FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Jun. 30, 2013

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of June 30, 2013 and December 31, 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:



	Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)		Total
June 30, 2013
Financial Assets:
Available-for-sale debt securities:
Obligations of states and political subdivisions	$	—	$	30,489	$	—	$	30,489
Mortgage-backed securities issued or guaranteed by U.S. government sponsored enterprises	—		348,778		—		348,778
Collateralized mortgage obligations issued or guaranteed by U.S. government sponsored enterprises	—		402,257		—		402,257
Private issue collateralized mortgage obligations	—		7,845		—		7,845
Trading account assets	2,281		—		—		2,281
Loans held for sale	—		2,826		—		2,826
Customer interest rate swap agreements	—		193		—		193
Financial Liabilities:
Interest rate swap agreements	—		6,437		—		6,437
December 31, 2012
Financial Assets:
Available-for-sale debt securities:
Obligations of states and political subdivisions	$	—	$	33,040	$	—	$	33,040
Mortgage-backed securities issued or guaranteed by U.S. government sponsored enterprises	—		358,148		—		358,148
Collateralized mortgage obligations issued or guaranteed by U.S. government sponsored enterprises	—		381,688		—		381,688
Private issue collateralized mortgage obligations	—		8,174		—		8,174
Trading account assets	2,300		—		—		2,300
Customer interest rate swap agreements	—		496		—		496
Financial Liabilities:
Interest rate swap agreements	—		11,580		—		11,580

Summary of Assets Measured at Fair Value on Non Recurring Basis

Assets measured at fair value on a non-recurring basis as of June 30, 2013 and December 31, 2012 are included below:



	Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)		Total
June 30, 2013
Assets:
Collateral-dependent impaired loans	$	—	$	—	$	7,998	$	7,998
Other real estate owned	—		—		2,155		2,155
Mortgage servicing rights	—		1,316		—		1,316
December 31, 2012
Assets:
Collateral-dependent impaired loans	$	—	$	—	$	9,183	$	9,183
Other real estate owned	—		—		1,313		1,313
Mortgage servicing rights	—		879		—		879

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at June 30, 2013:



	Fair Value		Valuation Methodology	Unobservable input	Discount Range
June 30, 2013
Collateral-dependent impaired loans: (1)
Partially charged-off	$	3,378	Market approach appraisal of collateral	Management adjustment of appraisal	10 – 30	%
Specifically reserved	$	4,620	Market approach appraisal of collateral	Management adjustment of appraisal	—	(2)
Other real estate owned	$	2,155	Market approach appraisal of collateral	Management adjustment of appraisal	10 – 30	%
				Estimated selling cost	6 – 10	%
December 31, 2012
Collateral-dependent impaired loans:(1)
Partially charged-off	$	3,524	Market approach appraisal of collateral	Management adjustment of appraisal	10 – 30	%
Specifically reserved	$	5,659	Market approach appraisal of collateral	Management adjustment of appraisal	—	(2)
Other real estate owned	$	1,313	Market approach appraisal of collateral	Management adjustment of appraisal	10 – 30	%
				Estimated selling cost	6 – 10	%


(1)	Does not include impaired loans that are measured by the present value of expected future cash flows discounted at the loan’s effective interest rate.


(2)	The specific reserve for collateral-dependent impaired loans is determined by any deficit of 75% of collateral value over the recorded investment.

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities measured at June 30, 2013:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	44,896	$	44,896	$	44,896	$	—	$	—
Securities available-for-sale	789,369		789,369		—		789,369		—
FHLB and Federal Reserve Bank stock	19,724		19,724		19,724		—		—
Trading account assets	2,281		2,281		2,281		—		—
Loans held for sale	2,826		2,826		—		2,826		—
Residential real estate loans	561,975		575,594		—		—		575,594
Commercial real estate loans	518,640		508,194		—		—		508,194
Commercial loans	183,059		180,642		—		—		180,642
Home equity loans	297,717		296,968		—		—		296,968
Consumer loans	17,847		18,104		—		—		18,104
Mortgage servicing rights	774		1,316		—		1,316		—
Interest receivable	6,506		6,506		—		6,506		—
Investment in trust preferred securities affiliates	1,331		1,331		—		—		1,331
Customer interest rate swap agreements	193		193		—		193		—
Financial liabilities:
Deposits	1,894,087		1,899,346		1,340,252		559,094		—
FHLB advances	186,147		189,421		—		189,421		—
Commercial repurchase agreements	30,165		32,615		—		32,615		—
Other borrowed funds	188,153		188,153		188,153		—		—
Junior subordinated debentures	43,870		43,845		—		43,845		—
Interest payable	563		563		563		—		—
Interest rate swap agreements	6,437		6,437		—		6,437		—

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities measured at December 31, 2012:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	58,290	$	58,290	$	58,290	$	—	$	—
Securities available-for-sale	781,050		781,050		—		781,050		—
FHLB and Federal Reserve Bank stock	21,034		21,034		21,034		—		—
Trading account assets	2,300		2,300		2,300		—		—
Residential real estate loans	564,184		591,139		—		—		591,139
Commercial real estate loans	501,037		492,602		—		—		492,602
Commercial loans	183,680		179,519		—		—		179,519
Home equity loans	275,498		277,194		—		—		277,194
Consumer loans	16,423		16,866		—		—		16,866
Mortgage servicing rights	542		879		—		879		—
Interest receivable	6,215		6,215		—		6,215		—
Investment in trust preferred securities affiliates	1,331		1,331		—		—		1,331
Customer interest rate swap agreements	496		496		—		496		—
Financial liabilities:
Deposits	1,929,469		1,936,446		1,339,290		597,156		—
FHLB advances	56,404		60,813		—		60,813		—
Commercial repurchase agreements	66,187		69,067		—		69,067		—
Other borrowed funds	193,753		193,753		193,753		—		—
Junior subordinated debentures	43,819		43,819		—		43,819		—
Interest payable	905		905		905		—		—
Interest rate swap agreements	11,580		11,580		—		11,580		—

- Definition

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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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15

-Subparagraph b-d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 18

-Subparagraph c(2), d, e, f

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32

-Subparagraph a, c(1), c(2), c(3), d

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 820

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 10

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13467-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 12

-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13476-108611

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 30

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 45

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 159

-Paragraph 19

-Subparagraph a, b, c(1), d(1)

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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