FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2014

FAIR VALUE.

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

			Fair Value Measurements at December 31, 2014 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
U. S. government agency	$	661			$	661
States and municipal		334,298				321,488	$	12,810
Mortgage-backed securities — residential — Government Sponsored Entity		182,172				182,172
Collateralized mortgage obligations — Government Sponsored Entity		343,437				343,437
Equity securities		4,689	$	4,689
Other securities		2,503						2,503
Total investment securities available-for-sale	$	867,760	$	4,689	$	847,758	$	15,313
Mortgage banking derivatives	$	975			$	975

			Fair Value Measurements at December 31, 2013 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
U. S. government agency	$	798			$	798
States and municipal		331,112				316,692	$	14,420
Mortgage-backed securities — residential — Government Sponsored Entity		185,429				185,429
Collateralized mortgage obligations — Government Sponsored Entity		365,309				365,309
Equity securities		4,939	$	4,689				250
Other securities		3,519				993		2,526
Total investment securities available-for-sale	$	891,106	$	4,689	$	869,221	$	17,196
Mortgage banking derivatives	$	525			$	525

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	2014			2013
Beginning balance, January 1	$	14,420		$	15,470
Total gains or losses (realized / unrealized)
Included in other comprehensive income		5			(99	)
Settlements		(1,615	)		(951	)
Ending balance, December 31	$	12,810		$	14,420

Equity securities	2014			2013
Beginning balance, January 1	$	250		$	250
Total gains or losses (realized / unrealized)
Settlements		(250	)		—
Ending balance, December 31	$	—		$	250

Other securities	2014			2013
Beginning balance, January 1	$	2,526		$	2,557
Total gains or losses (realized / unrealized)
Included in other comprehensive income		(23	)		(31	)
Ending balance, December 31	$	2,503		$	2,526

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

			Fair Value Measurements at December 31, 2014 Using:
	December 31, 2014		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	$	—			$	—
Agricultural		—				—
Farm real estate		55				55
Other real estate		1,235				1,235
Total impaired loans	$	1,290			$	1,290
Impaired servicing rights	$	1,854			$	1,854
Other real estate owned
Construction and development	$	21			$	21
Other real estate		291				291
1-4 Family		150				150
	$	462			$	462

			Fair Value Measurements at December 31, 2013 Using:
	December 31, 2013		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	$	76			$	76
Farm real estate		375				375
Other real estate		5,112				5,112
1-4 Family		226				226
Total impaired loans	$	5,789			$	5,789
Impaired servicing rights	$	1,794			$	1,794
Other real estate owned
Construction and development	$	522			$	522
Other real estate		425				425
Home equity		67				67
	$	1,014			$	1,014

Schedule of breakdown of impaired loans by portfolio class

	Recorded Investment		Valuation Allowance		Net
Commercial and industrial	$	12	$	12	$	—
Agricultural		150		150		—
Farm real estate		76		21		55
Other real estate		1,818		583		1,235
Ending Balance	$	2,056	$	766	$	1,290

Schedule of properties by portfolio class, net

A breakdown of these properties by portfolio class at December 31, 2014 is as follows:

	Gross Balance		Valuation Allowance		Net
Construction and development	$	30	$	9	$	21
Other real estate		466		175		291
1-4 Family		201		51		150
Ending Balance	$	697	$	235	$	462

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

December 31, 2014	Fair Value (in thousands)		Valuation Technique(s)	Unobservable Input(s)	Range/ Average
Impaired Loans:
Farm real estate	$	55	Sales comparison approach	Adjustment for differences between comparable sales	40% 40% Avg
Other		1,235	Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property	20%-45% 36% Avg
	$	1,290
Other real estate owned:
Construction and development	$	21	Sales comparison approach	Adjustment for differences between comparable sales.	15% 15% Avg
Other and 1-4 Family		441	Sales comparison approach	Adjustment for differences between comparable sales.	10%-19% 11% Avg
	$	462
Mortgage servicing rights	$	1,854	Cash flow analysis	Discount rate	10%

December 31, 2013	Fair Value (in thousands)	Valuation Technique(s)	Unobservable Input(s)	Range/ Average
Impaired Loans:
Commercial & industrial	$     76	Sales comparison approach	Adjustment for differences between comparable sales	0%-10% 10% Avg
Farm real estate	375	Sales comparison approach	Adjustment for differences between comparable sales	40% 40% Avg
Other/1-4 Family	5,338 $5,789	Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-40% 25% Avg
Other real estate owned:
Construction and development	$   522	Sales comparison approach	Adjustment for differences between comparable sales.	10% 10% Avg
Other and Home equity	492 $1,014	Sales comparison approach	Adjustment for differences between comparable sales.	10%-15% 10% Avg
Mortgage servicing rights	$1,794	Cash flow analysis	Discount rate	10%

Schedule of carrying amounts and estimated fair values of financial instruments

December 31, 2014	Carrying Amount			Level 1			Level 2			Level 3		Total
Assets
Cash and cash equivalents	$	62,485		$	60,662		$	1,823				$	62,485
Interest bearing time deposits		1,915						1,915					1,915
Loans including loans held for sale, net		1,941,507						8,514		$	1,946,843		1,955,357
FHLB and other stock		13,854											N/A
Interest receivable		10,064						4,459			5,605		10,064
Liabilities
Deposits		(2,468,321	)		(513,393	)		(1,952,833	)				(2,466,226	)
Other borrowings		(26,349	)					(26,349	)				(26,349	)
FHLB advances		(214,413	)					(219,050	)				(219,050	)
Interest payable		(599	)					(599	)				(599	)
Subordinated debentures		(41,239	)					(24,212	)				(24,212	)

December 31, 2013	Carrying Amount			Level 1			Level 2			Level 3		Total
Assets
Cash and cash equivalents	$	61,320		$	55,826		$	5,494				$	61,320
Loans including loans held for sale, net		1,644,527						6,158		$	1,657,199		1,663,357
FHLB and other stock		15,629											N/A
Interest receivable		9,706						4,573			5,133		9,706
Liabilities
Deposits		(2,200,628	)		(436,550	)		(1,764,719	)				(2,201,269	)
Other borrowings		(38,594	)					(38,594	)				(38,594	)
FHLB advances		(247,858	)					(252,402	)				(252,402	)
Interest payable		(799	)					(799	)				(799	)
Subordinated debentures		(46,394	)					(23,130	)				(23,130	)