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Disclosures About Fair Value of Assets and Liabilities (Tables)
 9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value Measurements of Assets and Liabilities Recognized in Consolidated Condensed Balance Sheets Measured at Fair Value
The following table presents the fair value measurements of assets and liabilities recognized in the Consolidated Condensed Balance Sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2013, and December 31, 2012.
 
 
 

Fair Value Measurements Using:
September 30, 2013
Fair Value

Quoted Prices in Active Markets for Identical Assets
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)
Available for sale securities:
 

 

 

 
U.S. Government-sponsored agency securities
$
3,800


 

$
3,800


 
State and municipal
202,182


 

181,672


$
20,510

U.S. Government-sponsored mortgage-backed securities
398,169




398,169


 
Corporate obligations
484


 

 

484

Equity securities
1,706


 

1,702


4

Interest rate swap asset
3,054


 

3,054


 
Interest rate cap
421


 

421


 
Interest rate swap liability
4,577


 

4,577


 


 
 

Fair Value Measurements Using:
December 31, 2012
Fair Value

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)
Available for sale securities:
 

 

 

 
U.S. Government-sponsored agency securities
$
4,640


 

$
4,640


 
State and municipal
158,194


 

140,094


$
18,100

U.S. Government-sponsored mortgage-backed securities
348,579


 

348,579


 
Corporate obligations
224


 

 

224

Equity securities
1,706


 

1,702


4

Interest rate swap asset
6,103


 

6,103




Interest rate cap
197


 

197




Interest rate swap liability
9,766


 

9,766
Reconciliation of Beginning and Ending Balances of Recurring Fair Value Measurements Recognized in Consolidated Condensed Balance Sheets using Significant Unobservable Level 3 Inputs
The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the Consolidated Condensed Balance Sheets using significant unobservable (Level 3) inputs for three and nine months ended September 30, 2013, and 2012.
 
 
Three Months Ended September 30, 2013

Nine Months Ended September 30, 2013
 
Available
for Sale
Securities

Interest
Rate Swap
Asset

Interest
Rate
Cap

Interest
Rate Swap
Liability

Available
for Sale
Securities

Interest
Rate Swap
Asset

Interest
Rate
Cap

Interest
Rate Swap
Liability
Balance at beginning of the period
$
17,915








$
18,328







Total realized and unrealized gains and losses:
 







 






Included in net income (loss)
















Included in other comprehensive income
(486
)







(521
)






Purchases, issuances and settlements

















Transfers in/(out) of Level 3
3,905








3,905







Principal payments/additions
(336
)







(714
)






Ending balance at September 30, 2013
$
20,998








$
20,998









 
Three Months Ended September 30, 2012

Nine Months Ended September 30, 2012
 
Available
for Sale Securities

Interest
Rate Swap
Asset

Interest
Rate
Cap

Interest
Rate Swap
Liability

Available
for Sale Securities

Interest
Rate Swap
Asset

Interest
Rate
Cap

Interest
Rate Swap Liability
Balance at beginning of the period
$
19,740








$
20,838


$
5,241


$
424


$
(7,797
)
Total realized and unrealized gains and losses:
 







 

 

 

 
Included in net income (loss)











(860
)



863

Included in other comprehensive income
(183
)







(944
)

481


(15
)



Purchases, issuances and settlements




















Transfers in/(out) of Level 3











(4,862
)

(409
)

6,934

Principal payments
(1,132
)







(1,469
)

 





Ending balance at September 30, 2012
$
18,425








$
18,425


$
—


$
—


$
—
Transfer Between Levels 1, 2 and 3 and Reasons For Transfers
Transfer between Levels 1, 2 and 3 and the reasons for those transfers are as follows:
 
 
Three and Nine Months Ended September 30, 2013
 
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Reason for Transfer
Transfers to/(from) Level:
 
 
 
 
 
 
 
Available for sale securities
 
 
$
(3,905
)
 
$
3,905

 
Selected state and municipal securities were transferred from Level 2 to Level 3 due to limited availability of similar securities in active markets.
 
 
 
$
(3,905
)
 
$
3,905

 
 


 
Nine Months Ended September 30, 2012
 
 
Quoted Prices in
Active Markets for Identical Assets
 (Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
 (Level 3)

Reason for Transfer
Transfers to/(from) Level:
 

 

 

 
Interest rate swap asset
 

$
4,862


$
(4,862
)

The interest rate swap and cap instruments were transferred from Level 3 to Level 2 as of March 31, 2012 due to the availability of additional valuation information. These instruments are valued using widely accepted valuation techniques including discounted cash flow analysis using observable inputs such as contractual terms and LIBOR-based rate curves.
Interest rate cap
 

409


(409
)

Interest rate swap liability
 

6,934


(6,934
)


 

$
12,205


$
(12,205
)

 
Description of Valuation Methodologies Used for Instruments Measured at Fair Value on a Non-Recurring Basis and Recognized in Consolidated Condensed Balance Sheets
The following table presents the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2013, and December 31, 2012.
 
 

 

Fair Value Measurements Using
September 30, 2013

Fair Value

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant Unobservable
Inputs
(Level 3)
Impaired loans (collateral dependent)

$
8,874


 

 

$
8,874

Other real estate owned

$
8,220


 

 

$
8,220

 
 
 

 

Fair Value Measurements Using
December 31, 2012

Fair Value

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable
 Inputs
(Level 2)

Significant Unobservable
Inputs
(Level 3)
Impaired loans (collateral dependent)

$
17,703


 

 

$
17,703

Other real estate owned

$
7,684


 

 

$
7,684
Unobservable Inputs Used in Recurring and Nonrecurring Level 3 Fair Value Measurements Other Than Goodwill
The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements, other than goodwill, at September 30, 2013.
 
 
Fair Value

Valuation Technique

Unobservable Inputs

Range
State and municipal securities
$
20,510


Discounted cash flow

Maturity/Call date

1 month to 10 yrs
 
 

 

Blend of US Muni BQ curve

A- to BBB-
 
 

 

Discount rate

1% - 5%
 
 
 
 
 
 
 
 
Corporate obligations/Equity securities
$
488


Discounted cash flow

Risk free rate

3 month LIBOR
 
 

 

plus Premium for illiquidity

plus 200bps
 
 
 
 
 
 
 
 
Impaired loans (collateral dependent)
$
8,874


Collateral based measurements

Discount to reflect current market conditions and ultimate collectability

0% - 50%
 
 





 
Other real estate owned
$
8,220


Appraisals

Discount to reflect current market conditions

0% - 20%
Estimated Fair Values of Financial Instruments
The following table presents estimated fair values of the Corporation’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2013, and December 31, 2012.




September 30, 2013





(unaudited)


 
Carrying
Amount

Quoted Prices in Active Markets
for Identical
Assets

Significant
Other
Observable
Inputs

Significant Unobservable
Inputs
 
(Level 1)

(Level 2)

(Level 3)
Assets:
 

 

 

 
Cash and due from banks
$
92,341


$
92,341


 

 
Interest-bearing time deposits
18,875


18,875


 

 
Investment securities available for sale
606,341


 

$
585,343


$
20,998

Investment securities held to maturity
307,794


 

303,371


11,012

Mortgage loans held for sale
5,312


 

5,312


 
Loans
2,859,233


 

 

2,822,465

Federal Reserve Bank and Federal Home Loan Bank stock
32,790


 

32,790


 
Interest rate swap and cap asset
3,475


 

3,475


 
Interest receivable
16,171


 

16,171


 
Liabilities:
 

 

 

 
Deposits
$
3,255,846


$
2,548,183


$
700,168


 
Borrowings:
 

 

 

 
Federal funds purchased
115,938


 

115,938


 
Securities sold under repurchase agreements
123,935


 

124,195


 
Federal Home Loan Bank advances
172,292


 

173,449


 
Subordinated debentures and term loans
111,849


 

63,391


 
Interest rate swap liability
4,577


 

4,577


 
Interest payable
1,155


 

1,155


 





December 31, 2012


 
Carrying
Amount

Quoted Prices in Active Markets
for Identical
Assets

Significant
Other
Observable
Inputs

Significant Unobservable
Inputs
 
(Level 1)

(Level 2)

(Level 3)
Assets:
 

 

 

 
Cash and due from banks
$
101,460


$
101,460


 

 
Interest-bearing time deposits
38,443


38,443


 

 
Investment securities available for sale
513,343


 

$
495,015


$
18,328

Investment securities held to maturity
361,020


 

366,590


11,584

Mortgage loans held for sale
22,300


 

22,300


 
Loans
2,832,843


 

 

2,852,614

Federal Reserve Bank and Federal Home Loan Bank stock
32,785


 

32,785


 
Interest rate swap and cap asset
6,300


 

6,300




Interest receivable
16,367


 

16,367


 
Liabilities:
 

 

 

 
Deposits
$
3,346,383


$
2,478,706


$
865,793


 
Borrowings:
 

 

 

 
Federal funds purchased
18,862




18,862



Securities sold under repurchase agreements
141,828


 

142,318


 
Federal Home Loan Bank advances
94,238


 

97,357


 
Subordinated debentures and term loans
112,161


 

62,133


 

Interest rate swap liability
9,766


 

9,766



Interest payable
1,841


 

1,841