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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2013

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the financial instruments carried at fair value at June 30, 2013 and December 31, 2012, on the consolidated balance sheets and by levels within the valuation hierarchy.


				Fair Value Measurements at Reporting Date Using
				Quoted Prices in		Significant
				Active Markets for		Other		Significant
				Identical		Observable		Unobservable
				Instruments		Inputs		Inputs
Description		June 30, 2013		(Level 1)		(Level 2)		(Level 3)
Assets
Available-for-sale securities:
U.S. Government Agencies	$	60,066	$	0	$	60,066	$	0
Obligations of states and political
subdivisions		407,500		0		407,500		0
Agency residential mortgage-backed
securities		1,740,532		0		1,740,532		0
Non-agency residential mortgage-
backed securities		25,183		0		634		24,549
Commercial mortgage-backed
securities		32,785		0		32,785		0
Other structured financial products		10,506		0		0		10,506
Other debt securities		43,203		0		43,203		0
Other equity securities		23,654		20,834		0		2,820
Derivatives: ⁽¹⁾
Designated as hedging instruments		1,882		0		1,882		0
Not designated as hedging
instruments		25,725		0		25,725		0
Total	$	2,371,036	$	20,834	$	2,312,327	$	37,875
Liabilities
Derivatives: ⁽²⁾
Designated as hedging instruments	$	37,837	$	0	$	37,837	$	0
Not designated as hedging
instruments		20,309		0		20,309		0
Total	$	58,146	$	0	$	58,146	$	0

					Fair Value Measurements at Reporting Date Using
					Quoted Prices in		Significant
					Active Markets for		Other		Significant
					Identical		Observable		Unobservable
					Instruments		Inputs		Inputs
	Description		December 31, 2012		(Level 1)		(Level 2)		(Level 3)
	Assets
	Available-for-sale securities:
	U.S. Government Agencies	$	114,408	$	0	$	114,408	$	0
	Obligations of states and political
	subdivisions		435,777		0		435,777		0
	Agency residential mortgage-
	backed securities		1,880,562		0		1,880,562		0
	Non-agency residential mortgage-
	backed securities		27,450		0		650		26,800
	Commercial mortgage-backed
	securities		40,380		0		40,380		0
	Other structured financial products		9,550		0		0		9,550
	Other debt securities		45,255		0		45,255		0
	Other equity securities		24,519		21,266		97		3,156
	Derivatives: ⁽¹⁾
	Designated as hedging instruments		878		0		878		0
	Not designated as hedging
	instruments		25,037		0		25,037		0
	Total	$	2,603,816	$	21,266	$	2,543,044	$	39,506
	Liabilities
	Derivatives: ⁽²⁾
	Designated as hedging instruments	$	51,172	$	0	$	51,172	$	0
	Not designated as hedging
	instruments		20,954		0		20,954		0
	Total	$	72,126	$	0	$	72,126	$	0

⁽¹⁾	Included in Other assets
⁽²⁾	Included in Other liabilities

Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs

	The following tables present roll-forwards of the balance sheet amounts for the three and six month periods ended June 30,
2013 and 2012, for financial instruments classified by Susquehanna within Level 3 of the valuation hierarchy.

		Available-for-sale Securities
						Non-
						agency
				Other		Residential
				Structured		Mortgage-
		Equity		Financial		backed
		Securities		Products		Securities		Total
	Balance at April 1, 2013	$	3,157	$	9,977	$	25,592	$	38,726
	Total gains or losses (realized/unrealized):
	Included in earnings:
	Other-than-temporary impairment ⁽¹⁾		(97)		0		0		(97)
	Included in other comprehensive income (before taxes)		(240)		529		(1,043)		(754)
	Balance at June 30, 2013	$	2,820	$	10,506	$	24,549	$	37,875

	Balance at April 1, 2012	$	3,190	$	8,021	$	20,137	$	31,348
	Total gains or losses (realized/unrealized):
	Included in earnings:
	Other-than-temporary impairment ⁽¹⁾		0		0		3,092		3,092
	Included in other comprehensive income (before taxes)		(31)		441		(159)		251
	Sales		0		0		(18,782)		(18,782)
	Balance at June 30, 2012	$	3,159	$	8,462	$	4,288	$	15,909

	Balance at January 1, 2013	$	3,156	$	9,550	$	26,800	$	39,506
	Total gains or losses (realized/unrealized):
	Included in earnings:
	Other-than-temporary impairment ⁽¹⁾		(97)		0		(388)		(485)
	Included in other comprehensive income (before taxes)		(239)		956		(1,863)		(1,146)
	Balance at June 30, 2013	$	2,820	$	10,506	$	24,549	$	37,875

	Balance at January 1, 2012	$	3,430	$	13,293	$	0	$	16,723
	Total gains or losses (realized/unrealized):
	Included in earnings:
	Other-than-temporary impairment ⁽¹⁾		(144)		0		3,092		2,948
	Included in other comprehensive income (before taxes)		(127)		(4,831)		(159)		(5,117)
	Sales		0		0		1,355		1,355
	Balance at June 30, 2012	$	3,159	$	8,462	$	4,288	$	15,909

⁽¹⁾	Included in noninterest income, net realized gain on sale of securities.

Assets Measured at Fair Value on a Nonrecurring Basis

	The following tables present assets measured at fair value on a nonrecurring basis at June 30, 2013 and December 31, 2012, on
the consolidated balance sheets and by the valuation hierarchy.

				Quoted
				Prices
				in Active		Significant
				Markets for		Other		Significant
				Identical		Observable		Unobservable
				Instruments		Inputs		Inputs
	Description	June 30, 2013		(Level 1)		(Level 2)		(Level 3)
	Impaired loans	$	80,085	$	0	$	0	$	80,085
	Foreclosed assets		18,349		0		0		18,349
		$	98,434	$	0	$	0	$	98,434

				Quoted
				Prices
				in Active		Significant
				Markets for		Other		Significant
				Identical		Observable		Unobservable
				Instruments		Inputs		Inputs
	Description	December 31, 2012		(Level 1)		(Level 2)		(Level 3)
	Impaired loans	$	65,731	$	0	$	0	$	65,731
	Foreclosed assets		26,245		0		0		26,245
		$	91,976	$	0	$	0	$	91,976

Quantitative Information about Level 3 Fair Value Measurements

	The following table details the quantitative information about Level 3 fair value measurements:


		Fair Value at		Valuation		Range
Asset		June 30, 2013		Technique(s)	Unobservable Input	(Weighted Average)

Non-agency residential mortgage-				Discounted Cash Flow	Conditional repayment rate	10.4%
	backed securities	$	24,549	Discounted Cash Flow	Loss severity	42.0%
					Conditional default rate	3.6%

Other structured financial products			10,506	Discounted Cash Flow	Credit default rates, call options and deferrals, waterfall structure, and covenants.	Varies by individual security, refer to Note 3
				Discounted Cash Flow



Other equity securities			2,820	Discounted Cash Flow	Timing of cash flows from dividends and terminal value	0.2x - 1.5x
				Discounted Cash Flow	Timing of cash flows from dividends and terminal value	(.9x)

Impaired loans			80,085	Discounted Cash Flow	Timing of cash flows based upon current discount rates and terminal value	1.1% - 8.2%
				Discounted Cash Flow		(4.0%)


Foreclosed assets			18,349	Discounted Cash Flow	Third party appraisals less estimated selling costs	0.0% - 100.0%
				Discounted Cash Flow	Third party appraisals less estimated selling costs	(27.4%)

		Fair Value at		Valuation		Range
Asset		December 31, 2012		Technique(s)	Unobservable Input	(Weighted Average)

Non-agency residential mortgage-				Discounted Cash Flow	Conditional repayment rate	10.4%
	backed securities	$	26,800	Discounted Cash Flow	Loss severity	43.8%
					Conditional default rate	3.6%

Other structured financial products			9,550	Discounted Cash Flow	Credit default rates, call options and deferrals, waterfall structure, and covenants.	Varies by individual security, refer to Note 3
				Discounted Cash Flow



Other equity securities			3,156	Discounted Cash Flow	Timing of cash flows from dividends and terminal value	0.2x - 1.5x
				Discounted Cash Flow	Timing of cash flows from dividends and terminal value	(0.9x)

Impaired loans			65,731	Discounted Cash Flow	Timing of cash flows based upon current discount rates and terminal value	2.9% - 5.6%
				Discounted Cash Flow		(4.2%)


Foreclosed assets			26,245	Discounted Cash Flow	Third party appraisals less estimated selling costs	0.0% - 100.0%
				Discounted Cash Flow	Third party appraisals less estimated selling costs	(24.0%)

Carrying Amounts and Estimated Fair Values

Additional Disclosures about Fair Value of Financial Instruments

	The following table represents the carrying amounts and estimated fair values of Susquehanna's financial instruments. The
methods and assumptions used to estimate the fair value of each class of financial instruments are described above.

		June 30, 2013
		Carrying
		Amount		Fair Value		Level 1		Level 2		Level 3
	Financial assets:
	Cash and due from banks	$	367,902	$	367,902	$	367,902	$	0	$	0
	Short-term investments		81,456		81,456		0		81,456		0
	Investment securities		2,343,429		2,343,429		20,834		2,284,720		37,875
	Restricted investment in bank stocks		150,749		150,749		0		150,749		0
	Loans and leases		13,157,762		13,276,903		0		0		13,276,903
	Derivatives		27,607		27,607		0		27,607		0
	Financial liabilities:
	Deposits		12,764,232		12,750,862		0		12,750,862		0
	Short-term borrowings		706,065		706,065		0		706,065		0
	FHLB borrowings		1,161,995		1,162,217		0		1,162,217		0
	Long-term debt		489,002		488,894		0		488,894		0
	Derivatives		58,146		58,146		0		58,146		0

		December 31, 2012
		Carrying
		Amount		Fair Value		Level 1		Level 2		Level 3
	Financial assets:
	Cash and due from banks	$	277,042	$	277,042	$	277,042	$	0	$	0
	Short-term investments		119,176		119,176		0		119,176		0
	Investment securities		2,577,901		2,577,901		21,266		2,517,129		39,506
	Restricted investment in bank stocks		152,434		152,434		0		152,434		0
	Loans and leases		12,894,741		12,954,918		0		0		12,954,918
	Derivatives		25,915		25,915		0		25,915		0
	Financial liabilities:
	Deposits		12,580,046		12,544,069		0		12,544,069		0
	Short-term borrowings		817,577		817,577		0		817,577		0
	FHLB borrowings		1,199,062		1,200,358		0		1,200,358		0
	Long-term debt		513,401		512,632		0		512,632		0
	Derivatives		72,126		72,126		0		72,126		0

- 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).

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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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

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-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

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-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

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-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.

+ Details