FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2012

FAIR VALUE

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

			Fair Value Measurements at June 30, 2012 Using:
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
(Dollars in thousands)	Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Investment Securities available-for sale
U.S. government agency	$	2,158			$	2,158
States and municipals	326,141				310,120		16,021
Mortgage-backed securities — residential —Government Sponsored Entity	273,115				273,115
Collateralized mortgage obligations — Government Sponsored Entity	286,143				286,143
Equity securities	4,938		4,688				250
Other securities	3,542				970		2,572
Total securities available-for-sale	$	896,037	$	4,688	$	872,506	$	18,843

			Fair Value Measurements at December 31, 2011 Using:
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
(Dollars in thousands)	Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Investment Securities available-for sale
States and municipals	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 securities available-for-sale	$	876,090	$	4,660	$	844,537	$	26,893

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)

Three months ended June 30

States and municipal	2012			2011
Beginning balance, April 1	$	16,267		$	—
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities
Included in other comprehensive income	(10		)
Purchases
Sales
Issuances
Settlements	(236		)
Transfers into Level 3				11,180
Transfers out of Level 3
Ending balance, June 30	$	16,021		$	11,180

Equity securities	2012		2011
Beginning balance, April 1	$	250	$	750
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities
Included in other comprehensive income
Purchases
Issuances
Settlements
Transfers into Level 3
Transfers out of Level 3
Ending balance, June 30	$	250	$	750

Other securities	2012			2011
Beginning balance, April 1	$	2,579		$	—
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities
Included in other comprehensive income	(7		)	—
Purchases
Issuances
Settlements
Transfers into Level 3
Transfers out of Level 3
Ending balance, June 30	$	2,572		$	—

Six months ended June 30

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	(18		)
Purchases
Sales	(7,268		)
Issuances
Settlements	(610		)
Transfers into Level 3				11,180
Transfers out of Level 3
Ending balance, June 30	$	16,021		$	11,180

Equity securities	2012			2011
Beginning balance, January 1	$	750		$	750
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities	(500		)
Included in other comprehensive income
Purchases
Issuances
Settlements
Transfers into Level 3
Transfers out of Level 3
Ending balance, June 30	$	250		$	750

Other securities	2012			2011
Beginning balance, January 1	$	2,587		$	1,870
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities
Included in other comprehensive income	(15		)	97
Purchases
Issuances
Settlements
Transfers into Level 3
Transfers out of Level 3				(1,967		)
Ending balance, June 30	$	2,572		$	—

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

			Fair Value Measurements at June 30, 2012 Using
	June 30, 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	$	213			$	213
Agricultural	—				—
Farm	337				337
Construction and development	600				600
Other	7,902				7,902
Total impaired loans	$	9,052			$	9,052
Servicing rights	3,135				$	3,135
Other real estate owned/assets held for sale
Construction and development	$	1,891			$	1,891
Other commercial real estate	929				929
Total other real estate owned/assets held for sale	$	2,820			$	2,820

			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
Servicing rights	$	4,000			$	4,000
Other real estate owned/assets held for sale
Construction and development	$	1,880			$	1,880
Other commercial real estate	3,636				3,636
Total other real estate owned/assets held for sale	$	5,516			$	5,516

Schedule of loans by portfolio class, net

	Gross Balance		Valuation Allowance		Net
Commercial and industrial	$	292	$	79	$	213
Farm	461		124		337
Construction and development	1,206		606		600
Other commercial real estate	12,951		5,049		7,902
Ending Balance	$	14,910	$	5,858	$	9,052

Schedule of properties by portfolio class, net

	Gross Balance		Valuation Allowance		Net
Construction and development	$	3,874	$	1,983	$	1,891
Other commercial real estate	1,100		171		929
Ending Balance	$	4,974	$	2,154	$	2,820

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)		ValuationTechnique(s)	Unobservable Input(s)	Range
Impaired Loans:
Commercial & industrial	$	213	Liquidation value of inventory	Management adjustment	0%-8%
Farm real estate	337		Sales comparison approach	Adjustment for differences between comparable sales	0%-25%
Construction and development	600		Sales comparison approach	Adjustment for differences between comparable sales	0%-30%
Other commercial real estate	7,902		Sales comparison approach, income approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-40%
	$	9,052
Other real estate owned:
Construction and development	$	1,891	Sales comparison approach	Adjustment for differences between comparable sales.	0%-36%
Other real estate	929		Sales comparison approach	Adjustment for differences between comparable sales.	10%-18%
	$	2,820

Schedule of carrying amounts and estimated fair values of financial instruments

June 30, 1012	Carrying Amount			Level 1			Level 2			Level 3		Total
Assets:
Cash and cash equivalents	$	102,312		$	54,645		$	47,667				$	102,312
Loans including loans held for sale, net	1,510,047						11,234			1,496,198		1,507,432
Restricted stock	15,845											N/A
Interest receivable	10,187						4,786			5,401		10,187
Liabilities
Deposits	(2,185,096		)	(364,030		)	(1,823,453		)			(2,187,483		)
Other borrowings	(24,428		)				(24,428		)			(24,428		)
FHLB advances	(146,150		)				(158,935		)			(158,935		)
Interest payable	(1,517		)				(1,517		)			(1,517		)
Subordinated debentures	(50,342		)							(31,659	)	(31,659		)

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		)