-208

For the three month period ending September 30, 2015, the commercial and industrial troubled debt restructurings described above decreased the allowance for loan losses by $68,000, the commercial real estate and multi-family residential loan troubled debt restructurings increased the allowance for loan losses by $9,000 and the consumer 1-4 family loan troubled debt restructuring described above increased the allowance by $13,000.  For the nine month period ending September 30, 2015, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $102,000, the commercial real estate and multi-family residential loan troubled debt restructurings decreased the allowance for loan losses by $13,000 and the consumer 1-4 family loan troubled debt restructuring increased the allowance by $11,000.

No charge-offs resulted from any troubled debt restructurings described above during the three and nine month period ending September 30, 2015.

During the nine months ending September 30, 2014 certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

During the quarter ending June 30, 2014 one loan previously identified as a troubled debt restructure was rewritten under terms that are not readily available in the marketplace.  Terms in the current loan agreement include an amortization period that exceeds those of similar type loans for a borrower enduring financial hardship.  This concession was granted without additional compensation.  This loan had a balance of $173,000 as of June 30, 2014.

During the quarter ending March 31, 2014, there were restructure terms offered to one borrower under financial duress which did not require additional compensation or consideration, and the terms offered would not have been readily available in the marketplace for loans bearing similar risk profiles. In this instance, it was determined that a concession had been granted. It is difficult to quantify the concession granted due to an absence of readily available market terms to be used for comparison. The restructure was granted to a borrower engaged in retail sales where the collateral and cash flow did not support the loan with a recorded investment of $159,000.

An additional concession was granted to a borrower with a previously restructured loan.  The new concession includes further forgiveness of principal if the terms of the restructured loan are met during the life of the loan. This borrower had a recorded investment of $2.7 million as of March 31, 2014.

The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ending September 30, 2014:

	All Modifications			Modified Repayment Terms
		Pre-Modification	Post-Modification		Extension
		Outstanding	Outstanding		Period or
	Number of	Recorded	Recorded	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	(in months)
Troubled Debt Restructurings
Owner occupied loans	1	$929	$1,000	1	24
Total	1	$929	$1,000	1	24

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ending September 30, 2014:

	All Modifications			Interest Rate Reductions			Modified Repayment Terms
		Pre-Modification	Post-Modification					Extension
		Outstanding	Outstanding		Interest at	Interest at		Period or
	Number of	Recorded	Recorded	Number of	Pre-Modification	Post-Modification	Number of	Range
(dollars in thousands)	Loans	Investment	Investment	Loans	Rate	Rate	Loans	(in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Non-working capital loans	2	$433	$433	0	$0	$0	2	12-15
Commercial real estate and multi-
family residential loans:
Owner occupied loans	3	2,639	2,710	1	89	95	2	12-24
Total	5	$3,072	$3,143	1	$89	$95	4	12-24

For the quarter ending September 30, 2014, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $74,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $53,000.  For the nine month period ending September 30, 2014, the commercial and industrial troubled debt restructurings described above increased the allowance for loan losses by $211,000 and the commercial real estate and multi-family residential loan troubled debt restructuring described above increased the allowance for loan losses by $152,000.

No charge-offs resulted from any of the troubled debt restructurings described above during the three-month and nine-month periods ending September 30, 2014.

There were no troubled debt restructurings that had payment defaults within the twelve months following modification during the three or nine month periods ended September 30, 2015 and the three month or nine-month periods ended September 30, 2014.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $150,000.

The Company uses the following definitions for risk ratings:

Special Mention. 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 commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with Not Rated loans. Loans listed as Not Rated are consumer loans included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. As of September 30, 2015, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$552,709	$32,373	$8,184	$0	$0	$593,266
Non-working capital loans	528,158	35,536	11,911	0	2,642	578,247
Commercial real estate and multi-
family residential loans:
Construction and land development loans	172,372	2,009	2,234	0	0	176,615
Owner occupied loans	376,411	22,632	9,647	0	0	408,690
Nonowner occupied loans	404,063	8,158	5,230	0	0	417,451
Multifamily loans	92,989	0	0	0	0	92,989
Agri-business and agricultural loans:
Loans secured by farmland	154,638	0	472	0	0	155,110
Loans for agricultural production	94,040	0	0	0	0	94,040
Other commercial loans	82,966	0	0	0	5	82,971
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	43,051	126	1,906	0	108,653	153,736
Open end and junior lien loans	8,230	0	1,625	0	151,811	161,666
Residential construction loans	0	0	0	0	8,425	8,425
Other consumer loans	14,080	0	61	0	34,933	49,074
Total	$2,523,707	$100,834	$41,270	$0	$306,469	$2,972,280

As of December 31, 2014, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

		Special			Not
(dollars in thousands)	Pass	Mention	Substandard	Doubtful	Rated	Total
Commercial and industrial loans:
Working capital lines of credit loans	$504,806	$28,485	$10,343	$611	$0	$544,245
Non-working capital loans	436,735	31,781	20,324	0	2,514	491,354
Commercial real estate and multi-
family residential loans:
Construction and land
development loans	150,442	1,033	4,762	0	0	156,237
Owner occupied loans	369,520	20,960	12,397	0	0	402,877
Nonowner occupied loans	375,702	12,512	5,840	0	0	394,054
Multi-family loans	71,695	0	0	0	0	71,695
Agri-business and agricultural loans:
Loans secured by farmland	136,923	0	485	0	0	137,408
Loans for agricultural production	136,466	0	0	0	0	136,466
Other commercial loans	75,680	0	30	0	4	75,714
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	39,156	0	2,199	0	103,529	144,884
Open end and junior lien loans	8,400	291	2,015	0	140,487	151,193
Residential construction loans	0	0	0	0	6,726	6,726
Other consumer loans	15,879	290	75	0	33,223	49,467
Total	$2,321,404	$95,352	$58,470	$611	$286,483	$2,762,320

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LOANS

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

LOANS

NOTE 3. LOANS

		September 30,				December 31,
(dollars in thousands)		2015				2014
Commercial and industrial loans:
Working capital lines of credit loans	$	593,780	20.0	%	$	544,043	19.7	%
Non-working capital loans		577,536	19.4			491,330	17.8
Total commercial and industrial loans		1,171,316	39.4			1,035,373	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans		176,945	6.0			156,636	5.7
Owner occupied loans		409,004	13.8			403,154	14.6
Nonowner occupied loans		417,790	14.1			394,458	14.3
Multifamily loans		93,075	3.1			71,811	2.6
Total commercial real estate and multi-family residential loans		1,096,814	36.9			1,026,059	37.1
Agri-business and agricultural loans:
Loans secured by farmland		155,106	5.2			137,407	5.0
Loans for agricultural production		93,964	3.2			136,380	4.9
Total agri-business and agricultural loans		249,070	8.4			273,787	9.9
Other commercial loans		82,976	2.8			75,715	2.7
Total commercial loans		2,600,176	87.5			2,410,934	87.3
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		154,019	5.2			145,167	5.3
Open end and junior lien loans		160,485	5.4			150,220	5.4
Residential construction and land development loans		8,445	0.3			6,742	0.2
Total consumer 1-4 family mortgage loans		322,949	10.9			302,129	10.9
Other consumer loans		49,169	1.7			49,541	1.8
Total consumer loans		372,118	12.5			351,670	12.7
Subtotal		2,972,294	100.0	%		2,762,604	100.0	%
Less: Allowance for loan losses		(44,694)				(46,262)
Net deferred loan fees		(14)				(284)
Loans, net	$	2,927,586			$	2,716,058

The recorded investment in loans does not include accrued interest.

The Company had $151,000 in residential real estate loans in process of foreclosure as of September 30, 2015.

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LOANS (Tables)

9 Months Ended

Sep. 30, 2015

Loans [Abstract]

Schedule of Loans

		September 30,				December 31,
(dollars in thousands)		2015				2014
Commercial and industrial loans:
Working capital lines of credit loans	$	593,780	20.0	%	$	544,043	19.7	%
Non-working capital loans		577,536	19.4			491,330	17.8
Total commercial and industrial loans		1,171,316	39.4			1,035,373	37.5
Commercial real estate and multi-family residential loans:
Construction and land development loans		176,945	6.0			156,636	5.7
Owner occupied loans		409,004	13.8			403,154	14.6
Nonowner occupied loans		417,790	14.1			394,458	14.3
Multifamily loans		93,075	3.1			71,811	2.6
Total commercial real estate and multi-family residential loans		1,096,814	36.9			1,026,059	37.1
Agri-business and agricultural loans:
Loans secured by farmland		155,106	5.2			137,407	5.0
Loans for agricultural production		93,964	3.2			136,380	4.9
Total agri-business and agricultural loans		249,070	8.4			273,787	9.9
Other commercial loans		82,976	2.8			75,715	2.7
Total commercial loans		2,600,176	87.5			2,410,934	87.3
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		154,019	5.2			145,167	5.3
Open end and junior lien loans		160,485	5.4			150,220	5.4
Residential construction and land development loans		8,445	0.3			6,742	0.2
Total consumer 1-4 family mortgage loans		322,949	10.9			302,129	10.9
Other consumer loans		49,169	1.7			49,541	1.8
Total consumer loans		372,118	12.5			351,670	12.7
Subtotal		2,972,294	100.0	%		2,762,604	100.0	%
Less: Allowance for loan losses		(44,694)				(46,262)
Net deferred loan fees		(14)				(284)
Loans, net	$	2,927,586			$	2,716,058

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NEW ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

NEW ACCOUNTING PRONOUNCEMENTS

NOTE 11.  NEW ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. This guidance will be effective for the Company beginning January 1, 2018 and can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Management is evaluating the impact of adopting this new accounting standard on our financial statements.

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EMPLOYEE BENEFIT PLANS

9 Months Ended

Sep. 30, 2015

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS

NOTE 7. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost:

	Nine Months Ended September 30,				Three Months Ended September 30,
	Pension Benefits		SERP Benefits		Pension Benefits		SERP Benefits
(dollars in thousands)	2015	2014	2015	2014	2015	2014	2015	2014
Interest cost	$    77	$    90	$    34	$    38	$    25	$    30	$    11	$    13
Expected return on plan assets	(104)	(94)	(57)	(55)	(34)	(31)	(18)	(19)
Recognized net actuarial (gain) loss	121	88	62	60	40	29	21	20
Net pension expense (benefit)	$    94	$    84	$    39	$    43	$    31	$    28	$    14	$    14

The Company previously disclosed in its financial statements for the year ended December 31, 2014 that it expected to contribute $318,000 to its pension plan and $110,000 to its Supplemental Executive Retirement Plan (“SERP”) in 2015.  The Company has contributed $238,000 to its pension plan and $110,000 to its SERP as of September 30, 2015.  The Company expects to contribute $80,000 to its pension plan during the remainder of 2015.  The Company does not expect to make any additional contributions to its SERP during the remainder of 2015.

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FAIR VALUE DISCLOSURES

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

NOTE 5.  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 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).

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 determine the Company’s valuation policies and procedures. Both of these areas report directly to the Executive Vice 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 Executive Vice 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 price tolerance variance of +/-3%, an individual security market value tolerance of +/-$50,000 and an aggregate market value tolerance of +/-$500,000 for all securities. If any securities fall outside any of these tolerance thresholds, 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.

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:  Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. 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: (a) raw and finished inventory is discounted from its cost or book value by 35-65%, depending on the marketability of the goods; (b) 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; (c) 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; (d) 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; and (e) 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, 2015 the fair value of the Company’s Level 3 servicing assets for residential mortgage loans was $3.3 million, none of which are currently impaired and therefore are carried at amortized cost.  These residential mortgage loans have a weighted average interest rate of 3.97%, 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, 2015, the constant prepayment speed (PSA) used was 189 and the discount rate used was 9.4%.  At December 31, 2014, the PSA used was 212 and the discount rate used was 9.4%.

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 properties used to determine value.  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, 2015
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$           1,021	$                     0	$                    0	$             1,021
Mortgage-backed securities	0	369,691	0	369,691
State and municipal securities	0	106,180	807	106,987
Total Securities	1,021	475,871	807	477,699
Mortgage banking derivative	0	283	0	283
Interest rate swap derivative	0	2,592	0	2,592
Total assets	$           1,021	$         478,746	$               807	$        480,574
Liabilities
Mortgage banking derivative	0	61	0	61
Interest rate swap derivative	0	2,646	0	2,646
Total liabilities	$                   0	$             2,707	$                    0	$             2,707
	December 31, 2014
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$             1,004	$                      0	$                     0	$              1,004
Mortgage-backed securities	0	372,095	0	372,095
State and municipal securities	0	101,962	850	102,812
Total Securities	1,004	474,057	850	475,911
Mortgage banking derivative	0	96	0	96
Interest rate swap derivative	0	1,191	0	1,191
Total assets	$             1,004	$           475,344	$                 850	$          477,198
Liabilities
Mortgage banking derivative	0	11	0	11
Interest rate swap derivative	0	1,242	0	1,242
Total liabilities	$                    0	$               1,253	$                     0	$              1,253

There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2015 and there were no transfers between Level 1 and Level 2 during 2014.

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, 2015 and 2014:

	State and Municipal Securities
(dollars in thousands)	2015	2014
Balance of recurring Level 3 assets at January 1	$             850	$               975
Changes in fair value of securities
included in other comprehensive income	(3)	11
Principal payments	(40)	(125)
Balance of recurring Level 3 assets at September 30	$             807	$               861

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
				Range of
	Fair Value at			Inputs
(dollars in thousands)	9/30/2015	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$              807	Price to type, par, call	Discount to benchmark index	0-5%
				(2.24%)
Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	12/31/2014	Valuation Technique	Unobservable Input	(Average)
State and municipal securities	$                850	Price to type, par, call	Discount to benchmark index	0-6%
				(2.49%)

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,  2015
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$                 0	$                 0	$         1,059	$         1,059
Non-working capital loans	0	0	2,223	2,223
Commercial real estate and multi-family
residential loans:
Construction and land development loans	0	0	300	300
Owner occupied loans	0	0	1,911	1,911
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	235	235
Other consumer loans	0	0	8	8
Total impaired loans	$                 0	$                 0	$         5,736	$         5,736
Other real estate owned	0	0	75	75
Total assets	$                 0	$                 0	$         5,811	$         5,811

	December 31, 2014
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$                  0	$                  0	$              531	$              531
Non-working capital loans	0	0	2,257	2,257
Commercial real estate and multi-family
residential loans:
Construction and land development loans	0	0	341	341
Owner occupied loans	0	0	4,084	4,084
Nonowner occupied loans	0	0	3,113	3,113
Agri-business and agricultural loans:
Loans secured by farmland	0	0	189	189
Other commercial loans	0	0	15	15
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	399	399
Residential construction loans	0	0	73	73
Other consumer loans	0	0	29	29
Total impaired loans	$                  0	$                  0	$         11,031	$         11,031
Other real estate owned	0	0	75	75
Total assets	$                  0	$                  0	$         11,106	$         11,106

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, 2015:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$     3,282	Collateral based	Discount to reflect	39%	(7% - 100%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	2,211	Collateral based	Discount to reflect	26%	(2% - 89%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	235	Collateral based	Discount to reflect	30%	(20% - 40%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	8	Collateral based	Discount to reflect	53%
		measurements	current market conditions
			and ultimate collectability
Other real estate owned	75	Appraisals	Discount to reflect	49%
			current market conditions

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, 2014:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$       2,788	Collateral based	Discount to reflect	40%	(11% - 68%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	7,538	Collateral based	Discount to reflect	25%	(6% - 50%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Agri-business and agricultural	189	Collateral based	Discount to reflect	7%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other commercial	15	Collateral based	Discount to reflect	50%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	472	Collateral based	Discount to reflect	32%	(3% - 77%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Other consumer	29	Collateral based	Discount to reflect	43%	(33% - 50%)
		measurements	current market conditions
			and ultimate collectability
Other real estate owned	75	Appraisals	Discount to reflect	49%
			current market conditions

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a gross carrying amount of $8.7 million, with a valuation allowance of $3.0 million at September 30, 2015, resulting in a net increase in the provision for loan losses of $800,000 in the three months ended September 30, 2015, and a net reduction in the provision for loan losses of $500,000 in the nine months ended September 30, 2015.  At September 30, 2014, impaired loans had a gross carrying amount of $16.5 million, with a valuation allowance of $4.2 million, resulting in a net increase in the provision for loan losses of $100,000 in the three months ended September 30, 2014, and a net reduction in the provision for loan losses of $2.1 million for the nine months ended September 30, 2014.

Other real estate owned measured at fair value less costs to sell, at both September 30, 2015 and September 30, 2014, had a net carrying amount of $75,000, which is made up of the outstanding balance of $147,000, net of a valuation allowance of $72,000, all of which was written down during 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, 2015
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$    98,071	$    98,071	$               0	$              0	$    98,071
Securities available for sale	477,699	1,021	475,871	807	477,699
Real estate mortgages held for sale	3,132	0	3,203	0	3,203
Loans, net	2,927,586	0	0	2,914,190	2,914,190
Federal Home Loan Bank stock	4,248	N/A	N/A	N/A	N/A
Federal Reserve Bank stock	3,420	N/A	N/A	N/A	N/A
Accrued interest receivable	9,330	8	1,976	7,346	9,330
Financial Liabilities:
Certificates of deposit	(1,056,484)	0	1,061,877	0	1,061,877
All other deposits	(2,091,050)	(2,091,050)	0	0	(2,091,050)
Securities sold under agreements
to repurchase	(80,414)	0	(80,414)	0	(80,414)
Long-term borrowings	(34)	0	(38)	0	(38)
Subordinated debentures	(30,928)	0	0	(31,218)	(31,218)
Standby letters of credit	(350)	0	0	(350)	(350)
Accrued interest payable	(3,712)	(176)	(3,533)	(3)	(3,712)
	December 31, 2014
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$      90,638	$      90,638	$               0	$              0	$      90,638
Securities available for sale	475,911	1,004	474,057	850	475,911
Real estate mortgages held for sale	1,585	0	1,612	0	1,612
Loans, net	2,716,058	0	0	2,698,767	2,698,767
Federal Home Loan Bank stock	5,993	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	8,662	3	2,312	6,347	8,662
Financial Liabilities:
Certificates of deposit	(870,590)	0	(876,953)	0	(876,953)
All other deposits	(2,002,530)	(2,002,530)	0	0	(2,002,530)
Securities sold under agreements
to repurchase	(54,907)	0	(54,907)	0	(54,907)
Federal funds purchased	(500)	0	(500)	0	(500)
Other short-term borrowings	(105,000)	0	(105,001)	0	(105,001)
Long-term borrowings	(35)	0	(40)	0	(40)
Subordinated debentures	(30,928)	0	0	(31,212)	(31,212)
Standby letters of credit	(379)	0	0	(379)	(379)
Accrued interest payable	(2,946)	(109)	(2,834)	(3)	(2,946)

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 of the loan 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 is estimated using discounted cash flow analysis based on current borrowing rates 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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SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

9 Months Ended

Sep. 30, 2015

Securities Sold under Agreements to Repurchase [Abstract]

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

NOTE 6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase represent collateralized borrowings with customers located primarily within the Company’s service area. These repurchase liabilities are not covered by federal deposit insurance and are secured by securities owned. The Company retains the right to substitute similar type securities and has the right to withdraw all excess collateral applicable to the repurchase liabilities whenever the collateral values are in excess of the related repurchase liabilities. However, as a means of mitigating market risk, the Company maintains excess collateral to cover normal changes in the repurchase liability by monitoring daily usage. The Company maintains control of the securities through the use of third-party safekeeping arrangements.

Securities sold under agreements to repurchase of $80.4 million and $54.9 million, which mature on demand, are secured by mortgage-backed securities with a carrying amount of $91.6 million and $94.2 million at September 30, 2015 and December 31, 2014.  Additional information concerning recognition of these liabilities is disclosed in Note 8.

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OFFSETTING ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2015

Offsetting Assets And Liabilities [Abstract]

OFFSETTING ASSETS AND LIABILITIES

NOTE 8. OFFSETTING ASSETS AND LIABILITIES

The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at September 30, 2015 and December 31, 2014.

	September 30, 2015
			Gross		Net Amounts
	Gross		Amounts		of Assets		Gross Amounts Not
	Amounts of		Offset in the		presented in		Offset in the Statement
	Recognized		Statement of		the Statement		of Financial Position
	Assets/		Financial		of Financial		Financial		Cash Collateral
(dollars in thousands)	Liabilities		Position		Position		Instruments		Received		Net Amount
Assets
Interest Rate Swap Derivatives	$	2,592	$	0	$	2,592	$	0	$	0	$	2,592
Total Assets	$	2,592	$	0	$	2,592	$	0	$	0	$	2,592
Liabilities
Interest Rate Swap Derivatives	$	2,646	$	0	$	2,646	$	0	$	(2,460)	$	186
Repurchase Agreements		80,414		0		80,414		(80,414)		0		0
Total Liabilities	$	83,060	$	0	$	83,060	$	(80,414)	$	(2,460)	$	186
	December 31, 2014
			Gross		Net Amounts
	Gross		Amounts		of Assets		Gross Amounts Not
	Amounts of		Offset in the		presented in		Offset in the Statement
	Recognized		Statement of		the Statement		of Financial Position
	Assets/		Financial		of Financial		Financial		Cash Collateral
(dollars in thousands)	Liabilities		Position		Position		Instruments		Received		Net Amount
Assets
Interest Rate Swap Derivatives	$	1,191	$	0	$	1,191	$	0	$	0	$	1,191
Total Assets	$	1,191	$	0	$	1,191	$	0	$	0	$	1,191
Liabilities
Interest Rate Swap Derivatives	$	1,242	$	0	$	1,242	$	0	$	(1,242)	$	0
Repurchase Agreements		54,907		0		54,907		(54,907)		0		0
Total Liabilities	$	56,149	$	0	$	56,149	$	(54,907)	$	(1,242)	$	0

                   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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SECURITIES (Quantitative Disclosure Of Available Sale Of Securities) (Details)	Sep. 30, 2015	Dec. 31, 2014
Number of securities with unrealized losses [Abstract]
Number of available-for-sale securities in unrealized loss positions, less than 12 months	47	17
Number of available-for-sale securities in unrealized loss positions, 12 months or more	20	56
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	67	73
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	12	9
Number of available-for-sale securities in unrealized loss positions, 12 months or more	8	27
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	20	36
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	35	8
Number of available-for-sale securities in unrealized loss positions, 12 months or more	12	29
Available-for-sale, Securities in Unrealized Loss Positions, Number of Positions	47	37

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FAIR VALUE DISCLOSURES (Estimated Fair Values And The Related Carrying Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financial Assets:
Securities available for sale	$ 477,699	$ 475,911
Financial Liabilities:
Federal funds purchased	0	(500)
Carrying Value [Member]
Financial Assets:
Cash and cash equivalents	98,071	90,638
Securities available for sale	477,699	475,911
Real estate mortgages held for sale	3,132	1,585
Loans, net	2,927,586	2,716,058
Federal Home Loan Bank stock	4,248	5,993
Federal Reserve Bank stock	3,420	3,420
Accrued interest receivable	9,330	8,662
Financial Liabilities:
Certificates of deposit	(1,056,484)	(870,590)
All other deposits	(2,091,050)	(2,002,530)
Securities sold under agreements to repurchase	(80,414)	(54,907)
Federal funds purchased		(500)
Other short-term borrowings		(105,000)
Long-term borrowings	(34)	(35)
Subordinated debentures	(30,928)	(30,928)
Standby letters of credit	(350)	(379)
Accrued interest payable	(3,712)	(2,946)
Estimated Fair Value [Member]
Financial Assets:
Cash and cash equivalents	98,071	90,638
Securities available for sale	477,699	475,911
Real estate mortgages held for sale	3,203	1,612
Loans, net	2,914,190	2,698,767
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	9,330	8,662
Financial Liabilities:
Certificates of deposit	1,061,877	(876,953)
All other deposits	(2,091,050)	(2,002,530)
Securities sold under agreements to repurchase	(80,414)	(54,907)
Federal funds purchased		(500)
Other short-term borrowings		(105,001)
Long-term borrowings	(38)	(40)
Subordinated debentures	(31,218)	(31,212)
Standby letters of credit	(350)	(379)
Accrued interest payable	(3,712)	(2,946)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Assets:
Cash and cash equivalents	98,071	90,638
Securities available for sale	1,021	1,004
Real estate mortgages held for sale	0	0
Loans, net	0	0
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	8	3
Financial Liabilities:
Certificates of deposit	0	0
All other deposits	(2,091,050)	(2,002,530)
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	(176)	(109)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 2 [Member]
Financial Assets:
Cash and cash equivalents	0	0
Securities available for sale	475,871	474,057
Real estate mortgages held for sale	3,203	1,612
Loans, net	0	0
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	1,976	2,312
Financial Liabilities:
Certificates of deposit	1,061,877	(876,953)
All other deposits	0	0
Securities sold under agreements to repurchase	(80,414)	(54,907)
Federal funds purchased		(500)
Other short-term borrowings		(105,001)
Long-term borrowings	(38)	(40)
Subordinated debentures	0	0
Standby letters of credit	0	0
Accrued interest payable	(3,533)	(2,834)
Estimated Fair Value [Member] | Fair Value, Inputs, Level 3 [Member]
Financial Assets:
Cash and cash equivalents	0	0
Securities available for sale	807	850
Real estate mortgages held for sale	0	0
Loans, net	2,914,190	2,698,767
Federal Home Loan Bank stock	0	0
Federal Reserve Bank stock	0	0
Accrued interest receivable	7,346	6,347
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	(31,218)	(31,212)
Standby letters of credit	(350)	(379)
Accrued interest payable	$ (3)	$ (3)

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RECLASSIFICATIONS

9 Months Ended

Sep. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

RECLASSIFICATIONS

NOTE 13. 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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EMPLOYEE BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2015

Employee Benefit Plans [Abstract]

Components of Net Periodic Benefit Cost

Components of net periodic benefit cost:

	Nine Months Ended September 30,				Three Months Ended September 30,
	Pension Benefits		SERP Benefits		Pension Benefits		SERP Benefits
(dollars in thousands)	2015	2014	2015	2014	2015	2014	2015	2014
Interest cost	$    77	$    90	$    34	$    38	$    25	$    30	$    11	$    13
Expected return on plan assets	(104)	(94)	(57)	(55)	(34)	(31)	(18)	(19)
Recognized net actuarial (gain) loss	121	88	62	60	40	29	21	20
Net pension expense (benefit)	$    94	$    84	$    39	$    43	$    31	$    28	$    14	$    14

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FAIR VALUE DISCLOSURES (Assets Measured at Fair Value on a Nonrecurring Basis) (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	$ 5,736	$ 11,031
Other real estate owned	75	75
Total assets	5,811	11,106
Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other real estate owned	0	0
Total assets	0	0
Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0	0
Other real estate owned	0	0
Total assets	0	0
Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	5,736	11,031
Other real estate owned	75	75
Total assets	5,811	11,106
Commercial and Industrial Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	3,282	2,788
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,059
Total assets		531
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial and Industrial Loans [Member] | Working Capital Lines of Credit Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,059
Total assets		531
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	2,223
Total assets		2,257
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial and Industrial Loans [Member] | Non Working Capital Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	2,223
Total assets		2,257
Commercial Real Estate and Multi-Family Residential Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	2,211	7,538
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	300
Total assets		341
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	300
Total assets		341
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,911
Total assets		4,084
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	1,911
Total assets		4,084
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		3,113
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		3,113
Agri-business and Agricultural Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans		189
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		189
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Agri-business and Agricultural Loans [Member] | Loans Secured by Farmland [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		189
Other Commercial Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans		15
Total assets		15
Other Commercial Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Other Commercial Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Other Commercial Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		15
Consumer 1-4 Family Mortgage Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	235	472
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	235
Total assets		399
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	235
Total assets		399
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		73
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		0
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Total assets		73
Other Consumer [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	8	29
Total assets		29
Other Consumer [Member] | Fair Value, Inputs, Level 1 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Other Consumer [Member] | Fair Value, Inputs, Level 2 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	0
Total assets		0
Other Consumer [Member] | Fair Value, Inputs, Level 3 [Member]
Assets Measured At Fair Value On Nonrecurring Basis [Line Items]
Impaired loans	$ 8
Total assets		$ 29

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Aging Of The Recorded Investment In Past Due Loans) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	$ 2,955,983	$ 2,746,240
30 to 89 Days Past Due	1,988	2,372
Nonaccrual	14,309	13,578
Total Past Due	16,297	16,080
Total	2,972,280	2,762,320
Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	130
Other Commercial Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	82,971	75,684
30 to 89 Days Past Due	0	0
Nonaccrual	0	30
Total Past Due	0	30
Total	82,971	75,714
Other Commercial Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Other consumer loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	48,951	49,308
30 to 89 Days Past Due	103	108
Nonaccrual	20	51
Total Past Due	123	159
Total	49,074	49,467
Other consumer loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Commercial and Industrial Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	1,171,513	1,035,599
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	591,700	543,613
30 to 89 Days Past Due	0	0
Nonaccrual	1,566	632
Total Past Due	1,566	632
Total	593,266	544,245
Commercial and Industrial Loans [Member] | Working Capital Lines Of Credit Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	574,413	487,655
30 to 89 Days Past Due	252	0
Nonaccrual	3,582	3,598
Total Past Due	3,834	3,699
Total	578,247	491,354
Commercial and Industrial Loans [Member] | Non-working Capital Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	101
Commercial Real Estate and Multi-Family Residential Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	1,095,745	1,024,863
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	176,615	155,711
30 to 89 Days Past Due	0	0
Nonaccrual	0	526
Total Past Due	0	526
Total	176,615	156,237
Commercial Real Estate and Multi-Family Residential Loans [Member] | Construction and Land Development Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	403,775	399,028
30 to 89 Days Past Due	0	800
Nonaccrual	4,915	3,049
Total Past Due	4,915	3,849
Total	408,690	402,877
Commercial Real Estate and Multi-Family Residential Loans [Member] | Owner Occupied Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	414,336	390,394
30 to 89 Days Past Due	0	31
Nonaccrual	3,115	3,629
Total Past Due	3,115	3,660
Total	417,451	394,054
Commercial Real Estate and Multi-Family Residential Loans [Member] | Nonowner Occupied Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	92,989	71,695
30 to 89 Days Past Due	0	0
Nonaccrual	0	0
Total Past Due	0	0
Total	92,989	71,695
Commercial Real Estate and Multi-Family Residential Loans [Member] | Multifamily Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Agri-business and Agricultural Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	249,150	273,874
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	154,639	136,923
30 to 89 Days Past Due	0	0
Nonaccrual	471	485
Total Past Due	471	485
Total	155,110	137,408
Agri-business and Agricultural Loans [Member] | Loans Secured By Farmland [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	93,937	136,466
30 to 89 Days Past Due	103	0
Nonaccrual	0	0
Total Past Due	103	0
Total	94,040	136,466
Agri-business and Agricultural Loans [Member] | Loans For Agricultural Production [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	0
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total	323,827	302,803
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	151,857	142,615
30 to 89 Days Past Due	1,367	1,198
Nonaccrual	512	1,051
Total Past Due	1,879	2,269
Total	153,736	144,884
Consumer 1-4 Family Mortgage Loans [Member] | Closed End First Mortgage Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	20
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	161,375	150,551
30 to 89 Days Past Due	163	235
Nonaccrual	128	398
Total Past Due	291	642
Total	161,666	151,193
Consumer 1-4 Family Mortgage Loans [Member] | Open End and Junior Lien Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	0	9
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Loans Not Past Due	8,425	6,597
30 to 89 Days Past Due	0	0
Nonaccrual	0	129
Total Past Due	0	129
Total	8,425	6,726
Consumer 1-4 Family Mortgage Loans [Member] | Residential Construction Loans [Member] | Greater than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Aging [Abstract]
Total Past Due	$ 0	$ 0

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net income	$ 11,565	$ 11,511	$ 34,081	$ 32,735
Change in securities available for sale:
Unrealized holding gain (loss) on securities available for sale arising during the period	3,764	(1,573)	2,196	7,979
Reclassification adjustment for (gains) losses included in net income	0	228	(42)	224
Net securities gain (loss) activity during the period	3,764	(1,345)	2,154	8,203
Tax effect	(1,488)	551	(884)	(3,241)
Net of tax amount	2,276	(794)	1,270	4,962
Defined benefit pension plans:
Net gain (loss) on defined benefit pension plans	0	0	(276)	64
Amortization of net actuarial loss	61	49	183	148
Net gain (loss) activity during the period	61	49	(93)	212
Tax effect	(24)	(20)	28	(93)
Net of tax amount	37	29	(65)	119
Total other comprehensive income (loss), net of tax	2,313	(765)	1,205	5,081
Comprehensive income	$ 13,878	$ 10,746	$ 35,286	$ 37,816

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SECURITIES

9 Months Ended

Sep. 30, 2015

Securities [Abstract]

SECURITIES

NOTE 2. 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
		Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)		Cost		Gain		Losses		Value
September 30, 2015
U.S. Treasury securities	$	987	$	34	$	0	$	1,021
Agency residential mortgage-backed securities		361,571		8,763		(643)		369,691
State and municipal securities		104,057		3,396		(466)		106,987
Total	$	466,615	$	12,193	$	(1,109)	$	477,699
December 31, 2014
U.S. Treasury securities	$	986	$	18	$	0	$	1,004
Agency residential mortgage-backed securities		366,596		7,178		(1,679)		372,095
State and municipal securities		99,399		3,857		(444)		102,812
Total	$	466,981	$	11,053	$	(2,123)	$	475,911

Information regarding the fair value and amortized cost of available for sale debt securities by maturity as of September 30, 2015 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
(dollars in thousands)		Cost		Value
Due in one year or less	$	2,273	$	2,293
Due after one year through five years		20,576		21,310
Due after five years through ten years		46,325		48,214
Due after ten years		35,870		36,191
		105,044		108,008
Mortgage-backed securities		361,571		369,691
Total debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$	466,615	$	477,699

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

		Nine months ended September 30,			Three months ended September 30,
(dollars in thousands)		2015		2014		2015		2014
Sales of securities available for sale
Proceeds	$	7,787	$	13,766	$	0	$	13,766
Gross gains		42		3		0		3
Gross losses		0		231		0		231

The Company sold two securities with a total book value of $7.7 million and a total fair value of $7.8 million during the first nine months of 2015.  The Company sold twelve securities with a total book value of $14.0 million and a total fair value of $13.8 million during the first nine months of 2014.

Purchase premiums or discounts are recognized in interest income using the interest method over the terms of the securities or over the estimated lives of 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 $178.9 million and $202.4 million were pledged as of September 30, 2015 and December 31, 2014, 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, 2015 and December 31, 2014 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
(dollars in thousands)		Value		Losses		Value		Losses		Value		Losses
September 30, 2015
Agency residential mortgage-backed
securities	$	28,944	$	(204)	$	26,970	$	(439)	$	55,914	$	(643)
State and municipal securities		17,941		(200)		7,919		(266)		25,860		(466)
Total temporarily impaired	$	46,885	$	(404)	$	34,889	$	(705)	$	81,774	$	(1,109)
December 31, 2014
Agency residential mortgage-backed
securities	$	33,420	$	(148)	$	102,512	$	(1,531)	$	135,932	$	(1,679)
State and municipal securities		2,458		(28)		16,391		(416)		18,849		(444)
Total temporarily impaired	$	35,878	$	(176)	$	118,903	$	(1,947)	$	154,781	$	(2,123)

The total number of securities with unrealized losses as of September 30, 2015 and December 31, 2014 is presented below.

	Less than	12 months
	12 months	or more	Total
September 30, 2015
Agency residential mortgage-backed securities	12	8	20
State and municipal securities	35	12	47
Total temporarily impaired	47	20	67
December 31, 2014
Agency residential mortgage-backed securities	9	27	36
State and municipal securities	8	29	37
Total temporarily impaired	17	56	73

The following factors are considered in determining whether or not the impairment of these securities is other-than-temporary. In making this determination, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer, as well as the underlying fundamentals of the relevant market and the outlook for such market in the near future.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  Credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings. As of September 30, 2015 and December 31, 2014, ninety-nine percent of the securities in the Company’s portfolio are backed by the U.S. government, government agencies, government sponsored agencies or are A-rated or better, except for certain non-local or local municipal securities, which are not rated. For the government, government-sponsored agency and municipal securities, management did not believe that there would be credit losses or that full principal would 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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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Changes in Accumulated Other Comprehensive Income By Component) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized Gains and Losses on Available- for-Sales Securities, Opening Balance			$ 5,467	$ (1,138)	$ (1,138)
Unrealized Gains and Losses on Available- for-Sales Securities, Other comprehensive income before reclassification			1,295		6,471
Unrealized Gains and Losses on Available- for-Sales Securities, Amounts reclassified from accumulated other comprehensive income (loss)			(25)		134
Unrealized Gains and Losses on Available- for-Sales Securities, Net current period other comprehensive income			1,270		6,605
Unrealized Gains and Losses on Available- for-Sales Securities, Ending Balance	$ 6,737		6,737		5,467
Defined Benefit Pension Items, Opening Balance			(1,637)	(1,356)	(1,356)
Defined Benefit Pension Items, Other comprehensive income before reclassification			(175)		(399)
Defined Benefit Pension Items, Amounts reclassified from accumulated other comprehensive income (loss)			110		118
Defined Benefit Pension Items, Net current period other comprehensive income	37	$ 29	(65)	119	(281)
Defined Benefit Pension Items, Ending Balance	(1,702)		(1,702)		(1,637)
Total, Opening Balance			3,830	(2,494)	(2,494)
Other comprehensive income (loss) before reclassification			1,120		6,072
Amounts reclassified from accumulated other comprehensive income (loss)			85		252
Total other comprehensive income (loss), net of tax	2,313	$ (765)	1,205	$ 5,081	6,324
Total, Ending Balance	$ 5,035		$ 5,035		$ 3,830

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OFFSETTING ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2015

Offsettings [Abstract]

Offsetting Assets And Liability

The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at September 30, 2015 and December 31, 2014.

	September 30, 2015
			Gross		Net Amounts
	Gross		Amounts		of Assets		Gross Amounts Not
	Amounts of		Offset in the		presented in		Offset in the Statement
	Recognized		Statement of		the Statement		of Financial Position
	Assets/		Financial		of Financial		Financial		Cash Collateral
(dollars in thousands)	Liabilities		Position		Position		Instruments		Received		Net Amount
Assets
Interest Rate Swap Derivatives	$	2,592	$	0	$	2,592	$	0	$	0	$	2,592
Total Assets	$	2,592	$	0	$	2,592	$	0	$	0	$	2,592
Liabilities
Interest Rate Swap Derivatives	$	2,646	$	0	$	2,646	$	0	$	(2,460)	$	186
Repurchase Agreements		80,414		0		80,414		(80,414)		0		0
Total Liabilities	$	83,060	$	0	$	83,060	$	(80,414)	$	(2,460)	$	186
	December 31, 2014
			Gross		Net Amounts
	Gross		Amounts		of Assets		Gross Amounts Not
	Amounts of		Offset in the		presented in		Offset in the Statement
	Recognized		Statement of		the Statement		of Financial Position
	Assets/		Financial		of Financial		Financial		Cash Collateral
(dollars in thousands)	Liabilities		Position		Position		Instruments		Received		Net Amount
Assets
Interest Rate Swap Derivatives	$	1,191	$	0	$	1,191	$	0	$	0	$	1,191
Total Assets	$	1,191	$	0	$	1,191	$	0	$	0	$	1,191
Liabilities
Interest Rate Swap Derivatives	$	1,242	$	0	$	1,242	$	0	$	(1,242)	$	0
Repurchase Agreements		54,907		0		54,907		(54,907)		0		0
Total Liabilities	$	56,149	$	0	$	56,149	$	(54,907)	$	(1,242)	$	0

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ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY (Allowance for loan losses by portfolio segment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	$ 44,816	$ 45,605	$ 46,262	$ 48,797
Provision for loan losses	0	0	0	0
Loans charged-off	(228)	(269)	(1,931)	(3,675)
Recoveries	106	1,051	363	1,265
Net loans charged-off	(122)	782	(1,568)	(2,410)
Ending balance	44,694	46,387	44,694	46,387
Commercial and Industrial Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	22,360	20,922	22,785	21,005
Provision for loan losses	(88)	919	240	1,296
Loans charged-off	(2)	(147)	(878)	(660)
Recoveries	43	291	166	344
Net loans charged-off	41	144	(712)	(316)
Ending balance	22,313	21,985	22,313	21,985
Commercial Real Estate and Multi-Family Residential Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	13,112	15,975	14,153	18,557
Provision for loan losses	(235)	(1,275)	(856)	(1,334)
Loans charged-off	0	0	(459)	(2,553)
Recoveries	14	670	53	701
Net loans charged-off	14	670	(406)	(1,852)
Ending balance	12,891	15,370	12,891	15,370
Agri-business and Agricultural Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	1,881	1,404	1,790	1,682
Provision for loan losses	103	(34)	184	(323)
Loans charged-off	0	0	0	0
Recoveries	5	5	15	16
Net loans charged-off	5	5	15	16
Ending balance	1,989	1,375	1,989	1,375
Other Commercial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	358	234	276	391
Provision for loan losses	11	76	215	(81)
Loans charged-off	0	0	(122)	0
Recoveries	0	0	0	0
Net loans charged-off	0	0	(122)	0
Ending balance	369	310	369	310
Consumer 1-4 Family Mortgage Loans [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	3,473	3,275	3,459	3,045
Provision for loan losses	14	179	149	587
Loans charged-off	(152)	(60)	(292)	(282)
Recoveries	21	59	40	102
Net loans charged-off	(131)	(1)	(252)	(180)
Ending balance	3,356	3,453	3,356	3,453
Other Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	392	487	483	608
Provision for loan losses	(13)	68	(64)	(11)
Loans charged-off	(74)	(62)	(180)	(180)
Recoveries	23	26	89	102
Net loans charged-off	(51)	(36)	(91)	(78)
Ending balance	328	519	328	519
Unallocated [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Beginning balance	3,240	3,308	3,316	3,509
Provision for loan losses	208	67	132	(134)
Loans charged-off	0	0	0	0
Recoveries	0	0	0	0
Net loans charged-off	0	0	0	0
Ending balance	$ 3,448	$ 3,375	$ 3,448	$ 3,375

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12. SUBSEQUENT EVENTS

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