FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2012

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair Value of Available-for-sale Securities Measured on Recurring Basis

The fair values of the Corporation's investment securities designated as available-for-sale at December 31, 2012 and 2011 are set forth in the tables that follow. These values are determined on a recurring basis using matrix pricing (Level 2 inputs). Matrix pricing, which is a mathematical technique widely used in the industry to value debt securities, does not rely exclusively on quoted prices for the specific securities but rather on the relationship of such securities to other benchmark quoted securities.

			Fair Value Measurements at December 31, 2012 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-Sale Securities:	(in thousands)
State and municipals	$	332,513	$	-	$	332,513	$	-
Pass-through mortgage securities		84,956		-		84,956		-
Collateralized mortgage obligations		399,965		-		399,965		-
	$	817,434	$	-	$	817,434	$	-

			Fair Value Measurements at December 31, 2011 Using:
			Quoted Prices		Significant
			in Active		Other		Significant
			Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-Sale Securities:	(in thousands)
U.S. government agencies	$	5,113	$	-	$	5,113	$	-
State and municipals		313,195		-		313,195		-
Pass-through mortgage securities		73,786		-		73,786		-
Collateralized mortgage obligations		501,862		-		501,862		-
	$	893,956	$	-	$	893,956	$	-

Fair Value of Loan Held for Sale and Impaired Loans Measured on a Nonrecurring Basis

Assets measured at fair value on a nonrecurring basis at December 31, 2012 and 2011, are set forth in the table that follows. Real estate appraisals utilized in measuring the fair value of impaired loans may employ a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. In arriving at fair value, the Corporation adjusts the value set forth in the appraisal by deducting costs to sell and a distressed sale adjustment. The adjustments made by the appraisers and the Corporation are deemed to be significant unobservable inputs and therefore result in a Level 3 classification of the inputs used for determining the fair value of impaired loans. Because the Corporation has a small amount of impaired loans measured at fair value, the impact of unobservable inputs on the Corporation's financial statements is not material.

			Fair Value Measurements Using:
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
Impaired loans - December 31, 2012:
Residential mortgages - closed end	$	1,929	$	-	$	-	$	1,929
Impaired loans - December 31, 2011:
Commercial mortgages - multifamily	$	805	$	-	$	-	$	805
Residential mortgages - closed end		507		-		-		507
	$	1,312	$	-	$	-	$	1,312

Summary of the Carrying Amounts and Fair Value of Assets and Liabilities of Financial Instruments that are not Recorded at Fair Value

The following table sets forth the carrying amounts and estimated fair values of financial instruments that are not recorded at fair value in the Corporation's financial statements at December 31, 2012 and 2011.

	Level of	December 31, 2012				December 31, 2011
	Fair Value	Carrying				Carrying
	Hierarchy	Amount		Fair Value		Amount		Fair Value
		(in thousands)
Financial Assets:
Cash and cash equivalents	Level 1	$	42,191	$	42,191	$	29,495	$	29,495
Held-to-maturity securities	Level 2		43,362		46,153		60,970		64,962
Held-to-maturity securities	Level 3		805		805		1,115		1,115
Loans	Level 3		1,126,831		1,140,731		967,975		989,785
Restricted stock	Level 1		13,104		13,104		12,284		12,284
Accrued interest receivable:
Investment securities	Level 2		4,943		4,943		5,621		5,621
Loans	Level 3		3,332		3,332		3,401		3,401
Financial Liabilities:
Checking deposits	Level 1		528,940		528,940		435,517		435,517
Savings, NOW and money market deposits	Level 1		844,583		844,583		796,009		796,009
Time deposits	Level 2		259,553		268,907		271,342		280,791
Short-term borrowings	Level 1		103,634		103,634		102,227		102,227
Long-term debt	Level 2		145,000		154,050		207,500		223,731
Accrued interest payable:
Checking, savings, NOW and money market deposits	Level 1		740		740		507		507
Time deposits	Level 2		3,828		3,828		2,902		2,902
Short-term borrowings	Level 1		1		1		2		2
Long-term debt	Level 2		379		379		787		787