BASIS OF PRESENTATION AND ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2012

Carrying amount and Estimated fair value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial instruments, were as follows:

	Carrying Amount		Fair Value Measurements at September 30, 2012  Using:
			Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Financial assets:
Loans, net	$	1,960,195	$	—	$	1,989,786	$	—	$	1,989,786
Financial liabilities:
Deposits		2,580,117		—		2,581,465		—		2,581,465
Other borrowings		—		—		—		—		—

	December 31, 2011				September 30, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in Thousands)
Financial assets:
Loans, net	$	1,868,419	$	1,877,320	$	1,929,085	$	1,907,017
Financial liabilities:
Deposits		2,591,566		2,593,113		2,628,892		2,629,974
Other borrowings		20,000		20,936		21,000		20,814

Fair Value Measurements of Assets and Liabilites on Recurring Basis

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of September 30, 2012 and 2011 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements on a Recurring Basis As of September 30, 2012
	Fair Value			Level 1		Level 2			Level 3
U.S. government agencies	$	8,895		$	—	$	8,895		$	—
State, county and municipal securities		111,742			6,932		104,810			—
Corporate debt securities		11,495			—		9,495			2,000
Mortgage backed securities		228,919			1,965		226,954			—
Mortgage loans held for sale		29,021			—		29,021			—
Total recurring assets at fair value	$	390,072		$	8,897	$	379,175		$	2,000
Derivative financial instruments	$	3,233		$	—	$	3,233			—
Total recurring liabilities at fair value	$	3,233		$	—	$	3,233		$	—
	Fair Value Measurements on a Recurring Basis As of December 31, 2011
	Fair Value			Level 1		Level 2			Level 3
U.S. government agencies	$	14,937		$	—	$	14,937		$	—
State, county and municipal securities		79,133			2,966		76,167			—
Corporate debt securities		11,401			—		9,401			2,000
Mortgage backed securities		234,496			3,302		231,194			—
Derivative financial instruments		(2,049	)		—		(2,049	)		—
Total recurring assets at fair value	$	337,918		$	6,268	$	329,650		$	2,000
	Fair Value Measurements on a Recurring Basis As of September 30, 2011
	Fair Value			Level 1		Level 2			Level 3
U.S. government agencies	$	20,309		$	—	$	20,309		$	—
State, county and municipal securities		71,682			6,552		65,130			—
Corporate debt securities		11,528			—		9,528			2,000
Mortgage backed securities		237,320			6,044		231,276			—
Total recurring assets at fair value	$	340,839		$	12,596	$	326,243		$	2,000

Valuation Methodologies Used for Instruments Measured at Fair Value on a Nonrecurring Basis

The following table is a presentation of the valuation methodologies used for instruments measured at fair value on a nonrecurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of September 30, 2012 and 2011 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements on a Nonrecurring Basis As of September 30, 2012
	Fair Value		Level 1		Level 2		Level 3
Impaired loans carried at fair value	$	50,437	$	—	$	50,437	$	—
Other real estate owned		37,325		—		—		37,325
Covered loans		546,234		—		—		546,234
Covered other real estate owned		88,895		—		—		88,895
Total non-recurring assets at fair value	$	722,891	$	—	$	50,437	$	672,454
	Fair Value Measurements on a Nonrecurring Basis As of December 31, 2011
	Fair Value		Level 1		Level 2		Level 3
Impaired loans carried at fair value	$	70,296	$	—	$	70,296	$	—
Other real estate owned		46,680		—		—		46,680
Covered loans		571,489		—		—		571,489
Covered other real estate owned		78,617		—		—		78,617
Total nonrecurring assets at fair value	$	767,082	$	—	$	70,296	$	696,786
	Fair Value Measurements on a Nonrecurring Basis As of September 30, 2011
	Fair Value		Level 1		Level 2		Level 3
Impaired loans carried at fair value	$	58,648	$	—	$	58,648	$	—
Other real estate owned		50,866		—		—		50,866
Covered loans		595,428		—		—		595,428
Covered other real estate owned		81,907		—		—		81,907
Total nonrecurring assets at fair value	$	786,849	$	—	$	58,648	$	728,201

Company's Reconciliation of Level 3 Assets

Below is the Company’s reconciliation of Level 3 assets as of September 30, 2012 (dollars in thousands):

	Investment Securities Available for Sale		Other Real Estate Owned			Covered Loans			Covered Other Real Estate
Beginning balance January 1, 2012	$	2,000	$	46,680		$	571,489		$	78,617
Total gains/(losses) included in net income		—		(9,048	)		—			—
Purchases, sales, issuances, and settlements, net		—		(21,008	)		15,281			(30,258	)
Transfers in or out of Level 3		—		20,701			(40,536	)		40,536
Ending balance September 30, 2012	$	2,000	$	37,325		$	546,234		$	88,895