Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Financial Instruments Measured at Fair Value on a Recurring Basis

The following table summarizes financial instruments measured at fair value on a recurring basis as of March 31, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	March 31, 2013
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	133,547	$	—	$	133,547
Obligations of states and political subdivisions	—		48,856		3,051		51,907
Residential mortgage-backed securities	—		297,553		—		297,553
Total securities available for sale	$	—	$	479,956	$	3,051	$	483,007
Portfolio loans	—		9,794		—		9,794
State tax credits held for sale	—		—		20,053		20,053
Derivative financial instruments	—		1,622		—		1,622
Total assets	$	—	$	491,372	$	23,104	$	514,476

Liabilities
Derivative financial instruments	$	—	$	1,721	$	—	$	1,721
Total liabilities	$	—	$	1,721	$	—	$	1,721

Fair Value, Financial Instruments, Unobservable Input Reconciliation



	Securities available for sale, at fair value
	Three months ended March 31,
(in thousands)	2013		2012
Beginning balance	$	3,049	$	6,763
Total gains (losses):
Included in other comprehensive income	2		(3		)
Purchases, sales, issuances and settlements:
Purchases	—		—
Transfer in and/or out of Level 3	—		(3,736		)
Ending balance	$	3,051	$	3,024

Change in unrealized gains relating to assets still held at the reporting date	$	2	$	(3	)



	State tax credits held for sale
	Three months ended March 31,
(in thousands)	2013			2012
Beginning balance	$	23,020		$	26,350
Total gains:
Included in earnings	156			171
Purchases, sales, issuances and settlements:
Sales	(3,123		)	(1,868		)
Ending balance	$	20,053		$	24,653

Change in unrealized gains relating to assets still held at the reporting date	$	(674	)	$	(283	)

Fair Value Measurements, Nonrecurring

The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of March 31, 2013:



	(1)		(1)		(1)		(1)
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total (losses) gains for the three months ended March 31, 2013
Impaired loans	$	7,654	$	—	$	—	$	7,654	$	(4,780	)
Other real estate	4,699		—		—		4,699		(544		)
Total	$	12,353	$	—	$	—	$	12,353	$	(5,324	)

(1) The amounts represent only balances measured at fair value during the period and still held as of the reporting date.

Summary of Carrying Amount and Fair Values of Financial Instruments Reported on the Balance Sheets

Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at March 31, 2013, and December 31, 2012.



	March 31, 2013				December 31, 2012
(in thousands)	Carrying Amount		Estimated fair value		Carrying Amount		Estimated fair value
Balance sheet assets
Cash and due from banks	$	39,321	$	39,321	$	21,906	$	21,906
Federal funds sold	32		32		51		51
Interest-bearing deposits	87,398		87,398		95,413		95,413
Securities available for sale	483,007		483,007		640,212		640,212
Other investments, at cost	14,405		14,405		14,294		14,294
Loans held for sale	5,138		5,138		11,792		11,792
Derivative financial instruments	1,622		1,622		1,754		1,754
Portfolio loans, net	2,222,729		2,225,070		2,261,280		2,267,038
State tax credits, held for sale	55,923		60,903		61,284		66,822
Accrued interest receivable	10,062		10,062		8,497		8,497

Balance sheet liabilities
Deposits	2,494,789		2,502,779		2,658,851		2,669,113
Subordinated debentures	85,081		65,760		85,081		65,840
Federal Home Loan Bank advances	80,000		88,482		80,000		89,301
Other borrowings	205,379		205,477		245,070		245,224
Derivative financial instruments	1,721		1,721		1,979		1,979
Accrued interest payable	1,191		1,191		1,282		1,282

Estimate of the Fair Value of Financial Instruments Not Recorded at Fair Value on Balance Sheet

The following table presents the level in the fair value hierarchy for the estimated fair values of only the Company’s financial instruments that are not already on the condensed consolidated balance sheets at fair value at March 31, 2013, and December 31, 2012:



	Estimated Fair Value Measurement at Reporting Date Using						Balance at March 31, 2013
(in thousands)	Level 1		Level 2		Level 3		Balance at March 31, 2013
Financial Assets:
Portfolio loans, net	$	—	$	—	$	2,224,976	$	2,224,976
State tax credits, held for sale	$	—	$	—	$	40,850	$	40,850
Financial Liabilities:
Deposits	1,963,937		—		538,842		2,502,779
Subordinated debentures	—		65,760		—		65,760
Federal Home Loan Bank advances	—		88,482		—		88,482
Other borrowings	—		205,477		—		205,477

	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2012
(in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2012
Financial Assets:
Portfolio loans, net	$	—	$	—	$	2,266,834	$	2,266,834
State tax credits, held for sale	$	—	$	—	$	43,802	$	43,802
Financial Liabilities:
Deposits	2,079,141		—		589,972		2,669,113
Subordinated debentures	—		65,840		—		65,840
Federal Home Loan Bank advances	—		89,301		—		89,301
Other borrowings	—		245,224		—		245,224

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

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

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- Definition

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

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 14

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

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-Name Statement of Financial Accounting Standard (FAS)

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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

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

-Publisher FASB

-Name Accounting Standards Codification

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-Publisher FASB

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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

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

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 10

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

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-Name Accounting Standards Codification

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