FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2016

The table below presents the balance of financial assets and liabilities at June 30, 2016 measured at fair value on a recurring basis:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury Obligations	$	25,425	$	—	$	25,425	$	—
U.S. GSEs		41,950		—		41,950		—
FHLB Obligations		41,092		—		41,092		—
Agency MBSs		88,171		—		88,171		—
Agency CMBSs		24,708		—		24,708		—
Agency CMOs		58,394		—		58,394		—
ABSs		338		—		338		—
Interest rate swap agreements		2,691		—		2,691		—
Total assets	$	282,769	$	—	$	282,769	$	—
Liabilities
Interest rate swap agreements		2,213		—		2,213		—
Total liabilities	$	2,213	$	—	$	2,213	$	—

The table below presents the balance of financial assets and liabilities at December 31, 2015 measured at fair value on a recurring basis:


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant
			Identical Assets		Observable Inputs		Unobservable Inputs
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Assets
U.S. Treasury Obligations	$	25,113	$	—	$	25,113	$	—
U.S. GSEs		20,794		—		20,794		—
FHLB Obligations		51,111		—		51,111		—
Agency MBSs		97,249		—		97,249		—
Agency CMBSs		24,553		—		24,553		—
Agency CMOs		64,279		—		64,279		—
ABSs		355		—		355		—
Interest rate swap agreements		1,084		—		1,084		—
Total assets	$	284,538	$	—	$	284,538	$	—
Liabilities
Interest rate swap agreements		1,004		—		1,004		—
Total liabilities	$	1,004	$	—	$	1,004	$	—

The fair value of Merchants’ financial instruments as of June 30, 2016 are summarized in the table below:


	Carrying
(In thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	59,522	$	59,522	$	59,522	$	—	$	—
Securities available for sale		280,078		280,078		—		280,078		—
Securities held to maturity		111,070		114,591		—		114,591		—
FHLB stock		7,036		N/A		N/A		N/A		N/A
Loans, net of allowance for loan losses		1,382,973		1,391,031		—		—		1,391,031
Interest rate swap agreement		2,691		2,691		—		2,691		—
Accrued interest receivable		3,714		3,714		—		1,052		2,662
Total	$	1,847,084	$	1,851,627	$	59,522	$	398,412	$	1,393,693
Deposits	$	1,453,330	$	1,453,919	$	1,234,083	$	219,836	$	—
Short-term borrowings		70,000		70,000		—		70,000		—
Securities sold under agreement to repurchase		184,920		184,882		—		184,882		—
Other long-term debt		3,694		3,733		—		3,733		—
Junior subordinated debentures issued to unconsolidated subsidiary trust		20,619		15,685		—		15,685		—
Interest rate swap agreement		2,213		2,213		—		2,213		—
Accrued interest payable		66		66		12		54		—
Total	$	1,734,842	$	1,730,498	$	1,234,095	$	496,403	$	—

The fair value of Merchants’ financial instruments as of December 31, 2015 are summarized in the table below:


	Carrying
(In thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	150,183	$	150,183	$	150,183	$	—	$	—
Securities available for sale		283,454		283,454		—		283,454		—
Securities held to maturity		119,674		120,093		—		120,093		—
FHLB stock		3,797		N/A		N/A		N/A		N/A
Loans, net of allowance for loan losses		1,402,240		1,397,877		—		—		1,397,877
Interest rate swap agreement		1,084		1,084		—		1,084		—
Accrued interest receivable		4,374		4,374		—		1,085		3,289
Total	$	1,964,806	$	1,957,065	$	150,183	$	405,716	$	1,401,166
Deposits	$	1,551,439	$	1,551,046	$	1,296,867	$	254,179	$	—
Securities sold under agreement to repurchase		286,639		286,586		—		286,586		—
Other long-term debt		5,238		5,191		—		5,191		—
Junior subordinated debentures issued to unconsolidated subsidiary trust		20,619		14,975		—		14,975		—
Interest rate swap agreement		1,004		1,004		—		1,004		—
Accrued interest payable		152		152		13		139		—
Total	$	1,865,091	$	1,858,954	$	1,296,880	$	562,074	$	—