FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS

Schedule of information on the assets measured and recorded at fair value on a recurring basis

The following table presents information about quantitative inputs and assumptions used to evaluate the fair values provided by our third party pricing service for our Level 3 covered private label CMOs measured at fair value on a recurring basis as of March 31, 2013:

Unobservable Inputs	Range of Inputs	Weighted Average Input
Voluntary annual prepayment speeds	0.13% - 33.9%		9.4	%
Annual default rates	0% - 15.1%		3.2	%
Loss severity rates	0% - 65.9%		40.4	%
Discount rates	0% - 12.9%		5.1	%

Fair value measurements

Summary of activity for assets measured at fair value on a recurring basis that are categorized as Level 3

	Covered Private Label CMOs (Level 3)
	(In thousands)
Balance, December 31, 2012	$	44,684
Total realized in earnings		402
Total unrealized gain in comprehensive income		246
Net settlements		(1,547	)
Balance, March 31, 2013	$	43,785

Schedule of assets measured at fair value on a non-recurring basis

	Fair Value Measurement as of March 31, 2013								Gain (Loss) Three Months Ended March 31, 2013
	Total		Level 1		Level 2		Level 3
	(In thousands)
Measured on a Non-Recurring Basis:
Non-covered impaired loans	$	80,980	$	—	$	6,226	$	74,754	$	(1,345	)
Covered other real estate owned		3,789		—		3,744		45		(1,093	)
SBA loan servicing asset		956		—		—		956		12
	$	85,725	$	—	$	9,970	$	75,755	$	(2,426	)

Summary of carrying values and estimated fair values of certain financial instruments

	March 31, 2013
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	90,659	$	90,659	$	90,659	$	—	$	—
Interest-earning deposits in financial institutions		41,019		41,019		41,019		—		—
Securities available-for-sale		1,362,777		1,362,777		9,856		1,309,136		43,785
Investment in FHLB stock		33,400		33,400		—		33,400		—
Loans and leases, net		3,374,744		3,415,761		—		6,226		3,409,535
SBA loan servicing asset		956		956		—		—		956
Financial Liabilities:
Deposits:
Demand, money market, interest checking and savings deposits		3,796,438		3,796,438		—		3,796,438		—
Time deposits		756,792		758,995		—		758,995		—
Borrowings		11,196		11,196		—		11,196		—
Subordinated debentures		108,250		108,186		—		108,186		—

	December 31, 2012
			Estimated Fair Value
	Carrying or Contract Amount
			Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	89,011	$	89,011	$	89,011	$	—	$	—
Interest-earning deposits in financial institutions		75,393		75,393		75,393		—		—
Securities available-for-sale		1,355,385		1,355,385		8,985		1,301,716		44,684
Investment in FHLB stock		37,126		37,126		—		37,126		—
Loans and leases, net		3,498,329		3,551,674		—		4,975		3,546,699
SBA loan servicing asset		1,000		1,000		—		—		1,000
Financial Liabilities:
Deposits:
Demand, money market, interest checking and savings deposits		3,888,794		3,888,794		—		3,888,794		—
Time deposits		820,327		823,912		—		823,912		—
Borrowings		12,591		12,611		—		12,611		—
Subordinated debentures		108,250		108,186		—		108,186		—

Recurring basis

Fair value measurements

Schedule of information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values

The following table presents information about quantitative inputs and assumptions used to evaluate the fair values provided by our third party pricing service for our Level 3 covered private label CMOs measured at fair value on a recurring basis as of March 31, 2013:

Unobservable Inputs	Range of Inputs	Weighted Average Input
Voluntary annual prepayment speeds	0.13% - 33.9%		9.4	%
Annual default rates	0% - 15.1%		3.2	%
Loss severity rates	0% - 65.9%		40.4	%
Discount rates	0% - 12.9%		5.1	%

Nonrecurring basis

Fair value measurements

Schedule of information about quantitative unobservable inputs, assumptions and valuation methodology used to evaluate the fair values

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2013:

Asset	Fair Value (in 000's)		Valuation Methodology	Unobservable Inputs	Range	Weighted Average
Impaired loans(1)	$	71,991	Discounted cash flow	Discount rates	4.06% - 8.81%		6.63	%
	$	1,311	Appraisals	Discount	3% - 100%		42	%
OREO(2)	$	45	Appraisals	Discount, including 8% for selling costs	18%		18	%
SBA loan servicing asset	$	956	Discounted cash flow	Prepayment speeds	3.40% - 16.34%			(3)
				Discount rates	9.66% - 12.67%			(3)

⁽¹⁾

Excludes $1.5 million of impaired loans with balances of $250,000 or less.

⁽²⁾

As of March 31, 2013, there was one OREO measured at Level 3.

⁽³⁾

Not readily available.