Assets acquired through, or in lieu of, foreclosure are to be sold and are initially recorded at the date of foreclosure  at fair value of the collateral less estimated selling costs through a gain or a charge to the allowance for loan losses,  establishing a new cost basis. Subsequent to foreclosure, the Company records a charge to earnings if the carrying value of  a property exceeds the fair value less estimated costs to sell. Revenue and expenses from operations and subsequent  declines in fair value are included in other non-interest expense in the statement of earnings. The Company has classified its investment securities portfolio as available-for-sale, with the exception of certain  investments held for regulatory purposes. The Company carries its available-for-sale investment securities at fair value and  employs valuation techniques which utilize quoted prices or observable inputs when those inputs are available. These  observable inputs reflect assumptions that market participants would use in pricing the security, developed based on market  data obtained from sources independent of the Company. When such information is not available, the Company employs  valuation techniques which utilize unobservable inputs, or those which reflect the Company’s own assumptions, based on  the best information available in the circumstances. These valuation methods typically involve estimated cash flows and  other financial modeling techniques. Changes in underlying factors, assumptions, estimates, or other inputs to the valuation  techniques could have a material impact on the Company’s future financial condition and results of operations. Fair value  measurements are classified as Level 1 (quoted prices), Level 2 (based on observable inputs) or Level 3 (based on  unobservable inputs). Available-for-sale securities are recorded at fair value with unrealized gains and losses excluded from  earnings and reported as a separate component of stockholders’ equity, net of taxes, until realized. Purchase premiums and  discounts on investment securities are amortized/accreted into interest income over the estimated lives of the securities using  the interest method. Realized gains and losses on sales of available-for-sale securities are recorded on a trade date basis and  are calculated using the specific identification method. The Company performs quarterly reviews of the investment portfolio to determine if any investment securities have  any declines in fair value which might be considered other-than-temporary. The initial review begins with all securities in  an unrealized loss position. The Company’s assessment of other-than-temporary impairment is based on its judgment of the  specific facts and circumstances impacting each individual security at the time such assessments are made. The Company  reviews and considers factual information, including expected cash flows, the structure of the security, the credit quality of  the underlying assets and the current and anticipated market conditions. Credit-related impairments on debt securities are  recorded through a charge to earnings. If an equity security is determined to be other-than-temporarily impaired, the entire  impairment is recorded through a charge to earnings.  We have completed several business and asset acquisitions, which have generated significant amounts of goodwill  and intangible assets and related amortization. The values assigned to goodwill and intangibles, as well as their related  useful lives, are subject to judgment and estimation by our management. Goodwill and intangibles related to acquisitions  are determined and based on purchase price allocations. The initial value assigned to goodwill is the residual of the  purchase price over the fair value of all identifiable tangible and intangible assets acquired and liabilities assumed. Valuation of intangible assets is generally based on the estimated cash flows related to those assets. Performing discounted  cash flow analyses involves the use of estimates and assumptions. Useful lives are based on the expected future period of  the benefit of the asset, the assessment of which considers various characteristics of the asset, including the historical cash  flows. Due to the number of estimates involved related to the allocation of purchase price and determining the appropriate  useful lives of intangible assets, we have identified purchase accounting, and the subsequent impairment testing of goodwill  and intangible assets, as a critical accounting policy.  Goodwill is not amortized; however, it is tested for impairment at each calendar year end or more frequently when  events or circumstances dictate. The impairment test compares the carrying value of goodwill to an implied fair value of the  goodwill, which is based on a review of the Company’s market capitalization adjusted for appropriate control premiums as  well as an analysis of valuation multiples of recent, comparable acquisitions. The Company considers the result from each  of these valuation methods to determine the implied fair value of its goodwill. A goodwill impairment would be recorded  for the amount that the carrying value exceeds the implied fair value. The Company performed a step one impairment test  as of December 31, 2012 by comparing the implied fair value of the Company’s single reporting unit to its carrying value. Fair value was determined using observable market data, including the Company’s market capitalization, with control  premiums and valuation multiples, compared to recent financial industry acquisition multiples for similar institutions to  estimate the fair value of the Company’s single reporting unit. The Company’s step one impairment test indicated that its  47 