FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2012

FAIR VALUE

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

			Fair Value Measurements at December 31, 2012 Using:
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for-sale
U. S. government agency	$	1,638			$	1,638
States and municipal		337,939				322,469		15,470
Mortgage-backed securities — Residential — Government Sponsored Entity		227,055				227,055
Collateralized mortgage obligations — Government Sponsored Entity		327,223				327,223
Equity securities		4,939		4,689				250
Other securities		3,547				990		2,557
Total investment securities available-for-sale	$	902,341	$	4,689	$	879,375	$	18,277
Mortgage banking derivative	$	2,200			$	2,200

			Fair Value Measurements at December 31, 2011 Using:
(Dollars in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets
Investment securities available-for-sale States and municipal	$	344,877			$	321,321	$	23,556
Mortgage-backed securities — residential — Government Sponsored Entity		271,504				271,504
Collateralized mortgage obligations — Government Sponsored Entity		250,767				250,767
Equity securities		5,410		4,660				750
Other securities		3,532				945		2,587
Total investment securities available-for-sale	$	876,090	$	4,660	$	844,537	$	26,893
Mortgage banking derivative	$	460			$	460

Schedule of reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

States and municipal	2012			2011
Beginning balance, January 1	$	23,556		$	—
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities		361			—
Included in other comprehensive income		(51	)		—
Sales		(7,268	)		—
Settlements		(832	)		—
Purchases		—			1,975
Transfers into Level 2		(296	)		—
Transfers into Level 3		—			21,581
Ending balance, December 31	$	15,470		$	23,556

Equity securities	2012			2011
Beginning balance, January 1	$	750		$	750
Total gains or losses (realized / unrealized)
Included in earnings
Other than temporary impairment		(500	)		—
Ending balance, December 31	$	250		$	750

Other securities	2012			2011
Beginning balance, January 1	$	2,587		$	1,870
Total gains or losses (realized / unrealized)
Included in earnings
Included in other comprehensive income		(30	)		—
Purchases		—			2,587
Transfers in and / or out of Level 3		—			(1,870	)
Ending balance, December 31	$	2,557		$	2,587

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

			Fair Value Measurements at December 31, 2012 Using
	December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans
Commercial and industrial	$	155			$	155
Farm real estate		480				480
Construction and development		404				404
Other		4,936				4,936
Total impaired loans	$	5,975			$	5,975
Impaired servicing rights	$	2,942			$	2,942
Other real estate owned/assets held for sale Construction and development	$	1,764			$	1,764
Other		803				803
1-4 Family		95				95
	$	2,662			$	2,662

			Fair Value Measurements at December 31, 2011 Using:
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Assets:
Impaired loans
Commercial and industrial	$	519			$	519
Agricultural		43				43
Farm		292				292
Construction and development		763				763
Other		6,125				6,125
Total impaired loans	$	7,742			$	7,742
Impaired servicing rights	$	4,000			$	4,000
Other real estate owned/assets held for sale
Construction and development	$	1,538			$	1,538
Other commercial real estate		1,830				1,830
	$	3,368			$	3,368

Schedule of breakdown of impaired loans by portfolio class

	Gross Balance		Valuation Allowance		Net
Commercial and industrial	$	305	$	150	$	155
Farm		922		442		480
Construction and development		644		240		404
Other		7,280		2,344		4,936
Ending Balance	$	9,151	$	3,176	$	5,975

Schedule of properties by portfolio class, net

	Gross Balance		Valuation Allowance		Net
Construction and development	$	3,222	$	1,458	$	1,764
Other commercial real estate		993		190		803
1-4 Family		119		24		95
Ending Balance	$	4,334	$	1,672	$	2,662

Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis

	Fair Value (in thousands)		Valuation Technique(s)	Unobservable Input(s)	Range
Impaired Loans:
Commercial & industrial	$	155	Liquidation value of inventory	Management adjustment	15% 15% Avg
Farm real estate		480	Sales comparison approach	Adjustment for differences between comparable sales	35-40% 37% Avg
Construction and development		404	Sales comparison approach	Adjustment for differences between comparable sales	10%-50% 41% Avg
Other	$	4,936 5,975	Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-60% 32% Avg
Other real estate owned:
Construction and development	$	1,764	Sales comparison approach	Adjustment for differences between comparable sales.	10%-26% 15% Avg
Other and 1-4 family	$	898 2,662	Sales comparison approach	Adjustment for differences between comparable sales.	2%-35% 17% Avg
Mortgage servicing rights	$	2,942	Cash flow analysis	Discount rate	10%

Schedule of carrying amounts and estimated fair values of financial instruments

December 31, 2012	Carrying Amount			Level 1			Level 2			Level 3		Total
Assets
Cash and cash equivalents	$	65,650		$	58,100		$	7,550				$	65,650
Loans including loans held for sale, net		1,564,433						17,025			1,538,489		1,555,514
Restricted stock		15,639											N/A
Interest receivable		9,827						4,621			5,206		9,827
Liabilities
Deposits		(2,185,054	)		(405,167	)		(1,780,511	)				(2,185,678	)
Other borrowings		(34,519	)					(34,519	)				(34,519	)
FHLB advances		(141,052	)					(152,018	)				(152,018	)
Interest payable		(1,195	)					(1,195	)				(1,195	)
Subordinated debentures		(50,418	)					(31,763	)				(31,763	)

December 31, 2011	Carrying Amount			Fair Value
Assets
Cash and cash equivalents	$	109,148		$	109,148
Loans including loans held for sale, net		1,503,368			1,507,310
Restricted stock		15,856			N/A
Interest receivable		10,814			10,814
Liabilities
Deposits		(2,159,900	)		(2,161,888	)
Other borrowings		(25,789	)		(25,789	)
FHLB advances		(151,427	)		(164,209	)
Interest payable		(1,891	)		(1,891	)
Subordinated debentures		(50,267	)		(26,645	)