FAIR VALUE DISCLOSURES (Tables)

9 Months Ended

Sep. 30, 2017

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, 2017
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$ 1,008	$ 0	$ 0	$ 1,008
U.S. government sponsored agency securities	0	5,433	0	5,433
Mortgage-backed securities	0	357,009	0	357,009
State and municipal securities	0	172,479	618	173,097
Total Securities	1,008	534,921	618	536,547
Mortgage banking derivative	0	251	0	251
Interest rate swap derivative	0	2,672	0	2,672
Total assets	$ 1,008	$ 537,844	$ 618	$ 539,470

Liabilities
Mortgage banking derivative	0	3	0	3
Interest rate swap derivative	0	2,825	0	2,825
Total liabilities	$ 0	$ 2,828	$ 0	$ 2,828


	December 31, 2016
	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	6,241	0	6,241
Mortgage-backed securities	0	351,568	0	351,568
State and municipal securities	0	144,709	670	145,379
Total Securities	1,003	502,518	670	504,191
Mortgage banking derivative	0	314	0	314
Interest rate swap derivative	0	2,645	0	2,645
Total assets	$ 1,003	$ 505,477	$ 670	$ 507,150

Liabilities
Mortgage banking derivative	0	14	0	14
Interest rate swap derivative	0	2,735	0	2,735
Total liabilities	$ 0	$ 2,749	$ 0	$ 2,749

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 nine months ended September 30, 2017 and 2016:


	State and Municipal Securities
(dollars in thousands)	2017	2016
Balance of recurring Level 3 assets at January 1	$ 670	$ 551
Transfers into Level 3	0	339
Changes in fair value of securities
included in other comprehensive income	(7)	0
Principal payments	(45)	(210)
Balance of recurring Level 3 assets at September 30	$ 618	$ 680

Fair Value Measurements, Recurring, Valuation Techniques

Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	September 30, 2017	Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$ 618	Price to type, par, call	Discount to benchmark index	0-5%
				(2.00%)

Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	December 31, 2016	Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$ 670	Price to type, par, call	Discount to benchmark index	0-5%
				(2.98%)

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, 2017
	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	$ 1,425	$ 1,425
Non-working capital loans	0	0	2,086	2,086
Commercial real estate and multi-family
residential loans:
Owner occupied loans	0	0	1,142	1,142
Consumer 1-4 family mortgage loans:
Open end and junior lien loans	0	0	201	201
Total impaired loans	$ 0	$ 0	$ 4,854	$ 4,854
Other real estate owned	0	0	75	75
Total assets	$ 0	$ 0	$ 4,929	$ 4,929

	December 31, 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	$ 621	$ 621
Non-working capital loans	0	0	3,889	3,889
Commercial real estate and multi-family
residential loans:
Owner occupied loans	0	0	1,195	1,195
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	62	62
Total impaired loans	$ 0	$ 0	$ 5,767	$ 5,767
Other real estate owned	0	0	75	75
Total assets	$ 0	$ 0	$ 5,842	$ 5,842

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, 2017:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$ 3,511	Collateral based	Discount to reflect	38%	(23% - 100%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate and	1,142	Collateral based	Discount to reflect	38%	(3% - 59%)
multi-family residential loans		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	201	Collateral based	Discount to reflect	17%
		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, 2016:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$ 4,510	Collateral based	Discount to reflect	44%	(22% - 100%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	1,195	Collateral based	Discount to reflect	30%	(6% - 59%)
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	62	Collateral based	Discount to reflect	15%
		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, 2017
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$ 129,833	$ 127,698	$ 2,134	$ 0	$ 129,832
Securities available for sale	536,547	1,008	534,921	618	536,547
Real estate mortgages held for sale	4,456	0	4,533	0	4,533
Loans, net	3,589,755	0	0	3,559,890	3,559,890
Federal Home Loan Bank stock	10,352	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	13,123	8	2,564	10,551	13,123
Financial Liabilities:
Certificates of deposit	(1,392,089)	0	(1,398,348)	0	(1,398,348)
All other deposits	(2,481,901)	(2,481,901)	0	0	(2,481,901)
Securities sold under agreements
to repurchase	(63,888)	0	(63,888)	0	(63,888)
Other short-term borrowings	0	0	0	0	0
Long-term borrowings	(30)	0	(31)	0	(31)
Subordinated debentures	(30,928)	0	0	(31,202)	(31,202)
Standby letters of credit	(669)	0	0	(669)	(669)
Accrued interest payable	(5,439)	(134)	(5,301)	(4)	(5,439)


	December 31, 2016
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1	Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$ 167,280	$ 165,385	$ 1,899	$ 0	$ 167,284
Securities available for sale	504,191	1,003	502,518	670	504,191
Real estate mortgages held for sale	5,915	0	5,994	0	5,994
Loans, net	3,427,209	0	0	3,411,121	3,411,121
Federal Home Loan Bank stock	8,102	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	11,687	3	2,688	8,996	11,687
Financial Liabilities:
Certificates of deposit	(1,163,818)	0	(1,169,905)	0	(1,169,905)
All other deposits	(2,414,094)	(2,414,094)	0	0	(2,414,094)
Securities sold under agreements
to repurchase	(50,045)	0	(50,045)	0	(50,045)
Other short-term borrowings	(180,000)	0	(180,005)	0	(180,005)
Long-term borrowings	(32)	0	(34)	0	(34)
Subordinated debentures	(30,928)	0	0	(31,194)	(31,194)
Standby letters of credit	(323)	0	0	(323)	(323)
Accrued interest payable	(5,676)	(93)	(5,580)	(3)	(5,676)