FAIR VALUE DISCLOSURES OF FINANCIAL ASSETS (Tables)

9 Months Ended

Sep. 30, 2012

Balances of Assets Measured at Fair Value

The table below presents the balances of assets measured at fair value as of September 30, 2012 (there are no material liabilities measured at fair value):


Description	Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value
	(in Thousands)
Assets Measured at Fair Value on a Recurring Basis
Available-for-sale securities:
Collateralized mortgage obligations	$	—	$	249,272	$	6,050		$	255,322
FNMA		—		461,435		—			461,435
FHLMC		—		72,356		—			72,356
GNMA		—		67,294		—			67,294
U.S. Government and agencies		—		51,052		—			51,052
State and political subdivisions		—		3,148		—			3,148
Reverse mortgages		—		—		(552	)		(552	)
Trading Securities		—		—		12,590			12,590

Total assets measured at fair value on a recurring basis	$	—	$	904,557	$	18,088		$	922,645

Assets Measured at Fair Value on a Nonrecurring Basis
Other real estate owned	$	—	$	—	$	6,996		$	6,996
Impaired Loans		—		—		47,291			47,291

Total assets measured at fair value on a nonrecurring basis	$	—	$	—	$	54,287		$	54,287

The table below presents the balances of assets measured at fair value as of December 31, 2011 (there are no material liabilities measured at fair value):


Description	Quoted Prices in Active Markets for Identical Asset (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Total Fair Value
	(in Thousands)
Assets Measured at Fair Value on a Recurring Basis
Available-for-sale securities:
Collateralized mortgage obligations	$	—	$	324,450	$	3,936		$	328,386
FNMA		—		329,354		—			329,354
FHLMC		—		95,086		—			95,086
GNMA		—		63,967		—			63,967
U.S. Government and agencies		—		39,025		—			39,025
State and political subdivisions		—		4,190		—			4,190
Reverse mortgages		—		—		(646	)		(646	)
Trading Securities		—		—		12,432			12,432

Total assets measured at fair value on a recurring basis	$	—	$	856,072	$	15,722		$	871,794

Assets Measured at Fair Value on a Nonrecurring Basis
Other real estate owned	$	—	$	11,695	$	—		$	11,695
Impaired Loans		—		74,562		—			74,562

Total assets measured at fair value on a nonrecurring basis	$	—	$	86,257	$	—		$	86,257

Assets Measured at Fair Value on Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis are summarized as follows:


	Trading Securities		Reverse Mortgages			Available- for-sale Securities			Total
(In Thousands)

Balance at December 31, 2010	$	12,432	$	(686	)	$	—		$	11,746
Total net (losses) income for the period included in net income		—		(137	)		265			128
Purchases, sales, issuances, and settlements, net		—		177			2,755			2,932
Mark-to-market adjustment		—		—			916			916

Balance at December 31, 2011	$	12,432	$	(646	)		3,936		$	15,722
Total net income (losses) for the period included in net income		33		(29	)		—			4
Purchases, sales, issuances, and settlements, net		—		45			—			45
Mark-to-market adjustment		—		—			(436	)		(436	)

Balance at March 31, 2012	$	12,465	$	(630	)	$	3,500		$	15,335
Total net losses for the period included in net income		—		(47	)		—			(47	)
Purchases, sales, issuances, and settlements, net		—		45			—			45
Mark-to-market adjustment		—		—			845			845

Balance at June 30, 2012	$	12,465	$	(632	)	$	4,345		$	16,178
Total net income for the period included in net income		—		35			—			35
Purchases, sales, issuances, and settlements, net		—		45			—			45
Mark-to-market adjustment		125		—			1,705			1,830

Balance at September 30, 2012	$	12,590	$	(552	)	$	6,050		$	18,088

Book Value and Estimated Fair Value of Financial Instruments

The book value and estimated fair value of our financial instruments are as follows:

Fair Value

September 30, 2012

December 31, 2011

Measurement

Book Value

Fair Value

Book Value

Fair Value

(In Thousands)

Financial assets:

Cash and cash equivalents

Level 1

447,100

468,017

Investment securities

See Footnote 7

922,645

871,794

Loans held for sale

Level 3

20,905

10,185

Loans, net

Level 3

2,656,161

2,677,467

2,702,589

2,721,804

Stock in Federal Home Loan Bank of Pittsburgh

Level 2

30,171

35,756

Accrued interest receivable

Level 2

10,292

11,743

Financial liabilities:

Deposits

Level 2

3,159,804

3,079,661

3,135,304

3,087,464

Borrowed funds

Level 2

644,823

650,389

723,620

731,522

Standby letters of credit

Level 3

257

322

Accrued interest payable

Level 2

6,335

1,910

Estimated Fair Value of Off-Balance Sheet Financial Instruments

The estimated fair value of our off-balance sheet financial instruments is as follows:


	September 30, 2012		December 31, 2011
(In Thousands)
Off-balance sheet instruments:
Commitments to extend credit	$	5,123	$	4,445

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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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.

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-Name Statement of Financial Accounting Standard (FAS)

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

-Publisher FASB

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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) which are not recognized in the financial statements (off-balance sheet) because they fail to meet some other criterion for recognition.

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 7, 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 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 3

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

-Publisher FASB

-Name Accounting Standards Codification

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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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.

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-Publisher FASB

-Name Accounting Standards Codification

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-Paragraph 32

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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.

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