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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2011	Dec. 31, 2010
Assets
Cash and due from banks	$ 84,599	$ 99,673
Short-term interest bearing accounts	237,347	69,119
Securities available for sale, at fair value	1,105,606	1,129,368
Securities held to maturity (fair value $91,426 and $98,759, respectively)	90,008	97,310
Trading securities	3,119	2,808
Federal Reserve and Federal Home Loan Bank stock	27,246	27,246
Loans and leases	3,626,994	3,610,006
Less allowance for loan and lease losses	69,934	71,234
Net loans and leases	3,557,060	3,538,772
Premises and equipment, net	67,109	67,404
Goodwill	114,841	114,841
Intangible assets, net	17,016	17,543
Bank owned life insurance	76,336	75,301
Other assets	97,325	99,471
Total assets	5,477,612	5,338,856
Liabilities
Demand (noninterest bearing)	909,833	911,741
Savings, NOW, and money market	2,418,748	2,291,833
Time	930,361	930,778
Total deposits	4,258,942	4,134,352
Short-term borrowings	167,461	159,434
Long-term debt	370,032	369,874
Trust preferred debentures	75,422	75,422
Other liabilities	66,679	66,202
Total liabilities	4,938,536	4,805,284
Stockholders' equity
Preferred stock, $0.01 par value. Authorized 2,500,000 shares at March 31, 2011 and December 31, 2010	0	0
Common stock, $0.01 par value. Authorized 50,000,000 shares at March 31, 2011 and December 31, 2010; issued 38,035,539 at March 31, 2011 and December 31, 2010	380	380
Additional paid-in-capital	314,787	314,023
Retained earnings	307,056	299,797
Accumulated other comprehensive loss	(6,702)	(5,335)
Common stock in treasury, at cost, 3,581,272 and 3,532,732 shares at March 31, 2011 and December 31, 2010, respectively	(76,445)	(75,293)
Total stockholders' equity	539,076	533,572
Total liabilities and stockholders' equity	$ 5,477,612	$ 5,338,856

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Interest, fee, and dividend income
Interest and fees on loans and leases	$ 50,860	$ 53,692
Securities available for sale	7,904	10,046
Securities held to maturity	800	1,137
Other	493	596
Total interest, fee, and dividend income	60,057	65,471
Interest expense
Deposits	6,287	8,454
Short-term borrowings	58	124
Long-term debt	3,571	5,065
Trust preferred debentures	889	1,027
Total interest expense	10,805	14,670
Net interest income	49,252	50,801
Provision for loan and lease losses	3,965	9,243
Net interest income after provision for loan and lease losses	45,287	41,558
Noninterest income
Service charges on deposit accounts	5,072	6,130
Insurance and other financial services revenue	5,773	5,245
Trust	2,036	1,766
Net securities gains	27	28
Bank owned life insurance	1,035	981
ATM and debit card fees	2,668	2,367
Retirement plan administration fees	2,171	2,390
Other	1,344	1,434
Total noninterest income	20,126	20,341
Noninterest expense
Salaries and employee benefits	25,004	22,204
Occupancy	4,522	4,152
Equipment	2,190	2,100
Data processing and communications	2,914	3,218
Professional fees and outside services	2,066	2,284
Office supplies and postage	1,545	1,542
Amortization of intangible assets	733	781
Loan collection and other real estate owned	719	1,059
Advertising	568	667
FDIC expenses	1,496	1,553
Other	3,304	2,600
Total noninterest expense	45,061	42,160
Income before income tax expense	20,352	19,739
Income tax expense	6,045	5,763
Net income	$ 14,307	$ 13,976
Earnings per share
Basic (in dollars per share)	$ 0.42	$ 0.41
Diluted (in dollars per share)	$ 0.41	$ 0.41

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Statement [Line Items]
Balance	$ 533,572	$ 505,123
Net income	14,307	13,976
Cash dividends - $0.20 per share	(6,913)	(6,883)
Purchase of treasury shares	(2,369)	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	701	1,313
Stock-based compensation	1,145	514
Issuance of shares of restricted stock awards	0	0
Forfeiture of shares of restricted stock	0	0
Other comprehensive (loss) income	(1,367)	1,433
Ending Balance	539,076	515,476
Common Stock
Statement [Line Items]
Balance	380	380
Net income	0	0
Cash dividends - $0.20 per share	0	0
Purchase of treasury shares	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	0	0
Stock-based compensation	0	0
Issuance of shares of restricted stock awards	0	0
Forfeiture of shares of restricted stock	0	0
Other comprehensive (loss) income	0	0
Ending Balance	380	380
Additional Paid-in- Capital
Statement [Line Items]
Balance	314,023	311,164
Net income	0	0
Cash dividends - $0.20 per share	0	0
Purchase of treasury shares	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	49	760
Stock-based compensation	1,145	514
Issuance of shares of restricted stock awards	(542)	(364)
Forfeiture of shares of restricted stock	112	46
Other comprehensive (loss) income	0	0
Ending Balance	314,787	312,120
Retained Earnings
Statement [Line Items]
Balance	299,797	270,232
Net income	14,307	13,976
Cash dividends - $0.20 per share	(6,913)	(6,883)
Purchase of treasury shares	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	(135)	(167)
Stock-based compensation	0	0
Issuance of shares of restricted stock awards	0	0
Forfeiture of shares of restricted stock	0	0
Other comprehensive (loss) income	0	0
Ending Balance	307,056	277,158
Accumulated Other Comprehensive (Loss) Income
Statement [Line Items]
Balance	(5,335)	1,163
Net income	0	0
Cash dividends - $0.20 per share	0	0
Purchase of treasury shares	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	0	0
Stock-based compensation	0	0
Issuance of shares of restricted stock awards	0	0
Forfeiture of shares of restricted stock	0	0
Other comprehensive (loss) income	(1,367)	1,433
Ending Balance	(6,702)	2,596
Common Stock in Treasury
Statement [Line Items]
Balance	(75,293)	(77,816)
Net income	0	0
Cash dividends - $0.20 per share	0	0
Purchase of treasury shares	(2,369)
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit	787	720
Stock-based compensation	0	0
Issuance of shares of restricted stock awards	542	364
Forfeiture of shares of restricted stock	(112)	(46)
Other comprehensive (loss) income	0	0
Ending Balance	$ (76,445)	$ (76,778)

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Operating activities
Net income	$ 14,307	$ 13,976
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses	3,965	9,243
Depreciation and amortization of premises and equipment	1,324	1,324
Net accretion on securities	254	152
Amortization of intangible assets	733	781
Stock based compensation	1,145	514
Bank owned life insurance income	(1,035)	(981)
Purchases of trading securities	(208)	(80)
Unrealized gains in trading securities	(103)	(103)
Deferred income tax benefit	(2,876)	(3,588)
Proceeds from sales of loans held for sale	2,043	21,789
Originations and purchases of loans held for sale	(503)	(21,277)
Net gains on sales of loans held for sale	0	(263)
Net security gains	(27)	(28)
Net gains on sales of other real estate owned	(257)	(118)
Net decrease in other assets	2,084	1,541
Net increase (decrease) in other liabilities	3,230	(3,979)
Net cash provided by operating activities	24,076	18,903
Securities available for sale:
Proceeds from maturities, calls, and principal paydowns	145,683	145,182
Proceeds from sales	0	702
Purchases	(124,835)	(160,683)
Securities held to maturity:
Proceeds from maturities, calls, and principal paydowns	12,576	15,400
Purchases	(4,246)	(12,578)
Net (increase) decrease in loans	(23,893)	1,539
Net decrease in Federal Reserve and FHLB stock	0	2,251
Purchases of premises and equipment	(1,029)	(1,332)
Proceeds from sales of other real estate owned	628	811
Net cash provided by (used in) investing activities	4,884	(8,708)
Financing activities
Net increase in deposits	124,590	84,133
Net increase in short-term borrowings	8,027	10,965
Repayments of long-term debt	0	(50,108)
Issuance of long-term debt	158	0
Excess tax benefit from exercise of stock options	103	809
Proceeds from the issuance of shares to employee benefit plans and other stock plans	598	504
Purchase of treasury shares	(2,369)	0
Cash dividends and payment for fractional shares	(6,913)	(6,883)
Net cash provided by financing activities	124,194	39,420
Net increase in cash and cash equivalents	153,154	49,615
Cash and cash equivalents at beginning of period	168,792	187,161
Cash and cash equivalents at end of period	321,946	236,776
Cash paid during the period for:
Interest	10,731	15,530
Income taxes, net of refunds received	1,275	3,421
Noncash investing activities:
Loans transferred to OREO	100	324
Increase in securities purchases in process	$ 0	$ 18,315

Use of Estimates	3 Months Ended
Use of Estimates	Mar. 31, 2011
Notes to Financial Statements [Abstract]
Use of Estimates	<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 3.<font style="LETTER-SPACING: 9pt"> </font> Use of Estimates</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Preparing financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period, as well as the disclosures provided. Actual results could differ from those estimates. Estimates associated with the allowance for loan and lease losses, other real estate owned (“OREO”), income taxes, pension expense, fair values of financial instruments and status of contingencies are particularly susceptible to material change in the near term.</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify">The allowance for loan and lease losses is the amount which, in the opinion of management, is necessary to absorb probable losses inherent in the loan and lease portfolio. The allowance is determined based upon numerous considerations, including local and national economic conditions, the growth and composition of the loan portfolio with respect to the mix between the various types of loans and their related risk characteristics, a review of the value of collateral supporting the loans, comprehensive reviews of the loan portfolio by the independent loan review staff and management, as well as consideration of volume and trends of delinquencies, nonperforming loans, and loan charge-offs. As a result of the review of these factors and historical and current indicators, required additions or reductions to the allowance for loan and lease losses are made periodically by charges to the provision for loan and lease losses.</div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"></font> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The allowance for loan and lease losses related to impaired loans is based on discounted cash flows using the loan’s initial effective interest rate or the fair value of the collateral for certain loans where repayment of the loan is expected to be provided solely by the underlying collateral (collateral dependent loans). The Company’s impaired loans are generally collateral dependent loans. The Company considers the estimated cost to sell, on a discounted basis, when determining the fair value of collateral in the measurement of impairment if those costs are expected to reduce the cash flows available to repay or otherwise satisfy the loans.</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Management believes that the allowance for loan and lease losses is adequate. While management uses available information to recognize loan and lease losses, future additions or reductions to the allowance for loan and lease losses may be necessary based on changes in economic conditions or changes in the values of properties securing loans in the process of foreclosure. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan and lease losses. Such agencies may require the Company to recognize additions to the allowance for loan and lease losses based on their judgments about information available to them at the time of their examination which may not be currently available to management.</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">OREO consists of properties acquired through foreclosure or by acceptance of a deed in lieu of foreclosure. These assets are recorded at the lower of fair value of the asset acquired less estimated costs to sell or “cost” (cost is defined as the fair value less costs to sell at initial foreclosure). At the time of foreclosure, or when foreclosure occurs in-substance, the excess, if any, of the loan over the fair value of the assets received, less estimated selling costs, is charged to the allowance for loan and lease losses and any subsequent valuation write-downs are charged to other expense. Operating costs associated with the properties are charged to expense as incurred. Gains on the sale of OREO are included in income when title has passed and the sale has met the minimum down payment requirements prescribed by U.S. GAAP.</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Income taxes are accounted for under the asset and liability method. The Company files consolidated tax returns on the accrual basis. Deferred income taxes are recognized for the future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon the generation of future taxable income or the existence of sufficient taxable income within the available carryback period. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset will not be realized. Based on available carrybacks and expected future income, gross deferred tax assets will ultimately be realized and a valuation allowance was not deemed necessary at March 31, 2011 or December 31, 2010. The effect of a change in tax rates on deferred taxes is recognized in income in the period that includes the enactment date. Uncertain tax positions are recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more than likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement.</font></div><div style="TEXT-INDENT: 0pt; DISPLAY: block"> </div><div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Management is required to make various assumptions in valuing its pension assets and liabilities. These assumptions include the expected long-term rate of return on plan assets, the discount rate, and the rate of increase in future compensation levels. Changes to these assumptions could impact earnings in future periods. The Company takes into account the plan asset mix, funding obligations, and expert opinions in determining the various assumptions used to compute pension expense. The Company also considers relevant indices and market interest rates in selecting an appropriate discount rate. A cash flow analysis for expected benefit payments from the plan is performed each year to assist in selecting the discount rate. In addition, the Company reviews expected inflationary and merit increases to compensation in determining the expected rate of increase in future compensation levels.</font></div>

Allowance for Loan and Lease Losses and Credit Quality of Loans and Leases

3 Months Ended

Mar. 31, 2011

Notes to Financial Statements [Abstract]

Allowance for Loan and Lease Losses and Credit Quality of Loans and Leases

Note 5. Allowance for Loan and Lease Losses and Credit Quality of Loans and Leases

Allowance for Loan and Lease Losses

The allowance for loan and lease losses is maintained at a level estimated by management to provide adequately for risk of probable losses inherent in the current loan and lease portfolio. The adequacy of the allowance for loan and lease losses is continuously monitored. It is assessed for adequacy using a methodology designed to ensure the level of the allowance reasonably reflects the loan and lease portfolio’s risk profile. It is evaluated to ensure that it is sufficient to absorb all reasonably estimable credit losses inherent in the current loan and lease portfolio.

To develop and document a systematic methodology for determining the allowance for loan and lease losses, the Company has divided the loan portfolio into three portfolio segments, each with different risk characteristics and methodologies for assessing risk. Each portfolio segment is broken down into class segments where appropriate. Class segments contain unique measurement attributes, risk characteristics and methods for monitoring and assessing risk that are necessary to develop the allowance for loan and lease losses. Unique characteristics such as borrower type, loan type, collateral type, and risk characteristics define each class segment. The following table illustrates the portfolio and class segments for the Company’s loan portfolio:

Portfolio	Class
Commercial Loans	Commercial
	Commercial Real Estate
	Agricultural
	Agricultural Real Estate
	Small Business

Consumer Loans and Leases	Indirect
	Home Equity
	Direct

Residential Real Estate Mortgages

Commercial – The Company offers a variety of loan options to meet the specific needs of our commercial customers including term loans, time notes and lines of credit. Such loans are made available to businesses for working capital such as inventory and receivables, business expansion and equipment purchases. Generally, a collateral lien is placed on equipment or other assets owned by the borrower. These loans carry a higher risk than commercial real estate loans due to the nature of the underlying collateral, which can be business assets such as equipment and accounts receivable and is generally less liquid than real estate. To reduce the risk, management also attempts to secure real estate as collateral and obtain personal guarantees of the borrowers.

Commercial Real Estate – The Company offers commercial real estate loans to finance real estate purchases, refinancings, expansions and improvements to commercial properties. Commercial real estate loans are made to finance the purchases of real property which generally consists of real estate with completed structures. These commercial real estate loans are secured by first liens on the real estate, which may include apartments, commercial structures, housing businesses, healthcare facilities, and other non owner-occupied facilities. These loans are typically less risky than commercial loans, since they are secured by real estate and buildings. The Company’s underwriting analysis includes credit verification, independent appraisals, a review of the borrower’s financial condition, and a detailed analysis of the borrower’s underlying cash flows. These loans are typically originated in amounts of no more than 80% of the appraised value of the property.

Agricultural – The Company offers a variety of agricultural loans to meet the needs of our agricultural customers including term loans, time notes, and lines of credit. These loans are made to purchase livestock, purchase and modernize equipment, and finance seasonal crop expenses. Generally, a collateral lien is placed on the livestock, equipment, produce inventories, and/or receivables owned by the borrower. These loans may carry a higher risk than commercial and agricultural real estate loans due to the industry price volatility, and in some cases, the perishable nature of the underlying collateral. To reduce these risks, management may attempt to secure these loans with additional real estate collateral, obtain personal guarantees of the borrowers, or obtain government loan guarantees to provide further support.

Agricultural Real Estate – The Company offers real estate loans to our agricultural customers to finance farm related real estate purchases, refinancings, expansions, and improvements to agricultural properties such as barns, production facilities, and land. The agricultural real estate loans are secured by first liens on the farm real estate. Because they are secured by land and buildings, these loans may be less risky than agricultural loans. The Company’s underwriting analysis includes credit verification, independent appraisals, a review of the borrower’s financial condition, and a detailed analysis of the borrower’s underlying cash flows. These loans are typically originated in amounts of no more than 75% of the appraised value of the property. Government loan guarantees may be obtained to provide further support.

Small Business - The Company offers a variety of loan options to meet the specific needs of our small business customers including term loans, small business mortgages and lines of credit. Such loans are generally less than $350 thousand and are made available to businesses for working capital such as inventory and receivables, business expansion, equipment purchases, and agricultural needs. Generally, a collateral lien is placed on equipment or other assets owned by the borrower such as inventory and/or receivables. These loans carry a higher risk than commercial loans due to the smaller size of the borrower and lower levels of capital. To reduce the risk, the Company obtains personal guarantees of the owners for a majority of the loans.

Indirect – The Company maintains relationships with many dealers primarily in the communities that we serve. Through these relationships, the company finances the purchases of automobiles and recreational vehicles (such as campers, boats, etc.) indirectly through dealer relationships. Approximately 69% of the indirect relationships represent automobile financing. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from three to six years, based upon the nature of the collateral and the size of the loan. The majority of indirect consumer loans are underwritten on a secured basis using the underlying collateral being financed.

Home Equity – The Company offers fixed home equity loans as well as home equity lines of credit to consumers to finance home improvements, debt consolidation, education and other uses. Consumers are able to borrower up to 85% of the equity in their homes. The Company originates home equity lines of credit and second mortgage loans (loans secured by a second [junior] lien position on one-to-four-family residential real estate). These loans carry a higher risk than first mortgage residential loans as they are in a second position with respect to collateral. Risk is reduced through underwriting criteria, which include credit verification, appraisals, a review of the borrower’s financial condition, and personal cash flows. A security interest, with title insurance when necessary, is taken in the underlying real estate.

Direct – The Company offers a variety of consumer installment loans to finance vehicle purchases, mobile home purchases and personal expenditures. Most of these loans carry a fixed rate of interest with principal repayment terms typically ranging from one to ten years, based upon the nature of the collateral and the size of the loan. The majority of consumer loans are underwritten on a secured basis using the underlying collateral being financed or a customer’s deposit account. In addition to installment loans, the Company also offers personal lines of credit and overdraft protection. A minimal amount of loans are unsecured, which carry a higher risk of loss.

Residential Real Estate – Residential real estate loans consist primarily of loans secured by first or second deeds of trust on primary residences. We originate adjustable-rate and fixed-rate, one-to-four-family residential real estate loans for the construction, purchase or refinancing of a mortgage. These loans are collateralized by owner-occupied properties located in the Company’s market area. When market conditions are favorable, for longer term, fixed-rate residential mortgages without escrow, the Company retains the servicing, but sells the right to receive principal and interest to Freddie Mac. This practice allows the Company to manage interest rate risk, liquidity risk, and credit risk. Loans on one-to-four-family residential real estate are generally originated in amounts of no more than 85% of the purchase price or appraised value (whichever is lower), or have private mortgage insurance. Mortgage title insurance and hazard insurance are normally required. Construction loans have a unique risk, because they are secured by an incomplete dwelling. This risk is reduced through periodic site inspections, including one at each loan draw period.

Allowance for Loan and Lease Loss Calculation

Management considers the accounting policy related to the allowance for loan and lease losses to be a critical accounting policy given the inherent uncertainty in evaluating the levels of the allowance required to cover credit losses in the portfolio and the material effect that such judgments can have on the consolidated results of operations.

For purposes of evaluating the adequacy of the allowance, the Company considers a number of significant factors that affect the collectibility of the portfolio. For individually analyzed loans, these include estimates of loss exposure, which reflect the facts and circumstances that affect the likelihood of repayment of such loans as of the evaluation date. For homogeneous pools of loans and leases, estimates of the Company’s exposure to credit loss reflect a current assessment of a number of factors, which could affect collectibility. These factors include: past loss experience; size, trend, composition, and nature of loans; changes in lending policies and procedures, including underwriting standards and collection, charge-offs and recoveries; trends experienced in nonperforming and delinquent loans; current economic conditions in the Company’s market; portfolio concentrations that may affect loss experienced across one or more components of the portfolio; the effect of external factors such as competition, legal and regulatory requirements; and the experience, ability, and depth of lending management and staff. In addition, various regulatory agencies, as an integral component of their examination process, periodically review the Company’s allowance for loan and lease losses. Such agencies may require the Company to make loan grade changes as well as recognize additions to the allowance based on their examinations.

After a thorough consideration of the factors discussed above, any required additions to the allowance for loan and lease losses are made periodically by charges to the provision for loan and lease losses. These charges are necessary to maintain the allowance at a level which management believes is reasonably reflective of overall inherent risk of probable loss in the portfolio. While management uses available information to recognize losses on loans and leases, additions to the allowance may fluctuate from one reporting period to another. These fluctuations are reflective of changes in risk associated with portfolio content and/or changes in management’s assessment of any or all of the determining factors discussed above. The following table illustrates the changes in the allowance for loan and lease losses by portfolio segment for the three months ended March 31, 2011 and March 31, 2010:

Allowance for Loan and Lease Losses
(in thousands)

				Consumer			Residential
	Commercial			Loans and			Real Estate
	Loans			Leases			Mortgages			Unallocated			Total
Balance as of January 1, 2011	$	40,101		$	26,126		$	4,627		$	380		$	71,234
Charge-offs		(2,870	)		(3,294	)		(99	)		—			(6,263	)
Recoveries		420			577			1			—			998
Provision		286			2,810			809			60			3,965
Ending Balance as of March 31, 2011	$	37,937		$	26,219		$	5,338		$	440		$	69,934

Balance as of January 1, 2010	$	36,598		$	26,664		$	3,002		$	286		$	66,550
Charge-offs		(2,830	)		(3,942	)		(112	)		—			(6,884	)
Recoveries		525			710			6			—			1,241
Provision		6,956			2,377			(58	)		(32	)		9,243
Ending Balance as of March 31, 2010	$	41,249		$	25,809		$	2,838		$	254		$	70,150

The following tables illustrate the allowance for loan and lease losses and the recorded investment by portfolio segment as of March 31, 2011 and December 31, 2010:

Allowance for Loan and Lease Losses and Recorded Investment in Loans and Leases
(in thousands)

			Consumer		Residential
	Commercial		Loans and		Real Estate
	Loans		Leases		Mortgages		Unallocated		Total
As of March 31, 2011

Allowance loan and lease losses	$	37,937	$	26,219	$	5,338	$	440	$	69,934

Allowance for loans and leases individually evaluated for impairment	$	1,815	$	—	$	—			$	1,815

Allowance for loans and leases collectively evaluated for impairment	$	36,122	$	26,219	$	5,338	$	440	$	68,119

Ending balance of loans and leases	$	1,605,394	$	1,459,817	$	561,783			$	3,626,994

Ending balance of loans and leases individually evaluated for impairment	$	11,157	$	—	$	—			$	11,157

Ending balance of loans and leases collectively evaluated for impairment	$	1,594,237	$	1,459,817	$	561,783			$	3,615,837

			Consumer		Residential
	Commercial		Loans and		Real Estate
	Loans		Leases		Mortgages		Unallocated		Total
As of December 31, 2010

Allowance loan and lease losses	$	40,101	$	26,126	$	4,627	$	380	$	71,234

Allowance for loans and leases individually evaluated for impairment	$	2,211	$	—	$	—			$	2,211

Allowance for loans and leases collectively evaluated for impairment	$	37,890	$	26,126	$	4,627	$	380	$	69,023

Ending balance of loans and leases	$	1,580,371	$	1,481,241	$	548,394			$	3,610,006

Ending balance of loans and leases individually evaluated for impairment	$	11,419	$	—	$	—			$	11,419

Ending balance of loans and leases collectively evaluated for impairment	$	1,568,952	$	1,481,241	$	548,394			$	3,598,587

Credit Quality of Loans and Leases

Loans and leases are placed on nonaccrual status when timely collection of principal and interest in accordance with contractual terms is doubtful. Loans and leases are transferred to nonaccrual status generally when principal or interest payments become ninety days delinquent, unless the loan is well secured and in the process of collection, or sooner when management concludes or circumstances indicate that borrowers may be unable to meet contractual principal or interest payments. When a loan or lease is transferred to a nonaccrual status, all interest previously accrued in the current period but not collected is reversed against interest income in that period. Interest accrued in a prior period and not collected is charged-off against the allowance for loan and lease losses.

If ultimate repayment of a nonaccrual loan is expected, any payments received are applied in accordance with contractual terms. If ultimate repayment of principal is not expected, any payment received on a nonaccrual loan is applied to principal until ultimate repayment becomes expected. Nonaccrual loans are returned to accrual status when they become current as to principal and interest and demonstrate a period of performance under the contractual terms and, in the opinion of management, are fully collectible as to principal and interest. When in the opinion of management the collection of principal appears unlikely, the loan balance is charged-off in total or in part.

The following table illustrates the Company’s nonaccrual loans by loan class:

Loans and Leases on Nonaccrual Status

(In thousands)	March 31, 2011		December 31, 2010
Commercial Loans
Commercial	$	4,344	$	5,837
Commercial Real Estate		7,180		5,687
Agricultural		4,002		4,065
Agricultural Real Estate		2,313		2,429
Small Business		7,987		7,033
		25,826		25,051

Consumer Loans and Leases
Indirect		2,131		1,971
Home Equity		8,936		6,395
Direct		389		399
		11,456		8,765

Residential Real Estate Mortgages		9,409		8,651

Total Nonaccrual	$	46,691	$	42,467

The following tables set forth information with regard to past due and nonperforming loans by loan class as of March 31, 2011 and December 31, 2010:

Age Analysis of Past Due Loans and Leases
As of March 31, 2011
(in thousands)

					Greater Than								Recorded
	31-60 Days		61-90 Days		91 Days		Total						Total
	Past Due		Past Due		Past Due		Past Due						Loans and
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Leases
Commercial Loans
Commercial	$	290	$	—	$	—	$	290	$	4,344	$	485,031	$	489,665
Commercial
Real Estate		1,708		27		395		2,130		7,180		743,864		753,174
Agricultural		—		—		—		—		4,002		62,196		66,198
Agricultural
Real Estate		617		—		—		617		2,313		31,916		34,846
Small Business		3,167		869		—		4,036		7,987		249,488		261,511
		5,782		896		395		7,073		25,826		1,572,495		1,605,394

Consumer Loans and Leases
Indirect		6,629		1,431		1,003		9,063		2,131		814,758		825,952
Home Equity		3,145		968		501		4,614		8,936		544,980		558,530
Direct		719		223		89		1,031		389		73,915		75,335
		10,493		2,622		1,593		14,708		11,456		1,433,653		1,459,817

Residential Real Estate Mortgages		1,754		294		19		2,067		9,409		550,307		561,783
	$	18,029	$	3,812	$	2,007	$	23,848	$	46,691	$	3,556,455	$	3,626,994

Age Analysis of Past Due Loans and Leases
As of December 31, 2010
(in thousands)

					Greater Than								Recorded
	31-60 Days		61-90 Days		91 Days		Total						Total
	Past Due		Past Due		Past Due		Past Due						Loans and
	Accruing		Accruing		Accruing		Accruing		Non-Accrual		Current		Leases
Commercial
Commercial	$	136	$	55	$	94	$	285	$	5,837	$	461,633	$	467,755
Commercial
Real Estate		1,263		—		—		1,263		5,687		730,285		737,235
Agricultural		63		92		—		155		4,065		63,336		67,556
Agricultural
Real Estate		108		—		—		108		2,429		33,400		35,937
Small Business		2,570		1,183		—		3,753		7,033		261,102		271,888
		4,140		1,330		94		5,564		25,051		1,549,756		1,580,371

Consumer
Indirect		9,307		2,193		862		12,362		1,971		814,594		828,927
Home Equity		5,740		1,756		396		7,892		6,395		561,391		575,678
Direct		927		158		54		1,139		399		75,098		76,636
		15,974		4,107		1,312		21,393		8,765		1,451,083		1,481,241

Residential Real Estate Mortgages		3,002		126		919		4,047		8,651		535,696		548,394
	$	23,116	$	5,563	$	2,325	$	31,004	$	42,467	$	3,536,535	$	3,610,006

There were no material commitments to extend further credit to borrowers with nonperforming loans. Within nonaccrual loans, there are approximately $3.4 million of troubled debt restructured loans at March 31, 2011.

Impaired loans, which primarily consist of nonaccruing commercial, commercial real estate, agricultural, and agricultural real estate loans were 17.2 million at March 31, 2011 and December, 31 2010.

The methodology used to establish the allowance for loan and lease losses on impaired loans incorporates specific allocations on loans analyzed individually. Classified loans with outstanding balances of $500 thousand or more are evaluated for impairment through the Company’s quarterly status review process. For loans that are impaired as defined by accounting standards, impairment is measured by one of three methods: 1) the fair value of collateral less cost to sell, 2) present value of expected future cash flows or 3) the loan’s observable market price. At March 31, 2011, $6.0 million of the total impaired loans had a specific reserve allocation of $1.8 million compared to $5.7 million of impaired loans at December 31, 2010 which had a specific reserve allocation of $2.2 million.

The following table provides additional information on impaired loans and specific reserve allocations as of March 31, 2011 and December 31, 2010:

Impaired Loans
	March 31, 2011						December 31, 2010
	Recorded		Unpaid				Recorded		Unpaid
	Investment		Principal				Investment		Principal
	Balance		Balance		Related		Balance		Balance		Related
(in thousands)	(Book)		(Legal)		Allowance		(Book)		(Legal)		Allowance
With no related allowance recorded:
Commercial Loans
Commercial	$	2,459	$	4,197			$	1,794	$	2,145
Commercial Real Estate		3,551		4,412				3,787		4,467
Agricultural		2,665		3,131				2,657		3,145
Agricultural Real Estate		1,265		1,376				1,283		1,382
Small Business		1,281		1,608				1,982		2,334
		11,221		14,724				11,503		13,473

With an allowance recorded:
Commercial Loans
Commercial	$	1,877	$	2,806	$	628	$	3,925	$	4,962	$	1,907
Commercial Real Estate		2,423		2,423		1,020		—		—		—
Agricultural		1,596		1,886		150		1,671		1,918		281
Agricultural Real Estate		72		78		17		73		78		23
		5,968		7,193		1,815		5,669		6,958		2,211

Total:	$	17,189	$	21,917	$	1,815	$	17,172	$	20,431	$	2,211

The following table summarizes the average recorded investments on impaired loans and the interest income recognized for the three months ended March 31, 2011 and March 31, 2010:

Impaired Loans

	For the three months ended
	March 31, 2011						March 31, 2010
	Average		Interest Income				Average		Interest Income
	Recorded		Recognized				Recorded		Recognized
(in thousands)	Investment		Total		Cash		Investment		Total		Cash
With no related allowance recorded:
Commercial Loans
Commercial	$	2,732	$	47	$	47	$	1,871	$	5	$	5
Commercial Real Estate		3,763		21		21		4,169		9		9
Agricultural		2,709		27		27		2,593		12		12
Agricultural Real Estate		1,271		17		17		1,969		29		29
Small Business		1,400		13		13		653		1		1
	$	11,875	$	125	$	125	$	11,255	$	56	$	56

With an allowance recorded:
Commercial Loans
Commercial	$	1,893	$	30	$	30	$	2,656	$	1	$	1
Commercial Real Estate		1,147		-		-		1,840		-		-
Agricultural		1,621		-		-		1,924		12		12
Agricultural Real Estate		72		5		5		78		29		29
		4,733		35		35		6,498		42		42

Total:	$	16,608	$	160	$	160	$	17,753	$	98	$	98

There has been significant disruption and volatility in the financial and capital markets since the second half of 2008. Turmoil in the mortgage industry adversely impacted both domestic and global economies and led to a significant credit and liquidity crisis in many domestic markets. These conditions were attributable to a variety of factors, in particular the fallout associated with subprime mortgage loans (a type of lending we have never actively pursued). The disruption was exacerbated by the decline of the real estate and housing market. However, in the markets in which the Company does business, the disruption has been somewhat delayed and less significant than in the national market. For example, our real estate market has not suffered the extreme declines seen nationally and our unemployment rate, while notably higher than in prior periods, is still below the national average.

While we continue to adhere to prudent underwriting standards, as a lender we may be adversely impacted by general economic weaknesses and, in particular, a sharp downturn in the housing market nationally. Decreases in real estate values could adversely affect the value of property used as collateral for our loans. Adverse changes in the economy may have a negative effect on the ability of our borrowers to make timely loan payments, which would have an adverse impact on our earnings. An adverse impact on loan delinquencies would decrease our net interest income and adversely impact our loan loss experience, causing increases in our provision and allowance for loan and lease losses.

The Company has developed an internal loan grading system to evaluate and quantify the Bank’s loan portfolio with respect to quality and risk. The system focuses on, among other things, financial strength of borrowers, experience and depth of management, primary and secondary sources of repayment, payment history, nature of the business, and outlook on particular industries. The internal grading system enables the Company to monitor the quality of the entire loan portfolio on a continuous basis and provide management with an early warning system, enabling recognition and response to problem loans and potential problem loans.

Commercial Grading System

For commercial and agricultural loans, the Company uses a grading system that relies on quantifiable and measurable characteristics when available. This would include comparison of financial strength to available industry averages, comparison of transaction factors (loan terms and conditions) to loan policy, and comparison of credit history to stated repayment terms and industry averages. Some grading factors are necessarily more subjective such as economic and industry factors, regulatory environment, and management. The grading system for commercial and agricultural loans is as follows:

●

4 – Doubtful

A doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as a loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral, and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Because of high probability of loss, nonaccrual treatment is required for doubtful assets.

●

3 – Substandard

Substandard loans have a high probability of payment default, or they have other well-defined weaknesses. They require more intensive supervision by bank management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and should be placed on nonaccrual. Although substandard assets in the aggregate will have a distinct potential for loss, an individual asset’s loss potential does not have to be distinct for the asset to be rated substandard.

●

2 – Special Mention

Special Mention loans have potential weaknesses that may, if not checked or corrected, weaken the asset or inadequately protect the Company’s position at some future date. These loans pose elevated risk, but their weakness does not yet justify a substandard classification. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or may be struggling with an ill-proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Although a Special Mention loan has a higher probability of default than a pass asset, its default is not imminent.

●

1 – Pass

Loans graded as Pass encompass all loans not graded as Doubtful, Substandard, or Special Mention. Pass loans are in compliance with loan covenants, and payments are generally made as agreed. Pass loans range from superior quality to fair quality.

Small Business Grading System

Small Business loans are graded as either Classified or Non-classified:

●

Classified

Classified loans are inadequately protected by the current worth and paying capacity of the obligor or, if applicable, the collateral pledged. These loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt, or in some cases make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Classified loans have a high probability of payment default, or a high probability of total or substantial loss. These loans require more intensive supervision by management and are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. When the likelihood of full collection of interest and principal may be in doubt; classified loans are considered to have a nonaccrual status. In some cases, classified loans are considered uncollectible and of such little value that their continuance as assets is not warranted.

●

Non-classified

Loans graded as Non-classified encompass all loans not graded as Classified. Non-classified loans are in compliance with loan covenants, and payments are generally made as agreed.

Consumer and Residential Mortgage Grading System

Consumer and Residential Mortgage loans are graded as either Performing or Nonperforming. Nonperforming loans are loans that are 1) over 90 days past due and interest is still accruing, 2) on nonaccrual status or 3) restructured. All loans not meeting any of these three criteria are considered Performing.

The following tables illustrate the Company’s credit quality by loan class as of March 31, 2011 and December 31, 2010:

Credit Quality Indicators
As of March 31, 2011

Commercial Credit Exposure By Internally Assigned Grade:	Commercial		Commercial Real Estate		Agricultural		Agricultural Real Estate		Total
1 - Pass	$	458,161	$	665,120	$	57,584	$	29,316	$	1,210,181
2 - Special Mention		7,200		38,843		457		538		47,038
3 - Substandard		23,185		47,938		8,067		4,992		84,182
4 - Doubtful		1,119		1,273		90		—		2,482
Total	$	489,665	$	753,174	$	66,198	$	34,846	$	1,343,883

Commercial Credit Exposure By Internally Assigned Grade:	Small Business								Total
Non-classified	$	240,039							$	240,039
Classified		21,472								21,472
Total	$	261,511							$	261,511

Consumer Credit Exposure By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	822,818	$	549,093	$	74,857			$	1,446,768
Nonperforming		3,134		9,437		478				13,049
Total	$	825,952	$	558,530	$	75,335			$	1,459,817

Residential Mortgage Credit Exposure By Payment Activity:	Residential Mortgage								Total
Performing	$	552,355							$	552,355
Nonperforming		9,428								9,428
Total	$	561,783							$	561,783

Credit Quality Indicators
As of December 31, 2010

Commercial Credit Exposure By Internally Assigned Grade:	Commercial		Commercial Real Estate		Agricultural		Agricultural Real Estate		Total
1 - Pass	$	441,030	$	654,974	$	61,195	$	30,483	$	1,188,486
2 - Special Mention		4,830		35,461		660		936		41,887
3 - Substandard		21,091		46,800		5,606		4,518		78,015
4 - Doubtful		804		—		95		—		95
Total	$	467,755	$	737,235	$	67,556	$	35,937	$	1,308,483

Commercial Credit Exposure By Internally Assigned Grade:	Small Business								Total
Non-classified	$	253,120							$	253,120
Classified		18,768								18,768
Total	$	271,888							$	271,888

Consumer Credit Exposure By Payment Activity:	Indirect		Home Equity		Direct				Total
Performing	$	826,094	$	568,887	$	76,183			$	1,471,164
Nonperforming		2,833		6,791		453				10,077
Total	$	828,927	$	575,678	$	76,636			$	1,481,241

Residential Mortgage Credit Exposure By Payment Activity:	Residential Mortgage								Total
Performing	$	538,824							$	538,824
Nonperforming		9,570								9,570
Total	$	548,394							$	548,394

Fair Values of Financial Instruments

3 Months Ended

Mar. 31, 2011

Notes to Financial Statements [Abstract]

Fair Values of Financial Instruments

Note 9. Fair Value Measurements and Fair Value of Financial Instruments

U.S. GAAP states that fair value 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 market participants. Fair value measurements are not adjusted for transaction costs. A fair value hierarchy exists within U.S. GAAP that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The types of instruments valued based on quoted market prices in active markets include most U.S. government and agency securities, many other sovereign government obligations, liquid mortgage products, active listed equities and most money market securities. Such instruments are generally classified within level 1 or level 2 of the fair value hierarchy. The Company does not adjust the quoted price for such instruments.

The types of instruments valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include most investment-grade and high-yield corporate bonds, less liquid mortgage products, less liquid agency securities, less liquid listed equities, state, municipal and provincial obligations, and certain physical commodities. Such instruments are generally classified within level 2 of the fair value hierarchy.

Level 3 is for positions that are not traded in active markets or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate will be used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Subsequent to inception, management only changes level 3 inputs and assumptions when corroborated by evidence such as transactions in similar instruments, completed or pending third-party transactions in the underlying investment or comparable entities, subsequent rounds of financing, recapitalizations and other transactions across the capital structure, offerings in the equity or debt markets, and changes in financial ratios or cash flows.

For the three months ended March 31, 2011, the Company has made no transfers of assets between Level 1 and Level 2, and has had no Level 3 activity.

The following tables set forth the Company’s financial assets and liabilities measured on a recurring basis that were accounted for at fair value. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of March 31, 2011
Assets:
Securities Available for Sale:
U.S. Treasury	$	80,963	$	—	$	—	$	80,963
Federal Agency		—		287,860		—		287,860
State & municipal		—		114,693		—		114,693
Mortgage-backed		—		281,509		—		281,509
Collateralized mortgage obligations		—		310,007		—		310,007
Corporate		—		20,376		—		20,376
Other securities		8,174		2,024		—		10,198
Total Securities Available for Sale	$	89,137	$	1,016,469	$	—	$	1,105,606

Trading Securities		3,119		—		—		3,119
Total	$	92,256	$	1,016,469	$	—	$	1,108,725

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2010
Assets:
Securities Available for Sale:
U.S. Treasury	$	91,280	$	—	$	—	$	91,280
Federal Agency		—		349,750		—		349,750
State & municipal		—		114,937		—		114,937
Mortgage-backed		—		244,808		—		244,808
Collateralized mortgage obligations		—		297,888		—		297,888
Corporate		—		20,489		—		20,489
Other securities		8,190		2,026		—		10,216
Total Securities Available for Sale	$	99,470	$	1,029,898	$	—	$	1,129,368

Trading Securities		2,808		—		—		2,808
Total	$	102,278	$	1,029,898	$	—	$	1,132,176

Certain common equity securities are reported at fair value utilizing Level 1 inputs (exchange quoted prices). The majority of the other investment securities are reported at fair value utilizing Level 2 inputs. The prices for these instruments are obtained through an independent pricing service or dealer market participants with whom the Company has historically transacted both purchases and sales of investment securities. Prices obtained from these sources include prices derived from market quotations and matrix pricing. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. Management reviews the methodologies used in pricing the securities by its third party providers.

U.S. GAAP require disclosure of assets and liabilities measured and recorded at fair value on a nonrecurring basis such as goodwill, loans held for sale, other real estate owned, lease residuals, collateral-dependent impaired loans, mortgage servicing rights, and held-to-maturity securities. The only nonrecurring fair value measurement recorded during the three month period ended March 31, 2011 was related to impaired loans. During the three month period ended March 31, 2011, the Company established specific reserves on impaired loans of approximately $1.0 million, which were included in the provision for loan and lease losses for the respective period. The Company uses the fair value of underlying collateral, less costs to sell, to estimate the specific reserves for collateral dependent impaired loans. Based on the valuation techniques used, the fair value measurements for collateral dependent impaired loans are classified as Level 3.

The following table sets forth information with regard to estimated fair values of financial instruments at March 31, 2011 and December 31, 2010:

	March 31, 2011				December 31, 2010
(In thousands)	Carrying amount		Estimated fair value		Carrying amount		Estimated fair value
Financial assets
Cash and cash equivalents	$	321,946	$	321,946	$	168,792	$	168,792
Securities available for sale		1,105,606		1,105,606		1,129,368		1,129,368
Securities held to maturity		90,008		91,426		97,310		98,759
Trading securities		3,119		3,119		2,808		2,808
Loans (1)		3,626,994		3,635,360		3,610,006		3,626,603
Less allowance for loan losses		69,934		—		71,234		—
Net loans		3,557,060		3,635,360		3,538,772		3,626,603
Accrued interest receivable		18,554		18,554		19,130		19,130
Financial liabilities
Savings, NOW, and money market	$	2,418,748	$	2,418,748	$	2,291,833	$	2,291,833
Time deposits		930,361		942,271		930,778		943,988
Noninterest bearing		909,833		909,833		911,741		911,741
Short-term borrowings		167,461		167,461		159,434		159,434
Long-term debt		370,032		420,826		369,874		423,350
Accrued interest payable		4,430		4,430		4,356		4,356
Trust preferred debentures		75,422		75,422		75,422		71,148

(1) Lease receivables, although excluded from the scope of SFAS No. 107, are included in the estimated fair value amounts at their carrying amounts.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on and off balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, the Company has a substantial trust and investment management operation that contributes net fee income annually. The trust and investment management operation is not considered a financial instrument, and its value has not been incorporated into the fair value estimates. Other significant assets and liabilities include the benefits resulting from the low-cost funding of deposit liabilities as compared to the cost of borrowing funds in the market, and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimate of fair value.

Securities

3 Months Ended

Mar. 31, 2011

Notes to Financial Statements [Abstract]

Securities

Note 10. Securities

The amortized cost, estimated fair value, and unrealized gains and losses of securities available for sale are as follows:

(In thousands)	Amortized cost		Unrealized gains		Unrealized losses		Estimated fair value
March 31, 2011
U.S. Treasury	$	81,254	$	322	$	613	$	80,963
Federal Agency		289,847		1,264		3,251		287,860
State & municipal		112,884		2,204		395		114,693
Mortgage-backed		271,433		11,219		1,143		281,509
Collateralized mortgage obligations		306,721		5,262		1,976		310,007
Corporate		20,003		373		—		20,376
Other securities		8,065		2,138		5		10,198
Total securities available for sale	$	1,090,207	$	22,782	$	7,383	$	1,105,606
December 31, 2010
U.S. Treasury	$	91,338	$	424	$	482	$	91,280
Federal Agency		350,641		1,905		2,796		349,750
State & municipal		113,821		1,771		655		114,937
Mortgage-backed		233,861		11,666		719		244,808
Collateralized mortgage obligations		293,565		6,574		2,251		297,888
Corporate		20,005		484		—		20,489
Other securities		8,059		2,162		5		10,216
Total securities available for sale	$	1,111,290	$	24,986	$	6,908	$	1,129,368

In the available for sale category at March 31, 2011, federal agency securities were comprised of Government-Sponsored Enterprise (“GSE”) securities; mortgaged-backed securities were comprised of GSE securities with an amortized cost of $247.6 million and a fair value of $255.8 million and US Government Agency securities with an amortized cost of $23.9 million and a fair value of $25.7 million; collateralized mortgage obligations were comprised of GSE securities with an amortized cost of $227.7 million and a fair value of $228.3 million and US Government Agency securities with an amortized cost of $79.0 million and a fair value of $81.7 million.

In the available for sale category at December 31, 2010, federal agency securities were comprised of GSE securities; mortgaged-backed securities were comprised of GSE securities with an amortized cost of $208.9 million and a fair value of $217.9 million and US Government Agency securities with an amortized cost of $25.0 million and a fair value of $26.9 million; collateralized mortgage obligations were comprised of GSE securities with an amortized cost of $206.0 million and a fair value of $207.0 million and US Government Agency securities with an amortized cost of $87.6 million and a fair value of $90.8 million.

Others securities primarily represent marketable equity securities.

There were no sales of securities available for sale during the three months ended March 31, 2011. Proceeds from the sales of securities available for sale totaled $0.7 million during the three month period ending March 31, 2010. Gains on these sales were negligible for the three months ended March 31, 2010.

Securities available for sale with amortized costs totaling $1.0 billion at March 31, 2011 and $0.9 billion at December 31, 2010, were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at March 31, 2011 and December 31, 2010, securities available for sale with an amortized cost of $201.9 million and $187.7 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The amortized cost, estimated fair value, and unrealized gains and losses of securities held to maturity are as follows:

	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	cost		gains		losses		fair value
March 31, 2011
Mortgage-backed	$	1,650	$	194	$	—	$	1,844
State & municipal		88,358		1,225		1		89,582
Total securities held to maturity	$	90,008	$	1,419	$	1	$	91,426
December 31, 2010
Mortgage-backed	$	1,719	$	200	$	—	$	1,919
State & municipal		95,591		1,249		—		96,840
Total securities held to maturity	$	97,310	$	1,449	$	—	$	98,759

The following table sets forth information with regard to investment securities with unrealized losses at March 31, 2011 and December 31, 2010:

	Less than 12 months							12 months or longer							Total
Security Type:	Fair Value		Unrealized losses			Number of Positions		Fair Value		Unrealized losses			Number of Positions		Fair Value		Unrealized losses			Number of Positions

March 31, 2011
U.S. Treasury	$	40,534	$	(613	)		4	$	—	$	—			—	$	40,534	$	(613	)		4
Federal agency		156,548		(3,251	)		13		—		—			—		156,548		(3,251	)		13
State & municipal		9,884		(86	)		14		8,165		(309	)		28		18,049		(395	)		42
Mortgage-backed		87,731		(1,143	)		7		—		—			—		87,731		(1,143	)		7
Collateralized mortgage obligations		100,772		(1,976	)		6		—		—			—		100,772		(1,976	)		6
Other securities		95		(5	)		1		—		—			—		95		(5	)		1
Total securities with unrealized losses	$	395,564	$	(7,074	)		45	$	8,165	$	(309	)		28	$	403,729	$	(7,383	)		73

December 31, 2010
U.S. Treasury	$	40,741	$	(482	)		4	$	—	$	—			—	$	40,741	$	(482	)		4
Federal agency		147,012		(2,796	)		12		—		—			—		147,012		(2,796	)		12
State & municipal		22,273		(317	)		31		7,533		(338	)		19		29,806		(655	)		50
Mortgage-backed		44,340		(719	)		3		—		—			—		44,340		(719	)		3
Collateralized mortgage obligations		72,595		(2,251	)		3		—		—			—		72,595		(2,251	)		3
Other securities		95		(5	)		1		—		—			—		95		(5	)		1
Total securities with unrealized losses	$	327,056	$	(6,570	)		54	$	7,533	$	(338	)		19	$	334,589	$	(6,908	)		73

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses or in other comprehensive income, depending on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary impairment shall be separated into (a) the amount representing the credit loss and (b) the amount related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss shall be recognized in earnings. The amount of the total other-than-temporary impairment related to other factors shall be recognized in other comprehensive income, net of applicable taxes.

In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the historical and implied volatility of the fair value of the security.

Management has the intent to hold the securities classified as held to maturity until they mature, at which time it is believed the Company will receive full value for the securities. Furthermore, as of March 31, 2011, management also had the intent to hold, and will not be required to sell, the securities classified as available for sale for a period of time sufficient for a recovery of cost, which may be until maturity. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. As of March 31, 2011, management believes the impairments detailed in the table above are temporary and no other-than-temporary impairment losses have been realized in the Company’s consolidated statements of income.

The following tables set forth information with regard to contractual maturities of debt securities at March 31, 2011:

(In thousands)	Amortized cost		Estimated fair value

Debt securities classified as available for sale
Within one year	$	31,426	$	31,884
From one to five years		355,588		353,904
From five to ten years		221,170		229,776
After ten years		473,958		479,844
	$	1,082,142	$	1,095,408

Debt securities classified as held to maturity
Within one year	$	38,196	$	38,236
From one to five years		38,360		39,403
From five to ten years		9,432		9,573
After ten years		4,020		4,214
	$	90,008	$	91,426

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. Government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at March 31, 2011.

Entity Information	3 Months Ended
Entity Information	Mar. 31, 2011 USD ($) shares
Entity Registrant Name	NBT BANCORP INC.
Entity Central Index Key	0000790359
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float \| $	$ 673,845,411
Entity Common Stock, Shares Outstanding \| shares	34,440,354
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q1

Consolidated Statements of Stockholders' Equity (Parenthetical) (Unaudited) - $ / shares	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Consolidated Statements of Stockholders' Equity
Cash dividends - per share (in dollars per share)	$ 0.20	$ 0.20
Purchase of Treasury Shares (in shares)	107,871	0
Net issuance of shares to employee benefit plans and other stock plans, including tax benefit (in shares)	38,868	37,931
Net issuance of shares of restricted stock awards (in shares)	25,463	13,055
Forfeiture of shares of restricted stock (in shares)	5,000	2,000

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Consolidated Statements of Comprehensive Income
Net income	$ 14,307	$ 13,976
Other comprehensive (loss) income, net of tax
Unrealized net holding (losses) gains arising during the period (pre-tax amounts of ($2,651) and $2,010)	(1,600)	1,213
Reclassification adjustment for net gains related to securities available for sale included in net income (pre-tax amounts of $27 and $28)	(17)	(17)
Amortization of prior service cost and actuarial gains (pre-tax amounts of $415 and $393)	250	237
Total other comprehensive (loss) income	(1,367)	1,433
Comprehensive income	$ 12,940	$ 15,409

Consolidated Statements of Comprehensive Income (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2011	Mar. 31, 2010
Other comprehensive (loss) income, net of tax
Unrealized net holding (losses) gains arising during the year, pre-tax amounts	$ (2,651)	$ 2,010
Reclassification adjustment for net gains related to securities available for sale included in net income, pre-tax amounts	27	28
Amortization of prior service cost and actuarial gains, pre-tax amounts	$ 415	$ 393

Description of Business	3 Months Ended
Description of Business	Mar. 31, 2011
Notes to Financial Statements [Abstract]
Description of Business	Note 1. Description of Business NBT Bancorp Inc. (the “Registrant”) is a registered financial holding company incorporated in the State of Delaware in 1986, with its principal headquarters located in Norwich, New York. The Registrant is the parent holding company of NBT Bank, N.A. (the “Bank”), NBT Financial Services, Inc. (“NBT Financial”), NBT Holdings, Inc. (“NBT Holdings”), CNBF Capital Trust I, NBT Statutory Trust I and NBT Statutory Trust II (the “Trusts”). Through the Bank, the Company is focused on community banking operations. Through NBT Financial, the Company operates EPIC Advisors, Inc. (“EPIC”), a retirement plan administrator. Through NBT Holdings, the Company operates Mang Insurance Agency, LLC (“Mang”), a full-service insurance agency. The Trusts were organized to raise additional regulatory capital and to provide funding for certain acquisitions. The Registrant’s primary business consists of providing commercial banking and financial services to customers in its market area. The principal assets of the Registrant are all of the outstanding shares of common stock of its direct subsidiaries, and its principal sources of revenue are the management fees and dividends it receives from the Bank, NBT Financial, and NBT Holdings. The Bank is a full service commercial bank formed in 1856, which provides a broad range of financial products to individuals, corporations and municipalities throughout the upstate New York, northeastern Pennsylvania, and greater Burlington, Vermont market areas.

Basis of Presentation	3 Months Ended
Basis of Presentation	Mar. 31, 2011
Notes to Financial Statements [Abstract]
Basis of Presentation	Note 2. Basis of Presentation The accompanying unaudited interim consolidated financial statements include the accounts of the Registrant and its wholly owned subsidiaries, the Bank, NBT Financial and NBT Holdings. Collectively, the Registrant and its subsidiaries are referred to herein as “the Company.” All intercompany transactions have been eliminated in consolidation. Amounts in the prior period financial statements are reclassified whenever necessary to conform to current period presentation.

Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2011	Dec. 31, 2010
Assets
Securities held to maturity, fair value	$ 91,426	$ 98,759
Stockholders' equity
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,500,000	2,500,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	38,035,539	38,035,539
Common stock in treasury, at cost shares (in shares)	3,581,272	3,532,732

Commitments and Contingent Liabilities	3 Months Ended
Commitments and Contingent Liabilities	Mar. 31, 2011
Notes to Financial Statements [Abstract]
Commitments and Contingent Liabilities	Note 4. Commitments and Contingencies The Company is a party to financial instruments in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuating interest rates. These financial instruments include commitments to extend credit, unused lines of credit, and standby letters of credit. Exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to make loans and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policy to make such commitments as it uses for on-balance-sheet items. Commitments to extend credit and unused lines of credit totaled $594.7 million at March 31, 2011 and $643.6 million at December 31, 2010. Since commitments to extend credit and unused lines of credit may expire without being fully drawn upon, this amount does not necessarily represent future cash commitments. Collateral obtained upon exercise of the commitment is determined using management’s credit evaluation of the borrower and may include accounts receivable, inventory, property, land and other items. The Company guarantees the obligations or performance of customers by issuing standby letters of credit to third parties. These standby letters of credit are frequently issued in support of third party debt, such as corporate debt issuances, industrial revenue bonds and municipal securities. The credit risk involved in issuing standby letters of credit is essentially the same as the credit risk involved in extending loan facilities to customers, and they are subject to the same credit origination guidelines, portfolio maintenance and management procedures as other credit and off-balance sheet products. Typically, these instruments have terms of five years or less and expire unused; therefore, the total amounts do not necessarily represent future cash commitments. Standby letters of credit totaled $25.9 million at March 31, 2011 and $26.2 million at December 31, 2010. As of March 31, 2011, the fair value of standby letters of credit was not significant to the Company’s consolidated financial statements. The Company has also entered into commercial letter of credit agreements on behalf of its customers. Under these agreements, the Company, on the request of its customer, opens the letter of credit and makes a commitment to honor draws made under the agreement, whereby the beneficiary is normally the provider of goods and/or services and the Company essentially replaces the customer as the payee. The credit risk involved in issuing commercial letters of credit is essentially the same as the credit risk involved in extending loan facilities to customers, and they are subject to the same credit origination guidelines, portfolio maintenance and management procedures as other credit and off-balance sheet products. Typically, these agreements vary in terms and the total amounts do not necessarily represent future cash commitments. Commercial letters of credit totaled $16.2 million at March 31, 2011 and $16.3 million at December 31, 2010. As of March 31, 2011, the fair value of commercial letters of credit was not significant to the Company’s consolidated financial statements.

Document Information	3 Months Ended
Document Information	Mar. 31, 2011
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2011