FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2016

The table below presents the balance of financial assets and liabilities at September 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	$	25,333	$	—	$	25,333	$	—
U.S. GSEs		49,529		—		49,529		—
FHLB Obligations		63,247		—		63,247		—
Agency MBSs		82,293		—		82,293		—
Agency CMBSs		24,280		—		24,280		—
Agency CMOs		53,961		—		53,961		—
ABSs		330		—		330		—
Interest rate swap agreements		2,402		—		2,402		—
Total assets	$	301,375	$	—	$	301,375	$	—
Liabilities
Interest rate swap agreements		1,881		—		1,881		—
Total liabilities	$	1,881	$	—	$	1,881	$	—

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 September 30, 2016 are summarized in the table below:


	Carrying
(In thousands)	Amount		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	78,717	$	78,717	$	78,717	$	—	$	—
Securities available for sale		298,973		298,973		—		298,973		—
Securities held to maturity		90,672		93,018		—		93,018		—
FHLB stock		4,844		N/A		N/A		N/A		N/A
Loans, net of allowance for loan losses		1,464,745		1,469,387		—		—		1,469,387
Interest rate swap agreement		2,402		2,402		—		2,402		—
Accrued interest receivable		3,910		3,910		—		1,017		2,893
Total	$	1,944,263	$	1,946,407	$	78,717	$	395,410	$	1,472,280
Deposits	$	1,503,840	$	1,504,161	$	1,294,809	$	209,352	$	—
Short-term borrowings		22,000		22,000		—		22,000		—
Securities sold under agreement to repurchase		276,083		276,027		—		276,027		—
Other long-term debt		3,673		3,704		—		3,704		—
Junior subordinated debentures issued to unconsolidated subsidiary trust		20,619		15,536		—		15,536		—
Interest rate swap agreement		1,881		1,881		—		1,881		—
Accrued interest payable		115		115		10		105		—
Total	$	1,828,211	$	1,823,424	$	1,294,819	$	528,605	$	—

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	$	—
Short-term borrowings		—		—		—		—		—
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	$	—