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Fair Values of Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 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 accompanying balance sheets measured at fair value on a recurring basis and the level within the ASC 820-10 fair value hierarchy in which the fair value measurements fall at December 31, 2013 and 2012.

 
 
 
 
Fair Value Measurements Using:
 
 
 
 
Quoted Prices in Active
Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant
Unobservable Inputs
December 31, 2013
 
Fair Value
 
(Level 1)
 
(Level 2)
 
(Level 3)
U.S. Treasury
 
$
15,973

 
 
 
$
15,973

 
 
U.S. Government-sponsored agency securities
 
3,545




3,545



State and municipal
 
230,987




223,752


$
7,235

U.S. Government-sponsored mortgage-backed securities
 
281,252




281,252



Corporate obligations
 
2,738






2,738

Equity securities
 
1,706




1,702


4

Interest rate swap asset
 
3,619




3,619



Interest rate cap
 
390




390



Interest rate swap liability
 
3,953




3,953



 
 
 
 
Fair Value Measurements Using:
 
 
 
 
Quoted Prices in Active
Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant
Unobservable Inputs
December 31, 2012
 
Fair Value
 
(Level 1)
 
(Level 2)
 
(Level 3)
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 accompanying balance sheet using significant unobservable Level 3 inputs for year ended December 31, 2013 and 2012.

 
Year Ended December 31, 2013
 
Available for
Sale Securities
Beginning Balance
$
18,328

Total realized and unrealized gains and losses

Included in net income


Included in other comprehensive income
1,330

Purchases, issuances, and settlements
7,590

Transfers in/(out) of Level 3
(16,434
)
Principal payments
(837
)
Ending balance
$
9,977



Year Ended December 31, 2012
 
Available for
Sale Securities

Interest Rate
Swap Asset

Interest
Rate Cap

Interest Rate
Swap Liability
Beginning Balance
$
20,838


$
5,241


$
424


$
7,797

Total realized and unrealized gains and losses
 

 

 

 
Included in net income



(860
)

 

(863
)
Included in other comprehensive income
(1,141
)

481


(15
)

 
Purchases, issuances, and settlements
 

 

 

 
Transfers in/(out) of Level 3



(4,862
)

(409
)

(6,934
)
Principal payments
(1,369
)

 

 

 
Ending balance
$
18,328
Transfer Between Levels 1, 2 and 3 and Reasons For Transfers
TRANSFERS BETWEEN LEVELS
 
Quoted Prices in Active
Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant
Unobservable Inputs
 
 
December 31, 2013
(Level 1)
 
(Level 2)
 
(Level 3)
 
Reason for Transfer
 Transfers to/(from) Level:
 
 
 
 
 
 
 
Available for sale securities
 
 
$
(350
)
 
$
350

 
Selected state and municipal securities were transferred from Level 2 to Level 3 due to limited availability of similar securities in active markets
Available for sale securities transferred to held to maturity
 
 
 
 
$
(16,784
)
 
Selected state and municipal securities were transferred from available for sale to held to maturity. These securities are valued at amortized cost and are no longer classified within the fair value hierarchy.

 
Quoted Prices in Active
Markets for Identical Assets
 
Significant Other Observable Inputs
 
Significant
Unobservable Inputs
 
 
December 31, 2012
(Level 1)
 
(Level 2)
 
(Level 3)
 
Reason for Transfer
 Transfers to/(from) Level:
 
 
 
 
 
 
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 swap asset
 
 
$
4,862

 
$
(4,862
)
 
Interest rate cap
 
 
$
409

 
$
(409
)
 
Interest rate swap liability
 
 
$
6,934

 
$
(6,934
)
 
Description of Valuation Methodologies Used for Instruments Measured at Fair Value on a Non-Recurring Basis and Recognized in Consolidated Condensed Balance Sheets
Following is a description of valuation methodologies used for instruments measured at fair value on a non-recurring basis and recognized in the accompanying balance sheet, as well as the general classification of such instruments pursuant to the valuation hierarchy for year ended December 31, 2013 and 2012.

 

 

Fair Value Measurements Using
 

 

Quoted Prices in Active
Markets for Identical Assets

Significant Other Observable Inputs

Significant
Unobservable Inputs
December 31, 2013

Fair Value

(Level 1)

(Level 2)

(Level 3)
Impaired Loans (collateral dependent)

$
12,117


 

 

$
12,117

Other real estate owned

$
6,877


 

 

$
6,877


 

 

Fair Value Measurements Using
 

 

Quoted Prices in Active
Markets for Identical Assets

Significant Other Observable Inputs

Significant
Unobservable Inputs
December 31, 2012

Fair Value

(Level 1)

(Level 2)

(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 December 31, 2013 .


Fair Value

Valuation Technique

Unobservable Inputs

Range (Weighted-Average)
State and municipal securities
$
7,235


Discounted cash flow

Maturity Call Date
US Muni BQ curve
Discount rate

1 month to 15 years
BBB-
1% - 5%








Corporate obligations/Equity securities
$
2,742


Discounted cash flow

Risk free rate
plus Premium for illiquidity

3 month LIBOR
plus 200 bps








Impaired loans (collateral dependent)
$
12,117


Collateral based measurements

Discount to reflect current market conditions and ultimate collectability

0% - 50% (3%)








Other real estate owned
$
6,877


Appraisals

Discount to reflect current market conditions

0% - 20% (2%)
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 December 31, 2013 and December 31, 2012.

 
2013
 
Carrying
Amount

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

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Assets at December 31:
 



 

 
Cash and cash equivalents
$
109,434


$
109,434







Interest-bearing time deposits
55,069


55,069







Investment securities available for sale
536,201





$
526,224


$
9,977

Investment securities held to maturity
559,378





525,998


34,849

Mortgage loans held for sale
5,331





5,331




Loans
3,564,539








3,506,615

FRB and FHLB stock
38,990





38,990




Interest rate swap asset
4,009





4,009




Interest receivable
18,672





18,672




Liabilities at December 31:







Deposits
$
4,231,468


$
3,082,117


$
934,937




Borrowings:







Federal funds purchased
125,645





125,645




Securities sold under repurchase agreements
148,672





148,852




FHLB Advances
122,140





122,962




Subordinated debentures and term loans
126,807





82,607




Interest rate swap liability
3,953





3,953




Interest payable
1,771





1,771





















 
2012
 
Carrying
Amount

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

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
Assets at December 31:
 



 

 
Cash and cash equivalents
$
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

FRB and FHLB stock
32,785





32,785




Interest rate swap asset
6,300





6,300




Interest receivable
16,367





16,367




Liabilities at December 31:







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




FHLB 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