FAIR VALUE MEASUREMENT AND FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Measurement and Fair Values Of Financial Instruments [Abstract]

Fair Value Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Table Text Block]

The estimated fair values of financial instruments and respective level classifications at September 30, 2012, are as follows:

					Fair value measurements using
					Quoted prices in				Significant
					active markets for		Other observable		unobservable
(Dollars in thousands)					identical assets		inputs		inputs
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	101,335	$	101,335	$	101,335	$	-	$	-
Trading securities		853		853		853		-		-
Investment securities		792,657		792,657		1,990		781,648		9,019
Federal Home Loan Bank stock		12,040		12,040		-		12,040		-
Loans held for sale		-		-		-		-		-
Net loans (net of allowance for loan losses)		1,459,310		1,391,543		-		-		1,391,543
Bank owned life insurance		26,895		26,895		-		26,895		-
FINANCIAL LIABILITIES:
Deposits	$	1,929,292	$	1,929,366	$	-	$	1,929,366	$	-
Short-term borrowings		35,000		35,000		-		35,000		-
Long-term borrowings		92,900		93,517		-		93,517		-
Junior subordinated debentures-variable		51,000		27,390		-		27,390		-

     The estimated fair values of financial instruments at December 31, 2011, are as follows:

(Dollars in thousands)	Carrying Value		Fair Value
FINANCIAL ASSETS:
Cash and cash equivalents	$	92,227	$	92,227
Trading securities		747		747
Investment securities available for sale		729,844		729,844
Federal Home Loan Bank stock		12,148		12,148
Net loans (net of allowance for loan losses
and including loans held for sale)		1,469,370		1,394,586
Bank owned life insurance		26,228		26,228
FINANCIAL LIABILITIES:
Deposits	$	1,915,569	$	1,916,030
Long-term borrowings		120,000		120,032
Junior subordinated debentures-variable		51,000		27,350

Fair Value, Assets Measured on Recurring and Nonrecurring Basis [Table Text Block]

			Fair value measurements at September 30, 2012, using
			Quoted prices in active
			markets for identical		Other observable		Significant
(Dollars in thousands)	Fair Value		assets		inputs		unobservable inputs		Impairment
	September 30, 2012		(Level 1)		(Level 2)		(Level 3)		recognized
Recurring fair value measurements:
Trading securities	$	853	$	853	$	-	$	-
Available for sale securities:
U.S. Treasury securities		200		-		200		-
U.S. Government agency securities		230,360		-		230,360		-
Corporate securities		9,019		-		-		9,019
Mortgage-backed securities		461,077		-		461,077		-
Obligations of state and political subdivisions		80,116		-		80,116		-
Equity investments and other securities		11,885		1,990		9,895		-
Total recurring assets measured at fair value	$	793,510	$	2,843	$	781,648	$	9,019
Nonrecurring fair value measurements
for the three months ending:
Loans measured for impairment 1	$	3,972	$	-	$	-	$	3,972	$	1,316
OREO 1		4,231		-		-		4,231		486
Total nonrecurring fair value measurements	$	8,203	$	-	$	-	$	8,203	$	1,802
Nonrecurring fair value measurements
for the nine months ending:
Loans measured for impairment 1	$	15,901	$	-	$	-	$	15,901	$	5,330
OREO 1		31,345		-		-		31,345		2,220
Total nonrecurring fair value measurements	$	47,246	$	-	$	-	$	47,246	$	7,550

¹ Fair value amounts exclude the estimated selling costs of impaired loan collateral and OREO properties.

			Fair value measurements at December 31, 2011, using
			Quoted prices in active
			markets for identical		Other observable		Significant
(Dollars in thousands)	Fair Value		assets		inputs		unobservable inputs		Impairment
	December 31, 2011		(Level 1)		(Level 2)		(Level 3)		recognized
Recurring fair value measurements:
Trading securities	$	747	$	747	$	-	$	-
Available for sale securities:
U.S. Treasury securities		203		-		203		-
U.S. Government agency securities		219,631		-		219,631		-
Corporate securities		8,507		-		-		8,507
Mortgage-backed securities		428,725		-		428,725		-
Obligations of state and political subdivisions		60,732		-		60,732		-
Equity investments and other securities		12,046		1,980		10,066		-
Total recurring assets measured at fair value	$	730,591	$	2,727	$	719,357	$	8,507
Nonrecurring fair value measurements:
Loans measured for impairment 1	$	68,466	$	-	$	-	$	68,466	$	15,410
OREO 1		60,491		-		-		60,491		4,832
Total nonrecurring fair value measurements	$	128,957	$	-	$	-	$	128,957	$	20,242

¹ Fair value amounts exclude the estimated selling costs of impaired loan collateral and OREO properties.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table represents a reconciliation of Level 3 instruments for assets that are measured at fair value on a recurring basis for the three and nine months ended September 30, 2012, and 2011:

	Three months ended September 30, 2012
						Reclassification of
			Gains (losses)			losses from
			included in other			adjustment for		Purchases,
	Balance		comprehensive			impairment of		Issuances, and		Balance
(Dollars in thousands)	June 30, 2012		income			securities		Settlements		September 30, 2012
Corporate securities	$	8,378	$	641		$	-	$	-	$	9,019
Fair value	$	8,378	$	641		$	-	$	-	$	9,019
	Nine months ended September 30, 2012
						Reclassification of
			Gains (losses)			losses from
			included in other			adjustment for		Purchases,
	Balance		comprehensive			impairment of		Issuances, and		Balance
(Dollars in thousands)	January 1, 2012		income			securities		Settlements		September 30, 2012
Corporate securities	$	8,507	$	463		$	49	$	-	$	9,019
Fair value	$	8,507	$	463		$	49	$	-	$	9,019
	Three months ended September 30, 2011
						Reclassification of
			Gains (losses)			losses from
			included in other			adjustment for		Purchases,
	Balance		comprehensive			impairment of		Issuances, and		Balance
(Dollars in thousands)	June 30, 2011		income			securities		Settlements		September 30, 2011
Corporate securities	$	9,506	$	(648	)	$	-	$	-	$	8,858
Obligations of state and political subdivisions		804		(309	)		-		-		495
Fair value	$	10,310	$	(957	)	$	-	$	-	$	9,353
	Nine months ended September 30, 2011
						Reclassification of
			Gains (losses)			losses from
			included in other			adjustment for		Purchases,
	Balance		comprehensive			impairment of		Issuances, and		Balance
(Dollars in thousands)	January 1, 2011		income			securities		Settlements		September 30, 2011
Corporate securities	$	9,392	$	(713	)	$	179	$	-	$	8,858
Obligations of state and political subdivisions		957		(462	)		-		-		495
Fair value	$	10,349	$	(1,175	)	$	179	$	-	$	9,353

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table presents quantitative information about Level 3 fair value measurements for the three months ended September 30, 2012:

(Dollars in thousands)

	September 30, 2012		Valuation	Unobservable		Weighted
	Fair Value		technique	inputs	Range	average
Corporate securities	$	9,019	Discounted cash flow	Prepayment rate	0 - 1%	0.50	%
				Deferral/default rate	.25 - 1.50%	0.88	%
				Recovery rate	0 - 50%	25	%
				Recovery lag	0 - 5 years	2.5 years
				Discount rate	6.90 - 8.10%	7.40	%
Loans measured for impairment		3,972	Market comparable	Adjustment to appraisal value	.84 - 72.02%	9.88	%
OREO		4,231	Market comparable	Adjustment to appraisal value	0 - 78.37%	11.18	%

The following table presents quantitative information about Level 3 fair value measurements for the nine months ended September 30, 2012:

(Dollars in thousands)

	September 30, 2012		Valuation	Unobservable		Weighted
	Fair Value		technique	inputs	Range	average
Corporate securities	$	9,019	Discounted cash flow	Prepayment rate	0 - 1%	0.50	%
				Deferral/default rate	.25 - 1.5%	0.88	%
				Recovery rate	0 - 50%	25	%
				Recovery lag	0 - 5 years	2.5 years
				Discount rate	7.10 - 8.40%	7.90	%
Loans measured for impairment		3,507	Income approach	Capitalization rate	6.75 - 8.00%	7.27	%
		12,394	Market comparable	Adjustment to appraisal value	.25 - 72.02%	10.60	%
OREO		6,248	Income approach	Capitalization rate	6.75 - 8.50%	7.69	%
		25,097	Market comparable	Adjustment to appraisal value	0 - 78.37%	8.37	%