Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2014

Assets and liabilities measured at fair value

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

			Fair Value Measurements Using
			Quoted
			Prices
			in Active
			Markets		Significant		Significant
			for		Other		Un-
	Fair Value		Identical		Observable		observable
	Measure-		Assets		Inputs		Inputs
	ments		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
March 31, 2014:
Measured at Fair Value on a Recurring Basis:
Assets
Trading securities	$	610	$	610	$	-	$	-
Securities available for sale
U.S. agency		47,654		-		47,654		-
U.S. agency residential mortgage-backed		236,745		-		236,745		-
U.S. agency commercial mortgage-backed		12,640		-		12,640
Private label residential mortgage-backed		6,643		-		6,643		-
Other asset backed		43,314				43,314
Obligations of states and political subdivisions		153,930		-		153,930		-
Corporate		19,565		-		19,565		-
Trust preferred		2,444		-		2,444		-
Loans held for sale		14,700		-		14,700		-
Derivatives (1)		397		-		397		-
Liabilities
Derivatives (2)		-		-		-		-

Measured at Fair Value on a Non-recurring basis:
Assets
Capitalized mortgage loan servicing rights (3)		7,307		-		-		7,307
Impaired loans (4)
Commercial
Income producing - real estate		2,315		-		-		2,315
Land, land development & construction-real estate		741		-		-		741
Commercial and industrial		4,254		-		-		4,254
Mortgage
1-4 Family		1,369		-		-		1,369
Resort Lending		465		-		-		465
Other real estate (5)
Commercial
Income producing - real estate		559		-		-		559
Land, land development & construction-real estate		1,047		-		-		1,047
Commercial and industrial		213		-		-		213
Mortgage
1-4 Family		171		-		-		171
Resort Lending		1,099		-		-		1,099
Installment
Home equity installment - 1st lien		29		-		-		29
Payment plan receivables
Full refund/partial refund		2,668		-		-		2,668

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance.

(4) Only includes impaired loans with specific loss allocations based on collateral value.

(5) Only includes other real estate with subsequent write downs to fair value.

			Fair Value Measurements Using
			Quoted
			Prices
			in Active
			Markets		Significant		Significant
			for		Other		Un-
	Fair Value		Identical		Observable		observable
	Measure-		Assets		Inputs		Inputs
	ments		(Level 1)		(Level 2)		(Level 3)
	(In thousands)
December 31, 2013:
Measured at Fair Value on a Recurring Basis:
Assets
Trading securities	$	498	$	498	$	-	$	-
Securities available for sale
U.S. agency		31,808		-		31,808		-
U.S. agency residential mortgage-backed		203,460		-		203,460		-
Private label residential mortgage-backed		6,788		-		6,788		-
Other asset backed		45,185		-		45,185		-
Obligations of states and political subdivisions		153,678		-		153,678		-
Corporate		19,137		-		19,137		-
Trust preferred		2,425		-		2,425		-
Loans held for sale		20,390		-		20,390		-
Derivatives (1)		494		-		494		-
Liabilities
Derivatives (2)		-		-		-		-

Measured at Fair Value on a Non-recurring basis:
Assets
Capitalized mortgage loan servicing rights (3)		7,773		-		-		7,773
Impaired loans (4)
Commercial
Income producing - real estate		1,997		-		-		1,997
Land, land development & construction-real estate		673		-		-		673
Commercial and industrial		2,927		-		-		2,927
Mortgage
1-4 Family		1,455		-		-		1,455
Resort Lending		340		-		-		340
Other real estate (5)
Commercial
Income producing - real estate		559		-		-		559
Land, land development & construction-real estate		1,047		-		-		1,047
Mortgage
1-4 Family		337		-		-		337
Resort Lending		1,257		-		-		1,257
Installment
Home equity - 1st lien		29		-		-		29
Payment plan receivables
Full refund/partial refund		2,668		-		-		2,668

(1) Included in accrued income and other assets

(2) Included in accrued expenses and other liabilities

(3) Only includes servicing rights that are carried at fair value due to recognition of a valuation allowance.

(4) Only includes impaired loans with specific loss allocations based on collateral value.

(5) Only includes other real estate with subsequent write downs to fair value.

Changes in fair value for financial assets

Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:

		Changes in Fair Values for the Three-Month
		Periods Ended March 31 for Items Measured at
		Fair Value Pursuant to Election of the Fair Value Option
		2014						2013
						Total							Total
						Change							Change
						in Fair							in Fair
						Values							Values
						Included							Included
		Net Gains (Losses)				in Current		Net Gains (Losses)					in Current
		on Assets				Period		on Assets					Period
		Securities		Loans		Earnings		Securities		Loans			Earnings
		(In thousands)
Trading securities	$	112	$	-	$	112	$	91	$	-		$	91
Loans held for sale		-		30		30		-		(694	)		(694	)

Reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

A reconciliation for all liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31 follows:

	(Liability)
	Amended Warrant
	2014		2013

Beginning balance	$	-	$	(459	)
Total losses realized and unrealized:
Included in results of operations		-		(1,045	)
Included in other comprehensive income		-		-
Purchases, issuances, settlements, maturities and calls		-		-
Transfers in and/or out of Level 3		-		-
Ending balance	$	-	$	(1,504	)

Amount of total losses for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at March 31	$	-	$	(1,045	)

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

	Asset
	(Liability)
	Fair		Valuation	Unobservable	Weighted
	Value		Technique	Inputs	Average
	(In thousands)
March 31, 2014
Capitalized mortgage loan servicing rights	$	7,307	Present value of net servicing revenue	Discount rate		10.06	%
				Cost to service	$	83
				Ancillary income		29
				Float rate		1.80	%
Impaired loans
Commercial		7,313	Sales comparison approach	Adjustment for differences between comparable sales		(1.2	)%
			Income approach	Capitalization rate		9.3
Mortgage		1,834	Sales comparison approach
				Adjustment for differences between comparable sales		3.4
Other real estate
Commercial		1,819	Sales comparison approach	Adjustment for differences between comparable sales		(5.7	)
			Income approach	Capitalization rate		11.0
Mortgage and installment		1,299	Sales comparison approach	Adjustment for differences between comparable sales		36.5

Payment plan receivables		2,668	Sales comparison approach	Adjustment for differences between comparable sales		7.5

December 31, 2013
Capitalized mortgage loan servicing rights	$	7,773	Present value of net servicing revenue	Discount rate		10.09	%
				Cost to service	$	81
				Ancillary income		29
				Float rate		1.79	%
Impaired loans
Commercial		5,597	Sales comparison approach	Adjustment for differences between comparable sales		(1.9	)%
			Income approach	Capitalization rate		9.3
Mortgage		1,795	Sales comparison approach
				Adjustment for differences between comparable sales		3.2
Other real estate
Commercial		1,606	Sales comparison approach	Adjustment for differences between comparable sales		(5.7	)

Mortgage and installment		1,623	Sales comparison approach	Adjustment for differences between comparable sales		55.7

Payment plan receivables		2,668	Sales comparison approach	Adjustment for differences between comparable sales		10.4

Aggregate fair value and aggregate remaining contractual principal balance for loans held for sale

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

	Asset
	(Liability)
	Fair		Valuation	Unobservable	Weighted
	Value		Technique	Inputs	Average
	(In thousands)
March 31, 2014

Capitalized mortgage loan servicing rights	$	7,307	Present value of net	Discount rate		10.06	%
			servicing revenue	Cost to service	$	83
				Ancillary income		29
				Float rate		1.80	%

Impaired loans Commercial		7,310	Sales comparison	Adjustment for differences
			approach	between comparable sales		0.7	%
			Income approach	Capitalization rate		9.3
Mortgage		1,834	Sales comparison	Adjustment for differences
			approach	between comparable sales		2.5

Other real estate Commercial		1,819	Sales comparison	Adjustment for differences
			approach	between comparable sales		(3.2	)

Mortgage and installment		1,299	Sales comparison	Adjustment for differences
			approach	between comparable sales		64.1

Payment plan receivables		2,668	Sales comparison	Adjustment for differences
			approach	between comparable sales		10.4

December 31, 2013

Capitalized mortgage loan servicing rights	$	7,773	Present value of net	Discount rate		10.09	%
			servicing revenue	Cost to service	$	81
				Ancillary income		29
				Float rate		1.79	%

Impaired loans Commercial		5,597	Sales comparison	Adjustment for differences
			approach	between comparable sales		(1.9	)%
			Income approach	Capitalization rate		9.3
Mortgage		1,795	Sales comparison	Adjustment for differences
			approach	between comparable sales		3.2

Other real estate Commercial		1,606	Sales comparison	Adjustment for differences
			approach	between comparable sales		(5.7	)

Mortgage and installment		1,623	Sales comparison	Adjustment for differences
			approach	between comparable sales		55.7

Payment plan receivables		2,668	Sales comparison	Adjustment for differences
			approach	between comparable sales		10.4

- Definition

Tabular disclosure related to 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 recurring and/or nonrecurring basis in periods after initial recognition. Disclosures 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) as well as transfers between levels 1 and 2.

+ References

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-Name Statement of Financial Accounting Standard (FAS)

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- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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-Name Statement of Financial Accounting Standard (FAS)

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