FAIR VALUE MEASUREMENT (Tables)

3 Months Ended

Mar. 31, 2013

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

	Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)		Total
At March 31, 2013
Financial Assets:
Available-for-sale debt securities:
Obligations of states and political subdivisions	$	-	$	30,967	$	-	$	30,967
Mortgage-backed securities issued or guaranteed by U.S. government sponsored enterprises		-		350,845		-		350,845
Collateralized mortgage obligations issued or guaranteed by U.S. government sponsored enterprises		-		413,914		-		413,914
Private issue collateralized mortgage obligations		-		7,894		-		7,894
Trading account assets		2,244		-		-		2,244
Loans held for sale		-		1,608		-		1,608
Customer interest rate swap agreements		-		449		-		449
Financial Liabilities:
Interest rate swap agreements		-		10,225		-		10,225
At 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

	Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)		Total
At March 31, 2013
Assets:
Collateral-dependent impaired loans	$	-	$	-	$	8,717	$	8,717
Other real estate owned		-		-		1,913		1,913
Mortgage servicing rights		-		1,373		-		1,373

At 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

	Fair Value		Valuation Methodology	Unobservable input	Discount Range
March 31, 2013
Collateral-dependent impaired loans: ⁽¹⁾
Partially charged-off	$	2,906	Market approach appraisal of collateral	Management adjustment of appraisal		10 - 30	%
Specifically reserved	$	5,811	Market approach appraisal of collateral	Management adjustment of appraisal		-	⁽²⁾
Other real estate owned	$	1,913	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 March 31, 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	$	46,868	$	46,868	$	46,868	$	-	$	-
Securities available-for-sale		803,620		803,620		-		803,620		-
FHLB and Federal Reserve Bank stock		19,724		19,724		19,724		-		-
Trading account assets		2,244		2,244		2,244		-		-
Loans held for sale		1,608		1,608		-		1,608		-
Residential real estate loans		563,708		585,656		-		-		585,656
Commercial real estate loans		501,916		492,105		-		-		492,105
Commercial loans		184,276		181,072		-		-		181,072
Home equity loans		287,890		288,867		-		-		288,867
Consumer loans		17,008		17,391		-		-		17,391
Mortgage servicing rights		671		1,373		-		1,373		-
Interest receivable		6,660		6,660		-		6,660		-
Investment in trust preferred securities affiliates		1,331		1,331		-		-		1,331
Customer interest rate swap agreements		449		449		-		449		-
Financial liabilities:
Deposits		1,951,785		1,959,709		1,313,574		646,135		-
FHLB advances		101,282		105,354		-		105,354		-
Commercial repurchase agreements		30,176		32,788		-		32,788		-
Other borrowed funds		190,916		190,916		190,916		-		-
Junior subordinated debentures		43,845		43,845		-		43,845		-
Interest payable		616		616		616		-		-
Interest rate swap agreements		10,225		10,225		-		10,225		-

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 14

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-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

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-Name Statement of Financial Accounting Standard (FAS)

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

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

-Publisher FASB

-Name Accounting Standards Codification

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-Publisher FASB

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

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 157

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-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 10: 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 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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