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Fair Value (Tables)
 12 Months Ended
Dec. 31, 2012
Fair Value [Abstract]  
Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis are as follows at December 31, 2012 and 2011:

 

                                 
         

Fair Value Measurements at December 31, 2012 Using

  

Description

  

Total

    

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

    

Significant Other
Observable Inputs
(Level 2)

    

Significant
Unobservable
Inputs

(Level 3)

  

Assets:

                                

Securities Available For Sale:

                                

U.S. Treasury

   $ 4,036     $ -     $ 4,036     $ -  

U.S. Government sponsored entities

     163,781       -       163,781       -  

States and political subdivisions

     181,279       -       181,279       -  

Residential and multi-family mortgage

     316,822       -       316,822       -  

Commercial mortgage

     1,304       -       1,304       -  

Corporate notes and bonds

     15,024       -       13,044       1,980  

Pooled trust preferred

     600       -       -       600  

Pooled SBA

     52,927       52,631       296       -  

Other securities

     1,538       1,538       -       -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total Securities Available For Sale

   $ 737,311     $ 54,169     $ 680,562     $ 2,580  
   

 

 

    

 

 

    

 

 

    

 

 

  

Trading Securities:

                                

Corporate equity securities

   $ 3,117     $ 3,117     $ -     $ -  

Certificates of deposit

     408       408       -       -  

International mutual funds

     287       287       -       -  

Large cap growth mutual funds

     157       157       -       -  

Money market mutual funds

     110       110       -       -  

Large cap value mutual funds

     104       104       -       -  

Corporate notes and bonds

     101       -       101       -  

Real estate investment trust mutual funds

     65       65       -       -  

U.S. Government sponsored entities

     58       -       58       -  

Small cap mutual funds

     26       26       -       -  

Mid cap mutual funds

     26       26       -       -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total Trading Securities

   $ 4,459     $ 4,300     $ 159     $ -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities,

                                

Interest rate swaps

   $ (1,745 )    $ -     $ (1,745 )    $ -  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

                                 
          Fair Value Measurements at December 31, 2011 Using  

Description

   Total     Quoted Prices in
Active  Markets for
Identical Assets
(Level 1)		     Significant Other
Observable  Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Assets:

                                

Securities Available For Sale:

                                

U.S. Treasury

   $ 8,130     $ -     $ 8,130     $ -  

U.S. Government sponsored entities

     107,492       2,000       105,492       -  

States and political subdivisions

     158,437       4,655       153,782       -  

Residential and multi-family mortgage

     300,126       8,577       291,549       -  

Commercial mortgage

     2,122       -       2,122       -  

Corporate notes and bonds

     13,860       -       11,800       2,060  

Pooled trust preferred

     340       -       -       340  

Pooled SBA

     46,056       46,056       -       -  

Other securities

     1,544       1,544       -       -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total Securities Available For Sale

   $ 638,107     $ 62,832     $ 572,875     $ 2,400  
   

 

 

    

 

 

    

 

 

    

 

 

  

Trading Securities:

                                

Corporate equity securities

   $ 1,959     $ 1,959     $ -     $ -  

Certificates of deposit

     255       255       -       -  

International mutual funds

     257       257       -       -  

Large cap growth mutual funds

     145       145       -       -  

Money market mutual funds

     241       241       -       -  

Large cap value mutual funds

     105       105       -       -  

Corporate notes and bonds

     100       -       100       -  

Real estate investment trust mutual funds

     68       68       -       -  

U.S. Government sponsored entities

     55       -       55       -  

Small cap mutual funds

     25       25       -       -  

Mid cap mutual funds

     23       23       -       -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Total Trading Securities

   $ 3,233     $ 3,078     $ 155     $ -  
   

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities,

                                

Interest rate swaps

   $ (1,669 )    $ -     $ (1,669 )    $ -  
   

 

 

    

 

 

    

 

 

    

 

 

  
Securities available for sale measured at fair value on recurring basis using significant unobservable inputs (Level 3)

The table below presents a reconciliation and income statement classification of gains and losses for all securities available for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2012:

 

                 
    Corporate
notes and
bonds		     Pooled
trust
preferred		  

Balance, January 1, 2012

   $ 2,060     $ 340  

Total gains or (losses):

                

Included in other comprehensive income (unrealized)

     (80 )      260  
   

 

 

    

 

 

  

Balance, December 31, 2012

   $ 1,980     $ 600  
   

 

 

    

 

 

  

 

The table below presents a reconciliation and income statement classification of gains and losses for all securities available for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2011:

 

                                 
    Residential
mortgage and
asset backed		     Corporate
notes and
bonds		     U.S. Gov’t
Sponsored
Entities		     Pooled
trust
preferred		  

Balance, January 1, 2011

   $ 2,269     $ 1,240     $ 2,000     $ 1,292  

Transfers out of Level 3 (a)(b)

     (3,988 )      -       (2,000 )      -  

Total gains or losses (realized/unrealized):

                                

Included in earnings

     -       -       -       (398 ) 

Included in other comprehensive income

     -       820       -       438  

Purchases, issuances, sales, and settlements:

                                

Purchases

     1,917       -       -       -  

Settlements

     (198 )      -       -       (992 ) 
   

 

 

    

 

 

    

 

 

    

 

 

  

Balance, December 31, 2011

   $ -     $ 2,060     $ -     $ 340  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

  (a)

Transferred from Level 3 to Level 2 since observable market data became available to value the security.

  (b)

The Corporation’s policy is to recognize transfers in and transfers out as of the beginning of the reporting period.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents quantitative information about Level 3 fair value measurements at December 31, 2012:

 

                     
     Fair value     Valuation
Technique		  

Unobservable

Inputs

  

Input

Utilized

Corporate notes and bonds

   $ 1,980     Discounted

cash flow

  

Constant prepayment rate

Probability of default

Discount rate

  

-%

-%

9.6%
         

Pooled trust preferred

   $ 600     Discounted

cash flow

  

Collateral default rate

 

Discount rate

Recovery probability

  

2% annually for 2 years;

0.36% thereafter

13%

10%, lagged 2 years
Sale securities reported as Level 1 securities as of the beginning of the period were transferred to the Level 2 category

During the year ended December 31, 2012 and 2011, the following available for sale securities reported as Level 1 securities as of the beginning of the year were transferred to the Level 2 category:

 

                 
    2012     2011  

U.S. Government sponsored entities

   $ 2,000     $ 2,000  

States and political subdivisions

     4,655       4,750  

Residential and multi-family mortgage

     8,577       20,405  
   

 

 

    

 

 

  

Total

   $ 15,232     $ 27,155  
   

 

 

    

 

 

  
Assets and liabilities measured at fair value on a non-recurring basis

Assets and liabilities measured at fair value on a non-recurring basis are as follows at December 31, 2012 and 2011:

 

                                 
          Fair Value Measurements at December 31, 2012
Using		  

Description

   Total     Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		     Significant  Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Assets:

                                

Impaired loans:

                                

Commercial mortgages

   $ 8,422     $ -     $ -     $ 8,422  

Commercial, industrial, and agricultural

     1,973       -       -       1,973  

Residential real estate

     402       -       -       402  
     
          Fair Value Measurements at December 31, 2011
Using		  

Description

   Total     Quoted Prices in
Active Markets for
Identical Assets
(Level 1)		     Significant Other
Observable
Inputs (Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  

Assets:

                                

Impaired loans:

                                

Commercial mortgages

   $ 7,219     $ -     $ -     $ 7,219  

Commercial, industrial, and agricultural

     3,190       -       -       3,190  

Residential real estate

     105       -       -       105  
Quantitative Information About Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Non Recurring Basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

 

                     
    Fair
value		    

Valuation

Technique

  

Unobservable

Inputs

   Range
(Weighted
Average)
         

Impaired loans – commercial mortgages

   $ 8,422     Sales comparison approach   Adjustment for differences between the comparable sales   1%—39%(19%)

Impaired loans – commercial, industrial, and agricultural

     1,973     Income approach   Adjusting for differences in net operating income   24%—38%(27%)

Impaired loans – residential real estate

     402     Sales comparison approach   Adjustment for differences between the comparable sales   10%—15%(11%)
Carrying amount and fair value of financial instruments

The following table presents the carrying amount and fair value of financial instruments at December 31, 2012:

 

                                         
    Carrying     Fair Value Measurement Using:     Total  
    Amount     Level 1     Level 2     Level 3     Fair Value  

ASSETS

                                        

Cash and cash equivalents

   $ 31,881     $ 31,881     $ -     $ -     $ 31,881  

Interest bearing time deposits with other banks

     225       -       281       -       281  

Securities available for sale

     737,311       54,169       680,562       2,580       737,311  

Trading securities

     4,459       4,300       159       -       4,459  

Loans held for sale

     2,398       -       2,460       -       2,460  

Net loans

     913,764       -       -       946,238       946,238  

FHLB and other equity interests

     6,684       n/a       n/a       n/a       n/a  

Accrued interest receivable

     6,863       278       3,498       3,087       6,863  
           

LIABILITIES

                                        

Deposits

   $ (1,485,003 )    $ (1,272,060 )    $ (215,485 )    $ -     $ (1,487,545 ) 

FHLB and other borrowings

     (97,806 )      -       (105,850 )      -       (105,850 ) 

Subordinated debentures

     (20,620 )      -       (10,682 )      -       (10,682 ) 

Interest rate swaps

     (1,745 )      -       (1,745 )      -       (1,745 ) 

Accrued interest payable

     (1,022 )      (301 )      (707 )      (14 )      (1,022 ) 

The following table presents the carrying amount and fair value of financial instruments at December 31, 2011:

 

                 
   

Carrying
Amount

    

Fair Value

  
     

ASSETS

                

Cash and cash equivalents

   $ 39,703     $ 39,703  

Interest bearing time deposits with other banks

     224       229  

Securities available for sale

     638,107       638,107  

Trading securities

     3,233       3,233  

Loans held for sale

     1,442       1,470  

Net loans

     837,268       862,389  

FHLB and other equity interests

     6,537       N/A  

Accrued interest receivable

     6,567       6,567  
     

LIABILITIES

                

Deposits

   $ (1,353,851 )    $ (1,357,415 ) 

FHLB and other borrowings

     (74,456 )      (83,042 ) 

Subordinated debentures

     (20,620 )      (10,906 ) 

Interest rate swaps

     (1,669 )      (1,669 ) 

Accrued interest payable

     (1,308 )      (1,308 )