FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of assets and liabilities measured at fair value on a recurring basis

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented.



(in thousands)			Fair Value Measurements Using
Measured at Fair Value on a Recurring Basis:	Total		Level 1		Level 2		Level 3
December 31, 2018
U.S. government agency securities	$	21,649	$	—	$	21,649	$	—
State, county and municipals	160,526		—		160,460		66
Mortgage-backed securities	131,644		—		131,644		—
Corporate debt securities	86,325		—		77,901		8,424
Securities AFS	$	400,144	$	—	$	391,654	$	8,490
Other investments (equity securities) *	$	2,650	$	2,650	$	—	$	—
December 31, 2017
U.S. government agency securities	$	26,209	$	—	$	26,209	$	—
State, county and municipals	184,044		—		183,386		658
Mortgage-backed securities	155,532		—		155,529		3
Corporate debt securities	36,797		—		28,307		8,490
Equity securities *	2,571		2,571		—		—
Securities AFS	$	405,153	$	2,571	$	393,431	$	9,151

*Effective January 1, 2018, the Company adopted ASU 2016-01, which requires equity securities with readily determinable fair values to be measured at fair value with changes in the fair value recognized through net income. As a result, the approximately $2.7 million current fair value of equity securities is now reflected within other investments on the consolidated balance sheets instead of securities AFS at December 31, 2018. Prior periods have not been restated for the impact of this accounting change. See Note 1 for additional information on this new accounting standard and see Note 3 additional information on the impact to securities AFS.

Schedule of changes in Level 3 assets measured at fair value on a recurring basis

The following table presents the changes in Level 3 securities AFS measured at fair value on a recurring basis.



(in thousands)	Years Ended
Level 3 Fair Value Measurements:	December 31, 2018			December 31, 2017
Balance at beginning of year	$	9,151		$	9,108
Acquired balances	—			189
Paydowns/Sales/Settlements	(661		)	(146		)
Balance at end of year	$	8,490		$	9,151

Schedule of assets measured at fair value on a nonrecurring basis

The following table presents the Company’s assets measured at fair value on a nonrecurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall.



(in thousands)			Fair Value Measurements Using
Measured at Fair Value on a Nonrecurring Basis:	Total		Level 1		Level 2		Level 3
December 31, 2018
Impaired loans	$	9,939	$	—	$	—	$	9,939
OREO	420		—		—		420
MSR asset	6,347		—		—		6,347
December 31, 2017
Impaired loans	$	17,058	$	—	$	—	$	17,058
OREO	1,294		—		—		1,294
MSR asset	4,097		—		—		4,097

Schedule of estimated fair values of financial instruments

The carrying amounts and estimated fair values of the Company's financial instruments are shown below.



December 31, 2018
(in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	249,526	$	249,526	$	249,526	$	—	$	—
Certificates of deposit in other banks	993		993		—		993		—
Securities AFS	400,144		400,144		—		391,654		8,490
Other investments	17,997		17,997		2,650		13,189		2,158
Loans held for sale	1,639		1,662		—		1,662		—
Loans, net	2,153,028		2,139,322		—		—		2,139,322
BOLI	66,310		66,310		66,310		—		—
MSR asset	3,749		6,347		—		—		6,347
Financial liabilities:
Deposits	$	2,614,138	$	2,614,995	$	—	$	—	$	2,614,995
Long-term borrowings	77,305		75,923		—		34,907		41,016



December 31, 2017
(in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	154,933	$	154,933	$	154,933	$	—	$	—
Certificates of deposit in other banks	1,746		1,746		—		1,746		—
Securities AFS	405,153		405,153		2,571		393,431		9,151
Other investments	14,837		14,837		—		13,142		1,695
Loans held for sale	4,666		4,750		—		4,750		—
Loans, net	2,075,272		2,068,382		—		—		2,068,382
BOLI	64,453		64,453		64,453		—		—
MSR asset	3,187		4,097		—		—		4,097
Financial liabilities:
Deposits	$	2,471,064	$	2,469,456	$	—	$	—	$	2,469,456
Long-term borrowings	78,046		77,029		—		36,510		40,519