Merchants Bancshares 10-Q 7 Nov 16 2016 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 24, 2016
Document And Entity Information
Entity Registrant Name	MERCHANTS BANCSHARES INC
Trading Symbol	mbvt
Entity Central Index Key	726,517
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		6,885,686
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash and due from banks	$ 31,166	$ 30,605
Interest earning deposits with banks and other short-term investments	47,551	119,578
Total cash and cash equivalents	78,717	150,183
Investments:
Securities available for sale, at fair value (amortized cost of $294,572 and $283,185)	298,973	283,454
Securities held to maturity (fair value of $93,018 and $120,093)	90,672	119,674
Total investments	389,645	403,128
Loans	1,477,285	1,414,280
Less: Allowance for loan losses	12,540	12,040
Net loans	1,464,745	1,402,240
Federal Home Loan Bank stock	4,844	3,797
Bank premises and equipment, net	13,624	15,030
Investment in real estate limited partnerships	5,352	5,687
Bank owned life insurance	10,709	10,551
Core deposit intangible	1,207	1,360
Goodwill	7,011	6,967
Other assets	18,801	22,294
Total assets	1,994,655	2,021,237
Deposits:
Demand (noninterest bearing)	632,847	631,244
Savings, interest bearing checking and money market accounts	661,962	665,623
Time deposits	209,031	254,572
Total deposits	1,503,840	1,551,439
Short-term borrowings	22,000
Securities sold under agreement to repurchase, short-term	276,083	286,639
Other long-term debt	3,673	5,238
Junior subordinated debentures issued to unconsolidated subsidiary trust	20,619	20,619
Other liabilities	10,153	9,248
Total liabilities	1,836,368	1,873,183
STOCKHOLDERS' EQUITY
Common stock, $.01 par value Authorized: 10,000,000 shares; Issued: 7,180,616 at September 30, 2016 and 7,168,869 at December 31, 2015 Outstanding: 6,883,644 at September 30, 2016 and 6,855,294 at December 31, 2015	72	72
Capital in excess of par value	55,356	55,063
Retained earnings	112,218	106,219
Treasury stock, at cost: 582,106 shares including 285,134 shares held by the Compensation Plan for Directors and Trustees at September 30, 2016 and 612,935 shares including 299,360 shares held by the Compensation Plan for Directors and Trustees at December 31, 2015	(13,438)	(13,798)
Deferred compensation arrangements: 285,134 shares at September 30, 2016 and 299,360 shares at December 31, 2015	6,352	6,521
Accumulated other comprehensive loss	(2,273)	(6,023)
Total stockholders' equity	158,287	148,054
Total liabilities and stockholders' equity	1,994,655	2,021,237
Preferred Class A non-voting
STOCKHOLDERS' EQUITY
Preferred stock
Preferred Class B voting
STOCKHOLDERS' EQUITY
Preferred stock

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Securities available for sale, amortized cost	$ 294,572	$ 283,185
Securities held to maturity, fair value	$ 93,018	$ 120,093
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	7,180,616	7,168,869
Common stock, shares outstanding	6,883,644	6,855,294
Treasury stock, shares	582,106	612,935
Deferred compensation arrangements
Common stock, shares outstanding	285,134	299,360
Preferred Class A non-voting
Preferred stock, shares authorized	200,000	200,000
Preferred stock, shares outstanding	0	0
Preferred Class B voting
Preferred stock, shares authorized	1,500,000	1,500,000
Preferred stock, shares outstanding	0	0

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
INTEREST AND DIVIDEND INCOME
Interest and fees on loans	$ 13,058	$ 11,055	$ 38,759	$ 32,478
Investment income:
Interest and dividends on investment securities	1,818	1,961	5,803	5,784
Interest on interest earning deposits with banks and other short-term investments	54	25	193	157
Total interest and dividend income	14,930	13,041	44,755	38,419
INTEREST EXPENSE
Savings, interest bearing checking and money market accounts	413	354	1,277	1,075
Time deposits	321	318	1,052	975
Short-term borrowings	79	8	110	13
Securities sold under agreement to repurchase, short-term	107	89	319	390
Long-term debt	213	199	637	595
Total interest expense	1,133	968	3,395	3,048
Net interest income	13,797	12,073	41,360	35,371
Provision for credit losses	500	150	905	250
Net interest income after provision for credit losses	13,297	11,923	40,455	35,121
NONINTEREST INCOME
Trust division income	843	886	2,545	2,666
Net debit card income	765	796	2,226	2,301
Overdraft income	667	548	1,975	1,327
Service charges on deposits	427	390	1,266	1,108
Other	429	829	1,264	1,470
Total noninterest income	3,131	3,449	9,276	8,872
NONINTEREST EXPENSE
Compensation and benefits	5,785	5,508	17,549	15,746
Occupancy expense	1,050	1,036	3,214	3,228
Equipment expense	676	726	2,099	2,224
Telephone expense	187	206	577	609
Legal and professional fees	651	414	1,975	1,394
Mobile & internet banking	345	399	1,047	1,195
Core / Item processing	425	450	1,401	1,289
Marketing	196	148	595	437
State franchise taxes	399	404	1,195	1,094
FDIC insurance	248	218	783	653
Community Bank System, Inc. merger costs	476		476
NUVO Bank & Trust Company acquisition costs		215	61	363
Amortization of core deposit intangible	51		153
Other	931	867	3,047	2,847
Total noninterest expense	11,420	10,591	34,172	31,079
Income before provision for income taxes	5,008	4,781	15,559	12,914
Provision for income taxes	1,097	925	3,792	2,606
NET INCOME	$ 3,911	$ 3,856	$ 11,767	$ 10,308
Basic earnings per common share (in dollars per share)	$ 0.57	$ 0.61	$ 1.71	$ 1.63
Diluted earnings per common share (in dollars per share)	$ 0.57	$ 0.61	$ 1.71	$ 1.62

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Comprehensive Income
Net income	$ 3,911	$ 3,856	$ 11,767	$ 10,308
Other comprehensive income, net of tax:
Unrealized holding (loss) gain on securities available for sale, net of taxes of $(443), $650, $1,445 and $497	(820)	1,215	2,687	933
Accretion of unrealized holding losses of securities transferred from available for sale to held to maturity, net of taxes of $285, $78, $419 and $213	531	144	779	396
Change in net unrealized loss on interest rate swaps, net of taxes of $25, $39, $66 and $50	46	73	122	94
Pension liability adjustment, net of taxes of $5, $36, $87 and $107	12	67	162	201
Other comprehensive (loss) income	(231)	1,499	3,750	1,624
Comprehensive income	$ 3,680	$ 5,355	$ 15,517	$ 11,932

Consolidated Statements of Com6

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements Of Comprehensive Income
Unrealized holding (loss) gain on securities available for sale, tax	$ (443)	$ 650	$ 1,445	$ 497
Accretion of unrealized holding losses of securities transferred from available for sale to held to maturity, tax	285	78	419	213
Change in net unrealized loss on interest rate swaps, tax	25	39	66	50
Pension liability adjustment, tax	$ 5	$ 36	$ 87	$ 107

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 11,767	$ 10,308
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	905	250
Depreciation and amortization	1,579	1,652
Amortization of investment security premiums and accretion of discounts, net	1,553	939
Amortization of deferred loan costs	507	355
Amortization of core deposit intangible	153
Stock based compensation	41	97
Deferred gain on sale of premises	(387)	(387)
Gain on sale of other real estate owned	(20)
Equity in losses of real estate limited partnerships, net	1,222	846
Increase in cash surrender value of bank owned life insurance	(158)	(181)
Changes in assets and liabilities:
Net change in interest receivable	464	111
Net change in other assets	1,142	1,247
Net change in interest payable	(37)	(32)
Net change in other liabilities	1,427	841
Net cash provided by operating activities	20,158	16,046
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities available for sale	33,283	34,957
Proceeds from maturities of investment securities held to maturity	29,382	14,917
Purchases of investment securities available for sale	(45,403)	(112,892)
Loan originations in excess of principal payments	(63,887)	(76,020)
Purchases of Federal Home Loan Bank stock, net	(1,047)
Proceeds from sales of other real estate owned	92
Real estate limited partnership investments	(827)	(1,594)
Purchases of bank premises and equipment	(173)	(1,179)
Net cash used in investing activities	(48,580)	(141,811)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits	(47,599)	78,701
Net increase in short-term borrowings	22,000
Net (decrease) increase in securities sold under agreement to repurchase	(10,556)	9,330
Principal payments on long-term debt	(1,565)	(62)
Cash dividends paid	(5,768)	(5,319)
Proceeds from the exercise of stock warrants	235
Increase in deferred compensation arrangements	430	215
Tax benefit from exercise of stock options and distribution of shares in deferred compensation arrangements	(221)	(100)
Net cash (used in) provided by financing activities	(43,044)	82,765
Decrease in cash and cash equivalents	(71,466)	(43,000)
Cash and cash equivalents beginning of period	150,183	154,459
Cash and cash equivalents end of period	78,717	111,459
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Total interest payments	3,432	3,079
Total income tax payments	1,122
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Distribution of stock under deferred compensation arrangements	559	514
Non-cash exercise of stock options and warrants	161	$ 626
Transfer of loans to other real estate owned	$ 60

FINANCIAL STATEMENT PRESENTATIO

FINANCIAL STATEMENT PRESENTATION	9 Months Ended
	Sep. 30, 2016
FINANCIAL STATEMENT PRESENTATION
FINANCIAL STATEMENT PRESENTATION	NOTE 1: FINANCIAL STATEMENT PRESENTATION Principles of Consolidation The accompanying consolidated financial statements include the accounts of Merchants Bancshares, Inc. (the “Company”), and its wholly-owned subsidiary Merchants Bank (the “Bank,” and collectively with the Company, “Merchants,” “we,” “us,” or “our”). All material intercompany accounts and transactions are eliminated in consolidation. We offer a full range of deposit, loan, cash management, and trust services to meet the financial needs of individual consumers, businesses and municipalities at 31 full-service banking offices throughout the state of Vermont and one full-service banking office in Massachusetts as of September 30, 2016. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. All adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our interim consolidated financial statements as of September 30, 2016 and December 31, 2015 and for the three and nine months ended September 30, 2016 and 2015 have been included. The information was prepared from our unaudited financial statements and the unaudited financial statements of our subsidiaries, Merchants Bank and MBVT Statutory Trust I. Amounts reported for prior periods are reclassified, where necessary, to be consistent with the current period presentation. Management’s Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting periods. The most significant estimates include those used in determining the allowance for credit losses, income taxes, interest income recognition on loans and investments and analysis of other-than-temporary impairment of our investment securities portfolio. Operating results in the future may vary from the amounts derived from Management's estimates and assumptions.

NEW ACCOUNTING PRONOUNCEMENTS

NEW ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2016
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS	NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)” implements a common revenue standard that clarifies the principles for recognizing revenue. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In July 2015, the Financial Accounting Standards Board (“FASB”) deferred the effective date of the ASU by one year which means ASU 2014-09 will be effective for the Company on January 1, 2018. In March 2016, FASB issued ASU 2016-08 which amended illustrative examples to clarify how to apply the implementation guidance on principal versus agent considerations. The Company is evaluating the potential impact of ASU 2014-09, and subsequent amendments, on its consolidated financial statements. In January 2016, the FASB amended existing guidance to improve accounting standards for financial instruments including clarification and simplification of accounting and disclosure requirements and the requirement for public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company is evaluating the impact of these amendments on its consolidated financial statements. In February 2016, the FASB amended existing guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company is evaluating the impact of these amendments on its consolidated financial statements. In March 2016, the FASB amended existing guidance to simplify aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2016. The Company is evaluating the impact of these amendments on its consolidated financial statements. In June 2016, the FASB released Accounting Standards Update 2016-13 Financial Instruments – Credit Losses which amended existing guidance to replace current generally accepted accounting principles used to measure a reporting entity’s credit losses. The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2019. The Company is evaluating the impact of these amendments on its consolidated financial statements. In August 2016, the FASB released Accounting Standards Update 2016-15 Clarifying Certain Cash Receipts and Cash Payments with the objective of eliminating the diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and application of the predominance principle. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company is evaluating the impact of these amendments on its consolidated financial statements.

ACQUISITION OF NUVO BANK & TRUS

ACQUISITION OF NUVO BANK & TRUST COMPANY	9 Months Ended
	Sep. 30, 2016
ACQUISITION OF NUVO BANK & TRUST COMPANY
ACQUISITION OF NUVO BANK & TRUST COMPANY	NOTE 3: ACQUISITION OF NUVO BANK & TRUST COMPANY On December 4 , 2015, the Company completed the acquisition of NUVO Bank & Trust Company (“NUVO”), Springfield, Massachusetts. NUVO's banking business operates as a division of Merchants Bank. Total consideration paid by Merchants for NUVO's outstanding stock comprised 517,109 shares of common stock and $5.109 million in cash. Merchants also paid an aggregate of $878,718 to cash out NUVO stock options and a portion of its common stock warrants and issued replacement warrants to purchase an aggregate of 90,756 shares of Merchants common stock on adjusted terms, consisting of warrants expiring in 2017 to purchase 56,386 shares at an exercise price of $20.69 and warrants expiring in 2018 to purchase 34,370 shares at an exercise price of $41.39 per share. The acquisition of NUVO expands the Company’s New England footprint beyond Vermont and into the Springfield and greater Western Massachusetts commercial banking market. The Company now has 32 banking locations, including the new office in Springfield, Massachusetts. The acquisition of NUVO was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration paid were recorded at their estimated fair values as of the acquisition date. The excess of consideration paid of $7.011 million over the fair value of net assets acquired has been reported as goodwill in the Company’s unaudited consolidated statements of financial condition as of September 30, 2016. Goodwill created in the acquisition is not deductible for income tax purposes. This goodwill consists largely of the synergies and cost savings arising from the combining of the operations of the two companies. The assets acquired and liabilities assumed in the acquisition of NUVO were recorded at their preliminary estimated fair values based on management’s best estimates using information available at the date of the acquisition and are subject to adjustment. In connection with the acquisition, the consideration paid and the fair value of identifiable assets acquired and liabilities assumed as of the date of acquisition are summarized in the following table: (In thousands) Consideration paid: Common stock issued in exchange for NUVO shares $ Cash paid for NUVO shares Stock warrants issued Total consideration paid $ Assets acquired: Cash and cash equivalents $ Interest bearing time deposits with banks Investments Restricted investment in bank stock Loans Premises and equipment , net Accrued interest receivable Core deposit intangible Deferred tax asset Other assets Total assets acquired Liabilities assumed: Deposits Federal Home Loan Bank advances Accrued interest payable Tax effect of acquisition fair value adjustments Other liabilities Total liabilities assumed Net assets acquired $ Goodwill $ The following table details the changes in fair value of the consideration paid and the net assets acquired as of December 4, 2015 from the amounts originally reported in the Company’s Form 10-K for the year ended December 31, 2015: (In thousands) Goodwill reported as of December 31, 2015 $ Effect of adjustments to: Stock warrants issued Deferred tax asset Adjusted goodwill as of September 30, 2016 $ The changes to goodwill during the nine months ended September 30, 2016 are primarily due to changes in the final market value for assets acquired and consideration paid. In many cases, the fair values of assets acquired and liabilities assumed were determined by estimating the cash flows expected to result from those assets and liabilities and discounting them at appropriate market rates. These changes had no impact on current quarter or previously reported income.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2016
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS	NOTE 4: GOODWILL AND INTANGIBLE ASSETS The goodwill and intangible balances presented below resulted from the Company’s acquisition of NUVO. The acquisition of NUVO resulted in goodwill of $7.011 million and core deposit intangible (“CDI”) of $1.377 million. For further information regarding goodwill and other intangible assets recorded in connection with the acquisition of NUVO, including the effect of adjustments to goodwill, please refer to Note 3. Goodwill Goodwill is deemed to have an indefinite life and therefore is not amortized, but is instead subject to impairment tests. There was no impairment for the three and nine months ended September 30, 2016 or the period from the date of the acquisition through December 31, 2015. September 30, December 31, (In thousands) 2016 2015 Beginning of period $ $ — Effect of adjustments — Goodwill — Impairment — — End of period $ $ Other Intangible Assets Acquired CDI were as follows: September 30, December 31, (In thousands) 2016 2015 Beginning of period $ $ — Additions — Amortization End of period $ $ The CDI recognized in 2015 was related to the acquisition of NUVO. Aggregate amortization expense for the CDI was $ 51 thousand and $153 thousand for the three and nine months ended September 30, 2016, respectively and $17 thousand for the period from the date of the acquisition through December 31, 2015. The estimated amortization expense for each of the next five years: (In thousands) Amount Remainder of 2016 $ 2017 2018 2019 2020 2021 Thereafter

INVESTMENT SECURITIES

INVESTMENT SECURITIES	9 Months Ended
	Sep. 30, 2016
INVESTMENT SECURITIES
INVESTMENT SECURITIES	NOTE 5: INVESTMENT SECURITIES Investments in securities are classified as available for sale or held to maturity as of September 30, 2016 and December 31, 2015. The amortized cost and fair values of the securities classified as available for sale and held to maturity as of September 30, 2016 are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value Available for Sale: U.S. Treasury Obligations $ $ $ — $ U.S. Government Sponsored Enterprises ("U.S. GSEs") — Federal Home Loan Bank ("FHLB") Obligations Residential Real Estate Mortgage-backed Securities ("Agency MBSs") Agency Commercial Mortgage Backed Securities ("Agency CMBSs") Agency Collateralized Mortgage Obligations ("Agency CMOs") Asset Backed Securities ("ABSs") — Total Available for Sale $ $ $ $ Gross Gross Amortized Unrecognized Unrecognized Fair Cost Gains Losses Value Held to Maturity: U.S. Agency Obligations $ $ $ — $ Agency CMOs Agency MBSs — Total Held to Maturity $ $ $ $ The amortized cost and fair values of the securities classified as available for sale and held to maturity as of December 31, 2015 are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value Available for Sale: U.S. Treasury Obligations $ $ $ $ U.S. GSEs FHLB Obligations Agency MBSs Agency CMBSs — Agency CMOs ABSs — Total Available for Sale $ $ $ $ Gross Gross Amortized Unrecognized Unrecognized Fair Cost Gains Losses Value Held to Maturity: U.S. Agency Obligations $ $ $ — $ U.S. GSEs — FHLB Obligations — Agency CMOs Agency MBSs — Total Held to Maturity $ $ $ $ The contractual final maturity distribution of the debt securities classified as available for sale as of September 30, 2016, are as follows: Securities After One After Five not due Within But Within But Within After Ten at a Single (In thousands) One Year Five Years Ten Years Years Maturity Total Available for Sale (at fair value): U.S. Treasury Obligations $ $ $ — $ — $ N/A $ U.S. GSEs — — — N/A FHLB Obligations — — N/A Agency MBSs N/A N/A N/A N/A Agency CMBSs N/A N/A N/A N/A Agency CMOs N/A N/A N/A N/A ABSs N/A N/A N/A N/A Total Available for Sale $ $ $ $ — $ $ Available for Sale (at amortized cost): U.S. Treasury Obligations $ $ $ — $ — $ N/A $ U.S. GSEs — — — N/A FHLB Obligations — — N/A Agency MBSs N/A N/A N/A N/A Agency CMBSs N/A N/A N/A N/A Agency CMOs N/A N/A N/A N/A ABSs N/A N/A N/A N/A Total Available for Sale $ $ $ $ — $ $ The contractual final maturity distribution of the debt securities classified as held to maturity as of September 30, 2016, are as follows: Securities After One After Five not due Within But Within But Within After Ten at a Single (In thousands) One Year Five Years Ten Years Years Maturity Total Held to Maturity (at fair value): U.S. Agency Obligations $ — $ — $ — $ $ N/A $ Agency CMOs N/A N/A N/A N/A Agency MBSs N/A N/A N/A N/A Total Held to Maturity $ — $ — $ — $ $ $ Held to Maturity (at amortized cost): U.S. Agency Obligations $ — $ — $ — $ $ N/A $ Agency CMOs N/A N/A N/A N/A Agency MBSs N/A N/A N/A N/A Total Held to Maturity $ — $ — $ — $ $ $ Actual maturities will differ from contractual maturities because borrowers may have rights to call or prepay obligations. For the nine months ended September 30, 2016 and 2015, we did not record any securities gains or losses related to the sale of securities. Securities with a carrying value of $363.92 million and $335. 81 million at September 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits, securities sold under agreements to repurchase, and for other purposes required by law. Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at September 30, 2016, were as follows: Less Than 12 Months 12 Months or More Total Number Fair Number Fair Number Fair (In thousands) of Issues Value Loss of Issues Value Loss of Issues Value Loss Available for Sale: FHLB Obligations $ $ — $ — $ — $ $ Agency MBSs — — — Agency CMBSs — — — Agency CMOs Total Available for Sale $ $ $ $ $ $ Held to Maturity: Agency CMOs — $ — $ — $ $ — $ $ Total Held to Maturity — $ — $ — $ $ — $ $ Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at December 31, 2015, were as follows: Less Than 12 Months 12 Months or More Total Number Fair Number Fair Number Fair (In thousands) of Issues Value Loss of Issues Value Loss of Issues Value Loss Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — — Agency CMBSs Agency CMOs Total Available for Sale $ $ $ $ $ $ Held to Maturity: Agency CMOs $ $ $ $ $ $ Total Held to Maturity $ $ $ $ $ $ There were no securities classified as trading at September 30, 2016 and December 31, 2015. Unrealized losses on investment securities result from the cost basis of the security being higher than its current fair value. These differences generally occur because of changes in interest rates since the time of purchase, or because the credit quality of the issuer has deteriorated. We perform a quarterly analysis of each security in our portfolio to determine if impairment exists, and if it does, whether that impairment is other-than-temporary. At September 30, 2016, all of our MBSs and CMOs held were issued by U.S. government-sponsored entities and agencies, primarily the Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”), institutions which the government has affirmed its commitment to support. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because we do not have the intent to sell these securities and it is not likely that we will be required to sell the securities before their anticipated recovery, we do not consider these securities to be other-than-temporarily impaired at September 30, 2016. Agency MBSs and Agency CMOs consist of pools of residential mortgages which are guaranteed by FNMA, FHLMC, or Government National Mortgage Association (“GNMA”) with various origination dates and maturities. Agency CMBS consists of bonds backed by commercial real estate which are guaranteed by FNMA and GNMA. During the first quarter of 2014, we transferred securities with a total amortized cost of $12.63 million, and a corresponding fair value of $12.64 million, from available for sale to held to maturity. The net unrealized gain, net of taxes, on these securities at the dates of the transfers was $8 thousand. During the third and fourth quarters of 2013, we transferred securities with a total amortized cost of $152.89 million, and a corresponding fair value of $147.45 million, from available for sale to held to maturity. The net unrealized holding loss, net of taxes, on these securities at the dates of the transfers was $3.53 million. The unrealized holding gains and losses at the time of transfer continues to be reported in accumulated other comprehensive income, net of tax and are amortized over the remaining lives of the securities as an adjustment of the yield. The amortization of the unamortized holding gains and losses reported in accumulated other comprehensive income will offset the effect on interest income of the premium and discount for the transferred securities. The remaining unamortized balance of the net losses for the securities transferred from available for sale to held to maturity was $ 2.35 million or $ 1.52 million, net of tax at September 30, 2016.

SECURITIES SOLD UNDER AGREEMENT

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE	9 Months Ended
	Sep. 30, 2016
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE.
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE	NOTE 6: SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE The following table presents the contractual maturity of our secured borrowings and class of collateral pledged at September 30, 2016: Remaining Contractual Maturity of the Agreements Overnight and Greater Than (In thousands) Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase Agreements: Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — — Agency CMBSs — — — Agency CMOs — — — Total Available for Sale $ $ — $ — $ — $ (In thousands) Held to Maturity: U.S. Agency Obligations $ $ — $ — $ — $ Agency CMOs — — — Total Held to Maturity $ $ — $ — $ — $ The following table presents the contractual maturity of our secured borrowings and class of collateral pledged at December 31, 2015: Remaining Contractual Maturity of the Agreements Overnight and Greater Than (In thousands) Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase Agreements: Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — Agency CMBSs — — — Agency CMOs — — — Total Available for Sale $ $ — $ — $ $ (In thousands) Held to Maturity: U.S. Agency Obligations $ $ — $ — $ — $ Agency CMOs — — — Agency MBSs — — — Total Held to Maturity $ $ — $ — $ — $ The fair value of securities pledged to secure repurchase agreements may decline. The Company manages this risk by having a policy to pledge securities valued greater than the gross outstanding balance of repurchase agreements. Securities sold under agreements to repurchase are secured by securities with a carrying value of $276.20 million at September 30, 2016 and $287.27 million at December 31, 2015.

LOANS AND THE ALLOWANCE FOR CRE

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES	9 Months Ended
	Sep. 30, 2016
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES	NOTE 7: LOANS AND THE ALLOWANCE FOR CREDIT LOSSES Loans The composition of our loan portfolio at September 30, 2016 and December 31, 2015 was as follows: (In thousands) September 30, 2016 December 31, 2015 Commercial, financial and agricultural $ $ Municipal loans Real estate loans – residential Real estate loans – commercial Real estate loans – construction Installment loans All other loans Total loans $ $ We primarily originate commercial, commercial real estate, municipal, and residential real estate loans to customers throughout the states of Vermont and Massachusetts. There are no significant industry concentrations in the loan portfolio. Total loans included $1.14 million and $1.20 million of net deferred loan origination costs at September 30, 2016 and December 31, 2015, respectively. The aggregate amount of overdrawn deposit balances classified as loan balances was $267 thousand and $308 thousand at September 30, 2016 and December 31, 2015, respectively. The following table reflects our loan loss experience and activity in the allowance for loan losses for the three months ended September 30, 2016: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $154 thousand included in the provision for credit losses in the consolidated statement of income. The following table reflects our loan loss experience and activity in the allowance for loan losses for the three months ended September 30, 2015: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $59 thousand included in the provision for credit losses in the consolidated statement of income . The following table reflects our loan loss experience and activity in the allowance for loan losses for the nine months ended September 30, 2016: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $90 thousand included in the provision for credit losses in the consolidated statement of income. The following table reflects our loan loss experience and activity in the allowance for loan losses for the nine months ended September 30, 2015: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All Other Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs — — — — Recoveries — — — Provision (credit) Ending balance $ $ $ $ $ $ $ — $ The $250 thousand provision for credit losses in the consolidated statement of income consisted of a $444 thousand provision for loan losses included above plus $194 thousand credit for excess reserves from the reserve for undisbursed lines and letters. The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based upon the impairment method at September 30, 2016: Commercial, financial and Real estate- Real estate- Real estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Ending balance individually evaluated for impairment $ $ — $ $ — $ — $ — $ — $ Ending balance collectively evaluated for impairment — Ending balance acquired with deteriorated credit quality — — — — — — — — Totals $ $ $ $ $ $ $ — $ Financing receivables: Ending balance individually evaluated for impairment $ $ — $ $ $ — $ — $ — $ Ending balance collectively evaluated for impairment Ending balance acquired with deteriorated credit quality — — — — — Totals $ $ $ $ $ $ $ $ The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based upon impairment method at December 31, 2015: Commercial, financial and Real estate- Real estate- Real estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Ending balance individually evaluated for impairment $ — $ — $ $ — $ — $ — $ — $ Ending balance collectively evaluated for impairment — Ending balance acquired with deteriorated credit quality — — — — — — — — Totals $ $ $ $ $ $ $ — $ Financing receivables: Ending balance individually evaluated for impairment $ $ — $ $ $ — $ $ — $ Ending balance collectively evaluated for impairment Ending balance acquired with deteriorated credit quality — — — — — Totals $ $ $ $ $ $ $ $ The table below presents the recorded investment of loans segregated by class, with delinquency aging as of September 30, 2016: 31-60 61-90 91 Days Total Days Days or More Past (In thousands) Past Due Past Due Past Due Due Current Nonperforming Total Commercial, financial and agricultural $ — $ $ — $ $ $ $ Municipal — — — — — Real estate-residential: First mortgage — — Second mortgage — — — — — Real estate-commercial: Owner occupied — — — — Non-owner occupied — — — — Real estate-construction: Residential — — — — — Commercial — — — — — Installment — — — Other — — — — — Total $ $ $ — $ $ $ $ Of the total nonperforming loans in the aging table above, $2.08 million were past due of which $316 thousand were restructured loans, $839 thousand were purchase credit impaired, and $0 were 91 days or more past due and accruing. In the third quarter of 2016, the Company’s policy was updated to classify accruing troubled debt restructurings (“ TDRs”) as performing loans to more accurately represent the characteristics of the loans. Prior period amounts have been reclassified to be consistent with the current period presentation. Nonperforming loans, as of December 31, 2015, were reduced $210 thousand for accruing TDRs. The table below presents the recorded investment of loans segregated by class, with delinquency aging as of December 31, 2015: 31-60 61-90 91 Days Total Days Days or More Past (In thousands) Past Due Past Due Past Due Due Current Nonperforming Total Commercial, financial and agricultural $ — $ $ — $ $ $ $ Municipal — — — — — Real estate-residential: First mortgage — — Second mortgage — — — Real estate-commercial: Owner occupied — — Non-owner occupied — — — — Real estate-construction: Residential — — — — — Commercial — — — — — Installment — Other — — — — — Total $ $ $ — $ $ $ $ Of the total nonperforming loans in the aging table above, $2.65 million were past due of which $472 thousand were restructured loans, $1.05 million were purchase credit impaired and $0 were 91 days or more past due and accruing. Impaired loans by class at September 30, 2016 and for the three and nine months ended September 30, 2016 are as follows: Period Ended Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 September 30, 2016 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (In thousands) Investment Balance Allowance Investment Recognized Investment Recognized With no related allowance recorded Commercial, financial and agricultural $ $ $ — $ $ $ $ Residential: First mortgage — Second mortgage — — — — — — Commercial Real Estate: Owner occupied — — — Non-owner occupied — — — Construction: Residential — — — — — — — Commercial — — — — — — — Installment — — — — — With related allowance recorded Commercial, financial and agricultural — — Residential: First mortgage — — Second mortgage — — — — — — — Commercial Real Estate: Owner occupied — — — — — — Total Commercial, financial and agricultural Residential Commercial Real Estate — — — Construction — — — — — — — Installment — — — — — Total $ $ $ $ $ $ $ Impaired loans by class at December 31, 2015 and for the three and nine months ended September 30, 2015 are as follows: Period Ended Three Months Ended Nine Months Ended December 31, 2015 September 30, 2015 September 30, 2015 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (In thousands) Investment Balance Allowance Investment Recognized Investment Recognized With no related allowance recorded Commercial, financial and agricultural $ $ $ — $ $ $ $ Residential: First mortgage — Second mortgage — — — — — Commercial Real Estate: Owner occupied — — — — — Non-owner occupied — — — — Installment — — — — — With related allowance recorded Commercial, financial and agricultural — — — — — — Residential: First mortgage — — Second mortgage — — — — — — Commercial Real Estate: Owner occupied — — — — — — — Installment — — — — — — — Total Commercial, financial and agricultural — Residential Commercial Real Estate — — — — Installment — — — — — Total $ $ $ $ $ $ $ Residential and commercial loans serviced for others at September 30, 2016 and December 31, 2015 amounted to approximately $23.70 million and $27.87 million, respectively. Nonperforming loans at September 30, 2016 and December 31, 2015 are as follows: (In thousands) September 30, 2016 December 31, 2015 Nonaccrual loans $ $ Loans greater than 90 days and accruing — — Troubled debt restructurings ("TDRs") Total nonperforming loans $ $ There were no loans restructured in the three months ended September 30, 2016. One loan was restructured during the nine months ended September 30, 2016 with a balance of $432 thousand and is considered to be a TDR. This loan was individually evaluated for impairment and it was determined that no reserve was required. One loan with a balance of $88 thousand was restructured during the three months ended September 30, 2015 and was considered to be a TDR. Loans with a total balance of $559 thousand were restructured during the nine months ended September 30, 2015 and were considered to be TDRs. TDRs represent balances where the existing loan was modified involving a concession in rate, term or payment amount due to the distressed financial condition of the borrower. There were three restructured residential mortgages at September 30, 2016 with balances totaling $113 thousand. There were two restructured commercial loans at September 30, 2016 with a balance of $397 thousand. One commercial real estate loan at September 30, 2016 with a balance of $432 thousand was restructured. Five of the six TDRs at September 30, 2016 continue to pay as agreed according to the modified terms. The one TDR that was delinquent at September 30, 2016 totaled $316 thousand. Four of the six TDRs totaling $194 thousand are accruing and are considered performing loans. At September 30, 2016, there were no commitments to lend additional funds to borrowers whose loans have been modified in a troubled debt restructuring. We had no commitments to lend additional funds to borrowers whose loans were in nonaccrual status or to borrowers whose loans were 91 days past due and still accruing at September 30, 2016. Interest income on restructured loans during the three and nine months ended September 30, 2016 and 2015 was insignificant. Nonaccrual loans by class as of September 30, 2016 and December 31, 2015 are as follows: (In thousands) September 30, 2016 December 31, 2015 Commercial, financial and agricultural $ $ Real estate - residential: First mortgage Second mortgage — — Real estate - commercial: Owner occupied Non owner occupied Installment — Total nonaccruing non-TDR loans $ $ Nonaccruing TDR’s Commercial, financial and agricultural Real estate – residential: First mortgage — — Real estate - commercial: Non owner occupied — Total nonaccrual loans including TDRs $ $ Commercial Grading System We use risk rating definitions for our commercial loan portfolios and certain residential loans which are generally consistent with regulatory and banking industry norms. Loans are assigned a credit quality grade which is based upon management’s on-going assessment of risk based upon an evaluation of the quantitative and qualitative aspects of each credit. This assessment is a dynamic process and risk ratings are adjusted as each borrower’s financial situation changes. This process is designed to provide timely recognition of a borrower’s financial condition and appropriately focus management resources. Pass rated loans exhibit acceptable risk to the bank in terms of financial capacity to repay their loans as well as possessing acceptable fallback repayment sources, typically collateral and personal guarantees. Pass rated commercial loan relationships with a total exposure of $1 million or greater are subject to a formal annual review process; additionally, management reviews the risk rating at the time of any late payments, overdrafts or other sign of deterioration in the interim. Loans rated Pass-Watch require more than usual attention and monitoring by the account officer, though not to the extent that a formal remediation plan is warranted. Borrowers can be rated Pass-Watch based upon a weakened capital structure, marginally adequate cash flow and/or collateral coverage or early-stage declining trends in operations or financial condition. Loans rated Special Mention possess potential weakness that may expose the bank to some risk of loss in the future. These loans require more frequent monitoring and formal reporting to Management. Substandard loans reflect well-defined weaknesses in the current repayment capacity, collateral or net worth of the borrower with the possibility of some loss to the bank if these weaknesses are not corrected. Action plans are required for these loans to address the inherent weakness in the credit and are formally reviewed. Residential real estate and consumer loans We do not use a grading system for our performing residential real estate and consumer loans. Credit quality for these loans is based on performance and payment status. Below is a summary of loans by credit quality indicator as of September 30, 2016: Pass- Special Sub- (In thousands) Unrated Pass Watch Mention Standard Total Commercial, financial and agricultural $ $ $ $ $ $ Municipal — Real estate – residential: First mortgage — Second mortgage — — — Real estate – commercial: Owner occupied Non-owner occupied Real estate – construction: Residential — — — Commercial — Installment — — — — All other loans — — — — Total $ $ $ $ $ $ Below is a summary of loans by credit quality indicator as of December 31, 2015: Pass- Special Sub- (In thousands) Unrated Pass Watch Mention Standard Total Commercial, financial and agricultural $ $ $ $ $ $ Municipal — — Real estate – residential: First mortgage — Second mortgage — — — — Real estate – commercial: Owner occupied Non-owner occupied Real estate – construction: Residential — — — Commercial — Installment — — — All other loans — — — — Total $ $ $ $ $ $ The carrying amount of loans purchased with evidence of credit deterioration accounted for under FASB Accounting Standards Codification (“ASC”) 310-30 acquired in the NUVO acquisition totaled $2.73 million and $3.24 million at September 30, 2016 and December 31, 2015, respectively.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	9 Months Ended
	Sep. 30, 2016
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 8: FAIR VALUE OF FINANCIAL INSTRUMENTS We record certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are also utilized to determine the initial value of certain assets and liabilities, to perform impairment assessments, and for disclosure purposes. We use quoted market prices and observable inputs to the maximum extent possible when measuring fair value. In the absence of quoted market prices, various valuation techniques are utilized to measure fair value. When possible, observable market data for identical or similar financial instruments are used in the valuation. When market data is not available, fair value is determined using valuation models that incorporate Management’s estimates of the assumptions a market participant would use in pricing the asset or liability. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: · Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. · Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. · Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The types of instruments valued based on quoted market prices in active markets include most U.S. government and Agency securities, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. We do not adjust the quoted price for such instruments. The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid Agency securities, less liquid listed equities, state, municipal and provincial obligations, and certain physical commodities. Such instruments are generally classified within Level 2 of the fair value hierarchy. Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions; valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, Management’s best estimate will be used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Subsequent to inception, Management only changes Level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows. Financial instruments on a recurring basis 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 $ $ — $ $ — U.S. GSEs — — FHLB Obligations — — Agency MBSs — — Agency CMBSs — — Agency CMOs — — ABSs — — Interest rate swap agreements — — Total assets $ $ — $ $ — Liabilities Interest rate swap agreements — — Total liabilities $ $ — $ $ — 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 $ $ — $ $ — U.S. GSEs — — FHLB Obligations — — Agency MBSs — — Agency CMBSs — — Agency CMOs — — ABSs — — Interest rate swap agreements — — Total assets $ $ — $ $ — Liabilities Interest rate swap agreements — — Total liabilities $ $ — $ $ — Investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participant with whom we have historically transacted both purchases and sales of investment securities. Prices obtained from these sources include market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. More information regarding our investment securities can be found in Note 5 to these consolidated financial statements. The interest rate swaps are reported at their fair value utilizing Level 2 inputs from third parties. The fair value of our interest rate swaps are determined using prices obtained from a third party advisor. The fair value measurement of the interest rate swap is determined by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates derived from observed market interest rate curves. There were no transfers between Level 1 and Level 2 for the nine months ended September 30, 2016 or September 30, 2015. There were no Level 3 assets measured at fair value on a recurring basis at September 30, 2016 or December 31, 2015. Financial instruments on a non-recurring basis Certain financial assets are also measured at fair value on a non-recurring basis, however they were not material at September 30, 2016 or December 31, 2015. These financial assets include impaired loans and other real estate owned (“OREO”). Fair value of financial instruments 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 $ $ $ $ — $ — Securities available for sale — — Securities held to maturity — — FHLB stock N/A N/A N/A N/A Loans, net of allowance for loan losses — — Interest rate swap agreement — — Accrued interest receivable — Total $ $ $ $ $ Deposits $ $ $ $ $ — Short-term borrowings — — Securities sold under agreement to repurchase — — Other long-term debt — — Junior subordinated debentures issued to unconsolidated subsidiary trust — — Interest rate swap agreement — — Accrued interest payable — Total $ $ $ $ $ — 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 $ $ $ $ — $ — Securities available for sale — — Securities held to maturity — — FHLB stock N/A N/A N/A N/A Loans, net of allowance for loan losses — — Interest rate swap agreement — — Accrued interest receivable — Total $ $ $ $ $ Deposits $ $ $ $ $ — Short-term borrowings — — — — — Securities sold under agreement to repurchase — — Other long-term debt — — Junior subordinated debentures issued to unconsolidated subsidiary trust — — Interest rate swap agreement — — Accrued interest payable — Total $ $ $ $ $ — The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accrued interest receivable and accrued interest payable approximate fair value. It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability. The methodologies for other financial assets and financial liabilities are discussed below. Loans - The fair value for loans is estimated using discounted cash flow analyses, using interest rates and spreads currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. Deposits - The fair value of deposits with no stated maturity, which includes demand, savings, interest bearing checking and money market accounts, is equal to the amount payable on demand resulting in a Level 1 classification. The fair value of variable rate, fixed term certificates of deposit also approximates the carrying amount reported in the consolidated balance sheets. The fair value of fixed rate and fixed term certificates of deposit is estimated using a discounted cash flow method which applies interest rates currently being offered for deposits of similar remaining maturities resulting in a Level 2 classification. Debt - The fair value of debt is estimated using current market rates for borrowings of similar remaining maturity resulting in a Level 2 classification. Commitments to Extend Credit and Standby Letters of Credit - The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of financial standby letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties. The fair value of commitments to extend credit and standby letters of credit is not material as of September 30, 2016 and December 31, 2015.

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	9 Months Ended
	Sep. 30, 2016
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	NOTE 9: EMPLOYEE BENEFIT PLANS Pension Plan Prior to January 1995, we maintained a noncontributory defined benefit plan (the “Pension Plan”) covering all eligible employees. During 1995, the Pension Plan was curtailed. Accordingly, all accrued benefits were fully vested and no additional years of service or age will be accrued. The following tables summarize the components of net periodic benefit cost and other changes in Pension Plan assets and benefit obligations recognized in other comprehensive income for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2016 2015 2016 2015 Interest cost $ $ $ $ Expected return on plan assets Service costs Net loss amortization Net periodic pension cost (benefit) $ $ $ $ We have no minimum required contribution for 2016. Our Pension Investment Policy Statement sets forth the investment objectives and constraints of the Pension Plan. The purpose of the policy is to assist our Retirement Plan Committee in effectively supervising, monitoring, and evaluating the Pension Plan.

EARNINGS PER SHARE

EARNINGS PER SHARE	9 Months Ended
	Sep. 30, 2016
EARNINGS PER SHARE
EARNINGS PER SHARE	NOTE 10: EARNINGS PER SHARE The following table presents reconciliations of the calculations of basic and diluted earnings per share for the three and nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30, September 30, (In thousands except per share data) 2016 2015 2016 2015 Net income $ $ $ $ Weighted average common shares outstanding Dilutive effect of common stock equivalents Weighted average common and common equivalent shares outstanding Basic earnings per common share $ $ $ $ Diluted earnings per common share $ $ $ $ Basic earnings per common share were computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share were computed by including potentially dilutive shares on the weighted average share count. Anti-dilutive warrants totaling 34, 370 shares have been excluded from the calculation of diluted EPS for the three and nine months ended September 30, 2016, respectively. There were no anti-dilutive shares excluded for the three or nine months ended September 30, 2015.

STOCK REPURCHASE PROGRAM

STOCK REPURCHASE PROGRAM	9 Months Ended
	Sep. 30, 2016
STOCK REPURCHASE PROGRAM
STOCK REPURCHASE PROGRAM	NOTE 11: STOCK REPURCHASE PROGRAM We extended our stock buyback program through January 26, 2017. Under the program, which was originally adopted in January 2007, we may repurchase up to 200,000 shares of our common stock on the open market from time to time, and have purchased 143,475 shares at an average price per share of $23.00 since the program's adoption. There were no shares repurchased during the three or nine months ended September 30, 2016.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 12: COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance Sheet Risk Merchants is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments primarily include commitments to extend credit and financial guarantees. Such instruments involve, to varying degrees, elements of credit and interest rate risk that are not recognized in the accompanying consolidated balance sheets. Exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and financial guarantees written is represented by the contractual amount of those instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitment is expected to expire without being drawn upon, the total commitment amount does not necessarily represent a future cash requirement. We evaluate each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained by us upon extension of credit is based on Management's credit evaluation of the counterparty, and an appropriate amount of real and/or personal property is typically obtained as collateral. Disclosures are required regarding liability-recognition for the fair value at issuance of certain guarantees. We do not issue any guarantees that would require liability-recognition or disclosure, other than our standby letters of credit. We have issued conditional commitments in the form of standby letters of credit to guarantee payment on behalf of a customer and guarantee the performance of a customer to a third party. Standby letters of credit generally arise in connection with lending relationships. The credit risk involved in issuing these instruments is essentially the same as that involved in extending loans to customers. Contingent obligations under standby letters of credit totaled approximately $ 7.11 million at September 30, 2016 and $6.30 million at December 31, 2015, respectively, and represent the maximum potential future payments we could be required to make. Typically, these instruments have terms of 12 months or less and expire unused; therefore, the total amounts do not necessarily represent future cash requirements. Each customer is evaluated individually for creditworthiness under the same underwriting standards used for commitments to extend credit and on-balance sheet instruments. Our policies governing loan collateral apply to standby letters of credit at the time of credit extension. Loan-to-value ratios are generally consistent with loan-to-value requirements for other commercial loans secured by similar types of collateral. We may enter into commitments to sell loans, which involve market and interest rate risk. There were no such commitments at September 30, 2016 or December 31, 2015. Reserve Balances at the Federal Reserve Bank At September 30, 2016 and December 31, 2015, amounts at the Federal Reserve Bank included $ 27.67 million and $ 30.52 million, respectively, held to satisfy certain reserve requirements of the Federal Reserve Bank. Legal Proceedings We have been named as defendants in various legal proceedings arising from our normal business activities. Although the amount of any ultimate liability with respect to such proceedings cannot be determined, in the opinion of Management, based upon input from counsel on the anticipated outcome of such proceedings, any such liability will not have a material effect on our consolidated financial position.

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	9 Months Ended
	Sep. 30, 2016
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	NOTE 13: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2016. Unrealized Unrealized Gains Gains (Losses) (Losses) on Securities on Securities Transferred From Accumulated Other Available-For- Available-For-Sale to Interest Rate Comprehensive (In thousands) Sale Held-To-Maturity Pension Plan Swaps Income (Loss) Beginning Balance June 30, 2016 $ $ $ $ $ Other comprehensive (loss) income before reclassifications — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive (loss) income Balance September 30, 2016 $ $ $ $ $ Beginning Balance December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2016 $ $ $ $ $ The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2015. Unrealized Unrealized Gains Gains (Losses) (Losses) on Securities on Securities Transferred From Accumulated Other Available-For- Available-For-Sale to Interest Rate Comprehensive (In thousands) Sale Held-To-Maturity Pension Plan Swaps Income (Loss) Beginning Balance June 30, 2015 $ $ $ $ $ Other comprehensive income before reclassifications — — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2015 $ $ $ $ $ Beginning Balance December 31, 2014 $ $ $ $ $ Other comprehensive income before reclassifications — — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2015 $ $ $ $ $ Details of the reclassification adjustments in the above table for the three and nine months ended September 30, 2016 and 2015 are presented below: Details about Accumulated Other Three Months Ended Nine Months Ended Comprehensive Income Components September 30, September 30, Affected Line Item in the Statement (In thousands) 2016 2016 Where Net Income is Presented Amortization of defined benefit pension plan $ $ Compensation and benefits expense Total before tax Provision for income taxes $ $ Net of tax Total reclassification adjustments $ $ Decrease to net income Details about Accumulated Other Three Months Ended Nine Months Ended Comprehensive Income Components September 30, September 30, Affected Line Item in the Statement (In thousands) 2015 2015 Where Net Income is Presented Amortization of defined benefit pension plan $ $ Compensation and benefits expense Total before tax Provision for income taxes $ $ Net of tax Total reclassification adjustments $ $ Decrease to net income

DERIVATIVE FINANCIAL INSTRUMENT

DERIVATIVE FINANCIAL INSTRUMENTS	9 Months Ended
	Sep. 30, 2016
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS	NOTE 14: DERIVATIVE FINANCIAL INSTRUMENTS At September 30, 2016 and December 31, 2015, we had an interest rate swap with a notional amount of $10 million that was designated as a cash flow hedge. The swap was used to convert a portion of the floating rate interest on our trust preferred issuance to a fixed rate of interest. Each quarter we assess the effectiveness of the hedging relationships by comparing the changes in cash flows of the derivative hedging instruments with the changes in cash flows of the designated hedged item. There was no ineffective portion recognized in earnings during the three or nine months ended September 30, 2016 or September 30, 2015. The fair values of $ 51 thousand and $239 thousand was reflected in other liabilities in the accompanying consolidated balance sheets at September 30, 2016 and December 31, 2015, respectively. We have interest rate swaps with a notional amount of $ 45.1 million with certain commercial customers. In order to minimize our risk, these customer derivatives (pay floating/receive fixed swaps) have been offset with essentially matching interest rate swaps with our counterparty totaling $45.1 million (pay fixed/receive floating swaps). At September 30, 2016, the weighted average receive rate of these interest rate swaps was 2.24%, the weighted average pay rate was 3.64% and the weighted average maturity was 9 .4 years. The fair values of $1.83 million and $ 1.83 million were reflected in other assets and other liabilities, respectively, in the accompanying consolidated balance sheets at September 30, 2016. At December 31, 2015, the weighted average receive rate of these interest rate swaps was 2.13%, the weighted average pay rate was 3.60% and the weighted average maturity was 10.2 years. The fair values of $765 thousand and $765 thousand were reflected in other assets and other liabilities, respectively, in the accompanying consolidated balance sheets at December 31, 2015. Hedge accounting has not been applied for these derivatives. Since the terms of the swaps with our customer and the other financial institution offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact our results of operations. We have interest rate swaps with notional amounts totaling $ 8.4 million at September 30, 2016, and $9.8 million at December 31, 2015, that were designated as fair value hedges of certain fixed rate loans with municipalities. At September 30, 2016, the weighted average receive rate of these interest rate swaps was 1.87%, the weighted average pay rate was 3.27% and the weighted average maturity was 15. 8 years. The fair value of $572 thousand at September 30, 2016, was reflected as a reduction to loans and an increase to other assets. At December 31, 2015 the weighted average receive rate of these interest rate swaps was 1.78%, the weighted average pay rate was 3.25% and the weighted average maturity was 16.6 years. The fair value of $319 thousand at December 31, 2015, was reflected as a reduction to loans and an increase to other assets. The ineffective portion of the interest swaps was immaterial and as such, amounts are not recognized in earnings. We assessed our counterparty risk at September 30, 2016 and determined any credit risk inherent in our derivative contracts was insignificant. Information about the fair value of derivative financial instruments can be found in Note 8 to these consolidated financial statements.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 15: SUBSEQUENT EVENTS On October 22, 2016, the Company entered into a definitive merger agreement to be acquired by Community Bank System, Inc. for approximately $304 million in Community Bank System, Inc. stock and cash. The merger is subject to the approval by the stockholders of Merchants Bancshares, Inc. and regulatory authorities and is expected to be completed during the second quarter of 2017.

FINANCIAL STATEMENT PRESENTAT23

FINANCIAL STATEMENT PRESENTATION (Policies)	9 Months Ended
	Sep. 30, 2016
ACCOUNTING POLICIES
Principles of Consolidation	Principles of Consolidation The accompanying consolidated financial statements include the accounts of Merchants Bancshares, Inc. (the “Company”), and its wholly-owned subsidiary Merchants Bank (the “Bank,” and collectively with the Company, “Merchants,” “we,” “us,” or “our”). All material intercompany accounts and transactions are eliminated in consolidation. We offer a full range of deposit, loan, cash management, and trust services to meet the financial needs of individual consumers, businesses and municipalities at 31 full-service banking offices throughout the state of Vermont and one full-service banking office in Massachusetts as of September 30, 2016.
Basis of Presentation	Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. All adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our interim consolidated financial statements as of September 30, 2016 and December 31, 2015 and for the three and nine months ended September 30, 2016 and 2015 have been included. The information was prepared from our unaudited financial statements and the unaudited financial statements of our subsidiaries, Merchants Bank and MBVT Statutory Trust I. Amounts reported for prior periods are reclassified, where necessary, to be consistent with the current period presentation.
Management's Use of Estimates in Preparation of Financial Statements	Management’s Use of Estimates in Preparation of Financial Statements The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting periods. The most significant estimates include those used in determining the allowance for credit losses, income taxes, interest income recognition on loans and investments and analysis of other-than-temporary impairment of our investment securities portfolio. Operating results in the future may vary from the amounts derived from Management's estimates and assumptions.

ACQUISITION OF NUVO BANK & TR24

ACQUISITION OF NUVO BANK & TRUST COMPANY (Tables) - NUVO Bank & Trust Company	9 Months Ended
	Sep. 30, 2016
Consideration paid and fair value of identifiable assets acquired and liabilities assumed	(In thousands) Consideration paid: Common stock issued in exchange for NUVO shares $ Cash paid for NUVO shares Stock warrants issued Total consideration paid $ Assets acquired: Cash and cash equivalents $ Interest bearing time deposits with banks Investments Restricted investment in bank stock Loans Premises and equipment , net Accrued interest receivable Core deposit intangible Deferred tax asset Other assets Total assets acquired Liabilities assumed: Deposits Federal Home Loan Bank advances Accrued interest payable Tax effect of acquisition fair value adjustments Other liabilities Total liabilities assumed Net assets acquired $ Goodwill $
Schedule of changes in fair value of consideration paid and net assets acquired	(In thousands) Goodwill reported as of December 31, 2015 $ Effect of adjustments to: Stock warrants issued Deferred tax asset Adjusted goodwill as of September 30, 2016 $

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2016
Schedule of other intangible assets	September 30, December 31, (In thousands) 2016 2015 Beginning of period $ $ — Additions — Amortization End of period $ $
Schedule of estimated amortization expense for each of the next five years	(In thousands) Amount Remainder of 2016 $ 2017 2018 2019 2020 2021 Thereafter
NUVO Bank & Trust Company
Schedule of goodwill	September 30, December 31, (In thousands) 2016 2015 Beginning of period $ $ — Effect of adjustments — Goodwill — Impairment — — End of period $ $

INVESTMENT SECURITIES (Tables)

INVESTMENT SECURITIES (Tables)	9 Months Ended
	Sep. 30, 2016
INVESTMENT SECURITIES
Schedule of amortized cost and fair values of securities classified as available for sale and held to maturity	The amortized cost and fair values of the securities classified as available for sale and held to maturity as of September 30, 2016 are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value Available for Sale: U.S. Treasury Obligations $ $ $ — $ U.S. Government Sponsored Enterprises ("U.S. GSEs") — Federal Home Loan Bank ("FHLB") Obligations Residential Real Estate Mortgage-backed Securities ("Agency MBSs") Agency Commercial Mortgage Backed Securities ("Agency CMBSs") Agency Collateralized Mortgage Obligations ("Agency CMOs") Asset Backed Securities ("ABSs") — Total Available for Sale $ $ $ $ Gross Gross Amortized Unrecognized Unrecognized Fair Cost Gains Losses Value Held to Maturity: U.S. Agency Obligations $ $ $ — $ Agency CMOs Agency MBSs — Total Held to Maturity $ $ $ $ The amortized cost and fair values of the securities classified as available for sale and held to maturity as of December 31, 2015 are as follows: Gross Gross Amortized Unrealized Unrealized Fair (In thousands) Cost Gains Losses Value Available for Sale: U.S. Treasury Obligations $ $ $ $ U.S. GSEs FHLB Obligations Agency MBSs Agency CMBSs — Agency CMOs ABSs — Total Available for Sale $ $ $ $ Gross Gross Amortized Unrecognized Unrecognized Fair Cost Gains Losses Value Held to Maturity: U.S. Agency Obligations $ $ $ — $ U.S. GSEs — FHLB Obligations — Agency CMOs Agency MBSs — Total Held to Maturity $ $ $ $
Schedule of contractual final maturity distribution of debt securities classified as available for sale or held to maturity	The contractual final maturity distribution of the debt securities classified as available for sale as of September 30, 2016, are as follows: Securities After One After Five not due Within But Within But Within After Ten at a Single (In thousands) One Year Five Years Ten Years Years Maturity Total Available for Sale (at fair value): U.S. Treasury Obligations $ $ $ — $ — $ N/A $ U.S. GSEs — — — N/A FHLB Obligations — — N/A Agency MBSs N/A N/A N/A N/A Agency CMBSs N/A N/A N/A N/A Agency CMOs N/A N/A N/A N/A ABSs N/A N/A N/A N/A Total Available for Sale $ $ $ $ — $ $ Available for Sale (at amortized cost): U.S. Treasury Obligations $ $ $ — $ — $ N/A $ U.S. GSEs — — — N/A FHLB Obligations — — N/A Agency MBSs N/A N/A N/A N/A Agency CMBSs N/A N/A N/A N/A Agency CMOs N/A N/A N/A N/A ABSs N/A N/A N/A N/A Total Available for Sale $ $ $ $ — $ $ The contractual final maturity distribution of the debt securities classified as held to maturity as of September 30, 2016, are as follows: Securities After One After Five not due Within But Within But Within After Ten at a Single (In thousands) One Year Five Years Ten Years Years Maturity Total Held to Maturity (at fair value): U.S. Agency Obligations $ — $ — $ — $ $ N/A $ Agency CMOs N/A N/A N/A N/A Agency MBSs N/A N/A N/A N/A Total Held to Maturity $ — $ — $ — $ $ $ Held to Maturity (at amortized cost): U.S. Agency Obligations $ — $ — $ — $ $ N/A $ Agency CMOs N/A N/A N/A N/A Agency MBSs N/A N/A N/A N/A Total Held to Maturity $ — $ — $ — $ $ $
Schedule of gross unrealized losses on investment securities and fair value of related securities, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position	Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at September 30, 2016, were as follows: Less Than 12 Months 12 Months or More Total Number Fair Number Fair Number Fair (In thousands) of Issues Value Loss of Issues Value Loss of Issues Value Loss Available for Sale: FHLB Obligations $ $ — $ — $ — $ $ Agency MBSs — — — Agency CMBSs — — — Agency CMOs Total Available for Sale $ $ $ $ $ $ Held to Maturity: Agency CMOs — $ — $ — $ $ — $ $ Total Held to Maturity — $ — $ — $ $ — $ $ Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, at December 31, 2015, were as follows: Less Than 12 Months 12 Months or More Total Number Fair Number Fair Number Fair (In thousands) of Issues Value Loss of Issues Value Loss of Issues Value Loss Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — — Agency CMBSs Agency CMOs Total Available for Sale $ $ $ $ $ $ Held to Maturity: Agency CMOs $ $ $ $ $ $ Total Held to Maturity $ $ $ $ $ $

SECURITIES SOLD UNDER AGREEME27

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Tables)	9 Months Ended
	Sep. 30, 2016
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE.
Schedule of contractual maturity of secured borrowings and class of collateral pledged	Remaining Contractual Maturity of the Agreements Overnight and Greater Than (In thousands) Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase Agreements: Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — — Agency CMBSs — — — Agency CMOs — — — Total Available for Sale $ $ — $ — $ — $ (In thousands) Held to Maturity: U.S. Agency Obligations $ $ — $ — $ — $ Agency CMOs — — — Total Held to Maturity $ $ — $ — $ — $ The following table presents the contractual maturity of our secured borrowings and class of collateral pledged at December 31, 2015: Remaining Contractual Maturity of the Agreements Overnight and Greater Than (In thousands) Continuous Up to 30 Days 30-90 Days 90 Days Total Repurchase Agreements: Available for Sale: U.S. Treasury Obligations $ $ — $ — $ — $ U.S. GSEs — — — FHLB Obligations — — — Agency MBSs — — Agency CMBSs — — — Agency CMOs — — — Total Available for Sale $ $ — $ — $ $ (In thousands) Held to Maturity: U.S. Agency Obligations $ $ — $ — $ — $ Agency CMOs — — — Agency MBSs — — — Total Held to Maturity $ $ — $ — $ — $

LOANS AND THE ALLOWANCE FOR C28

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES (Tables)	9 Months Ended
	Sep. 30, 2016
LOANS AND THE ALLOWANCE FOR CREDIT LOSSES
Schedule of composition of loan portfolio	(In thousands) September 30, 2016 December 31, 2015 Commercial, financial and agricultural $ $ Municipal loans Real estate loans – residential Real estate loans – commercial Real estate loans – construction Installment loans All other loans Total loans $ $
Schedule of loan loss experience and activity in allowance for loan losses	The following table reflects our loan loss experience and activity in the allowance for loan losses for the three months ended September 30, 2016: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $154 thousand included in the provision for credit losses in the consolidated statement of income. The following table reflects our loan loss experience and activity in the allowance for loan losses for the three months ended September 30, 2015: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $59 thousand included in the provision for credit losses in the consolidated statement of income . The following table reflects our loan loss experience and activity in the allowance for loan losses for the nine months ended September 30, 2016: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ — $ Charge-offs — — — — Recoveries — — — Provision (credit) — Ending balance $ $ $ $ $ $ $ — $ In addition to the provision for loan losses included above, there was a provision for the reserve for undisbursed lines of $90 thousand included in the provision for credit losses in the consolidated statement of income. The following table reflects our loan loss experience and activity in the allowance for loan losses for the nine months ended September 30, 2015: Commercial, financial Real Real Real and estate- estate- estate- (In thousands) agricultural Municipal residential commercial construction Installment All Other Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ $ Charge-offs — — — — Recoveries — — — Provision (credit) Ending balance $ $ $ $ $ $ $ — $ The $250 thousand provision for credit losses in the consolidated statement of income consisted of a $444 thousand provision for loan losses included above plus $194 thousand credit for excess reserves from the reserve for undisbursed lines and letters.
Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment based upon impairment method	The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based upon the impairment method at September 30, 2016: Commercial, financial and Real estate- Real estate- Real estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Ending balance individually evaluated for impairment $ $ — $ $ — $ — $ — $ — $ Ending balance collectively evaluated for impairment — Ending balance acquired with deteriorated credit quality — — — — — — — — Totals $ $ $ $ $ $ $ — $ Financing receivables: Ending balance individually evaluated for impairment $ $ — $ $ $ — $ — $ — $ Ending balance collectively evaluated for impairment Ending balance acquired with deteriorated credit quality — — — — — Totals $ $ $ $ $ $ $ $ The following presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based upon impairment method at December 31, 2015: Commercial, financial and Real estate- Real estate- Real estate- (In thousands) agricultural Municipal residential commercial construction Installment All other Totals Allowance for loan losses: Ending balance individually evaluated for impairment $ — $ — $ $ — $ — $ — $ — $ Ending balance collectively evaluated for impairment — Ending balance acquired with deteriorated credit quality — — — — — — — — Totals $ $ $ $ $ $ $ — $ Financing receivables: Ending balance individually evaluated for impairment $ $ — $ $ $ — $ $ — $ Ending balance collectively evaluated for impairment Ending balance acquired with deteriorated credit quality — — — — — Totals $ $ $ $ $ $ $ $
Schedule of recorded investment of loans, including nonaccrual and restructured loans	The table below presents the recorded investment of loans segregated by class, with delinquency aging as of September 30, 2016: 31-60 61-90 91 Days Total Days Days or More Past (In thousands) Past Due Past Due Past Due Due Current Nonperforming Total Commercial, financial and agricultural $ — $ $ — $ $ $ $ Municipal — — — — — Real estate-residential: First mortgage — — Second mortgage — — — — — Real estate-commercial: Owner occupied — — — — Non-owner occupied — — — — Real estate-construction: Residential — — — — — Commercial — — — — — Installment — — — Other — — — — — Total $ $ $ — $ $ $ $ Of the total nonperforming loans in the aging table above, $2.08 million were past due of which $316 thousand were restructured loans, $839 thousand were purchase credit impaired, and $0 were 91 days or more past due and accruing. In the third quarter of 2016, the Company’s policy was updated to classify accruing troubled debt restructurings (“ TDRs”) as performing loans to more accurately represent the characteristics of the loans. Prior period amounts have been reclassified to be consistent with the current period presentation. Nonperforming loans, as of December 31, 2015, were reduced $210 thousand for accruing TDRs. The table below presents the recorded investment of loans segregated by class, with delinquency aging as of December 31, 2015: 31-60 61-90 91 Days Total Days Days or More Past (In thousands) Past Due Past Due Past Due Due Current Nonperforming Total Commercial, financial and agricultural $ — $ $ — $ $ $ $ Municipal — — — — — Real estate-residential: First mortgage — — Second mortgage — — — Real estate-commercial: Owner occupied — — Non-owner occupied — — — — Real estate-construction: Residential — — — — — Commercial — — — — — Installment — Other — — — — — Total $ $ $ — $ $ $ $ Of the total nonperforming loans in the aging table above, $2.65 million were past due of which $472 thousand were restructured loans, $1.05 million were purchase credit impaired and $0 were 91 days or more past due and accruing.
Schedule of impaired loans by class	Impaired loans by class at September 30, 2016 and for the three and nine months ended September 30, 2016 are as follows: Period Ended Three Months Ended Nine Months Ended September 30, 2016 September 30, 2016 September 30, 2016 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (In thousands) Investment Balance Allowance Investment Recognized Investment Recognized With no related allowance recorded Commercial, financial and agricultural $ $ $ — $ $ $ $ Residential: First mortgage — Second mortgage — — — — — — Commercial Real Estate: Owner occupied — — — Non-owner occupied — — — Construction: Residential — — — — — — — Commercial — — — — — — — Installment — — — — — With related allowance recorded Commercial, financial and agricultural — — Residential: First mortgage — — Second mortgage — — — — — — — Commercial Real Estate: Owner occupied — — — — — — Total Commercial, financial and agricultural Residential Commercial Real Estate — — — Construction — — — — — — — Installment — — — — — Total $ $ $ $ $ $ $ Impaired loans by class at December 31, 2015 and for the three and nine months ended September 30, 2015 are as follows: Period Ended Three Months Ended Nine Months Ended December 31, 2015 September 30, 2015 September 30, 2015 Unpaid Average Interest Average Interest Recorded Principal Related Recorded Income Recorded Income (In thousands) Investment Balance Allowance Investment Recognized Investment Recognized With no related allowance recorded Commercial, financial and agricultural $ $ $ — $ $ $ $ Residential: First mortgage — Second mortgage — — — — — Commercial Real Estate: Owner occupied — — — — — Non-owner occupied — — — — Installment — — — — — With related allowance recorded Commercial, financial and agricultural — — — — — — Residential: First mortgage — — Second mortgage — — — — — — Commercial Real Estate: Owner occupied — — — — — — — Installment — — — — — — — Total Commercial, financial and agricultural — Residential Commercial Real Estate — — — — Installment — — — — — Total $ $ $ $ $ $ $
Schedule of nonperforming loans	(In thousands) September 30, 2016 December 31, 2015 Nonaccrual loans $ $ Loans greater than 90 days and accruing — — Troubled debt restructurings ("TDRs") Total nonperforming loans $ $
Schedule of nonaccrual loans by class	(In thousands) September 30, 2016 December 31, 2015 Commercial, financial and agricultural $ $ Real estate - residential: First mortgage Second mortgage — — Real estate - commercial: Owner occupied Non owner occupied Installment — Total nonaccruing non-TDR loans $ $ Nonaccruing TDR’s Commercial, financial and agricultural Real estate – residential: First mortgage — — Real estate - commercial: Non owner occupied — Total nonaccrual loans including TDRs $ $
Schedule of loans by credit quality indicator	Below is a summary of loans by credit quality indicator as of September 30, 2016: Pass- Special Sub- (In thousands) Unrated Pass Watch Mention Standard Total Commercial, financial and agricultural $ $ $ $ $ $ Municipal — Real estate – residential: First mortgage — Second mortgage — — — Real estate – commercial: Owner occupied Non-owner occupied Real estate – construction: Residential — — — Commercial — Installment — — — — All other loans — — — — Total $ $ $ $ $ $ Below is a summary of loans by credit quality indicator as of December 31, 2015: Pass- Special Sub- (In thousands) Unrated Pass Watch Mention Standard Total Commercial, financial and agricultural $ $ $ $ $ $ Municipal — — Real estate – residential: First mortgage — Second mortgage — — — — Real estate – commercial: Owner occupied Non-owner occupied Real estate – construction: Residential — — — Commercial — Installment — — — All other loans — — — — Total $ $ $ $ $ $

FAIR VALUE OF FINANCIAL INSTR29

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	9 Months Ended
	Sep. 30, 2016
FAIR VALUE OF FINANCIAL INSTRUMENTS
Schedule of financial instruments on a recurring basis	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 $ $ — $ $ — U.S. GSEs — — FHLB Obligations — — Agency MBSs — — Agency CMBSs — — Agency CMOs — — ABSs — — Interest rate swap agreements — — Total assets $ $ — $ $ — Liabilities Interest rate swap agreements — — Total liabilities $ $ — $ $ — 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 $ $ — $ $ — U.S. GSEs — — FHLB Obligations — — Agency MBSs — — Agency CMBSs — — Agency CMOs — — ABSs — — Interest rate swap agreements — — Total assets $ $ — $ $ — Liabilities Interest rate swap agreements — — Total liabilities $ $ — $ $ —
Schedule of fair value of financial instruments	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 $ $ $ $ — $ — Securities available for sale — — Securities held to maturity — — FHLB stock N/A N/A N/A N/A Loans, net of allowance for loan losses — — Interest rate swap agreement — — Accrued interest receivable — Total $ $ $ $ $ Deposits $ $ $ $ $ — Short-term borrowings — — Securities sold under agreement to repurchase — — Other long-term debt — — Junior subordinated debentures issued to unconsolidated subsidiary trust — — Interest rate swap agreement — — Accrued interest payable — Total $ $ $ $ $ — 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 $ $ $ $ — $ — Securities available for sale — — Securities held to maturity — — FHLB stock N/A N/A N/A N/A Loans, net of allowance for loan losses — — Interest rate swap agreement — — Accrued interest receivable — Total $ $ $ $ $ Deposits $ $ $ $ $ — Short-term borrowings — — — — — Securities sold under agreement to repurchase — — Other long-term debt — — Junior subordinated debentures issued to unconsolidated subsidiary trust — — Interest rate swap agreement — — Accrued interest payable — Total $ $ $ $ $ —

EMPLOYEE BENEFIT PLANS (Tables)

EMPLOYEE BENEFIT PLANS (Tables)	9 Months Ended
	Sep. 30, 2016
EMPLOYEE BENEFIT PLANS
Net periodic pension cost (benefit)	Three Months Ended Nine Months Ended September 30, September 30, (In thousands) 2016 2015 2016 2015 Interest cost $ $ $ $ Expected return on plan assets Service costs Net loss amortization Net periodic pension cost (benefit) $ $ $ $

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	9 Months Ended
	Sep. 30, 2016
EARNINGS PER SHARE
Schedule of reconciliations of the calculations of basic and diluted earnings per share	Three Months Ended Nine Months Ended September 30, September 30, (In thousands except per share data) 2016 2015 2016 2015 Net income $ $ $ $ Weighted average common shares outstanding Dilutive effect of common stock equivalents Weighted average common and common equivalent shares outstanding Basic earnings per common share $ $ $ $ Diluted earnings per common share $ $ $ $

ACCUMULATED OTHER COMPREHENSI32

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	9 Months Ended
	Sep. 30, 2016
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax	The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2016. Unrealized Unrealized Gains Gains (Losses) (Losses) on Securities on Securities Transferred From Accumulated Other Available-For- Available-For-Sale to Interest Rate Comprehensive (In thousands) Sale Held-To-Maturity Pension Plan Swaps Income (Loss) Beginning Balance June 30, 2016 $ $ $ $ $ Other comprehensive (loss) income before reclassifications — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive (loss) income Balance September 30, 2016 $ $ $ $ $ Beginning Balance December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2016 $ $ $ $ $ The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2015. Unrealized Unrealized Gains Gains (Losses) (Losses) on Securities on Securities Transferred From Accumulated Other Available-For- Available-For-Sale to Interest Rate Comprehensive (In thousands) Sale Held-To-Maturity Pension Plan Swaps Income (Loss) Beginning Balance June 30, 2015 $ $ $ $ $ Other comprehensive income before reclassifications — — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2015 $ $ $ $ $ Beginning Balance December 31, 2014 $ $ $ $ $ Other comprehensive income before reclassifications — — Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income — — — Reclassification adjustments for losses reclassified into income — — — Net current period other comprehensive income Balance September 30, 2015 $ $ $ $ $
Schedule of details of the reclassification adjustments	Details about Accumulated Other Three Months Ended Nine Months Ended Comprehensive Income Components September 30, September 30, Affected Line Item in the Statement (In thousands) 2016 2016 Where Net Income is Presented Amortization of defined benefit pension plan $ $ Compensation and benefits expense Total before tax Provision for income taxes $ $ Net of tax Total reclassification adjustments $ $ Decrease to net income Details about Accumulated Other Three Months Ended Nine Months Ended Comprehensive Income Components September 30, September 30, Affected Line Item in the Statement (In thousands) 2015 2015 Where Net Income is Presented Amortization of defined benefit pension plan $ $ Compensation and benefits expense Total before tax Provision for income taxes $ $ Net of tax Total reclassification adjustments $ $ Decrease to net income

FINANCIAL STATEMENT PRESENTAT33

FINANCIAL STATEMENT PRESENTATION (Details)	9 Months Ended
	Sep. 30, 2016item
Number of locations	32
Vermont
Number of locations	31
Massachusetts
Number of locations	1

ACQUISITION of NUVO BANK & TR34

ACQUISITION of NUVO BANK & TRUST COMPANY - Acquisition (Details)	Dec. 04, 2015USD ($)item$ / sharesshares	Sep. 30, 2016item
Business Acquisition
Number of locations | item		32
NUVO Bank & Trust Company
Business Acquisition
Consideration transferred ( in shares)	517,109
Cash paid for NUVO shares | $	$ 5,109,000
Aggregate payment to cash out NUVO stock options and portion of common stock warrants | $	$ 878,718
Number of shares callable by warrants	90,756
Number of businesses acquired | item	2
NUVO Bank & Trust Company | 2017 Warrants
Business Acquisition
Number of shares callable by warrants	56,386
Exercise price of warrants | $ / shares	$ 20.69
NUVO Bank & Trust Company | 2018 Warrants
Business Acquisition
Number of shares callable by warrants	34,370
Exercise price of warrants | $ / shares	$ 41.39

ACQUISITION of NUVO BANK & TR35

ACQUISITION of NUVO BANK & TRUST COMPANY - Assets Aquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Dec. 04, 2015	Sep. 30, 2016	Dec. 31, 2015
Liabilities assumed:
Goodwill		$ 7,011	$ 6,967
NUVO Bank & Trust Company
Consideration paid:
Common stock issued in exchange for NUVO shares	$ 16,889
Cash paid for NUVO shares	5,988
Stock warrants issued	656
Total consideration paid	23,533
Assets acquired:
Cash and cash equivalents	7,070
Interest bearing time deposits with banks	110
Investments	4,344
Restricted investment in bank stock	376
Loans	149,360
Premises and equipment , net	580
Accrued interest receivable	369
Core deposit intangible	1,377
Deferred tax asset	1,993	68
Other assets	356
Total assets acquired	165,935
Liabilities assumed:
Deposits	144,482
Federal Home Loan Bank advances	4,001
Accrued interest payable	42
Tax effect of acquisition fair value adjustments	705
Other liabilities	183
Total liabilities assumed	149,413
Net assets acquired	16,522
Goodwill	$ 7,011	$ 7,011	$ 6,967

ACQUISITION of NUVO BANK & TR36

ACQUISITION of NUVO BANK & TRUST COMPANY - Changes in Fair Value of the Consideration Paid and Net Assets Acquired (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 04, 2015
Goodwill Rollforward
Goodwill, Beginning Balance	$ 6,967
Goodwill, Ending Balance	7,011
NUVO Bank & Trust Company
Goodwill Rollforward
Goodwill, Beginning Balance	6,967
Stock warrants issued	112
Deferred tax asset	(68)	$ (1,993)
Goodwill, Ending Balance	$ 7,011

GOODWILL AND INTANGIBLE ASSET37

GOODWILL AND INTANGIBLE ASSETS - Goodwill Rollforward (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2016	Dec. 31, 2015
Goodwill Rollforward
Goodwill, Beginning Balance		$ 6,967
Effect of adjustments		44
Goodwill			$ 6,967
Impairment	$ 0	0
Goodwill, Ending Balance	$ 6,967	$ 7,011	$ 6,967

GOODWILL AND INTANGIBLE ASSET38

GOODWILL AND INTANGIBLE ASSETS - Acquired Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2016	Dec. 31, 2015
Other Intangible Assets
Balance at beginning of period			$ 1,360
Amortization	$ 51		153
Balance at end of period	1,207	$ 1,360	1,207	$ 1,360
Core deposit intangible
Other Intangible Assets
Balance at beginning of period			1,360
Additions				1,377
Amortization	51	17	153	17
Balance at end of period	$ 1,207	$ 1,360	$ 1,207	$ 1,360

GOODWILL AND INTANGIBLE ASSET39

GOODWILL AND INTANGIBLE ASSETS - Estimated Amortization Expense (Details) $ in Thousands	Sep. 30, 2016USD ($)
Estimated amortization expense
Remainder of 2016	$ 51
2,017	173
2,018	147
2,019	126
2,020	120
2,021	120
Thereafter	$ 470

INVESTMENT SECURITIES - Investm

INVESTMENT SECURITIES - Investments in Securities Classified as Available for Sale or Held To Maturity (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Available for Sale
Amortized Cost	$ 294,572	$ 283,185
Gross Unrealized Gains	4,524	1,963
Gross Unrealized Losses	(123)	(1,694)
Fair Value	298,973	283,454
Held to Maturity
Amortized Cost	90,672	119,674
Gross Unrealized Gains	2,365	1,135
Gross Unrealized Losses	(19)	(716)
Fair Value	93,018	120,093
U.S. Treasury Obligations
Available for Sale
Amortized Cost	25,076	25,064
Gross Unrealized Gains	257	61
Gross Unrealized Losses		(12)
Fair Value	25,333	25,113
U.S. Agency Obligations
Held to Maturity
Amortized Cost	18,073	20,084
Gross Unrealized Gains	830	486
Fair Value	18,903	20,570
U.S. GSEs
Available for Sale
Amortized Cost	49,030	20,895
Gross Unrealized Gains	499	3
Gross Unrealized Losses		(104)
Fair Value	49,529	20,794
Held to Maturity
Amortized Cost		9,556
Gross Unrealized Gains		166
Fair Value		9,722
FHLB Obligations
Available for Sale
Amortized Cost	62,372	51,230
Gross Unrealized Gains	878	107
Gross Unrealized Losses	(3)	(226)
Fair Value	63,247	51,111
Held to Maturity
Amortized Cost		4,758
Gross Unrealized Gains		76
Fair Value		4,834
Agency MBSs
Available for Sale
Amortized Cost	80,061	96,073
Gross Unrealized Gains	2,256	1,688
Gross Unrealized Losses	(24)	(512)
Fair Value	82,293	97,249
Held to Maturity
Amortized Cost	6,143	7,027
Gross Unrealized Gains	286	154
Fair Value	6,429	7,181
Agency CMBSs
Available for Sale
Amortized Cost	24,162	24,950
Gross Unrealized Gains	151
Gross Unrealized Losses	(33)	(397)
Fair Value	24,280	24,553
Agency CMOs
Available for Sale
Amortized Cost	53,576	64,648
Gross Unrealized Gains	448	74
Gross Unrealized Losses	(63)	(443)
Fair Value	53,961	64,279
Held to Maturity
Amortized Cost	66,456	78,249
Gross Unrealized Gains	1,249	253
Gross Unrealized Losses	(19)	(716)
Fair Value	67,686	77,786
ABSs
Available for Sale
Amortized Cost	295	325
Gross Unrealized Gains	35	30
Fair Value	$ 330	$ 355

INVESTMENT SECURITIES - Contrac

INVESTMENT SECURITIES - Contractual Final Maturity Distribution of Debt Securities Classified as Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available for Sale, Fair Value
Within One Year	$ 10,120
After One But Within Five Years	121,766
After Five But Within Ten Years	6,223
Securities not due at a Single Maturity	160,864
Total	298,973
Available for Sale, Amortized Cost
Within One Year	10,093
After One But Within Five Years	120,466
After Five But Within Ten Years	5,919
Securities not due at a Single Maturity	158,094
Total	294,572
Held to Maturity, Fair Value
After Ten Years	18,903
Securities not due at a Single Maturity	74,115
Total	93,018	$ 120,093
Held to Maturity, Amortized Cost
After Ten Years	18,073
Securities not due at a Single Maturity	72,599
Total	90,672	119,674
U.S. Treasury Obligations
Available for Sale, Fair Value
Within One Year	10,120
After One But Within Five Years	15,213
Total	25,333
Available for Sale, Amortized Cost
Within One Year	10,093
After One But Within Five Years	14,983
Total	25,076
U.S. Agency Obligations
Held to Maturity, Fair Value
After Ten Years	18,903
Total	18,903	20,570
Held to Maturity, Amortized Cost
After Ten Years	18,073
Total	18,073	20,084
U.S. GSEs
Available for Sale, Fair Value
After One But Within Five Years	49,529
Total	49,529
Available for Sale, Amortized Cost
After One But Within Five Years	49,030
Total	49,030
Held to Maturity, Fair Value
Total		9,722
Held to Maturity, Amortized Cost
Total		9,556
FHLB Obligations
Available for Sale, Fair Value
After One But Within Five Years	57,024
After Five But Within Ten Years	6,223
Total	63,247
Available for Sale, Amortized Cost
After One But Within Five Years	56,453
After Five But Within Ten Years	5,919
Total	62,372
Held to Maturity, Fair Value
Total		4,834
Held to Maturity, Amortized Cost
Total		4,758
Agency MBSs
Available for Sale, Fair Value
Securities not due at a Single Maturity	82,293
Total	82,293
Available for Sale, Amortized Cost
Securities not due at a Single Maturity	80,061
Total	80,061
Held to Maturity, Fair Value
Securities not due at a Single Maturity	6,429
Total	6,429	7,181
Held to Maturity, Amortized Cost
Securities not due at a Single Maturity	6,143
Total	6,143	7,027
Agency CMBSs
Available for Sale, Fair Value
Securities not due at a Single Maturity	24,280
Total	24,280
Available for Sale, Amortized Cost
Securities not due at a Single Maturity	24,162
Total	24,162
Agency CMOs
Available for Sale, Fair Value
Securities not due at a Single Maturity	53,961
Total	53,961
Available for Sale, Amortized Cost
Securities not due at a Single Maturity	53,576
Total	53,576
Held to Maturity, Fair Value
Securities not due at a Single Maturity	67,686
Total	67,686	77,786
Held to Maturity, Amortized Cost
Securities not due at a Single Maturity	66,456
Total	66,456	$ 78,249
ABSs
Available for Sale, Fair Value
Securities not due at a Single Maturity	330
Total	330
Available for Sale, Amortized Cost
Securities not due at a Single Maturity	295
Total	$ 295

INVESTMENT SECURITIES - Carryin

INVESTMENT SECURITIES - Carrying Value of Securities Pledged (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investments.
Carrying value of securities pledged	$ 363,920	$ 335,810

INVESTMENT SECURITIES - Gross U

INVESTMENT SECURITIES - Gross Unrealized Losses on Investment Securities and Fair Value of Related Securities (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2016USD ($)item	Dec. 31, 2015USD ($)item
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item	7	51
Available-for-sale Securities, 12 months or more, Number of Issues | item	2	4
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item	9	55
Available-for-sale Securities, Less than 12 months, Fair Value	$ 25,101,000	$ 191,570,000
Available-for-sale Securities, Less than 12 months, Loss	(83,000)	(1,468,000)
Available-for-sale Securities, 12 months or more, Fair Value	2,426,000	10,850,000
Available-for-sale Securities, 12 months or more, Loss	(40,000)	(226,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	27,527,000	202,420,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	(123,000)	$ (1,694,000)
Held to Maturity
Held to Maturity Securities, Less Than 12 Months, Number of Issues | item		14
Held to Maturity Securities, 12 Months or More, Number of Issues	1	$ 2
Held to Maturity Securities, Continuous Unrealized Loss Position, Number of Issues | item		16
Held to Maturity Securities, Less Than 12 Months, Fair Value		$ 51,713,000
Held to Maturity Securities, Less Than 12 Months, Loss		(623,000)
Held to Maturity Securities, 12 Months or More, Fair Value	3,345,000	5,287,000
Held to Maturity Securities, 12 Months or More, Loss	(19,000)	(93,000)
Held to Maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total	3,345,000	57,000,000
Held to Maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	$ (19,000)	$ (716,000)
U.S. Treasury Obligations
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item		3
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item		3
Available-for-sale Securities, Less than 12 months, Fair Value		$ 15,068,000
Available-for-sale Securities, Less than 12 months, Loss		(12,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total		15,068,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total		$ (12,000)
U.S. GSEs
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item		3
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item		3
Available-for-sale Securities, Less than 12 months, Fair Value		$ 14,817,000
Available-for-sale Securities, Less than 12 months, Loss		(104,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total		14,817,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total		$ (104,000)
FHLB Obligations
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item	1	8
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item	1	8
Available-for-sale Securities, Less than 12 months, Fair Value	$ 5,997,000	$ 39,094,000
Available-for-sale Securities, Less than 12 months, Loss	(3,000)	(226,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	5,997,000	39,094,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	$ (3,000)	$ (226,000)
Agency MBSs
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item	3	17
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item	3	17
Available-for-sale Securities, Less than 12 months, Fair Value	$ 8,363,000	$ 60,748,000
Available-for-sale Securities, Less than 12 months, Loss	(24,000)	(512,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	8,363,000	60,748,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	$ (24,000)	$ (512,000)
Agency CMBSs
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item	1	5
Available-for-sale Securities, 12 months or more, Number of Issues | item		1
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item	1	6
Available-for-sale Securities, Less than 12 months, Fair Value	$ 3,717,000	$ 19,608,000
Available-for-sale Securities, Less than 12 months, Loss	(33,000)	(331,000)
Available-for-sale Securities, 12 months or more, Fair Value		4,761,000
Available-for-sale Securities, 12 months or more, Loss		(66,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	3,717,000	24,369,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	$ (33,000)	$ (397,000)
Agency CMOs
Available for Sale
Available-for-sale Securities, Less than 12 months Number of Issues | item	2	15
Available-for-sale Securities, 12 months or more, Number of Issues | item	2	3
Available-for-sale Securities, Continuous Unrealized Loss Position, Number of Issues | item	4	18
Available-for-sale Securities, Less than 12 months, Fair Value	$ 7,024,000	$ 42,235,000
Available-for-sale Securities, Less than 12 months, Loss	(23,000)	(283,000)
Available-for-sale Securities, 12 months or more, Fair Value	2,426,000	6,089,000
Available-for-sale Securities, 12 months or more, Loss	(40,000)	(160,000)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value, Total	9,450,000	48,324,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	(63,000)	$ (443,000)
Held to Maturity
Held to Maturity Securities, Less Than 12 Months, Number of Issues | item		14
Held to Maturity Securities, 12 Months or More, Number of Issues	1	$ 2
Held to Maturity Securities, Continuous Unrealized Loss Position, Number of Issues | item		16
Held to Maturity Securities, Less Than 12 Months, Fair Value		$ 51,713,000
Held to Maturity Securities, Less Than 12 Months, Loss		(623,000)
Held to Maturity Securities, 12 Months or More, Fair Value	3,345,000	5,287,000
Held to Maturity Securities, 12 Months or More, Loss	(19,000)	(93,000)
Held to Maturity Securities, Continuous Unrealized Loss Position, Fair Value, Total	3,345,000	57,000,000
Held to Maturity Securities, Continuous Unrealized Loss Position, Aggregate Losses, Total	$ (19,000)	$ (716,000)

INVESTMENT SECURITIES - Securit

INVESTMENT SECURITIES - Securities Transferred between AFS and HTM (Details) - USD ($)	3 Months Ended					9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Investment Securities
Securities classified as trading	$ 0					$ 0		$ 0
Securities transferred from available-for-sale to held-to-maturity category, remaining unamortized loss, net of tax	$ 820,000	$ (1,215,000)				(2,687,000)	$ (933,000)
Transferred From Available-For-Sale to Held-To-Maturity
Investment Securities
Securities transferred from available-for-sale to held-to-maturity category, amortized cost			$ 12,630,000	$ 152,890,000	$ 152,890,000
Securities transferred from available-for-sale to held-to-maturity category, fair value			12,640,000	147,450,000	147,450,000
Securities transferred from available-for-sale to held-to-maturity category, unrealized holding gain				$ 3,530,000	$ 3,530,000
Securities transferred from available-for-sale to held-to-maturity category, remaining unamortized loss						2,350,000
Securities transferred from available-for-sale to held-to-maturity category, remaining unamortized loss, net of tax						1,520,000
Unrealized Gains (Losses) on Securities | Transferred From Available-For-Sale to Held-To-Maturity
Investment Securities
Securities transferred from available-for-sale to held-to-maturity category, unrealized holding gain			$ 8,000
Securities transferred from available-for-sale to held-to-maturity category, remaining unamortized loss, net of tax						$ (779,000)	$ (396,000)

SECURITIES SOLD UNDER AGREEME45

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Contractual Maturity of Secured Borrowings and Class of Collateral Pledged (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Available-for-sale Securities Pledged as Collateral	$ 208,946	$ 185,963
Held-to-maturity Securities Pledged as Collateral	67,137	100,676
Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	208,946	185,533
Held-to-maturity Securities Pledged as Collateral	67,137	100,676
Greater than 90 Days
Available-for-sale Securities Pledged as Collateral		430
U.S. Treasury Obligations
Available-for-sale Securities Pledged as Collateral	24,388	23,902
U.S. Treasury Obligations | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	24,388	23,902
U.S. Agency Obligations
Held-to-maturity Securities Pledged as Collateral	16,602	14,524
U.S. Agency Obligations | Overnight and Continuous
Held-to-maturity Securities Pledged as Collateral	16,602	14,524
U.S. GSEs
Available-for-sale Securities Pledged as Collateral	35,634	21,719
U.S. GSEs | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	35,634	21,719
FHLB Obligations
Available-for-sale Securities Pledged as Collateral	59,753	42,681
FHLB Obligations | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	59,753	42,681
Agency MBSs
Available-for-sale Securities Pledged as Collateral	41,151	49,592
Held-to-maturity Securities Pledged as Collateral		19,263
Agency MBSs | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	41,151	49,162
Held-to-maturity Securities Pledged as Collateral		19,263
Agency MBSs | Greater than 90 Days
Available-for-sale Securities Pledged as Collateral		430
Agency CMBSs
Available-for-sale Securities Pledged as Collateral	20,298	14,957
Held-to-maturity Securities Pledged as Collateral	50,535
Agency CMBSs | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	20,298	14,957
Held-to-maturity Securities Pledged as Collateral	50,535
Agency CMOs
Available-for-sale Securities Pledged as Collateral	27,722	33,112
Held-to-maturity Securities Pledged as Collateral		66,889
Agency CMOs | Overnight and Continuous
Available-for-sale Securities Pledged as Collateral	$ 27,722	33,112
Held-to-maturity Securities Pledged as Collateral		$ 66,889

SECURITIES SOLD UNDER AGREEME46

SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE - Carrying Value of Pledged Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE.
Carrying value of pledged securities	$ 276,200	$ 287,270

LOANS AND THE ALLOWANCE FOR C47

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment
Total Loans	$ 1,477,285	$ 1,414,280
Net deferred loan origination fees	1,140	1,200
Overdrawn deposit balances classified as loan balances	267	308
Commercial, financial and agricultural
Financing Receivable, Recorded Investment
Total Loans	268,530	237,451
Municipal
Financing Receivable, Recorded Investment
Total Loans	112,007	105,421
Real estate loans - residential
Financing Receivable, Recorded Investment
Total Loans	450,584	468,443
Real estate loans - commercial
Financing Receivable, Recorded Investment
Total Loans	584,392	558,004
Real estate loans - construction
Financing Receivable, Recorded Investment
Total Loans	55,210	34,802
Installment
Financing Receivable, Recorded Investment
Total Loans	6,547	10,115
All other loans
Financing Receivable, Recorded Investment
Total Loans	$ 15	$ 44

LOANS AND THE ALLOWANCE FOR C48

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Loan Loss Experience and Activity in Allowance for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Loan loss experience and activity in allowance for loan losses
Beginning balance	$ 12,420	$ 12,162	$ 12,040	$ 11,833
Charge-offs	(247)	(62)	(405)	(177)
Recoveries	21	19	90	110
Provision (credit)	346	91	815	444
Ending balance	12,540	12,210	12,540	12,210
Additional disclosures
Provision for credit losses	500	150	905	250
Excess credit reserves	154	59	90	194
Commercial, financial and agricultural
Loan loss experience and activity in allowance for loan losses
Beginning balance	3,198	2,925	2,696	2,583
Charge-offs	(115)	(11)	(122)	(28)
Recoveries	1	3	5	31
Provision (credit)	22	(84)	527	247
Ending balance	3,106	2,833	3,106	2,833
Municipal
Loan loss experience and activity in allowance for loan losses
Beginning balance	352	359	590	623
Provision (credit)	251	272	13	8
Ending balance	603	631	603	631
Real estate loans - residential
Loan loss experience and activity in allowance for loan losses
Beginning balance	2,809	3,043	2,882	3,038
Charge-offs	(82)	(29)	(155)	(84)
Recoveries	6	7	28	36
Provision (credit)	(70)	(62)	(92)	(31)
Ending balance	2,663	2,959	2,663	2,959
Real estate loans - commercial
Loan loss experience and activity in allowance for loan losses
Beginning balance	5,423	5,299	5,386	5,209
Recoveries		1	4	2
Provision (credit)	84	(62)	117	27
Ending balance	5,507	5,238	5,507	5,238
Real estate loans - construction
Loan loss experience and activity in allowance for loan losses
Beginning balance	549	477	420	325
Provision (credit)	25	16	154	168
Ending balance	574	493	574	493
Installment
Loan loss experience and activity in allowance for loan losses
Beginning balance	89	59	66	13
Charge-offs	(50)	(22)	(128)	(65)
Recoveries	14	8	53	41
Provision (credit)	34	11	96	67
Ending balance	$ 87	$ 56	$ 87	56
All other loans
Loan loss experience and activity in allowance for loan losses
Beginning balance				42
Provision (credit)				$ (42)

LOANS AND THE ALLOWANCE FOR C49

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Allowance for Loan Losses and Recorded Investment in Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Loan loss experience and activity in allowance for loan losses
Ending balance individually evaluated for impairment	$ 218		$ 137
Ending balance collectively evaluated for impairment	12,322		11,903
Total allowance for credit losses	12,540	$ 12,420	12,040	$ 12,210	$ 12,162	$ 11,833
Financing receivables, Ending balance individually evaluated for impairment	2,365		1,970
Financing receivables, Ending balance collectively evaluated for impairment	1,472,187		1,409,072
Total	1,477,285		1,414,280
Receivables acquired with deteriorated credit quality
Loan loss experience and activity in allowance for loan losses
Total	2,733		3,238
Commercial, financial and agricultural
Loan loss experience and activity in allowance for loan losses
Ending balance individually evaluated for impairment	40
Ending balance collectively evaluated for impairment	3,066		2,696
Total allowance for credit losses	3,106	3,198	2,696	2,833	2,925	2,583
Financing receivables, Ending balance individually evaluated for impairment	465		595
Financing receivables, Ending balance collectively evaluated for impairment	267,271		235,652
Total	268,530		237,451
Commercial, financial and agricultural | Receivables acquired with deteriorated credit quality
Loan loss experience and activity in allowance for loan losses
Total	794		1,204
Municipal
Loan loss experience and activity in allowance for loan losses
Ending balance collectively evaluated for impairment	603		590
Total allowance for credit losses	603	352	590	631	359	623
Financing receivables, Ending balance collectively evaluated for impairment	112,007		105,421
Total	112,007		105,421
Real estate loans - residential
Loan loss experience and activity in allowance for loan losses
Ending balance individually evaluated for impairment	178		137
Ending balance collectively evaluated for impairment	2,485		2,745
Total allowance for credit losses	2,663	2,809	2,882	2,959	3,043	3,038
Financing receivables, Ending balance individually evaluated for impairment	927		706
Financing receivables, Ending balance collectively evaluated for impairment	449,657		467,737
Total	450,584		468,443
Real estate loans - commercial
Loan loss experience and activity in allowance for loan losses
Ending balance collectively evaluated for impairment	5,507		5,386
Total allowance for credit losses	5,507	5,423	5,386	5,238	5,299	5,209
Financing receivables, Ending balance individually evaluated for impairment	973		647
Financing receivables, Ending balance collectively evaluated for impairment	581,480		555,323
Total	584,392		558,004
Real estate loans - commercial | Receivables acquired with deteriorated credit quality
Loan loss experience and activity in allowance for loan losses
Total	1,939		2,034
Real estate loans - construction
Loan loss experience and activity in allowance for loan losses
Ending balance collectively evaluated for impairment	574		420
Total allowance for credit losses	574	549	420	493	477	325
Financing receivables, Ending balance collectively evaluated for impairment	55,210		34,802
Total	55,210		34,802
Installment
Loan loss experience and activity in allowance for loan losses
Ending balance collectively evaluated for impairment	87		66
Total allowance for credit losses	87	$ 89	66	$ 56	$ 59	13
Financing receivables, Ending balance individually evaluated for impairment			22
Financing receivables, Ending balance collectively evaluated for impairment	6,547		10,093
Total	6,547		10,115
All other loans
Loan loss experience and activity in allowance for loan losses
Total allowance for credit losses						$ 42
Financing receivables, Ending balance collectively evaluated for impairment	15		44
Total	$ 15		$ 44

LOANS AND THE ALLOWANCE FOR C50

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Recorded Investment of Loans, Including Nonaccrual and Restructured Loans, by Class (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Past due loans
Total	$ 1,477,285	$ 1,414,280
Past due loans	825	702
Non-accrual loans
Past due loans
Past due loans	2,080	2,650
Restructured
Past due loans
Past due loans	316	472
Purchase credit impaired
Past due loans
Past due loans	839	1,050
Commercial, financial and agricultural
Past due loans
Total	268,530	237,451
Past due loans	562	251
Municipal
Past due loans
Total	112,007	105,421
Real estate loans - residential
Past due loans
Total	450,584	468,443
Real estate loans - commercial
Past due loans
Total	584,392	558,004
Real estate loans - construction
Past due loans
Total	55,210	34,802
First mortgage
Past due loans
Total		426,276
Past due loans		50
First mortgage | Real estate loans - residential
Past due loans
Total	410,980	426,276
Past due loans	171
Second mortgage
Past due loans
Total		42,167
Past due loans		8
Second mortgage | Real estate loans - residential
Past due loans
Total	39,604	42,167
Owner occupied
Past due loans
Total		221,008
Past due loans		323
Owner occupied | Real estate loans - commercial
Past due loans
Total	226,105	221,008
Non-owner occupied
Past due loans
Total		336,996
Non-owner occupied | Real estate loans - commercial
Past due loans
Total	358,287	336,996
Residential
Past due loans
Total		2,422
Residential | Real estate loans - construction
Past due loans
Total	2,881	2,422
Commercial
Past due loans
Total		32,380
Commercial | Real estate loans - construction
Past due loans
Total	52,329	32,380
Installment
Past due loans
Total	6,547	10,115
Past due loans		70
Installment | Real estate loans - construction
Past due loans
Total	6,547
Past due loans	92
All other loans
Past due loans
Total	15	44
All other loans | Real estate loans - construction
Past due loans
Total	15
31-60 Days Past Due
Past due loans
Past due loans	263	434
31-60 Days Past Due | First mortgage
Past due loans
Past due loans		50
31-60 Days Past Due | First mortgage | Real estate loans - residential
Past due loans
Past due loans	171
31-60 Days Past Due | Owner occupied
Past due loans
Past due loans		323
31-60 Days Past Due | Installment
Past due loans
Past due loans		61
31-60 Days Past Due | Installment | Real estate loans - construction
Past due loans
Past due loans	92
61-90 Days Past Due
Past due loans
Past due loans	562	268
61-90 Days Past Due | Commercial, financial and agricultural
Past due loans
Past due loans	562	251
61-90 Days Past Due | Second mortgage
Past due loans
Past due loans		8
61-90 Days Past Due | Installment
Past due loans
Past due loans		9
91 Days or More Past Due | Accruing loans
Past due loans
Past due loans	0	0
Current
Past due loans
Total	1,472,224	1,409,593
Current | Commercial, financial and agricultural
Past due loans
Total	266,883	235,905
Current | Municipal
Past due loans
Total	112,007	105,421
Current | First mortgage
Past due loans
Total		425,645
Current | First mortgage | Real estate loans - residential
Past due loans
Total	409,996
Current | Second mortgage
Past due loans
Total		42,159
Current | Second mortgage | Real estate loans - residential
Past due loans
Total	39,604
Current | Owner occupied
Past due loans
Total		219,080
Current | Owner occupied | Real estate loans - commercial
Past due loans
Total	224,276
Current | Non-owner occupied
Past due loans
Total		336,514
Current | Non-owner occupied | Real estate loans - commercial
Past due loans
Total	357,778
Current | Residential
Past due loans
Total		2,422
Current | Residential | Real estate loans - construction
Past due loans
Total	2,881
Current | Commercial
Past due loans
Total		32,380
Current | Commercial | Real estate loans - construction
Past due loans
Total	52,329
Current | Installment
Past due loans
Total		10,023
Current | Installment | Real estate loans - construction
Past due loans
Total	6,455
Current | All other loans
Past due loans
Total		44
Current | All other loans | Real estate loans - construction
Past due loans
Total	15
Nonperforming
Past due loans
Total	4,236	3,985
Nonperforming | Commercial, financial and agricultural
Past due loans
Total	1,085	1,295
Nonperforming | First mortgage
Past due loans
Total		581
Nonperforming | First mortgage | Real estate loans - residential
Past due loans
Total	813
Nonperforming | Owner occupied
Past due loans
Total		1,605
Nonperforming | Owner occupied | Real estate loans - commercial
Past due loans
Total	1,829
Nonperforming | Non-owner occupied
Past due loans
Total		482
Nonperforming | Non-owner occupied | Real estate loans - commercial
Past due loans
Total	$ 509
Nonperforming | Installment
Past due loans
Total		$ 22

LOANS AND THE ALLOWANCE FOR C51

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Impaired Loans by Class (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Financing Receivable, Impaired
Recorded Investment	$ 2,365		$ 2,365		$ 1,970
Unpaid Principal Balance	2,551		2,551		2,032
Related allowance	218		218		137
Average Recorded Investment	2,365	$ 1,457	2,352	$ 1,245
Interest Income Recognized	2	7	7	11
Loans	1,477,285		1,477,285		1,414,280
First mortgage
Financing Receivable, Impaired
Loans					426,276
Second mortgage
Financing Receivable, Impaired
Loans					42,167
Owner occupied
Financing Receivable, Impaired
Loans					221,008
Non-owner occupied
Financing Receivable, Impaired
Loans					336,996
Installment
Financing Receivable, Impaired
Recorded Investment					22
Unpaid Principal Balance					22
Average Recorded Investment	5		8
Loans	6,547		6,547		10,115
Commercial, financial and agricultural
Financing Receivable, Impaired
Recorded Investment	465		465		595
Unpaid Principal Balance	471		471		599
Related allowance	40		40
Average Recorded Investment	587	571	612	469
Interest Income Recognized	1	5	3	7
Loans	268,530		268,530		237,451
Real estate loans - residential
Financing Receivable, Impaired
Recorded Investment	927		927		706
Unpaid Principal Balance	1,082		1,082		764
Related allowance	178		178		137
Average Recorded Investment	791	886	698	773
Interest Income Recognized	1	2	4	4
Loans	450,584		450,584		468,443
Real estate loans - residential | First mortgage
Financing Receivable, Impaired
Loans	410,980		410,980		426,276
Real estate loans - residential | Second mortgage
Financing Receivable, Impaired
Loans	39,604		39,604		42,167
Real estate loans - commercial
Financing Receivable, Impaired
Recorded Investment	973		973		647
Unpaid Principal Balance	998		998		647
Average Recorded Investment	982		1,034	3
Loans	584,392		584,392		558,004
Real estate loans - commercial | Owner occupied
Financing Receivable, Impaired
Loans	226,105		226,105		221,008
Real estate loans - commercial | Non-owner occupied
Financing Receivable, Impaired
Loans	358,287		358,287		336,996
Real estate loans - construction
Financing Receivable, Impaired
Loans	55,210		55,210		34,802
Real estate loans - construction | Installment
Financing Receivable, Impaired
Loans	6,547		6,547
Residential and commercial loans serviced for others
Financing Receivable, Impaired
Loans	23,700		23,700		27,870
With no related allowance recorded | Installment
Financing Receivable, Impaired
Average Recorded Investment	5		8
With no related allowance recorded | Commercial, financial and agricultural
Financing Receivable, Impaired
Recorded Investment	397		397		595
Unpaid Principal Balance	401		401		599
Average Recorded Investment	187	571	225	303
Interest Income Recognized	1	5	3	7
With no related allowance recorded | Real estate loans - residential | First mortgage
Financing Receivable, Impaired
Recorded Investment	372		372		264
Unpaid Principal Balance	517		517		322
Average Recorded Investment	286	293	246	200
Interest Income Recognized	1	2	4	4
With no related allowance recorded | Real estate loans - residential | Second mortgage
Financing Receivable, Impaired
Average Recorded Investment		52	1	70
With no related allowance recorded | Real estate loans - commercial | Owner occupied
Financing Receivable, Impaired
Recorded Investment	464		464		165
Unpaid Principal Balance	468		468		165
Average Recorded Investment	469		497
With no related allowance recorded | Real estate loans - commercial | Non-owner occupied
Financing Receivable, Impaired
Recorded Investment	509		509		482
Unpaid Principal Balance	530		530		482
Average Recorded Investment	513		524	3
With no related allowance recorded | Real estate loans - commercial | Installment
Financing Receivable, Impaired
Recorded Investment					22
Unpaid Principal Balance					22
With related allowance recorded | Commercial, financial and agricultural
Financing Receivable, Impaired
Recorded Investment	68		68
Unpaid Principal Balance	70		70
Related allowance	40		40
Average Recorded Investment	400		387	166
With related allowance recorded | Real estate loans - residential | First mortgage
Financing Receivable, Impaired
Recorded Investment	555		555		442
Unpaid Principal Balance	565		565		442
Related allowance	178		178		$ 137
Average Recorded Investment	$ 505	$ 541	451	497
With related allowance recorded | Real estate loans - residential | Second mortgage
Financing Receivable, Impaired
Average Recorded Investment				$ 6
With related allowance recorded | Real estate loans - commercial | Owner occupied
Financing Receivable, Impaired
Average Recorded Investment			$ 13

LOANS AND THE ALLOWANCE FOR C52

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Nonperforming Loans (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016USD ($)loanitem	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)
Nonaccrual loans	$ 3,488	$ 3,513
Troubled debt restructurings ("TDRs")	748	472		$ 88
Total nonperforming loans	4,236	3,985
Troubled debt restructured loans ("TDRs")	$ 748	$ 472		$ 88
Number of TDRs agreed to pay | item	5
Number of TDRs | item	6
Commitments to lend additional funds to borrowers	$ 0
Non-accrual loans
Nonaccruing TDR's	$ 316
Number of TDRs | loan	1
Commitments to lend additional funds to borrowers	$ 0
Residential mortgage | Restructured
Troubled debt restructurings ("TDRs")	$ 113		$ 559
Number of loans | loan	3
Troubled debt restructured loans ("TDRs")	$ 113		$ 559
Commercial | Restructured
Number of loans | loan	2
Total troubled debt restructured loans ("TDRs")	$ 397
Real estate loans - commercial | Restructured
Troubled debt restructurings ("TDRs")	$ 432
Number of loans | loan	1
Reserves	$ 0
Troubled debt restructured loans ("TDRs")	432
Total troubled debt restructured loans ("TDRs")	$ 432

LOANS AND THE ALLOWANCE FOR C53

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Nonaccrual Loans by Class (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	$ 4,236	$ 3,985
Non accrual non-TDR loans	3,488	3,513
Exposure threshold for loans subject to formal review	1,000
Commercial, financial and agricultural
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	769	823
Nonaccruing TDR's	316	472
Real estate loans - residential | First mortgage
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	813	581
Real estate loans - commercial | Owner occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	1,829	1,605
Nonaccruing TDR's	432
Real estate loans - commercial | Non-owner occupied
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans	$ 77	482
Installment
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total nonaccrual loans		$ 22

LOANS AND THE ALLOWANCE FOR C54

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Summary of Loans by Credit Quality Indicator (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment
Loans	$ 1,477,285	$ 1,414,280
First mortgage
Financing Receivable, Recorded Investment
Loans		426,276
Second mortgage
Financing Receivable, Recorded Investment
Loans		42,167
Owner occupied
Financing Receivable, Recorded Investment
Loans		221,008
Non-owner occupied
Financing Receivable, Recorded Investment
Loans		336,996
Residential
Financing Receivable, Recorded Investment
Loans		2,422
Commercial
Financing Receivable, Recorded Investment
Loans		32,380
Installment
Financing Receivable, Recorded Investment
Loans	6,547	10,115
All other loans
Financing Receivable, Recorded Investment
Loans	15	44
Unrated
Financing Receivable, Recorded Investment
Loans	449,988	474,842
Unrated | Installment
Financing Receivable, Recorded Investment
Loans	6,547	10,093
Unrated | All other loans
Financing Receivable, Recorded Investment
Loans	15	44
Pass
Financing Receivable, Recorded Investment
Loans	875,639	757,585
Pass-Watch
Financing Receivable, Recorded Investment
Loans	111,925	148,591
Special Mention
Financing Receivable, Recorded Investment
Loans	3,465	10,580
Sub-standard
Financing Receivable, Recorded Investment
Loans	36,268	22,682
Sub-standard | Installment
Financing Receivable, Recorded Investment
Loans		22
Commercial, financial and agricultural
Financing Receivable, Recorded Investment
Loans	268,530	237,451
Commercial, financial and agricultural | Unrated
Financing Receivable, Recorded Investment
Loans	499	597
Commercial, financial and agricultural | Pass
Financing Receivable, Recorded Investment
Loans	221,528	179,451
Commercial, financial and agricultural | Pass-Watch
Financing Receivable, Recorded Investment
Loans	29,333	45,977
Commercial, financial and agricultural | Special Mention
Financing Receivable, Recorded Investment
Loans	590	4,177
Commercial, financial and agricultural | Sub-standard
Financing Receivable, Recorded Investment
Loans	16,580	7,249
Municipal
Financing Receivable, Recorded Investment
Loans	112,007	105,421
Municipal | Unrated
Financing Receivable, Recorded Investment
Loans	79	58
Municipal | Pass
Financing Receivable, Recorded Investment
Loans	101,956	92,011
Municipal | Pass-Watch
Financing Receivable, Recorded Investment
Loans	9,128	13,352
Municipal | Special Mention
Financing Receivable, Recorded Investment
Loans	844
Real estate loans - residential
Financing Receivable, Recorded Investment
Loans	450,584	468,443
Real estate loans - residential | First mortgage
Financing Receivable, Recorded Investment
Loans	410,980	426,276
Real estate loans - residential | Second mortgage
Financing Receivable, Recorded Investment
Loans	39,604	42,167
Real estate loans - residential | Unrated | First mortgage
Financing Receivable, Recorded Investment
Loans	402,284	420,798
Real estate loans - residential | Unrated | Second mortgage
Financing Receivable, Recorded Investment
Loans	39,377	42,167
Real estate loans - residential | Pass | First mortgage
Financing Receivable, Recorded Investment
Loans	6,311	4,733
Real estate loans - residential | Pass-Watch | First mortgage
Financing Receivable, Recorded Investment
Loans	1,573	164
Real estate loans - residential | Pass-Watch | Second mortgage
Financing Receivable, Recorded Investment
Loans	227
Real estate loans - residential | Sub-standard | First mortgage
Financing Receivable, Recorded Investment
Loans	812	581
Real estate loans - commercial
Financing Receivable, Recorded Investment
Loans	584,392	558,004
Real estate loans - commercial | Owner occupied
Financing Receivable, Recorded Investment
Loans	226,105	221,008
Real estate loans - commercial | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	358,287	336,996
Real estate loans - commercial | Unrated | Owner occupied
Financing Receivable, Recorded Investment
Loans	228	296
Real estate loans - commercial | Unrated | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	474	166
Real estate loans - commercial | Pass | Owner occupied
Financing Receivable, Recorded Investment
Loans	182,831	161,810
Real estate loans - commercial | Pass | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	314,391	290,337
Real estate loans - commercial | Pass-Watch | Owner occupied
Financing Receivable, Recorded Investment
Loans	27,354	41,477
Real estate loans - commercial | Pass-Watch | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	39,898	44,485
Real estate loans - commercial | Special Mention | Owner occupied
Financing Receivable, Recorded Investment
Loans	1,845	5,959
Real estate loans - commercial | Special Mention | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	186	444
Real estate loans - commercial | Sub-standard | Owner occupied
Financing Receivable, Recorded Investment
Loans	13,847	11,466
Real estate loans - commercial | Sub-standard | Non-owner occupied
Financing Receivable, Recorded Investment
Loans	3,338	1,564
Real estate loans - construction
Financing Receivable, Recorded Investment
Loans	55,210	34,802
Real estate loans - construction | Residential
Financing Receivable, Recorded Investment
Loans	2,881	2,422
Real estate loans - construction | Commercial
Financing Receivable, Recorded Investment
Loans	52,329	32,380
Real estate loans - construction | Installment
Financing Receivable, Recorded Investment
Loans	6,547
Real estate loans - construction | All other loans
Financing Receivable, Recorded Investment
Loans	15
Real estate loans - construction | Unrated | Residential
Financing Receivable, Recorded Investment
Loans	263	478
Real estate loans - construction | Unrated | Commercial
Financing Receivable, Recorded Investment
Loans	222	145
Real estate loans - construction | Pass | Residential
Financing Receivable, Recorded Investment
Loans	2,618	1,944
Real estate loans - construction | Pass | Commercial
Financing Receivable, Recorded Investment
Loans	46,004	27,299
Real estate loans - construction | Pass-Watch | Commercial
Financing Receivable, Recorded Investment
Loans	4,412	3,136
Real estate loans - construction | Sub-standard | Commercial
Financing Receivable, Recorded Investment
Loans	$ 1,691	$ 1,800

LOANS AND THE ALLOWANCE FOR C55

LOANS AND THE ALLOWANCE FOR CREDIT LOSSES - Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accounted for under ASC 310-30 | NUVO Bank & Trust Company
Accounts, Notes, Loans and Financing Receivable
Carrying amount of loans purchased with evidence of credit deterioration accounted for under ASC 310-30	$ 2,730	$ 3,240

FAIR VALUE OF FINANCIAL INSTR56

FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial Assets and Liabilities Measured At Fair Value, Recurring Basis (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	$ 301,375	$ 284,538
Liabilities	1,881	1,004
Transfers, Assets, level 1 to level 2	0		$ 0
Transfers, Assets, level 2 to level 1	0		0
Transfers, Liabilities, level 1 to level 2	0		0
Transfers, Liabilities, level 2 to level 1	0		$ 0
Fair value assets level 3 net transfers	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	301,375	284,538
Liabilities	1,881	1,004
U.S. Treasury Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	25,333	25,113
U.S. Treasury Obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	25,333	25,113
U.S. GSEs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	49,529	20,794
U.S. GSEs | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	49,529	20,794
FHLB Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	63,247	51,111
FHLB Obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	63,247	51,111
Agency MBSs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	82,293	97,249
Agency MBSs | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	82,293	97,249
Agency CMBSs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	24,280	24,553
Agency CMBSs | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	24,280	24,553
Agency CMOs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	53,961	64,279
Agency CMOs | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	53,961	64,279
ABSs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	330	355
ABSs | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	330	355
Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	2,402	1,084
Liabilities	1,881	1,004
Interest Rate Swap | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Assets	2,402	1,084
Liabilities	$ 1,881	$ 1,004

FAIR VALUE OF FINANCIAL INSTR57

FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Assets:
Cash and cash equivalents	$ 78,717	$ 150,183	$ 111,459	$ 154,459
Securities available for sale	298,973	283,454
Securities held to maturity	93,018	120,093
FHLB stock	4,844	3,797
Liabilities:
Short-term borrowings	22,000
Level 1
Assets:
Cash and cash equivalents	78,717	150,183
Total assets	78,717	150,183
Liabilities:
Deposits	1,294,809	1,296,867
Accrued interest payable	10	13
Total liabilities	1,294,819	1,296,880
Level 2
Assets:
Securities available for sale	298,973	283,454
Securities held to maturity	93,018	120,093
Interest rate swap agreement	2,402	1,084
Accrued interest receivable	1,017	1,085
Total assets	395,410	405,716
Liabilities:
Deposits	209,352	254,179
Short-term borrowings	22,000
Securities sold under agreement to repurchase	276,027	286,586
Other long-term debt	3,704	5,191
Junior subordinated debentures issued to unconsolidated subsidiary trust	15,536	14,975
Interest rate swap agreement	1,881	1,004
Accrued interest payable	105	139
Total liabilities	528,605	562,074
Level 3
Assets:
Loans, net of allowance for loan losses	1,469,387	1,397,877
Accrued interest receivable	2,893	3,289
Total assets	1,472,280	1,401,166
Carrying Amount
Assets:
Cash and cash equivalents	78,717	150,183
Securities available for sale	298,973	283,454
Securities held to maturity	90,672	119,674
FHLB stock	4,844	3,797
Loans, net of allowance for loan losses	1,464,745	1,402,240
Interest rate swap agreement	2,402	1,084
Accrued interest receivable	3,910	4,374
Total assets	1,944,263	1,964,806
Liabilities:
Deposits	1,503,840	1,551,439
Short-term borrowings	22,000
Securities sold under agreement to repurchase	276,083	286,639
Other long-term debt	3,673	5,238
Junior subordinated debentures issued to unconsolidated subsidiary trust	20,619	20,619
Interest rate swap agreement	1,881	1,004
Accrued interest payable	115	152
Total liabilities	1,828,211	1,865,091
Fair Value
Assets:
Cash and cash equivalents	78,717	150,183
Securities available for sale	298,973	283,454
Securities held to maturity	93,018	120,093
Loans, net of allowance for loan losses	1,469,387	1,397,877
Interest rate swap agreement	2,402	1,084
Accrued interest receivable	3,910	4,374
Total assets	1,946,407	1,957,065
Liabilities:
Deposits	1,504,161	1,551,046
Short-term borrowings	22,000
Securities sold under agreement to repurchase	276,027	286,586
Other long-term debt	3,704	5,191
Junior subordinated debentures issued to unconsolidated subsidiary trust	15,536	14,975
Interest rate swap agreement	1,881	1,004
Accrued interest payable	115	152
Total liabilities	$ 1,823,424	$ 1,858,954

EMPLOYEE BENEFIT PLANS (Details

EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2016
Interest cost	$ 128	$ 112	$ 352	$ 336
Expected return on plan assets	(241)	(264)	(725)	(791)
Service costs	15	13	44	39
Net loss amortization	95	103	327	308
Net periodic pension cost (benefit)	$ (3)	$ (36)	$ (2)	$ (108)
Minimum
Minimum required contribution					$ 0

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income	$ 3,911	$ 3,856	$ 11,767	$ 10,308
Weighted average common shares outstanding	6,878,000	6,338,000	6,866,000	6,333,000
Dilutive effect of common stock equivalents	21,000	11,000	20,000	13,000
Weighted average common and common equivalent shares outstanding	6,899,000	6,349,000	6,886,000	6,346,000
Basic earnings per common share	$ 0.57	$ 0.61	$ 1.71	$ 1.63
Diluted earnings per common share	$ 0.57	$ 0.61	$ 1.71	$ 1.62
Earnings Per Share, Diluted, Other Disclosures
Warrants or shares which were not included in the calculation of diluted earnings per share				0
Warrants
Earnings Per Share, Diluted, Other Disclosures
Warrants or shares which were not included in the calculation of diluted earnings per share	34,370		34,370

STOCK REPURCHASE PROGRAM (Detai

STOCK REPURCHASE PROGRAM (Details) - $ / shares	117 Months Ended
	Sep. 30, 2016	Dec. 31, 2016	Jan. 31, 2007
STOCK REPURCHASE PROGRAM
Shares authorized to be repurchased under the stock repurchase program			200,000
Shares repurchased under the stock repurchase program	0	143,475
Average price per share for shares purchased under the stock repurchase program	$ 23

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
COMMITMENTS AND CONTINGENCIES.
Financial instruments whose contract amounts represent credit risk	$ 7,110	$ 6,300
Expiration term of contingent obligations, months	12 months
Balances at the Federal Reserve Bank	$ 27,670	$ 30,520

ACCUMULATED OTHER COMPREHENSI62

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in Accumulated Other Comprehensive Income (Loss) By Component (Details) - USD ($)	3 Months Ended					9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Sep. 30, 2016	Sep. 30, 2015
Accumulated other comprehensive income (loss) by component
Balance						$ (6,023,000)
Other comprehensive income before reclassifications, Interest rate swaps	$ 46,000	$ 73,000				122,000	$ 94,000
Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income	531,000	144,000				779,000	396,000
Net current period other comprehensive (loss) income, Unrealized (gains) losses on securities	(820,000)	1,215,000				2,687,000	933,000
Net current period other comprehensive (loss) income, Pension and postretirement benefit plans	12,000	67,000				162,000	201,000
Balance	(2,273,000)					(2,273,000)
Transferred From Available-For-Sale to Held-To-Maturity
Accumulated other comprehensive income (loss) by component
Transfer of securities from available-for-sale to held-to-maturity				$ 3,530,000	$ 3,530,000
Net current period other comprehensive (loss) income, Unrealized (gains) losses on securities						(1,520,000)
Unrealized Gains (Losses) on Securities | Available for sale
Accumulated other comprehensive income (loss) by component
Balance	3,673,000	1,200,000				166,000	1,482,000
Other comprehensive income before reclassifications, Unrealized (gains) losses on securities	(820,000)	1,215,000				2,687,000	933,000
Net current period other comprehensive (loss) income, Unrealized (gains) losses on securities						2,687,000	933,000
Net current periodic change, Accumulated other comprehensive income (loss)	(820,000)	1,215,000
Balance	2,853,000	2,415,000				2,853,000	2,415,000
Unrealized Gains (Losses) on Securities | Transferred From Available-For-Sale to Held-To-Maturity
Accumulated other comprehensive income (loss) by component
Balance	(2,049,000)	(2,572,000)				(2,297,000)	(2,824,000)
Transfer of securities from available-for-sale to held-to-maturity			$ 8,000
Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income	531,000	144,000				779,000	396,000
Net current period other comprehensive (loss) income, Unrealized (gains) losses on securities						779,000	396,000
Net current periodic change, Accumulated other comprehensive income (loss)	531,000	144,000
Balance	(1,518,000)	(2,428,000)				(1,518,000)	(2,428,000)
Pension Plan
Accumulated other comprehensive income (loss) by component
Balance	(3,587,000)	(3,261,000)				(3,737,000)	(3,395,000)
Other comprehensive income before reclassifications, Unrealized (gains) losses on securities	(50,000)
Other comprehensive income before reclassifications, Pension and postretirement benefit plans						(50,000)
Reclassification adjustments for (gains) losses reclassified into income	62,000	67,000
Reclassification adjustments for (gains) losses reclassified into income, Pension and postretirement benefit plans							201,000
Reclassification adjustments for (gains) losses reclassified into income, Interest rate swaps						212,000
Net current period other comprehensive (loss) income, Pension and postretirement benefit plans						162,000	201,000
Net current periodic change, Accumulated other comprehensive income (loss)	12,000	67,000
Balance	(3,575,000)	(3,194,000)				(3,575,000)	(3,194,000)
Interest Rate Swaps
Accumulated other comprehensive income (loss) by component
Balance	(79,000)	(290,000)				(155,000)	(311,000)
Other comprehensive income before reclassifications, Unrealized (gains) losses on securities	46,000	73,000
Other comprehensive income before reclassifications, Interest rate swaps						122,000	94,000
Net current period other comprehensive (loss) income, Interest rate swaps						122,000	94,000
Net current periodic change, Accumulated other comprehensive income (loss)	46,000	73,000
Balance	(33,000)	(217,000)				(33,000)	(217,000)
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) by component
Balance	(2,042,000)	(4,923,000)				(6,023,000)	(5,048,000)
Other comprehensive income before reclassifications, Unrealized (gains) losses on securities	(824,000)	1,288,000
Other comprehensive income before reclassifications, Accumulated other comprehensive income (loss)						2,759,000	1,027,000
Accretion of unrealized losses of securities transferred from available-for-sale to held-to-maturity recognized in other comprehensive income	531,000	144,000				779,000	396,000
Reclassification adjustments for (gains) losses reclassified into income	62,000	67,000
Reclassification adjustments for (gains) losses reclassified into income, Accumulated other comprehensive income (loss)						212,000	201,000
Net current periodic change, Accumulated other comprehensive income (loss)	(231,000)	1,499,000				3,750,000	1,624,000
Balance	$ (2,273,000)	$ (3,424,000)				$ (2,273,000)	$ (3,424,000)

ACCUMULATED OTHER COMPREHENSI63

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Reclassification Adjustments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Provision for income taxes	$ 1,097	$ 925	$ 3,792	$ 2,606
Reclassification adjustments | Pension Plan
Reclassification Adjustment out of Accumulated Other Comprehensive Income
Compensation and benefits	95	103	327	308
Total before tax	95	103	327	308
Provision for income taxes	(33)	(36)	(115)	(107)
Net of tax	62	67	212	201
Total reclassification adjustments	$ 62	$ 67	$ 212	$ 201

DERIVATIVE FINANCIAL INSTRUME64

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Cash Flow Hedge | Interest Rate Swap
Derivative
Interest rate swaps designated as cash flow hedges, notional amount	$ 10,000	$ 10,000
Fair values of effective portion of hedges reflected in Other Comprehensive Income	51	239
Fair Value Hedge | Interest Rate Swap
Derivative
Interest rate swaps designated as cash flow hedges, notional amount	8,400	9,800
Fair values of effective portion of hedges reflected in Other Comprehensive Income	$ 572	$ 319
Average receive rate	1.87%	1.78%
Average pay rate	3.27%	3.25%
Weighted average maturity	15 years 9 months 18 days	16 years 7 months 6 days
Not designated as hedging instrument | Interest Rate Swap
Derivative
Average receive rate	2.24%	2.13%
Average pay rate	3.64%	3.60%
Weighted average maturity	9 years 4 months 24 days	10 years 2 months 12 days
Not designated as hedging instrument | Interest Rate Swap | Other Assets
Derivative
Interest rate derivative assets, fair value	$ 1,830	$ 765
Not designated as hedging instrument | Interest Rate Swap | Other Liabilities
Derivative
Interest rate derivative liabilities, fair value	1,830	$ 765
Not designated as hedging instrument | Pay Fixed Receive Floating Interest Rate Swap
Derivative
Interest rate swaps designated as cash flow hedges, notional amount	$ 45,100

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) $ in Millions	Oct. 22, 2016USD ($)
Subsequent Events
Subsequent Events
Transaction value	$ 304