Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2012

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 September 30, 2012 and December 31, 2011, 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
At September 30, 2012
Financial Assets:
Available for sale debt securities:
Obligations of states and political subdivisions	$	—	$	36,317	$	—	$	36,317
Mortgage-backed securities issued or guaranteed by U.S. government sponsored enterprises		—		386,947		—		386,947
Collateralized mortgage obligations issued or guaranteed by U.S. government sponsored enterprises		—		296,982		—		296,982
Private issue collateralized mortgage obligations		—		10,384		—		10,384
Trading account assets		2,259		—		—		2,259
Financial Liabilities:
Interest rate swap agreements		—		12,718		—		12,718
At December 31, 2011
Financial Assets:
Available for sale debt securities:
Obligations of U.S. government sponsored enterprises	$	—	$	30,107	$	—	$	30,107
Obligations of states and political subdivisions		—		39,758		—		39,758
Mortgage-backed securities issued or guaranteed by U.S. government sponsored enterprises		—		376,934		—		376,934
Collateralized mortgage obligations issued or guaranteed by U.S. government sponsored enterprises		—		128,450		—		128,450
Private issue collateralized mortgage obligations		—		10,641		—		10,641
Equity securities		—		4,146		—		4,146
Trading account assets		2,244		—		—		2,244
Financial Liabilities:
Interest rate swap agreements		—		11,387		—		11,387

Summary of Assets Measured at Fair Value on Non Recurring Basis

Assets measured at fair value on a non-recurring basis as of September 30, 2012 and December 31, 2011 are included below:

	Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)		Total
At September 30, 2012
Assets:
Collateral-dependent impaired loans	$	—	$	—	$	8,900	$	8,900
Other real estate owned		—		—		596		596
Mortgage servicing rights		—		813		—		813
At December 31, 2011
Assets:
Impaired loans	$	—	$	—	$	18,183	$	18,183
Goodwill		—		—		276		276
Other real estate owned		—		—		1,682		1,682
Mortgage servicing rights		—		1,138		—		1,138

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 September 30, 2012:

	Fair Value		Valuation Methodology	Unobservable input	Discount Range
Collateral-dependent impaired loans:(1)
Partially charged-off	$	4,299	Market approach appraisal of collateral	Management adjustment of appraisal		10 – 30	%
Specifically reserved	$	4,601	Market approach appraisal of collateral	Management adjustment of appraisal		—	(2)
Other real estate owned	$	596	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 at September 30, 2012:

					Fair Value Measurement at September 30, 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	$	48,933	$	48,933	$	48,933	$	—	$	—
Securities available for sale		730,630		730,630		—		730,630		—
FHLB and Federal Reserve Bank stock		21,034		21,034		21,034		—		—
Trading account assets		2,259		2,259		2,259		—		—
Loans receivable, net of allowance		1,517,749		1,543,450		—		—		1,543,450
Mortgage servicing rights		561		813		—		813		—
Interest receivable		6,373		6,373		—		6,373		—
Financial liabilities:
Deposits		1,689,319		1,698,231		1,153,974		544,257		—
FHLB advances		171,519		177,668		—		177,668		—
Commercial repurchase agreements		66,199		69,588		—		69,588		—
Other borrowed funds		204,492		204,492		204,492		—		—
Junior subordinated debentures		43,794		43,794		—		43,794		—
Interest payable		905		905		905		—		—
Interest rate swap agreements		12,718		12,718		—		12,718		—

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities at December 31, 2011:

	December 31, 2011
	Carrying  Amount		Fair Value
Financial assets:
Cash and due from banks	$	39,325	$	39,325
Securities available for sale		590,036		590,036
FHLB and Federal Reserve Bank stock		21,962		21,962
Trading account assets		2,244		2,244
Loans held for sale		6,061		6,268
Loans receivable, net of allowance		1,491,017		1,510,277
Mortgage servicing rights		768		1,138
Interest receivable		6,431		6,431
Financial liabilities:
Deposits		1,591,366		1,600,222
FHLB advances		136,860		143,642
Commercial repurchase agreements		71,243		75,342
Other borrowed funds		204,413		204,413
Junior subordinated debentures		43,717		43,717
Interest payable		1,093		1,093
Interest rate swap agreements		11,387		11,387