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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Schedule of assets and liabilities measured at fair value
The fair value of derivatives is based on valuation models using observable market data as of the measurement date (Level 2 inputs).
 
 
 
June 30, 2013
 
 
 
Fair Value Measurements Using Significant
 
 
 
Unobservable Inputs (Level 3)
 
(Dollar amounts in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
U.S. Government agencies
 
$
-
 
$
1,755
 
$
-
 
$
1,755
 
Mortgage Backed Securities-residential
 
 
-
 
 
227,690
 
 
-
 
 
227,690
 
Mortgage Backed Securities-commercial
 
 
-
 
 
4,638
 
 
-
 
 
4,638
 
Collateralized mortgage obligations
 
 
-
 
 
402,997
 
 
-
 
 
402,997
 
State and municipal
 
 
-
 
 
184,819
 
 
6,502
 
 
191,321
 
Collateralized debt obligations
 
 
-
 
 
-
 
 
8,176
 
 
8,176
 
Equities
 
 
470
 
 
-
 
 
-
 
 
470
 
TOTAL
 
$
470
 
$
821,899
 
$
14,678
 
$
837,047
 
Derivative Assets
 
 
 
 
 
1,401
 
 
 
 
 
 
 
Derivative Liabilities
 
 
 
 
 
(1,401)
 
 
 
 
 
 
 
 
 
 
December 31, 2012
 
 
 
Fair Value Measurements Using Significant
 
 
 
Unobservable Inputs (Level 3)
 
(Dollar amounts in thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
U.S. Government agencies
 
$
-
 
$
1,886
 
$
-
 
$
1,886
 
Mortgage Backed Securities-residential
 
 
-
 
 
244,676
 
 
-
 
 
244,676
 
Mortgage Backed Securities-commercial
 
 
-
 
 
5,131
 
 
-
 
 
5,131
 
Collateralized mortgage obligations
 
 
-
 
 
233,320
 
 
-
 
 
233,320
 
State and municipal
 
 
-
 
 
189,574
 
 
9,911
 
 
199,485
 
Collateralized debt obligations
 
 
-
 
 
-
 
 
6,122
 
 
6,122
 
Equities
 
 
380
 
 
-
 
 
-
 
 
380
 
TOTAL
 
$
380
 
$
674,587
 
$
16,033
 
$
691,000
 
Derivative Assets
 
 
 
 
 
2,053
 
 
 
 
 
 
 
Derivative Liabilities
 
 
 
 
 
(2,053)
 
 
 
 
 
 
 
Roll forward of financial instruments having fair value measurements using significant unobservable inputs (Level 3)
The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2013 and the year ended December 31, 2012.
 
 
 
Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)
 
 
 
Three months ended June 30, 2013
 
 
 
State and
 
Collateralized
 
 
 
 
 
 
municipal
 
debt
 
 
 
 
 
 
obligations
 
obligations
 
Total
 
Beginning balance, April 1
 
$
6,502
 
$
5,972
 
$
12,474
 
Total realized/unrealized gains or losses
 
 
 
 
 
 
 
 
 
 
Included in earnings
 
 
-
 
 
-
 
 
-
 
Included in other comprehensive income
 
 
-
 
 
2,408
 
 
2,408
 
Transfers & Purchases
 
 
-
 
 
-
 
 
-
 
Settlements
 
 
-
 
 
(204)
 
 
(204)
 
Ending balance, June 30
 
$
6,502
 
$
8,176
 
$
14,678
 
 
 
 
Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)
 
 
 
Six months ended June 30, 2013
 
 
 
State and
 
Collateralized
 
 
 
 
 
 
municipal
 
debt
 
 
 
 
 
 
obligations
 
obligations
 
Total
 
Beginning balance, January 1
 
$
9,911
 
$
6,122
 
$
16,033
 
Total realized/unrealized gains or losses
 
 
 
 
 
 
 
 
 
 
Included in earnings
 
 
-
 
 
 
 
 
-
 
Included in other comprehensive income
 
 
-
 
 
2,803
 
 
2,803
 
Transfers & Purchases
 
 
-
 
 
-
 
 
-
 
Settlements
 
 
(3,409)
 
 
(749)
 
 
(4,158)
 
Ending balance, June 31
 
$
6,502
 
$
8,176
 
$
14,678
 
 
 
 
Fair Value Measurements Using SignificantUnobservable Inputs (Level 3)
 
 
 
December 31, 2012
 
 
 
 
 
 
State and
 
Collateralized
 
 
 
 
 
 
 
 
 
municipal
 
debt
 
 
 
 
 
 
Equities
 
obligations
 
obligations
 
Total
 
Beginning balance, January 1
 
$
1,711
 
$
9,525
 
$
4,771
 
$
16,007
 
Total realized/unrealized gains or losses
 
 
 
 
 
 
 
 
 
 
 
 
 
Included in earnings
 
 
(446)
 
 
-
 
 
(96)
 
 
(542)
 
Included in other comprehensive income
 
 
-
 
 
-
 
 
1,556
 
 
1,556
 
Transfers & Purchases
 
 
-
 
 
1,186
 
 
-
 
 
1,186
 
Settlements
 
 
(1,265)
 
 
(800)
 
 
(109)
 
 
(2,174)
 
Ending balance, December 31
 
$
-
 
$
9,911
 
$
6,122
 
$
16,033
 
Quantitative information about recurring and non-recurring Level 3
The following table presents quantitative information about recurring and non-recurring Level 3 fair value measurements at June 30, 2013.
 
 
 
Fair Value
 
Valuation Technique(s)
 
Unobservable Input(s)
 
Range
 
 
 
 
 
 
Discounted cash flow
 
Discount rate
 
 
3.05%-5.50%
 
State and municipal obligations
 
$
6,502
 
 
 
Probability of default
 
 
0%
 
Other real estate
 
$
9,336
 
Sales comparison/income approach
 
Discount rate for age of appraisal and market conditions
 
 
5.00%-20.00%
 
Impaired Loans
 
 
21,060
 
Sales comparison/income approach
 
Discount rate for age of appraisal and market conditions
 
 
0.00%-50.00%
 
Schedule of loans identified as impaired by class of loans
The following tables presents loans identified as impaired by class of loans as of June 30, 2013 and December 31, 2012, which are all considered Level 3.
 
 
 
June 30, 2013
 
(Dollar amounts in thousands)
 
Carrying
Value
 
Allowance
for Loan
Losses
Allocated
 
Fair Value
 
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial
 
$
14,391
 
$
3,657
 
$
10,734
 
Farmland
 
 
-
 
 
-
 
 
-
 
Non Farm, Non Residential
 
 
8,373
 
 
1,507
 
 
6,866
 
Agriculture
 
 
-
 
 
-
 
 
-
 
All Other Commercial
 
 
4,189
 
 
993
 
 
3,196
 
Residential
 
 
 
 
 
 
 
 
 
 
First Liens
 
 
73
 
 
-
 
 
73
 
Home Equity
 
 
191
 
 
-
 
 
191
 
Junior Liens
 
 
-
 
 
-
 
 
-
 
Multifamily
 
 
-
 
 
-
 
 
-
 
All Other Residential
 
 
-
 
 
-
 
 
-
 
Consumer
 
 
 
 
 
 
 
 
 
 
Motor Vehicle
 
 
-
 
 
-
 
 
-
 
All Other Consumer
 
 
-
 
 
-
 
 
-
 
TOTAL
 
$
27,217
 
$
6,157
 
$
21,060
 
 
 
 
December 31, 2012
 
(Dollar amounts in thousands)
 
Carrying
Value
 
Allowance
for Loan
Losses
Allocated
 
Fair Value
 
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial & Industrial
 
$
17,098
 
$
3,153
 
$
13,945
 
Farmland
 
 
891
 
 
191
 
 
700
 
Non Farm, Non Residential
 
 
7,386
 
 
293
 
 
7,093
 
Agriculture
 
 
-
 
 
-
 
 
 
 
All Other Commercial
 
 
1,209
 
 
52
 
 
1,157
 
Residential
 
 
 
 
 
 
 
 
 
 
First Liens
 
 
1,254
 
 
126
 
 
1,128
 
Home Equity
 
 
179
 
 
-
 
 
179
 
Junior Liens
 
 
-
 
 
-
 
 
-
 
Multifamily
 
 
5,540
 
 
3,794
 
 
1,746
 
All Other Residential
 
 
-
 
 
 
 
 
-
 
Consumer
 
 
 
 
 
 
 
 
 
 
Motor Vehicle
 
 
-
 
 
 
 
 
-
 
All Other Consumer
 
 
-
 
 
 
 
 
-
 
TOTAL
 
$
33,557
 
$
7,609
 
$
25,948
 
Schedule of carrying amount and estimated fair value of financial instruments
The fair value of off-balance sheet items is not considered material.
 
 
 
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Carrying
 
Fair Value
 
(Dollar amounts in thousands)
 
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
 
$
73,720
 
$
17,946
 
$
55,774
 
$
-
 
$
73,720
 
Federal funds sold
 
 
10,215
 
 
-
 
 
10,215
 
 
-
 
 
10,215
 
Securities available—for—sale
 
 
837,047
 
 
470
 
 
821,898
 
 
14,679
 
 
837,047
 
Restricted stock
 
 
21,050
 
 
n/a
 
 
n/a
 
 
n/a
 
 
n/a
 
Loans, net
 
 
1,777,186
 
 
-
 
 
 
 
 
1,832,518
 
 
1,832,518
 
FDIC Indemnification Asset
 
 
1,515
 
 
-
 
 
1,515
 
 
-
 
 
1,515
 
Accrued interest receivable
 
 
11,046
 
 
-
 
 
3,171
 
 
7,875
 
 
11,046
 
Deposits
 
 
(2,279,505)
 
 
-
 
 
(2,282,242)
 
 
-
 
 
(2,282,242)
 
Short—term borrowings
 
 
(29,194)
 
 
-
 
 
(29,194)
 
 
-
 
 
(29,194)
 
Federal Home Loan Bank advances
 
 
(209,534)
 
 
-
 
 
(211,786)
 
 
-
 
 
(211,786)
 
Accrued interest payable
 
 
(924)
 
 
-
 
 
(924)
 
 
-
 
 
(924)
 
 
 
 
December 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
Carrying
 
Fair Value
 
(Dollar amounts in thousands)
 
Value
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Cash and due from banks
 
$
87,230
 
$
21,333
 
$
65,897
 
$
-
 
$
87,230
 
Federal funds sold
 
 
20,800
 
 
-
 
 
20,800
 
 
-
 
 
20,800
 
Securities available—for—sale
 
 
691,000
 
 
380
 
 
674,587
 
 
16,033
 
 
691,000
 
Restricted stock
 
 
21,292
 
 
n/a
 
 
n/a
 
 
n/a
 
 
n/a
 
Loans, net
 
 
1,829,978
 
 
-
 
 
-
 
 
1,916,256
 
 
1,916,256
 
FDIC Indemnification Asset
 
 
2,632
 
 
-
 
 
2,632
 
 
-
 
 
2,632
 
Accrued interest receivable
 
 
12,024
 
 
-
 
 
2,980
 
 
9,044
 
 
12,024
 
Deposits
 
 
(2,276,134)
 
 
-
 
 
(2,280,910)
 
 
-
 
 
(2,280,910)
 
Short—term borrowings
 
 
(40,551)
 
 
-
 
 
(40,551)
 
 
-
 
 
(40,551)
 
Federal Home Loan Bank advances
 
 
(119,705)
 
 
-
 
 
(124,933)
 
 
-
 
 
(124,933)
 
Accrued interest payable
 
 
(1,163)
 
 
-
 
 
(1,163)
 
 
-
 
 
(1,163)