Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Below is a table that presents information about certain assets and liabilities measured at fair value on a recurring basis (dollars in thousands):

			Assets
			Measured at		Fair Value Measured Using
Description			Fair Value		Level 1		Level 2		Level 3
At June 30, 2013:
Assets:
Investment securities available-for-sale:
	U.S. government agencies		$	15,520	$	-	$	15,520	$	-
	State and municipals			159,234		-		159,234		-
	Corporate debt securities			7,903		-		7,903		-
	Mortgage-backed securities:
		Residential government sponsored		51,156		-		51,156		-
		Other government sponsored		8,763		-		8,763		-
Total investment securities available-for-sale				242,576		-		242,576		-
Derivative instruments:
	Interest rate swap			2,967				2,967
	Interest rate cap			10		-		10		-
Total derivative instruments				2,977		-		2,977		-
Total assets measured at fair value on a recurring basis			$	245,553	$	-	$	245,553	$	-

At December 31, 2012:
Assets:
Investment securities available-for-sale:
	U.S. government agencies		$	16,395	$	-	$	16,395	$	-
	State and municipals			223,886		-		223,886		-
	Mortgage-backed securities:
		Residential government sponsored		86,890		-		86,890		-
		Other government sponsored		14,368		-		14,368		-
Total investment securities available-for-sale				341,539		-		341,539		-
Interest rate cap				40		-		40		-
Total assets measured at fair value on a recurring basis			$	341,579	$	-	$	341,579	$	-

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Below is a table that presents information about certain assets and liabilities measured at fair value on a nonrecurring basis (dollars in thousands):

	Assets
	Measured at		Fair Value Measured Using
Description	Fair Value		Level 1		Level 2		Level 3
June 30, 2013:
Loans held for sale	$	39,954	$	-	$	39,954	$	-
Impaired loans		261,111		-		-		261,111
Other real estate owned		46,811		-		-		46,811
Total assets measured at fair value on a nonrecurring basis	$	347,876	$	-	$	39,954	$	307,922

December 31, 2012:
Loans held for sale	$	57,414	$	-	$	57,414	$	-
Impaired loans		290,085		-		-		290,085
Other real estate owned		51,913		-		-		51,913
Total assets measured at fair value on a nonrecurring basis	$	399,412	$	-	$	57,414	$	341,998

Valuation Techniques and Unobservable Inputs used in the Valuation of Financial Instruments Falling Within Level 3 of the FV Hierarchy

	Fair Value at		Valuation		Range of
Description	June 30, 2013		Methodology	Unobservable Inputs	Inputs

Impaired loans	$	261,111	Appraised value	Discount to reflect current market conditions and ultimate collectability	0% - 20%

Other real estate owned	$	46,811	Appraised value	Discount to reflect current market conditions	0% - 20%

Carrying Value and Estimated Fair Value of Financial Instruments

The carrying value and estimated fair values of the Company’s financial instruments, including those that are not measured and reported at fair value on a recurring basis or nonrecurring basis, at the dates indicated are as follows (dollars in thousands):

		June 30, 2013
		Carrying		Estimated
		Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
	Cash and cash equivalents	$	83,443	$	83,443	$	83,443	$	-	$	-
	Investment securities available-for-sale		242,576		242,576		-		242,576		-
	Investment securities held-to-maturity		223,503		216,625		-		216,625		-
	Federal Home Loan Bank stock		9,780		9,780		-		9,780		-
	Loans held for sale		39,954		39,954		-		39,954		-
	Loans receivable, net		2,016,082		2,075,634		-		1,814,523		261,111
	Accrued interest receivable		11,675		11,675		-		11,675		-
	FDIC indemnification asset		38,166		38,166		-		-		38,166
	Investment in bank-owned life insurance		71,956		71,956		-		71,956		-
	Interest rate cap derivative		10		10		-		10		-
	Interest rate swap derivative		2,967		2,967		-		2,967		-
Financial liabilities:
	Demand deposits and savings	$	1,428,763	$	1,428,763	$	-	$	1,428,763	$	-
	Time deposits		999,552		1,012,669		-		1,012,669		-
	Short-term borrowings		112,105		112,105		-		112,105		-
	Long-term debt		115,592		109,571		-		109,571		-
	Accrued interest payable		1,803		1,803		-		1,803		-


		December 31, 2012
		Carrying		Estimated
		Value		Fair Value		Level 1		Level 2		Level 3
Financial assets:
	Cash and cash equivalents	$	234,071	$	234,071	$	234,071	$	-	$	-
	Investment securities available-for-sale		341,539		341,539		-		341,539		-
	Investment securities held-to-maturity		114,805		118,235		-		118,235		-
	Federal Home Loan Bank stock		7,604		7,604		-		7,604		-
	Loans held for sale		57,414		57,414		-		57,414		-
	Loans receivable, net		1,994,966		1,976,745		-		1,686,660		290,085
	Accrued interest receivable		11,363		11,363		-		11,363		-
	FDIC indemnification asset		53,519		53,519		-		-		53,519
	Investment in bank-owned life insurance		70,756		70,756		-		70,756		-
	Interest rate cap derivative		40		40		-		40		-
Financial liabilities:
	Demand deposits and savings	$	1,496,694	$	1,496,694	$	-	$	1,496,694	$	-
	Time deposits		1,159,615		1,170,560		-		1,170,560		-
	Short-term borrowings		32,382		32,382		-		32,382		-
	Long-term debt		88,173		83,292		-		83,292		-
	Accrued interest payable		2,158		2,158		-		2,158		-

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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