FAIR VALUE MEASUREMENTS

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at December 31, 2015 and 2014. There were no transfers between Level 1 and Level 2 for items measured at fair value on a recurring basis during the periods presented.



	December 31, 2015
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Securities available-for-sale:
U.S. Treasury securities	$	—	$	14,941	$	—	$	14,941
Obligations of U.S. government corporations and agencies	—		263,303		—		263,303
Collateralized mortgage obligations of U.S. government corporations and agencies	—		128,835		—		128,835
Residential mortgage-backed securities of U.S. government corporations and agencies	—		40,125		—		40,125
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		69,204		—		69,204
Obligations of states and political subdivisions	—		134,886		—		134,886
Marketable equity securities	—		9,669		—		9,669
Total securities available-for-sale	—		660,963		—		660,963
Trading securities held in a Rabbi Trust	4,021		—		—		4,021
Total securities	4,021		660,963		—		664,984
Derivative financial assets:
Interest rate swaps	—		11,295		—		11,295
Interest rate lock commitments	—		261		—		261
Total Assets	$	4,021	$	672,519	$	—	$	676,540
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	11,276	$	—	$	11,276
Forward sale contracts	—		5		—		5
Total Liabilities	$	—	$	11,281	$	—	$	11,281



	December 31, 2014
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Securities available-for-sale:
U.S. Treasury securities	$	—	$	14,880	$	—	$	14,880
Obligations of U.S. government corporations and agencies	—		269,285		—		269,285
Collateralized mortgage obligations of U.S. government corporations and agencies	—		118,006		—		118,006
Residential mortgage-backed securities of U.S. government corporations and agencies	—		46,668		—		46,668
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		39,673		—		39,673
Obligations of states and political subdivisions	—		142,702		—		142,702
Marketable equity securities	178		8,881		—		9,059
Total securities available-for-sale	178		640,095		—		640,273
Trading securities held in a Rabbi Trust	3,456		—		—		3,456
Total securities	3,634		640,095		—		643,729
Derivative financial assets:
Interest rate swaps	—		12,981		—		12,981
Interest rate lock commitments	—		235		—		235
Total Assets	$	3,634	$	653,311	$	—	$	656,945
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	12,953	$	—	$	12,953
Forward Sale Contracts	—		57				57
Total Liabilities	$	—	$	13,010	$	—	$	13,010

We classify financial instruments as Level 3 when valuation models are used because significant inputs are not observable in the market.

We may be required to measure certain assets and liabilities on a nonrecurring basis. Nonrecurring assets are recorded at the lower of cost or fair value in our financial statements. There were no liabilities measured at fair value on a nonrecurring basis at December 31, 2015 and 2014. The following table presents our assets that are measured at fair value on a nonrecurring basis by the fair value hierarchy level as of the dates presented:



	December 31, 2015								December 31, 2014
(dollars in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
ASSETS⁽¹⁾
Impaired loans	—		—		9,373		9,373		—		—		12,916		12,916
Other real estate owned	—		—		158		158		—		—		117		117
Mortgage servicing rights	—		—		3,396		3,396		—		—		2,934		2,934
Total Assets	$	—	$	—	$	12,927	$	12,927	$	—	$	—	$	15,967	$	15,967


(1)	This table presents only the nonrecurring items that are recorded at fair value in our financial statements.

The carrying values and fair values of our financial instruments at December 31, 2015 and 2014 are presented in the following tables:



			Fair Value Measurements at December 31, 2015
(dollars in thousands)	Carrying Value⁽¹⁾		Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	99,399	$	99,399	$	99,399	$	—	$	—
Securities available-for-sale	660,963		660,963		—		660,963		—
Loans held for sale	35,321		35,500		—		—		35,500
Portfolio loans, net of unearned income	5,027,612		5,001,004		—		—		5,001,004
Bank owned life insurance	70,175		70,175		—		70,175		—
FHLB and other restricted stock	23,032		23,032		—		—		23,032
Trading securities held in a Rabbi Trust	4,021		4,021		4,021		—		—
Mortgage servicing rights	3,237		3,396		—		—		3,396
Interest rate swaps	11,295		11,295		—		11,295		—
Interest rate lock commitments	261		261		—		261		—
LIABILITIES
Deposits	$	4,876,611	$	4,881,718	$	—	$	—	$	4,881,718
Securities sold under repurchase agreements	62,086		62,086		—		—		62,086
Short-term borrowings	356,000		356,000		—		—		356,000
Long-term borrowings	117,043		117,859		—		—		117,859
Junior subordinated debt securities	45,619		45,619		—		—		45,619
Interest rate swaps	11,276		11,276		—		11,276		—
Forward sale contracts	5		5		—		5		—


(1)	As reported in the Consolidated Balance Sheets



			Fair Value Measurements at December 31, 2014
(dollars in thousands)	Carrying Value⁽¹⁾		Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	109,580	$	109,580	$	109,580	$	—	$	—
Securities available-for-sale	640,273		640,273		178		640,095		—
Loans held for sale	2,970		2,991		—		—		2,991
Portfolio loans, net of unearned income	3,868,746		3,827,634		—		—		3,827,634
Bank owned life insurance	62,252		62,252		—		62,252		—
FHLB and other restricted stock	15,135		15,135		—		—		15,135
Trading securities held in a Rabbi Trust	3,456		3,456		3,456		—		—
Mortgage servicing rights	2,817		2,934		—		—		2,934
Interest rate swaps	12,981		12,981		—		12,981		—
Interest rate lock commitments	235		235		—		235		—
LIABILITIES
Deposits	$	3,908,842	$	3,910,342	$	—	$	—	$	3,910,342
Securities sold under repurchase agreements	30,605		30,605		—		—		30,605
Short-term borrowings	290,000		290,000		—		—		290,000
Long-term borrowings	19,442		20,462		—		—		20,462
Junior subordinated debt securities	45,619		45,619		—		—		45,619
Interest rate swaps	12,953		12,953		—		12,953		—
Forward sale contracts	57		57		—		57		—


(1)	As reported in the Consolidated Balance Sheets