FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis Segregated by the Level of the Valuation Inputs Within the Fair Value Hierarchy Utilized to Measure Fair Value

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2017 and December 31, 2016, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	December 31, 2017
	Level 1		Level 2		Level 3			Total
(in thousands)	Inputs		Inputs		Inputs			Fair Value
Available for sale securities:
Obligations of US Government sponsored enterprises	$	—	$	6,972	$	—		$	6,972
Mortgage-backed securities:
US Government-sponsored enterprises	—		443,003		—			443,003
US Government agency	—		95,596		—			95,596
Private label	—		674		—			674
Obligations of states and political subdivisions thereof	—		140,200		—			140,200
Corporate bonds	—		30,797		—			30,797
Derivative assets	—		669		—			669
Derivative liabilities	—				(222		)	(222		)



	December 31, 2016
	Level 1		Level 2		Level 3		Total
(in thousands)	Inputs		Inputs		Inputs		Fair Value
Available for sale securities:
Obligations of US Government sponsored enterprises	$	—	$	—	$	—	$	—
Mortgage-backed securities:
US Government-sponsored enterprises	—		328,452		—		328,452
US Government agency	—		76,906		—		76,906
Private label	—		1,132		—		1,132
Obligations of states and political subdivisions thereof	—		122,366		—		122,366
Corporate bonds	—		—		—		—
Derivative assets	—		1,748		—		1,748
Derivative liabilities	—		—		—		—

Schedule of Changes in Level 3 Assets and Liabilities That Were Measured at Fair Value on a Recurring Basis

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis in 2017.



	Assets (Liabilities)
	Interest Rate Lock			Forward
(in thousands)	Commitments			Commitments
December 31, 2016	0			0
Acquisition of Lake Sunapee Bank, January 13, 2017	$	96		$	23
Goodwill adjustment Lake Sunapee Bank Merger	(75		)	(167		)
Realized (loss) recognized in non-interest income	(22		)	(77		)
December 31, 2017	$	(1	)	$	(221	)

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:



(in thousands, except ratios)	Fair Value December 31, 2017			Valuation Techniques	Unobservable Inputs	Significant Unobservable Input Value
Assets (Liabilities)
Interest Rate Lock Commitment	$	(1	)	Historical trend	Closing Ratio	90		%
				Pricing Model	Origination Costs, per loan	$	1.7

Forward Commitments	(221		)	Quoted prices for similar loans in active markets.	Freddie Mac pricing system	Pair-off contract price
Total	$	(222	)

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets as of December 31, 2017 and December 31, 2016 is as follows:

Fair Value

(in thousands, except ratios)

December 31, 2017

Valuation Techniques

Unobservable Inputs

Range (Weighted Average) (a)

Assets

Impaired loans

8,586

Fair value of collateral - appraised value

Loss severity

15.7% to 45.28%

Appraised value

$100 to $7,545

Impaired loans

2,207

Discounted cash flow

Discount rate

2.63% to 9.50%

Cash flows

$6 to $320

Capitalized servicing rights

4,158

Discounted cash flow

Constant prepayment rate (CPR)

10.97

Discount rate

10.10

Other real estate owned

122

Fair value of collateral

Appraised value

$122

Total

15,073


(a)	Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

Fair Value

(in thousands, except ratios)

December 31, 2016

Valuation Techniques

Unobservable Inputs

Range (Weighted Average) (a)

Assets

Impaired loans

3,268

Fair value of collateral - appraised value

Loss severity

0% to 51%

Appraised value

$0 to $1,732

Impaired loans

3,441

Discount cash flow

Discount rate

3.25% to 18.25%

Cash flows

$6 to $861

Capitalized servicing rights

Discounted cash flow

Constant prepayment rate (CPR)

17.09

Discount rate

7.55

Other real estate owned

Fair value of collateral

Appraised value

120

Total

6,804

______________________________________


(a)	Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

Summary of Applicable Non-Recurring Fair Value Measurements

The following is a summary of applicable non-recurring fair value measurements as of December 31, 2017 and December 31, 2016. There are no liabilities measured at fair value on a non-recurring basis.



	December 31, 2017		December 31, 2016		December 31, 2017			Fair Value Measurement Date as of December 31, 2017
(in thousands)	Level 3 Inputs		Level 3 Inputs		Total Gains (Losses)			Level 3 Inputs
Assets
Impaired loans	$	10,793	$	6,709	$	(231	)	December 2017
Capitalized servicing rights	4,158		5		—			December 2017
Other real estate owned	122		90		—			Jan 2017 - Mar 2017
Total	$	15,073	$	6,804	$	(231	)

Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments



	December 31, 2017
(in thousands)	Carrying Amount			Fair Value			Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	90,685		$	90,685		$	90,685	$	—	$	—
Securities available for sale	717,242			717,242			—		717,242		—
FHLB bank stock	38,105			38,105			—		38,105		—
Net loans	2,473,288			2,433,557			—		—		2,433,557
Accrued interest receivable	3,347			3,347			—		3,347		—
Cash surrender value of bank-owned life insurance policies	57,997			57,997			—		57,997		—
Derivative assets	669			669			—		669		—

Financial Liabilities
Total deposits	$	2,352,085		$	2,348,574		$	—	$	2,348,574	$	—
Securities sold under agreements to repurchase	40,706			40,680			—		40,680		—
Federal Home Loan Bank advances	745,982			744,006			—		744,006		—
Subordinated borrowings	38,033			38,033			—		38,033		—
Junior subordinated borrowings	5,000			3,782			—		3,782		—
Derivative liabilities	(222		)	(222		)	—		—		(222		)



	December 31, 2016
(in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	8,439	$	8,439	$	8,439	$	—	$	—
Securities available for sale	528,856		528,856		—		528,856		—
FHLB bank stock	25,331		25,331		—		25,331		—
Net loans	1,118,645		1,100,601		—		—		1,100,601
Accrued interest receivable	6,051		6,051		—		6,051		—
Cash surrender value of bank-owned life insurance policies	24,450		24,450		—		24,450		—
Derivative assets	1,748		1,748		—		1,748		—

Financial Liabilities
Total deposits	$	1,050,300	$	1,048,932	$	—	$	1,048,932	$	—
Securities sold under agreements to repurchase	21,780		21,773		—		21,773		—
Federal Home Loan Bank advances	509,816		509,793		—		509,793		—
Subordinated borrowings	—		—		—		—		—
Junior subordinated borrowings	5,000		3,560		—		3,560		—
Derivative liabilities	—		—		—		—		—