Fair Value Option and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Option and Fair Value Measurements

Schedule of balance of assets and liabilities which are measured at fair value on a recurring basis

	June 30, 2012
	Level 1			Level 2			Level 3		Total
Assets:
Investment securities available-for-sale
U.S. Treasury	$	1,515		$		-	$	-	$		1,515
U.S. government agencies	-			44,623			-		44,623
U.S. government agency mortgage-backed	-			95,208			-		95,208
States and political subdivisions	-			13,920			138		14,058
Corporate Bonds	-			35,267			-		35,267
Collateralized mortgage obligations	-			62,387			-		62,387
Asset-backed securities	51,752			84,922			-		136,674
Collateralized debt obligations	-			-			9,163		9,163
Loans held-for-sale	-			6,445			-		6,445
Mortgage servicing rights	-			-			3,531		3,531
Other assets (Interest rate swap agreements net of swap credit valuation)	-			2,606			(69)		2,537
Other assets (Forward MBS)	-			910			-		910
Total	$	53,267		$		346,288	$	12,763	$		412,318
Liabilities:
Other liabilities (Interest rate swap agreements)	$	-		$		2,606	$	-	$		2,606
Other liabilities (Interest rate lock commitments to borrowers)	-			16			-		16
Total	$	-		$		2,622	$	-	$		2,622
	December 31, 2011
	Level 1			Level 2			Level 3		Total
Assets:
Investment securities available-for-sale
U.S. Treasury	$		1,524	$	-		$	-	$	1,524
U.S. government agencies	-			43,398			-		43,398
U.S. government agency mortgage-backed	-			154,007			-		154,007
States and political subdivisions	-			13,671			138		13,809
Corporate Bonds	-			31,389			-		31,389
Collateralized mortgage obligations	-			25,122			-		25,122
Asset-backed securities				28,341			-		28,341
Collateralized debt obligations	-			-			9,974		9,974
Loans held-for-sale	-			12,806			-		12,806
Mortgage servicing rights	-			-			3,487		3,487
Other assets (Interest rate swap agreements net of swap credit valuation)	-			3,152			(80)		3,072
Other assets (Forward MBS)	-			107			-		107
Total	$		1,524	$	311,993		$	13,519	$	327,036
Liabilities:
Other liabilities (Interest rate swap agreements)	$		-	$	3,152		$	-	$	3,152
Other liabilities (Interest rate lock commitments to borrowers)	-			50			-		50
Total	$		-	$	3,202		$	-	$	3,202

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

	Six months ended June 30, 2012
	Investment securities  available-for- sale
	Collateralized Debt Obligations			States and Political Subdivisons			Mortgage Servicing Rights			Interest Rate Swap Valuation
Beginning balance January 1, 2012	$	9,974		$		138	$	3,487		$		(80)
Transfers into Level 3	-			-			-			-
Transfers out of Level 3	-			-			-			-
Total gains or losses
Included in earnings (or changes in net assets)	80			-			(835)			11
Included in other comprehensive income	(829)			-			-			-
Purchases, issuances, sales, and settlements
Purchases	-			-			-			-
Issuances	-			-			879			-
Settlements	(62)			-			-			-
Expirations	-			-			-			-
Ending balance June 30, 2012	$	9,163		$		138	$	3,531		$		(69)
	Six months ended June 30, 2011
	Investment securities available-for- sale
	Equity Securities			Collateralized Debt Obligations			States and political subdivisions			Mortgage Servicing Rights			Interest Rate Swap Valuation		Risk Participation Agreement
Beginning balance January 1, 2011	$		6	$	11,073		$		3,000	$	3,897		$	(108)	$	(38)
Transfers into Level 3	-			-			-			-			-		-
Transfers out of Level 3	-			-			(3,000)			-			-		-
Total gains or losses
Included in earnings (or changes in net assets)	-			69			-			(500)			(43)		38
Included in other comprehensive income	2			617			-			-			-		-
Purchases, issuances, sales, and settlements
Purchases	-			-			-			-			-		-
Issuances	-			-			-			621			-		-
Settlements	-			(69)			-			-			-		-
Expirations	-			-			-			-			-		-
Ending balance June 30, 2011	$		8	$	11,690		$		-	$	4,018		$	(151)	$	-

Schedule of assets and liabilities measured at fair value on a nonrecurring basis

	June 30, 2012
	Level 1		Level 2		Level 3		Total
Impaired loans1	$	-	$	-	$	39,392	$	39,392
Other real estate owned, net2	-		-		89,671		89,671
Total	$	-	$	-	$	129,063	$	129,063

1   Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans.  These loans had a carrying amount of $45.7 million, with a valuation allowance of $6.3 million, resulting in a decrease of specific allocations within the allowance for loan losses of $6.7 million for the six months ending June 30, 2012.

2 OREO, measured at the lower of carrying or fair value less costs to sell, had a net carrying amount of $89.7 million, which is made up of the outstanding balance of $117.1 million, net of a valuation allowance of $27.5 million, at June 30, 2012, resulting in a charge to expense of $7.6 million for the six months ended June 30, 2012.

	December 31, 2011
	Level 1		Level 2		Level 3		Total
Impaired loans1	$	-	$	-	$	51,075	$	51,075
Other real estate owned, net2	-		-		93,290		93,290
Total	$	-	$	-	$	144,365	$	144,365

1Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans. These loans had a carrying amount of $64.1 million, with a valuation allowance of $13.0 million, resulting in a decrease of specific allocations within the allowance for loan losses of $9.9 million for the year ending December 31, 2011.

2OREO is measured at the lower of carrying or fair value less costs to sell and had a net carrying amount of $93.3 million, which is made up of the outstanding balance of $116.8 million, net of a valuation allowance of $23.5 million, at December 31, 2011, resulting in a charge to expense of $15.1 million for the year ended December 31, 2011.