FAIR VALUE DISCLOSURES (Tables)

3 Months Ended

Mar. 31, 2019

Schedule of Assets Measured at Fair Value on a Recurring Basis

The table below presents the balances of assets measured at fair value on a recurring basis:

	March 31, 2019
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$ 994	$ 0	$ 0	$ 994
U.S. government sponsored agency securities	0	3,989	0	3,989
Mortgage-backed securities: residential	0	320,279	0	320,279
Mortgage-backed securities: commercial	0	38,029	0	38,029
State and municipal securities	0	232,112	150	232,262
Total Securities	994	594,409	150	595,553
Mortgage banking derivative	0	209	0	209
Interest rate swap derivative	0	4,061	0	4,061
Total assets	$ 994	$ 598,679	$ 150	$ 599,823

Liabilities
Mortgage banking derivative	0	52	0	52
Interest rate swap derivative	0	4,388	0	4,388
Total liabilities	$ 0	$ 4,440	$ 0	$ 4,440


	December 31, 2018
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
U.S. Treasury securities	$ 987	$ 0	$ 0	$ 987
U.S. government sponsored agency securities	0	4,350	0	4,350
Mortgage-backed securities: residential	0	325,412	0	325,412
Mortgage-backed securities: commercial	0	38,141	0	38,141
State and municipal securities	0	216,509	150	216,659
Total Securities	987	584,412	150	585,549
Mortgage banking derivative	0	95	0	95
Interest rate swap derivative	0	3,869	0	3,869
Total assets	$ 987	$ 588,376	$ 150	$ 589,513

Liabilities
Mortgage banking derivative	0	23	0	23
Interest rate swap derivative	0	4,025	0	4,025
Total liabilities	$ 0	$ 4,048	$ 0	$ 4,048

Schedule of Reconciliation of All Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2019 and 2018:

	State and Municipal Securities
(dollars in thousands)	2019	2018
Balance of recurring Level 3 assets at January 1	$ 150	$ 880
Changes in fair value of securities included in other comprehensive income	0	(4)
Principal payments	0	(45)
Balance of recurring Level 3 assets at March 31	$ 150	$ 831

Fair Value Measurements, Recurring, Valuation Techniques

The state and municipal securities measured at fair value included below are non-rated Indiana municipal revenue bonds and are not actively traded.

Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	3/31/2019	Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$ 150	Price to type, par, call	Discount to benchmark index	0-1%
				(0.17%)

Quantitative Information about Level 3 Fair Value Measurements
				Range of
	Fair Value at			Inputs
(dollars in thousands)	12/31/2018	Valuation Technique	Unobservable Input	(Average)

State and municipal securities	$ 150	Price to type, par, call	Discount to benchmark index	0-1%
				(0.17%)

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

The table below presents the balances of assets measured at fair value on a nonrecurring basis:

	March 31, 2019
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$ 0	$ 0	$ 3,693	$ 3,693
Non-working capital loans	0	0	4,787	4,787
Commercial real estate and multi-family
residential loans:
Owner occupied loans	0	0	732	732
Agri-business and agricultural loans:
Loans secured by farmland	0	0	66	66
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	486	486
Total impaired loans	$ 0	$ 0	$ 9,764	$ 9,764
Other real estate owned	0	0	0	0
Total assets	$ 0	$ 0	$ 9,764	$ 9,764

	December 31, 2018
	Fair Value Measurements Using			Assets
(dollars in thousands)	Level 1	Level 2	Level 3	at Fair Value
Assets
Impaired loans:
Commercial and industrial loans:
Working capital lines of credit loans	$ 0	$ 0	$ 4,092	$ 4,092
Non-working capital loans	0	0	4,967	4,967
Commercial real estate and multi-family
residential loans:
Construction and land development loans	0	0	148	148
Owner occupied loans	0	0	1,669	1,669
Agri-business and agricultural loans:
Loans secured by farmland	0	0	77	77
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	0	0	553	553
Total impaired loans	$ 0	$ 0	$ 11,506	$ 11,506
Other real estate owned	0	0	316	316
Total assets	$ 0	$ 0	$ 11,822	$ 11,822

Fair Value Measured On Nonrecurring Basis Valuation Techniques

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at March 31, 2019:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$ 8,480	Collateral based	Discount to reflect	51%	0%-100%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	732	Collateral based	Discount to reflect	35%	0%-53%
		measurements	current market conditions
			and ultimate collectability

Impaired loans:
Agribusiness and agricultural	66	Collateral based	Discount to reflect	55%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	486	Collateral based	Discount to reflect	17%	0%-21%
		measurements	current market conditions
			and ultimate collectability

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2018:

(dollars in thousands)	Fair Value	Valuation Methodology	Unobservable Inputs	Average	Range of Inputs
Impaired loans:
Commercial and industrial	$ 9,059	Collateral based	Discount to reflect	48%	4%-100%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Commercial real estate	1,817	Collateral based	Discount to reflect	34%	6%-53%
		measurements	current market conditions
			and ultimate collectability

Impaired loans:
Agribusiness and agricultural	77	Collateral based	Discount to reflect	49%
		measurements	current market conditions
			and ultimate collectability
Impaired loans:
Consumer 1-4 family mortgage	553	Collateral based	Discount to reflect	23%	0%-64%
		measurements	current market conditions
			and ultimate collectability

Other real estate owned	316	Collateral based	Discount to reflect	0%
		measurements	current market conditions

Schedule of Fair Values and the Related Carrying Values of Financial Instruments

The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments. Items which are not financial instruments are not included.

	March 31, 2019
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1		Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$ 188,753	$ 185,998		$ 2,755	$ 0	$ 188,753
Securities available for sale	595,553	994		594,409	150	595,553
Real estate mortgages held for sale	3,047	0		3,085	0	3,085
Loans, net	3,889,448	0		0	3,816,004	3,816,004
Federal Reserve and Federal Home Loan Bank stock	13,772	N/A		N/A	N/A	N/A
Accrued interest receivable	17,387	8		3,110	14,269	17,387
Financial Liabilities:
Certificates of deposit	(1,406,580)	0		(1,413,329)	0	(1,413,329)
All other deposits	(2,740,857)	(2,740,857)		0	0	(2,740,857)
Other short-term borrowings	(122,000)	(122,000	)	0	0	(122,000)
Subordinated debentures	(30,928)	0		0	(31,199)	(31,199)
Standby letters of credit	(1,151)	0		0	(1,151)	(1,151)
Accrued interest payable	(11,794)	(168)		(11,621)	(5)	(11,794)


	December 31, 2018
	Carrying	Estimated Fair Value
(dollars in thousands)	Value	Level 1		Level 2	Level 3	Total
Financial Assets:
Cash and cash equivalents	$ 216,922	$ 214,452		$ 2,470	$ 0	$ 216,922
Securities available for sale	585,549	987		584,412	150	585,549
Real estate mortgages held for sale	2,293	0		2,314	0	2,314
Loans, net	3,866,292	0		0	3,786,175	3,786,175
Federal Reserve and Federal Home Loan Bank stock	13,772	N/A		N/A	N/A	N/A
Accrued interest receivable	15,518	3		3,569	11,946	15,518
Financial Liabilities:
Certificates of deposit	(1,419,754)	0		(1,424,553)	0	(1,424,553)
All other deposits	(2,624,311)	(2,624,311)		0	0	(2,624,311)
Securities sold under agreements to repurchase	(75,555)	0		(75,555)	0	(75,555)
Other short-term borrowings	(170,000)	0		(169,996)	0	(169,996)
Subordinated debentures	(30,928)	0		0	(31,195)	(31,195)
Standby letters of credit	(978)	0		0	(978)	(978)
Accrued interest payable	(10,404)	(110)		(10,289)	(5)	(10,404)