FAIR VALUE DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Assets Measured at Fair Value on a Recurring Basis

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

	June 30, 2016
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,048	$	0	$	0	$	1,048
U.S. government sponsored agency securities		0		6,937		0		6,937
Mortgage-backed securities		0		361,084		0		361,084
State and municipal securities		0		129,675		856		130,531
Total Securities		1,048		497,696		856		499,600
Mortgage banking derivative		0		444		0		444
Interest rate swap derivative		0		6,646		0		6,646
Total assets	$	1,048	$	504,786	$	856	$	506,690

Liabilities
Mortgage banking derivative		0		88		0		88
Interest rate swap derivative		0		7,129		0		7,129
Total liabilities	$	0	$	7,217	$	0	$	7,217

	December 31, 2015
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets
U.S. Treasury securities	$	1,003	$	0	$	0	$	1,003
U.S. government sponsored agency securities		0		7,120		0		7,120
Mortgage-backed securities		0		360,672		0		360,672
State and municipal securities		0		108,725		551		109,276
Total Securities		1,003		476,517		551		478,071
Mortgage banking derivative		0		165		0		165
Interest rate swap derivative		0		1,732		0		1,732
Total assets	$	1,003	$	478,414	$	551	$	479,968

Liabilities
Mortgage banking derivative		0		1		0		1
Interest rate swap derivative		0		1,748		0		1,748
Total liabilities	$	0	$	1,749	$	0	$	1,749

Schedule of Reconciliation of All Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2016 and 2015:

	State and Municipal Securities
(dollars in thousands)	2016		2015
Balance of recurring Level 3 assets at January 1	$	551	$	850
Transfers into Level 3		339		0
Changes in fair value of securities
included in other comprehensive income		6		(2)
Principal payments		(40)		(40)
Balance of recurring Level 3 assets at June 30	$	856	$	808

Fair Value Measurements, Recurring, Valuation Techniques

Quantitative Information about Level 3 Fair Value Measurements
					Range of
	Fair Value at				Inputs
(dollars in thousands)	June 30, 2016		Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$	856	Price to type, par, call	Discount to benchmark index	0-9%
					(4.64%)

Quantitative Information about Level 3 Fair Value Measurements
					Range of
	Fair Value at				Inputs
(dollars in thousands)	December 31, 2015		Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$	551	Price to type, par, call	Discount to benchmark index	0-5%
					(2.82%)

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

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

	June 30, 2016
	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	$	367	$	367
Non-working capital loans		0		0		1,850		1,850
Commercial real estate and multi-family
residential loans:
Construction and land development loans		0		0		242		242
Owner occupied loans		0		0		1,003		1,003
Nonowner occupied loans		0		0		0		0
Multifamily loans		0		0		253		253
Other commercial loans		0		0		8		8
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		0		0		216		216
Open end and junior lien loans		0		0		0		0
Total impaired loans	$	0	$	0	$	3,939	$	3,939
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	4,014	$	4,014

	December 31, 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	$	753	$	753
Non-working capital loans		0		0		2,083		2,083
Commercial real estate and multi-family
residential loans:
Construction and land development loans		0		0		293		293
Owner occupied loans		0		0		717		717
Multifamily loans		0		0		227		227
Other commercial loans		0		0		7		7
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans		0		0		245		245
Open end and junior lien loans		0		0		226		226
Total impaired loans	$	0	$	0	$	4,551	$	4,551
Other real estate owned		0		0		75		75
Total assets	$	0	$	0	$	4,626	$	4,626

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 June 30, 2016:

(dollars in thousands)

Fair Value

Valuation Methodology

Unobservable Inputs

Average

Range of Inputs

Impaired loans:

Commercial and industrial

2,217

Collateral based

Discount to reflect

(10% - 100%)

measurements

current market conditions

and ultimate collectability

Impaired loans:

Commercial real estate

1,498

Collateral based

Discount to reflect

(5% - 34%)

measurements

current market conditions

and ultimate collectability

Impaired loans:

Other commercial

Collateral based

Discount to reflect

measurements

current market conditions

and ultimate collectability

Impaired loans:

Consumer 1-4 family mortgage

216

Collateral based

Discount to reflect

(17% - 99%)

measurements

current market conditions

and ultimate collectability

Other real estate owned

Appraisals

Discount to reflect

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, 2015:

(dollars in thousands)

Fair Value

Valuation Methodology

Unobservable Inputs

Average

Range of Inputs

Impaired loans:

Commercial and industrial

2,836

Collateral based

Discount to reflect

(5% - 100%)

measurements

current market conditions

and ultimate collectability

Impaired loans:

Commercial real estate

1,237

Collateral based

Discount to reflect

(19% - 53%)

measurements

current market conditions

and ultimate collectability

Impaired loans:

Other commercial

Collateral based

Discount to reflect

measurements

current market conditions

and ultimate collectability

Impaired loans:

Consumer 1-4 family mortgage

471

Collateral based

Discount to reflect

(11% - 42%)

measurements

current market conditions

and ultimate collectability

Other real estate owned

Appraisals

Discount to reflect

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.

	June 30, 2016
	Carrying		Estimated Fair Value
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	108,863	$	106,847	$	2,016	$	0	$	108,863
Securities available for sale		499,600		1,048		497,696		856		499,600
Real estate mortgages held for sale		4,009		0		4,089		0		4,089
Loans, net		3,154,750		0		0		3,146,249		3,146,249
Federal Home Loan Bank stock		4,953		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		10,294		3		2,428		7,863		10,294
Financial Liabilities:
Certificates of deposit		(1,175,427)		0		(1,183,308)		0		(1,183,308)
All other deposits		(2,228,028)		(2,228,028)		0		0		(2,228,028)
Securities sold under agreements
to repurchase		(56,368)		0		(56,368)		0		(56,368)
Long-term borrowings		(32)		0		(35)		0		(35)
Subordinated debentures		(30,928)		0		0		(31,145)		(31,145)
Standby letters of credit		(370)		0		0		(370)		(370)
Accrued interest payable		(4,403)		(82)		(4,318)		(3)		(4,403)

	December 31, 2015
	Carrying		Estimated Fair Value
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	80,674	$	79,074	$	1,602	$	0	$	80,676
Securities available for sale		478,071		1,003		476,517		551		478,071
Real estate mortgages held for sale		3,294		0		3,340		0		3,340
Loans, net		3,037,319		0		0		3,029,533		3,029,533
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		9,462		3		2,301		7,158		9,462
Financial Liabilities:
Certificates of deposit		(997,514)		0		(1,002,452)		0		(1,002,452)
All other deposits		(2,185,907)		(2,185,907)		0		0		(2,185,907)
Securities sold under agreements
to repurchase		(69,622)		0		(69,622)		0		(69,622)
Other short-term borrowings		(70,000)		0		(70,003)		0		(70,003)
Long-term borrowings		(34)		0		(37)		0		(37)
Subordinated debentures		(30,928)		0		0		(31,211)		(31,211)
Standby letters of credit		(381)		0		0		(381)		(381)
Accrued interest payable		(3,773)		(86)		(3,684)		(3)		(3,773)