FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2016

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


			Fair Value Measurements at June 30, 2016 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other 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	$	462	$	—	$	462	$	—
States and municipal		360,571		—		350,141		10,430
Mortgage-backed securities — residential — Government Sponsored Entity		450,362		—		450,362		—
Collateralized mortgage obligations — Government Sponsored Entity		209,714		—		209,714		—
Equity securities		4,670		4,670		—		—
Other securities		6,601		—		—		6,601
Total investment securities available-for-sale	$	1,032,380	$	4,670	$	1,010,679	$	17,031

Mortgage banking derivatives	$	990		—	$	990		—

Interest rate swap asset	$	6,569		—	$	6,569		—
Interest rate swap liability	$	(6,569)		—	$	(6,569)		—


			Fair Value Measurements at December 31, 2015 Using:
			Quoted Prices in		Significant		Significant
			Active Markets for		Other 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	$	504	$	—	$	504	$	—
States and municipal		350,733		—		339,875		10,858
Mortgage-backed securities — residential — Government Sponsored Entity		334,080		—		334,080		—
Collateralized mortgage obligations — Government Sponsored Entity		228,749		—		228,749		—
Equity securities		4,689		4,689		—		—
Other securities		6,524		—		—		6,524
Total investment securities available-for-sale	$	925,279	$	4,689	$	903,208	$	17,382

Mortgage banking derivative	$	700		—	$	700		—

Interest rate swap asset	$	1,508		—	$	1,508		—
Interest rate swap liability	$	(1,508)		—	$	(1,508)		—

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	2016		2015
Beginning balance, April 1	$	10,429	$	12,371
Total gains or losses (realized / unrealized)
Included in other comprehensive income		1		(30)
Settlements		—		(478)
Ending balance, June 30	$	10,430	$	11,863


Other securities	2016		2015
Beginning balance, April 1	$	6,523	$	2,538
Total gains or losses (realized / unrealized)
Purchases		—		—
Included in other comprehensive income		78		(11)
Ending balance, June 30	$	6,601	$	2,527

Six months ended June 30:


States and municipal	2016		2015
Beginning balance, January 1	$	10,858	$	12,810
Total gains or losses (realized / unrealized)
Included in other comprehensive income		2		(30)
Settlements		(430)		(917)
Ending balance, June 30	$	10,430	$	11,863


Other securities	2016		2015
Beginning balance, January 1	$	6,524	$	2,503
Total gains or losses (realized / unrealized)
Purchases				—
Included in other comprehensive income		77		24
Ending balance, June 30	$	6,601	$	2,527

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


			Fair Value Measurements at June 30, 2016 Using:
			Quoted Prices in	Significant	Significant
			Active Markets for	Other Observable	Unobservable
	June 30,		Identical Assets	Inputs	Inputs
	2016		(Level 1)	(Level 2)	(Level 3)
Assets:
Impaired loans
Commercial and industrial	$	256			$	256
Agricultural		1,179				1,179
Farm real estate		880				880
Other real estate		460				460
Total impaired loans	$	2,775			$	2,775

Impaired servicing rights	$	1,145			$	1,145


			Fair Value Measurements at December 31, 2015 Using:
			Quoted Prices in	Significant	Significant
			Active Markets for	Other Observable	Unobservable
	December 31,		Identical Assets	Inputs	Inputs
	2015		(Level 1)	(Level 2)	(Level 3)
Assets:
Impaired loans
Commercial and industrial	$	58			$	58
Other real estate		1,082				1,082
Total impaired loans	$	1,140			$	1,140

Impaired servicing rights	$	531			$	531

Schedule of breakdown of impaired loans by portfolio class


	Gross		Valuation
	Balance		Allowance		Net
Commercial and industrial	$	348	$	92	$	256
Agricultural		1,450		271		1,179
Farm real estate		1,083		203		880
Other real estate		614		154		460
Ending Balance	$	3,495	$	720	$	2,775

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

Fair Value

Valuation

Unobservable

Range/

June 30, 2016

(in thousands)

Technique(s)

Input(s)

Average

Impaired Loans:

Commercial and industrial

256

Sales comparison approach

Adjustment for differences between comparable sales

15% - 25%

21% Avg

Agricultural

1,179

Sales comparison approach

Adjustment for differences between comparable sales

10%

10% Avg

Farm real estate

880

Sales comparison approach

Adjustment for differences between comparable sales

10%

10% Avg

Other real estate

460

Sales comparison approach

Adjustment for differences between comparable sales, type of property, current status of property

15% - 25%

20% Avg

2,775

Mortgage servicing rights

1,145

Cash flow analysis

Discount rate

10%

Fair Value

Valuation

Unobservable

Range/

December 31, 2015

(in thousands)

Technique(s)

Input(s)

Average

Impaired Loans:

Farm real estate

Sales comparison approach

Adjustment for differences between comparable sales

10%

10% Avg

Other

1,082

Sales comparison approach

Adjustment for differences between comparable sales, type of property, current status of property

0% - 20%

1,140

10% Avg

Mortgage servicing rights

531

Cash flow analysis

Discount rate

10%

Schedule of carrying amounts and estimated fair values of financial instruments


	Carrying
June 30, 2016	Amount		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	88,428	$	75,915	$	12,513	$		$	88,428
Interest bearing time deposits		1,715				1,715				1,715
Loans including loans held for sale, net		2,537,522				13,452		2,614,007		2,627,459
FHLB and other stock		20,400								N/A
Interest receivable		12,411				5,095		7,316		12,411
Liabilities
Deposits		(3,099,359)		(677,654)		(2,422,196)				(3,099,850)
Other borrowings		(130,946)				(138,946)				(138,946)
FHLB advances		(249,808)				(255,637)				(255,637)
Interest payable		(674)				(674)				(674)
Subordinated debentures		(41,239)				(24,212)				(24,212)


	Carrying
December 31, 2015	Amount		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	67,578	$	56,104	$	11,474	$		$	67,578
Interest bearing time deposits		1,960				1,960				1,960
Loans including loans held for sale, net		2,139,765				7,726		2,187,366		2,195,092
FHLB and other stock		11,300								N/A
Interest receivable		10,779				4,901		5,878		10,779
Liabilities
Deposits		(2,650,775)		(641,439)		(2,007,405)				(2,648,844)
Other borrowings		(28,363)				(28,363)				(28,363)
FHLB advances		(269,488)				(270,977)				(270,977)
Interest payable		(560)				(560)				(560)
Subordinated debentures		(41,239)				(24,212)				(24,212)