FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2012

FAIR VALUE

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

	Fair Value Measurements at September 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	$	1,884			$	1,884
States and municipals	332,589				317,065		15,524
Mortgage-backed securities — residential —Government Sponsored Entity	235,598				235,598
Collateralized mortgage obligations — Government Sponsored Entity	323,613				323,613
Equity securities	4,939		4,689				250
Other securities	3,555				990		2,565
Total securities available-for-sale	$	902,178	$	4,689	$	879,150	$	18,339

	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 September 30

States and municipal	2012			2011
Beginning balance, July 1	$	16,021		$	11,180
Total gains or losses (realized / unrealized)
Included in earnings
Included in other comprehensive income	(15		)	—
Transfers into Level 2	(296		)	—
Settlements	(186		)	(230		)
Ending balance, September 30	$	15,524		$	10,950

Equity securities	2012		2011
Beginning balance, July 1	$	250	$	750
Total gains or losses (realized / unrealized)
Included in earnings
Ending balance, September 30	$	250	$	750

Other securities	2012			2011
Beginning balance, July 1	$	2,572		$	—
Total gains or losses (realized / unrealized)
Included in earnings
Included in other comprehensive income	(7		)	—
Ending balance, September 30	$	2,565		$	—

Nine months ended September 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	(33		)	—
Sales	(7,268		)	—
Settlements	(796		)	(230		)
Transfers into Level 2	(296		)	—
Transfers into Level 3	—			11,180
Ending balance, September 30	$	15,524		$	10,950

Equity securities	2012			2011
Beginning balance, January 1	$	750		$	750
Total gains or losses (realized / unrealized)
Included in earnings
Gains (losses) on securities	(500		)	—
Ending balance, September 30	$	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	(22		)	97
Transfer out of Level 3	—			(1,967		)
Ending balance, September 30	$	2,565		$	—

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

			Fair Value Measurements at September 30, 2012 Using
	September 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	$	1,194			$	1,194
Agricultural	—				—
Farm	315				315
Construction and development	1,096				1,096
Other	7,457				7,457
Total impaired loans	$	10,062			$	10,062
Servicing rights	3,630				$	3,630
Other real estate owned/assets held for sale
Construction and development	$	2,897			$	2,897
Other commercial real estate	953				953
1-4 Family	172				172
Total other real estate owned/assets held for sale	$	4,022			$	4,022

			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	$	3,011	$	1,817	$	1,194
Farm	461		146		315
Construction and development	1,764		668		1,096
Other commercial real estate	10,766		3,309		7,457
Ending Balance	$	16,002	$	5,940	$	10,062

Schedule of properties by portfolio class, net

	Gross Balance		Valuation Allowance		Net
Construction and development	$	5,156	$	2,259	$	2,897
Other commercial real estate	1,113		160		953
1-4 Family	200		28		172
Ending Balance	$	6,469	$	2,447	$	4,022

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	$	1,194	Liquidation value of inventory	Management adjustment	25%-100% 35% Avg
Farm real estate	315		Sales comparison approach	Adjustment for differences between comparable sales	30% 30% Avg
Construction and development	1,096		Sales comparison approach	Adjustment for differences between comparable sales	0%-60% 26% Avg
Other commercial real estate	7,457		Sales comparison approach, income approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-50% 32% Avg
	$	10,062
Other real estate owned:
Construction and development	$	2,897	Sales comparison approach	Adjustment for differences between comparable sales.	0%-36% 24% Avg
Other real estate	1,125		Sales comparison approach	Adjustment for differences between comparable sales.	10%-18% 15% Avg
	$	4,022

Schedule of carrying amounts and estimated fair values of financial instruments

September 30, 2012	Carrying Amount			Level 1			Level 2			Level 3		Total
Assets:
Cash and cash equivalents	$	72,417		$	65,772		$	6,645				$	72,417
Loans including loans held for sale, net	1,545,392						23,879			1,529,798		1,553,677
Restricted stock	15,642											N/A
Interest receivable	10,213						4,549			5,664		10,213
Liabilities
Deposits	(2,083,018		)	(350,790		)	(1,734,326		)			(2,085,116		)
Other borrowings	(47,733		)				(24,428		)			(24,428		)
FHLB advances	(201,119		)				(212,728		)			(212,728		)
Interest payable	(1,229		)				(1,229		)			(1,229		)
Subordinated debentures	(50,380		)							(31,683	)	(31,683		)

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		)