FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2017

FAIR VALUE

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

			Fair Value Measurements at December 31, 2017 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	$	115	$	—	$	115	$	—
States and municipal		398,126		—		388,789		9,337
Mortgage-backed securities — residential — Government Sponsored Entity		383,254		—		383,254		—
Collateralized mortgage obligations — Government Sponsored Entity		286,395		—		286,395		—
Equity securities		4,670		4,670		—		—
Other securities		5,013		—		—		5,013
Total investment securities available-for-sale	$	1,077,573	$	4,670	$	1,058,553	$	14,350
Mortgage banking derivatives	$	621		—	$	621		—
Interest rate swap asset	$	3,657		—	$	3,657		—
Interest rate swap liability	$	(3,657)		—	$	(3,657)		—
Free standing interest rate swap	$	275		—	$	275		—

			Fair Value Measurements at December 31, 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	$	955	$	—	$	955	$	—
States and municipal		369,286		—		359,166		10,120
Mortgage-backed securities — residential — Government Sponsored Entity		446,630		—		446,630		—
Collateralized mortgage obligations — Government Sponsored Entity		179,401		—		179,401		—
Equity securities		4,670		4,670		—		—
Other securities		6,598		—		—		6,598
Total investment securities available-for-sale	$	1,007,540	$	4,670	$	986,152	$	16,718
Mortgage banking derivatives	$	648		—	$	648		—
Interest rate swap asset	$	3,003		—	$	3,003		—
Interest rate swap liability	$	(3,003)		—	$	(3,003)		—

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	2017		2016
Beginning balance, January 1	$	10,120	$	10,858
Total gains or losses (realized / unrealized)
Included in other comprehensive income		(5)		(1)
Settlements		(778)		(737)
Ending balance, December 31	$	9,337	$	10,120

Other securities	2017		2016
Beginning balance, January 1	$	6,598	$	6,524
Total gains or losses (realized / unrealized)
Purchases		505		—
Settlements through acquisition		(1,590)		—
Settlements		(500)		74
Ending balance, December 31	$	5,013	$	6,598

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

			Fair Value Measurements at December 31, 2017 Using:
			Quoted Prices in	Significant	Significant
			Active Markets for	Other Observable	Unobservable
	December 31,		Identical Assets	Inputs	Inputs
	2017		(Level 1)	(Level 2)	(Level 3)
Assets:
Impaired loans
Commercial and industrial	$	270			$	270
Agricultural		613				613
Farm real estate		275				275
Other real estate		1,751				1,751
Total impaired loans	$	2,909			$	2,909
Impaired servicing rights	$	400			$	400

			Fair Value Measurements at December 31, 2016 Using:
			Quoted Prices in	Significant	Significant
			Active Markets for	Other Observable	Unobservable
	December 31,		Identical Assets	Inputs	Inputs
	2016		(Level 1)	(Level 2)	(Level 3)
Assets:
Impaired loans
Commercial and industrial	$	260			$	260
Agricultural		972				972
Farm real estate		745				745
Other real estate		560				560
Total impaired loans	$	2,537			$	2,537
Impaired servicing rights	$	1,083			$	1,083

Schedule of breakdown of impaired loans by portfolio class

	Recorded		Valuation
	Investment		Allowance		Net
Commercial and industrial	$	1,902	$	1,632	$	270
Agricultural		1,438		825		613
Farm real estate		708		433		275
Other real estate		2,121		370		1,751
Ending Balance	$	6,169	$	3,260	$	2,909

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/
December 31, 2017	(in thousands)		Technique(s)	Input(s)	Average
Impaired Loans:
Commercial and industrial	$	270	Sales comparison approach	Adjustment for differences between comparable sales		0%
						0% Avg
Agricultural		613	Sales comparison approach	Adjustment for differences between comparable sales		30%
						30% Avg
Farm real estate		275	Sales comparison approach	Adjustment for differences between comparable sales		30%
						30% Avg
Other real estate		1,751	Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property		20% - 30%
						22% Avg
	$	2,909
Mortgage servicing rights	$	400	Cash flow analysis	Discount rate		13%

	Fair Value		Valuation	Unobservable	Range/
December 31, 2016	(in thousands)		Technique(s)	Input(s)	Average
Impaired Loans:
Commercial and industrial	$	260	Sales comparison approach	Adjustment for differences between comparable sales		10% - 30%
						18% Avg
Agricultural		972	Sales comparison approach	Adjustment for differences between comparable sales		10%
						10% Avg
Farm real estate		745	Sales comparison approach	Adjustment for differences between comparable sales		10%
						10% Avg
Other real estate		560	Sales comparison approach	Adjustment for differences between comparable sales, type of property, current status of property		16% - 31%
						27% Avg
	$	2,537
Mortgage servicing rights	$	1,083	Cash flow analysis	Discount rate		14%

Schedule of carrying amounts and estimated fair values of financial instruments

	Carrying
December 31, 2017	Amount		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	97,505	$	89,623	$	7,882	$		$	97,505
Interest bearing time deposits		2,065				2,065				2,065
Loans including loans held for sale, net		3,045,705				7,981		3,064,489		3,072,470
FHLB and other stock		27,796								N/A
Interest receivable		14,849				5,754		9,095		14,849
Liabilities
Deposits		(3,507,603)		(868,384)		(2,635,297)				(3,503,681)
Other borrowings		(185,652)				(185,652)				(185,652)
FHLB advances		(335,986)				(331,831)				(331,831)
Interest payable		(1,371)				(1,371)				(1,371)
Subordinated debentures		(56,545)				(50,911)				(50,911)

	Carrying
December 31, 2016	Amount		Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	86,552	$	75,778	$	10,774	$		$	86,552
Interest bearing time deposits		1,960				1,960				1,960
Loans including loans held for sale, net		2,639,046				12,598		2,662,431		2,675,029
FHLB and other stock		21,693								N/A
Interest receivable		12,576				5,234		7,342		12,576
Liabilities
Deposits		(3,110,871)		(767,159)		(2,340,824)				(3,107,983)
Other borrowings		(209,672)				(209,686)				(209,686)
FHLB advances		(249,658)				(248,944)				(248,944)
Interest payable		(642)				(642)				(642)
Subordinated debentures		(41,239)				(34,084)				(34,084)