FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2015

FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Schedule of carrying amount and estimated fair value of financial instruments

						Fair Value Measurement Using
						Quoted Prices		Significant
						in Active		Other			Significant
						Markets for		Observable			Unobservable
	Carrying		Estimated			Identical Assets		Inputs			Inputs
	Amount		Fair Value			(Level 1)		(Level 2)			(Level 3)
	(Dollars in thousands)
June 30, 2015
Financial assets
Cash and due from banks	$	66,715	$	66,715		$	66,715	$	—		$	—
Interest-bearing deposits in other banks	14,775		14,775			14,775		—			—
Investment securities	1,537,090		1,533,462			918		1,519,916			12,628
Loans held for sale	22,917		22,917			—		—			22,917
Net loans and leases	2,939,131		2,885,053			—		49,433			2,835,620
Accrued interest receivable	14,021		14,021			14,021		—			—

Financial liabilities
Deposits:
Noninterest-bearing deposits	1,080,428		1,080,428			1,080,428		—			—
Interest-bearing demand and savings deposits	2,069,031		2,069,031			2,069,031		—			—
Time deposits	1,032,863		1,034,242			—		—			1,034,242
Short-term debt	157,000		157,000			—		157,000			—
Long-term debt	92,785		69,035			—		69,035			—
Accrued interest payable (included in other liabilities)	927		927			927		—			—

Off-balance sheet financial instruments
Commitments to extend credit	740,072		3,700			—		3,700			—
Standby letters of credit and financial guarantees written	16,061		120			—		120			—
Interest rate options	34,007		360			—		360			—
Forward interest rate contracts	33,531		290			—		290			—

December 31, 2014
Financial assets
Cash and due from banks	$	72,316	$	72,316		$	72,316	$	—		$	—
Interest-bearing deposits in other banks	13,691		13,691			13,691		—			—
Investment securities	1,467,305		1,464,615			877		1,450,643			13,095
Loans held for sale	9,683		9,683			—		—			9,683
Net loans and leases	2,858,158		2,752,420			—		70,743			2,681,677
Accrued interest receivable	13,584		13,584			13,584		—			—

Financial liabilities
Deposits:
Noninterest-bearing deposits	1,034,146		1,034,146			1,034,146		—			—
Interest-bearing demand and savings deposits	2,030,870		2,030,870			2,030,870		—			—
Time deposits	1,045,284		1,047,322			—		—			1,047,322
Short-term debt	38,000		38,000			—		38,000			—
Long-term debt	92,785		42,454			—		42,454			—
Accrued interest payable (included in other liabilities)	1,018		1,018			1,018		—			—

Off-balance sheet financial instruments
Commitments to extend credit	720,255		3,601			—		3,601			—
Standby letters of credit and financial guarantees written	18,797		141			—		141			—
Interest rate options	44,266		444			—		444			—
Forward interest rate contracts	23,919		(62		)	—		(62		)	—

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

			Fair Value at Reporting Date Using
			Quoted
			Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
			Assets		Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
June 30, 2015
Available for sale securities:
Debt securities:
States and political subdivisions	$	188,257	$	—	$	175,629	$	12,628
Corporate securities	99,562		—		99,562		—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	778,067		—		778,067		—
Residential - Non-government agencies	70,357		—		70,357		—
Commerical - Non-government agencies	137,151		—		137,151		—
Other	918		918		—		—
Total available for sale securities	1,274,312		918		1,260,766		12,628
Derivatives - Interest rate contracts	650		—		650		—
Total	$	1,274,962	$	918	$	1,261,416	$	12,628

December 31, 2014
Available for sale securities:
Debt securities:
States and political subdivisions	$	191,645	$	—	$	178,550	$	13,095
Corporate securities	100,604		—		100,604		—
Mortgage-backed securities:
Residential - U.S. Government sponsored entities	751,558		—		751,558		—
Residential - Non-government agencies	46,693		—		46,693		—
Commerical - Non-government agencies	137,641		—		137,641		—
Other	877		877		—		—
Total available for sale securities	1,229,018		877		1,215,046		13,095
Derivatives - Interest rate contracts	382		—		382		—
Total	$	1,229,400	$	877	$	1,215,428	$	13,095

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

	Available for Sale States and Political Subdivisions Debt Securities
	(Dollars in thousands)

Balance at December 31, 2014	$	13,095
Principal payments received	(812		)
Unrealized net gain included in other comprehensive income	345
Balance at June 30, 2015	$	12,628

Balance at December 31, 2013	$	10,518
Principal payments received	(139		)
Unrealized net gain included in other comprehensive income	76
Purchases	2,269
Balance at June 30, 2014	$	12,724

Schedule of level of valuation assumptions used to determine the fair value of assets measured on a nonrecurring basis

			Fair Value Measurements Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in thousands)
June 30, 2015
Impaired loans (1)	$	49,433	$	—	$	49,433	$	—
Other real estate (2)	5,278		—		5,278		—

December 31, 2014
Impaired loans (1)	$	70,743	$	—	$	70,743	$	—
Other real estate (2)	2,948		—		2,948		—

(1) Represents carrying value and related write-downs of loans for which adjustments are based on agreed upon purchase prices for the loans or the appraised value of the collateral.

(2) Represents other real estate that is carried at the lower of carrying value or fair value less costs to sell. Fair value is generally based upon independent market prices or appraised values of the collateral.