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FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2012

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Schedule of carrying amount and estimated fair value of financial instruments

								Fair Value Measurement Using
								Quoted Prices in						Significant
								Active Markets for			Significant Other			Unobservable
		Carrying			Estimated			Identical Assets			Observable Inputs			Inputs
		amount			fair value			(Level 1)			(Level 2)			(Level 3)
		(Dollars in thousands)
September 30, 2012
Financial assets
Cash and due from banks		$	61,078		$	61,078		$	61,078		$	—		$	—
Interest-bearing deposits in other banks		159,595			159,595			159,595			—			—
Investment securities		1,663,279			1,664,558			897			1,650,648			13,013
Loans held for sale		24,080			24,080			—			—			24,080
Net loans and leases		2,013,235			1,973,852			—			114,401			1,859,451
Accrued interest receivable		13,198			13,198			13,198			—			—

Financial liabilities
Deposits:
Noninterest-bearing deposits		803,796			803,796			803,796			—			—
Interest-bearing demand and savings deposits		1,825,495			1,825,495			1,825,495			—			—
Time deposits		992,299			995,030			—			—			995,030
Long-term debt		108,285			41,892			—			41,892			—
Accrued interest payable (included in other liabilities)		12,265			12,265			12,265			—			—

Off-balance sheet financial instruments
Commitments to extend credit		536,820			2,684			—			2,684			—
Standby letters of credit and financial guarantees written		14,391			108			—			108			—
Interest rate options		145,543			2,212			—			2,212			—
Forward interest rate contracts		41,151			(893		)	—			(893		)	—

December 31, 2011
Financial assets
Cash and due from banks		$	76,233		$	76,233		$	76,233		$	—		$	—
Interest-bearing deposits in other banks		180,839			180,839			180,839			—			—
Investment securities		1,493,925			1,493,970			970			1,480,006			12,994
Loans held for sale		50,290			50,290			—			12,414			37,876
Net loans and leases		1,942,354			1,858,267			—			131,836			1,726,431
Accrued interest receivable		11,674			11,674			11,674			—			—

Financial liabilities
Deposits:
Noninterest-bearing deposits		729,149			729,149			729,149			—			—
Interest-bearing demand and savings deposits		1,705,551			1,705,551			1,705,551			—			—
Time deposits		1,008,828			1,012,121			—			—			1,012,121
Short-term borrowings		34			34			—			34			—
Long-term debt		158,298			89,646			—			89,646			—
Accrued interest payable (included in other liabilities)		10,019			10,019			10,019			—			—

Off-balance sheet financial instruments
Commitments to extend credit		451,378			2,257			—			2,257			—
Standby letters of credit and financial guarantees written		13,159			99			—			99			—
Interest rate options		68,979			515			—			515			—
Forward interest rate contracts		33,776			(413		)	—			(413		)	—
Forward foreign exchange contracts		547			1			—			1			—

Schedule of balances of assets and liabilities measured at fair value on a recurring basis

					Fair Value at Reporting Date Using
					Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
		Fair Value			(Level 1)			(Level 2)			(Level 3)
		(Dollars in thousands)
September 30, 2012
Available for sale securities:
U.S. Government sponsored entities debt securities		$	316,997		$	—		$	316,997		$	—
States and political subdivisions debt securities		162,824			—			149,811			13,013
U.S. Government sponsored entities mortgage-backed securities		967,699			—			967,699			—
Corporate securities		51,129			—			51,129			—
Other		897			897			—			—
Derivatives:
Interest rate contracts		1,319			—			1,319			—
Amended TARP Warrant		(800		)	—			(800		)	—
Total		$	1,500,065		$	897		$	1,486,155		$	13,013

December 31, 2011
Available for sale securities:
U.S. Government sponsored entities debt securities		$	373,177		$	—		$	373,177		$	—
States and political subdivisions debt securities		12,994			—			—			12,994
U.S. Government sponsored entities mortgage-backed securities		1,097,302			—			1,097,302			—
Corporate securities		8,551			—			8,551			—
Other		970			970			—			—
Derivatives:
Interest rate contracts		102			—			102			—
Amended TARP Warrant		(677		)	—			(677		)	—
Total		$	1,492,419		$	970		$	1,478,455		$	12,994

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

		Available for sale states and political subdivisions debt securities			Available for sale non-agency collateralized mortgage obligations (1)
		(Dollars in thousands)

Balance at December 31, 2011		$	12,994		$	—
Principal payments received		(285		)	—
Unrealized net gain included in other comprehensive income		304			—
Balance at September 30, 2012		$	13,013		$	—

Balance at December 31, 2010		$	12,619		$	17
Principal payments received		(264		)	(17		)
Balance at September 30, 2011		$	12,355		$	—

(1) Represents available for sale non-agency collateralized mortgage obligations previously classified as Level 2 for which the market became inactive during 2008; therefore the fair value measurement was derived from discounted cash flow models using unobservable inputs and assumptions.

Schedule of level of valuation assumptions used to determine the fair value of assets measured on a nonrecurring basis

					Fair Value Measurements Using
					Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
		Fair Value			(Level 1)			(Level 2)			(Level 3)
		(Dollars in thousands)
September 30, 2012
Impaired loans (1)		$	114,401		$	—		$	114,401		$	—
Other real estate (2)		47,378			—			47,378			—

December 31, 2011
Loans held for sale (1)		$	12,414		$	—		$	12,414		$	—
Impaired loans (1)		131,836			—			131,836			—
Other real estate (2)		61,681			—			61,681			—

(1) Represents carrying value and related write-downs of loans for which adjustments are based on agreed upon purchase prices for the loans or the appraised value of the collateral.

(2) Represents other real estate that is carried at the lower of carrying value or fair value less costs to sell. Fair value is generally based upon independent market prices or appraised values of the collateral.

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).

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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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