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FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2013

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

			Fair Value Measurements at September 30, 2013 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	$	925			$	925
States and municipals	334,792				320,322		$	14,470
Mortgage-backed securities — residential —Government Sponsored Entity	195,402				195,402
Collateralized mortgage obligations — Government Sponsored Entity	353,605				353,605
Equity securities	4,939		$	4,689			250
Other securities	3,524				990		2,534
Total investment securities available-for-sale	$	893,187	$	4,689	$	871,244	$	17,254

Mortgage banking derivative	$	600			$	600

			Fair Value Measurements at December 31, 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	$	1,638			$	1,638
States and municipals	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

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	2013			2012
Beginning balance, July 1	$	14,688		$	16,021
Total gains or losses (realized / unrealized)
Included in other comprehensive income	(12		)	(15		)
Transfer into Level 2	—			(296		)
Settlements	(206		)	(186		)
Ending balance, Septmeber 30	$	14,470		$	15,524

Equity securities	2013		2012
Beginning balance, July 1	$	250	$	250
Total gains or losses (realized / unrealized)
Included in earnings
Other than temporary impairment			—
Ending balance, September 30	$	250	$	250

Other securities	2013			2012
Beginning balance, July 1	$	2,542		$	2,572
Total gains or losses (realized / unrealized)
Included in other comprehensive income	(8		)	(7		)
Ending balance, September 30	$	2,534		$	2,565

Nine Months Ended September 30:

States and municipal	2013			2012
Beginning balance, January 1	$	15,470		$	23,556
Total gains or losses (realized / unrealized)
Included in earnings
Gains/(losses) on securities	—			361
Included in other comprehensive income	(84		)	(33		)
Sales	—			(7,268		)
Transfer into Level 2	—			(296		)
Settlements	(916		)	(796		)
Ending balance,September 30	$	14,470		$	15,524

Equity securities	2013		2012
Beginning balance, January 1	$	250	$	750
Total gains or losses (realized / unrealized)
Included in earnings
Other than temporary impairment	—		(500		)
Ending balance, September 30	$	250	$	250

Other securities	2013			2012
Beginning balance, January 1	$	2,557		$	2,587
Total gains or losses (realized / unrealized)
Included in other comprehensive income	(23		)	(22		)
Ending balance, September 30	$	2,534		$	2,565

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

			Fair Value Measurements at September 30, 2013 Using
	September 30, 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	$	28			$	28
Farm	124				124
Construction and development	256				256
Other	6,218				6,218
1-4 Family	227				227
Total impaired loans	$	6,853			$	6,853
Impaired servicing rights	$	2,569			$	2,569
Other real estate owned/assets held for sale
Construction and development	$	591			$	591
Other	588				588
1-4 family	67				67
Total other real estate owned/assets held for sale	$	1,246			$	1,246

			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	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
Total other real estate owned/assets held for sale	$	2,662			$	2,662

Schedule of breakdown of impaired loans by portfolio class

	Gross Balance		Valuation Allowance		Net
Commercial and industrial	$	92	$	64	$	28
Farm	202		78		124
Construction and development	304		48		256
Other commercial real estate	7,309		1,091		6,218
1-4 Family	238		11		227
Ending Balance	$	8,145	$	1,292	$	6,853

Schedule of properties by portfolio class, net

	Gross Balance		Valuation Allowance		Net
Construction and development	$	743	$	152	$	591
Other commercial real estate	815		227		588
1-4 Family	82		15		67
Ending Balance	$	1,640	$	394	$	1,246

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

September 30, 2013	Fair Value (in thousands)		Valuation Technique(s)	Unobservable Input(s)	Range
Impaired Loans:
Commercial & industrial	$	28	Liquidation value of inventory	Management adjustment	0%-10% 10% Avg
Farm real estate	124		Sales comparison approach	Adjustment for differences between comparable sales	40% 40% Avg
Construction and development	256		Sales comparison approach	Adjustment for differences between comparable sales	0% 0% Avg
Other real estate	6,445		Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-40% 20% Avg
	$	6,853
Other real estate owned:
Construction and development	$	591	Sales comparison approach	Adjustment for differences between comparable sales.	10% 10% Avg
Other and 1-4 family	655		Sales comparison approach	Adjustment for differences between comparable sales.	10%-35% 19% Avg
	$	1,246

Mortgage servicing rights	$	2,569	Cash flow analysis	Discount rate	10%

December 31, 2012	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 real estate	4,936		Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property	0%-60% 32% Avg
	$	5,975
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		Sales comparison approach	Adjustment for differences between comparable sales.	2%-35% 17% Avg
	$	2,662

Mortgage servicing rights	$	2,942	Cash flow analysis	Discount rate	10%

Schedule of carrying amounts and estimated fair values of financial instruments

September 30, 2013	Carrying Amount			Level 1			Level 2			Level 3		Total
Financial assets:
Cash and cash equivalents	$	84,114		$	78,753		$	5,361				$	84,114
Loans including loans held for sale, net	1,582,176						5,888			$	1,597,411	1,603,299
Restricted stock	15,630											N/A
Interest receivable	9,591						4,396			5,195		9,591
Financial liabilities
Deposits	(2,168,274		)	(415,572		)	(1,749,746		)			(2,165,318		)
Other borrowings	(30,435		)				(30,435		)			(30,435		)
FHLB advances	(247,291		)				(252,506		)			(252,506		)
Interest payable	(810		)				(810		)			(810		)
Subordinated debentures	(50,518		)				(31,826		)			(31,826		)

December 31,2012	Carrying Amount			Level 1			Level 2			Level 3		Total
Financial assets:
Cash and cash equivalents	$	65,650		$	58,100		$	7,550				$	65,650
Loans including loans held for sale, net	1,532,247						17,025			$	1,538,489	1,555,514
Restricted stock	15,639											N/A
Interest receivable	9,827						4,621			5,206		9,827
Financial 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		)

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details