FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2018

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 June 30, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	June 30, 2018
	Level 1		Level 2			Level 3			Total
(in thousands)	Inputs		Inputs			Inputs			Fair Value
Available for sale securities:
Obligations of US Government-sponsored enterprises	$	—	$	3,988		$	—		$	3,988
Mortgage-backed securities:
US Government-sponsored enterprises	—		446,850			—			446,850
US Government agency	—		86,254			—			86,254
Private label	—		564			—			564
Obligations of states and political subdivisions thereof	—		134,386			—			134,386
Corporate bonds	—		38,105			—			38,105
Derivative assets	—		1,944			8			1,952
Derivative liabilities	—		(625		)	(74		)	(699		)



	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		)

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 for the three months ended June 30, 2018.



	Assets (Liabilities)
	Interest Rate Lock			Forward
(in thousands)	Commitments			Commitments
Three Months Ended June 30, 2018
December 31, 2017	$	7		$	(51	)
Realized gain recognized in non-interest income	1			(23		)
June 30, 2018	$	8		$	(74	)

Six Months Ended June 30, 2018
December 31, 2017	$	(1	)	$	(221	)
Realized (loss) recognized in non-interest income	9			147
June 30, 2018	$	8		$	(74	)

Summary of Applicable Non-Recurring Fair Value Measurements

The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.



	June 30, 2018		December 31, 2017		Three Months Ended June 30, 2018			Six Months Ended June 30, 2018		Fair Value Measurement Date as of June 30, 2018
(in thousands)	Level 3 Inputs		Level 3 Inputs		Total Gains (Losses)			Total Gains (Losses)		Level 3 Inputs
Assets
Impaired loans	$	16,652	$	10,793	$	(1,525	)	(5,859	)	June 2018
Capitalized servicing rights	4,978		4,158							June 2018
Other real estate owned	129		122							Mar 2018 - June 2018
Total	$	21,759	$	15,073	(1,525		)	(5,859	)

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 June 30, 2018			Valuation Techniques	Unobservable Inputs	Significant Unobservable Input Value
Assets (Liabilities)
Interest Rate Lock Commitment	$	8		Historical trend	Closing Ratio	90		%
				Pricing Model	Origination Costs, per loan	$	1.7

Forward Commitments	(74		)	Quoted prices for similar loans in active markets.	Freddie Mac pricing system	Pair-off contract price
Total	$	(66	)

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

Fair Value

Range (Weighted Average)^(a)

(in thousands, except ratios)

June 30, 2018

Valuation Techniques

Unobservable Inputs

Assets

Impaired loans

13,696

Fair value of collateral -appraised value

Loss severity

0% to 55%

Appraised value

$65 to $6,915

Impaired loans

2,956

Discount cash flow

Discount rate

2.88% to 9.50%

Cash flows

$37 to $1,162

Capitalized servicing rights

4,978

Discounted cash flow

Constant prepayment rate (CPR)

8.85

Discount rate

10.09

Other real estate owned

129

Fair value of collateral less selling costs

Appraised value

$142

Selling Costs

Total

21,759


(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

Range

(in thousands, except ratios)

December 31, 2017

Valuation Techniques

Unobservable Inputs

(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

Discount 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 less selling costs

Appraised value

$136

Selling Costs

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.

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

The estimated fair values, and related carrying amounts, of the Company’s financial instruments follow. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.



	June 30, 2018
(in thousands)	Carrying Amount			Fair Value			Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	61,393		$	61,393		$	61,393	$	—	$	—
Securities available for sale	710,147			710,147			—		710,147		—
FHLB stock	38,712			38,712			—		38,712		—
Net loans	2,471,976			2,406,857			—		—		2,406,857
Accrued interest receivable	3,498			3,498			—		3,498		—
Cash surrender value of bank-owned life insurance policies	58,811			58,811			—		58,811		—
Derivative assets	1,952			1,952			—		1,944		8

Financial Liabilities
Total deposits	$	2,374,721		$	2,291,030		$	—	$	2,291,030	$	—
Securities sold under agreements to repurchase	34,740			34,709			—		34,709		—
FHLB advances	701,184			698,844			—		698,844		—
Subordinated borrowings	5,000			5,000			—		5,000		—
Junior subordinated borrowings	38,003			36,781			—		36,781		—
Derivative liabilities	(699		)	(699		)	—		—		(699		)



	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 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		—
FHLB 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		)