10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-20293

UNION FIRST MARKET BANKSHARES CORPORATION

(Exact name of registrant as specified in its charter)

VIRGINIA	54-1598552
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1051 East Cary Street

Suite 1200

Richmond, Virginia 23219

(Address of principal executive offices) (Zip Code)

(804) 633-5031

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ¨    No  x

The number of shares of common stock outstanding as of November 5, 2012 was 25,965,424

UNION FIRST MARKET BANKSHARES CORPORATION

FORM 10-Q

INDEX

ITEM		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2012, December 31, 2011 and September 30, 2011		1
	Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 and 2011		2
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and 2011		3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the nine months ended September 30, 2012 and 2011		4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011		5
	Notes to Condensed Consolidated Financial Statements		6
	Report of Independent Registered Public Accounting Firm		39
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		62
Item 4.	Controls and Procedures		64
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings		65
Item 1A.	Risk Factors		65
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		65
Item 6.	Exhibits		66
	Signatures		67

ii

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	September 30,		December 31,		September 30,
	2012		2011		2011
	(Unaudited)		(Audited)		(Unaudited)
ASSETS
Cash and cash equivalents:
Cash and due from banks	$	52,095	$	64,412	$	57,171
Interest-bearing deposits in other banks		10,081		31,930		92,247
Money market investments		1		155		199
Federal funds sold		157		162		160
Total cash and cash equivalents		62,334		96,659		149,777
Securities available for sale, at fair value		622,067		620,166		584,668
Restricted stock, at cost		20,687		20,661		21,817
Loans held for sale		141,965		74,823		61,786
Loans, net of unearned income		2,908,510		2,818,583		2,818,342
Less allowance for loan losses		39,894		39,470		41,290
Net loans		2,868,616		2,779,113		2,777,052
Bank premises and equipment, net		87,305		90,589		90,936
Other real estate owned, net of valuation allowance		34,440		32,263		34,464
Core deposit intangibles, net		16,966		20,714		22,162
Goodwill		59,400		59,400		59,400
Other assets		114,413		112,699		112,395
Total assets	$	4,028,193	$	3,907,087	$	3,914,457
LIABILITIES
Noninterest-bearing demand deposits	$	604,274	$	534,535	$	542,692
Interest-bearing deposits:
NOW accounts		418,988		412,605		395,822
Money market accounts		898,625		904,893		858,426
Savings accounts		204,317		179,157		176,531
Time deposits of $100,000 and over		534,797		551,349		561,303
Other time deposits		538,778		592,566		600,102
Total interest-bearing deposits		2,595,505		2,640,570		2,592,184
Total deposits		3,199,779		3,175,105		3,134,876
Securities sold under agreements to repurchase		94,616		62,995		70,450
Other short-term borrowings		59,500		—		—
Trust preferred capital notes		60,310		60,310		60,310
Long-term borrowings		136,260		155,381		155,258
Other liabilities		34,779		31,657		41,982
Total liabilities		3,585,244		3,485,448		3,462,876
STOCKHOLDERS’ EQUITY
Preferred stock, $10.00 par value, $1,000 liquidation value, shares authorized 500,000; issued and outstanding, 35,595 shares at September 30, 2011 and zero at December 31, 2011 and September 30, 2012.		—		—		35,595
Common stock, $1.33 par value, shares authorized 36,000,000; issued and outstanding, 25,967,705 shares, 26,134,830 shares, and 26,057,500 shares, respectively.		34,433		34,672		34,581
Surplus		186,224		187,493		186,505
Retained earnings		209,308		189,824		184,845
Discount on preferred stock		—		—		(982	)
Accumulated other comprehensive income		12,984		9,650		11,037
Total stockholders’ equity		442,949		421,639		451,581
Total liabilities and stockholders’ equity	$	4,028,193	$	3,907,087	$	3,914,457

See accompanying notes to condensed consolidated financial statements.

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UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012		2011
	(Unaudited)			(Unaudited)			(Unaudited)		(Unaudited)
Interest and dividend income:
Interest and fees on loans	$	40,836		$	42,664		$	121,743	$	126,999
Interest on Federal funds sold		1			1			1		1
Interest on deposits in other banks		6			24			64		60
Interest and dividends on securities:
Taxable		2,846			3,146			9,482		10,400
Nontaxable		1,814			1,771			5,391		5,294
Total interest and dividend income		45,503			47,606			136,681		142,754
Interest expense:
Interest on deposits		4,726			5,924			15,084		18,774
Interest on Federal funds purchased		28			—			29		7
Interest on short-term borrowings		69			92			160		258
Interest on long-term borrowings		1,918			2,144			6,212		5,846
Total interest expense		6,741			8,160			21,485		24,885
Net interest income		38,762			39,446			115,196		117,869
Provision for loan losses		2,400			3,600			8,900		14,400
Net interest income after provision for loan losses		36,362			35,846			106,296		103,469
Noninterest income:
Service charges on deposit accounts		2,222			2,294			6,643		6,568
Other service charges, commissions and fees		3,655			3,254			10,692		9,529
Gains (losses) on securities transactions, net		(1	)		499			4		483
Other-than-temporary impairment losses		—			(400	)		—		(400	)
Gains on sales of mortgage loans		8,918			4,861			21,529		14,132
Gains (losses) on bank premises, net		(309	)		(16	)		34		(644	)
Other operating income		1,067			919			3,084		2,715
Total noninterest income		15,552			11,411			41,986		32,383
Noninterest expenses:
Salaries and benefits		21,279			18,076			61,204		53,310
Occupancy expenses		3,262			2,885			9,001		8,307
Furniture and equipment expenses		1,809			1,756			5,440		5,097
Other operating expenses		11,968			11,787			36,252		38,891
Total noninterest expenses		38,318			34,504			111,897		105,605
Income before income taxes		13,596			12,753			36,385		30,247
Income tax expense		3,970			3,682			10,416		8,162
Net income	$	9,626		$	9,071		$	25,969	$	22,085
Dividends paid and accumulated on preferred stock		—			462			—		1,386
Accretion of discount on preferred stock		—			66			—		195
Net income available to common shareholders	$	9,626		$	8,543		$	25,969	$	20,504
Earnings per common share, basic	$	0.37		$	0.33		$	1.00	$	0.79
Earnings per common share, diluted	$	0.37		$	0.33		$	1.00	$	0.79

See accompanying notes to condensed consolidated financial statements.

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UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012			2011
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Net income	$	9,626		$	9,071		$	25,969		$	22,085
Other comprehensive income:
Change in fair value of interest rate swap (cash flow hedge)		(202	)		(1,827	)		(492	)		(2,826	)
Unrealized gains on securities:
Unrealized holding gains arising during period (net of tax, $1,172 and $2,062 for three and nine months ended 2012)		2,176			3,230			3,829			10,346
Reclassification adjustment for (gains) losses included in net income (net of tax, $0 and $1 for three and nine months ended 2012)		1			(64	)		(3	)		(54	)
Other comprehensive income		1,975			1,339			3,334			7,466
Comprehensive income	$	11,601		$	10,410		$	29,303		$	29,551

See accompanying notes to condensed consolidated financial statements.

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UNION FIRST MARKET BANKSHARES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Dollars in thousands)

(Unaudited)

	Preferred Stock		Common Stock			Surplus			Retained Earnings			Discount on Preferred Stock			Accumulated Other Comprehensive Income		Total
Balance - December 31, 2010	$	35,595	$	34,532		$	185,763		$	169,801		$	(1,177	)	$	3,571	$	428,085
Net income - 2011										22,085								22,085
Other comprehensive income (net of tax, $5,542)																7,466		7,466
Dividends on Common Stock ($.21 per share)										(5,460	)							(5,460	)
Tax benefit from exercise of stock awards							1											1
Dividends on Preferred Stock										(1,386	)							(1,386	)
Accretion of discount on Preferred Stock										(195	)		195					—
Issuance of common stock under Dividend Reinvestment Plan (18,135 shares)				24			243											267
Issuance of common stock under Stock Incentive Plan (6,450 shares)				9			47											56
Vesting of restricted stock under Stock Incentive Plan (12,243 shares)				16			(16	)										—
Stock-based compensation expense							467											467
Balance - September 30, 2011	$	35,595	$	34,581		$	186,505		$	184,845		$	(983	)	$	11,037	$	451,581
Balance - December 31, 2011	$	—	$	34,672		$	187,493		$	189,824		$	—		$	9,650	$	421,639
Net income - 2012										25,969								25,969
Other comprehensive income (net of tax, $2,060)																3,334		3,334
Dividends on Common Stock ($.25 per share)										(6,058	)							(6,058	)
Stock purchased under stock repurchase plan (220,265 shares)				(293	)		(2,570	)										(2,863	)
Issuance of common stock under Dividend Reinvestment Plan (31,179 shares)				41			386			(427	)							—
Issuance of common stock under Stock Incentive Plan (1,165 shares)				2			14											16
Vesting of restricted stock under Stock Incentive Plan (9,647 shares)				13			(13	)										—
Net settle for taxes on Restricted Stock Awards (1,818 shares)				(2	)		(24	)										(26	)
Stock-based compensation expense							938											938
Balance - September 30, 2012	$	—	$	34,433		$	186,224		$	209,308		$	—		$	12,984	$	442,949

See accompanying notes to condensed consolidated financial statements.

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UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011

(Dollars in thousands)

	2012			2011
Operating activities:
Net income	$	25,969		$	22,085
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation of bank premises and equipment		5,049			5,005
Other-than-temporary impairment recognized in earnings		—			400
Amortization, net		7,658			5,300
Provision for loan losses		8,900			14,400
(Gains) losses on the sale of investment securities		(4	)		(483	)
(Increase) decrease in loans held for sale, net		(67,142	)		12,188
(Gains) losses on sales of other real estate owned, net		442			328
(Gains) losses on sales of bank premises, net		(34	)		644
Stock-based compensation expense		938			467
(Increase) decrease in other assets		(634	)		4,263
Increase in other liabilities		2,630			11,048
Net cash and cash equivalents provided by (used in) operating activities		(16,228	)		75,645
Investing activities:
Purchases of securities available for sale		(131,262	)		(130,160	)
Proceeds from sales of securities available for sale		2,186			18,365
Proceeds from maturities, calls and paydowns of securities available for sale		125,988			87,585
Net (increase) decrease in loans		(109,812	)		69,306
Net increase in bank premises and equipment		(1,731	)		(3,742	)
Proceeds from sales of other real estate owned		9,148			10,557
Improvements to other real estate owned		(358	)		—
Cash paid in bank acquisition		—			(26,437	)
Cash acquired in bank and branch acquisitions		—			230
Net cash and cash equivalents provided by (used in) investing activities		(105,841	)		25,704
Financing activities:
Net increase in noninterest-bearing deposits		69,739			53,459
Net decrease in interest-bearing deposits		(45,065	)		(37,511	)
Net increase (decrease) in short-term borrowings		91,121			(22,517	)
Net (decrease) increase in long-term borrowings(1)		(19,121	)		366
Cash dividends paid - common stock		(6,058	)		(5,460	)
Cash dividends paid - preferred stock		—			(1,386	)
Repurchase of common stock		(2,862	)		—
Taxes paid related to net share settlement of equity awards		(26	)		—
Issuance of common stock		16			324
Net cash and cash equivalents provided by (used in) financing activities		87,744			(12,725	)
Increase (decrease) in cash and cash equivalents		(34,325	)		88,624
Cash and cash equivalents at beginning of the period		96,659			61,153
Cash and cash equivalents at end of the period	$	62,334		$	149,777
Supplemental Disclosure of Cash Flow Information
Cash payments for:
Interest	$	22,495		$	25,265
Income taxes		4,300			4,238
Supplemental schedule of noncash investing and financing activities
Unrealized gain on securities available for sale	$	5,887		$	15,834
Changes in fair value of interest rate swap		(492	)		(2,826	)
Transfers from loans to other real estate owned		11,409			9,236
Transactions related to bank and branch acquisitions
Increase in assets and liabilities:
Loans	$	—		$	70,817
Other assets		—			4,324
Noninterest bearing deposits		—			4,366
Interest bearing deposits		—			44,503
Other liabilities		—			65

⁽¹⁾  See Note 6. Borrowings related to 2012 activity

See accompanying notes to consolidated financial statements.

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UNION FIRST MARKET BANKSHARES CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2012

1. ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of Union First Market Bankshares Corporation and its subsidiaries (collectively, the “Company”). Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K. If needed, certain previously reported amounts have been reclassified to conform to current period presentation.

2. BUSINESS COMBINATIONS

Harrisonburg Branch Acquisition

On May 20, 2011, the Company completed the purchase of the former NewBridge Bank branch in Harrisonburg, Virginia, assets and liabilities related to the branch business, and a potential branch site in Waynesboro, Virginia. Under the parties’ agreement, the Company purchased loans of $72.5 million, assumed deposit liabilities of $48.9 million, and purchased the related fixed assets of the branch. The Company operates the acquired bank branch under the name Union First Market Bank (the “Harrisonburg branch”). The acquisition, which allowed the Company to establish immediately a meaningful presence in a new banking market, is consistent with the Company’s secondary growth strategy of expanding operations along the Interstate Route 81 corridor. The Company’s consolidated statements of income include the results of operations of the Harrisonburg branch from the closing date of the acquisition.

In connection with the acquisition, the Company recorded $1.8 million of goodwill and $9,500 of core deposit intangibles. The core deposit intangible of $9,500 was expensed immediately upon completion of the acquisition. The recorded goodwill was allocated to the community banking segment of the Company and is deductible for tax purposes.

The Company acquired the $72.5 million loan portfolio at a fair value discount of $1.7 million. The discount represents expected credit losses, adjustments to market interest rates and liquidity adjustments. The performing loan portfolio fair value estimate was $70.5 million and the impaired loan portfolio fair value estimate was $276,000.

- 6 -

In the third quarter, interest income of approximately $640,000 was recorded on loans acquired in the Harrisonburg branch acquisition. The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

September 30, 2012:
Outstanding principal balance	$	47,658
Carrying amount	$	47,131
December 31, 2011:
Outstanding principal balance	$	54,953
Carrying amount	$	53,359

Loans obtained in the acquisition of the Harrisonburg branch for which there is specific evidence of credit deterioration and for which it was probable that the Company would be unable to collect all contractually required principal and interest payments are not considered to be material to the Company’s consolidated assets.

First Market Bank Acquisition

In February 2010, the Company completed the acquisition of First Market Bank, FSB (“FMB”). Interest income on acquired loans for the third quarter of 2012 was approximately $6.5 million. The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

September 30, 2012:
Outstanding principal balance	$	471,557
Carrying amount	$	462,552
December 31, 2011:
Outstanding principal balance	$	632,602
Carrying amount	$	620,048

Loans obtained in the acquisition of FMB for which there is specific evidence of credit deterioration and for which it was probable that the Company would be unable to collect all contractually required principal and interest payments are not considered to be material to the Company’s consolidated assets.

During the second quarter of 2012, the Company compared the expected prepayments at acquisition to actual payments and anticipated future payments on four purchased performing loan pools. The slower prepayment speed noted on real estate, commercial real estate, land, and auto pools during this assessment resulted in an adjustment to the fair value discount accretion rate. This is considered a change in accounting estimate and resulted in a lower effective yield in each pool and had an immaterial impact on the financial statements.

3. STOCK-BASED COMPENSATION

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) and the 2003 Stock Incentive Plan (the “2003 Plan”) provide for the granting of incentive stock options, non-statutory stock options, and nonvested stock awards to key employees of the Company and its subsidiaries. The 2011 Plan makes available 1,000,000 shares, which may be awarded to employees of the Company and its subsidiaries in the form of incentive stock options intended to comply with the requirements of Section 422 of the Internal Revenue Code of 1986 (“incentive stock options”), non-statutory stock options, and nonvested stock. Approximately 26,400 shares remain available for grant under the 2003 Plan, which expires in 2013. Under both plans, the option price cannot be less than the fair market value of the stock on the grant date. The Company issues new shares to satisfy stock-based awards. A stock option’s maximum term is ten years from the date of grant and vests in equal annual installments of 20% over a five year vesting schedule. Collectively, there remain approximately 746,500 shares available as of September 30, 2012 for issuance under the 2011 and 2003 Plans.

- 7 -

For the three month and nine month periods ended September 30, 2012 and 2011, respectively, the Company recognized stock-based compensation expense of approximately $324,000 and $938,000 ($242,000 and $707,000, net of tax), respectively, and $244,000 and $467,000, ($182,000 and $374,000, net of tax), respectively. These expenses were less than $0.01 per common share for both periods ended September 30, 2011, and $0.01 and $0.04 for the three and nine month periods, respectively, ended September 30, 2012.

Stock Options

The following table summarizes the stock option activity for the nine months ended September 30, 2012:

	Number of Stock Options			Weighted Average Exercise Price
Options outstanding, December 31, 2011		422,750		$	17.70
Granted		131,657			14.40
Exercised		(1,165	)		12.11
Forfeited		(19,029	)		14.58
Expired		(16,775	)		22.53
Options outstanding, September 30, 2012		517,438			16.83
Options exercisable, September 30, 2012		222,301			20.50

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table for the nine months ended September 30, 2012 and 2011:

	Nine Months Ended September 30,
	2012			2011
Dividend yield (1)		2.47	%		2.36	%
Expected life in years (2)		7.0			7.0
Expected volatility (3)		41.53	%		41.02	%
Risk-free interest rate (4)		1.24	%		2.71	%
Weighted average fair value per option granted	$	4.76		$	4.31

(1) Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant.

(2) Based on the average of the contractual life and vesting schedule for the respective option.

(3) Based on the monthly historical volatility of the Company’s stock price over the expected life of the options.

(4) Based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant.

- 8 -

The following table summarizes information concerning stock options issued to the Company’s employees that are vested or are expected to vest and stock options exercisable as of September 30, 2012:

	Stock Options Vested or Expected to Vest		Exercisable
Stock options		492,196		222,301
Weighted average remaining contractual life in years		6.47		3.81
Weighted average exercise price on shares above water	$	13.23	$	12.23
Aggregate intrinsic value	$	257,186	$	28,561

There was one stock option award exercised during the third quarter of 2012; the total intrinsic value for the stock option award exercised during both three and nine month periods ended September 30, 2012 was $3,367, and the total fair value for the stock option award exercised during both three and nine month periods ended September 30, 2012 was $14,108. The fair value of stock options vested during the nine months ended September 30, 2012 was approximately $279,000.

Nonvested Stock

The 2003 and the 2011 Stock Incentive Plans permit the granting of nonvested stock but are limited to one-third of the aggregate number of total awards granted. This equity component of compensation is divided between restricted (time-based) stock grants and performance-based stock grants. Generally, the restricted stock vests 50% on each of the third and fourth anniversaries from the date of the grant. The performance-based stock is subject to vesting on the fourth anniversary of the date of the grant based on the performance of the Company’s stock price. The value of the nonvested stock awards was calculated by multiplying the fair market value of the Company’s common stock on grant date by the number of shares awarded. Employees have the right to vote the shares and to receive cash or stock dividends (restricted stock), if any, except for the nonvested stock under the performance-based component (performance stock).

The following table summarizes the nonvested stock activity for the nine months ended September 30, 2012:

	Number of Shares of Restricted Stock			Performance Stock			Weighted Average Grant- Date Fair Value
Balance, December 31, 2011		140,557			6,000		$	12.62
Granted		73,414			—			14.28
Vested		(7,497	)		—			15.81
Forfeited		(14,310	)		(1,500	)		12.95
Balance, September 30, 2012		192,164			4,500			12.85

The estimated unamortized compensation expense, net of estimated forfeitures, related to nonvested stock and stock options issued and outstanding as of September 30, 2012 that will be recognized in future periods is as follows (dollars in thousands):

	Stock Options		Restricted Stock		Total
For the remaining three months of 2012	$	90	$	230	$	320
For year ending December 31, 2013		366		699		1,065
For year ending December 31, 2014		360		366		726
For year ending December 31, 2015		268		98		366
For year ending December 31, 2016		155		13		168
For year ending December 31, 2017		25		—		25
Total	$	1,264	$	1,406	$	2,670

- 9 -

4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30, 2012		December 31, 2011
Commercial:
Commercial Construction	$	200,032	$	185,359
Commercial Real Estate - Owner Occupied		492,715		452,407
Commercial Real Estate - Non-Owner Occupied		693,679		655,083
Raw Land and Lots		212,316		214,284
Single Family Investment Real Estate		206,090		192,437
Commercial and Industrial		209,401		212,268
Other Commercial		40,307		44,403
Consumer:
Mortgage		221,474		219,646
Consumer Construction		27,488		20,757
Indirect Auto		159,495		162,708
Indirect Marine		31,314		39,819
HELOCs		286,348		277,101
Credit Card		20,332		19,006
Other Consumer		107,519		123,305
Total	$	2,908,510	$	2,818,583

The following table shows the aging of the Company’s loan portfolio, by class, at September 30, 2012 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	6,148	$	—	$	—	$	—	$	7,846	$	186,038	$	200,032
Commercial Real Estate - Owner Occupied		2,865		88		822		1,228		2,212		485,500		492,715
Commercial Real Estate - Non-Owner Occupied		5,116		—		635		—		540		687,388		693,679
Raw Land and Lots		138		—		153		3,743		10,995		197,287		212,316
Single Family Investment Real Estate		686		102		201		371		4,081		200,649		206,090
Commercial and Industrial		230		191		120		89		2,678		206,093		209,401
Other Commercial		238		1		—		—		195		39,873		40,307
Consumer:
Mortgage		3,899		3,003		3,991		—		693		209,888		221,474
Consumer Construction		—		—		—		—		210		27,278		27,488
Indirect Auto		1,998		234		289		24		2		156,948		159,495
Indirect Marine		68		—		114		—		876		30,256		31,314
HELOCs		2,481		536		1,707		851		797		279,976		286,348
Credit Card		147		223		268		—		—		19,694		20,332
Other Consumer		893		629		796		131		1,034		104,036		107,519
Total	$	24,907	$	5,007	$	9,096	$	6,437	$	32,159	$	2,830,904	$	2,908,510

- 10 -

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2011 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	—	$	—	$	490	$	—	$	10,276	$	174,593	$	185,359
Commercial Real Estate - Owner Occupied		520		—		2,482		1,292		5,962		442,151		452,407
Commercial Real Estate - Non-Owner Occupied		190		64		2,887		1,133		2,031		648,778		655,083
Raw Land and Lots		94		1,124		—		5,623		13,322		194,121		214,284
Single Family Investment Real Estate		779		70		3,637		388		5,048		182,515		192,437
Commercial and Industrial		601		185		3,369		392		5,297		202,424		212,268
Other Commercial		—		25		—		—		238		44,140		44,403
Consumer:
Mortgage		6,748		412		3,804		—		240		208,442		219,646
Consumer Construction		—		—		—		—		207		20,550		20,757
Indirect Auto		2,653		416		443		40		7		159,149		162,708
Indirect Marine		189		795		—		—		544		38,291		39,819
HELOCs		1,678		547		820		865		885		272,306		277,101
Credit Card		245		184		323		—		—		18,254		19,006
Other Consumer		1,421		443		1,657		164		777		118,843		123,305
Total	$	15,118	$	4,265	$	19,912	$	9,897	$	44,834	$	2,724,557	$	2,818,583

Nonaccrual loans totaled $32.2 million and $51.9 million at September 30, 2012 and 2011, respectively. There were no nonaccrual loans excluded from impaired loan disclosure in 2012 or 2011. Loans past due 90 days or more and accruing interest totaled $9.1 million and $12.1 million at September 30, 2012 and 2011, respectively.

The following table shows purchased impaired commercial and consumer loan portfolios, by class and their delinquency status through September 30, 2012 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	—	$	1,164	$	64	$	1,228
Raw Land and Lots		—		91		3,652		3,743
Single Family Investment Real Estate		16		—		355		371
Commercial and Industrial		—		89		—		89
Consumer:
Indirect Auto		7		—		17		24
HELOCs		—		50		801		851
Other Consumer		—		26		105		131
Total	$	23	$	1,420	$	4,994	$	6,437

The following table shows purchased impaired commercial and consumer loan portfolios, by class and their delinquency status through December 31, 2011 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	206	$	50	$	1,036	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		—		5,623		5,623
Single Family Investment Real Estate		—		—		388		388
Commercial and Industrial		—		302		90		392
Consumer:
Indirect Auto		6		11		23		40
HELOCs		19		32		814		865
Other Consumer		—		77		87		164
Total	$	231	$	1,605	$	8,061	$	9,897

- 11 -

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. At September 30, 2012, the Company had $177.9 million in loans considered to be impaired of which $16.7 million were collectively evaluated for impairment and $161.2 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at September 30, 2012 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	30,864	$	31,347	$	—	$	31,913	$	1,073
Commercial Real Estate - Owner Occupied		10,774		11,246		—		11,517		423
Commercial Real Estate - Non-Owner Occupied		21,230		21,305		—		22,644		867
Raw Land and Lots		35,067		35,141		—		36,376		941
Single Family Investment Real Estate		5,860		6,180		—		6,440		216
Commercial and Industrial		3,361		3,394		—		3,837		135
Other Commercial		906		906		—		1,009		46
Consumer:
Mortgage		2,592		2,645		—		2,983		80
Indirect Auto		6		6		—		9		—
HELOCs		1,672		1,771		—		1,843		10
Other Consumer		871		910		—		937		21
Total impaired loans without a specific allowance	$	113,203	$	114,851	$	—	$	119,508	$	3,812
Loans with a specific allowance
Commercial:
Commercial Construction	$	4,290	$	4,338	$	1,368	$	4,360	$	20
Commercial Real Estate - Owner Occupied		2,718		2,853		665		2,888		22
Commercial Real Estate - Non-Owner Occupied		13,546		13,580		426		13,777		568
Raw Land and Lots		12,472		12,669		3,052		13,168		118
Single Family Investment Real Estate		2,503		2,573		962		2,736		44
Commercial and Industrial		9,929		10,069		3,581		10,059		304
Other Commercial		134		134		108		134		—
Consumer:
Consumer Construction		210		236		76		226		—
Indirect Marine		876		876		404		879		3
HELOCs		752		811		550		1,017		—
Other Consumer		563		563		246		563		—
Total impaired loans with a specific allowance	$	47,993	$	48,702	$	11,438	$	49,807	$	1,079
Total loans individually evaluated for impairment	$	161,196	$	163,553	$	11,438	$	169,315	$	4,891

- 12 -

At December 31, 2011, the Company had $255.1 million in loans considered to be impaired of which $12.3 million were collectively evaluated for impairment and $242.8 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at December 31, 2011 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	40,475	$	40,524	$	—	$	37,835	$	1,690
Commercial Real Estate - Owner Occupied		20,487		21,010		—		23,364		1,183
Commercial Real Estate - Non-Owner Occupied		37,799		37,855		—		38,084		2,002
Raw Land and Lots		46,791		46,890		—		47,808		1,306
Single Family Investment Real Estate		11,285		11,349		—		11,684		637
Commercial and Industrial		9,467		9,959		—		10,216		423
Other Commercial		1,257		1,257		—		1,269		75
Consumer:
Mortgage		1,202		1,202		—		1,225		70
HELOCs		349		349		—		350		11
Other Consumer		—		—		—		1		—
Total impaired loans without a specific allowance	$	169,112	$	170,395	$	—	$	171,836	$	7,397
Loans with a specific allowance
Commercial:
Commercial Construction	$	12,927	$	13,297	$	583	$	13,811	$	343
Commercial Real Estate - Owner Occupied		8,679		8,788		1,961		8,681		267
Commercial Real Estate - Non-Owner Occupied		8,858		8,879		1,069		9,010		322
Raw Land and Lots		22,188		22,429		991		24,553		973
Single Family Investment Real Estate		9,020		9,312		1,140		9,571		321
Commercial and Industrial		8,980		9,133		3,320		10,448		369
Other Commercial		150		150		3		153		10
Consumer:
Mortgage		535		535		11		536		32
Consumer Construction		207		226		86		228		—
Indirect Auto		71		71		—		93		5
Indirect Marine		544		547		263		548		9
HELOCs		785		825		587		1,034		—
Other Consumer		777		804		284		815		5
Total impaired loans with a specific allowance	$	73,721	$	74,996	$	10,298	$	79,481	$	2,656
Total loans individually evaluated for impairment	$	242,833	$	245,391	$	10,298	$	251,317	$	10,053

The Company considers troubled debt restructurings (“TDRs”) to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Included in the impaired loan disclosures above are $63.8 million and $112.6 million of loans considered to be troubled debt restructurings as of September 30, 2012 and December 31, 2011, respectively. All loans that are considered to be TDRs are specifically evaluated for impairment in accordance with the Company’s allowance for loan loss methodology.

- 13 -

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30, 2012						December 31, 2011
	No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction		6	$	6,559	$	169		14	$	21,461	$	3,185
Commercial Real Estate - Owner Occupied		8		3,056		—		11		7,996		180
Commercial Real Estate - Non-Owner Occupied		10		13,082		29		16		21,777		13
Raw Land and Lots		14		25,274		1		15		32,450		1
Single Family Investment Real Estate		5		848		—		12		8,525		—
Commercial and Industrial		6		1,103		—		12		4,991		204
Other Commercial		1		236		—		4		864		—
Consumer:
Mortgage		7		1,690		—		1		507		—
Other Consumer		2		85		—		2		263		—
Total performing		59	$	51,933	$	199		87	$	98,834	$	3,583
Nonperforming
Commercial:
Commercial Construction		4	$	4,260	$	—		5	$	5,353	$	—
Commercial Real Estate - Owner Occupied		3		1,084		—		—		—		—
Commercial Real Estate - Non-Owner Occupied		1		208		—		2		292		—
Raw Land and Lots		3		3,860		—		6		4,342		—
Single Family Investment Real Estate		2		433		—		4		1,342		—
Commercial and Industrial		7		1,284		—		3		1,134		—
Consumer:
Mortgage		1		202		—		5		1,076		—
Indirect Marine		1		283		—		—		—		—
Other Consumer		2		266		—		1		265		—
Total nonperforming		24	$	11,880	$	—		26	$	13,804	$	—
Total performing and nonperforming		83	$	63,813	$	199		113	$	112,638	$	3,583

The Company considers a default of a restructured loan to occur when subsequent to the restructure, the borrower is 90 days past due or results in foreclosure and repossession of the applicable collateral; the Company did not identify any restructured loans that went into default in the third quarter that had been restructured during the previous twelve months. During the nine months ended September 30, 2012, the Company identified three restructured loans, totaling approximately $1.4 million, that went into default that had been restructured in the twelve-month period prior to the time of default. All three loans had a term extension at a market rate.

- 14 -

The following table shows, by class and modification type, TDRs that occurred during the three month and nine month periods ended September 30, 2012 (dollars in thousands):

	Three months ended September 30, 2012				Nine months ended September 30, 2012
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	309
Raw Land and Lots		—		—		3		260
Single Family Investment Real Estate		—		—		2		176
Consumer:
Indirect Marine		—		—		1		283
Total interest only at market rate of interest		—	$	—		7	$	1,028
Term modification, at a market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		3	$	1,809
Commercial Real Estate - Non-Owner Occupied		2		720		2		720
Raw Land and Lots		—		—		1		603
Commercial and Industrial		1		115		6		432
Consumer:
Mortgage		—		—		2		472
Other Consumer		—		—		3		282
Total loan term extended at a market rate		3	$	835		17	$	4,318
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		4	$	654
Raw Land and Lots		1		60		1		60
Consumer:
Other Consumer		1		69		1		69
Total loan term extended at a below market rate		2	$	129		6	$	783
Interest rate modification, below market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		2	$	2,390
Total interest only at below market rate of interest		—	$	—		2	$	2,390
Total		5	$	964		32	$	8,519

- 15 -

The following table shows, by class and modification type, TDRs that occurred during the three month and nine month periods ended September 30, 2011 (dollars in thousands):

	Three months ended September 30, 2011				Nine months ended September 30, 2011
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	223
Raw Land and Lots		—		—		1		341
Single Family Investment Real Estate		1		95		1		95
Total interest only at market rate of interest		1	$	95		3	$	659
Term modification, at a market rate
Commercial:
Commercial Construction		5	$	7,072		15	$	22,940
Commercial Real Estate - Owner Occupied		3		3,869		5		5,035
Commercial Real Estate - Non-Owner Occupied		2		2,572		16		21,655
Raw Land and Lots		4		18,625		14		27,596
Single Family Investment Real Estate		1		2,616		10		7,286
Commercial and Industrial		5		2,729		12		5,623
Other Commercial		2		457		5		911
Consumer:
Mortgage		1		56		4		538
Other Consumer		1		270		3		533
Total loan term extended at a market rate		24	$	38,266		84	$	92,117
Term modification, below market rate
Commercial:
Commercial Construction		—	$	—		3	$	3,451
Commercial Real Estate - Owner Occupied		2		546		2		546
Raw Land and Lots		—		—		6		6,391
Single Family Investment Real Estate		—		—		4		2,506
Commercial and Industrial		—		—		2		368
Consumer:
Mortgage		—		—		1		507
Total loan term extended at a below market rate		2	$	546		18	$	13,769
Total		27	$	38,907		105	$	106,545

- 16 -

The following table shows the allowance for loan loss activity, by portfolio segment, balances for allowance for credit losses, and loans based on impairment methodology for the nine months ended September 30, 2012. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	27,891		$	11,498		$	81		$	39,470
Recoveries credited to allowance		490			881			—			1,371
Loans charged off		(5,956	)		(3,891	)		—			(9,847	)
Provision charged to operations		7,301			1,626			(27	)		8,900
Balance, end of period	$	29,726		$	10,114		$	54		$	39,894
Ending balance: individually evaluated for impairment		10,033			1,276			—			11,309
Ending balance: collectively evaluated for impairment		19,564			8,838			54			28,456
Ending balance: loans acquired with deteriorated credit quality		129			—			—			129
Total	$	29,726		$	10,114		$	54		$	39,894
Loans:
Ending balance	$	2,054,540		$	853,970		$	—		$	2,908,510
Ending balance: individually evaluated for impairment		148,223			6,536			—			154,759
Ending balance: collectively evaluated for impairment		1,900,886			846,428			—			2,747,314
Ending balance: loans acquired with deteriorated credit quality		5,431			1,006			—			6,437
Total	$	2,054,540		$	853,970		$	—		$	2,908,510

- 17 -

The following table shows the allowance for loan loss activity, portfolio segment types, balances for allowance for loan losses, and loans based on impairment methodology for the year ended December 31, 2011. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	28,255		$	10,189		$	(38	)	$	38,406
Recoveries credited to allowance		924			1,206			—			2,130
Loans charged off		(10,891	)		(6,975	)		—			(17,866	)
Provision charged to operations		9,603			7,078			119			16,800
Balance, end of year	$	27,891		$	11,498		$	81		$	39,470
Ending balance: individually evaluated for impairment		8,982			1,231			—			10,213
Ending balance: collectively evaluated for impairment		18,824			10,267			81			29,172
Ending balance: loans acquired with deteriorated credit quality		85			—			—			85
Total	$	27,891		$	11,498		$	81		$	39,470
Loans:
Ending balance	$	1,956,241		$	862,342		$	—		$	2,818,583
Ending balance: individually evaluated for impairment		229,535			3,401			—			232,936
Ending balance: collectively evaluated for impairment		1,717,878			857,872			—			2,575,750
Ending balance: loans acquired with deteriorated credit quality		8,828			1,069			—			9,897
Total	$	1,956,241		$	862,342		$	—		$	2,818,583

The Company uses the past due status and trends as the primary credit quality indicator for the consumer loan portfolio segment while a risk rating system is utilized for commercial loans. Commercial loans are graded on a scale of 1 through 9. A general description of the characteristics of the risk grades follows:

• Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

• Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

• Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

• Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

• Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

• Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position;

• Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

- 18 -

• Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

• Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of September 30, 2012. The risk rating information has been updated through September 30, 2012 (dollars in thousands):

	3		4		5		6		7		8		Total
Commercial Construction	$	11,409	$	105,226	$	11,150	$	39,371	$	32,766	$	110	$	200,032
Commercial Real Estate - Owner Occupied		125,840		314,456		22,406		17,671		11,114		—		491,487
Commercial Real Estate - Non-Owner Occupied		164,530		416,312		51,597		31,961		29,279		—		693,679
Raw Land and Lots		3,378		112,439		14,807		33,719		43,724		506		208,573
Single Family Investment Real Estate		24,329		145,213		14,109		12,898		8,431		739		205,719
Commercial and Industrial		44,831		122,572		13,779		13,284		14,671		175		209,312
Other Commercial		5,307		16,489		12,133		4,803		1,515		60		40,307
Total	$	379,624	$	1,232,707	$	139,981	$	153,707	$	141,500	$	1,590	$	2,049,109

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of December 31, 2011. The risk rating information has been updated through December 31, 2011 (dollars in thousands):

	3		4		5		6		7		8		Total
Commercial Construction	$	10,099	$	84,299	$	6,079	$	36,650	$	48,232	$	—	$	185,359
Commercial Real Estate - Owner Occupied		88,430		296,825		17,604		21,158		26,389		709		451,115
Commercial Real Estate - Non-Owner Occupied		149,346		367,244		58,844		38,662		39,854		—		653,950
Raw Land and Lots		4,368		99,374		18,767		33,673		52,204		275		208,661
Single Family Investment Real Estate		32,741		116,570		11,928		14,358		16,452		—		192,049
Commercial and Industrial		35,120		123,872		22,079		11,559		19,066		180		211,876
Other Commercial		6,364		15,918		16,739		3,807		1,512		63		44,403
Total	$	326,468	$	1,104,102	$	152,040	$	159,867	$	203,709	$	1,227	$	1,947,413

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of September 30, 2012. The credit quality indicator information has been updated through September 30, 2012 (dollars in thousands):

	5		6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	—	$	1,228	$	—	$	1,228
Raw Land and Lots		—		—		3,743		—		3,743
Single Family Investment Real Estate		355		—		16		—		371
Commercial and Industrial		—		—		89		—		89
Total	$	355	$	—	$	5,076	$	—	$	5,431

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of December 31, 2011. The credit quality indicator information has been updated through December 31, 2011 (dollars in thousands):

	6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	1,292	$	—	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		5,623		—		5,623
Single Family Investment Real Estate		369		19		—		388
Commercial and Industrial		—		91		301		392
Total	$	369	$	8,158	$	301	$	8,828

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Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. The contractually required payments, cash flows expected to be collected, and fair value as of the date of acquisition were $1,080,780, $1,072,726, and $1,052,358, respectively (dollars in thousands).

The following shows changes in the Company’s acquired loan portfolio and accretable yield for the following periods (dollars in thousands):

	For the Nine Months Ended												For the Twelve Months Ended
	September 30, 2012												December 31, 2011
	Purchased Impaired						Purchased Nonimpaired						Purchased Impaired						Purchased Nonimpaired
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Balance at beginning of period	$	5,140		$	9,897		$	9,010		$	663,510		$	8,169		$	13,999		$	13,589		$	799,898
Additions		—			—			—			—			122			276			1,593			70,524
Accretion		(55	)		—			(2,960	)		—			(66	)		—			(6,172	)		—
Charged off		(1,602	)		(397	)		—			(1,551	)		(3,073	)		(1,329	)		—			(5,988	)
Transfers to OREO		—			(2,371	)		—			(2,766	)		(12	)		(174	)		—			(2,341	)
Payments received, net		—			(692	)		—			(155,947	)		—			(2,875	)		—			(198,583	)
Balance at end of period	$	3,483		$	6,437		$	6,050		$	503,246		$	5,140		$	9,897		$	9,010		$	663,510

5. EARNINGS PER SHARE

Basic earnings per common share (“EPS”) was computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards. Amortization of discount and dividends on the preferred stock is treated as a reduction of the numerator in calculating basic and diluted EPS. There were approximately 594,946 and 409,562 shares underlying anti-dilutive stock awards as of September 30, 2012 and 2011, respectively.

The following is a reconcilement of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2012 and 2011 (dollars and shares in thousands, except per share amounts):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
For the Three Months ended September 30, 2012
Net income, basic	$	9,626		25,881	$	0.37
Add: potentially dilutive common shares - stock awards		—		27		—
Diluted	$	9,626		25,908	$	0.37
For the Three Months ended September 30, 2011
Net income	$	9,071		25,987	$	0.35
Less: dividends paid and accumulated on preferred stock		462		—		0.02
Less: accretion of discount on preferred stock		66		—		—
Basic	$	8,543		25,987	$	0.33
Add: potentially dilutive common shares - stock awards		—		15		—
Diluted	$	8,543		26,002	$	0.33
For the Nine Months ended September 30, 2012
Net income, basic	$	25,969		25,893	$	1.00
Add: potentially dilutive common shares - stock awards		—		28		—
Diluted	$	25,969		25,921	$	1.00
For the Nine Months ended September 30, 2011
Net income	$	22,085		25,972	$	0.85
Less: dividends paid and accumulated on preferred stock		1,386		—		0.06
Less: accretion of discount on preferred stock		195		—		—
Basic	$	20,504	$	25,972	$	0.79
Add: potentially dilutive common shares - stock awards		—		22		—
Diluted	$	20,504		25,994	$	0.79

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6. BORROWINGS

Short-term Borrowings

Total short-term borrowings consist of securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Also included in total short-term borrowings are Federal funds purchased, which are secured overnight borrowings from other financial institutions, and short-term Federal Home Loan Bank of Atlanta (“FHLB”) advances. Total short-term borrowings consist of the following as of September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30,			December 31,
	2012			2011
Securities sold under agreements to repurchase	$	94,616		$	62,995
Other short-term borrowings		59,500			—
Total short-term borrowings	$	154,116		$	62,995
Maximum month-end outstanding balance	$	154,116		$	78,622
Average outstanding balance during the year		81,061			73,831
Average interest rate during the year		0.93	%		0.49	%
Average interest rate at end of year		0.31	%		0.47	%
Other short-term borrowings:
Federal Funds purchased		19,500			—
FHLB		40,000			—

Union First Market Bank (the “Bank”) maintains Federal funds lines with several correspondent banks; the remaining available balance was $85.5 million and $113.0 million at September 30, 2012 and December 31, 2011, respectively. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $793.2 million and $776.8 million at September 30, 2012 and December 31, 2011, respectively.

Long-term Borrowings

During the first quarter of 2004, the Company’s Statutory Trust I, a wholly owned subsidiary of the Company, issued a Trust Preferred Capital Note of $22.5 million through a pooled underwriting for an acquisition in 2004. The securities have an indexed London Interbank Offer Rate (“LIBOR”) floating rate (three month LIBOR rate plus 2.75%) which adjusts and is payable quarterly. The interest rate at September 30, 2012 was 3.11%. The capital securities were redeemable at par beginning on June 17, 2009 and quarterly thereafter until the securities mature on June 17, 2034. The principal asset of Statutory Trust I is $23.2 million of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital notes. Of the above amount, $696,000 is reflected as the Company’s investment in Statutory Trust I and reported as “Other assets” within the consolidated balance sheet.

During the first quarter of 2006, the Company’s Statutory Trust II, a wholly owned subsidiary of the Company, issued a Trust Preferred Capital Note of $36.0 million through a pooled underwriting for an acquisition in 2006. The securities have a LIBOR-indexed floating rate (three month LIBOR plus 1.40%) that adjusts and is payable quarterly. The interest rate at September 30, 2012 was 1.76%. The capital securities were redeemable at par on June 15, 2011 and quarterly thereafter until the securities mature on June 15, 2036. The principal asset of Statutory Trust II is $37.1 million of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital notes. Of this amount, $1.1 million is reflected as the Company’s investment in Statutory Trust II reported as “Other assets” within the consolidated balance sheet.

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The obligations of the Company with respect to the issuance of the capital securities constitute a full and unconditional guarantee by the Company of the trust’s obligations with respect to the capital securities. Subject to certain exceptions and limitations, the Company may elect from time to time to defer interest payments on the junior subordinated debt securities, which would result in a deferral of distribution payments on the related capital securities and require a deferral of common dividends. No such deferrals have taken place to date.

As part of the acquisition of FMB, the Company assumed subordinated debt with terms of LIBOR plus 1.45% and a maturity date of April 2016. At September 30, 2012 the carrying value of the subordinated debt, net of the purchase accounting discount, was $15.7 million.

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s consolidated balance sheet. In accordance with Accounting Statements Codification (“ASC”) 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings on the Company’s consolidated income statement. Amortization expense for the three and nine months ended September 30, 2012 was $179,000.

As of September 30, 2012, the advances from the FHLB consist of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Adjustable Rate Credit	0.44%	0.80%	8/23/2022	n/a	n/a	$ 65,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	55,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
						$140,000

As of December 31, 2011 the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Convertible	3.60%	5/23/2018	5/23/2013	Once	$65,000
Convertible	3.84%	8/22/2018	8/22/2013	Once	55,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
					$140,000

The carrying value of the loans and securities pledged as collateral for FHLB advances total $978.3 million and $849.5 million as of September 30, 2012 and December 31, 2011, respectively.

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As of September 30, 2012, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Adjustable Rate
	Subordinated Debt		Trust Preferred Capital Notes		FHLB Advances		Prepayment Penalty			Total  Long-term Borrowings
Remaining three months 2012	$	—	$	—	$	—	$	(433	)	$	(433	)
2013		—		—		—		(1,744	)		(1,744	)
2014		—		—		—		(1,787	)		(1,787	)
2015		—		—		—		(1,831	)		(1,831	)
2016		15,747		—		—		(1,882	)		13,865
Thereafter		—		60,310		140,000		(11,810	)		188,500
Total long-term borrowings	$	15,747	$	60,310	$	140,000	$	(19,487	)	$	196,570

7. SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank and a mortgage loan origination business. The community bank business for 2012 includes one subsidiary bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 94 retail locations in Virginia. The mortgage segment provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which subject the Company to only de minimus risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service based. The mortgage business is a fee-based business while the Bank is driven principally by net interest income. The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank segment, due largely to the minimal degree of overlapping geographic markets.

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest at the three month LIBOR rate plus 1.5% basis points, floor of 2%. These transactions are eliminated in the consolidation process. A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

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Information about reportable segments and reconciliation of such information to the consolidated financial statements for three and nine months ended September 30, 2012 and 2011 was as follows (dollars in thousands):

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended September 30, 2012
Net interest income	$	38,428	$	334	$	—		$	38,762
Provision for loan losses		2,400		—		—			2,400
Net interest income after provision for loan losses		36,028		334		—			36,362
Noninterest income		6,750		8,919		(117	)		15,552
Noninterest expenses		30,596		7,839		(117	)		38,318
Income before income taxes		12,182		1,414		—			13,596
Income tax expense		3,415		555		—			3,970
Net income	$	8,767	$	859	$	—		$	9,626
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Three Months Ended September 30, 2011
Net interest income	$	39,208	$	238	$	—		$	39,446
Provision for loan losses		3,600		—		—			3,600
Net interest income after provision for loan losses		35,608		238		—			35,846
Noninterest income		6,665		4,862		(116	)		11,411
Noninterest expenses		30,259		4,361		(116	)		34,504
Income before income taxes		12,014		739		—			12,753
Income tax expense		3,407		275		—			3,682
Net income	$	8,607	$	464	$	—		$	9,071
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457
Nine Months Ended September 30, 2012
Net interest income	$	114,258	$	938	$	—		$	115,196
Provision for loan losses		8,900		—		—			8,900
Net interest income after provision for loan losses		105,358		938		—			106,296
Noninterest income		20,805		21,532		(351	)		41,986
Noninterest expenses		92,357		19,891		(351	)		111,897
Income before income taxes		33,806		2,579		—			36,385
Income tax expense		9,400		1,016		—			10,416
Net income	$	24,406	$	1,563	$	—		$	25,969
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Nine Months Ended September 30, 2011
Net interest income	$	116,862	$	1,007	$	—		$	117,869
Provision for loan losses		14,400		—		—			14,400
Net interest income after provision for loan losses		102,462		1,007		—			103,469
Noninterest income		18,599		14,135		(351	)		32,383
Noninterest expenses		92,342		13,614		(351	)		105,605
Income before income taxes		28,719		1,528		—			30,247
Income tax (benefit) expense		7,593		569		—			8,162
Net income	$	21,126	$	959	$	—		$	22,085
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457

8. RECENT ACCOUNTING PRONOUNCEMENTS

In April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-03, “Transfers and Servicing (Topic 860) – Reconsideration of Effective Control for Repurchase Agreements.” The amendments in this ASU remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and (2) the collateral maintenance implementation guidance related to that criterion. The amendments in this ASU became effective during the quarter ended June 30, 2012 and were applied prospectively to transactions or modifications of existing transactions that occurred on or after the effective date. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.

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In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This ASU is the result of joint efforts by the FASB and International Accounting Standards Board (IASB) to develop a single, converged fair value framework on how (not when) to measure fair value and what disclosures to provide about fair value measurements. The ASU is largely consistent with existing fair value measurement principles in U.S. GAAP (Topic 820), with many of the amendments made to eliminate unnecessary wording differences between U.S. GAAP and International Financial Reporting Standards (IFRS). The amendments are effective for interim and annual periods beginning after December 15, 2011 with prospective application. The Company has included the required disclosures in its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.” The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement of comprehensive income should include the components of net income, a total for net income, the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present all the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The amendments do not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, or the calculation or reporting of earnings per share. The amendments in this ASU were applied retrospectively. The amendments are effective for fiscal years and interim periods within those years beginning after December 15, 2011. The Company has included the required Statements of Comprehensive Income using the two-statement approach in its consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, “Intangible – Goodwill and Other (Topic 350) – Testing Goodwill for Impairment.” The amendments in this ASU permit an entity to first assess qualitative factors related to goodwill to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under the amendments in this ASU, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.

In December 2011, the FASB issued ASU 2011-11, “Balance Sheet (Topic 210) – Disclosures about Offsetting Assets and Liabilities.” This ASU requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not expect the adoption of ASU 2011-11 to have a material impact on its consolidated financial statements.

In December 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220) – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” The amendments are being made to allow the Board time to redeliberate whether to present on the face of the financial statements the effects of

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reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the Board is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company has included the required disclosures in its consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” The amendments in this ASU apply to all entities that have indefinite-lived intangible assets, other than goodwill, reported in their financial statements. The amendments in this ASU provide an entity with the option to make a qualitative assessment about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. The amendments also enhance the consistency of impairment testing guidance among long-lived asset categories by permitting an entity to assess qualitative factors to determine whether it is necessary to calculate the asset’s fair value when testing an indefinite-lived intangible asset for impairment. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption of ASU 2012-02 to have a material impact on its (consolidated) financial statements.

In October 2012, the FASB issued ASU 2012-06, “Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution.” The amendments in this ASU clarify the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. In addition, the amendments should resolve current diversity in practice on the subsequent measurement of these types of indemnification assets. The amendments are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution. The Company does not expect the adoption of ASU 2012-06 to have a material impact on its (consolidated) financial statements.

9. GOODWILL AND INTANGIBLE ASSETS

The Company follows ASC 350, Goodwill and Other Intangible Assets, in accounting for goodwill and intangible assets subsequent to initial recognition. The provisions of this section discontinued the amortization of goodwill and intangible assets with indefinite lives but require an impairment review at least annually and more frequently if certain impairment indicators are evident. Based on the annual testing during the second quarter of each year and the absence of impairment indicators during the quarter ended September 30, 2012, the Company has recorded no impairment charges to date for goodwill or intangible assets.

Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years. The acquired trademark intangible is included as a component of other assets in the consolidated balance sheet.

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Information concerning goodwill and intangible assets is presented in the following table (in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2012
Amortizable core deposit intangibles	$	46,615	$	29,649	$	16,966
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		1,067		133
December 31, 2011
Amortizable core deposit intangibles	$	46,615	$	25,901	$	20,714
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		767		433
September 30, 2011
Amortizable core deposit intangibles	$	46,615	$	24,453	$	22,162
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		667		533

Amortization expense of the core deposit intangibles for the three and nine month periods ended September 30, 2012 totaled $1.2 million and $3.7 million, respectively, compared to $1.5 million and $4.6 million, respectively, in 2011. The Harrisonburg branch core deposit intangible of $9,500 was expensed in the second quarter of 2011. Amortization expense of the trademark intangibles for the three and nine month periods ended September 30, 2012 and 2011 was both $100,000 and $300,000, respectively.

As of September 30, 2012, the estimated remaining amortization expense of core deposit and trademark intangibles is as follows (dollars in thousands):

For the remaining three months of 2012	$	1,288
For the year ending December 31, 2013		3,830
For the year ending December 31, 2014		2,899
For the year ending December 31, 2015		2,461
For the year ending December 31, 2016		1,864
For the year ending December 31, 2017		1,435
Thereafter		3,321
		$ 17,099

10. COMMITMENTS AND CONTINGENCIES

Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payments of fees. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case by case basis.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

At September 30, 2012, Union Mortgage Group, Inc. (“Union Mortgage”), a wholly owned subsidiary of Union First Market Bank, a wholly owned subsidiary of Union First Market Bankshares Corporation, had rate lock commitments to originate mortgage loans and loans held for sale. These commitments to sell loans are designed to mitigate the mortgage company’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale.

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The following table presents the balances of commitments and contingencies (dollars in thousands):

	September 30,		December 31,		September 30,
	2012		2011		2011
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	844,190	$	720,317	$	735,129
Standby letters of credit		46,861		38,068		40,242
Mortgage loan rate lock commitments		172,316		45,820		132,691
Total commitments with off-balance sheet risk	$	1,063,367	$	804,205	$	908,062
Commitments with balance sheet risk:
Loans held for sale	$	141,965	$	74,823	$	61,786
Total other commitments	$	1,205,332	$	879,028	$	969,848

(1) Includes unfunded overdraft protection.

11. SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities as of September 30, 2012 and December 31, 2011 are summarized as follows (dollars in thousands):

			Gross Unrealized
	Amortized Cost		Gains		(Losses)			Estimated Fair Value
September 30, 2012
U.S. government and agency securities	$	2,919	$	120	$	(12	)	$	3,027
Obligations of states and political subdivisions		198,954		15,488		(79	)		214,363
Corporate and other bonds		9,390		275		(408	)		9,257
Mortgage-backed securities		380,790		11,360		(85	)		392,065
Other securities		3,233		122		—			3,355
Total securities	$	595,286	$	27,365	$	(584	)	$	622,067
December 31, 2011
U.S. government and agency securities	$	3,933	$	351	$	—		$	4,284
Obligations of states and political subdivisions		189,117		11,337		(247	)		200,207
Corporate and other bonds		12,839		188		(787	)		12,240
Mortgage-backed securities		390,329		10,434		(445	)		400,318
Other securities		3,044		77		(4	)		3,117
Total securities	$	599,262	$	22,387	$	(1,483	)	$	620,166

Due to restrictions placed upon the Company’s common stock investment in the Federal Reserve Bank of Richmond and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications. The FHLB requires the Bank to maintain stock in an amount equal to 4.5% of outstanding borrowings and a specific percentage of the member’s total assets. The Federal Reserve Bank of Richmond requires the Company to maintain stock with a par value equal to 6% of its outstanding capital. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $6.8 million and $6.7 million and FHLB stock in the amount of $13.9 million as of September 30, 2012 and December 31, 2011.

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The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position and are as follows:

	Less than 12 months					More than 12 months					Total
	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
September 30, 2012
U.S. government and agency securities	$	6	$	(12	)	$	—	$	—		$	6	$	(12	)
Obligations of states and political subdivisions		6,188		(26	)		1,161		(53	)		7,349		(79	)
Mortgage-backed securities		30,511		(85	)		—		—			30,511		(85	)
Corporate bonds and other securities		50		—			1,510		(408	)		1,560		(408	)
Totals	$	36,755	$	(123	)	$	2,671	$	(461	)	$	39,426	$	(584	)
December 31, 2011
Obligations of states and political subdivisions	$	5,429	$	(152	)	$	1,090	$	(95	)	$	6,519	$	(247	)
Mortgage-backed securities		97,203		(445	)		—		—			97,203		(445	)
Corporate bonds and other securities		2,342		(165	)		3,790		(626	)		6,132		(791	)
Totals	$	104,974	$	(762	)	$	4,880	$	(721	)	$	109,854	$	(1,483	)

As of September 30, 2012, there were $2.7 million, or 5 issues, of individual securities that had been in a continuous loss position for more than 12 months. Additionally, these securities had an unrealized loss of $461,000 and consisted of corporate and municipal obligations.

The following table presents the amortized cost and estimated fair value of securities as of September 30, 2012, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2012				December 31, 2011
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less		2,923		2,971	$	6,046	$	6,098
Due after one year through five years		16,191		16,880		18,771		19,408
Due after five years through ten years		71,169		75,804		76,044		80,214
Due after ten years		501,770		523,059		495,357		511,329
Other securities		3,233		3,355		3,044		3,117
Total securities available for sale	$	595,286	$	622,067	$	599,262	$	620,166

Securities with an amortized cost of $202.7 million and $172.1 million as of September 30, 2012 and December 31, 2011, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes.

During each quarter the Company conducts an assessment of the securities portfolio for other-than-temporary impairment (“OTTI”) consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is OTTI if any of the following conditions exists: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the quarter ended September 30, 2012, and in accordance with the guidance, no OTTI was recognized.

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Based on the assessment for the quarter ended September 30, 2011 and in accordance with the guidance, the Company determined that a single issuer Trust Preferred security incurred credit-related OTTI of $400,000, which was recognized in earnings for the quarter ended September 30, 2011. There is a possibility that the Company will sell the security before recovering all unamortized costs. The significant inputs the Company considered in determining the amount of the credit loss are as follows:

• The assessment of security credit rating agencies and research performed by third parties;

• The continued interest payment deferral by the issuer;

• The lack of improving asset quality of the issuer and worsening economic conditions; and

• The security is thinly traded and trading at its historical low, below par.

OTTI recognized for the periods presented is summarized as follow (dollars in thousands):

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2011	$	400
Cumulative credit losses on investment securities		—
Additions for credit losses not previously regognized		—
Cumulative credit losses on investment securities, through September 30, 2012	$	400

12. FAIR VALUE MEASUREMENTS

The Company follows ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:

Level 1	Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Interest rate swap agreement used for interest rate risk management

Interest rate swaps are recorded at fair value on a recurring basis. The Company utilizes an interest rate swap agreement as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for interest rate swaps using standard swap valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using

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Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities.

Securities available for sale

Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity then the security would fall to the lowest level of the hierarchy (Level 3).

The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary modes, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance and rating to incorporate additional spreads to the industry benchmark curves.

The Company uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during our validation as of September 30, 2012 and December 31, 2011.

The carrying value of restricted Federal Reserve Bank of Richmond and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the following table.

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The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	39	$	—	$	39
Securities available for sale:
U.S. government and agency securities		—		3,027		—		3,027
Obligations of states and political subdivisions		—		214,363		—		214,363
Corporate and other bonds		—		9,257		—		9,257
Mortgage-backed securities		—		392,065		—		392,065
Other securities		—		3,355		—		3,355
LIABILITIES
Interest rate swap - loans	$	—	$	39	$	—	$	39
Cash flow hedge - trust		—		4,785		—		4,785
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	66	$	—	$	66
Securities available for sale:
U.S. government and agency securities		—		4,284		—		4,284
Obligations of states and political subdivisions		—		200,207		—		200,207
Corporate and other bonds		—		12,240		—		12,240
Mortgage-backed securities		—		400,318		—		400,318
Other securities		—		3,117		—		3,117
LIABILITIES
Interest rate swap - loans	$	—	$	66	$	—	$	66
Cash flow hedge - trust		—		4,293		—		4,293

Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements.

Loans held for sale

Loans held for sale are carried at the lower of cost or market value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during September 30, 2012 and December 31, 2011. Gains and losses on the sale of loans are recorded within income from the mortgage segment on the Consolidated Statements of Income.

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Impaired loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal, of one year or less, conducted by an independent, licensed appraiser using observable market data (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the property is more than one year old and not solely based on observable market comparables or management determines the fair value of the collateral is further impaired below the appraised value, then a Level 3 valuation is considered to measure the fair value. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income.

Other real estate owned

Fair values of other real estate owned (“OREO”) are carried at the lower of carrying value or fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as Level 2 valuation. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. Total valuation expenses related to OREO properties for September 30, 2012 and December 31, 2011 were $0 and $707,000, respectively.

The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2012 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	141,965	$	—	$	141,965
Impaired loans		—		—		36,555		36,555
Other real estate owned		—		—		34,440		34,440
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	74,823	$	—	$	74,823
Impaired loans		—		—		63,423		63,423
Other real estate owned		—		—		32,263		32,263

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The changes in Level 3 assets measured at estimated fair value on a nonrecurring basis during the nine months ended September 30, 2012 were as follows:

	Fair Value Measurements at September 30, 2012
	Impaired Loans			Other Real Estate Owned
Balance - January 1, 2012	$	63,423		$	32,263
Total gains (losses) realized/unrealized:
Included in earnings		—			(442	)
Additions		25,802			11,766
Sales		—			(9,147	)
Net decrease (1)		(52,670	)		—
Balance - September 30, 2012	$	36,555		$	34,440

(1) Includes payments, upgrades, charge-offs, and foreclosures.

The following table displays quantitative information about Level 3 Fair Value Measurements for September 30, 2012 (dollars in thousands):

	Fair Value Measurements at September 30, 2012
	Fair Value		Valuation Technique(s)		Unobservable Inputs			Weighted Average
ASSETS
Commercial Construction	$	2,922		Market comparables		Discount applied to market comparables	(1)		8	%
Commercial Real Estate - Owner Occupied		2,053		Market comparables		Discount applied to market comparables	(1)		13	%
Commercial Real Estate - Non-Owner Occupied		13,120		Market comparables		Discount applied to market comparables	(1)		7	%
Raw Land and Lots		9,420		Market comparables		Discount applied to market comparables	(1)		4	%
Single Family Investment Real Estate		1,541		Market comparables		Discount applied to market comparables	(1)		2	%
Commercial and Industrial		6,348		Market comparables		Discount applied to market comparables	(1)		5	%
Other (2)		1,151		Market comparables		Discount applied to market comparables	(1)		22	%
Total Impaired Loans		36,555
Other real estate owned		34,440		Market comparables		Discount applied to market comparables	(1)		31	%
Total	$	70,995

⁽¹⁾  A discount percentage is applied based on age of independent appraisals, current market conditions, and experience within the local market.

⁽²⁾  The “Other” category of the impaired loans section from the table above consists of Other Commercial, Consumer Construction, Indirect Marine, HELOCs, and Other Consumer.

ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Cash and cash equivalents

For those short-term instruments, the carrying amount is a reasonable estimate of fair value.

Loans

The fair value of performing loans is estimated by discounting expected future cash flows using a yield curve that is constructed by adding a loan spread to a market yield curve. Loan spreads are based on spreads currently observed in the market for loans of similar type and structure (Level 2). Fair value for impaired loans and their respective level within the fair value hierarchy, are described in the previous disclosure related to fair value measurements of assets that are measured on a nonrecurring basis.

Deposits

The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposits is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities (Level 2).

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Borrowings

The carrying value of the Company’s repurchase agreements is a reasonable estimate of fair value. Other borrowings are discounted using the current yield curve for the same type of borrowing. For borrowings with embedded optionality, a third party source is used to value the instrument (Level 2). The Company validates all third party valuations for borrowings with optionality using Bloomberg’s derivative pricing functions.

Accrued interest

The carrying amounts of accrued interest approximate fair value (Level 2).

Commitments to extend credit and standby letters of credit

The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. At September 30, 2012 and December 31, 2011, the fair value of loan commitments and standby letters of credit was immaterial.

The carrying values and estimated fair values of the Company’s financial instruments as of September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2012 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	62,334	$	62,334	$	—	$	—	$	62,334
Securities available for sale		622,067		—		622,067		—		622,067
Restricted stock		20,687		—		20,687		—		20,687
Loans held for sale		141,965		—		141,965		—		141,965
Net loans		2,868,616		—		2,864,799		36,555		2,901,354
Interest rate swap - loans		39		—		39		—		39
Accrued interest receivable		18,565		—		18,565		—		18,565
LIABILITIES
Deposits	$	3,199,779	$	—	$	3,213,963	$	—	$	3,213,963
Borrowings		350,686		—		332,484		—		332,484
Accrued interest payable		856		—		856		—		856
Cash flow hedge - trust		4,785		—		4,785		—		4,785
Interest rate swap - loans		39		—		39		—		39

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			Fair Value Measurements at December 31, 2011 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	96,659	$	96,659	$	—	$	—	$	96,659
Securities available for sale		620,166		—		620,166		—		620,166
Restricted stock		20,661		—		20,661		—		20,661
Loans held for sale		74,823		—		74,823		—		74,823
Net loans		2,779,113		—		2,731,491		63,423		2,794,914
Interest rate swap - loans		66		—		66		—		66
Accrued interest receivable		16,626		—		16,626		—		16,626
LIABILITIES
Deposits	$	3,175,105	$	—	$	3,191,256	$	—	$	3,191,256
Borrowings		278,686		—		277,374		—		277,374
Accrued interest payable		1,865		—		1,865		—		1,865
Cash flow hedge - trust		4,293		—		4,293		—		4,293
Interest rate swap - loans		66		—		66		—		66

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

13. DERIVATIVES

During the second quarter of 2010, the Company entered into an interest rate swap agreement (the “trust swap”) as part of the management of interest rate risk. The Company designated the trust swap as a cash flow hedge intended to protect against the variability of cash flows associated with the aforementioned Statutory Trust II preferred capital securities. The trust swap hedges the interest rate risk, wherein the Company receives interest of LIBOR from a counterparty and pays a fixed rate of 3.51% to the same counterparty calculated on a notional amount of $36.0 million. The term of the trust swap is six years with a fixed rate that started June 15, 2011. The trust swap was entered into with a counterparty that met the Company’s credit standards and the agreement contains collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant.

Amounts receivable or payable are recognized as accrued under the terms of the agreements. In accordance with ASC 815 Derivatives and Hedging, the trust swap is designated as a cash flow hedge, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. The Company has assessed the effectiveness of the hedging relationship by comparing the changes in cash flows on the designated hedged item. There was no hedge ineffectiveness for this trust swap. At September 30, 2012, the fair value of the trust swap agreement was an unrealized loss of $4.8 million, the amount the Company would have expected to pay if the contract was terminated. The below liability is recorded as a component of other comprehensive income recorded in the Company’s Consolidated Statements of Comprehensive Income.

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Shown below is a summary of the derivative designated as a cash flow hedge at September 30, 2012 and December 31, 2011 (dollars in thousands):

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,785		0.36	%		3.51	%		4.71
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,293		0.58	%		3.51	%		5.46

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with counterparties in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives with fair values reported in other assets and other liabilities. Shown below is a summary regarding loan swap derivative activities at September 30, 2012 and December 31, 2011 (dollars in thousands):

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Receive fixed - pay floating interest rate swaps	2	$	2,137	$	39	$	—		6.15	%		2.81	%		9.84
Pay fixed - receive floating interest rate swaps	2	$	2,137	$	—	$	39		2.81	%		6.15	%		9.84
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Receive fixed - pay floating interest rate swaps	2	$	4,028	$	66	$	—		6.35	%		2.77	%		1.01
Pay fixed - receive floating interest rate swaps	2	$	4,028	$	—	$	66		2.77	%		6.35	%		1.01

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14. OTHER OPERATING EXPENSES

The following table presents the consolidated statement of income line “Other Operating Expenses” broken into greater detail for the three and nine months ended September 30, 2012 and 2011, respectively (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Printing, postage, and supplies	$	814	$	502	$	2,020	$	1,597
Communications expense		783		716		2,246		2,178
Technology and data processing		2,034		2,135		6,411		6,885
Professional services		850		767		2,284		2,310
Marketing and advertising expense		1,241		1,414		4,131		3,909
FDIC assessment premiums and other insurance		593		905		1,912		4,050
Other taxes		746		711		2,262		2,121
Loan related expenses		489		468		1,646		1,433
OREO and related costs (1)		1,035		532		3,273		3,389
Amortization of core deposit premuims		1,313		1,596		4,048		4,974
Acquistion and conversion costs		—		—		—		426
Other expenses		2,070		2,041		6,019		5,619
Total other operating expenses	$	11,968	$	11,787	$	36,252	$	38,891

⁽¹⁾ OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Union First Market Bankshares Corporation

Richmond, Virginia

We have reviewed the accompanying condensed consolidated balance sheets of Union First Market Bankshares Corporation and subsidiaries as of September 30, 2012 and 2011, the related condensed consolidated statements of income and comprehensive income for the three month and nine month periods ended September 30, 2012 and 2011 and the related consolidated changes in stockholders' equity and cash flows for the nine months ended September 30, 2012 and 2011. These condensed financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of Union First Market Bankshares Corporation and subsidiaries as of December 31, 2011, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the year then ended (not presented herein); and in our report dated March 14, 2012, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2011 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Yount, Hyde & Barbour, P.C.

Winchester, Virginia

November 8, 2012

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis is presented to aid the reader in understanding and evaluating the financial condition and results of operations of Union First Market Bankshares Corporation and its subsidiaries (collectively, the “Company”). This discussion and analysis should be read with the consolidated financial statements, the notes to the financial statements, and the other financial data included in this report, as well as the Company’s Annual Report on Form 10-K and management’s discussion and analysis for the year ended December 31, 2011. Highlighted in the discussion are material changes from prior reporting periods and any identifiable trends affecting the Company. Results of operations for the three and nine month periods ended September 30, 2012 and 2011 are not necessarily indicative of results that may be attained for any other period. Amounts are rounded for presentation purposes while some of the percentages presented are computed based on unrounded amounts.

FORWARD-LOOKING STATEMENTS

Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate,” “intend,” “will,” or words of similar meaning or other statements concerning opinions or judgment of the Company and its management about future events. Although the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic and bank industry conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, changes in the stock and bond markets, accounting standards or interpretations of existing standards, mergers and acquisitions, technology, and consumer spending and savings habits. More information is available on the Company’s website, http://investors.bankatunion.com and on the Securities and Exchange Commission’s website, www.sec.gov. The information on the Company’s website is not a part of this Form 10-Q. The Company does not intend or assume any obligation to update or revise any forward-looking statements that may be made from time to time by or on behalf of the Company.

CRITICAL ACCOUNTING POLICIES

General

The accounting and reporting policies of the Company and its subsidiaries are in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to general practices within the banking industry. The Company’s financial position and results of operations are affected by management’s application of accounting policies, including estimates, assumptions and judgments made to arrive at the carrying value of assets and liabilities, and amounts reported for revenues, expenses and related disclosures. Different assumptions in the application of these policies could result in material changes in the Company’s consolidated financial position and/or results of operations.

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The more critical accounting and reporting policies include the Company’s accounting for the allowance for loan losses, mergers and acquisitions goodwill, and intangible assets. The Company’s accounting policies are fundamental to understanding the Company’s consolidated financial position and consolidated results of operations. Accordingly, the Company’s significant accounting policies are discussed in detail in Note 1 “Summary of Significant Accounting Policies” in the “Notes to the Consolidated Financial Statements” contained in Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The following is a summary of the Company’s critical accounting policies that are highly dependent on estimates, assumptions, and judgments.

Allowance for Loan Losses (“ALL”)

The provision for loan losses charged to operations is an amount sufficient to bring the allowance for loan losses to an estimated balance that management considers adequate to absorb potential losses in the portfolio. Loans are charged against the allowance when management believes the collectability of the principal is unlikely. Recoveries of amounts previously charged-off are credited to the allowance. Management's determination of the adequacy of the allowance is based on an evaluation of the composition of the loan portfolio, the value and adequacy of collateral, current economic conditions, historical loan loss experience, and other risk factors. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, particularly those affecting real estate values. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company's allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

The Company performs regular credit reviews of the loan portfolio to review the credit quality and adherence to its underwriting standards. The credit reviews consist of reviews by its Internal Audit group (or, prior to March 1, 2012, its Credit Administration group) and reviews performed by an independent third party. Upon origination each commercial loan is assigned a risk rating ranging from one to nine, with loans closer to one having less risk, and this risk rating scale is our primary credit quality indicator. Consumer loans are generally not risk rated, the primary credit quality indicator for this portfolio segment is delinquency status. The Company has various committees that review and ensure that the allowance for loan losses methodology is in accordance with GAAP and loss factors used appropriately reflect the risk characteristics of the loan portfolio.

The Company’s ALL consists of specific, general and unallocated components.

Specific Reserve Component – The specific component relates to commercial loans that are classified as impaired. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Upon being identified as impaired an allowance is established when the discounted cash flows of the impaired loan is lower than the carrying value of that loan for loans not considered to be collateral dependent. The significant majority of the Company’s impaired loans are collateral dependent. The impairment of collateral dependent loans is measured based on the fair value of the underlying collateral (based on independent appraisals), less selling costs, compared to the carrying value of the loan. The Company obtains independent appraisals from a pre-approved list of independent, third party, appraisal firms located in the market in which the collateral is located. The Company’s approved appraiser list is continuously maintained to ensure the list only includes such appraisers that have the experience, reputation, character, and knowledge of the respective real estate market. At a minimum, it is ascertained that the appraiser is currently licensed in the state in which the property is located, experienced in the appraisal of properties similar to the property being appraised, has knowledge of current real estate market conditions and financing trends, and is reputable. The Company’s internal real estate valuation group performs either a technical or administrative review of all appraisals obtained. A technical review will ensure the overall quality of the appraisal while an administrative review ensures that all of the required components of an appraisal are present. Generally, independent appraisals are updated every 12 to 24 months or as necessary. The Company’s impairment analysis documents the date of the appraisal used in

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the analysis, whether the officer preparing the report deems it current, and, if not, allows for internal valuation adjustments with justification. Adjustments to appraisals generally include discounts for continued market deterioration subsequent to appraisal date. Any adjustments from appraised value to carrying value are documented in the impairment analysis, which is reviewed and approved by senior credit administration officers and the Special Assets Loan Committee. External appraisals are the primary source to value collateral dependent loans; however, the Company may also utilize values obtained through broker price opinions or other valuations sources. These alternative sources of value are used only if deemed to be more representative of value based on updated information regarding collateral resolution. Impairment analyses are updated, reviewed and approved on a quarterly basis at or near the end of each reporting period.

General Reserve Component – The general component covers non-impaired loans and is derived from an estimate of credit losses adjusted for various environmental factors applicable to both commercial and consumer loan segments. The estimate of credit losses is a function of the product of net charge-off historical loss experience to the loan balance of the loan portfolio averaged during the preceding twelve quarters, as management has determined this to adequately reflect the losses inherent in the loan portfolio. The environmental factors consist of national, local and portfolio characteristics and are applied to both the commercial and consumer segments. The following table shows the types of environmental factors management considers:

ENVIRONMENTAL FACTORS
Portfolio	National	Local
Experience and ability of lending team	Interest rates	Level of economic activity
Depth of lending team	Inflation	Unemployment
Pace of loan growth	Unemployment	Competition
Franchise expansion	Gross domestic product	Military/government impact
Execution of loan risk rating process	General market risk and other concerns
Degree of oversight / underwriting standards	Legislative and regulatory environment
Value of real estate serving as collateral
Delinquency levels in portofolio
Charge-off levels in portfolio
Credit concentrations / nature and volume of the portfolio

Unallocated Component – This component may be used to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio. Together, the specific, general, and any unallocated allowance for loan loss represents management’s estimate of losses inherent in the current loan portfolio. Though provisions for loan losses may be based on specific loans, the entire allowance for loan losses is available for any loan management deems necessary to charge-off. At September 30, 2012, there were no material amounts considered unallocated as part of the allowance for loan losses.

Impaired Loans

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. A loan that is classified substandard or worse is considered impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent. The impairment loan policy is the same for each of the seven classes within the commercial portfolio segment.

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For the consumer loan portfolio segment, large groups of smaller balance homogeneous loans are collectively evaluated for impairment. This evaluation subjects each of the Company’s homogenous pools to a historical loss factor derived from net charge-offs experienced over the preceding twelve quarters. The Company applies payments received on impaired loans to principal and interest based on the contractual terms until they are placed on nonaccrual status at which time all payments received are applied to reduce the principal balance and recognition of interest income is terminated as previously discussed.

Mergers and Acquisitions

The Company accounts for its business combinations under the acquisition method of accounting, a cost allocation process which requires the cost of an acquisition to be allocated to the individual assets acquired and liabilities assumed based on their estimated fair values. The acquisition method of accounting requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. To determine the fair values, the Company will continue to rely on third party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. Under the acquisition method of accounting, the Company will identify the acquirer and the closing date and apply applicable recognition principles and conditions. Costs that the Company expects, but is not obligated to incur in the future, to affect its plan to exit an activity of an acquiree or to terminate the employment of or relocate an acquiree's employees are not liabilities at the acquisition date. The Company will not recognize these costs as part of applying the acquisition method. Instead, the Company will recognize these costs in its post-combination financial statements in accordance with other applicable accounting guidance.

Acquisition-related costs are costs the Company incurs to effect a business combination. Those costs include advisory, legal, accounting, valuation, and other professional or consulting fees. Some other examples for the Company include systems conversions, integration planning consultants and advertising costs. The Company will account for acquisition-related costs as expenses in the periods in which the costs are incurred and the services are received, with one exception. The costs to issue debt or equity securities will be recognized in accordance with other applicable accounting guidance. These acquisition-related costs are included within the Consolidated Statements of Income classified within the noninterest expense caption.

NewBridge Bank branch acquisition

On May 20, 2011, the Company completed the purchase of the former NewBridge Bank branch in Harrisonburg, Virginia, assets and liabilities relating to the branch business, and a potential branch site in Waynesboro, Virginia. Under the parties’ agreement, the Company purchased loans of $72.5 million and assumed deposit liabilities of $48.9 million, and purchased the related fixed assets of the branch. The Company operates the acquired bank branch under the name Union First Market Bank (the “Harrisonburg branch”). The Company’s condensed consolidated statements of income include the results of operations of the Harrisonburg branch from the closing date of the acquisition.

In connection with the acquisition, the Company recorded $1.8 million of goodwill and $9,500 of core deposit intangible. The core deposit intangible of $9,500 was expensed at acquisition. The recorded goodwill was allocated to the community banking segment of the Company and is deductible for tax purposes.

The Company acquired the $72.5 million loan portfolio at a fair value discount of $1.7 million. The discount represents expected credit losses, adjustments to market interest rates and liquidity adjustments. The performing loan portfolio fair value estimate was $70.5 million and the impaired loan portfolio fair value estimate was $276,000. The estimated fair value of liabilities assumed was based on the discounted value of contractual cash flows and compared to other securities with similar characteristics and remaining maturities.

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First Market Bank acquisition

On February 1, 2010, the Company completed its acquisition of First Market Bank, FSB (“FMB”) in an all stock transaction. FMB’s common shareholders received 6,273.259 shares of the Company’s common stock in exchange for each share of FMB’s common stock, resulting in the Company issuing 6,701,478 common shares. The Series A preferred shareholder of FMB received 775,795 shares of the Company’s common stock in exchange for all shares of the Series A preferred stock. In connection with the transaction, the Company issued a total of 7,477,273 common shares with an acquisition date fair value of $96.1 million. The Series B and Series C preferred shareholder of FMB received 35,595 shares of the Company’s Series B preferred stock in exchange for all shares of the FMB Series B and Series C preferred stock.

The FMB transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed and consideration exchanged were recorded at estimated fair values on the acquisition date. Assets acquired totaled $1.4 billion, including $981.5 million in net loans and $218.7 million in investment securities. Liabilities assumed were $1.3 billion, including $1.2 billion of deposits. In connection with the acquisition, the Company recorded $1.1 million of goodwill and $26.4 million of core deposit intangible. The core deposit intangible is being amortized over an average of 4.3 years using an accelerated method. In addition, the Company recorded $1.2 million related to a trademark intangible. This is being amortized over a three year time period. Based on the annual testing during the second quarter of each year and the absence of impairment indicators during the quarter ended September 30, 2012, the Company has recorded no impairment charges to date for goodwill or intangible assets.

In many cases, determining the estimated fair value of the acquired assets and assumed liabilities required the Company to estimate cash flows expected to result from those assets and liabilities and to discount those cash flows at appropriate rates of interest. The most significant of these determinations related to the fair valuation of acquired loans. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and other factors, such as prepayments. In accordance with GAAP, there was no carryover of FMB’s or the Harrisonburg branch’s previously established allowance for loan losses. Subsequent decreases in the expected cash flows (credit deterioration) will require the Company to evaluate the need for additions to the Company’s allowance for credit losses. Subsequent improvements in expected cash flows will result in the recognition of additional interest income over the then remaining lives of the loans.

ABOUT UNION FIRST MARKET BANKSHARES CORPORATION

Headquartered in Richmond, Virginia, Union First Market Bankshares Corporation is the holding company for Union First Market Bank, which has 94 branches and more than 150 ATMs throughout Virginia. Non-bank affiliates of the holding company include: Union Investment Services, Inc., which provides full brokerage services; Union Mortgage Group, Inc., which provides a full line of mortgage products; and Union Insurance Group, LLC, which offers various lines of insurance products. Union First Market Bank also owns a non-controlling interest in Johnson Mortgage Company, LLC.

Additional information is available on the Company’s website at http://investors.bankatunion.com. The information contained on the Company’s website is not a part of this report. Shares of the Company’s common stock are traded on the NASDAQ Global Select Market under the symbol UBSH.

RESULTS OF OPERATIONS

Net Income

The Company reported net income of $9.6 million and earnings per share of $0.37 for its third quarter ended September 30, 2012. The quarterly results represent an increase of $1.2 million, or 14.3%, in net income from the most recent quarter and an increase of $555,000, or 6.1%, from the same quarter of the prior year.

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Reported earnings per share of $0.37 for the current quarter represents an increase of $0.05, or 15.6%, from the most recent quarter and $0.04, or 12.1%, from the prior year’s third quarter which included preferred dividends and discount accretion on preferred stock of $528,000.

Third quarter net income increased $1.2 million, or 14.3%, compared to the second quarter. The increase was largely a result of gains on sales of mortgage loans, driven by higher loan production volume and increased net interest income. The increase in net interest income was driven by higher earning asset balances partially offset by the impact of lower net interest margin. In addition, the Company’s provision for loan losses was $600,000 lower than the prior quarter.

Net income for the quarter ended September 30, 2012 increased $555,000, or 6.1%, from the same quarter in the prior year. The increase was principally a result of higher gains on sales of mortgage loans, increased service charges, commissions and fees and a $1.2 million lower provision for loan losses, partially offset by an increase in commission expense related to mortgage loan origination volume. In addition, net interest income decreased as interest income declined at a faster pace than interest expense, a result of lower loan yields, faster prepayments on mortgage backed securities, and cash flows from securities investments reinvested at lower yields.

NET INTEREST INCOME

	Three Months Ended
	Dollars in thousands
	09/30/12			06/30/12			Change			09/30/11			Change
Average interest-earning assets	$	3,671,398		$	3,615,718		$	55,680		$	3,538,752		$	132,646
Interest income	$	46,555		$	46,340		$	215		$	48,673		$	(2,118	)
Yield on interest-earning assets		5.04	%		5.15	%		(11	) bps		5.46	%		(42	) bps
Average interest-bearing liabilities	$	2,925,322		$	2,910,987		$	14,335		$	2,873,721		$	51,601
Interest expense	$	6,740		$	7,215		$	(475	)	$	8,159		$	(1,419	)
Cost of interest-bearing liabilities		0.92	%		1.00	%		(8	) bps		1.13	%		(21	) bps
Net Interest Income (FTE)	$	39,815		$	39,125		$	690		$	40,514		$	(699	)
Net Interest Margin (FTE)		4.31	%		4.36	%		(5	) bps		4.54	%		(23	) bps

On a linked quarter basis, tax-equivalent net interest income was $39.8 million, an increase of $690,000, or 1.8%, from the second quarter of 2012. This increase was principally due to higher loan balances offset by the impact of lower a net interest margin. Third quarter tax-equivalent net interest margin declined by 5 basis points to 4.31% from 4.36% in the most recent quarter. The change in net interest margin was principally attributable to the continued decline in net accretion on the acquired net earning assets (3 bps) and lower investment and loan yields outpacing the reduction in the cost of interest-bearing liabilities (2 bps). Loan yields continue to be negatively affected by competitive pricing and a low rate environment while yields on investment securities were impacted by lower reinvestment rates and faster prepayments related to mortgage-backed securities during the quarter. The cost of interest-bearing deposits declined during the quarter driven by a shift in mix from time deposits to transaction deposits, reductions in deposit rates and lower wholesale borrowing costs.

For the three months ended September 30, 2012, tax-equivalent net interest income decreased $699,000, or 1.7%, when compared to the same period last year. The tax-equivalent net interest margin decreased by 23 basis points to 4.31% from 4.54% in the prior year. This decrease was principally due to the continued decline in accretion on the acquired net earning assets (12 bps) and the decline in interest-earning asset yields exceeding the decrease in interest-bearing liabilities rates (11 bps). Lower interest income was principally due to lower yields on loans as new and renewed loans are originated and repriced at lower rates, faster prepayments on mortgage backed securities, and cash flows from securities investments reinvested at lower yields.

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The Company continues to expect that its net interest margin will decline modestly over the next several quarters as decreases in earning asset yields are projected to outpace declines in interest-bearing liabilities rates.

	Year-over-year results
	Nine Months Ended
	Dollars in thousands
	09/30/12			09/30/11			Change
Average interest-earning assets	$	3,622,057		$	3,494,013		$	128,044
Interest income	$	139,814		$	146,012		$	(6,198	)
Yield on interest-earning assets		5.16	%		5.59	%		(43	) bps
Average interest-bearing liabilities	$	2,915,082		$	2,864,620		$	50,462
Interest expense	$	21,485		$	24,884		$	(3,399	)
Cost of interest-bearing liabilities		0.99	%		1.16	%		(17	) bps
Net Interest Income (FTE)	$	118,329		$	121,128		$	(2,799	)
Net Interest Margin (FTE)		4.36	%		4.63	%		(27	) bps

For the nine months ended September 30, 2012, tax-equivalent net interest income decreased $2.8 million, or 2.3%, when compared to the same period last year. The tax-equivalent net interest margin decreased by 27 basis points to 4.36% from 4.63% in the prior year. The decline in the net interest margin was principally due to the continued decline in accretion on the acquired net earning assets (9 bps) and a decline in income from interest-earning assets outpacing lower costs on interest-bearing liabilities (18 bps). Lower interest-earning asset income was principally due to lower yields on loans and investment securities as new loans and renewed loans are originated and repriced at lower rates, faster prepayments on mortgage backed securities, and cash flows from securities investments are reinvested at lower yields.

Acquisition Activity – Impact on Net Interest Margin

The favorable impact of acquisition accounting fair value adjustments on net interest income was $752,000 ($627,000 – FMB; $125,000 – Harrisonburg branch) and $3.0 million ($2.5 million – FMB; $503,000 – Harrisonburg branch) for the three and nine months ended September 30, 2012, respectively. If not for this favorable impact, the net interest margin for the third quarter would have been 4.23%, compared to 4.25% from the second quarter of 2012 and 4.34% from the third quarter of 2011.

The third quarter and remaining estimated accretion/amortization are reflected in the following table (dollars in thousands):

	Harrisonburg Branch				First Market Bank
	Loan Accretion		Certificates of Deposit		Loan Accretion		Investment Securities		Borrowings			Total
For the quarter ended September 30, 2012	$	122	$	3	$	703	$	46	$	(122	)	$	752
For the remaining three months of 2012		95		2		652		46		(122	)		673
For the years ending:
2013		148		7		2,142		15		(489	)		1,823
2014		37		4		1,511		—		(489	)		1,063
2015		26		—		903		—		(489	)		440
2016		27		—		345		—		(163	)		209
2017		23		—		18		—		—			41
Thereafter		120		—		—		—		—			120

Acquisition Activity – Other Operating Expenses

Acquisition related expenses associated with the acquisition of the Harrisonburg branch were $426,000 for the year ended December 31, 2011 and are recorded in “Other operating expenses” in the Company’s condensed consolidated statements of income. Such costs principally included system conversion and operations integration charges that have been expensed as incurred. There were no acquisition related expenses related to the Harrisonburg branch in 2012. The Company expects no further expenses from the Harrisonburg branch acquisition.

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AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

	For the Three Months Ended September 30,
	2012								2011								2010
	Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	470,563		$	2,848		2.41	%	$	429,780		$	3,148		2.91	%	$	420,394		$	3,176		3.00	%
Tax-exempt		181,292			2,790		6.12	%		167,709			2,726		6.45	%		151,622			2,527		6.61	%
Total securities (2)		651,855			5,638		3.44	%		597,489			5,874		3.90	%		572,016			5,703		3.96	%
Loans, net (3) (4)		2,890,666			40,026		5.51	%		2,831,924			42,323		5.93	%		2,827,451			43,062		6.04	%
Loans held for sale		119,190			887		2.96	%		48,664			454		3.70	%		75,261			675		3.56	%
Federal funds sold		315			0		0.23	%		519			0		0.24	%		12,960			2		0.22	%
Money market investments		(24	)		—		0.00	%		48			—		0.00	%		160			—		0.00	%
Interest-bearing deposits in other banks		9,396			4		0.18	%		60,108			22		0.15	%		35,830			48		0.53	%
Other interest-bearing deposits		—			—		0.00	%		—			—		0.00	%		—			—		0.00	%
Total earning assets		3,671,398			46,555		5.04	%		3,538,752			48,673		5.46	%		3,523,678			49,490		5.57	%
Allowance for loan losses		(41,122	)							(40,320	)							(34,486	)
Total non-earning assets		364,554								378,308								376,057
Total assets	$	3,994,830							$	3,876,740							$	3,865,249
Liabilities and Stockholders’ Equity:
Interest-bearing deposits:
Checking	$	413,753			99		0.10	%	$	383,452			173		0.18	%	$	354,590			196		0.22	%
Money market savings		909,920			757		0.33	%		863,022			1,373		0.63	%		754,238			1,652		0.87	%
Regular savings		201,065			159		0.31	%		176,728			172		0.39	%		152,219			124		0.32	%
Certificates of deposit: (5)
$100,000 and over		528,359			1,979		1.49	%		561,755			2,168		1.53	%		665,980			3,110		1.85	%
Under $100,000		551,663			1,731		1.25	%		598,907			2,037		1.35	%		664,248			2,873		1.72	%
Total interest-bearing deposits		2,604,760			4,725		0.72	%		2,583,864			5,923		0.91	%		2,591,275			7,955		1.22	%
Other borrowings (6)		320,562			2,015		2.50	%		289,857			2,236		3.06	%		323,207			1,836		2.25	%
Total interest-bearing liabilities		2,925,322			6,740		0.92	%		2,873,721			8,159		1.13	%		2,914,482			9,791		1.33	%
Noninterest-bearing liabilities:
Demand deposits		587,478								521,928								489,633
Other liabilities		41,908								32,473								32,008
Total liabilities		3,554,708								3,428,122								3,436,123
Stockholders' equity		440,122								448,618								429,126
Total liabilities and stockholders' equity	$	3,994,830							$	3,876,740							$	3,865,249
Net interest income				$	39,815							$	40,514							$	39,699
Interest rate spread (7)							4.13	%							4.33	%							4.24	%
Interest expense as a percent of average earning assets							0.73	%							0.91	%							1.10	%
Net interest margin (8)							4.31	%							4.54	%							4.47	%

(1) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.

(2) Interest income on securities includes $46 thousand in accretion of the fair market value adjustments related to the acquisition of FMB. Remaining estimated accretion for 2012 is $46 thousand.

(3) Nonaccrual loans are included in average loans outstanding.

(4) Interest income on loans includes $825 thousand in accretion of the fair market value adjustments related to the acquisitions. Remaining estimated accretion for 2012 is $747 thousand.

(5) Interest expense on certificates of deposits includes $3 thousand in accretion of the fair market value adjustments related to the Harrisonburg branch. Remaining estimated accretion for 2012 is $2 thousand.

(6) Interest expense on borrowings includes $122 thousand in amortization of the fair market value adjustments related to the acquisition of FMB. Remaining estimated amortization for 2012 is $122 thousand.

(7) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.

(8) Core net interest margin excludes purchase accounting adjustments and was 4.23% for the quarter ending 9/30/12.

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AVERAGE BALANCES, INCOME AND EXPENSES, YIELDS AND RATES (TAXABLE EQUIVALENT BASIS)

	For the Nine Months Ended September 30,
	2012								2011								2010
	Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)			Average Balance			Interest Income / Expense		Yield / Rate (1)
	(Dollars in thousands)
Assets:
Securities:
Taxable	$	471,255		$	9,488		2.69	%	$	420,743		$	10,405		3.31	%	$	402,771		$	10,218		3.39	%
Tax-exempt		176,536			8,293		6.28	%		166,443			8,145		6.54	%		137,019			6,983		6.81	%
Total securities (2)		647,791			17,781		3.67	%		587,186			18,550		4.22	%		539,790			17,201		4.26	%
Loans, net (3) (4)		2,856,005			119,851		5.61	%		2,822,579			125,920		5.96	%		2,723,904			124,969		6.13	%
Loans held for sale		86,989			2,123		3.26	%		48,366			1,486		4.11	%		60,020			1,838		4.09	%
Federal funds sold		369			1		0.24	%		318			1		0.24	%		16,132			17		0.14	%
Money market investments		8			—		0.00	%		120			—		0.00	%		160			—		0.00	%
Interest-bearing deposits in other banks		30,895			58		0.25	%		35,444			55		0.21	%		37,151			71		0.26	%
Other interest-bearing deposits		—			—		0.00	%		—			—		0.00	%		971			—		0.00	%
Total earning assets		3,622,057			139,814		5.16	%		3,494,013			146,012		5.59	%		3,378,128			144,096		5.69	%
Allowance for loan losses		(40,595	)							(39,701	)							(33,419	)
Total non-earning assets		365,817								384,436								373,398
Total assets	$	3,947,279							$	3,838,748							$	3,718,107
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
Checking	$	415,615			347		0.11	%	$	381,470			489		0.17	%	$	339,910			579		0.23	%
Money market savings		904,068			2,635		0.39	%		838,289			4,343		0.69	%		707,334			4,852		0.92	%
Regular savings		194,729			512		0.35	%		171,113			467		0.36	%		150,326			440		0.39	%
Certificates of deposit: (5)
$100,000 and over		542,174			6,143		1.51	%		577,281			6,868		1.59	%		638,249			8,997		1.88	%
Under $100,000		568,078			5,447		1.28	%		606,532			6,607		1.46	%		642,657			8,188		1.70	%
Total interest-bearing deposits		2,624,664			15,084		0.77	%		2,574,685			18,774		0.97	%		2,478,476			23,056		1.24	%
Other borrowings (6)		290,418			6,401		2.94	%		289,935			6,110		2.82	%		340,474			5,648		2.22	%
Total interest-bearing liabilities		2,915,082			21,485		0.99	%		2,864,620			24,884		1.16	%		2,818,950			28,704		1.36	%
Noninterest-bearing liabilities:
Demand deposits		561,992								504,662								459,015
Other liabilities		38,067								28,945								28,341
Total liabilities		3,515,141								3,398,227								3,306,306
Stockholders’ equity		432,138								440,521								411,801
Total liabilities and stockholders’ equity	$	3,947,279							$	3,838,748							$	3,718,107
Net interest income				$	118,329							$	121,128							$	115,392
Interest rate spread (7)							4.17	%							4.43	%							4.33	%
Interest expense as a percent of average earning assets							0.79	%							0.95	%							1.13	%
Net interest margin (8)							4.36	%							4.63	%							4.56	%

(1) Rates and yields are annualized and calculated from actual, not rounded amounts in thousands, which appear above.

(2) Interest income on securities includes $154 thousand in accretion of the fair market value adjustments related to the acquisition of FMB. Remaining estimated accretion for 2012 is $46 thousand.

(3) Nonaccrual loans are included in average loans outstanding.

(4) Interest income on loans includes $3.0 million in accretion of the fair market value adjustments related to the acquisitions. Remaining estimated accretion for 2012 is $747 thousand.

(5) Interest expense on certificates of deposits includes $231 thousand in accretion of the fair market value adjustments related to the acquisitions. Remaining estimated accretion for 2012 is $2 thousand.

(6) Interest expense on borrowings includes $366 thousand in amortization of the fair market value adjustments related to the acquisition of FMB. Remaining estimated amortization for 2012 is $122 thousand.

(7) Income and yields are reported on a taxable equivalent basis using the statutory federal corporate tax rate of 35%.

(8) Core net interest margin excludes purchase accounting adjustments and was 4.25% for the nine months ending 9/30/12.

- 48 -

Provision for Loan Losses

The provision for loan losses for the current quarter was $2.4 million, a decrease of $600,000 from the second quarter and a decline of $1.2 million from the same quarter a year ago. The lower provision is largely due to the charge off of loans that had been reserved for in earlier periods. The current level of the allowance for loan losses reflects specific reserves related to nonperforming loans, current risk ratings on loans, net charge-off activity, loan growth, delinquency trends, and other credit risk factors that the Company considers in assessing the adequacy of the allowance for loan losses.

The allowance for loan losses as a percentage of the total loan portfolio was 1.37% at September 30, 2012, 1.42% at June 30, 2012, and 1.47% at September 30, 2011. The decrease in the allowance and related ratio was primarily attributable to the charge off of loans specifically reserved for in prior periods. In acquisition accounting, there is no carryover of previously established allowance for loan losses. The allowance for loan losses as a percentage of the total loan portfolio, adjusted for loans acquired in the FMB and Harrisonburg branch acquisitions, was 1.66% at September 30, 2012, a decrease from 1.74% at June 30, 2012 and 1.94% from a year ago. The allowance for loan losses expressed as a percentage of nonaccrual loans significantly improved, as it increased from 104.63% at June 30, 2012 and from 79.46% at September 30, 2011 to 124.05% at September 30, 2012. The rise in the coverage ratio, which is at the highest level since the fourth quarter of 2009, reflects management’s efforts to work through problem credits.

NONINTEREST INCOME

	For the Three Months Ended
	Dollars in thouands
	09/30/12			06/30/12		$			%			09/30/11			$			%
Noninterest income:
Service charges on deposit accounts	$	2,222		$	2,291		(69	)		-3.0	%	$	2,294		$	(72	)		-3.1	%
Other service charges, commissions and fees		3,655			3,627		28			0.8	%		3,254			401			12.3	%
Losses (gains) on securities transactions, net		(1	)		10		(11	)		NM			499			(500	)		NM
Other-than-temporary impairment losses		—			—		—			0.0	%		(400	)		400			NM
Gains on sales of loans		8,918			7,315		1,603			21.9	%		4,861			4,057			83.5	%
Gains (losses) on bank premises, net		(309	)		374		(683	)		NM			(16	)		(293	)		NM
Other operating income		1,067			972		95			9.8	%		919			148			16.1	%
Total noninterest income	$	15,552		$	14,589	$	963			6.6	%	$	11,411		$	4,141			36.3	%

NM - Not Meaningful

On a linked quarter basis, noninterest income increased $963,000, or 6.6%, to $15.6 million from $14.6 million in the second quarter. Of this increase, gains on sales of mortgage loans increased $1.6 million or 21.9%, driven by an increase in loan origination volume as mortgage rates remain attractive at historic lows. Gains on bank premises decreased $683,000 largely due to the sale of a former branch building at a gain in the prior quarter, and a write down on a former branch location in the current quarter. Service charges on deposit accounts and other account fees were largely unchanged from the prior quarter. Excluding mortgage segment operations and the impact of current and prior period bank property sales, noninterest income was comparatively unchanged, increasing 0.7%.

For the quarter ended September 30, 2012, noninterest income increased $4.1 million, or 36.3%, to $15.6 million from $11.4 million in the prior year’s third quarter. Gains on sales of mortgage loans increased $4.1 million, or 83.5%, due to higher origination volume, a result of additional loan originators hired in 2012 and historically low interest rates. Service charges on deposit accounts and other account fees increased $329,000 or 5.9%, driven by higher interchange fee income and higher brokerage commissions. Gains on securities transactions decreased $500,000 as a result of a gain on the sale of municipal securities in the prior year. Also, an other-than-temporary impairment charge of $400,000 related to a single issuer Trust Preferred security was recorded in the prior year. Gains on bank premises decreased $309,000 largely due to a write down of a former branch building during the current quarter. Excluding the mortgage segment operations and the impact of prior period securities transactions and bank premises transactions, noninterest income increased $478,000, or 7.3%, from the same period a year ago.

- 49 -

	For the Nine Months Ended
	Dollars in thousands
	09/30/12		09/30/11			$			%
Noninterest income:
Service charges on deposit accounts	$	6,643	$	6,568			75			1.1	%
Other service charges, commissions and fees		10,692		9,529			1,163			12.2	%
Losses (gains) on securities transactions, net		4		483			(479	)		NM
Other-than-temporary impairment losses		—		(400	)		400			NM
Gains on sales of loans		21,529		14,132			7,397			52.3	%
Gains (losses) on bank premises, net		34		(644	)		678			NM
Other operating income		3,084		2,715			369			13.6	%
Total noninterest income	$	41,986	$	32,383		$	9,603			29.7	%

NM - Not Meaningful

For the nine months ending September 30, 2012, noninterest income increased $9.6 million, or 29.7%, to $42.0 million, from $32.4 million a year ago. Gains on sales of loans in the mortgage segment increased $7.4 million driven by an increase in loan origination volume, a result of additional loan originators hired in 2012 and historically low interest rates. Service charges on deposit accounts and other account fees increased $1.2 million primarily related to higher interchange fee income, higher brokerage commissions, and higher ATM fee income. In addition, gains on bank premises increased $678,000 as the Company sold a former branch building and recorded a loss on the sale of $626,000 during 2011. Gains on securities transactions decreased $479,000 as a result of a gain on the sale of municipal securities in the prior year. Also, an other-than-temporary loss of $400,000 related to a single issuer Trust Preferred security was recorded in the prior year. Excluding the mortgage segment operations, prior period securities transactions, and the impact of the bank premises related transactions, noninterest income increased $1.6 million or 8.4%, from the same period a year ago.

NONINTEREST EXPENSE

	For the Three Months Ended
	Dollars in thousands
	09/30/12			06/30/12			$			%			09/30/11			$			%
Noninterest expense:
Salaries and benefits	$	21,279		$	20,418		$	861			4.2	%	$	18,076		$	3,203			17.7	%
Occupancy expenses		3,262			3,092			170			5.5	%		2,885			377			13.1	%
Furniture and equipment expenses		1,809			1,868			(59	)		-3.2	%		1,756			53			3.0	%
OREO and related costs (1)		1,036			1,310			(274	)		-20.9	%		532			504			94.7	%
Other operating expenses		10,932			11,256			(324	)		-2.9	%		11,255			(323	)		-2.9	%
Total noninterest expense	$	38,318		$	37,944		$	374			1.0	%	$	34,504			3,814			11.1	%
Mortgage segment operations	$	(7,839	)	$	(6,820	)	$	(1,019	)		14.9	%	$	(4,361	)	$	(3,478	)		79.8	%
Intercompany eliminations		117			117			—			0.0	%		116			1			0.9	%
	$	30,596		$	31,241		$	(645	)		-2.1	%	$	30,259		$	337			1.1	%

NM - Not Meaningful

⁽¹⁾  OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses

On a linked quarter basis, noninterest expense increased $374,000, or 1.0%, to $38.3 million from $37.9 million when compared to the second quarter. This increase was primarily driven by salaries and benefit expense, which increased $861,000 due to higher commission expense related to increased loan origination volume in the mortgage segment. Offsetting this increase was a decline in other operating expenses of $324,000, which included lower marketing and advertising expenses, lower employee travel costs, and lower account processing expenses. In addition, other real estate owned (“OREO”) and related costs declined $274,000, or 20.9%, due to the Company’s continued proactive diligence in resolving problem credits. Excluding the mortgage segment operations, noninterest expense declined $645,000 or 2.1% compared to the second quarter.

- 50 -

For the quarter ended September 30, 2012, noninterest expense increased $3.8 million, or 11.1%, to $38.3 million from $34.5 million for the third quarter of 2011. Salaries and benefits expenses increased $3.2 million primarily related to increased mortgage origination volume driven commissions and the costs associated with the addition of mortgage loan originators and support personnel in 2012. Occupancy expenses increased $377,000 primarily driven by increased mortgage office space. OREO related costs increased $504,000 from the prior year’s third quarter primarily as a result of current quarter losses on the sale of OREO compared to OREO gains recorded in the prior year. These increases were partially offset by lower other operating expenses of $323,000, related to lower Federal Deposit Insurance Corporation (“FDIC”) insurance expense and declining amortization on the acquired deposit portfolio. Excluding the mortgage segment operations and prior year conversion costs, noninterest expense increased $337,000, or 1.1%, compared to the third quarter of 2011.

	For the Nine Months Ended
	Dollars in thousands
	09/30/12			09/30/11			$			%
Noninterest expense:
Salaries and benefits	$	61,204		$	53,310		$	7,894			14.8	%
Occupancy expenses		9,001			8,307			694			8.4	%
Furniture and equipment expenses		5,440			5,097			343			6.7	%
OREO and related costs (1)		3,273			3,389			(115	)		-3.4	%
Other operating expenses		32,979			35,502			(2,524	)		-7.1	%
Total noninterest expense	$	111,897		$	105,605			6,292			6.0	%
Mortgage segment operations	$	(19,891	)	$	(13,614	)	$	(6,277	)		46.1	%
Acquisition and conversion costs		—			(426	)		426			NM
Intercompany eliminations		351			351			—			0.0	%
	$	92,357		$	91,916		$	441			0.5	%

NM - Not Meaningful

⁽¹⁾  OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses

For the nine months ending September 30, 2012, noninterest expense increased $6.3 million, or 6.0% to $111.9 million, from $105.6 million a year ago. Salaries and benefits expense increased $7.9 million due to higher mortgage loan origination related commission expense, the addition of mortgage loan originators and support personnel hired in 2012, and group insurance cost increases,. Occupancy costs increased $694,000 due to bank branch rent increases and additional office space in the mortgage segment, and furniture and equipment expense increased $343,000, primarily related to equipment maintenance contracts and software amortization. Partially offsetting these cost increases was a decrease in other operating expenses of $2.5 million, or 7.1%. Included in the reduction of other operating expenses was a $2.1 million reduction in FDIC insurance due to change in base assessment and rate, lower amortization on the acquired deposit portfolio of $926,000, and a decrease in conversion costs of $426,000 related to acquisition activity during the prior year. Excluding the mortgage segment operations and prior year conversion costs, noninterest expense increased $441,000, or 0.5%, compared to the same period in 2011.

Community Bank Segment

On a linked quarter basis, net income increased $817,000, or 10.3%, from $8.0 million to $8.8 million in the prior quarter. Net interest income was $38.4 million, an increase of $635,000, or 1.7%, from the second quarter of 2012. This increase was principally due to higher loan balances offset by the impact of a lower net interest margin. Loan yields continue to be negatively affected by competitive pricing and a low rate environment while yields on investment securities were impacted by lower reinvestment rates and faster prepayments related to mortgage-backed securities during the quarter. In addition, the Company’s provision for loan losses was $600,000 lower than the prior quarter.

Noninterest income decreased $641,000, or 8.7%, to $6.8 million from $7.4 million in the second quarter. The decline was due to the sale of a former branch building at a gain in the prior quarter, and a write down on a former branch location in the current quarter.

- 51 -

Noninterest expense decreased $645,000, or 2.1%, to $30.6 million from $31.2 million when compared to the second quarter. Primarily driving this decrease was a decline in other operating expenses of $539,000 which included lower marketing and advertising expenses, lower employee travel costs, and lower account processing expenses.

For the three months ended September 30, 2012, net income increased $160,000 or 1.9%, from $8.6 million to $8.8 million when compared to the same period last year. Net interest income decreased $781,000, or 2.0% during the same period and was principally due to the continued decline in accretion on the acquired net earning assets and the decline in interest-earning asset yields exceeding the decrease in interest-bearing liabilities rates. In addition, the Company’s provision for loan losses was $1.2 million lower compared to the same period last year.

Noninterest income was relatively unchanged, increasing $86,000, or 1.3%, to $6.8 million from $6.7 million in the prior year’s third quarter. Service charges on deposit accounts and other account fees increased $329,000 or 5.9%, driven by higher interchange fee income and higher brokerage commissions. Gains on securities transactions decreased $500,000 as a result of a gain on the sale of municipal securities in the prior year. Also, an other-than-temporary loss of $400,000 related to a single issuer Trust Preferred security that was recorded in the same period. Gains on bank premises decreased $293,000 largely due a write down on a former branch location during the current quarter.

Noninterest expense increased $337,000, or 1.1%, to $30.6 million from $30.3 million for the third quarter of 2011. Primarily driving the increase was higher occupancy costs and OREO and related costs partially offset by lower FDIC insurance expense and declining amortization on the acquired deposit portfolio.

For the nine months ended September 30, 2012, net income increased $3.3 million, or 15.5%, from $21.1 million to $24.6 million when compared to the prior year. Net interest income decreased $2.6 million, or 2.2%, during the same period, principally due to the continued decline in accretion on the acquired net earning assets and a decline in income from interest-earning assets outpacing lower costs on interest-bearing liabilities. In addition, the Company’s provision for loan losses was $5.5 million lower compared to the same period last year.

Noninterest income increased $2.2 million, or 11.9%, to $20.8 million, from $18.6 million a year ago. Service charges on deposit accounts and other account fees increased $1.2 million primarily related to higher interchange fee income, higher brokerage commissions, and higher ATM fee income. In addition, gains on bank premises increased $678,000 as the Company sold a former branch building and recorded a loss on the sale of $626,000 during 2011. Gains on securities transactions decreased $479,000 as a result of a gain on the sale of municipal securities in the prior year. Also, the Company incurred an other-than-temporary impairment charge of $400,000 related to a single issuer Trust Preferred security recorded in the prior year.

Noninterest expense was comparatively unchanged for both periods at $92.3 million. Salaries and benefits expense increased $2.3 million due to higher group insurance cost increases and annual merit increases, and occupancy costs increased $510,000 due to bank branch rent increases. Offsetting these increases were a $2.1 million reduction in FDIC insurance due to change in base assessment and rate, lower amortization on the acquired deposit portfolio of $926,000, and a decrease in conversion costs of $426,000 related to acquisition activity during the prior year.

Mortgage Segment

On a linked quarter basis, the mortgage segment net income for the third quarter increased $389,000, or 82.8%, from $470,000 in the second quarter to $859,000. In early 2012, the Company hired additional loan originators and support personnel who were formerly employed by a national mortgage company that exited the mortgage origination business. As new originators have increased their production, aided by historically low interest rates, mortgage loan originations increased by $65.7 million or 25.5% in the current quarter to $323.1 million from $257.4 million in the second quarter. As a result, gains on the sale of loans increased $1.6 million, or 21.9% to $8.9 million. Salary and benefit expenses increased $1.0 million, or 18.9% to $6.4

- 52 -

million, primarily due to commission expenses related to the increased loan volume levels. Operating expenses increased $105,000, or 35.5%, from the prior quarter due to increased rental expense related to mortgage offices added in 2012. Refinanced loans represented 57.6% of the originations during the third quarter compared to 45.1% during the second quarter.

For the three months ended September 30, 2012, the mortgage segment net income increased $396,000 or 85.5% from $463,000 to $859,000 compared to the same period last year. Originations increased by $147.6 million, or 84.1%, to $323.1 million from $175.5 million due to the additions in production personnel described above and the sustained low interest rate environment which resulted in increased gains on the sale of loans of $4.1 million, or 83.5%, over the same period last year. Salaries and benefits increased $3.1 million, or 93.8%, as a result of personnel additions and higher commissions related to the growth in mortgage loan originations. Refinanced loans represented 57.6% of originations during the third quarter of 2012 compared to 37.5% during the same period a year ago.

For the nine months ended September 30, 2012, the mortgage segment net income increased $605,000, or 63.1%, to $1.6 million from $958,000 during the same period last year. Originations increased by $291.5 million or 61.6% from $472.9 million to $764.4 million during the same period last year due to the addition of mortgage loan originators in 2012 and a sustained low interest rate environment. Gains on sales of loans increased $7.4 million, or 52.3%, while salary and benefit expenses increased $5.6 million, or 53.7%, primarily due to commissions related to the increased loan production. Refinanced loans represented 53.1% of originations during the first nine months of the year compared to 31.6% during the same period a year ago.

Income Taxes

The provision for income taxes is based upon the results of operations, adjusted for the effect of certain tax-exempt income and non-deductible expenses. In addition, certain items of income and expense are reported in different periods for financial reporting and tax return purposes. The tax effects of these temporary differences are recognized currently in the deferred income tax provision or benefit. Deferred tax assets or liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the applicable enacted marginal tax rate.

The Company must also evaluate the likelihood that deferred tax assets will be recovered from future taxable income. If any such assets are not likely to be recovered, a valuation allowance must be recognized. The Company has determined that a valuation allowance is not required for deferred tax assets as of September 30, 2012. The assessment of the carrying value of deferred tax assets is based on certain assumptions, changes in which could have a material impact on the Company’s financial statements.

The effective tax rate for the three and nine months ended September 30, 2012 and 2011 was 29.2% and 28.6%, and 28.9% and 27.0%, respectively.

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BALANCE SHEET

At September 30, 2012, total assets were $4.0 billion, an increase of $113.7 million compared to the third quarter of 2011, and an increase of $121.1 million from December 31, 2011. At September 30, 2012, total cash and cash equivalents were $62.3 million, a decrease of $87.4 million from September 30, 2011, and a decrease of $34.3 million from December 31, 2011. At September 30, 2012, investment in securities decreased $37.4 million when compared to the same period of the prior year and increased $1.9 million from December 31, 2011. At September 30, 2012, loans (net of unearned income) were $2.9 billion, an increase of $90.2 million, or 3.2% (4.3% on an annualized basis), from September 30, 2011, and an increase of $89.9 million, or 3.2% (4.3% on an annualized basis), from December 31, 2011. Mortgage loans held for sale were $142.0 million, an increase of $80.2 million when compared to the same quarter of the prior year, and an increase of $67.1 million from December 31, 2011, which was primarily due to the increase in origination volume due to the impact of the favorable rate environment and the addition of mortgage loan originators during 2012.

As of September 30, 2012, total deposits were $3.2 billion, an increase of $64.9 million, or 2.1%, when compared to September 30, 2011 and an increase of $24.7 million, or 0.8%, when compared to December 31, 2011. Total short-term borrowings, including FHLB borrowings and repurchase agreements, increased $83.7 million from September 30, 2011 and increased $91.1 million from December 31, 2011, as the Company relied on short-term borrowings to fund loan growth and customer preference for repurchase agreements increased. As of September 30, 2012, long-term borrowings declined $18.9 million and $19.1 million when compared to September 30, 2011 and December 31, 2011. During the current quarter, the Company modified its fixed rate convertible Federal Home Loan Bank of Atlanta (“FHLB”) advances to floating rate advances, which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification, the Company incurred a prepayment penalty of $19.6 million on the original advances which is being amortized, as a component of interest expense on borrowing, over the life of the advances. The prepayment amount is reported as a component of long-term borrowings in the Company’s consolidated balance sheet.

The Company had a ratio of total capital to risk-weighted assets of 15.00% and 15.36% on September 30, 2012 and 2011, respectively. The Company’s ratio of Tier 1 capital to risk-weighted assets was 13.44% and 13.71% at September 30, 2012 and 2011, respectively, exceeding the definition of “well capitalized” for regulatory purposes. During the fourth quarter of 2011, the Company paid the U.S.Treasury $35.7 million to redeem the Preferred Stock issued to the U.S. Treasury and assumed in the FMB acquisition. This redemption caused the Company’s total capital and Tier 1 capital to risk-weighted assets ratios to decline from the prior year. In addition, the Company’s review of the regulatory risk weightings of the mortgage loans held for sale during the current quarter resulted in a reduction of risk weighted assets. The impact of this change was not considered to be material to the Company’s regulatory capital ratios. The Company’s common equity to asset ratios at September 30, 2012 and 2011 were 11.00% and 10.63%, respectively, while its tangible common equity to tangible assets ratio increased to 9.27% from 8.74% at September 30, 2011.

Securities

As of September 30, 2012, the Company maintained a diversified municipal bond portfolio with approximately 74% of its holdings in general obligation issues and the remainder backed by revenue bonds. Issuances within the Commonwealth of Virginia represented 11% and the State of Texas represented 22% of the municipal portfolio. No other state had a concentration above 10%. Approximately 88% of municipal holdings are considered investment grade by Moody’s or Standard & Poor. The non-investment grade securities are principally insured Texas municipalities with no underlying rating. When purchasing municipal securities, the Company focuses on strong underlying ratings for general obligation issuers or bonds backed by essential service revenues.

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Liquidity

Liquidity represents an institution’s ability to meet present and future financial obligations through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. Liquid assets include cash, interest-bearing deposits with banks, money market investments, Federal funds sold, securities available for sale, loans held for sale and loans maturing or re-pricing within one year. Additional sources of liquidity available to the Company include its capacity to borrow additional funds when necessary through Federal funds lines with several correspondent banks, a line of credit with the FHLB, and a corporate line of credit with a large correspondent bank. Management considers the Company’s overall liquidity to be sufficient to satisfy its depositors’ requirements and to meet its customers’ credit needs.

As of September 30, 2012, cash, interest-bearing deposits in other banks, money market investments, Federal funds sold, loans held for sale, investment securities and loans that mature within one year totaled $1.2 billion, or 33.7%, of total earning assets. As of September 30, 2012, approximately $981 million, or 33.7%, of total loans are scheduled to mature within one year. In addition to deposits, the Company utilizes Federal funds purchased, FHLB advances, and customer repurchase agreements to fund the growth in its loan portfolio, securities purchases, and periodically, wholesale leverage transactions.

Loan Portfolio

The following table presents the Company’s composition of loans, net of unearned income in dollar amounts and as a percentage of total gross loans (dollars in thousands) as of:

	September 30,		% of Total			December 31,		% of Total			September 30,		% of Total
	2012		Loans			2011		Loans			2011		Loans
Loans secured by real estate:
Residential 1-4 family	$	449,032		15.4	%	$	447,544		15.9	%	$	452,027		16.0	%
Commercial		1,034,954		35.6	%		985,934		34.9	%		967,662		34.4	%
Construction, land development and other land loans		466,330		16.0	%		444,739		15.8	%		454,774		16.1	%
Second mortgages		48,912		1.7	%		55,630		2.0	%		59,579		2.1	%
Equity lines of credit		309,691		10.6	%		304,320		10.8	%		304,181		10.8	%
Multifamily		141,092		4.9	%		108,260		3.8	%		103,018		3.7	%
Farm land		23,815		0.8	%		26,962		1.0	%		27,336		1.0	%
Total real estate loans		2,473,826		85.0	%		2,373,389		84.2	%		2,368,577		84.1	%
Commercial Loans		174,121		6.0	%		169,695		6.0	%		158,852		5.6	%
Consumer installment loans
Personal		226,102		7.8	%		241,753		8.6	%		253,216		9.0	%
Credit cards		20,332		0.7	%		19,006		0.7	%		17,835		0.6	%
Total consumer installment loans		246,434		8.5	%		260,759		9.3	%		271,051		9.6	%
All other loans		14,129		0.5	%		14,740		0.5	%		19,862		0.7	%
Gross loans	$	2,908,510		100.0	%	$	2,818,583		100.0	%	$	2,818,342		100.0	%

As reflected in the loan table, at September 30, 2012, the largest component of the Company’s loan portfolio consisted of real estate loans, concentrated in commercial, construction and residential 1-4 family. The risks attributable to these concentrations are mitigated by the Company’s credit underwriting and monitoring processes, including oversight by a centralized credit administration function and credit policy and risk management committee, as well as seasoned bankers’ focusing their lending to borrowers with proven track records in markets with which the Company is familiar.

Asset Quality

Overview

During the third quarter, the Company continued to experience improvement in asset quality. Improving market conditions in the Company’s local markets led to a reduction in both OREO and nonaccrual loans, which are at their lowest levels since the fourth quarter of 2009. The Company’s reduction in

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nonperforming assets and troubled debt restructurings, favorable trends in provisions for loan losses, and decreased allowance to total loans ratio, demonstrate that its diligent efforts to improve asset quality are having a positive impact. The allowance to nonperforming loans coverage ratio has continued to increase significantly and is at its highest level since the fourth quarter of 2009. The magnitude of any change in the real estate market and its impact on the Company is still largely dependent upon continued recovery of commercial real estate and residential housing and the pace at which the local economies in the Company’s operating markets improve.

Loans obtained in connection with the FMB and branch acquisitions have been accounted for in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations, and/or ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC 310-30”), if the loans had experienced deterioration of credit quality at the time of acquisition. Both require that acquired loans be recorded at fair value and prohibit the carryover of the related allowance for loan losses. Determining the fair value of the acquired loans required estimating cash flows expected to be collected on the loans. Because ASC 310-30 loans (i.e., impaired loans) have been recorded at fair value, such loans are not classified as nonaccrual or past due even though some payments may be contractually past due. If there is further deterioration of credit quality on these acquired loans, the deterioration will be reflected through the allowance process and there will be no additional fair value adjustment.

Troubled Debt Restructurings (“TDRs”)

On July 1, 2011 the Company adopted the amendments in Accounting Standards Update (“ASU”) No. 2011-02 Determination of Whether a Restructuring is a Troubled Debt Restructuring (“ASU 2011-02”). The total recorded investment in TDRs as of September 30, 2012 was $63.8 million, a decrease of $16.4 million, or 20.5%, from $80.2 million at June 30, 2012 and a decline of $52.6 million, or 45.2%, from $116.4 million at September 30, 2011. Of the $63.8 million of TDRs at September 30, 2012, $51.9 million, or 81.4%, were considered performing while the remaining $11.9 million were considered nonperforming. The decline in the TDR balance from the prior quarter is attributable to $11.0 million being removed from TDR status and $6.4 million in net payments, partially offset by additions of $1.0 million. Loans removed from TDR status represent restructured loans with a market rate of interest at the time of the restructuring, which were performing in accordance with their modified terms for a consecutive twelve month period and that were no longer considered impaired. The TDR activity during the quarter did not have a material impact on the Company’s allowance for loan losses, financial condition, or results of operations.

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The following table provides a summary, by class and modification type, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2012 (dollars in thousands):

	Performing						Nonperforming						Total
	No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment
Modified to Interest Only
Commercial:
Commercial Real Estate - Non-Owner Occupied		2	$	610	$	—		1	$	208	$	—		3	$	818	$	—
Raw Land and Lots		3		260		—		1		341		—		4		601		—
Single Family Investment Real Estate		2		176		—		1		88		—		3		264		—
Consumer:
Mortgage		1		391		—		—		—		—		1		391		—
Indirect Marine		—		—		—		1		283		—		1		283		—
Total modified to interest only		8	$	1,437	$	—		4	$	920	$	—		12	$	2,357	$	—
Term Modification, at a market rate
Commercial:
Commercial Construction		6	$	6,559	$	169		1	$	709	$	—		7	$	7,268	$	169
Commercial Real Estate - Owner Occupied		4		2,049		—		1		896		—		5		2,945		—
Commercial Real Estate - Non-Owner Occupied		6		10,082		29		—		—		—		6		10,082		29
Raw Land and Lots		5		18,323		1		—		—		—		5		18,323		1
Single Family Investment Real Estate		2		287		—		—		—		—		2		287		—
Commercial and Industrial		4		774		—		7		1,284		—		11		2,058		—
Other Commercial		1		236		—		—		—		—		1		236		—
Consumer:
Mortgage		5		800		—		1		202		—		6		1,002		—
Other Consumer		2		85		—		1		197		—		3		282		—
Total term modification, at a market rate		35	$	39,195	$	199		11	$	3,288	$	—		46	$	42,483	$	199
Term Modification, below market rate
Commercial:
Commercial Construction		—	$	—	$	—		3	$	3,551	$	—		3	$	3,551	$	—
Commercial Real Estate - Owner Occupied		4		1,007		—		2		188		—		6		1,195		—
Commercial Real Estate - Non-Owner Occupied		—		—		—		—		—		—		—		—		—
Raw Land and Lots		6		6,691		—		2		3,519		—		8		10,210		—
Single Family Investment Real Estate		1		385		—		1		345		—		2		730		—
Commercial and Industrial		2		329		—		—		—		—		2		329		—
Consumer:
Mortgage		1		499		—		—		—		—		1		499		—
Other Consumer		—		—		—		1		69		—		1		69		—
Total term modification, below market rate		14	$	8,911	$	—		9	$	7,672	$	—		23	$	16,583	$	—
Interest Rate Modification, below market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied		2	$	2,390	$	—		—	$	—	$	—		2	$	2,390	$	—
Total interest rate modification, below market rate		2	$	2,390	$	—		—	$	—	$	—		2	$	2,390	$	—
Total		59	$	51,933	$	199		24	$	11,880	$	—		83	$	63,813	$	199

Nonperforming Assets (“NPAs”)

At September 30, 2012, nonperforming assets totaled $66.6 million, a decrease of $8.4 million, or 11.2%, from the second quarter and a decrease of $19.8 million, or 22.9%, from a year ago. In addition, NPAs as a percentage of total outstanding loans declined 31 basis points from 2.60% in the second quarter and 78 basis points from 3.07% in the third quarter of the prior year to 2.29% at September 30, 2012. The current quarter decrease in NPAs from the second quarter related to a net decrease in nonaccrual loans, excluding purchased impaired loans, of $7.0 million as well as a net decrease in OREO of $1.4 million.

Nonperforming assets at September 30, 2012 included $32.2 million in nonaccrual loans (excluding purchased impaired loans), a net decrease of $7.0 million, or 17.9%, from the prior quarter. The following table shows the activity in nonaccrual loans for the quarter ended (dollars in thousands):

	September 30, 2012			June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011
Beginning Balance	$	39,171		$	42,391		$	44,834		$	51,965		$	54,322
Net customer payments		(5,774	)		(3,174	)		(2,778	)		(6,556	)		(2,343	)
Additions		2,586			2,568			2,805			5,364			1,751
Charge-offs		(3,012	)		(561	)		(1,549	)		(2,304	)		(1,268	)
Loans returning to accruing status		(812	)		(1,803	)		—			(1,950	)		(497	)
Transfers to OREO		—			(250	)		(921	)		(1,685	)		—
Ending Balance	$	32,159		$	39,171		$	42,391		$	44,834		$	51,965

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The nonperforming loans added during the quarter were principally commercial loans as borrowers continued to experience financial difficulties with the prolonged economic recovery exhausting their cash reserves and other repayment sources.

The following table presents the composition of nonaccrual loans (excluding purchased impaired loans) and the coverage ratio, which is the allowance for loan losses expressed as a percentage of nonaccrual loans, at the quarter ended (dollars in thousands):

	September 30, 2012			June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011
Raw Land and Lots	$	10,995		$	12,139		$	13,064		$	13,322		$	15,997
Commercial Construction		7,846			9,763			9,835			10,276			9,818
Commercial Real Estate		2,752			5,711			6,299			7,993			9,204
Single Family Investment Real Estate		4,081			3,476			4,507			5,048			7,969
Commercial and Industrial		2,678			4,715			5,318			5,297			4,000
Other Commercial		195			231			233			238			259
Consumer		3,612			3,136			3,135			2,660			4,718
Total	$	32,159		$	39,171		$	42,391		$	44,834		$	51,965
Coverage Ratio		124.05	%		104.63	%		94.84	%		88.04	%		79.46	%

Impairment analyses provided appropriate reserves on these nonperforming loans while appropriate reserves on homogenous pools continue to be maintained. The increase in the coverage ratio is primarily related to a decline in nonperforming loans.

Nonperforming assets at September 30, 2012 also included $34.4 million in OREO, a net decrease of $1.4 million, or 3.9%, from the prior quarter. The following table shows the activity in OREO for the quarter ended (dollars in thousands):

	September 30, 2012			June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011
Beginning Balance	$	35,802		$	37,663		$	32,263		$	34,464		$	36,935
Additions		929			3,887			6,593			2,543			449
Capitalized Improvements		16			23			319			197			241
Valuation Adjustments		—			—			—			(530	)		—
Proceeds from sales		(2,071	)		(5,592	)		(1,485	)		(3,674	)		(3,285	)
Gains (losses) from sales		(236	)		(179	)		(27	)		(737	)		124
Ending Balance	$	34,440		$	35,802		$	37,663		$	32,263		$	34,464

The additions to OREO were principally related to closed branch property and residential real estate; sales from OREO were principally related to residential lots and land, land previously held for branch sites, and commercial property.

The following table presents the composition of the OREO portfolio at the quarter ended (dollars in thousands):

	September 30, 2012		June 30, 2012		March 31, 2012		December 31, 2011		September 30, 2011
Land	$	6,953	$	6,953	$	6,327	$	6,327	$	8,559
Land Development		11,034		11,313		11,559		11,309		11,824
Residential Real Estate		9,729		10,431		12,482		11,024		11,903
Commercial Real Estate		5,640		6,085		6,275		2,583		1,158
Former Bank Premises (1)		1,084		1,020		1,020		1,020		1,020
Total	$	34,440	$	35,802	$	37,663	$	32,263	$	34,464

⁽¹⁾  Includes closed branch property and land previously held for branch sites.

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Included in land development is $9.1 million related to a residential community in the Northern Neck region of Virginia, which includes developed residential lots, a golf course, and undeveloped land. Foreclosed properties were adjusted to their fair values at the time of each foreclosure and any losses were taken as loan charge-offs against the allowance for loan losses at that time. OREO asset valuations are also evaluated at least quarterly by the Bank’s Special Asset Loan Committee and any necessary write downs to fair values are recorded as impairment.

Accruing Past Due Loans

At September 30, 2012, total accruing past due loans were $39.0 million, or 1.34% of total loans, an increase from 1.15% at June 30, 2012, but down from 1.61% a year ago. The increase in past due loans from the prior quarter is attributable to the addition of three large credit relationships previously identified as impaired and evaluated within the Company’s allowance for loan losses methodology.

Charge-offs

For the quarter ended September 30, 2012, net charge-offs of loans were $3.5 million, or 0.48% on an annualized basis, compared to $2.2 million, or 0.31%, for the second quarter and $1.9 million, or 0.27%, for the same quarter in the prior year. The uptick in charge-offs from the prior quarter and prior year quarter relate to loans that were previously considered impaired and specifically reserved for in prior periods. Of the $3.5 million in net charge-offs, $2.9 million, or 83%, related to impaired loans which had $3.3 million in reserves or credit mark assigned to them. Net charge-offs in the current quarter included commercial loans of $2.7 million and consumer loans of $800,000.

For the nine months ended September 30, 2012, net charge-offs of loans were $8.5 million, or 0.39% on an annualized basis, compared to $11.5 million, or 0.55%, for the nine months ended September 30, 2011. The decrease in charge-offs is related to the reduced levels of nonperforming loans, as management continues to proactively manage problem credits.

The following table shows a summary of assets quality balances and related ratios for periods presented (dollars in thousands):

	September 30,			June 30,			March 31,			December 31,			September 30,
	2012			2012			2012			2011			2011
Nonaccrual loans	$	32,159		$	39,171		$	42,391		$	44,834		$	51,965
Foreclosed properties		33,356			34,782			36,643			31,243			33,444
Real estate investment		1,084			1,020			1,020			1,020			1,020
Total nonperforming assets (“NPAs”)		66,599			74,973			80,054			77,097			86,429
Loans past due 90 days and accruing interest		9,096			10,768			12,267			19,911			12,154
Total nonperforming assets and Loans past due 90 days and accruing interest	$	75,695		$	85,741		$	92,321		$	97,008		$	98,583
Performing Restructurings	$	51,933		$	67,490		$	86,064		$	98,834		$	102,132
Balances
Allowance for loan losses (“ALLL”)	$	39,894		$	40,985		$	40,204		$	39,470		$	41,290
Average loans, net of unearned income		2,890,666			2,847,087			2,829,881			2,804,500			2,831,924
Loans, net of unearned income		2,908,510			2,887,790			2,841,758			2,818,583			2,818,342
Ratios
ALLL to total outstanding loans		1.37	%		1.42	%		1.41	%		1.40	%		1.47	%
ALLL to legacy loans (Non-GAAP)		1.66	%		1.74	%		1.77	%		1.83	%		1.94	%
ALLL to nonaccrual loans		124.05	%		104.63	%		94.84	%		88.04	%		79.46	%
ALLL to nonaccrual loans & loans 90 days past due		96.70	%		82.07	%		73.56	%		60.96	%		64.40	%
NPAs to total loans & OREO		2.26	%		2.56	%		2.78	%		2.70	%		3.03	%
NPAs to total loans		2.29	%		2.60	%		2.82	%		2.74	%		3.07	%
NPAs & loans 90 days past due to total loans & OREO		2.57	%		2.93	%		3.21	%		3.40	%		3.46	%
NPAs & loans 90 days past due to total loans		2.60	%		2.97	%		3.25	%		3.44	%		3.50	%
Net charge-offs to total loans (annualized)		0.48	%		0.31	%		0.39	%		0.59	%		0.27	%

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Capital Resources

Capital resources represent funds, earned or obtained, over which financial institutions can exercise greater or longer control in comparison with deposits and borrowed funds. The adequacy of the Company’s capital is reviewed by management on an ongoing basis with reference to size, composition, and quality of the Company’s resources and consistency with regulatory requirements and industry standards. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses, yet allow management to effectively leverage its capital to maximize return to shareholders.

The Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the FDIC have adopted capital guidelines to supplement the existing definitions of capital for regulatory purposes and to establish minimum capital standards. Specifically, the guidelines categorize assets and off-balance sheet items into four risk-weighted categories. The minimum ratio of qualifying total assets is 8.0%, of which 4.0% must be Tier 1 capital, consisting of common equity, retained earnings and a limited amount of perpetual preferred stock, less certain intangible items. The Company had a ratio of total capital to risk-weighted assets of 15.00% and 15.36% on September 30, 2012 and 2011, respectively. The Company’s ratio of Tier 1 capital to risk-weighted assets was 13.44% and 13.71% at September 30, 2012 and 2011, respectively, allowing the Company to exceed the definition of “well capitalized” for regulatory purposes. As previously discussed, the Company’s review of the regulatory risk weightings of the mortgage loans held for sale during the current quarter resulted in a reduction of risk weighted assets. The impact of this change was not considered to be material to the Company’s regulatory capital ratios. The Company’s common equity to asset ratios at September 30, 2012 and 2011 were 11.00% and 10.63%.

In connection with two bank acquisitions, prior to 2005, the Company issued trust preferred capital notes to fund the cash portion of those acquisitions, collectively totaling $58.5 million. The trust preferred capital notes currently qualify for Tier 1 capital of the Company for regulatory purposes.

The Company’s outstanding series of preferred stock as of December 31, 2010 resulted from the acquisition of FMB. On February 6, 2009, FMB issued and sold to the Treasury 33,900 shares of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B and a warrant to purchase up to 1,695 shares of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series C. The Treasury immediately exercised the warrant for the entire 1,695 shares. In connection with the Company’s acquisition of FMB, the Company’s Board of Directors established a series of preferred stock with substantially identical preferences, rights and limitations to the FMB preferred stock, except as explained below. Pursuant to the closing of the acquisition, each share of FMB Series B and Series C preferred stock was exchanged for one share of the Company’s Series B Preferred Stock. The Series B Preferred Stock of the Company paid cumulative dividends to the Treasury at a rate of 5.19% year. The 5.19% dividend rate was a blended rate comprised of the dividend rate of the 33,900 shares of FMB 5% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series B and 1,695 shares of FMB 9% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. The Series B Preferred Stock of the Company was non-voting and had a liquidation preference of $1,000. During the fourth quarter of 2011, the Company received approval from the Treasury and its regulators to redeem the Series B Preferred Stock issued to the Treasury and assumed by the Company as part of the 2010 merger with FMB. On December 7, 2011, the Company paid approximately $35.7 million, from cash, to the Treasury in full redemption of the Series B Preferred Stock.

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The following table summarizes the Company’s regulatory capital and related ratios (dollars in thousands):

	September 30,			December 31,			September 30,
	2012			2011			2011
Tier 1 capital	$	412,744		$	390,623		$	417,597
Tier 2 capital		47,912			50,395			50,331
Total risk-based capital		460,656			441,018			467,928
Risk-weighted assets		3,070,839			3,039,099			3,046,761
Capital ratios:
Tier 1 risk-based capital ratio		13.44	%		12.85	%		13.71	%
Total risk-based capital ratio		15.00	%		14.51	%		15.36	%
Leverage ratio (Tier 1 capital to average adjusted assets)		10.53	%		10.14	%		11.00	%
Common equity to assets		11.00	%		10.79	%		10.63	%
Tangible common equity to tangible assets		9.27	%		8.91	%		8.74	%

In June 2012, the Office of the Comptroller of the Currency, the Federal Reserve, and the FDIC proposed rules that would revise and replace the current capital rules to align with the Basel III capital standards and meet certain requirements of the Dodd-Frank Act. The Basel III capital standards substantially increase the complexity of capital calculations and the amount of capital required to be maintained. The proposed rules were in a comment period running through October 22, 2012 and are subject to further modification. The Company is in the process of evaluating the impact these proposed rules may have on its capital position.

NON-GAAP MEASURES

In reporting the results of September 30, 2012, the Company has provided supplemental performance measures on an operating or tangible basis. Such measures exclude amortization expense related to intangible assets, such as core deposit and trademark intangibles. The Company believes these measures are useful to investors as they exclude non-operating adjustments resulting from acquisition activity and allow investors to see the combined economic results of the organization. Cash basis operating earnings per share were $0.40 and $1.10 and $0.39 and $0.97 for the three and nine months ended September 30, 2012 and 2011, respectively. Cash basis return on average tangible assets for the three and nine months ended September 30, 2012 was 1.06% and 0.99%, respectively. Cash basis return on average tangible equity for the three and nine months ended September 30, 2012 was 11.48% and 10.80%, respectively.

These measures are a supplement to GAAP used to prepare the Company’s financial statements and should not be viewed as a substitute for GAAP measures. In addition, the Company’s non-GAAP measures may not be comparable to non-GAAP measures of other companies.

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The following table reconciles these non-GAAP measures from their respective GAAP basis measures for the periods ended (dollars in thousands, except share and per share amounts):

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2012			2011			2012			2011
Net income	$	9,626		$	9,071		$	25,969		$	22,085
Plus: core deposit intangible amortization, net of tax		788			972			2,436			3,038
Plus: trademark intangible amortization, net of tax		65			65			195			195
Cash basis operating earnings	$	10,479		$	10,108		$	28,600		$	25,318
Average assets	$	3,994,830		$	3,876,740		$	3,947,279		$	3,838,748
Less: average trademark intangible		181			582			281			681
Less: average goodwill		59,400			59,401			59,400			58,189
Less: average core deposit intangibles		17,546			22,890			18,677			24,411
Average tangible assets	$	3,917,704		$	3,793,867		$	3,868,921		$	3,755,467
Average equity	$	440,122		$	448,618			432,138		$	440,521
Less: average trademark intangible		181			582			281			681
Less: average goodwill		59,400			59,401			59,400			58,189
Less: average core deposit intangibles		17,546			22,890			18,677			24,411
Less: average preferred equity		—			34,576			—			34,514
Average tangible equity	$	362,996		$	331,169		$	353,780		$	322,726
Weighted average shares outstanding, diluted		25,911,987			26,001,900			25,922,261			25,993,611
Cash basis earnings per share, diluted	$	0.40		$	0.39		$	1.10		$	0.97
Cash basis return on average tangible assets		1.06	%		1.06	%		0.99	%		0.90	%
Cash basis return on average tangible equity		11.48	%		12.11	%		10.80	%		10.49	%

The allowance for loan losses as a percentage of the total loan portfolio includes net loans acquired in the FMB and the Harrisonburg branch acquisitions. The Company believes the presentation of the allowance-to-legacy loan ratio (non-GAAP) is useful to investors because the acquired loans were recorded at a market discount (including credit valuation) with no allowance for loan losses carried over to the Company.

Acquired loans that have further deteriorated are included in the loan loss calculation and reflected in both the numerator and denominator of the allowance-to-legacy loan ratio. In order to present the allowance-to-legacy loan ratio, acquired loans with no additional credit deterioration beyond the original credit mark are adjusted out of the loan balance denominator. The following table shows the allowance for loan losses as a percentage of the total loan portfolio, adjusted to remove acquired loans (dollars in thousands):

	For the Nine Months Ended September 30,
	2012			2011
Gross loans	$	2,908,510		$	2,818,342
Less: acquired loans without additional credit deterioration		(505,362	)		(635,072	)
Gross loans, net of acquired	$	2,403,148		$	2,183,270
Allowance for loan losses	$	39,894		$	41,290
Allowance for loan losses ratio		1.37	%		1.47	%
Allowance for loan losses ratio, net of acquired		1.66	%		1.89	%

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates and equity prices. The Company’s market risk is composed primarily of interest rate risk. The Asset and Liability Management Committee (“ALCO”) of the Company is responsible for reviewing the interest rate sensitivity position of the Company and establishing policies to monitor and limit exposure to this risk. The Company’s Board of Directors reviews and approves the guidelines established by ALCO.

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Interest rate risk is monitored through the use of three complementary modeling tools: static gap analysis, earnings simulation modeling, and economic value simulation (net present value estimation). Each of these models measures changes in a variety of interest rate scenarios. While each of the interest rate risk models has limitations, taken together they represent a reasonably comprehensive view of the magnitude of interest rate risk in the Company, the distribution of risk along the yield curve, the level of risk through time, and the amount of exposure to changes in certain interest rate relationships. Static gap, which measures aggregate re-pricing values, is less utilized because it does not effectively measure the options risk impact on the Company and is not addressed here. Earnings simulation and economic value models, which more effectively measure the cash flow and optionality impacts, are utilized by management on a regular basis and are explained below.

EARNINGS SIMULATION ANALYSIS

Management uses simulation analysis to measure the sensitivity of net interest income to changes in interest rates. The model calculates an earnings estimate based on current and projected balances and rates. This method is subject to the accuracy of the assumptions that underlie the process, but it provides a better analysis of the sensitivity of earnings to changes in interest rates than other analyses, such as the static gap analysis discussed above.

Assumptions used in the model are derived from historical trends and management’s outlook and include loan and deposit growth rates and projected yields and rates. Such assumptions are monitored by management and periodically adjusted as appropriate. All maturities, calls and prepayments in the securities portfolio are assumed to be reinvested in like instruments. Mortgage loans and mortgage backed securities prepayment assumptions are based on industry estimates of prepayment speeds for portfolios with similar coupon ranges and seasoning. Different interest rate scenarios and yield curves are used to measure the sensitivity of earnings to changing interest rates. Interest rates on different asset and liability accounts move differently when the prime rate changes and are reflected in the different rate scenarios.

The Company uses its simulation model to estimate earnings in rate environments where rates are instantaneously shocked up or down around a “most likely” rate scenario, based on implied forward rates. The analysis assesses the impact on net interest income over a 12 month time horizon after an immediate increase or “shock” in rates, of 100 basis points up to 300 basis points. The shock down 200 or 300 basis points analysis is not as meaningful as interest rates across most of the yield curve are at historic lows and cannot decrease another 200 or 300 basis points. The model, under all scenarios, does not drop the index below zero.

The following table represents the interest rate sensitivity on net interest income for the Company across the rate paths modeled for balances ended September 30, 2012 (dollars in thousands):

	Change In Net Interest Income
	%			$
Change in Yield Curve:
+300 basis points		2.31			3,616
+200 basis points		1.34			2,108
+100 basis points		0.23			356
Most likely rate scenario		—			—
-100 basis points		(1.49	)		(2,342	)
-200 basis points		(2.34	)		(3,665	)
-300 basis points		(2.41	)		(3,773	)

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ECONOMIC VALUE SIMULATION

Economic value simulation is used to calculate the estimated fair value of assets and liabilities over different interest rate environments. Economic values are calculated based on discounted cash flow analysis. The net economic value of equity is the economic value of all assets minus the economic value of all liabilities. The change in net economic value over different rate environments is an indication of the longer-term earnings capability of the balance sheet. The same assumptions are used in the economic value simulation as in the earnings simulation. The economic value simulation uses instantaneous rate shocks to the balance sheet.

The following chart reflects the estimated change in net economic value over different rate environments using economic value simulation based on the balances at the period ended September 30, 2012 (dollars in thousands):

	Change In Economic Value of Equity
	%			$
Change in Yield Curve:
+300 basis points		(6.43	)		(35,202	)
+200 basis points		(3.51	)		(19,243	)
+100 basis points		(1.50	)		(8,229	)
Most likely rate scenario		—			—
-100 basis points		(3.14	)		(17,179	)
-200 basis points		(2.30	)		(12,597	)
-300 basis points		(0.19	)		(1,033	)

The shock down 200 or 300 basis points analysis is not as meaningful since interest rates across most of the yield curve are at historic lows and cannot decrease another 200 or 300 basis points. While management considers this scenario highly unlikely, the natural floor increases the Company’s sensitivity in rates down scenarios.

ITEM 4 - CONTROLS AND PROCEDURES

The Company maintains “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective at the reasonable assurance level. There was no change in the internal control over financial reporting that occurred during the quarter ended September 30, 2012 that has materially affected, or is reasonably likely to materially affect, the internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

In the ordinary course of its operations, the Company is a party to various legal proceedings. Based on the information presently available, and after consultation with legal counsel, management believes that the ultimate outcome in such proceedings, in the aggregate, will not have a material adverse effect on the business or the financial condition or results of operations of the Company.

ITEM 1A - RISK FACTORS

Update to Risk Factors

Proposed rules may require higher capital levels, impacting the Company’s profitability, lending, and ability to pay common stock dividends

In June of 2012, the Board of Governors of the Federal Reserve System announced Notices of Proposed Rulemaking (NPRs) for three sets of capital rules that translate the Basel III capital rules into U.S. regulation. The Basel III capital standards substantially increase the complexity of capital calculations and the amount of required capital to be maintained. Specifically, Basel III reduces the items that count as capital, establishes higher capital ratios for all banks and increases risk weighting of a number of asset classes the Company holds. The potential impact of Basel III includes, but is not limited to, reduced lending and negative pressure on profitability and return on equity due to the higher capital requirements. The cost of implementation and ongoing compliance with Basel III may also negatively impact overhead costs. To the extent the Company is required to increase capital in the future to comply with Basel III, existing shareholders may be diluted and/or our ability to pay common stock dividends may be reduced.

There have been no other material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Sales of Unregistered Securities – None

(b) Use of Proceeds – Not Applicable

(c) Issuer Purchases of Securities

In December 2011, the Company was authorized to repurchase up to 350,000 shares of its common stock in the open market at prices that management determines to be prudent. No shares were repurchased during 2011. In February 2012, the Company entered into a Stock Purchase Agreement (the “Agreement”) with a member of the Company’s board of directors. Pursuant to the Agreement, the Company repurchased 335,649 shares of its common stock for an aggregate purchase price of $4,363,437, or $13.00 per share. The repurchase was funded with cash on hand. The Company transferred 115,384 of the repurchased shares to its Employee Stock Ownership Plan for $13.00 per share. The remaining 220,265 shares were retired. On February 6, 2012, the Company filed a Current Report on Form 8-K with respect to the agreement and repurchase.

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ITEM 6 - EXHIBITS

The following exhibits are filed as part of this Form 10-Q and this list includes the Exhibit Index:

Exhibit No.	Description
31.01	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification of Chief Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.00	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, (ii) the Consolidated Statements of Income for the three and nine months ended September 30, 2012 and September 30, 2011, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2012 and September 30, 2011, (iv) the Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2012 and September 30, 2011, (v) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and September 30, 2011 and (v) the Notes to the Consolidated Financial Statements (furnished herewith).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Union First Market Bankshares Corporation
	(Registrant)
Date: November 8, 2012	By:	/s/ G. William Beale
		G. William Beale,
		Chief Executive Officer
		(principal executive officer)
Date: November 8, 2012	By:	/s/ Robert M. Gorman
		Robert M. Gorman,
		Executive Vice President and Chief Financial Officer
		(principal financial and accounting officer)

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EX-31.01

Exhibit 31.01

CERTIFICATIONS

I, G. William Beale, certify that:

1. I have reviewed this report on Form 10-Q of Union First Market Bankshares Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2012

/s/ G. William Beale

G. William Beale,

Chief Executive Officer

EX-31.02

Exhibit 31.02

CERTIFICATIONS

I, Robert M. Gorman, certify that:

1. I have reviewed this report on Form 10-Q of Union First Market Bankshares Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2012

/s/ Robert M. Gorman

Robert M. Gorman,

Executive Vice President and Chief Financial Officer

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Union First Market Bankshares Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that based on their knowledge and belief: 1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ G. William Beale

G. William Beale, Chief Executive Officer

/s/ Robert M. Gorman

Robert M. Gorman, Executive Vice President and Chief Financial Officer

November 8, 2012

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to Union First Market Bankshares Corporation and will be retained by Union First Market Bankshares Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Business Combinations (Details Textual) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Harrisonburg branch acquisition [Member]
Business Combinations (Textual) [Abstract]
Amount of loans purchased		$ 72,500,000
Deposit liabilities	48,900,000	48,900,000
Company recorded goodwill amount	1,800,000	1,800,000
Core deposit intangible	9,500	9,500
Fair value inputs discount value		1,700,000
Fair value estimate loan portfolio	70,500,000	70,500,000
Impaired loan portfolio fair value estimate	276,000	276,000
Interest income	640,000
First Market Bank Acquisition [Member]
Business Combinations (Textual) [Abstract]
Interest income	$ 6,500,000

XML

Loans and Allowance for Loan Losses (Details 8) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	$ 2,049,109	$ 1,947,413
Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	491,487	451,115
Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	693,679	653,950
Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	208,573	208,661
Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	205,719	192,049
Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	209,312	211,876
5 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	139,981	152,040
5 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	22,406	17,604
5 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	51,597	58,844
5 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	14,807	18,767
5 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	14,109	11,928
5 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	13,779	22,079
6 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	153,707	159,867
6 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	17,671	21,158
6 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	31,961	38,662
6 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	33,719	33,673
6 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	12,898	14,358
6 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	13,284	11,559
7 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	141,500	203,709
7 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	11,114	26,389
7 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	29,279	39,854
7 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	43,724	52,204
7 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	8,431	16,452
7 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	14,671	19,066
8 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	1,590	1,227
8 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		709
8 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
8 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	506	275
8 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	739
8 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	175	180
Impaired loans purchased [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	5,431	8,828
Impaired loans purchased [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	1,228	1,292
Impaired loans purchased [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		1,133
Impaired loans purchased [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	3,743	5,623
Impaired loans purchased [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	371	388
Impaired loans purchased [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	89	392
Impaired loans purchased [Member] | 5 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	355
Impaired loans purchased [Member] | 5 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 5 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 5 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	355
Impaired loans purchased [Member] | 5 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 6 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		369
Impaired loans purchased [Member] | 6 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 6 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 6 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 6 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		369
Impaired loans purchased [Member] | 6 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 7 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	5,076	8,158
Impaired loans purchased [Member] | 7 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	1,228	1,292
Impaired loans purchased [Member] | 7 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		1,133
Impaired loans purchased [Member] | 7 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	3,743	5,623
Impaired loans purchased [Member] | 7 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	16	19
Impaired loans purchased [Member] | 7 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating	89	91
Impaired loans purchased [Member] | 8 [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		301
Impaired loans purchased [Member] | 8 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 8 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 8 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 8 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating
Impaired loans purchased [Member] | 8 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating including purchased impaired loans
Loans receivables related risk rating		$ 301

XML

Loans and Allowance for Loan Losses (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	$ 23	$ 231
Greater than 90 Days	1,420	1,605
Current	4,994	8,061
Total	6,437	9,897
Commercial Real Estate - Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due		206
Greater than 90 Days	1,164	50
Current	64	1,036
Total	1,228	1,292
Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days		1,133
Current
Total		1,133
Raw Land and Lots [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days	91
Current	3,652	5,623
Total	3,743	5,623
Single Family Investment Real Estate [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	16
Greater than 90 Days
Current	355	388
Total	371	388
Commercial and Industrial [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days	89	302
Current		90
Total	89	392
Indirect Auto [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due	7	6
Greater than 90 Days		11
Current	17	23
Total	24	40
HELOCs [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due		19
Greater than 90 Days	50	32
Current	801	814
Total	851	865
Other Consumer [Member]
Schedule of purchased impaired commercial and consumer loan portfolios, by class
30-89 Days Past Due
Greater than 90 Days	26	77
Current	105	87
Total	$ 131	$ 164

XML

Securities (Details 1) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	$ 36,755,000	$ 104,974,000
Less than 12 months, Unrealized Losses	(123,000)	(762,000)
More than 12 Months, Fair value	2,671,000	4,880,000
More than 12 Months, Unrealized Losses	(461,000)	(721,000)
Fair value, Total	39,426,000	109,854,000
Unrealized Losses, Total	(584,000)	(1,483,000)
U.S. government and agency securities [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	6,000
Less than 12 months, Unrealized Losses	(12,000)
Fair value, Total	6,000
Unrealized Losses, Total	(12,000)
Obligations of states and political subdivisions [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	6,188,000	5,429,000
Less than 12 months, Unrealized Losses	(26,000)	(152,000)
More than 12 Months, Fair value	1,161,000	1,090,000
More than 12 Months, Unrealized Losses	(53,000)	(95,000)
Fair value, Total	7,349,000	6,519,000
Unrealized Losses, Total	(79,000)	(247,000)
Mortgage-backed securities [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	30,511,000	97,203,000
Less than 12 months, Unrealized Losses	(85,000)	(445,000)
Fair value, Total	30,511,000	97,203,000
Unrealized Losses, Total	(85,000)	(445,000)
Corporate bonds and other securities [Member]
Schedule of gross unrealized losses and fair value of investments
Less than 12 months, Fair value	50,000	2,342,000
Less than 12 months, Unrealized Losses		(165,000)
More than 12 Months, Fair value	1,510,000	3,790,000
More than 12 Months, Unrealized Losses	(408,000)	(626,000)
Fair value, Total	1,560,000	6,132,000
Unrealized Losses, Total	$ (408,000)	$ (791,000)

XML

Loans and Allowance for Loan Losses (Details 9) (USD $) In Thousands, unless otherwise specified				9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Sep. 30, 2012 Purchased Impaired [Member]	Dec. 31, 2011 Purchased Impaired [Member]	Sep. 30, 2012 Purchased Non impaired [Member]	Dec. 31, 2011 Purchased Non impaired [Member]
Accretable Yield
Balance at beginning of period				$ 5,140	$ 8,169	$ 9,010	$ 13,589
Additions					122		1,593
Accretion				(55)	(66)	(2,960)	(6,172)
Charged off				(1,602)	(3,073)
Transfers to OREO					(12)
Payments received, net
Balance at end of period				3,483	5,140	6,050	9,010
Carrying Amount of Loans
Balance at beginning of period	39,894	39,470	41,290	9,897	13,999	663,510	799,898
Additions					276		70,524
Accretion
Charged off				(397)	(1,329)	(1,551)	(5,988)
Transfers to OREO				(2,371)	(174)	(2,766)	(2,341)
Payments received, net				(692)	(2,875)	(155,947)	(198,583)
Balance at end of period	$ 39,894	$ 39,470	$ 41,290	$ 6,437	$ 9,897	$ 503,246	$ 663,510

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Fair Value Measurements (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 62,334	$ 96,659
Securities available for sale	622,067	620,166
Restricted stock	20,687	20,661
Loans held for sale	141,965	74,823
Net loans	2,901,354	2,794,914
Interest rate swap - loans	39	66
Accrued interest receivable	18,565	16,626
LIABILITIES
Deposits	3,213,963	3,191,256
Borrowings	332,484	277,374
Accrued interest payable	856	1,865
Cash flow hedge - trust	4,785	4,293
Interest rate swap - loans	39	66
Carrying Value [Member]
ASSETS
Cash and cash equivalents	62,334	96,659
Securities available for sale	622,067	620,166
Restricted stock	20,687	20,661
Loans held for sale	141,965	74,823
Net loans	2,868,616	2,779,113
Interest rate swap - loans	39	66
Accrued interest receivable	18,565	16,626
LIABILITIES
Deposits	3,199,779	3,175,105
Borrowings	350,686	278,686
Accrued interest payable	856	1,865
Cash flow hedge - trust	4,785	4,293
Interest rate swap - loans	39	66
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS
Cash and cash equivalents	62,334	96,659
Securities available for sale
Restricted stock
Loans held for sale
Net loans
Interest rate swap - loans
Accrued interest receivable
LIABILITIES
Deposits
Borrowings
Accrued interest payable
Cash flow hedge - trust
Interest rate swap - loans
Significant Other Observable Inputs Level 2 [Member]
ASSETS
Cash and cash equivalents
Securities available for sale	622,067	620,166
Restricted stock	20,687	20,661
Loans held for sale	141,965	74,823
Net loans	2,864,799	2,731,491
Interest rate swap - loans	39	66
Accrued interest receivable	18,565	16,626
LIABILITIES
Deposits	3,213,963	3,191,256
Borrowings	332,484	277,374
Accrued interest payable	856	1,865
Cash flow hedge - trust	4,785	4,293
Interest rate swap - loans	39	66
Significant Unobservable Inputs Level 3 [Member]
ASSETS
Cash and cash equivalents
Securities available for sale
Restricted stock
Loans held for sale
Net loans	36,555	63,423
Interest rate swap - loans
Accrued interest receivable
LIABILITIES
Deposits
Borrowings
Accrued interest payable
Cash flow hedge - trust
Interest rate swap - loans

XML

Loans and Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Loans stated at face amount, net of unearned income
Loans, net of unearned income	$ 2,908,510	$ 2,818,583	$ 2,818,342
Commercial Construction [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	200,032	185,359
Commercial Real Estate - Owner Occupied [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	492,715	452,407
Commercial Real Estate - Non-Owner Occupied [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	693,679	655,083
Raw Land and Lots [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	212,316	214,284
Single Family Investment Real Estate [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	206,090	192,437
Commercial and Industrial [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	209,401	212,268
Other Commercial [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	40,307	44,403
Mortgage [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	221,474	219,646
Consumer Construction [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	27,488	20,757
Indirect Auto [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	159,495	162,708
Indirect Marine [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	31,314	39,819
HELOCs [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	286,348	277,101
Credit Card [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	20,332	19,006
Other Consumer [Member]
Loans stated at face amount, net of unearned income
Loans, net of unearned income	$ 107,519	$ 123,305

XML

Securities (Tables)

9 Months Ended

Sep. 30, 2012

Securities [Abstract]

Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities

			Gross Unrealized
	Amortized Cost		Gains		(Losses)			Estimated Fair Value
September 30, 2012
U.S. government and agency securities	$	2,919	$	120	$	(12	)	$	3,027
Obligations of states and political subdivisions		198,954		15,488		(79	)		214,363
Corporate and other bonds		9,390		275		(408	)		9,257
Mortgage-backed securities		380,790		11,360		(85	)		392,065
Other securities		3,233		122		—			3,355
Total securities	$	595,286	$	27,365	$	(584	)	$	622,067
December 31, 2011
U.S. government and agency securities	$	3,933	$	351	$	—		$	4,284
Obligations of states and political subdivisions		189,117		11,337		(247	)		200,207
Corporate and other bonds		12,839		188		(787	)		12,240
Mortgage-backed securities		390,329		10,434		(445	)		400,318
Other securities		3,044		77		(4	)		3,117
Total securities	$	599,262	$	22,387	$	(1,483	)	$	620,166

Schedule of gross unrealized losses and fair value of investments

	Less than 12 months					More than 12 months					Total
	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
September 30, 2012
U.S. government and agency securities	$	6	$	(12	)	$	—	$	—		$	6	$	(12	)
Obligations of states and political subdivisions		6,188		(26	)		1,161		(53	)		7,349		(79	)
Mortgage-backed securities		30,511		(85	)		—		—			30,511		(85	)
Corporate bonds and other securities		50		—			1,510		(408	)		1,560		(408	)
Totals	$	36,755	$	(123	)	$	2,671	$	(461	)	$	39,426	$	(584	)
December 31, 2011
Obligations of states and political subdivisions	$	5,429	$	(152	)	$	1,090	$	(95	)	$	6,519	$	(247	)
Mortgage-backed securities		97,203		(445	)		—		—			97,203		(445	)
Corporate bonds and other securities		2,342		(165	)		3,790		(626	)		6,132		(791	)
Totals	$	104,974	$	(762	)	$	4,880	$	(721	)	$	109,854	$	(1,483	)

Schedule of amortized cost and estimated fair value of securities

	September 30, 2012				December 31, 2011
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less		2,923		2,971	$	6,046	$	6,098
Due after one year through five years		16,191		16,880		18,771		19,408
Due after five years through ten years		71,169		75,804		76,044		80,214
Due after ten years		501,770		523,059		495,357		511,329
Other securities		3,233		3,355		3,044		3,117
Total securities available for sale	$	595,286	$	622,067	$	599,262	$	620,166

Schedule of other-than-temporary impairment

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2011	$	400
Cumulative credit losses on investment securities		—
Additions for credit losses not previously regognized		—
Cumulative credit losses on investment securities, through September 30, 2012	$	400

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Fair Value Measurements (Details Textual) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Fair Value Measurement (Textual) [Abstract]
Nonrecurring fair value adjustments were recorded on loans held for sale	$ 0	$ 0
Total valuation expenses related to OREO properties	$ 0	$ 707,000

XML

Securities (Details Textual) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2012 Issue	Dec. 31, 2011
Securities (Textual) [Abstract]
Securities had an unrealized loss		$ (461,000)	$ (721,000)
Securities (Additional Textual) [Abstract]
Federal Home Loan Bank requires Bank to maintain percentage of stock equal to outstanding borrowings		4.50%
Federal Reserve Bank require to maintain stock with a percentage par value equal to its outstanding capital		6.00%
Restricted equity securities consist of Federal Reserve Bank stock		6,800,000	6,700,000
Federal Home Loan Bank Stock		13,900,000	13,900,000
Individual securities that had been in a continuous loss position, amount		2,671,000	4,880,000
Individual securities that had been in a continuous loss position		5
Securities with an amortized cost		202,700,000	172,100,000
Credit-related OTTI	400,000
Corporate and municipal obligations [Member]
Securities (Textual) [Abstract]
Securities had an unrealized loss		$ 461,000

XML

Earnings per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Reconcilement of the denominators of the basic and diluted EPS computations
Net income, basic	$ 9,626	$ 8,543	$ 25,969	$ 20,504
Weighted Average Common Shares, Basic	25,881	25,987	25,895	25,972
Basic, Per Share Amount	$ 0.37	$ 0.33	$ 1.00	$ 0.79
Add: potentially dilutive common shares - stock awards, Net Income Available to Common Shareholders
Add: potentially dilutive common shares - stock awards, Weighted Average Common Shares	27	15	28	22
Add: potentially dilutive common shares - stock awards, Per Share Amount
Diluted, Net Income Available to Common Shareholders	9,626	8,543	25,969	20,504
Diluted, Weighted Average Common Shares	25,908	26,002	25,922	25,994
Diluted, Per Share Amount	$ 0.37	$ 0.33	$ 1.00	$ 0.79
Net income	9,626	9,071	25,969	22,085
Net income, Per Share Amount		$ 0.35		$ 0.85
Less: dividends paid and accumulated on preferred stock		462		1,386
Less: dividends paid and accumulated on preferred stock, Per Share Amount		$ 0.02		$ 0.06
Less: accretion of discount on preferred stock		$ 66		$ 195

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Summary of changes in Level 3 assets measured at estimated fair value on a nonrecurring basis
Ending Balance	$ 36,555
Impaired loans [Member]
Summary of changes in Level 3 assets measured at estimated fair value on a nonrecurring basis
Beginning balance	63,423
Included in earnings
Additions	25,802
Sales
Net decrease	(52,670)
Ending Balance	36,555
Other real estate owned [Member]
Summary of changes in Level 3 assets measured at estimated fair value on a nonrecurring basis
Beginning balance	32,263
Included in earnings	(442)
Additions	11,766
Sales	(9,147)
Net decrease
Ending Balance	$ 34,440

XML

Derivatives (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Dec. 31, 2011 position	Sep. 30, 2012 position
Summary regarding loan swap derivative activities
Notional amount		$ 36,000
Life (Years)		6 years
Receive fixed - pay floating interest rate swaps [Member] | Interest rate swap [Member]
Summary regarding loan swap derivative activities
Positions	2	2
Notional amount	4,028	2,137
Asset	66	39
Liability
Receive Rate	6.35%	6.15%
Pay Rate	2.77%	2.81%
Life (Years)	1 year 4 days	9 years 10 months 2 days
Pay fixed - receive floating interest rate swaps [Member]
Summary regarding loan swap derivative activities
Positions	1	1
Notional amount	36,000	36,000
Asset
Liability	4,293	4,785
Receive Rate	0.58%	0.36%
Pay Rate	3.51%	3.51%
Life (Years)	5 years 5 months 16 days	4 years 8 months 16 days
Pay fixed - receive floating interest rate swaps [Member] | Interest rate swap [Member]
Summary regarding loan swap derivative activities
Positions	2	2
Notional amount	4,028	2,137
Asset
Liability	$ 66	$ 39
Receive Rate	2.77%	2.81%
Pay Rate	6.35%	6.15%
Life (Years)	1 year 4 days	9 years 10 months 2 days

XML

Fair Value Measurements (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	$ 36,555
Total	70,995
Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	36,555	63,423
Other real estate owned [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Total Impaired Loans	34,440	32,263
Other real estate owned	34,440
Market comparables [Member] | Discount applied to market comparables [Member] | Other real estate owned [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	31.00%
Commercial Construction [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	2,922
Commercial Construction [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	8.00%
Commercial Real Estate - Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	2,053
Commercial Real Estate - Owner Occupied [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	13.00%
Commercial Real Estate - Non-Owner Occupied [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	13,120
Commercial Real Estate - Non-Owner Occupied [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	7.00%
Raw Land and Lots [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	9,420
Raw Land and Lots [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	4.00%
Single Family Investment Real Estate [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	1,541
Single Family Investment Real Estate [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	2.00%
Commercial and Industrial [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	6,348
Commercial and Industrial [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	5.00%
Other Consumer [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Other real estate owned	$ 1,151
Other Consumer [Member] | Market comparables [Member] | Discount applied to market comparables [Member] | Impaired loans [Member]
Summary of quantitative information about Level 3 Fair Value Measurements
Weighted Average	22.00%

XML

Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of amortized cost and estimated fair value of securities
Due in one year or less, Amortized Cost	$ 2,923	$ 6,046
Due in one year or less, Estimated Fair Value	2,971	6,098
Due after one year through five years, Amortized Cost	16,191	18,771
Due after one year through five years, Estimated Fair Value	16,880	19,408
Due after five years through ten years, Amortized Cost	71,169	76,044
Due after five years through ten years, Estimated Fair Value	75,804	80,214
Due after ten years, Amortized Cost	501,771	495,357
Due after ten years, Estimated Fair Value	523,059	511,329
Other securities, Amortized Cost	3,233	3,044
Other securities, Estimated Fair Value	3,355	3,117
Total securities available for sale, Amortized Cost	595,286	599,262
Total securities available for sale, Estimated Fair Value	$ 622,067	$ 620,166

XML

Business Combinations (Tables)

9 Months Ended

Sep. 30, 2012

Harrisonburg branch acquisition [Member]

Business Acquisition [Line Items]

Outstanding principal balance and the carrying amount of acquired loans

September 30, 2012:
Outstanding principal balance	$	47,658
Carrying amount	$	47,131
December 31, 2011:
Outstanding principal balance	$	54,953
Carrying amount	$	53,359

First Market Bank Acquisition [Member]

Business Acquisition [Line Items]

Outstanding principal balance and the carrying amount of acquired loans

September 30, 2012:
Outstanding principal balance	$	471,557
Carrying amount	$	462,552
December 31, 2011:
Outstanding principal balance	$	632,602
Carrying amount	$	620,048

XML

Loans and Allowance for Loan Losses (Details 4) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012 Loan	Dec. 31, 2011 Loan
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	83	113
Recorded Investment	$ 63,813	$ 112,638
Outstanding Commitment	199	3,583
Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	59	87
Recorded Investment	51,933	98,834
Outstanding Commitment	199	3,583
Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	24	26
Recorded Investment	11,880	13,804
Outstanding Commitment
Commercial Construction [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	6	14
Recorded Investment	6,559	21,461
Outstanding Commitment	169	3,185
Commercial Construction [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	4	5
Recorded Investment	4,260	5,353
Outstanding Commitment
Commercial Real Estate - Owner Occupied [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	8	11
Recorded Investment	3,056	7,996
Outstanding Commitment		180
Commercial Real Estate - Owner Occupied [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	3
Recorded Investment	1,084
Outstanding Commitment
Commercial Real Estate - Non-Owner Occupied [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	10	16
Recorded Investment	13,082	21,777
Outstanding Commitment	29	13
Commercial Real Estate - Non-Owner Occupied [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	1	2
Recorded Investment	208	292
Outstanding Commitment
Raw Land and Lots [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	14	15
Recorded Investment	25,274	32,450
Outstanding Commitment	1	1
Raw Land and Lots [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	3	6
Recorded Investment	3,860	4,342
Outstanding Commitment
Single Family Investment Real Estate [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	5	12
Recorded Investment	848	8,525
Outstanding Commitment
Single Family Investment Real Estate [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	2	4
Recorded Investment	433	1,342
Outstanding Commitment
Commercial and Industrial [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	6	12
Recorded Investment	1,103	4,991
Outstanding Commitment		204
Commercial and Industrial [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	7	3
Recorded Investment	1,284	1,134
Outstanding Commitment
Other Commercial [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	1	4
Recorded Investment	236	864
Outstanding Commitment
Mortgage [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	1
Recorded Investment	202
Outstanding Commitment
Mortgage [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	7	1
Recorded Investment	1,690	507
Outstanding Commitment
Mortgage [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans		5
Recorded Investment		1,076
Outstanding Commitment
Indirect Marine [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans
Recorded Investment
Outstanding Commitment
Indirect Marine [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	1
Recorded Investment	283
Outstanding Commitment
Other Consumer [Member] | Performing [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	2	2
Recorded Investment	85	263
Outstanding Commitment
Other Consumer [Member] | Nonperforming [Member]
Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement
No. of Loans	2	1
Recorded Investment	266	265
Outstanding Commitment

XML

Stock-Based Compensation (Details 2) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Summary of information concerning stock options
Stock Options Vested or Expected to Vest, Stock options	492,196
Stock options, Exercisable	222,301
Stock Options Vested or Expected to Vest, Weighted average remaining contractual life in years	6 years 5 months 19 days
Weighted average remaining contractual life in years, Exercisable	3 years 9 months 22 days
Stock Options Vested or Expected to Vest, Weighted average exercise price on shares above water	$ 13.23
Weighted average exercise price on shares above water, Exercisable	$ 12.23
Stock Options Vested or Expected to Vest, Aggregate intrinsic value	$ 257,186
Aggregate intrinsic value, Exercisable	$ 28,561

XML

Fair Value Measurements (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Other real estate owned	$ 34,440	$ 32,263	$ 34,464
Loans held for sale [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Assets	141,965	74,823
Impaired loans [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Impaired loans	36,555	63,423
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Other real estate owned
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Loans held for sale [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Assets
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Impaired loans [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Impaired loans
Significant Other Observable Inputs Level 2 [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Other real estate owned
Significant Other Observable Inputs Level 2 [Member] | Loans held for sale [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Assets	141,965	74,823
Significant Other Observable Inputs Level 2 [Member] | Impaired loans [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Impaired loans
Significant Unobservable Inputs Level 3 [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Other real estate owned	34,440	32,263
Significant Unobservable Inputs Level 3 [Member] | Loans held for sale [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Assets
Significant Unobservable Inputs Level 3 [Member] | Impaired loans [Member]
Schedule of financial assets and liabilities measured at fair value on a recurring basis
Impaired loans	$ 36,555	$ 63,423

XML

Business Combinations (Details) (Harrisonburg branch acquisition [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Harrisonburg branch acquisition [Member]
Outstanding principal balance and carrying amount of acquired loans
Outstanding principal balance	$ 47,658	$ 54,953
Carrying amount	$ 47,131	$ 53,359

XML

Loans and Allowance for Loan Losses (Details 6) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Allowance for loan losses:
Balance, beginning of the year	$ 39,470	$ 38,406
Recoveries credited to allowance	1,371	2,130
Loans charged off	(9,847)	(17,866)
Provision charged to operations	8,900	16,800
Balance, end of year	39,894	39,470
Ending balance: individually evaluated for impairment	11,309	10,213
Ending balance: collectively evaluated for impairment	28,456	29,172
Ending balance: loans acquired with deteriorated credit quality	129	85
Total	39,894	39,470
Loans:
Ending balance	2,908,510	2,818,583	2,818,342
Ending balance: individually evaluated for impairment	154,759	232,936
Ending balance: collectively evaluated for impairment	2,747,314	2,575,750
Ending balance: loans acquired with deteriorated credit quality	6,437	9,897
Total Loans	2,908,510	2,818,583	2,818,342
Commercial [Member]
Allowance for loan losses:
Balance, beginning of the year	27,891	28,255
Recoveries credited to allowance	490	924
Loans charged off	(5,956)	(10,891)
Provision charged to operations	7,301	9,603
Balance, end of year	29,726	27,891
Ending balance: individually evaluated for impairment	10,033	8,982
Ending balance: collectively evaluated for impairment	19,564	18,824
Ending balance: loans acquired with deteriorated credit quality	129	85
Total	29,726	27,891
Loans:
Ending balance	2,054,540	1,956,241
Ending balance: individually evaluated for impairment	148,223	229,535
Ending balance: collectively evaluated for impairment	1,900,886	1,717,878
Ending balance: loans acquired with deteriorated credit quality	5,431	8,828
Total Loans	2,054,540	1,956,241
Consumer [Member]
Allowance for loan losses:
Balance, beginning of the year	11,498	10,189
Recoveries credited to allowance	881	1,206
Loans charged off	(3,891)	(6,975)
Provision charged to operations	1,626	7,078
Balance, end of year	10,114	11,498
Ending balance: individually evaluated for impairment	1,276	1,231
Ending balance: collectively evaluated for impairment	8,838	10,267
Ending balance: loans acquired with deteriorated credit quality
Total	10,114	11,498
Loans:
Ending balance	853,970	862,342
Ending balance: individually evaluated for impairment	6,536	3,401
Ending balance: collectively evaluated for impairment	846,428	857,872
Ending balance: loans acquired with deteriorated credit quality	1,006	1,069
Total Loans	853,970	862,342
Unallocated [Member]
Allowance for loan losses:
Balance, beginning of the year	81	(38)
Recoveries credited to allowance
Loans charged off
Provision charged to operations	(27)	119
Balance, end of year	54	81
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment	54	81
Ending balance: loans acquired with deteriorated credit quality
Total	54	81
Loans:
Ending balance
Ending balance: individually evaluated for impairment
Ending balance: collectively evaluated for impairment
Ending balance: loans acquired with deteriorated credit quality
Total Loans

XML

Goodwill and Intangible Assets (Details Textual) (USD $)	9 Months Ended					3 Months Ended		9 Months Ended		6 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Minimum [Member]	Sep. 30, 2012 Maximum [Member]	Sep. 30, 2012 Harrisonburg branch acquisition [Member]	Sep. 30, 2012 Amortizable core deposit intangibles [Member]	Sep. 30, 2011 Amortizable core deposit intangibles [Member]	Sep. 30, 2012 Amortizable core deposit intangibles [Member]	Sep. 30, 2011 Amortizable core deposit intangibles [Member]	Jun. 30, 2011 Amortizable core deposit intangibles [Member] Harrisonburg branch acquisition [Member]	Sep. 30, 2012 Trademark intangible [Member]	Sep. 30, 2011 Trademark intangible [Member]	Sep. 30, 2012 Trademark intangible [Member]	Sep. 30, 2011 Trademark intangible [Member]
Goodwill and Intangible Assets (Textual) [Abstract]
Core deposit intangibles					$ 9,500
Amortization expense	$ 7,658,000	$ 5,300,000				$ 1,200,000	$ 1,500,000	$ 3,700,000	$ 4,600,000	$ 9,500	$ 100,000	$ 300,000	$ 100,000	$ 300,000
Period of amortization			4 years	14 years

XML

Borrowings (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Contractual maturities of long-term debt
Remaining three months 2012	$ (433)
2013	(1,744)
2014	(1,787)
2015	(1,831)
2016	13,865
Thereafter	188,500
Total long-term Borrowings	196,570
Prepayment Penalty [Member]
Contractual maturities of long-term debt
Remaining three months 2012	(433)
2013	(1,744)
2014	(1,787)
2015	(1,831)
2016	(1,882)
Thereafter	(11,810)
Total long-term Borrowings	(19,487)
Adjustable Rate [Member] | Subordinated Debt [Member]
Contractual maturities of long-term debt
Remaining three months 2012
2013
2014
2015
2016	15,747
Thereafter
Total long-term Borrowings	15,747
Adjustable Rate [Member] | Trust Preferred Capital Notes [Member]
Contractual maturities of long-term debt
Remaining three months 2012
2013
2014
2015
2016
Thereafter	60,310
Total long-term Borrowings	60,310
Adjustable Rate [Member] | FHLB Advances [Member]
Contractual maturities of long-term debt
Remaining three months 2012
2013
2014
2015
2016
Thereafter	140,000
Total long-term Borrowings	$ 140,000

XML

Loans and Allowance for Loan Losses (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	$ 24,907	$ 15,118
60-89 Days Past Due	5,007	4,265
Greater Than 90 Days and still Accruing	9,096	19,912
Purchased Impaired (net of credit mark)	6,437	9,897
Nonaccrual	32,159	44,834
Current	2,830,904	2,724,557
Total Loans	2,908,510	2,818,583	2,818,342
Commercial Construction [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	6,148
60-89 Days Past Due
Greater Than 90 Days and still Accruing		490
Purchased Impaired (net of credit mark)
Nonaccrual	7,846	10,276
Current	186,038	174,593
Total Loans	200,032	185,359
Commercial Real Estate - Owner Occupied [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	2,865	520
60-89 Days Past Due	88
Greater Than 90 Days and still Accruing	822	2,482
Purchased Impaired (net of credit mark)	1,228	1,292
Nonaccrual	2,212	5,962
Current	485,500	442,151
Total Loans	492,715	452,407
Commercial Real Estate - Non-Owner Occupied [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	5,116	190
60-89 Days Past Due		64
Greater Than 90 Days and still Accruing	635	2,887
Purchased Impaired (net of credit mark)		1,133
Nonaccrual	540	2,031
Current	687,388	648,778
Total Loans	693,679	655,083
Raw Land and Lots [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	138	94
60-89 Days Past Due		1,124
Greater Than 90 Days and still Accruing	153
Purchased Impaired (net of credit mark)	3,743	5,623
Nonaccrual	10,995	13,322
Current	197,287	194,121
Total Loans	212,316	214,284
Single Family Investment Real Estate [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	686	779
60-89 Days Past Due	102	70
Greater Than 90 Days and still Accruing	201	3,637
Purchased Impaired (net of credit mark)	371	388
Nonaccrual	4,081	5,048
Current	200,649	182,515
Total Loans	206,090	192,437
Commercial and Industrial [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	230	601
60-89 Days Past Due	191	185
Greater Than 90 Days and still Accruing	120	3,369
Purchased Impaired (net of credit mark)	89	392
Nonaccrual	2,678	5,297
Current	206,093	202,424
Total Loans	209,401	212,268
Other Commercial [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	238
60-89 Days Past Due	1	25
Greater Than 90 Days and still Accruing
Purchased Impaired (net of credit mark)
Nonaccrual	195	238
Current	39,873	44,140
Total Loans	40,307	44,403
Mortgage [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	3,899	6,748
60-89 Days Past Due	3,003	412
Greater Than 90 Days and still Accruing	3,991	3,804
Purchased Impaired (net of credit mark)
Nonaccrual	693	240
Current	209,888	208,442
Total Loans	221,474	219,646
Consumer Construction [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due
Greater Than 90 Days and still Accruing
Purchased Impaired (net of credit mark)
Nonaccrual	210	207
Current	27,278	20,550
Total Loans	27,488	20,757
Indirect Auto [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	1,998	2,653
60-89 Days Past Due	234	416
Greater Than 90 Days and still Accruing	289	443
Purchased Impaired (net of credit mark)	24	40
Nonaccrual	2	7
Current	156,948	159,149
Total Loans	159,495	162,708
Indirect Marine [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	68	189
60-89 Days Past Due		795
Greater Than 90 Days and still Accruing	114
Purchased Impaired (net of credit mark)
Nonaccrual	876	544
Current	30,256	38,291
Total Loans	31,314	39,819
HELOCs [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	2,481	1,678
60-89 Days Past Due	536	547
Greater Than 90 Days and still Accruing	1,707	820
Purchased Impaired (net of credit mark)	851	865
Nonaccrual	797	885
Current	279,976	272,306
Total Loans	286,348	277,101
Credit Card [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	147	245
60-89 Days Past Due	223	184
Greater Than 90 Days and still Accruing	268	323
Purchased Impaired (net of credit mark)
Nonaccrual
Current	19,694	18,254
Total Loans	20,332	19,006
Other Consumer [Member]
Summary of aging of the loan portfolio, by class
30-59 Days Past Due	893	1,421
60-89 Days Past Due	629	443
Greater Than 90 Days and still Accruing	796	1,657
Purchased Impaired (net of credit mark)	131	164
Nonaccrual	1,034	777
Current	104,036	118,843
Total Loans	$ 107,519	$ 123,305

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating activities:
Net income	$ 25,969	$ 22,085
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation of bank premises and equipment	5,049	5,005
Other-than-temporary impairment recognized in earnings		400
Amortization, net	7,658	5,300
Provision for loan losses	8,900	14,400
(Gains) losses on the sale of investment securities	(4)	(483)
(Increase) decrease in loans held for sale, net	(67,142)	12,188
(Gains) losses on sales of other real estate owned, net	442	328
(Gains) losses on sales of bank premises, net	(34)	644
Stock-based compensation expense	938	467
(Increase) decrease in other assets	(634)	4,263
Increase in other liabilities	2,630	11,048
Net cash and cash equivalents provided by (used in) operating activities	(16,228)	75,645
Investing activities:
Purchases of securities available for sale	(131,262)	(130,160)
Proceeds from sales of securities available for sale	2,186	18,365
Proceeds from maturities, calls and paydowns of securities available for sale	125,988	87,585
Net (increase) decrease in loans	(109,812)	69,306
Net increase in bank premises and equipment	(1,731)	(3,742)
Proceeds from sales of other real estate owned	9,148	10,557
Improvements to other real estate owned	(358)
Cash paid in bank acquisition		(26,437)
Cash acquired in bank and branch acquisitions		230
Net cash and cash equivalents provided (used in) investing activities	(105,841)	25,704
Financing activities:
Net increase in noninterest-bearing deposits	69,739	53,459
Net increase in interest-bearing deposits	(45,065)	(37,511)
Net increase (decrease) in short-term borrowings	91,121	(22,517)
Net (decrease) increase in long-term borrowings	(19,121)	366
Cash dividends paid - common stock	(6,058)	(5,460)
Cash dividends paid - preferred stock		(1,386)
Repurchase of common stock	(2,862)
Taxes paid related to net share settlement of equity awards	(26)
Issuance of common stock	16	324
Net cash and cash equivalents provided by (used in) financing activities	87,744	(12,725)
Increase (decrease) in cash and cash equivalents	(34,325)	88,624
Cash and cash equivalents at beginning of the period	96,659	61,153
Cash and cash equivalents at end of the period	62,334	149,777
Cash payments for:
Interest	22,495	25,265
Income taxes	4,300	4,238
Supplemental schedule of noncash investing and financing activities
Unrealized gain on securities available for sale	5,887	15,834
Changes in fair value of interest rate swap	(492)	(2,826)
Transfers from loans to other real estate owned	11,409	9,236
Increase in assets and liabilities:
Loans		70,817
Other assets		4,324
Noninterest bearing deposits		4,366
Interest bearing deposits		44,503
Other liabilities		$ 65

XML

Borrowings (Details Textual) (USD $)	1 Months Ended		3 Months Ended			9 Months Ended
	Jun. 15, 2011	Jun. 17, 2009	Sep. 30, 2012	Mar. 31, 2006	Mar. 31, 2004	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Borrowings (Textual) [Abstract]
Other Assets			$ 114,413,000			$ 114,413,000	$ 112,699,000	$ 112,395,000
Borrowings (Additional Textual) [Abstract]
Federal funds lines			85,500,000			85,500,000	113,000,000
Collateral dependent line of credit with the FHLB			793,200,000			793,200,000	776,800,000
Subordinated debt interest rate basis				LIBOR plus 1.40%	LIBOR rate plus 2.75%	LIBOR plus 1.45%
Capital securities maturity date				Jun. 15, 2036	Jun. 17, 2034
Securities pledged as collateral for FHLB advances			978,300,000			978,300,000	849,500,000
Subordinated debt			15,700,000			15,700,000
Subordinated debt maturity date						Apr. 01, 2016
Amortization expense			179,000			179,000
Prepayment Penalty						19,600,000
Capital securities redeemable at par	Jun. 15, 2011	Jun. 17, 2009
Statutory Trust 1 [Member]
Borrowings (Textual) [Abstract]
Trust Preferred Capital Note, issued					22,500,000
Interest rate			3.11%			3.11%
Principal value on debt securities					23,200,000
Other Assets			696,000			696,000
Statutory Trust 2 [Member]
Borrowings (Textual) [Abstract]
Trust Preferred Capital Note, issued				36,000,000
Interest rate			1.76%			1.76%
Principal value on debt securities				37,100,000
Other Assets			$ 1,100,000			$ 1,100,000

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Stock-Based Compensation (Details 3) (USD $)	9 Months Ended
	Sep. 30, 2012
Summary of nonvested stock activity
Weighted Average Grant-Date Fair Value, beginning balance	$ 12.62
Weighted Average Grant-Date Fair Value, Granted	$ 14.28
Weighted Average Grant-Date Fair Value, Vested	$ 15.81
Weighted Average Grant-Date Fair Value, Forfeited	$ 12.95
Weighted Average Grant-Date Fair Value, ending balance	$ 12.85
Number of Shares of Restricted Stock [Member]
Summary of nonvested stock activity
Number of Shares of Restricted Stock, beginning balance	140,557
Number of Shares of Restricted Stock, Granted	73,414
Number of Shares of Restricted Stock, Vested	(7,497)
Number of Shares of Restricted Stock, Forfeited	(14,310)
Number of Shares of Restricted Stock, ending balance	192,164
Performance Stock [Member]
Summary of nonvested stock activity
Number of Shares of Restricted Stock, beginning balance	6,000
Number of Shares of Restricted Stock, Forfeited	(1,500)
Number of Shares of Restricted Stock, ending balance	4,500

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2012

Borrowings [Abstract]

Short-term borrowings

	September 30,			December 31,
	2012			2011
Securities sold under agreements to repurchase	$	94,616		$	62,995
Other short-term borrowings		59,500			—
Total short-term borrowings	$	154,116		$	62,995
Maximum month-end outstanding balance	$	154,116		$	78,622
Average outstanding balance during the year		81,061			73,831
Average interest rate during the year		0.93	%		0.49	%
Average interest rate at end of year		0.31	%		0.47	%
Other short-term borrowings:
Federal Funds purchased		19,500			—
FHLB		40,000			—

Advances from the FHLB

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Adjustable Rate Credit	0.44%	0.80%	8/23/2022	n/a	n/a	$ 65,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	55,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
						$140,000

As of December 31, 2011 the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Convertible	3.60%	5/23/2018	5/23/2013	Once	$65,000
Convertible	3.84%	8/22/2018	8/22/2013	Once	55,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
					$140,000

Contractual maturities of long-term debt by interest rate type

	Adjustable Rate
	Subordinated Debt		Trust Preferred Capital Notes		FHLB Advances		Prepayment Penalty			Total  Long-term Borrowings
Remaining three months 2012	$	—	$	—	$	—	$	(433	)	$	(433	)
2013		—		—		—		(1,744	)		(1,744	)
2014		—		—		—		(1,787	)		(1,787	)
2015		—		—		—		(1,831	)		(1,831	)
2016		15,747		—		—		(1,882	)		13,865
Thereafter		—		60,310		140,000		(11,810	)		188,500
Total long-term borrowings	$	15,747	$	60,310	$	140,000	$	(19,487	)	$	196,570

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Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings per Share [Abstract]

Reconcilement of the denominators of the basic and diluted EPS computations

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
For the Three Months ended September 30, 2012
Net income, basic	$	9,626		25,881	$	0.37
Add: potentially dilutive common shares - stock awards		—		27		—
Diluted	$	9,626		25,908	$	0.37
For the Three Months ended September 30, 2011
Net income	$	9,071		25,987	$	0.35
Less: dividends paid and accumulated on preferred stock		462		—		0.02
Less: accretion of discount on preferred stock		66		—		—
Basic	$	8,543		25,987	$	0.33
Add: potentially dilutive common shares - stock awards		—		15		—
Diluted	$	8,543		26,002	$	0.33
For the Nine Months ended September 30, 2012
Net income, basic	$	25,969		25,893	$	1.00
Add: potentially dilutive common shares - stock awards		—		28		—
Diluted	$	25,969		25,921	$	1.00
For the Nine Months ended September 30, 2011
Net income	$	22,085		25,972	$	0.85
Less: dividends paid and accumulated on preferred stock		1,386		—		0.06
Less: accretion of discount on preferred stock		195		—		—
Basic	$	20,504	$	25,972	$	0.79
Add: potentially dilutive common shares - stock awards		—		22		—
Diluted	$	20,504		25,994	$	0.79

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Loans and Allowance for Loan Losses (Details Textual) (USD $)	9 Months Ended					9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Sep. 30, 2012 Nonaccrual Loans [Member]	Sep. 30, 2011 Nonaccrual Loans [Member]	Sep. 30, 2012 Impaired loans [Member]	Dec. 31, 2011 Impaired loans [Member]
Loans and Allowance for Loan Losses (Textual) [Abstract]
Loans	$ 2,908,510,000	$ 2,818,583,000	$ 2,818,342,000	$ 32,200,000	$ 51,900,000	$ 177,900,000	$ 255,100,000
Total accruing interest	9,096,000	19,912,000		9,100,000	12,100,000
Individually evaluated for impairment						161,200,000	242,800,000
Impaired loans collectively evaluated						16,700,000	12,300,000
TDR Recorded investment						63,800,000	112,600,000
Loans and Allowance for Loan Losses (Additional Textual) [Abstract]
Contractually required payments	1,080,780
Cash flows expected to be collected	1,072,726
Fair value of loans acquired as on date of acquisition	1,052,358
Restructured loans	$ 1,400,000
restructured loans, Number	3

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Stock-Based Compensation (Details 4) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2012	$ 320
For year ending December 31, 2013	1,065
For year ending December 31, 2014	726
For year ending December 31, 2015	366
For year ending December 31, 2016	168
For year ending December 31, 2017	25
Total	2,670
Stock Options [Member]
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2012	90
For year ending December 31, 2013	366
For year ending December 31, 2014	360
For year ending December 31, 2015	268
For year ending December 31, 2016	155
For year ending December 31, 2017	25
Total	1,264
Restricted Stock [Member]
Estimated unamortized compensation expense recognized in future
For the remaining three months of 2012	230
For year ending December 31, 2013	699
For year ending December 31, 2014	366
For year ending December 31, 2015	98
For year ending December 31, 2016	13
Total	$ 1,406

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Segment Reporting Disclosures (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting Disclosures [Abstract]

Information about reportable segments and reconciliation

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended September 30, 2012
Net interest income	$	38,428	$	334	$	—		$	38,762
Provision for loan losses		2,400		—		—			2,400
Net interest income after provision for loan losses		36,028		334		—			36,362
Noninterest income		6,750		8,919		(117	)		15,552
Noninterest expenses		30,596		7,839		(117	)		38,318
Income before income taxes		12,182		1,414		—			13,596
Income tax expense		3,415		555		—			3,970
Net income	$	8,767	$	859	$	—		$	9,626
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Three Months Ended September 30, 2011
Net interest income	$	39,208	$	238	$	—		$	39,446
Provision for loan losses		3,600		—		—			3,600
Net interest income after provision for loan losses		35,608		238		—			35,846
Noninterest income		6,665		4,862		(116	)		11,411
Noninterest expenses		30,259		4,361		(116	)		34,504
Income before income taxes		12,014		739		—			12,753
Income tax expense		3,407		275		—			3,682
Net income	$	8,607	$	464	$	—		$	9,071
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457
Nine Months Ended September 30, 2012
Net interest income	$	114,258	$	938	$	—		$	115,196
Provision for loan losses		8,900		—		—			8,900
Net interest income after provision for loan losses		105,358		938		—			106,296
Noninterest income		20,805		21,532		(351	)		41,986
Noninterest expenses		92,357		19,891		(351	)		111,897
Income before income taxes		33,806		2,579		—			36,385
Income tax expense		9,400		1,016		—			10,416
Net income	$	24,406	$	1,563	$	—		$	25,969
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Nine Months Ended September 30, 2011
Net interest income	$	116,862	$	1,007	$	—		$	117,869
Provision for loan losses		14,400		—		—			14,400
Net interest income after provision for loan losses		102,462		1,007		—			103,469
Noninterest income		18,599		14,135		(351	)		32,383
Noninterest expenses		92,342		13,614		(351	)		105,605
Income before income taxes		28,719		1,528		—			30,247
Income tax (benefit) expense		7,593		569		—			8,162
Net income	$	21,126	$	959	$	—		$	22,085
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

Information concerning goodwill and intangible assets

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2012
Amortizable core deposit intangibles	$	46,615	$	29,649	$	16,966
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		1,067		133
December 31, 2011
Amortizable core deposit intangibles	$	46,615	$	25,901	$	20,714
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		767		433
September 30, 2011
Amortizable core deposit intangibles	$	46,615	$	24,453	$	22,162
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		667		533

For the remaining three months of 2012	$	1,288
For the year ending December 31, 2013		3,830
For the year ending December 31, 2014		2,899
For the year ending December 31, 2015		2,461
For the year ending December 31, 2016		1,864
For the year ending December 31, 2017		1,435
Thereafter		3,321
		$ 17,099

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Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Changes in Stockholders' Equity [Abstract]
Other comprehensive income, tax	$ 2,060	$ 5,542
Dividends on Common Stock	$ 0.25	$ 0.21
Issuance of common stock under Dividend Reinvestment Plan, shares	31,179	18,135
Issuance of common stock under Stock Incentive Plan, shares	1,165	6,450
Vesting of restricted stock under Stock Incentive Plan, shares	9,647	12,243
Stock purchased under stock repurchase plan, shares	220,265
Restricted Stock Awards	1,818

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies [Abstract]

Balances of commitments and contingencies

	September 30,		December 31,		September 30,
	2012		2011		2011
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	844,190	$	720,317	$	735,129
Standby letters of credit		46,861		38,068		40,242
Mortgage loan rate lock commitments		172,316		45,820		132,691
Total commitments with off-balance sheet risk	$	1,063,367	$	804,205	$	908,062
Commitments with balance sheet risk:
Loans held for sale	$	141,965	$	74,823	$	61,786
Total other commitments	$	1,205,332	$	879,028	$	969,848

(1) Includes unfunded overdraft protection.

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Other Operating Expenses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Other Operating Expenses
Printing, postage, and supplies	$ 814	$ 502	$ 2,020	$ 1,597
Communication expense	783	716	2,246	2,178
Technology and data processing	2,034	2,135	6,411	6,885
Professional services	850	767	2,284	2,310
Marketing and advertising expense	1,241	1,414	4,131	3,909
FDIC assessment premiums and other insurance	593	905	1,912	4,050
Other taxes	746	711	2,262	2,121
Loan related expenses	489	468	1,646	1,433
OREO and related costs	1,035	532	3,273	3,389
Amortization of core deposit premiums	1,313	1,596	4,048	4,974
Acquisition and conversion costs				426
Other expenses	2,070	2,041	6,019	5,619
Total other operating expenses	$ 11,968	$ 11,787	$ 36,252	$ 38,891

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Stock-Based Compensation (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Summarizes the stock option activity
Number of Stock Options, Outstanding beginning balance		422,750
Weighted Average Exercise Price, Outstanding beginning balance		$ 17.70
Number of Stock Options, Granted		131,657
Weighted Average Exercise Price, Granted		$ 14.40
Number of Stock Options, Exercised	(1)	(1,165)
Weighted Average Exercise Price, Exercised		$ 12.11
Number of Stock Options, Forfeited		(19,029)
Weighted Average Exercise Price, Forfeited		$ 14.58
Number of Stock Options, Expired		(16,775)
Weighted Average Exercise Price, Expired		$ 22.53
Number of Stock Options, Outstanding ending balance	517,438	517,438
Weighted Average Exercise Price, Outstanding ending balance	$ 16.83	$ 16.83
Number of Stock Options, Exercisable	222,301	222,301
Weighted Average Exercise Price, Options exercisable	$ 20.50	$ 20.50

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Loans and Allowance for Loan Losses (Details 7) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	$ 2,049,109	$ 1,947,413
Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	200,032	185,359
Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	491,487	451,115
Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	693,679	653,950
Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	208,573	208,661
Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	205,719	192,049
Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	209,312	211,876
Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	40,307	44,403
1-3 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	379,624	326,468
1-3 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	11,409	10,099
1-3 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	125,840	88,430
1-3 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	164,530	149,346
1-3 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	3,378	4,368
1-3 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	24,329	32,741
1-3 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	44,831	35,120
1-3 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	5,307	6,364
4 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	1,232,707	1,104,102
4 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	105,226	84,299
4 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	314,456	296,825
4 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	416,312	367,244
4 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	112,439	99,374
4 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	145,213	116,570
4 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	122,572	123,872
4 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	16,489	15,918
5 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	139,981	152,040
5 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	11,150	6,079
5 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	22,406	17,604
5 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	51,597	58,844
5 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	14,807	18,767
5 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	14,109	11,928
5 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	13,779	22,079
5 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	12,133	16,739
6 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	153,707	159,867
6 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	39,371	36,650
6 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	17,671	21,158
6 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	31,961	38,662
6 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	33,719	33,673
6 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	12,898	14,358
6 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	13,284	11,559
6 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	4,803	3,807
7 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	141,500	203,709
7 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	32,766	48,232
7 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	11,114	26,389
7 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	29,279	39,854
7 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	43,724	52,204
7 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	8,431	16,452
7 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	14,671	19,066
7 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	1,515	1,512
8 [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	1,590	1,227
8 [Member] | Commercial Construction [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	110
8 [Member] | Commercial Real Estate - Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating		709
8 [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating
8 [Member] | Raw Land and Lots [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	506	275
8 [Member] | Single Family Investment Real Estate [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	739
8 [Member] | Commercial and Industrial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	175	180
8 [Member] | Other Commercial [Member]
Loans receivables related risk rating excluding purchased impaired loans
Loans receivables related risk rating	$ 60	$ 63

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Securities (Details 3) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Schedule of other-than-temporary impairment
Cumulative credit losses on investment securities, through December 31, 2011	$ 400
Cumulative credit losses on investment securities
Additions for credit losses not previously recognized
Cumulative credit losses on investment securities, through September 30, 2012	$ 400

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Cash and cash equivalents:
Cash and due from banks	$ 52,095	$ 64,412	$ 57,171
Interest-bearing deposits in other banks	10,081	31,930	92,247
Money market investments	1	155	199
Federal funds sold	157	162	160
Total cash and cash equivalents	62,334	96,659	149,777
Securities available for sale, at fair value	622,067	620,166	584,668
Restricted stock, at cost	20,687	20,661	21,817
Loans held for sale	141,965	74,823	61,786
Loans, net of unearned income	2,908,510	2,818,583	2,818,342
Less allowance for loan losses	39,894	39,470	41,290
Net loans	2,868,616	2,779,113	2,777,052
Bank premises and equipment, net	87,305	90,589	90,936
Other real estate owned, net of valuation allowance	34,440	32,263	34,464
Core deposit intangibles, net	16,966	20,714	22,162
Goodwill	59,400	59,400	59,400
Other assets	114,413	112,699	112,395
Total assets	4,028,193	3,907,087	3,914,457
LIABILITIES
Noninterest-bearing demand deposits	604,274	534,535	542,692
Interest-bearing deposits:
NOW accounts	418,988	412,605	395,822
Money market accounts	898,625	904,893	858,426
Savings accounts	204,317	179,157	176,531
Time deposits of $100,000 and over	534,797	551,349	561,303
Other time deposits	538,778	592,566	600,102
Total interest-bearing deposits	2,595,505	2,640,570	2,592,184
Total deposits	3,199,779	3,175,105	3,134,876
Securities sold under agreements to repurchase	94,616	62,995	70,450
Other short-term borrowings	59,500
Trust preferred capital note	60,310	60,310	60,310
Long-term borrowings	136,260	155,381	155,258
Other liabilities	34,779	31,657	41,982
Total liabilities	3,585,244	3,485,448	3,462,876
STOCKHOLDERS' EQUITY
Preferred stock, $10.00 par value, $1,000 liquidation value, shares authorized 500,000; issued and outstanding, 35,595 shares at September 30, 2011 and zero at December 31, 2011 and September 30, 2012.			35,595
Common stock, $1.33 par value, shares authorized 36,000,000; issued and outstanding, 25,967,705 shares, 26,134,830 shares, and 26,057,500 shares, respectively.	34,433	34,672	34,581
Surplus	186,224	187,493	186,505
Retained earnings	209,308	189,824	184,845
Discount on preferred stock			(982)
Accumulated other comprehensive income	12,984	9,650	11,037
Total stockholders' equity	442,949	421,639	451,581
Total liabilities and stockholders' equity	$ 4,028,193	$ 3,907,087	$ 3,914,457

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Stock-Based Compensation (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stock-Based Compensation (Additional Textual) [Abstract]
Available shares for stock option awards to employees	1,000,000		1,000,000
Shares available for grant	26,400		26,400
Expiry period of stock option plan			2013
Maximum term for stock option's from the grant date			10 years
Vesting proportion per year			20.00%
Maximum vesting period			5 years
Shares available for issuance under stock option plan	746,500		746,500
Recognized stock-based compensation expense	$ 324,000	$ 244,000	$ 938,000	$ 467,000
Recognized stock-based compensation expense, Net of tax	242,000	182,000	707,000	374,000
Stock-based compensation expense per share		less than $0.01		less than $0.01
Stock-based compensation expense per share	$ 0.01		$ 0.04
Number of Stock Options, Exercised	1		1,165
Intrinsic Value for stock options exercised	3,367		3,367
Total fair value for stock options exercised	14,108		14,108
Fair value of stock options vested			$ 279,000
Restricted stock vests			50.00%

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Condensed Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Unrealized holding gains arising during period, tax	$ 1,172	$ 2,062
Reclassification adjustment for (gains) losses included in net income, tax	$ 0	$ 1

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Borrowings (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Short-term borrowings
Securities sold under agreements to repurchase	$ 94,616	$ 62,995	$ 70,450
Other short-term borrowings	59,500
Total short-term borrowings	154,116	62,995
Maximum month-end outstanding balance	154,116	78,622
Average outstanding balance during the year	81,061	73,831
Average interest rate during the year	0.93%	0.49%
Average interest rate at end of year	0.31%	0.47%
Other short-term borrowings:
Federal Funds purchased	19,500
FHLB	$ 40,000	$ 40,000

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Derivatives (Tables)

9 Months Ended

Sep. 30, 2012

Cash flow hedging [Member]

Derivative [Line Items]

Summary of the derivative designated as a cash flow hedge

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,785		0.36	%		3.51	%		4.71
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,293		0.58	%		3.51	%		5.46

Interest rate swap [Member]

Derivative [Line Items]

Summary of the derivative designated as a cash flow hedge

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Receive fixed - pay floating interest rate swaps	2	$	2,137	$	39	$	—		6.15	%		2.81	%		9.84
Pay fixed - receive floating interest rate swaps	2	$	2,137	$	—	$	39		2.81	%		6.15	%		9.84
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Receive fixed - pay floating interest rate swaps	2	$	4,028	$	66	$	—		6.35	%		2.77	%		1.01
Pay fixed - receive floating interest rate swaps	2	$	4,028	$	—	$	66		2.77	%		6.35	%		1.01

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Information concerning goodwill and intangible assets
Net Carrying Value	$ 17,099
Amortizable core deposit intangibles [Member]
Information concerning goodwill and intangible assets
Gross Carrying Value	46,615	46,615	46,615
Accumulated Amortization	29,649	25,901	24,453
Net Carrying Value	16,966	20,714	22,162
Unamortizable goodwill [Member]
Information concerning goodwill and intangible assets
Gross Carrying Value	59,742	59,742	59,742
Accumulated Amortization	342	342	342
Net Carrying Value	59,400	59,400	59,400
Trademark intangible [Member]
Information concerning goodwill and intangible assets
Gross Carrying Value	1,200	1,200	1,200
Accumulated Amortization	1,067	767	667
Net Carrying Value	$ 133	$ 433	$ 533

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Derivatives

9 Months Ended

Sep. 30, 2012

Derivatives [Abstract]

DERIVATIVES

13. DERIVATIVES

During the second quarter of 2010, the Company entered into an interest rate swap agreement (the “trust swap”) as part of the management of interest rate risk. The Company designated the trust swap as a cash flow hedge intended to protect against the variability of cash flows associated with the aforementioned Statutory Trust II preferred capital securities. The trust swap hedges the interest rate risk, wherein the Company receives interest of LIBOR from a counterparty and pays a fixed rate of 3.51% to the same counterparty calculated on a notional amount of $36.0 million. The term of the trust swap is six years with a fixed rate that started June 15, 2011. The trust swap was entered into with a counterparty that met the Company’s credit standards and the agreement contains collateral provisions protecting the at-risk party. The Company believes that the credit risk inherent in the contract is not significant.

Amounts receivable or payable are recognized as accrued under the terms of the agreements. In accordance with ASC 815 Derivatives and Hedging, the trust swap is designated as a cash flow hedge, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. The Company has assessed the effectiveness of the hedging relationship by comparing the changes in cash flows on the designated hedged item. There was no hedge ineffectiveness for this trust swap. At September 30, 2012, the fair value of the trust swap agreement was an unrealized loss of $4.8 million, the amount the Company would have expected to pay if the contract was terminated. The below liability is recorded as a component of other comprehensive income recorded in the Company’s Consolidated Statements of Comprehensive Income.

Shown below is a summary of the derivative designated as a cash flow hedge at September 30, 2012 and December 31, 2011 (dollars in thousands):

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,785		0.36	%		3.51	%		4.71
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Pay fixed - receive floating interest rate swaps	1	$	36,000	$	—	$	4,293		0.58	%		3.51	%		5.46

During the normal course of business, the Company enters into interest rate swap loan relationships (“loan swaps”) with borrowers to meet their financing needs. Upon entering into the loan swaps, the Company enters into offsetting positions with counterparties in order to minimize interest rate risk. These back-to-back loan swaps qualify as financial derivatives with fair values reported in other assets and other liabilities. Shown below is a summary regarding loan swap derivative activities at September 30, 2012 and December 31, 2011 (dollars in thousands):

		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of September 30, 2012
Receive fixed - pay floating interest rate swaps	2	$	2,137	$	39	$	—		6.15	%		2.81	%		9.84
Pay fixed - receive floating interest rate swaps	2	$	2,137	$	—	$	39		2.81	%		6.15	%		9.84
		Notional						Receive			Pay			Life
	Positions	Amount		Asset		Liability		Rate			Rate			(Years)
As of December 31, 2011
Receive fixed - pay floating interest rate swaps	2	$	4,028	$	66	$	—		6.35	%		2.77	%		1.01
Pay fixed - receive floating interest rate swaps	2	$	4,028	$	—	$	66		2.77	%		6.35	%		1.01

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Other Operating Expenses (Tables)

9 Months Ended

Sep. 30, 2012

Other Operating Expenses [Abstract]

Other Operating Expenses

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Printing, postage, and supplies	$	814	$	502	$	2,020	$	1,597
Communications expense		783		716		2,246		2,178
Technology and data processing		2,034		2,135		6,411		6,885
Professional services		850		767		2,284		2,310
Marketing and advertising expense		1,241		1,414		4,131		3,909
FDIC assessment premiums and other insurance		593		905		1,912		4,050
Other taxes		746		711		2,262		2,121
Loan related expenses		489		468		1,646		1,433
OREO and related costs (1)		1,035		532		3,273		3,389
Amortization of core deposit premuims		1,313		1,596		4,048		4,974
Acquistion and conversion costs		—		—		—		426
Other expenses		2,070		2,041		6,019		5,619
Total other operating expenses	$	11,968	$	11,787	$	36,252	$	38,891

⁽¹⁾ OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses.

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Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Modifications and Extinguishments

In accordance with Accounting Statements Codification (“ASC”) 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings on the Company’s consolidated income statement. Amortization expense for the three and nine months ended September 30, 2012 was $179,000.

Goodwill and Other Intangible Assets

The Company follows ASC 350, Goodwill and Other Intangible Assets, in accounting for goodwill and intangible assets subsequent to initial recognition. The provisions of this section discontinued the amortization of goodwill and intangible assets with indefinite lives but require an impairment review at least annually and more frequently if certain impairment indicators are evident. Based on the annual testing during the second quarter of each year and the absence of impairment indicators during the quarter ended September 30, 2012, the Company has recorded no impairment charges to date for goodwill or intangible assets.

Fair Value Measurements and Disclosures

The Company follows ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:

Level 1	Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Financial Instruments

ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Derivatives and hedging

Amounts receivable or payable are recognized as accrued under the terms of the agreements. In accordance with ASC 815 Derivatives and Hedging, the trust swap is designated as a cash flow hedge, with the effective portion of the derivative’s unrealized gain or loss recorded as a component of other comprehensive income. The ineffective portion of the unrealized gain or loss, if any, would be recorded in other expense. The Company has assessed the effectiveness of the hedging relationship by comparing the changes in cash flows on the designated hedged item. There was no hedge ineffectiveness for this trust swap. At September 30, 2012, the fair value of the trust swap agreement was an unrealized loss of $4.8 million, the amount the Company would have expected to pay if the contract was terminated. The below liability is recorded as a component of other comprehensive income recorded in the Company’s Consolidated Statements of Comprehensive Income.

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Commitments with balance sheet risk:
Loans held for sale	$ 141,965	$ 74,823	$ 61,786
Union Mortgage [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	1,063,367	804,205	908,062
Commitments with balance sheet risk:
Loans held for sale	141,965	74,823	61,786
Total other commitments	1,205,332	879,028	969,848
Union Mortgage [Member] | Commitments to extend credit [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	844,190	720,317	735,129
Union Mortgage [Member] | Standby letters of credit [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	46,861	38,068	40,242
Union Mortgage [Member] | Mortgage loan rate lock commitments [Member]
Commitments with off-balance sheet risk:
Total commitments with off-balance sheet risk	$ 172,316	$ 45,820	$ 132,691

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Condensed Consolidated Statements of Changes in Stockholders' Equity (USD $) In Thousands	Total	Preferred Stock	Common Stock	Surplus	Retained Earnings	Discount on Preferred Stock	Accumulated Other Comprehensive Income
Balance at Dec. 31, 2010	$ 428,085	$ 35,595	$ 34,532	$ 185,763	$ 169,801	$ (1,177)	$ 3,571
Net income	22,085				22,085
Other comprehensive income	7,466						7,466
Dividends on Common Stock	(5,460)				(5,460)
Tax benefit from exercise of stock awards	1			1
Dividends on Preferred Stock	(1,386)				(1,386)
Accretion of discount on Preferred Stock					(195)	195
Issuance of common stock under Dividend Reinvestment Plan	267		24	243
Issuance of common stock under Stock Incentive Plan	56		9	47
Vesting of restricted stock under Stock Incentive Plan			16	(16)
Stock-based compensation expense	467			467
Balance at Sep. 30, 2011	451,581	35,595	34,581	186,505	184,845	(983)	11,037
Balance at Dec. 31, 2011	421,639		34,672	187,493	189,824		9,650
Net income	25,969				25,969
Other comprehensive income	3,334						3,334
Dividends on Common Stock	(6,058)				(6,058)
Stock purchased under stock repurchase plan	(2,863)		(293)	(2,570)
Issuance of common stock under Dividend Reinvestment Plan			41	386	(427)
Issuance of common stock under Stock Incentive Plan	16		2	14
Vesting of restricted stock under Stock Incentive Plan			13	(13)
Net settle for taxes on Restricted Stock Awards	(26)		(2)	(24)
Stock-based compensation expense	938			938
Balance at Sep. 30, 2012	$ 442,949		$ 34,433	$ 186,224	$ 209,308		$ 12,984

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 10.00	$ 10.00	$ 10.00
Preferred stock, liquidation value	$ 1,000	$ 1,000	$ 1,000
Preferred stock, shares authorized	500,000	500,000	500,000
Preferred stock, shares issued	0	0	35,595
Preferred stock, shares outstanding	0	0	35,595
Common stock, par value	$ 1.33	$ 1.33	$ 1.33
Common stock, shares authorized	36,000,000	36,000,000	36,000,000
Common stock, shares issued	25,967,705	26,134,830	26,057,500
Common stock, shares outstanding	25,967,705	26,134,830	26,057,500

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Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

Recent Accounting Pronouncements [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

8. RECENT ACCOUNTING PRONOUNCEMENTS

In April 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-03, “Transfers and Servicing (Topic 860) – Reconsideration of Effective Control for Repurchase Agreements.” The amendments in this ASU remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee and (2) the collateral maintenance implementation guidance related to that criterion. The amendments in this ASU became effective during the quarter ended June 30, 2012 and were applied prospectively to transactions or modifications of existing transactions that occurred on or after the effective date. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820) – Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This ASU is the result of joint efforts by the FASB and International Accounting Standards Board (IASB) to develop a single, converged fair value framework on how (not when) to measure fair value and what disclosures to provide about fair value measurements. The ASU is largely consistent with existing fair value measurement principles in U.S. GAAP (Topic 820), with many of the amendments made to eliminate unnecessary wording differences between U.S. GAAP and International Financial Reporting Standards (IFRS). The amendments are effective for interim and annual periods beginning after December 15, 2011 with prospective application. The Company has included the required disclosures in its consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220) – Presentation of Comprehensive Income.” The objective of this ASU is to improve the comparability, consistency and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement of comprehensive income should include the components of net income, a total for net income, the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present all the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The amendments do not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects, or the calculation or reporting of earnings per share. The amendments in this ASU were applied retrospectively. The amendments are effective for fiscal years and interim periods within those years beginning after December 15, 2011. The Company has included the required Statements of Comprehensive Income using the two-statement approach in its consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08, “Intangible – Goodwill and Other (Topic 350) – Testing Goodwill for Impairment.” The amendments in this ASU permit an entity to first assess qualitative factors related to goodwill to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. Under the amendments in this ASU, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. The amendments in this ASU are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of the new guidance did not have a material impact on the Company’s consolidated financial statements.

In December 2011, the FASB issued ASU 2011-11, “Balance Sheet (Topic 210) – Disclosures about Offsetting Assets and Liabilities.” This ASU requires entities to disclose both gross information and net information about both instruments and transactions eligible for offset in the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not expect the adoption of ASU 2011-11 to have a material impact on its consolidated financial statements.

In December 2011, the FASB issued ASU 2011-12, “Comprehensive Income (Topic 220) – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” The amendments are being made to allow the Board time to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the Board is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before ASU 2011-05. All other requirements in ASU 2011-05 are not affected by ASU 2011-12, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company has included the required disclosures in its consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” The amendments in this ASU apply to all entities that have indefinite-lived intangible assets, other than goodwill, reported in their financial statements. The amendments in this ASU provide an entity with the option to make a qualitative assessment about the likelihood that an indefinite-lived intangible asset is impaired to determine whether it should perform a quantitative impairment test. The amendments also enhance the consistency of impairment testing guidance among long-lived asset categories by permitting an entity to assess qualitative factors to determine whether it is necessary to calculate the asset’s fair value when testing an indefinite-lived intangible asset for impairment. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The Company does not expect the adoption of ASU 2012-02 to have a material impact on its (consolidated) financial statements.

In October 2012, the FASB issued ASU 2012-06, “Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution.” The amendments in this ASU clarify the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. In addition, the amendments should resolve current diversity in practice on the subsequent measurement of these types of indemnification assets. The amendments are effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2012. Early adoption is permitted. The amendments should be applied prospectively to any new indemnification assets acquired after the date of adoption and to indemnification assets existing as of the date of adoption arising from a government-assisted acquisition of a financial institution. The Company does not expect the adoption of ASU 2012-06 to have a material impact on its (consolidated) financial statements.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 05, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	UNION FIRST MARKET BANKSHARES CORP
Entity Central Index Key	0000883948
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		25,965,424

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets [Abstract]

GOODWILL AND INTANGIBLE ASSETS

9. GOODWILL AND INTANGIBLE ASSETS

The Company follows ASC 350, Goodwill and Other Intangible Assets, in accounting for goodwill and intangible assets subsequent to initial recognition. The provisions of this section discontinued the amortization of goodwill and intangible assets with indefinite lives but require an impairment review at least annually and more frequently if certain impairment indicators are evident. Based on the annual testing during the second quarter of each year and the absence of impairment indicators during the quarter ended September 30, 2012, the Company has recorded no impairment charges to date for goodwill or intangible assets.

Core deposit intangible assets are being amortized over the period of expected benefit, which ranges from 4 to 14 years. The acquired trademark intangible is included as a component of other assets in the consolidated balance sheet.

Information concerning goodwill and intangible assets is presented in the following table (in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
September 30, 2012
Amortizable core deposit intangibles	$	46,615	$	29,649	$	16,966
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		1,067		133
December 31, 2011
Amortizable core deposit intangibles	$	46,615	$	25,901	$	20,714
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		767		433
September 30, 2011
Amortizable core deposit intangibles	$	46,615	$	24,453	$	22,162
Unamortizable goodwill		59,742		342		59,400
Trademark intangible		1,200		667		533

Amortization expense of the core deposit intangibles for the three and nine month periods ended September 30, 2012 totaled $1.2 million and $3.7 million, respectively, compared to $1.5 million and $4.6 million, respectively, in 2011. The Harrisonburg branch core deposit intangible of $9,500 was expensed in the second quarter of 2011. Amortization expense of the trademark intangibles for the three and nine month periods ended September 30, 2012 and 2011 was both $100,000 and $300,000, respectively.

As of September 30, 2012, the estimated remaining amortization expense of core deposit and trademark intangibles is as follows (dollars in thousands):

For the remaining three months of 2012	$	1,288
For the year ending December 31, 2013		3,830
For the year ending December 31, 2014		2,899
For the year ending December 31, 2015		2,461
For the year ending December 31, 2016		1,864
For the year ending December 31, 2017		1,435
Thereafter		3,321
		$ 17,099

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Derivatives (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Dec. 31, 2011 position	Sep. 30, 2012 position
Summary of the derivative designated as a cash flow hedge
Notional amount		$ 36,000
Life (Years)		6 years
Pay fixed - receive floating interest rate swaps [Member]
Summary of the derivative designated as a cash flow hedge
Positions	1	1
Notional amount	36,000	36,000
Asset
Liability	$ 4,293	$ 4,785
Receive Rate	0.58%	0.36%
Pay Rate	3.51%	3.51%
Life (Years)	5 years 5 months 16 days	4 years 8 months 16 days

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Interest and dividend income:
Interest and fees on loans	$ 40,836	$ 42,664	$ 121,743	$ 126,999
Interest on Federal funds sold	1	1	1	1
Interest on deposits in other banks	6	24	64	60
Interest and dividends on securities:
Taxable	2,846	3,146	9,482	10,400
Nontaxable	1,814	1,771	5,391	5,294
Total interest and dividend income	45,503	47,606	136,681	142,754
Interest expense:
Interest on deposits	4,726	5,924	15,084	18,774
Interest on Federal funds purchased	28		29	7
Interest on short-term borrowings	69	92	160	258
Interest on long-term borrowings	1,918	2,144	6,212	5,846
Total interest expense	6,741	8,160	21,485	24,885
Net interest income	38,762	39,446	115,196	117,869
Provision for loan losses	2,400	3,600	8,900	14,400
Net interest income after provision for loan losses	36,362	35,846	106,296	103,469
Noninterest income:
Service charges on deposit accounts	2,222	2,294	6,643	6,568
Other service charges, commissions and fees	3,655	3,254	10,692	9,529
Gains (losses) on securities transactions, net	(1)	499	4	483
Other-than-temporary impairment losses		(400)		(400)
Gains on sales of mortgage loans	8,918	4,861	21,529	14,132
Gains (losses) on bank premises, net	(309)	(16)	34	(644)
Other operating income	1,067	919	3,084	2,715
Total noninterest income	15,552	11,411	41,986	32,383
Noninterest expenses:
Salaries and benefits	21,279	18,076	61,204	53,310
Occupancy expenses	3,262	2,885	9,001	8,307
Furniture and equipment expenses	1,809	1,756	5,440	5,097
Other operating expenses	11,968	11,787	36,252	38,891
Total noninterest expenses	38,318	34,504	111,897	105,605
Income before income taxes	13,596	12,753	36,385	30,247
Income tax expense	3,970	3,682	10,416	8,162
Net income	9,626	9,071	25,969	22,085
Dividends paid and accumulated on preferred stock		462		1,386
Accretion of discount on preferred stock		66		195
Net income available to common shareholders	$ 9,626	$ 8,543	$ 25,969	$ 20,504
Earnings per common share, basic	$ 0.37	$ 0.33	$ 1.00	$ 0.79
Earnings per common share, diluted	$ 0.37	$ 0.33	$ 1.00	$ 0.79

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

STOCK-BASED COMPENSATION

3. STOCK-BASED COMPENSATION

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) and the 2003 Stock Incentive Plan (the “2003 Plan”) provide for the granting of incentive stock options, non-statutory stock options, and nonvested stock awards to key employees of the Company and its subsidiaries. The 2011 Plan makes available 1,000,000 shares, which may be awarded to employees of the Company and its subsidiaries in the form of incentive stock options intended to comply with the requirements of Section 422 of the Internal Revenue Code of 1986 (“incentive stock options”), non-statutory stock options, and nonvested stock. Approximately 26,400 shares remain available for grant under the 2003 Plan, which expires in 2013. Under both plans, the option price cannot be less than the fair market value of the stock on the grant date. The Company issues new shares to satisfy stock-based awards. A stock option’s maximum term is ten years from the date of grant and vests in equal annual installments of 20% over a five year vesting schedule. Collectively, there remain approximately 746,500 shares available as of September 30, 2012 for issuance under the 2011 and 2003 Plans.

For the three month and nine month periods ended September 30, 2012 and 2011, respectively, the Company recognized stock-based compensation expense of approximately $324,000 and $938,000 ($242,000 and $707,000, net of tax), respectively, and $244,000 and $467,000, ($182,000 and $374,000, net of tax), respectively. These expenses were less than $0.01 per common share for both periods ended September 30, 2011, and $0.01 and $0.04 for the three and nine month periods, respectively, ended September 30, 2012.

Stock Options

The following table summarizes the stock option activity for the nine months ended September 30, 2012:

	Number of Stock Options			Weighted Average Exercise Price
Options outstanding, December 31, 2011		422,750		$	17.70
Granted		131,657			14.40
Exercised		(1,165	)		12.11
Forfeited		(19,029	)		14.58
Expired		(16,775	)		22.53
Options outstanding, September 30, 2012		517,438			16.83
Options exercisable, September 30, 2012		222,301			20.50

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table for the nine months ended September 30, 2012 and 2011:

	Nine Months Ended September 30,
	2012			2011
Dividend yield (1)		2.47	%		2.36	%
Expected life in years (2)		7.0			7.0
Expected volatility (3)		41.53	%		41.02	%
Risk-free interest rate (4)		1.24	%		2.71	%
Weighted average fair value per option granted	$	4.76		$	4.31

(1) Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant.

(2) Based on the average of the contractual life and vesting schedule for the respective option.

(3) Based on the monthly historical volatility of the Company’s stock price over the expected life of the options.

(4) Based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant.

The following table summarizes information concerning stock options issued to the Company’s employees that are vested or are expected to vest and stock options exercisable as of September 30, 2012:

	Stock Options Vested or Expected to Vest		Exercisable
Stock options		492,196		222,301
Weighted average remaining contractual life in years		6.47		3.81
Weighted average exercise price on shares above water	$	13.23	$	12.23
Aggregate intrinsic value	$	257,186	$	28,561

There was one stock option award exercised during the third quarter of 2012; the total intrinsic value for the stock option award exercised during both three and nine month periods ended September 30, 2012 was $3,367, and the total fair value for the stock option award exercised during both three and nine month periods ended September 30, 2012 was $14,108. The fair value of stock options vested during the nine months ended September 30, 2012 was approximately $279,000.

Nonvested Stock

The 2003 and the 2011 Stock Incentive Plans permit the granting of nonvested stock but are limited to one-third of the aggregate number of total awards granted. This equity component of compensation is divided between restricted (time-based) stock grants and performance-based stock grants. Generally, the restricted stock vests 50% on each of the third and fourth anniversaries from the date of the grant. The performance-based stock is subject to vesting on the fourth anniversary of the date of the grant based on the performance of the Company’s stock price. The value of the nonvested stock awards was calculated by multiplying the fair market value of the Company’s common stock on grant date by the number of shares awarded. Employees have the right to vote the shares and to receive cash or stock dividends (restricted stock), if any, except for the nonvested stock under the performance-based component (performance stock).

The following table summarizes the nonvested stock activity for the nine months ended September 30, 2012:

	Number of Shares of Restricted Stock			Performance Stock			Weighted Average Grant- Date Fair Value
Balance, December 31, 2011		140,557			6,000		$	12.62
Granted		73,414			—			14.28
Vested		(7,497	)		—			15.81
Forfeited		(14,310	)		(1,500	)		12.95
Balance, September 30, 2012		192,164			4,500			12.85

The estimated unamortized compensation expense, net of estimated forfeitures, related to nonvested stock and stock options issued and outstanding as of September 30, 2012 that will be recognized in future periods is as follows (dollars in thousands):

	Stock Options		Restricted Stock		Total
For the remaining three months of 2012	$	90	$	230	$	320
For year ending December 31, 2013		366		699		1,065
For year ending December 31, 2014		360		366		726
For year ending December 31, 2015		268		98		366
For year ending December 31, 2016		155		13		168
For year ending December 31, 2017		25		—		25
Total	$	1,264	$	1,406	$	2,670

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Business Combinations

9 Months Ended

Sep. 30, 2012

Business Combinations [Abstract]

BUSINESS COMBINATIONS

2. BUSINESS COMBINATIONS

Harrisonburg Branch Acquisition

On May 20, 2011, the Company completed the purchase of the former NewBridge Bank branch in Harrisonburg, Virginia, assets and liabilities related to the branch business, and a potential branch site in Waynesboro, Virginia. Under the parties’ agreement, the Company purchased loans of $72.5 million, assumed deposit liabilities of $48.9 million, and purchased the related fixed assets of the branch. The Company operates the acquired bank branch under the name Union First Market Bank (the “Harrisonburg branch”). The acquisition, which allowed the Company to establish immediately a meaningful presence in a new banking market, is consistent with the Company’s secondary growth strategy of expanding operations along the Interstate Route 81 corridor. The Company’s consolidated statements of income include the results of operations of the Harrisonburg branch from the closing date of the acquisition.

In connection with the acquisition, the Company recorded $1.8 million of goodwill and $9,500 of core deposit intangibles. The core deposit intangible of $9,500 was expensed immediately upon completion of the acquisition. The recorded goodwill was allocated to the community banking segment of the Company and is deductible for tax purposes.

The Company acquired the $72.5 million loan portfolio at a fair value discount of $1.7 million. The discount represents expected credit losses, adjustments to market interest rates and liquidity adjustments. The performing loan portfolio fair value estimate was $70.5 million and the impaired loan portfolio fair value estimate was $276,000.

In the third quarter, interest income of approximately $640,000 was recorded on loans acquired in the Harrisonburg branch acquisition. The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

September 30, 2012:
Outstanding principal balance	$	47,658
Carrying amount	$	47,131
December 31, 2011:
Outstanding principal balance	$	54,953
Carrying amount	$	53,359

Loans obtained in the acquisition of the Harrisonburg branch for which there is specific evidence of credit deterioration and for which it was probable that the Company would be unable to collect all contractually required principal and interest payments are not considered to be material to the Company’s consolidated assets.

First Market Bank Acquisition

In February 2010, the Company completed the acquisition of First Market Bank, FSB (“FMB”). Interest income on acquired loans for the third quarter of 2012 was approximately $6.5 million. The outstanding principal balance and the carrying amount of these loans included in the consolidated balance sheet at September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

September 30, 2012:
Outstanding principal balance	$	471,557
Carrying amount	$	462,552
December 31, 2011:
Outstanding principal balance	$	632,602
Carrying amount	$	620,048

Loans obtained in the acquisition of FMB for which there is specific evidence of credit deterioration and for which it was probable that the Company would be unable to collect all contractually required principal and interest payments are not considered to be material to the Company’s consolidated assets.

During the second quarter of 2012, the Company compared the expected prepayments at acquisition to actual payments and anticipated future payments on four purchased performing loan pools. The slower prepayment speed noted on real estate, commercial real estate, land, and auto pools during this assessment resulted in an adjustment to the fair value discount accretion rate. This is considered a change in accounting estimate and resulted in a lower effective yield in each pool and had an immaterial impact on the financial statements.

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Other Operating Expenses

9 Months Ended

Sep. 30, 2012

Other Operating Expenses [Abstract]

OTHER OPERATING EXPENSES

14. OTHER OPERATING EXPENSES

The following table presents the consolidated statement of income line “Other Operating Expenses” broken into greater detail for the three and nine months ended September 30, 2012 and 2011, respectively (dollars in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2012		2011		2012		2011
Printing, postage, and supplies	$	814	$	502	$	2,020	$	1,597
Communications expense		783		716		2,246		2,178
Technology and data processing		2,034		2,135		6,411		6,885
Professional services		850		767		2,284		2,310
Marketing and advertising expense		1,241		1,414		4,131		3,909
FDIC assessment premiums and other insurance		593		905		1,912		4,050
Other taxes		746		711		2,262		2,121
Loan related expenses		489		468		1,646		1,433
OREO and related costs (1)		1,035		532		3,273		3,389
Amortization of core deposit premuims		1,313		1,596		4,048		4,974
Acquistion and conversion costs		—		—		—		426
Other expenses		2,070		2,041		6,019		5,619
Total other operating expenses	$	11,968	$	11,787	$	36,252	$	38,891

⁽¹⁾ OREO related costs include foreclosure related expenses, gains/losses on the sale of OREO, valuation reserves, and asset resolution related legal expenses.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

Commitments to extend credit are agreements to lend to customers as long as there are no violations of any conditions established in the contracts. Commitments generally have fixed expiration dates or other termination clauses and may require payments of fees. Because many of the commitments may expire without being completely drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case by case basis.

Letters of credit are conditional commitments issued by the Company to guarantee the performance of customers to third parties. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

At September 30, 2012, Union Mortgage Group, Inc. (“Union Mortgage”), a wholly owned subsidiary of Union First Market Bank, a wholly owned subsidiary of Union First Market Bankshares Corporation, had rate lock commitments to originate mortgage loans and loans held for sale. These commitments to sell loans are designed to mitigate the mortgage company’s exposure to fluctuations in interest rates in connection with rate lock commitments and loans held for sale.

The following table presents the balances of commitments and contingencies (dollars in thousands):

	September 30,		December 31,		September 30,
	2012		2011		2011
Commitments with off-balance sheet risk:
Commitments to extend credit (1)	$	844,190	$	720,317	$	735,129
Standby letters of credit		46,861		38,068		40,242
Mortgage loan rate lock commitments		172,316		45,820		132,691
Total commitments with off-balance sheet risk	$	1,063,367	$	804,205	$	908,062
Commitments with balance sheet risk:
Loans held for sale	$	141,965	$	74,823	$	61,786
Total other commitments	$	1,205,332	$	879,028	$	969,848

(1) Includes unfunded overdraft protection.

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Borrowings

9 Months Ended

Sep. 30, 2012

Borrowings [Abstract]

BORROWINGS

6. BORROWINGS

Short-term Borrowings

Total short-term borrowings consist of securities sold under agreements to repurchase, which are secured transactions with customers and generally mature the day following the date sold. Also included in total short-term borrowings are Federal funds purchased, which are secured overnight borrowings from other financial institutions, and short-term Federal Home Loan Bank of Atlanta (“FHLB”) advances. Total short-term borrowings consist of the following as of September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30,			December 31,
	2012			2011
Securities sold under agreements to repurchase	$	94,616		$	62,995
Other short-term borrowings		59,500			—
Total short-term borrowings	$	154,116		$	62,995
Maximum month-end outstanding balance	$	154,116		$	78,622
Average outstanding balance during the year		81,061			73,831
Average interest rate during the year		0.93	%		0.49	%
Average interest rate at end of year		0.31	%		0.47	%
Other short-term borrowings:
Federal Funds purchased		19,500			—
FHLB		40,000			—

Union First Market Bank (the “Bank”) maintains Federal funds lines with several correspondent banks; the remaining available balance was $85.5 million and $113.0 million at September 30, 2012 and December 31, 2011, respectively. The Company has certain restrictive covenants related to certain asset quality, capital, and profitability metrics associated with these lines and is considered to be in compliance with these covenants. Additionally, the Company had a collateral dependent line of credit with the FHLB of up to $793.2 million and $776.8 million at September 30, 2012 and December 31, 2011, respectively.

Long-term Borrowings

During the first quarter of 2004, the Company’s Statutory Trust I, a wholly owned subsidiary of the Company, issued a Trust Preferred Capital Note of $22.5 million through a pooled underwriting for an acquisition in 2004. The securities have an indexed London Interbank Offer Rate (“LIBOR”) floating rate (three month LIBOR rate plus 2.75%) which adjusts and is payable quarterly. The interest rate at September 30, 2012 was 3.11%. The capital securities were redeemable at par beginning on June 17, 2009 and quarterly thereafter until the securities mature on June 17, 2034. The principal asset of Statutory Trust I is $23.2 million of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital notes. Of the above amount, $696,000 is reflected as the Company’s investment in Statutory Trust I and reported as “Other assets” within the consolidated balance sheet.

During the first quarter of 2006, the Company’s Statutory Trust II, a wholly owned subsidiary of the Company, issued a Trust Preferred Capital Note of $36.0 million through a pooled underwriting for an acquisition in 2006. The securities have a LIBOR-indexed floating rate (three month LIBOR plus 1.40%) that adjusts and is payable quarterly. The interest rate at September 30, 2012 was 1.76%. The capital securities were redeemable at par on June 15, 2011 and quarterly thereafter until the securities mature on June 15, 2036. The principal asset of Statutory Trust II is $37.1 million of the Company’s junior subordinated debt securities with like maturities and like interest rates to the capital notes. Of this amount, $1.1 million is reflected as the Company’s investment in Statutory Trust II reported as “Other assets” within the consolidated balance sheet.

The obligations of the Company with respect to the issuance of the capital securities constitute a full and unconditional guarantee by the Company of the trust’s obligations with respect to the capital securities. Subject to certain exceptions and limitations, the Company may elect from time to time to defer interest payments on the junior subordinated debt securities, which would result in a deferral of distribution payments on the related capital securities and require a deferral of common dividends. No such deferrals have taken place to date.

As part of the acquisition of FMB, the Company assumed subordinated debt with terms of LIBOR plus 1.45% and a maturity date of April 2016. At September 30, 2012 the carrying value of the subordinated debt, net of the purchase accounting discount, was $15.7 million.

On August 23, 2012, the Company modified its fixed rate FHLB advances to floating rate advances which resulted in reducing the Company’s FHLB borrowing costs. In connection with this modification the Company incurred a prepayment penalty of $19.6 million on the original advances, which is included as a component of long-term borrowings in the Company’s consolidated balance sheet. In accordance with Accounting Statements Codification (“ASC”) 470-50, Modifications and Extinguishments, the Company will amortize this prepayment penalty over the term of the modified advances using the effective rate method. The amortization expense is included as a component of interest expense on long-term borrowings on the Company’s consolidated income statement. Amortization expense for the three and nine months ended September 30, 2012 was $179,000.

As of September 30, 2012, the advances from the FHLB consist of the following (dollars in thousands):

Long Term Type	Spread to 3-Month LIBOR	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Adjustable Rate Credit	0.44%	0.80%	8/23/2022	n/a	n/a	$ 65,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	55,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
Adjustable Rate Credit	0.45%	0.81%	11/23/2022	n/a	n/a	10,000
						$140,000

As of December 31, 2011 the advances from the FHLB consisted of the following (dollars in thousands):

Long Term Type	Interest Rate	Maturity Date	Conversion Date	Option Frequency	Advance Amount
Convertible	3.60%	5/23/2018	5/23/2013	Once	$65,000
Convertible	3.84%	8/22/2018	8/22/2013	Once	55,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
Convertible	3.60%	5/23/2018	5/23/2013	Once	10,000
					$140,000

The carrying value of the loans and securities pledged as collateral for FHLB advances total $978.3 million and $849.5 million as of September 30, 2012 and December 31, 2011, respectively.

As of September 30, 2012, the contractual maturities of long-term debt are as follows for the years ending (dollars in thousands):

	Adjustable Rate
	Subordinated Debt		Trust Preferred Capital Notes		FHLB Advances		Prepayment Penalty			Total  Long-term Borrowings
Remaining three months 2012	$	—	$	—	$	—	$	(433	)	$	(433	)
2013		—		—		—		(1,744	)		(1,744	)
2014		—		—		—		(1,787	)		(1,787	)
2015		—		—		—		(1,831	)		(1,831	)
2016		15,747		—		—		(1,882	)		13,865
Thereafter		—		60,310		140,000		(11,810	)		188,500
Total long-term borrowings	$	15,747	$	60,310	$	140,000	$	(19,487	)	$	196,570

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Borrowings (Details 1) (USD $) In Thousands, unless otherwise specified	9 Months Ended		9 Months Ended				12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Adjustable Rate Credit 1 [Member]	Sep. 30, 2012 Adjustable Rate Credit 2 [Member]	Sep. 30, 2012 Adjustable Rate Credit 3 [Member]	Sep. 30, 2012 Adjustable Rate Credit 4 [Member]	Dec. 31, 2011 Convertible Debt 1 [Member]	Dec. 31, 2011 Convertible Debt 2 [Member]	Dec. 31, 2011 Convertible Debt 3 [Member]	Dec. 31, 2011 Convertible Debt 4 [Member]
Advances from the FHLB
Spread to 3-Month LIBOR	1.50%		0.44%	0.45%	0.45%	0.45%
Interest Rate			0.80%	0.81%	0.81%	0.81%	3.60%	3.84%	3.60%	3.60%
Maturity Date	Apr. 01, 2016		Aug. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	Nov. 23, 2022	May 23, 2018	Aug. 22, 2018	May 23, 2018	May 23, 2018
Conversion Date			. NaN, NaN	. NaN, NaN	. NaN, NaN	. NaN, NaN	May 23, 2013	Aug. 22, 2013	May 23, 2013	May 23, 2013
Option Frequency							Once	Once	Once	Once
Advance Amount	$ 40,000	$ 40,000	$ 65,000	$ 55,000	$ 10,000	$ 10,000	$ 65,000	$ 55,000	$ 10,000	$ 10,000

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Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2012

Loans and Allowance for Loan Losses [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

4. LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at their face amount, net of unearned income, and consist of the following at September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30, 2012		December 31, 2011
Commercial:
Commercial Construction	$	200,032	$	185,359
Commercial Real Estate - Owner Occupied		492,715		452,407
Commercial Real Estate - Non-Owner Occupied		693,679		655,083
Raw Land and Lots		212,316		214,284
Single Family Investment Real Estate		206,090		192,437
Commercial and Industrial		209,401		212,268
Other Commercial		40,307		44,403
Consumer:
Mortgage		221,474		219,646
Consumer Construction		27,488		20,757
Indirect Auto		159,495		162,708
Indirect Marine		31,314		39,819
HELOCs		286,348		277,101
Credit Card		20,332		19,006
Other Consumer		107,519		123,305
Total	$	2,908,510	$	2,818,583

The following table shows the aging of the Company’s loan portfolio, by class, at September 30, 2012 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	6,148	$	—	$	—	$	—	$	7,846	$	186,038	$	200,032
Commercial Real Estate - Owner Occupied		2,865		88		822		1,228		2,212		485,500		492,715
Commercial Real Estate - Non-Owner Occupied		5,116		—		635		—		540		687,388		693,679
Raw Land and Lots		138		—		153		3,743		10,995		197,287		212,316
Single Family Investment Real Estate		686		102		201		371		4,081		200,649		206,090
Commercial and Industrial		230		191		120		89		2,678		206,093		209,401
Other Commercial		238		1		—		—		195		39,873		40,307
Consumer:
Mortgage		3,899		3,003		3,991		—		693		209,888		221,474
Consumer Construction		—		—		—		—		210		27,278		27,488
Indirect Auto		1,998		234		289		24		2		156,948		159,495
Indirect Marine		68		—		114		—		876		30,256		31,314
HELOCs		2,481		536		1,707		851		797		279,976		286,348
Credit Card		147		223		268		—		—		19,694		20,332
Other Consumer		893		629		796		131		1,034		104,036		107,519
Total	$	24,907	$	5,007	$	9,096	$	6,437	$	32,159	$	2,830,904	$	2,908,510

The following table shows the aging of the Company’s loan portfolio, by class, at December 31, 2011 (dollars in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	—	$	—	$	490	$	—	$	10,276	$	174,593	$	185,359
Commercial Real Estate - Owner Occupied		520		—		2,482		1,292		5,962		442,151		452,407
Commercial Real Estate - Non-Owner Occupied		190		64		2,887		1,133		2,031		648,778		655,083
Raw Land and Lots		94		1,124		—		5,623		13,322		194,121		214,284
Single Family Investment Real Estate		779		70		3,637		388		5,048		182,515		192,437
Commercial and Industrial		601		185		3,369		392		5,297		202,424		212,268
Other Commercial		—		25		—		—		238		44,140		44,403
Consumer:
Mortgage		6,748		412		3,804		—		240		208,442		219,646
Consumer Construction		—		—		—		—		207		20,550		20,757
Indirect Auto		2,653		416		443		40		7		159,149		162,708
Indirect Marine		189		795		—		—		544		38,291		39,819
HELOCs		1,678		547		820		865		885		272,306		277,101
Credit Card		245		184		323		—		—		18,254		19,006
Other Consumer		1,421		443		1,657		164		777		118,843		123,305
Total	$	15,118	$	4,265	$	19,912	$	9,897	$	44,834	$	2,724,557	$	2,818,583

Nonaccrual loans totaled $32.2 million and $51.9 million at September 30, 2012 and 2011, respectively. There were no nonaccrual loans excluded from impaired loan disclosure in 2012 or 2011. Loans past due 90 days or more and accruing interest totaled $9.1 million and $12.1 million at September 30, 2012 and 2011, respectively.

The following table shows purchased impaired commercial and consumer loan portfolios, by class and their delinquency status through September 30, 2012 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	—	$	1,164	$	64	$	1,228
Raw Land and Lots		—		91		3,652		3,743
Single Family Investment Real Estate		16		—		355		371
Commercial and Industrial		—		89		—		89
Consumer:
Indirect Auto		7		—		17		24
HELOCs		—		50		801		851
Other Consumer		—		26		105		131
Total	$	23	$	1,420	$	4,994	$	6,437

The following table shows purchased impaired commercial and consumer loan portfolios, by class and their delinquency status through December 31, 2011 (dollars in thousands):

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	206	$	50	$	1,036	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		—		5,623		5,623
Single Family Investment Real Estate		—		—		388		388
Commercial and Industrial		—		302		90		392
Consumer:
Indirect Auto		6		11		23		40
HELOCs		19		32		814		865
Other Consumer		—		77		87		164
Total	$	231	$	1,605	$	8,061	$	9,897

The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. At September 30, 2012, the Company had $177.9 million in loans considered to be impaired of which $16.7 million were collectively evaluated for impairment and $161.2 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at September 30, 2012 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	30,864	$	31,347	$	—	$	31,913	$	1,073
Commercial Real Estate - Owner Occupied		10,774		11,246		—		11,517		423
Commercial Real Estate - Non-Owner Occupied		21,230		21,305		—		22,644		867
Raw Land and Lots		35,067		35,141		—		36,376		941
Single Family Investment Real Estate		5,860		6,180		—		6,440		216
Commercial and Industrial		3,361		3,394		—		3,837		135
Other Commercial		906		906		—		1,009		46
Consumer:
Mortgage		2,592		2,645		—		2,983		80
Indirect Auto		6		6		—		9		—
HELOCs		1,672		1,771		—		1,843		10
Other Consumer		871		910		—		937		21
Total impaired loans without a specific allowance	$	113,203	$	114,851	$	—	$	119,508	$	3,812
Loans with a specific allowance
Commercial:
Commercial Construction	$	4,290	$	4,338	$	1,368	$	4,360	$	20
Commercial Real Estate - Owner Occupied		2,718		2,853		665		2,888		22
Commercial Real Estate - Non-Owner Occupied		13,546		13,580		426		13,777		568
Raw Land and Lots		12,472		12,669		3,052		13,168		118
Single Family Investment Real Estate		2,503		2,573		962		2,736		44
Commercial and Industrial		9,929		10,069		3,581		10,059		304
Other Commercial		134		134		108		134		—
Consumer:
Consumer Construction		210		236		76		226		—
Indirect Marine		876		876		404		879		3
HELOCs		752		811		550		1,017		—
Other Consumer		563		563		246		563		—
Total impaired loans with a specific allowance	$	47,993	$	48,702	$	11,438	$	49,807	$	1,079
Total loans individually evaluated for impairment	$	161,196	$	163,553	$	11,438	$	169,315	$	4,891

At December 31, 2011, the Company had $255.1 million in loans considered to be impaired of which $12.3 million were collectively evaluated for impairment and $242.8 million were individually evaluated for impairment. The following table shows the Company’s impaired loans individually evaluated for impairment, by class, at December 31, 2011 (dollars in thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	40,475	$	40,524	$	—	$	37,835	$	1,690
Commercial Real Estate - Owner Occupied		20,487		21,010		—		23,364		1,183
Commercial Real Estate - Non-Owner Occupied		37,799		37,855		—		38,084		2,002
Raw Land and Lots		46,791		46,890		—		47,808		1,306
Single Family Investment Real Estate		11,285		11,349		—		11,684		637
Commercial and Industrial		9,467		9,959		—		10,216		423
Other Commercial		1,257		1,257		—		1,269		75
Consumer:
Mortgage		1,202		1,202		—		1,225		70
HELOCs		349		349		—		350		11
Other Consumer		—		—		—		1		—
Total impaired loans without a specific allowance	$	169,112	$	170,395	$	—	$	171,836	$	7,397
Loans with a specific allowance
Commercial:
Commercial Construction	$	12,927	$	13,297	$	583	$	13,811	$	343
Commercial Real Estate - Owner Occupied		8,679		8,788		1,961		8,681		267
Commercial Real Estate - Non-Owner Occupied		8,858		8,879		1,069		9,010		322
Raw Land and Lots		22,188		22,429		991		24,553		973
Single Family Investment Real Estate		9,020		9,312		1,140		9,571		321
Commercial and Industrial		8,980		9,133		3,320		10,448		369
Other Commercial		150		150		3		153		10
Consumer:
Mortgage		535		535		11		536		32
Consumer Construction		207		226		86		228		—
Indirect Auto		71		71		—		93		5
Indirect Marine		544		547		263		548		9
HELOCs		785		825		587		1,034		—
Other Consumer		777		804		284		815		5
Total impaired loans with a specific allowance	$	73,721	$	74,996	$	10,298	$	79,481	$	2,656
Total loans individually evaluated for impairment	$	242,833	$	245,391	$	10,298	$	251,317	$	10,053

The Company considers troubled debt restructurings (“TDRs”) to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession to the borrower for economic or legal reasons related to the borrower’s financial difficulties that it would not otherwise consider. Included in the impaired loan disclosures above are $63.8 million and $112.6 million of loans considered to be troubled debt restructurings as of September 30, 2012 and December 31, 2011, respectively. All loans that are considered to be TDRs are specifically evaluated for impairment in accordance with the Company’s allowance for loan loss methodology.

The following table provides a summary, by class, of modified loans that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and modified loans that have been placed in nonaccrual status, which are considered to be nonperforming, as of September 30, 2012 and December 31, 2011 (dollars in thousands):

	September 30, 2012						December 31, 2011
	No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction		6	$	6,559	$	169		14	$	21,461	$	3,185
Commercial Real Estate - Owner Occupied		8		3,056		—		11		7,996		180
Commercial Real Estate - Non-Owner Occupied		10		13,082		29		16		21,777		13
Raw Land and Lots		14		25,274		1		15		32,450		1
Single Family Investment Real Estate		5		848		—		12		8,525		—
Commercial and Industrial		6		1,103		—		12		4,991		204
Other Commercial		1		236		—		4		864		—
Consumer:
Mortgage		7		1,690		—		1		507		—
Other Consumer		2		85		—		2		263		—
Total performing		59	$	51,933	$	199		87	$	98,834	$	3,583
Nonperforming
Commercial:
Commercial Construction		4	$	4,260	$	—		5	$	5,353	$	—
Commercial Real Estate - Owner Occupied		3		1,084		—		—		—		—
Commercial Real Estate - Non-Owner Occupied		1		208		—		2		292		—
Raw Land and Lots		3		3,860		—		6		4,342		—
Single Family Investment Real Estate		2		433		—		4		1,342		—
Commercial and Industrial		7		1,284		—		3		1,134		—
Consumer:
Mortgage		1		202		—		5		1,076		—
Indirect Marine		1		283		—		—		—		—
Other Consumer		2		266		—		1		265		—
Total nonperforming		24	$	11,880	$	—		26	$	13,804	$	—
Total performing and nonperforming		83	$	63,813	$	199		113	$	112,638	$	3,583

The Company considers a default of a restructured loan to occur when subsequent to the restructure, the borrower is 90 days past due or results in foreclosure and repossession of the applicable collateral; the Company did not identify any restructured loans that went into default in the third quarter that had been restructured during the previous twelve months. During the nine months ended September 30, 2012, the Company identified three restructured loans, totaling approximately $1.4 million, that went into default that had been restructured in the twelve-month period prior to the time of default. All three loans had a term extension at a market rate.

The following table shows, by class and modification type, TDRs that occurred during the three month and nine month periods ended September 30, 2012 (dollars in thousands):

	Three months ended September 30, 2012				Nine months ended September 30, 2012
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	309
Raw Land and Lots		—		—		3		260
Single Family Investment Real Estate		—		—		2		176
Consumer:
Indirect Marine		—		—		1		283
Total interest only at market rate of interest		—	$	—		7	$	1,028
Term modification, at a market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		3	$	1,809
Commercial Real Estate - Non-Owner Occupied		2		720		2		720
Raw Land and Lots		—		—		1		603
Commercial and Industrial		1		115		6		432
Consumer:
Mortgage		—		—		2		472
Other Consumer		—		—		3		282
Total loan term extended at a market rate		3	$	835		17	$	4,318
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		4	$	654
Raw Land and Lots		1		60		1		60
Consumer:
Other Consumer		1		69		1		69
Total loan term extended at a below market rate		2	$	129		6	$	783
Interest rate modification, below market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		2	$	2,390
Total interest only at below market rate of interest		—	$	—		2	$	2,390
Total		5	$	964		32	$	8,519

The following table shows, by class and modification type, TDRs that occurred during the three month and nine month periods ended September 30, 2011 (dollars in thousands):

	Three months ended September 30, 2011				Nine months ended September 30, 2011
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	223
Raw Land and Lots		—		—		1		341
Single Family Investment Real Estate		1		95		1		95
Total interest only at market rate of interest		1	$	95		3	$	659
Term modification, at a market rate
Commercial:
Commercial Construction		5	$	7,072		15	$	22,940
Commercial Real Estate - Owner Occupied		3		3,869		5		5,035
Commercial Real Estate - Non-Owner Occupied		2		2,572		16		21,655
Raw Land and Lots		4		18,625		14		27,596
Single Family Investment Real Estate		1		2,616		10		7,286
Commercial and Industrial		5		2,729		12		5,623
Other Commercial		2		457		5		911
Consumer:
Mortgage		1		56		4		538
Other Consumer		1		270		3		533
Total loan term extended at a market rate		24	$	38,266		84	$	92,117
Term modification, below market rate
Commercial:
Commercial Construction		—	$	—		3	$	3,451
Commercial Real Estate - Owner Occupied		2		546		2		546
Raw Land and Lots		—		—		6		6,391
Single Family Investment Real Estate		—		—		4		2,506
Commercial and Industrial		—		—		2		368
Consumer:
Mortgage		—		—		1		507
Total loan term extended at a below market rate		2	$	546		18	$	13,769
Total		27	$	38,907		105	$	106,545

The following table shows the allowance for loan loss activity, by portfolio segment, balances for allowance for credit losses, and loans based on impairment methodology for the nine months ended September 30, 2012. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	27,891		$	11,498		$	81		$	39,470
Recoveries credited to allowance		490			881			—			1,371
Loans charged off		(5,956	)		(3,891	)		—			(9,847	)
Provision charged to operations		7,301			1,626			(27	)		8,900
Balance, end of period	$	29,726		$	10,114		$	54		$	39,894
Ending balance: individually evaluated for impairment		10,033			1,276			—			11,309
Ending balance: collectively evaluated for impairment		19,564			8,838			54			28,456
Ending balance: loans acquired with deteriorated credit quality		129			—			—			129
Total	$	29,726		$	10,114		$	54		$	39,894
Loans:
Ending balance	$	2,054,540		$	853,970		$	—		$	2,908,510
Ending balance: individually evaluated for impairment		148,223			6,536			—			154,759
Ending balance: collectively evaluated for impairment		1,900,886			846,428			—			2,747,314
Ending balance: loans acquired with deteriorated credit quality		5,431			1,006			—			6,437
Total	$	2,054,540		$	853,970		$	—		$	2,908,510

The following table shows the allowance for loan loss activity, portfolio segment types, balances for allowance for loan losses, and loans based on impairment methodology for the year ended December 31, 2011. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	28,255		$	10,189		$	(38	)	$	38,406
Recoveries credited to allowance		924			1,206			—			2,130
Loans charged off		(10,891	)		(6,975	)		—			(17,866	)
Provision charged to operations		9,603			7,078			119			16,800
Balance, end of year	$	27,891		$	11,498		$	81		$	39,470
Ending balance: individually evaluated for impairment		8,982			1,231			—			10,213
Ending balance: collectively evaluated for impairment		18,824			10,267			81			29,172
Ending balance: loans acquired with deteriorated credit quality		85			—			—			85
Total	$	27,891		$	11,498		$	81		$	39,470
Loans:
Ending balance	$	1,956,241		$	862,342		$	—		$	2,818,583
Ending balance: individually evaluated for impairment		229,535			3,401			—			232,936
Ending balance: collectively evaluated for impairment		1,717,878			857,872			—			2,575,750
Ending balance: loans acquired with deteriorated credit quality		8,828			1,069			—			9,897
Total	$	1,956,241		$	862,342		$	—		$	2,818,583

The Company uses the past due status and trends as the primary credit quality indicator for the consumer loan portfolio segment while a risk rating system is utilized for commercial loans. Commercial loans are graded on a scale of 1 through 9. A general description of the characteristics of the risk grades follows:

• Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;

• Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;

• Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;

• Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan;

• Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;

• Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position;

• Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected;

• Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; and

• Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted.

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of September 30, 2012. The risk rating information has been updated through September 30, 2012 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	11,409	$	105,226	$	11,150	$	39,371	$	32,766	$	110	$	200,032
Commercial Real Estate - Owner Occupied		125,840		314,456		22,406		17,671		11,114		—		491,487
Commercial Real Estate - Non-Owner Occupied		164,530		416,312		51,597		31,961		29,279		—		693,679
Raw Land and Lots		3,378		112,439		14,807		33,719		43,724		506		208,573
Single Family Investment Real Estate		24,329		145,213		14,109		12,898		8,431		739		205,719
Commercial and Industrial		44,831		122,572		13,779		13,284		14,671		175		209,312
Other Commercial		5,307		16,489		12,133		4,803		1,515		60		40,307
Total	$	379,624	$	1,232,707	$	139,981	$	153,707	$	141,500	$	1,590	$	2,049,109

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of December 31, 2011. The risk rating information has been updated through December 31, 2011 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	10,099	$	84,299	$	6,079	$	36,650	$	48,232	$	—	$	185,359
Commercial Real Estate - Owner Occupied		88,430		296,825		17,604		21,158		26,389		709		451,115
Commercial Real Estate - Non-Owner Occupied		149,346		367,244		58,844		38,662		39,854		—		653,950
Raw Land and Lots		4,368		99,374		18,767		33,673		52,204		275		208,661
Single Family Investment Real Estate		32,741		116,570		11,928		14,358		16,452		—		192,049
Commercial and Industrial		35,120		123,872		22,079		11,559		19,066		180		211,876
Other Commercial		6,364		15,918		16,739		3,807		1,512		63		44,403
Total	$	326,468	$	1,104,102	$	152,040	$	159,867	$	203,709	$	1,227	$	1,947,413

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of September 30, 2012. The credit quality indicator information has been updated through September 30, 2012 (dollars in thousands):

	5		6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	—	$	1,228	$	—	$	1,228
Raw Land and Lots		—		—		3,743		—		3,743
Single Family Investment Real Estate		355		—		16		—		371
Commercial and Industrial		—		—		89		—		89
Total	$	355	$	—	$	5,076	$	—	$	5,431

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of December 31, 2011. The credit quality indicator information has been updated through December 31, 2011 (dollars in thousands):

	6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	1,292	$	—	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		5,623		—		5,623
Single Family Investment Real Estate		369		19		—		388
Commercial and Industrial		—		91		301		392
Total	$	369	$	8,158	$	301	$	8,828

Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. The contractually required payments, cash flows expected to be collected, and fair value as of the date of acquisition were $1,080,780, $1,072,726, and $1,052,358, respectively (dollars in thousands).

The following shows changes in the Company’s acquired loan portfolio and accretable yield for the following periods (dollars in thousands):

	For the Nine Months Ended												For the Twelve Months Ended
	September 30, 2012												December 31, 2011
	Purchased Impaired						Purchased Nonimpaired						Purchased Impaired						Purchased Nonimpaired
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Balance at beginning of period	$	5,140		$	9,897		$	9,010		$	663,510		$	8,169		$	13,999		$	13,589		$	799,898
Additions		—			—			—			—			122			276			1,593			70,524
Accretion		(55	)		—			(2,960	)		—			(66	)		—			(6,172	)		—
Charged off		(1,602	)		(397	)		—			(1,551	)		(3,073	)		(1,329	)		—			(5,988	)
Transfers to OREO		—			(2,371	)		—			(2,766	)		(12	)		(174	)		—			(2,341	)
Payments received, net		—			(692	)		—			(155,947	)		—			(2,875	)		—			(198,583	)
Balance at end of period	$	3,483		$	6,437		$	6,050		$	503,246		$	5,140		$	9,897		$	9,010		$	663,510

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Earnings per Share

9 Months Ended

Sep. 30, 2012

Earnings per Share [Abstract]

EARNINGS PER SHARE

5. EARNINGS PER SHARE

Basic earnings per common share (“EPS”) was computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common shares outstanding during the period, including the effect of dilutive potential common shares outstanding attributable to stock awards. Amortization of discount and dividends on the preferred stock is treated as a reduction of the numerator in calculating basic and diluted EPS. There were approximately 594,946 and 409,562 shares underlying anti-dilutive stock awards as of September 30, 2012 and 2011, respectively.

The following is a reconcilement of the denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2012 and 2011 (dollars and shares in thousands, except per share amounts):

	Net Income Available to Common Shareholders (Numerator)		Weighted Average Common Shares (Denominator)		Per Share Amount
For the Three Months ended September 30, 2012
Net income, basic	$	9,626		25,881	$	0.37
Add: potentially dilutive common shares - stock awards		—		27		—
Diluted	$	9,626		25,908	$	0.37
For the Three Months ended September 30, 2011
Net income	$	9,071		25,987	$	0.35
Less: dividends paid and accumulated on preferred stock		462		—		0.02
Less: accretion of discount on preferred stock		66		—		—
Basic	$	8,543		25,987	$	0.33
Add: potentially dilutive common shares - stock awards		—		15		—
Diluted	$	8,543		26,002	$	0.33
For the Nine Months ended September 30, 2012
Net income, basic	$	25,969		25,893	$	1.00
Add: potentially dilutive common shares - stock awards		—		28		—
Diluted	$	25,969		25,921	$	1.00
For the Nine Months ended September 30, 2011
Net income	$	22,085		25,972	$	0.85
Less: dividends paid and accumulated on preferred stock		1,386		—		0.06
Less: accretion of discount on preferred stock		195		—		—
Basic	$	20,504	$	25,972	$	0.79
Add: potentially dilutive common shares - stock awards		—		22		—
Diluted	$	20,504		25,994	$	0.79

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Segment Reporting Disclosures

9 Months Ended

Sep. 30, 2012

Segment Reporting Disclosures [Abstract]

SEGMENT REPORTING DISCLOSURES

7. SEGMENT REPORTING DISCLOSURES

The Company has two reportable segments: a traditional full service community bank and a mortgage loan origination business. The community bank business for 2012 includes one subsidiary bank, which provides loan, deposit, investment, and trust services to retail and commercial customers throughout its 94 retail locations in Virginia. The mortgage segment provides a variety of mortgage loan products principally in Virginia, North Carolina, South Carolina, Maryland and the Washington D.C. metro area. These loans are originated and sold primarily in the secondary market through purchase commitments from investors, which subject the Company to only de minimus risk.

Profit and loss is measured by net income after taxes including realized gains and losses on the Company’s investment portfolio. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Inter-segment transactions are recorded at cost and eliminated as part of the consolidation process.

Both of the Company’s reportable segments are service based. The mortgage business is a fee-based business while the Bank is driven principally by net interest income. The bank segment provides a distribution and referral network through its customers for the mortgage loan origination business. The mortgage segment offers a more limited referral network for the bank segment, due largely to the minimal degree of overlapping geographic markets.

The community bank segment provides the mortgage segment with the short-term funds needed to originate mortgage loans through a warehouse line of credit and charges the mortgage banking segment interest at the three month LIBOR rate plus 1.5% basis points, floor of 2%. These transactions are eliminated in the consolidation process. A management fee for operations and administrative support services is charged to all subsidiaries and eliminated in the consolidated totals.

Information about reportable segments and reconciliation of such information to the consolidated financial statements for three and nine months ended September 30, 2012 and 2011 was as follows (dollars in thousands):

	Community Bank		Mortgage		Eliminations			Consolidated
Three Months Ended September 30, 2012
Net interest income	$	38,428	$	334	$	—		$	38,762
Provision for loan losses		2,400		—		—			2,400
Net interest income after provision for loan losses		36,028		334		—			36,362
Noninterest income		6,750		8,919		(117	)		15,552
Noninterest expenses		30,596		7,839		(117	)		38,318
Income before income taxes		12,182		1,414		—			13,596
Income tax expense		3,415		555		—			3,970
Net income	$	8,767	$	859	$	—		$	9,626
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Three Months Ended September 30, 2011
Net interest income	$	39,208	$	238	$	—		$	39,446
Provision for loan losses		3,600		—		—			3,600
Net interest income after provision for loan losses		35,608		238		—			35,846
Noninterest income		6,665		4,862		(116	)		11,411
Noninterest expenses		30,259		4,361		(116	)		34,504
Income before income taxes		12,014		739		—			12,753
Income tax expense		3,407		275		—			3,682
Net income	$	8,607	$	464	$	—		$	9,071
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457
Nine Months Ended September 30, 2012
Net interest income	$	114,258	$	938	$	—		$	115,196
Provision for loan losses		8,900		—		—			8,900
Net interest income after provision for loan losses		105,358		938		—			106,296
Noninterest income		20,805		21,532		(351	)		41,986
Noninterest expenses		92,357		19,891		(351	)		111,897
Income before income taxes		33,806		2,579		—			36,385
Income tax expense		9,400		1,016		—			10,416
Net income	$	24,406	$	1,563	$	—		$	25,969
Total assets	$	4,020,661	$	154,181	$	(146,649	)	$	4,028,193
Nine Months Ended September 30, 2011
Net interest income	$	116,862	$	1,007	$	—		$	117,869
Provision for loan losses		14,400		—		—			14,400
Net interest income after provision for loan losses		102,462		1,007		—			103,469
Noninterest income		18,599		14,135		(351	)		32,383
Noninterest expenses		92,342		13,614		(351	)		105,605
Income before income taxes		28,719		1,528		—			30,247
Income tax (benefit) expense		7,593		569		—			8,162
Net income	$	21,126	$	959	$	—		$	22,085
Total assets	$	3,902,362	$	70,055	$	(57,960	)	$	3,914,457

XML

Segment Reporting Disclosures (Details Textual)	Sep. 30, 2012 Rate Store
Segment Reporting Disclosures (Textual) [Abstract]
Number of retail locations	94
LIBOR rate plus	1.50%
Mortgage banking segment interest - floor	2.00%

XML

Goodwill and Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Estimated remaining amortization expense of core deposit and trademark intangibles
For the remaining three months of 2012	$ 1,288
For the year ending December 31, 2013	3,830
For the year ending December 31, 2014	2,899
For the year ending December 31, 2015	2,461
For the year ending December 31, 2016	1,864
For the year ending December 31, 2017	1,435
Thereafter	3,321
Net Carrying Value	$ 17,099

XML

Segment Reporting Disclosures (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Information about reportable segments and reconciliation
Net interest income	$ 38,762	$ 39,446	$ 115,196	$ 117,869
Provision for loan losses	2,400	3,600	8,900	14,400
Net interest income after provision for loan losses	36,362	35,846	106,296	103,469
Noninterest income	15,552	11,411	41,986	32,383
Noninterest expenses	38,318	34,504	111,897	105,605
Income before income taxes	13,596	12,753	36,385	30,247
Income tax (benefit) expense	3,970	3,682	10,416	8,162
Net income	9,626	9,071	25,969	22,085
Total assets	4,028,193	3,914,457	4,028,193	3,914,457	3,907,087
Community Bank [Member]
Information about reportable segments and reconciliation
Net interest income	38,428	39,208	114,258	116,862
Provision for loan losses	2,400	3,600	8,900	14,400
Net interest income after provision for loan losses	36,028	35,608	105,358	102,462
Noninterest income	6,750	6,665	20,805	18,599
Noninterest expenses	30,596	30,259	92,357	92,342
Income before income taxes	12,182	12,014	33,806	28,719
Income tax (benefit) expense	3,415	3,407	9,400	7,593
Net income	8,767	8,607	24,406	21,126
Total assets	4,020,661	3,902,362	4,020,661	3,902,362
Mortgage [Member]
Information about reportable segments and reconciliation
Net interest income	334	238	938	1,007
Provision for loan losses
Net interest income after provision for loan losses	334	238	938	1,007
Noninterest income	8,919	4,862	21,532	14,135
Noninterest expenses	7,839	4,361	19,891	13,614
Income before income taxes	1,414	739	2,579	1,528
Income tax (benefit) expense	555	275	1,016	569
Net income	859	464	1,563	959
Total assets	154,181	70,055	154,181	70,055
Eliminations [Member]
Information about reportable segments and reconciliation
Net interest income
Provision for loan losses
Net interest income after provision for loan losses
Noninterest income	(117)	(116)	(351)	(351)
Noninterest expenses	(117)	(116)	(351)	(351)
Income before income taxes
Income tax (benefit) expense
Net income
Total assets	(146,649)	(57,960)	(146,649)	(57,960)
Consolidated [Member]
Information about reportable segments and reconciliation
Net interest income	38,762	39,446	115,196	117,869
Provision for loan losses	2,400	3,600	8,900	14,400
Net interest income after provision for loan losses	36,362	35,846	106,296	103,469
Noninterest income	15,552	11,411	41,986	32,383
Noninterest expenses	38,318	34,504	111,897	105,605
Income before income taxes	13,596	12,753	36,385	30,247
Income tax (benefit) expense	3,970	3,682	10,416	8,162
Net income	9,626	9,071	25,969	22,085
Total assets	$ 4,028,193	$ 3,914,457	$ 4,028,193	$ 3,914,457

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

Schedule of financial assets and liabilities measured at fair value on recurring basis

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	39	$	—	$	39
Securities available for sale:
U.S. government and agency securities		—		3,027		—		3,027
Obligations of states and political subdivisions		—		214,363		—		214,363
Corporate and other bonds		—		9,257		—		9,257
Mortgage-backed securities		—		392,065		—		392,065
Other securities		—		3,355		—		3,355
LIABILITIES
Interest rate swap - loans	$	—	$	39	$	—	$	39
Cash flow hedge - trust		—		4,785		—		4,785
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	66	$	—	$	66
Securities available for sale:
U.S. government and agency securities		—		4,284		—		4,284
Obligations of states and political subdivisions		—		200,207		—		200,207
Corporate and other bonds		—		12,240		—		12,240
Mortgage-backed securities		—		400,318		—		400,318
Other securities		—		3,117		—		3,117
LIABILITIES
Interest rate swap - loans	$	—	$	66	$	—	$	66
Cash flow hedge - trust		—		4,293		—		4,293

Schedule of financial assets measured at fair value on nonrecurring basis

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	141,965	$	—	$	141,965
Impaired loans		—		—		36,555		36,555
Other real estate owned		—		—		34,440		34,440
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	74,823	$	—	$	74,823
Impaired loans		—		—		63,423		63,423
Other real estate owned		—		—		32,263		32,263

Summary of changes in Level 3 assets measured at estimated fair value on a nonrecurring basis

	Fair Value Measurements at September 30, 2012
	Impaired Loans			Other Real Estate Owned
Balance - January 1, 2012	$	63,423		$	32,263
Total gains (losses) realized/unrealized:
Included in earnings		—			(442	)
Additions		25,802			11,766
Sales		—			(9,147	)
Net decrease (1)		(52,670	)		—
Balance - September 30, 2012	$	36,555		$	34,440

(1) Includes payments, upgrades, charge-offs, and foreclosures.

Summary of quantitative information about Level 3 Fair Value Measurements

	Fair Value Measurements at September 30, 2012
	Fair Value		Valuation Technique(s)		Unobservable Inputs			Weighted Average
ASSETS
Commercial Construction	$	2,922		Market comparables		Discount applied to market comparables	(1)		8	%
Commercial Real Estate - Owner Occupied		2,053		Market comparables		Discount applied to market comparables	(1)		13	%
Commercial Real Estate - Non-Owner Occupied		13,120		Market comparables		Discount applied to market comparables	(1)		7	%
Raw Land and Lots		9,420		Market comparables		Discount applied to market comparables	(1)		4	%
Single Family Investment Real Estate		1,541		Market comparables		Discount applied to market comparables	(1)		2	%
Commercial and Industrial		6,348		Market comparables		Discount applied to market comparables	(1)		5	%
Other (2)		1,151		Market comparables		Discount applied to market comparables	(1)		22	%
Total Impaired Loans		36,555
Other real estate owned		34,440		Market comparables		Discount applied to market comparables	(1)		31	%
Total	$	70,995

⁽¹⁾  A discount percentage is applied based on age of independent appraisals, current market conditions, and experience within the local market.

⁽²⁾  The “Other” category of the impaired loans section from the table above consists of Other Commercial, Consumer Construction, Indirect Marine, HELOCs, and Other Consumer.

Carrying values and estimated fair values of the Company's financial instruments

			Fair Value Measurements at September 30, 2012 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	62,334	$	62,334	$	—	$	—	$	62,334
Securities available for sale		622,067		—		622,067		—		622,067
Restricted stock		20,687		—		20,687		—		20,687
Loans held for sale		141,965		—		141,965		—		141,965
Net loans		2,868,616		—		2,864,799		36,555		2,901,354
Interest rate swap - loans		39		—		39		—		39
Accrued interest receivable		18,565		—		18,565		—		18,565
LIABILITIES
Deposits	$	3,199,779	$	—	$	3,213,963	$	—	$	3,213,963
Borrowings		350,686		—		332,484		—		332,484
Accrued interest payable		856		—		856		—		856
Cash flow hedge - trust		4,785		—		4,785		—		4,785
Interest rate swap - loans		39		—		39		—		39

			Fair Value Measurements at December 31, 2011 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	96,659	$	96,659	$	—	$	—	$	96,659
Securities available for sale		620,166		—		620,166		—		620,166
Restricted stock		20,661		—		20,661		—		20,661
Loans held for sale		74,823		—		74,823		—		74,823
Net loans		2,779,113		—		2,731,491		63,423		2,794,914
Interest rate swap - loans		66		—		66		—		66
Accrued interest receivable		16,626		—		16,626		—		16,626
LIABILITIES
Deposits	$	3,175,105	$	—	$	3,191,256	$	—	$	3,191,256
Borrowings		278,686		—		277,374		—		277,374
Accrued interest payable		1,865		—		1,865		—		1,865
Cash flow hedge - trust		4,293		—		4,293		—		4,293
Interest rate swap - loans		66		—		66		—		66

XML

Loans and Allowance for Loan Losses (Details 5) (Interest Only at Market Rate of Interest [Member], USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Schedule of TDR by class and modification type
No. of Loans		$ 27		$ 105
Recorded investment at period end		38,907,000		106,545,000
Modified to Interest Only [Member]
Schedule of TDR by class and modification type
No. of Loans		1	7	3
Recorded investment at period end		95,000	1,028,000	659,000
Modified to Interest Only [Member] | Commercial [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of TDR by class and modification type
No. of Loans			1	1
Recorded investment at period end			309,000	223,000
Modified to Interest Only [Member] | Commercial [Member] | Raw Land and Lots [Member]
Schedule of TDR by class and modification type
No. of Loans			3	1
Recorded investment at period end			260,000	341,000
Modified to Interest Only [Member] | Commercial [Member] | Single Family Investment Real Estate [Member]
Schedule of TDR by class and modification type
No. of Loans		1	2	1
Recorded investment at period end		95,000	176,000	95,000
Modified to Interest Only [Member] | Consumer [Member] | Indirect Marine [Member]
Schedule of TDR by class and modification type
No. of Loans			1
Recorded investment at period end			283,000
Term modification, at a market rate [Member]
Schedule of TDR by class and modification type
No. of Loans	3	24	17	84
Recorded investment at period end	835,000	38,266,000	4,318,000	92,117,000
Term modification, at a market rate [Member] | Commercial [Member] | Commercial Real Estate - Owner Occupied [Member]
Schedule of TDR by class and modification type
No. of Loans		3	3	5
Recorded investment at period end		3,869,000	1,809,000	5,035,000
Term modification, at a market rate [Member] | Commercial [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of TDR by class and modification type
No. of Loans	2	2	2	16
Recorded investment at period end	720,000	2,572,000	720,000	21,655,000
Term modification, at a market rate [Member] | Commercial [Member] | Raw Land and Lots [Member]
Schedule of TDR by class and modification type
No. of Loans		4	1	14
Recorded investment at period end		18,625,000	603,000	27,596,000
Term modification, at a market rate [Member] | Commercial [Member] | Single Family Investment Real Estate [Member]
Schedule of TDR by class and modification type
No. of Loans		1		10
Recorded investment at period end		2,616,000		7,286,000
Term modification, at a market rate [Member] | Commercial [Member] | Commercial and Industrial [Member]
Schedule of TDR by class and modification type
No. of Loans	1	5	6	12
Recorded investment at period end	115,000	2,729,000	432,000	5,623,000
Term modification, at a market rate [Member] | Commercial [Member] | Other Commercial [Member]
Schedule of TDR by class and modification type
No. of Loans		2		5
Recorded investment at period end		457,000		911,000
Term modification, at a market rate [Member] | Commercial [Member] | Commercial Construction [Member]
Schedule of TDR by class and modification type
No. of Loans		5		15
Recorded investment at period end		7,072,000		22,940,000
Term modification, at a market rate [Member] | Consumer [Member] | Mortgage [Member]
Schedule of TDR by class and modification type
No. of Loans		1	2	4
Recorded investment at period end		56,000	472,000	538,000
Term modification, at a market rate [Member] | Consumer [Member] | Other Consumer [Member]
Schedule of TDR by class and modification type
No. of Loans		1	3	3
Recorded investment at period end		270,000	282,000	533,000
Term modification, below market rate [Member]
Schedule of TDR by class and modification type
No. of Loans	2	2	6	18
Recorded investment at period end	129,000	546,000	783,000	13,769,000
Term modification, below market rate [Member] | Commercial [Member] | Commercial Real Estate - Owner Occupied [Member]
Schedule of TDR by class and modification type
No. of Loans		2	4	2
Recorded investment at period end		546,000	654,000	546,000
Term modification, below market rate [Member] | Commercial [Member] | Raw Land and Lots [Member]
Schedule of TDR by class and modification type
No. of Loans	1		1	6
Recorded investment at period end	60,000		60,000	6,391,000
Term modification, below market rate [Member] | Commercial [Member] | Single Family Investment Real Estate [Member]
Schedule of TDR by class and modification type
No. of Loans				4
Recorded investment at period end				2,506,000
Term modification, below market rate [Member] | Commercial [Member] | Commercial and Industrial [Member]
Schedule of TDR by class and modification type
No. of Loans				2
Recorded investment at period end				368,000
Term modification, below market rate [Member] | Commercial [Member] | Other Consumer [Member]
Schedule of TDR by class and modification type
No. of Loans	1		1
Recorded investment at period end	69,000		69,000
Term modification, below market rate [Member] | Commercial [Member] | Commercial Construction [Member]
Schedule of TDR by class and modification type
No. of Loans				3
Recorded investment at period end				3,451,000
Term modification, below market rate [Member] | Consumer [Member] | Mortgage [Member]
Schedule of TDR by class and modification type
No. of Loans				1
Recorded investment at period end				507,000
Interest Rate Modification, Below Market Rate [Member]
Schedule of TDR by class and modification type
No. of Loans	5		32
Recorded investment at period end	964,000		8,519,000
Interest Rate Modification, Below Market Rate [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of TDR by class and modification type
Recorded investment at period end			2,390,000
Interest Rate Modification, Below Market Rate [Member] | Commercial [Member] | Commercial Real Estate - Non-Owner Occupied [Member]
Schedule of TDR by class and modification type
No. of Loans			2
Recorded investment at period end			$ 2,390,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

12. FAIR VALUE MEASUREMENTS

The Company follows ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. This codification clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants.

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows:

Level 1	Valuation is based on quoted prices in active markets for identical assets and liabilities.
Level 2	Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets.
Level 3	Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort.

The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements.

Interest rate swap agreement used for interest rate risk management

Interest rate swaps are recorded at fair value on a recurring basis. The Company utilizes an interest rate swap agreement as part of the management of interest rate risk to modify the repricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities. The Company has contracted with a third party vendor to provide valuations for interest rate swaps using standard swap valuation techniques and therefore classifies such valuations as Level 2. Third party valuations are validated by the Company using Bloomberg Valuation Service’s derivative pricing functions. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities.

Securities available for sale

Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity then the security would fall to the lowest level of the hierarchy (Level 3).

The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is Interactive Data Corporation (“IDC”), which evaluates securities based on market data. IDC utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary modes, vast descriptive terms and conditions databases, as well as extensive quality control programs.

The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance and rating to incorporate additional spreads to the industry benchmark curves.

The Company uses Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any material differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No material differences were identified during our validation as of September 30, 2012 and December 31, 2011.

The carrying value of restricted Federal Reserve Bank of Richmond and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the following table.

The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2012 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	39	$	—	$	39
Securities available for sale:
U.S. government and agency securities		—		3,027		—		3,027
Obligations of states and political subdivisions		—		214,363		—		214,363
Corporate and other bonds		—		9,257		—		9,257
Mortgage-backed securities		—		392,065		—		392,065
Other securities		—		3,355		—		3,355
LIABILITIES
Interest rate swap - loans	$	—	$	39	$	—	$	39
Cash flow hedge - trust		—		4,785		—		4,785
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Interest rate swap - loans	$	—	$	66	$	—	$	66
Securities available for sale:
U.S. government and agency securities		—		4,284		—		4,284
Obligations of states and political subdivisions		—		200,207		—		200,207
Corporate and other bonds		—		12,240		—		12,240
Mortgage-backed securities		—		400,318		—		400,318
Other securities		—		3,117		—		3,117
LIABILITIES
Interest rate swap - loans	$	—	$	66	$	—	$	66
Cash flow hedge - trust		—		4,293		—		4,293

Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a nonrecurring basis in the financial statements.

Loans held for sale

Loans held for sale are carried at the lower of cost or market value. These loans currently consist of residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). As such, the Company records any fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during September 30, 2012 and December 31, 2011. Gains and losses on the sale of loans are recorded within income from the mortgage segment on the Consolidated Statements of Income.

Impaired loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts due according to the contractual terms of the loan agreements will not be collected. The measurement of loss associated with impaired loans can be based on either the observable market price of the loan or the fair value of the collateral. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. The vast majority of the Company’s collateral is real estate. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal, of one year or less, conducted by an independent, licensed appraiser using observable market data (Level 2). However, if the collateral is a house or building in the process of construction or if an appraisal of the property is more than one year old and not solely based on observable market comparables or management determines the fair value of the collateral is further impaired below the appraised value, then a Level 3 valuation is considered to measure the fair value. The value of business equipment is based upon an outside appraisal, of one year or less, if deemed significant, or the net book value on the applicable business’s financial statements if not considered significant using observable market data. Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). Impaired loans allocated to the allowance for loan losses are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan losses on the Consolidated Statements of Income.

Other real estate owned

Fair values of other real estate owned (“OREO”) are carried at the lower of carrying value or fair value less selling costs. Fair value is based upon independent market prices, appraised values of the collateral or management’s estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the Company records the foreclosed asset as Level 2 valuation. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the Company records the foreclosed asset as Level 3 valuation. Total valuation expenses related to OREO properties for September 30, 2012 and December 31, 2011 were $0 and $707,000, respectively.

The following table summarizes the Company’s financial assets that were measured at fair value on a nonrecurring basis at September 30, 2012 and December 31, 2011 (dollars in thousands):

	Fair Value Measurements at September 30, 2012 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	141,965	$	—	$	141,965
Impaired loans		—		—		36,555		36,555
Other real estate owned		—		—		34,440		34,440
	Fair Value Measurements at December 31, 2011 using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Balance
ASSETS
Loans held for sale	$	—	$	74,823	$	—	$	74,823
Impaired loans		—		—		63,423		63,423
Other real estate owned		—		—		32,263		32,263

The changes in Level 3 assets measured at estimated fair value on a nonrecurring basis during the nine months ended September 30, 2012 were as follows:

	Fair Value Measurements at September 30, 2012
	Impaired Loans			Other Real Estate Owned
Balance - January 1, 2012	$	63,423		$	32,263
Total gains (losses) realized/unrealized:
Included in earnings		—			(442	)
Additions		25,802			11,766
Sales		—			(9,147	)
Net decrease (1)		(52,670	)		—
Balance - September 30, 2012	$	36,555		$	34,440

(1) Includes payments, upgrades, charge-offs, and foreclosures.

The following table displays quantitative information about Level 3 Fair Value Measurements for September 30, 2012 (dollars in thousands):

	Fair Value Measurements at September 30, 2012
	Fair Value		Valuation Technique(s)		Unobservable Inputs			Weighted Average
ASSETS
Commercial Construction	$	2,922		Market comparables		Discount applied to market comparables	(1)		8	%
Commercial Real Estate - Owner Occupied		2,053		Market comparables		Discount applied to market comparables	(1)		13	%
Commercial Real Estate - Non-Owner Occupied		13,120		Market comparables		Discount applied to market comparables	(1)		7	%
Raw Land and Lots		9,420		Market comparables		Discount applied to market comparables	(1)		4	%
Single Family Investment Real Estate		1,541		Market comparables		Discount applied to market comparables	(1)		2	%
Commercial and Industrial		6,348		Market comparables		Discount applied to market comparables	(1)		5	%
Other (2)		1,151		Market comparables		Discount applied to market comparables	(1)		22	%
Total Impaired Loans		36,555
Other real estate owned		34,440		Market comparables		Discount applied to market comparables	(1)		31	%
Total	$	70,995

⁽¹⁾  A discount percentage is applied based on age of independent appraisals, current market conditions, and experience within the local market.

⁽²⁾  The “Other” category of the impaired loans section from the table above consists of Other Commercial, Consumer Construction, Indirect Marine, HELOCs, and Other Consumer.

ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Cash and cash equivalents

For those short-term instruments, the carrying amount is a reasonable estimate of fair value.

Loans

The fair value of performing loans is estimated by discounting expected future cash flows using a yield curve that is constructed by adding a loan spread to a market yield curve. Loan spreads are based on spreads currently observed in the market for loans of similar type and structure (Level 2). Fair value for impaired loans and their respective level within the fair value hierarchy, are described in the previous disclosure related to fair value measurements of assets that are measured on a nonrecurring basis.

Deposits

The fair value of demand deposits, savings accounts, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposits is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities (Level 2).

Borrowings

The carrying value of the Company’s repurchase agreements is a reasonable estimate of fair value. Other borrowings are discounted using the current yield curve for the same type of borrowing. For borrowings with embedded optionality, a third party source is used to value the instrument (Level 2). The Company validates all third party valuations for borrowings with optionality using Bloomberg’s derivative pricing functions.

Accrued interest

The carrying amounts of accrued interest approximate fair value (Level 2).

Commitments to extend credit and standby letters of credit

The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. At September 30, 2012 and December 31, 2011, the fair value of loan commitments and standby letters of credit was immaterial.

The carrying values and estimated fair values of the Company’s financial instruments as of September 30, 2012 and December 31, 2011 are as follows (dollars in thousands):

			Fair Value Measurements at September 30, 2012 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	62,334	$	62,334	$	—	$	—	$	62,334
Securities available for sale		622,067		—		622,067		—		622,067
Restricted stock		20,687		—		20,687		—		20,687
Loans held for sale		141,965		—		141,965		—		141,965
Net loans		2,868,616		—		2,864,799		36,555		2,901,354
Interest rate swap - loans		39		—		39		—		39
Accrued interest receivable		18,565		—		18,565		—		18,565
LIABILITIES
Deposits	$	3,199,779	$	—	$	3,213,963	$	—	$	3,213,963
Borrowings		350,686		—		332,484		—		332,484
Accrued interest payable		856		—		856		—		856
Cash flow hedge - trust		4,785		—		4,785		—		4,785
Interest rate swap - loans		39		—		39		—		39

			Fair Value Measurements at December 31, 2011 using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Total Fair Value
	Carrying Value		Level 1		Level 2		Level 3		Balance
ASSETS
Cash and cash equivalents	$	96,659	$	96,659	$	—	$	—	$	96,659
Securities available for sale		620,166		—		620,166		—		620,166
Restricted stock		20,661		—		20,661		—		20,661
Loans held for sale		74,823		—		74,823		—		74,823
Net loans		2,779,113		—		2,731,491		63,423		2,794,914
Interest rate swap - loans		66		—		66		—		66
Accrued interest receivable		16,626		—		16,626		—		16,626
LIABILITIES
Deposits	$	3,175,105	$	—	$	3,191,256	$	—	$	3,191,256
Borrowings		278,686		—		277,374		—		277,374
Accrued interest payable		1,865		—		1,865		—		1,865
Cash flow hedge - trust		4,293		—		4,293		—		4,293
Interest rate swap - loans		66		—		66		—		66

The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Stock-Based Compensation [Abstract]

Summarizes the stock option activity

	Number of Stock Options			Weighted Average Exercise Price
Options outstanding, December 31, 2011		422,750		$	17.70
Granted		131,657			14.40
Exercised		(1,165	)		12.11
Forfeited		(19,029	)		14.58
Expired		(16,775	)		22.53
Options outstanding, September 30, 2012		517,438			16.83
Options exercisable, September 30, 2012		222,301			20.50

Estimated stock option on the date of grant fair value

	Nine Months Ended September 30,
	2012			2011
Dividend yield (1)		2.47	%		2.36	%
Expected life in years (2)		7.0			7.0
Expected volatility (3)		41.53	%		41.02	%
Risk-free interest rate (4)		1.24	%		2.71	%
Weighted average fair value per option granted	$	4.76		$	4.31

(1) Calculated as the ratio of historical dividends paid per share of common stock to the stock price on the date of grant.

(2) Based on the average of the contractual life and vesting schedule for the respective option.

(3) Based on the monthly historical volatility of the Company’s stock price over the expected life of the options.

(4) Based upon the U.S. Treasury bill yield curve, for periods within the contractual life of the option, in effect at the time of grant.

Summary of information concerning stock options

	Stock Options Vested or Expected to Vest		Exercisable
Stock options		492,196		222,301
Weighted average remaining contractual life in years		6.47		3.81
Weighted average exercise price on shares above water	$	13.23	$	12.23
Aggregate intrinsic value	$	257,186	$	28,561

Summary the nonvested stock activity

	Number of Shares of Restricted Stock			Performance Stock			Weighted Average Grant- Date Fair Value
Balance, December 31, 2011		140,557			6,000		$	12.62
Granted		73,414			—			14.28
Vested		(7,497	)		—			15.81
Forfeited		(14,310	)		(1,500	)		12.95
Balance, September 30, 2012		192,164			4,500			12.85

Estimated unamortized compensation expense recognized in future

	Stock Options		Restricted Stock		Total
For the remaining three months of 2012	$	90	$	230	$	320
For year ending December 31, 2013		366		699		1,065
For year ending December 31, 2014		360		366		726
For year ending December 31, 2015		268		98		366
For year ending December 31, 2016		155		13		168
For year ending December 31, 2017		25		—		25
Total	$	1,264	$	1,406	$	2,670

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Loans and Allowance for Loan Losses (Details 3) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Impaired loans individually evaluated for impairment
Loans with a specific allowance, Related Allowance	$ 11,438	$ 10,298
Loans with a specific allowance, Interest Income Recognized	4,891	10,053
Recorded Investment	161,196	242,833
Unpaid Principal Balance	163,553	245,391
Year to Date Average Investment	169,315	251,317
Loans without a specific allowance [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	113,203	169,112
Loans without a specific allowance, Unpaid Principle Balance	114,851	170,395
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	119,508	171,836
Loans without a specific allowance, Interest Income Recognized	3,812	7,397
Loans with a specific allowance [Member]
Impaired loans individually evaluated for impairment
Loans with a specific allowance, Recorded Investment	47,993	73,721
Loans with a specific allowance, Unpaid Principle Balance	48,702	74,996
Loans with a specific allowance, Related Allowance	11,438	10,298
Loans with a specific allowance, YTD Average Investment	49,807	79,481
Loans with a specific allowance, Interest Income Recognized	1,079	2,656
Commercial Construction [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	30,864	40,475
Loans without a specific allowance, Unpaid Principle Balance	31,347	40,524
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	31,913	37,835
Loans without a specific allowance, Interest Income Recognized	1,073	1,690
Loans with a specific allowance, Recorded Investment	4,290	12,927
Loans with a specific allowance, Unpaid Principle Balance	4,338	13,297
Loans with a specific allowance, Related Allowance	1,368	583
Loans with a specific allowance, YTD Average Investment	4,360	13,811
Loans with a specific allowance, Interest Income Recognized	20	343
Commercial Real Estate - Owner Occupied [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	10,774	20,487
Loans without a specific allowance, Unpaid Principle Balance	11,246	21,010
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	11,517	23,364
Loans without a specific allowance, Interest Income Recognized	423	1,183
Loans with a specific allowance, Recorded Investment	2,718	8,679
Loans with a specific allowance, Unpaid Principle Balance	2,853	8,788
Loans with a specific allowance, Related Allowance	665	1,961
Loans with a specific allowance, YTD Average Investment	2,888	8,681
Loans with a specific allowance, Interest Income Recognized	22	267
Commercial Real Estate - Non-Owner Occupied [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	21,230	37,799
Loans without a specific allowance, Unpaid Principle Balance	21,305	37,855
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	22,644	38,084
Loans without a specific allowance, Interest Income Recognized	867	2,002
Loans with a specific allowance, Recorded Investment	13,546	8,858
Loans with a specific allowance, Unpaid Principle Balance	13,580	8,879
Loans with a specific allowance, Related Allowance	426	1,069
Loans with a specific allowance, YTD Average Investment	13,777	9,010
Loans with a specific allowance, Interest Income Recognized	568	322
Raw Land and Lots [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	35,067	46,791
Loans without a specific allowance, Unpaid Principle Balance	35,141	46,890
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	36,376	47,808
Loans without a specific allowance, Interest Income Recognized	941	1,306
Loans with a specific allowance, Recorded Investment	12,472	22,188
Loans with a specific allowance, Unpaid Principle Balance	12,669	22,429
Loans with a specific allowance, Related Allowance	3,052	991
Loans with a specific allowance, YTD Average Investment	13,168	24,553
Loans with a specific allowance, Interest Income Recognized	118	973
Single Family Investment Real Estate [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	5,860	11,285
Loans without a specific allowance, Unpaid Principle Balance	6,180	11,349
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	6,440	11,684
Loans without a specific allowance, Interest Income Recognized	216	637
Loans with a specific allowance, Recorded Investment	2,503	9,020
Loans with a specific allowance, Unpaid Principle Balance	2,573	9,312
Loans with a specific allowance, Related Allowance	962	1,140
Loans with a specific allowance, YTD Average Investment	2,736	9,571
Loans with a specific allowance, Interest Income Recognized	44	321
Commercial and Industrial [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	3,361	9,467
Loans without a specific allowance, Unpaid Principle Balance	3,394	9,959
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	3,837	10,216
Loans without a specific allowance, Interest Income Recognized	135	423
Loans with a specific allowance, Recorded Investment	9,929	8,980
Loans with a specific allowance, Unpaid Principle Balance	10,069	9,133
Loans with a specific allowance, Related Allowance	3,581	3,320
Loans with a specific allowance, YTD Average Investment	10,059	10,448
Loans with a specific allowance, Interest Income Recognized	304	369
Other Commercial [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	906	1,257
Loans without a specific allowance, Unpaid Principle Balance	906	1,257
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	1,009	1,269
Loans without a specific allowance, Interest Income Recognized	46	75
Loans with a specific allowance, Recorded Investment	134	150
Loans with a specific allowance, Unpaid Principle Balance	134	150
Loans with a specific allowance, Related Allowance	108	3
Loans with a specific allowance, YTD Average Investment	134	153
Loans with a specific allowance, Interest Income Recognized		10
Mortgage [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	2,592	1,202
Loans without a specific allowance, Unpaid Principle Balance	2,645	1,202
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	2,983	1,225
Loans without a specific allowance, Interest Income Recognized	80	70
Loans with a specific allowance, Recorded Investment		535
Loans with a specific allowance, Unpaid Principle Balance		535
Loans with a specific allowance, Related Allowance		11
Loans with a specific allowance, YTD Average Investment		536
Loans with a specific allowance, Interest Income Recognized		32
Consumer Construction [Member]
Impaired loans individually evaluated for impairment
Loans with a specific allowance, Recorded Investment	210	207
Loans with a specific allowance, Unpaid Principle Balance	236	226
Loans with a specific allowance, Related Allowance	76	86
Loans with a specific allowance, YTD Average Investment	226	228
Loans with a specific allowance, Interest Income Recognized
Indirect Marine [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	876
Loans without a specific allowance, Unpaid Principle Balance	876
Loans without a specific allowance, Related Allowance	404
Loans without a specific allowance, YTD Average Investment	879
Loans without a specific allowance, Interest Income Recognized	3
Loans with a specific allowance, Recorded Investment		544
Loans with a specific allowance, Unpaid Principle Balance		547
Loans with a specific allowance, Related Allowance		263
Loans with a specific allowance, YTD Average Investment		548
Loans with a specific allowance, Interest Income Recognized		9
Indirect Auto [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	6
Loans without a specific allowance, Unpaid Principle Balance	6
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	9
Loans without a specific allowance, Interest Income Recognized
Loans with a specific allowance, Recorded Investment		71
Loans with a specific allowance, Unpaid Principle Balance		71
Loans with a specific allowance, Related Allowance
Loans with a specific allowance, YTD Average Investment		93
Loans with a specific allowance, Interest Income Recognized		5
HELOCs [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	1,672	349
Loans without a specific allowance, Unpaid Principle Balance	1,771	349
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	1,843	350
Loans without a specific allowance, Interest Income Recognized	10	11
Loans with a specific allowance, Recorded Investment	752	785
Loans with a specific allowance, Unpaid Principle Balance	811	825
Loans with a specific allowance, Related Allowance	550	587
Loans with a specific allowance, YTD Average Investment	1,017	1,034
Loans with a specific allowance, Interest Income Recognized
Other Consumer [Member]
Impaired loans individually evaluated for impairment
Loans without a specific allowance, Recorded Investment	871
Loans without a specific allowance, Unpaid Principle Balance	910
Loans without a specific allowance, Related Allowance
Loans without a specific allowance, YTD Average Investment	937	1
Loans without a specific allowance, Interest Income Recognized	21
Loans with a specific allowance, Recorded Investment	563	777
Loans with a specific allowance, Unpaid Principle Balance	563	804
Loans with a specific allowance, Related Allowance	246	284
Loans with a specific allowance, YTD Average Investment	563	815
Loans with a specific allowance, Interest Income Recognized		$ 5

XML

Stock-Based Compensation (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Estimated stock option on the date of grant fair value
Dividend yield	2.47%	2.36%
Expected life in years	7 years	7 years
Expected volatility	41.53%	41.02%
Risk-free interest rate	1.24%	2.71%
Weighted average fair value per option granted	$ 4.76	$ 4.31

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 9,626	$ 9,071	$ 25,969	$ 22,085
Other comprehensive income:
Change in fair value of interest rate swap (cash flow hedge)	(202)	(1,827)	(492)	(2,826)
Unrealized gains on securities:
Unrealized holding gains arising during period (net of tax, $1,172 and $2,062 for three and nine months ended 2012)	2,176	3,230	3,829	10,346
Reclassification adjustment for (gains) losses included in net income (net of tax. $0 and $1 for three and nine months ended 2012)	1	(64)	(3)	(54)
Other comprehensive income	1,975	1,339	3,334	7,466
Comprehensive income	$ 11,601	$ 10,410	$ 29,303	$ 29,551

XML

Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

ACCOUNTING POLICIES

1. ACCOUNTING POLICIES

The condensed consolidated financial statements include the accounts of Union First Market Bankshares Corporation and its subsidiaries (collectively, the “Company”). Significant inter-company accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and follow general practice within the banking industry. Accordingly, the unaudited condensed consolidated financial statements do not include all the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of the interim periods presented have been made. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2011 Annual Report on Form 10-K. If needed, certain previously reported amounts have been reclassified to conform to current period presentation.

XML

Earnings per Share (Details Textual)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share (Textual) [Abstract]
Anti-dilutive stock awards	594,946	409,562

XML

Derivatives (Details Textual) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012
Derivatives (Textual) [Abstract]
Rate of interest for counterparty	3.51%
Notional amount	$ 36.0
Trust swap term	6 years
Unrealized loss of fair value of the trust swap agreement	$ 4.8

XML

Securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	$ 595,286	$ 599,262
Gross Unrealized Gains	27,365	22,387
Gross Unrealized (Losses)	(584)	(1,483)
Estimated Fair Value	622,067	620,166
U.S. government and agency securities [Member]
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	2,919	3,933
Gross Unrealized Gains	120	351
Gross Unrealized (Losses)	(12)
Estimated Fair Value	3,027	4,284
Obligations of states and political subdivisions [Member]
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	198,954	189,117
Gross Unrealized Gains	15,488	11,337
Gross Unrealized (Losses)	(79)	(247)
Estimated Fair Value	214,363	200,207
Corporate and other bonds [Member]
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	9,390	12,839
Gross Unrealized Gains	275	188
Gross Unrealized (Losses)	(408)	(787)
Estimated Fair Value	9,257	12,240
Mortgage-backed securities [Member]
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	380,790	390,329
Gross Unrealized Gains	11,360	10,434
Gross Unrealized (Losses)	(85)	(445)
Estimated Fair Value	392,065	400,318
Other securities [Member]
Amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities
Amortized Cost	3,233	3,044
Gross Unrealized Gains	122	77
Gross Unrealized (Losses)		(4)
Estimated Fair Value	$ 3,355	$ 3,117

XML

Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2012

Loans and Allowance for Loan Losses [Abstract]

Loans stated at face amount, net of unearned income

	September 30, 2012		December 31, 2011
Commercial:
Commercial Construction	$	200,032	$	185,359
Commercial Real Estate - Owner Occupied		492,715		452,407
Commercial Real Estate - Non-Owner Occupied		693,679		655,083
Raw Land and Lots		212,316		214,284
Single Family Investment Real Estate		206,090		192,437
Commercial and Industrial		209,401		212,268
Other Commercial		40,307		44,403
Consumer:
Mortgage		221,474		219,646
Consumer Construction		27,488		20,757
Indirect Auto		159,495		162,708
Indirect Marine		31,314		39,819
HELOCs		286,348		277,101
Credit Card		20,332		19,006
Other Consumer		107,519		123,305
Total	$	2,908,510	$	2,818,583

Summary of aging of the loan portfolio, by class

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	6,148	$	—	$	—	$	—	$	7,846	$	186,038	$	200,032
Commercial Real Estate - Owner Occupied		2,865		88		822		1,228		2,212		485,500		492,715
Commercial Real Estate - Non-Owner Occupied		5,116		—		635		—		540		687,388		693,679
Raw Land and Lots		138		—		153		3,743		10,995		197,287		212,316
Single Family Investment Real Estate		686		102		201		371		4,081		200,649		206,090
Commercial and Industrial		230		191		120		89		2,678		206,093		209,401
Other Commercial		238		1		—		—		195		39,873		40,307
Consumer:
Mortgage		3,899		3,003		3,991		—		693		209,888		221,474
Consumer Construction		—		—		—		—		210		27,278		27,488
Indirect Auto		1,998		234		289		24		2		156,948		159,495
Indirect Marine		68		—		114		—		876		30,256		31,314
HELOCs		2,481		536		1,707		851		797		279,976		286,348
Credit Card		147		223		268		—		—		19,694		20,332
Other Consumer		893		629		796		131		1,034		104,036		107,519
Total	$	24,907	$	5,007	$	9,096	$	6,437	$	32,159	$	2,830,904	$	2,908,510

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days and still Accruing		Purchased Impaired (net of credit mark)		Nonaccrual		Current		Total Loans
Commercial:
Commercial Construction	$	—	$	—	$	490	$	—	$	10,276	$	174,593	$	185,359
Commercial Real Estate - Owner Occupied		520		—		2,482		1,292		5,962		442,151		452,407
Commercial Real Estate - Non-Owner Occupied		190		64		2,887		1,133		2,031		648,778		655,083
Raw Land and Lots		94		1,124		—		5,623		13,322		194,121		214,284
Single Family Investment Real Estate		779		70		3,637		388		5,048		182,515		192,437
Commercial and Industrial		601		185		3,369		392		5,297		202,424		212,268
Other Commercial		—		25		—		—		238		44,140		44,403
Consumer:
Mortgage		6,748		412		3,804		—		240		208,442		219,646
Consumer Construction		—		—		—		—		207		20,550		20,757
Indirect Auto		2,653		416		443		40		7		159,149		162,708
Indirect Marine		189		795		—		—		544		38,291		39,819
HELOCs		1,678		547		820		865		885		272,306		277,101
Credit Card		245		184		323		—		—		18,254		19,006
Other Consumer		1,421		443		1,657		164		777		118,843		123,305
Total	$	15,118	$	4,265	$	19,912	$	9,897	$	44,834	$	2,724,557	$	2,818,583

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	—	$	1,164	$	64	$	1,228
Raw Land and Lots		—		91		3,652		3,743
Single Family Investment Real Estate		16		—		355		371
Commercial and Industrial		—		89		—		89
Consumer:
Indirect Auto		7		—		17		24
HELOCs		—		50		801		851
Other Consumer		—		26		105		131
Total	$	23	$	1,420	$	4,994	$	6,437

	30-89 Days Past Due		Greater than 90 Days		Current		Total
Commercial:
Commercial Real Estate - Owner Occupied	$	206	$	50	$	1,036	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		—		5,623		5,623
Single Family Investment Real Estate		—		—		388		388
Commercial and Industrial		—		302		90		392
Consumer:
Indirect Auto		6		11		23		40
HELOCs		19		32		814		865
Other Consumer		—		77		87		164
Total	$	231	$	1,605	$	8,061	$	9,897

Impaired loans individually evaluated for impairment, by class

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	30,864	$	31,347	$	—	$	31,913	$	1,073
Commercial Real Estate - Owner Occupied		10,774		11,246		—		11,517		423
Commercial Real Estate - Non-Owner Occupied		21,230		21,305		—		22,644		867
Raw Land and Lots		35,067		35,141		—		36,376		941
Single Family Investment Real Estate		5,860		6,180		—		6,440		216
Commercial and Industrial		3,361		3,394		—		3,837		135
Other Commercial		906		906		—		1,009		46
Consumer:
Mortgage		2,592		2,645		—		2,983		80
Indirect Auto		6		6		—		9		—
HELOCs		1,672		1,771		—		1,843		10
Other Consumer		871		910		—		937		21
Total impaired loans without a specific allowance	$	113,203	$	114,851	$	—	$	119,508	$	3,812
Loans with a specific allowance
Commercial:
Commercial Construction	$	4,290	$	4,338	$	1,368	$	4,360	$	20
Commercial Real Estate - Owner Occupied		2,718		2,853		665		2,888		22
Commercial Real Estate - Non-Owner Occupied		13,546		13,580		426		13,777		568
Raw Land and Lots		12,472		12,669		3,052		13,168		118
Single Family Investment Real Estate		2,503		2,573		962		2,736		44
Commercial and Industrial		9,929		10,069		3,581		10,059		304
Other Commercial		134		134		108		134		—
Consumer:
Consumer Construction		210		236		76		226		—
Indirect Marine		876		876		404		879		3
HELOCs		752		811		550		1,017		—
Other Consumer		563		563		246		563		—
Total impaired loans with a specific allowance	$	47,993	$	48,702	$	11,438	$	49,807	$	1,079
Total loans individually evaluated for impairment	$	161,196	$	163,553	$	11,438	$	169,315	$	4,891

	Recorded Investment		Unpaid Principal Balance		Related Allowance		YTD Average Investment		Interest Income Recognized
Loans without a specific allowance
Commercial:
Commercial Construction	$	40,475	$	40,524	$	—	$	37,835	$	1,690
Commercial Real Estate - Owner Occupied		20,487		21,010		—		23,364		1,183
Commercial Real Estate - Non-Owner Occupied		37,799		37,855		—		38,084		2,002
Raw Land and Lots		46,791		46,890		—		47,808		1,306
Single Family Investment Real Estate		11,285		11,349		—		11,684		637
Commercial and Industrial		9,467		9,959		—		10,216		423
Other Commercial		1,257		1,257		—		1,269		75
Consumer:
Mortgage		1,202		1,202		—		1,225		70
HELOCs		349		349		—		350		11
Other Consumer		—		—		—		1		—
Total impaired loans without a specific allowance	$	169,112	$	170,395	$	—	$	171,836	$	7,397
Loans with a specific allowance
Commercial:
Commercial Construction	$	12,927	$	13,297	$	583	$	13,811	$	343
Commercial Real Estate - Owner Occupied		8,679		8,788		1,961		8,681		267
Commercial Real Estate - Non-Owner Occupied		8,858		8,879		1,069		9,010		322
Raw Land and Lots		22,188		22,429		991		24,553		973
Single Family Investment Real Estate		9,020		9,312		1,140		9,571		321
Commercial and Industrial		8,980		9,133		3,320		10,448		369
Other Commercial		150		150		3		153		10
Consumer:
Mortgage		535		535		11		536		32
Consumer Construction		207		226		86		228		—
Indirect Auto		71		71		—		93		5
Indirect Marine		544		547		263		548		9
HELOCs		785		825		587		1,034		—
Other Consumer		777		804		284		815		5
Total impaired loans with a specific allowance	$	73,721	$	74,996	$	10,298	$	79,481	$	2,656
Total loans individually evaluated for impairment	$	242,833	$	245,391	$	10,298	$	251,317	$	10,053

Summary, by class and modification type, of continue accrue interest under the terms of restructuring agreement

	September 30, 2012						December 31, 2011
	No. of Loans		Recorded Investment		Outstanding Commitment		No. of Loans		Recorded Investment		Outstanding Commitment
Performing
Commercial:
Commercial Construction		6	$	6,559	$	169		14	$	21,461	$	3,185
Commercial Real Estate - Owner Occupied		8		3,056		—		11		7,996		180
Commercial Real Estate - Non-Owner Occupied		10		13,082		29		16		21,777		13
Raw Land and Lots		14		25,274		1		15		32,450		1
Single Family Investment Real Estate		5		848		—		12		8,525		—
Commercial and Industrial		6		1,103		—		12		4,991		204
Other Commercial		1		236		—		4		864		—
Consumer:
Mortgage		7		1,690		—		1		507		—
Other Consumer		2		85		—		2		263		—
Total performing		59	$	51,933	$	199		87	$	98,834	$	3,583
Nonperforming
Commercial:
Commercial Construction		4	$	4,260	$	—		5	$	5,353	$	—
Commercial Real Estate - Owner Occupied		3		1,084		—		—		—		—
Commercial Real Estate - Non-Owner Occupied		1		208		—		2		292		—
Raw Land and Lots		3		3,860		—		6		4,342		—
Single Family Investment Real Estate		2		433		—		4		1,342		—
Commercial and Industrial		7		1,284		—		3		1,134		—
Consumer:
Mortgage		1		202		—		5		1,076		—
Indirect Marine		1		283		—		—		—		—
Other Consumer		2		266		—		1		265		—
Total nonperforming		24	$	11,880	$	—		26	$	13,804	$	—
Total performing and nonperforming		83	$	63,813	$	199		113	$	112,638	$	3,583

Schedule of TDR by class and modification type

	Three months ended September 30, 2012				Nine months ended September 30, 2012
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	309
Raw Land and Lots		—		—		3		260
Single Family Investment Real Estate		—		—		2		176
Consumer:
Indirect Marine		—		—		1		283
Total interest only at market rate of interest		—	$	—		7	$	1,028
Term modification, at a market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		3	$	1,809
Commercial Real Estate - Non-Owner Occupied		2		720		2		720
Raw Land and Lots		—		—		1		603
Commercial and Industrial		1		115		6		432
Consumer:
Mortgage		—		—		2		472
Other Consumer		—		—		3		282
Total loan term extended at a market rate		3	$	835		17	$	4,318
Term modification, below market rate
Commercial:
Commercial Real Estate - Owner Occupied		—	$	—		4	$	654
Raw Land and Lots		1		60		1		60
Consumer:
Other Consumer		1		69		1		69
Total loan term extended at a below market rate		2	$	129		6	$	783
Interest rate modification, below market rate
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		2	$	2,390
Total interest only at below market rate of interest		—	$	—		2	$	2,390
Total		5	$	964		32	$	8,519

	Three months ended September 30, 2011				Nine months ended September 30, 2011
	No. of Loans		Recorded investment at period end		No. of Loans		Recorded investment at period end
Modified to interest only
Commercial:
Commercial Real Estate - Non-Owner Occupied		—	$	—		1	$	223
Raw Land and Lots		—		—		1		341
Single Family Investment Real Estate		1		95		1		95
Total interest only at market rate of interest		1	$	95		3	$	659
Term modification, at a market rate
Commercial:
Commercial Construction		5	$	7,072		15	$	22,940
Commercial Real Estate - Owner Occupied		3		3,869		5		5,035
Commercial Real Estate - Non-Owner Occupied		2		2,572		16		21,655
Raw Land and Lots		4		18,625		14		27,596
Single Family Investment Real Estate		1		2,616		10		7,286
Commercial and Industrial		5		2,729		12		5,623
Other Commercial		2		457		5		911
Consumer:
Mortgage		1		56		4		538
Other Consumer		1		270		3		533
Total loan term extended at a market rate		24	$	38,266		84	$	92,117
Term modification, below market rate
Commercial:
Commercial Construction		—	$	—		3	$	3,451
Commercial Real Estate - Owner Occupied		2		546		2		546
Raw Land and Lots		—		—		6		6,391
Single Family Investment Real Estate		—		—		4		2,506
Commercial and Industrial		—		—		2		368
Consumer:
Mortgage		—		—		1		507
Total loan term extended at a below market rate		2	$	546		18	$	13,769
Total		27	$	38,907		105	$	106,545

Allowance for loan loss activity, by portfolio segment, balances for allowance for credit losses, and loans based on impairment methodology

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	27,891		$	11,498		$	81		$	39,470
Recoveries credited to allowance		490			881			—			1,371
Loans charged off		(5,956	)		(3,891	)		—			(9,847	)
Provision charged to operations		7,301			1,626			(27	)		8,900
Balance, end of period	$	29,726		$	10,114		$	54		$	39,894
Ending balance: individually evaluated for impairment		10,033			1,276			—			11,309
Ending balance: collectively evaluated for impairment		19,564			8,838			54			28,456
Ending balance: loans acquired with deteriorated credit quality		129			—			—			129
Total	$	29,726		$	10,114		$	54		$	39,894
Loans:
Ending balance	$	2,054,540		$	853,970		$	—		$	2,908,510
Ending balance: individually evaluated for impairment		148,223			6,536			—			154,759
Ending balance: collectively evaluated for impairment		1,900,886			846,428			—			2,747,314
Ending balance: loans acquired with deteriorated credit quality		5,431			1,006			—			6,437
Total	$	2,054,540		$	853,970		$	—		$	2,908,510

	Commercial			Consumer			Unallocated			Total
Allowance for loan losses:
Balance, beginning of the year	$	28,255		$	10,189		$	(38	)	$	38,406
Recoveries credited to allowance		924			1,206			—			2,130
Loans charged off		(10,891	)		(6,975	)		—			(17,866	)
Provision charged to operations		9,603			7,078			119			16,800
Balance, end of year	$	27,891		$	11,498		$	81		$	39,470
Ending balance: individually evaluated for impairment		8,982			1,231			—			10,213
Ending balance: collectively evaluated for impairment		18,824			10,267			81			29,172
Ending balance: loans acquired with deteriorated credit quality		85			—			—			85
Total	$	27,891		$	11,498		$	81		$	39,470
Loans:
Ending balance	$	1,956,241		$	862,342		$	—		$	2,818,583
Ending balance: individually evaluated for impairment		229,535			3,401			—			232,936
Ending balance: collectively evaluated for impairment		1,717,878			857,872			—			2,575,750
Ending balance: loans acquired with deteriorated credit quality		8,828			1,069			—			9,897
Total	$	1,956,241		$	862,342		$	—		$	2,818,583

Loans receivables related risk rating excluding purchased impaired loans

	1-3		4		5		6		7		8		Total
Commercial Construction	$	11,409	$	105,226	$	11,150	$	39,371	$	32,766	$	110	$	200,032
Commercial Real Estate - Owner Occupied		125,840		314,456		22,406		17,671		11,114		—		491,487
Commercial Real Estate - Non-Owner Occupied		164,530		416,312		51,597		31,961		29,279		—		693,679
Raw Land and Lots		3,378		112,439		14,807		33,719		43,724		506		208,573
Single Family Investment Real Estate		24,329		145,213		14,109		12,898		8,431		739		205,719
Commercial and Industrial		44,831		122,572		13,779		13,284		14,671		175		209,312
Other Commercial		5,307		16,489		12,133		4,803		1,515		60		40,307
Total	$	379,624	$	1,232,707	$	139,981	$	153,707	$	141,500	$	1,590	$	2,049,109

The following table shows all loans, excluding purchased impaired loans, in the commercial portfolios by class with their related risk rating as of December 31, 2011. The risk rating information has been updated through December 31, 2011 (dollars in thousands):

	1-3		4		5		6		7		8		Total
Commercial Construction	$	10,099	$	84,299	$	6,079	$	36,650	$	48,232	$	—	$	185,359
Commercial Real Estate - Owner Occupied		88,430		296,825		17,604		21,158		26,389		709		451,115
Commercial Real Estate - Non-Owner Occupied		149,346		367,244		58,844		38,662		39,854		—		653,950
Raw Land and Lots		4,368		99,374		18,767		33,673		52,204		275		208,661
Single Family Investment Real Estate		32,741		116,570		11,928		14,358		16,452		—		192,049
Commercial and Industrial		35,120		123,872		22,079		11,559		19,066		180		211,876
Other Commercial		6,364		15,918		16,739		3,807		1,512		63		44,403
Total	$	326,468	$	1,104,102	$	152,040	$	159,867	$	203,709	$	1,227	$	1,947,413

Loans receivables related risk rating including purchased impaired loans

	5		6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	—	$	1,228	$	—	$	1,228
Raw Land and Lots		—		—		3,743		—		3,743
Single Family Investment Real Estate		355		—		16		—		371
Commercial and Industrial		—		—		89		—		89
Total	$	355	$	—	$	5,076	$	—	$	5,431

The following table shows only purchased impaired loans in the commercial portfolios by class with their related risk rating as of December 31, 2011. The credit quality indicator information has been updated through December 31, 2011 (dollars in thousands):

	6		7		8		Total
Commercial Real Estate - Owner Occupied	$	—	$	1,292	$	—	$	1,292
Commercial Real Estate - Non-Owner Occupied		—		1,133		—		1,133
Raw Land and Lots		—		5,623		—		5,623
Single Family Investment Real Estate		369		19		—		388
Commercial and Industrial		—		91		301		392
Total	$	369	$	8,158	$	301	$	8,828

Schedule of acquired loan portfolio and accretable yield

	For the Nine Months Ended												For the Twelve Months Ended
	September 30, 2012												December 31, 2011
	Purchased Impaired						Purchased Nonimpaired						Purchased Impaired						Purchased Nonimpaired
	Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans			Accretable Yield			Carrying Amount of Loans
Balance at beginning of period	$	5,140		$	9,897		$	9,010		$	663,510		$	8,169		$	13,999		$	13,589		$	799,898
Additions		—			—			—			—			122			276			1,593			70,524
Accretion		(55	)		—			(2,960	)		—			(66	)		—			(6,172	)		—
Charged off		(1,602	)		(397	)		—			(1,551	)		(3,073	)		(1,329	)		—			(5,988	)
Transfers to OREO		—			(2,371	)		—			(2,766	)		(12	)		(174	)		—			(2,341	)
Payments received, net		—			(692	)		—			(155,947	)		—			(2,875	)		—			(198,583	)
Balance at end of period	$	3,483		$	6,437		$	6,050		$	503,246		$	5,140		$	9,897		$	9,010		$	663,510

XML

Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
ASSETS
Interest rate swap - loans	$ 39	$ 66
Securities available for sale	622,067	620,166
Recurring [Member]
ASSETS
Interest rate swap - loans	39	66
LIABILITIES
Interest rate swap - loans	39	66
Cash flow hedge - trust	4,785	4,293
Quoted Prices in Active Markets for Identical Assets Level 1 [Member]
ASSETS
Interest rate swap - loans
Securities available for sale
Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Interest rate swap - loans
LIABILITIES
Interest rate swap - loans
Cash flow hedge - trust
Significant Other Observable Inputs Level 2 [Member]
ASSETS
Interest rate swap - loans	39	66
Securities available for sale	622,067	620,166
Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Interest rate swap - loans	39	66
LIABILITIES
Interest rate swap - loans	39	66
Cash flow hedge - trust	4,785	4,293
Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Interest rate swap - loans
LIABILITIES
Interest rate swap - loans
Cash flow hedge - trust
U.S. government and agency securities [Member]
ASSETS
Securities available for sale	3,027	4,284
U.S. government and agency securities [Member] | Recurring [Member]
ASSETS
Securities available for sale	3,027	4,284
U.S. government and agency securities [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Securities available for sale
U.S. government and agency securities [Member] | Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Securities available for sale	3,027	4,284
U.S. government and agency securities [Member] | Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Obligations of states and political subdivisions [Member]
ASSETS
Securities available for sale	214,363	200,207
Obligations of states and political subdivisions [Member] | Recurring [Member]
ASSETS
Securities available for sale	214,363	200,207
Obligations of states and political subdivisions [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Obligations of states and political subdivisions [Member] | Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Securities available for sale	214,363	200,207
Obligations of states and political subdivisions [Member] | Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Corporate and other bonds [Member]
ASSETS
Securities available for sale	9,257	12,240
Corporate and other bonds [Member] | Recurring [Member]
ASSETS
Securities available for sale	9,257	12,240
Corporate and other bonds [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Corporate and other bonds [Member] | Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Securities available for sale	9,257	12,240
Corporate and other bonds [Member] | Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Mortgage-backed securities [Member]
ASSETS
Securities available for sale	392,065	400,318
Mortgage-backed securities [Member] | Recurring [Member]
ASSETS
Securities available for sale	392,065	400,318
Mortgage-backed securities [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Mortgage-backed securities [Member] | Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Securities available for sale	392,065	400,318
Mortgage-backed securities [Member] | Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Other securities [Member]
ASSETS
Securities available for sale	3,355	3,117
Other securities [Member] | Recurring [Member]
ASSETS
Securities available for sale	3,355	3,117
Other securities [Member] | Quoted Prices in Active Markets for Identical Assets Level 1 [Member] | Recurring [Member]
ASSETS
Securities available for sale
Other securities [Member] | Significant Other Observable Inputs Level 2 [Member] | Recurring [Member]
ASSETS
Securities available for sale	3,355	3,117
Other securities [Member] | Significant Unobservable Inputs Level 3 [Member] | Recurring [Member]
ASSETS
Securities available for sale

XML

Business Combinations (Details 1) (First Market Bank Acquisition [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
First Market Bank Acquisition [Member]
Outstanding principal balance and carrying amount of acquired loans
Outstanding principal balance	$ 471,557	$ 632,602
Carrying amount	$ 462,552	$ 620,048

XML

Securities

9 Months Ended

Sep. 30, 2012

Securities [Abstract]

SECURITIES

11. SECURITIES

The amortized cost, gross unrealized gains and losses, and estimated fair values of investment securities as of September 30, 2012 and December 31, 2011 are summarized as follows (dollars in thousands):

			Gross Unrealized
	Amortized Cost		Gains		(Losses)			Estimated Fair Value
September 30, 2012
U.S. government and agency securities	$	2,919	$	120	$	(12	)	$	3,027
Obligations of states and political subdivisions		198,954		15,488		(79	)		214,363
Corporate and other bonds		9,390		275		(408	)		9,257
Mortgage-backed securities		380,790		11,360		(85	)		392,065
Other securities		3,233		122		—			3,355
Total securities	$	595,286	$	27,365	$	(584	)	$	622,067
December 31, 2011
U.S. government and agency securities	$	3,933	$	351	$	—		$	4,284
Obligations of states and political subdivisions		189,117		11,337		(247	)		200,207
Corporate and other bonds		12,839		188		(787	)		12,240
Mortgage-backed securities		390,329		10,434		(445	)		400,318
Other securities		3,044		77		(4	)		3,117
Total securities	$	599,262	$	22,387	$	(1,483	)	$	620,166

Due to restrictions placed upon the Company’s common stock investment in the Federal Reserve Bank of Richmond and FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications. The FHLB requires the Bank to maintain stock in an amount equal to 4.5% of outstanding borrowings and a specific percentage of the member’s total assets. The Federal Reserve Bank of Richmond requires the Company to maintain stock with a par value equal to 6% of its outstanding capital. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $6.8 million and $6.7 million and FHLB stock in the amount of $13.9 million as of September 30, 2012 and December 31, 2011.

The following table shows the gross unrealized losses and fair value (in thousands) of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position and are as follows:

	Less than 12 months					More than 12 months					Total
	Fair value		Unrealized Losses			Fair value		Unrealized Losses			Fair value		Unrealized Losses
September 30, 2012
U.S. government and agency securities	$	6	$	(12	)	$	—	$	—		$	6	$	(12	)
Obligations of states and political subdivisions		6,188		(26	)		1,161		(53	)		7,349		(79	)
Mortgage-backed securities		30,511		(85	)		—		—			30,511		(85	)
Corporate bonds and other securities		50		—			1,510		(408	)		1,560		(408	)
Totals	$	36,755	$	(123	)	$	2,671	$	(461	)	$	39,426	$	(584	)
December 31, 2011
Obligations of states and political subdivisions	$	5,429	$	(152	)	$	1,090	$	(95	)	$	6,519	$	(247	)
Mortgage-backed securities		97,203		(445	)		—		—			97,203		(445	)
Corporate bonds and other securities		2,342		(165	)		3,790		(626	)		6,132		(791	)
Totals	$	104,974	$	(762	)	$	4,880	$	(721	)	$	109,854	$	(1,483	)

As of September 30, 2012, there were $2.7 million, or 5 issues, of individual securities that had been in a continuous loss position for more than 12 months. Additionally, these securities had an unrealized loss of $461,000 and consisted of corporate and municipal obligations.

The following table presents the amortized cost and estimated fair value of securities as of September 30, 2012, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	September 30, 2012				December 31, 2011
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
Due in one year or less		2,923		2,971	$	6,046	$	6,098
Due after one year through five years		16,191		16,880		18,771		19,408
Due after five years through ten years		71,169		75,804		76,044		80,214
Due after ten years		501,770		523,059		495,357		511,329
Other securities		3,233		3,355		3,044		3,117
Total securities available for sale	$	595,286	$	622,067	$	599,262	$	620,166

Securities with an amortized cost of $202.7 million and $172.1 million as of September 30, 2012 and December 31, 2011, respectively, were pledged to secure public deposits, repurchase agreements and for other purposes.

During each quarter the Company conducts an assessment of the securities portfolio for other-than-temporary impairment (“OTTI”) consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is OTTI if any of the following conditions exists: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessment for the quarter ended September 30, 2012, and in accordance with the guidance, no OTTI was recognized.

Based on the assessment for the quarter ended September 30, 2011 and in accordance with the guidance, the Company determined that a single issuer Trust Preferred security incurred credit-related OTTI of $400,000, which was recognized in earnings for the quarter ended September 30, 2011. There is a possibility that the Company will sell the security before recovering all unamortized costs. The significant inputs the Company considered in determining the amount of the credit loss are as follows:

• The assessment of security credit rating agencies and research performed by third parties;

• The continued interest payment deferral by the issuer;

• The lack of improving asset quality of the issuer and worsening economic conditions; and

• The security is thinly traded and trading at its historical low, below par.

OTTI recognized for the periods presented is summarized as follow (dollars in thousands):

	OTTI Losses
Cumulative credit losses on investment securities, through December 31, 2011	$	400
Cumulative credit losses on investment securities		—
Additions for credit losses not previously regognized		—
Cumulative credit losses on investment securities, through September 30, 2012	$	400