Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Financial Instruments Measured at Fair Value on a Recurring Basis

The following table summarizes financial instruments measured at fair value on a recurring basis as of December 31, 2015 and 2014, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	December 31, 2015
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	99,008	$	—	$	99,008
Obligations of states and political subdivisions	—		38,624		3,077		41,701
Residential mortgage-backed securities	—		311,061		—		311,061
Total securities available for sale	$	—	$	448,693	$	3,077	$	451,770
State tax credits held for sale	—		—		5,941		5,941
Derivative financial instruments	—		1,155		—		1,155
Total assets	$	—	$	449,848	$	9,018	$	458,866

Liabilities
Derivative financial instruments	$	—	$	1,155	$	—	$	1,155
Total liabilities	$	—	$	1,155	$	—	$	1,155



	December 31, 2014
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	91,826	$	—	$	91,826
Obligations of states and political subdivisions	—		31,822		3,059		34,881
Residential mortgage-backed securities	—		273,439		—		273,439
Total securities available for sale	$	—	$	397,087	$	3,059	$	400,146
State tax credits held for sale	—		—		11,689		11,689
Derivative financial instruments	—		909		—		909
Total assets	$	—	$	397,996	$	14,748	$	412,744

Liabilities
Derivative financial instruments	$	—	$	907	$	—	$	907
Total liabilities	$	—	$	907	$	—	$	907

Schedule of Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

The following table presents the changes in Level 3 financial instruments measured at fair value on a recurring basis as of December 31, 2015 and 2014.


•	Purchases, sales, issuances and settlements. There were no Level 3 purchases during the year ended December 31, 2015.


•	Transfers in and/or out of Level 3. There were no transfers in and/or out of Level 3 for the years ending December 31, 2015 and 2014.



	Securities available for sale, at fair value
	Years ended December 31,
(in thousands)	2015		2014
Beginning balance	$	3,059	$	3,040
Total gains:
Included in other comprehensive income	18		19
Purchases, sales, issuances and settlements:
Purchases	—		—
Transfer in and/or out of Level 3	—		—
Ending balance	$	3,077	$	3,059

Change in unrealized gains (losses) relating to assets still held at the reporting date	$	18	$	19



	State tax credits held for sale, at fair value
	Years ended December 31,
(in thousands)	2015			2014
Beginning balance	$	11,689		$	16,491
Total gains:
Included in earnings	406			558
Purchases, sales, issuances and settlements:
Sales	(6,154		)	(5,360		)
Ending balance	$	5,941		$	11,689

Change in unrealized gains (losses) relating to assets still held at the reporting date	$	(1,212	)	$	(868	)

Summary of Financial Instruments and Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of December 31, 2015 and 2014.



	December 31, 2015
	(1)		(1)		(1)		(1)
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total losses for the year ended December 31, 2015
Impaired loans	$	2,561	$	—	$	—	$	2,561	$	(6,091	)
Other real estate	753		—		—		753		(83		)
Total	$	3,314	$	—	$	—	$	3,314	$	(6,174	)



	December 31, 2014
	(1)		(1)		(1)		(1)
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total losses for the year ended December 31, 2014
Impaired loans	$	6,726	$	—	$	—	$	6,726	$	(5,556	)
Other real estate	3,788		—		—		3,788		(696		)
Total	$	10,514	$	—	$	—	$	10,514	$	(6,252	)

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

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

Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at December 31, 2015 and 2014.



	December 31, 2015				December 31, 2014
(in thousands)	Carrying Amount		Estimated fair value		Carrying Amount		Estimated fair value
Balance sheet assets
Cash and due from banks	$	47,935	$	47,935	$	42,903	$	42,903
Federal funds sold	91		91		35		35
Interest-bearing deposits	47,131		47,131		63,058		63,058
Securities available for sale	451,770		451,770		400,146		400,146
Securities held to maturity	43,714		43,441		45,985		45,795
Other investments, at cost	17,455		17,455		17,037		17,037
Loans held for sale	6,598		6,598		4,033		4,033
Derivative financial instruments	1,155		1,155		909		909
Portfolio loans, net	2,781,879		2,782,704		2,487,424		2,482,700
State tax credits, held for sale	45,850		49,588		38,309		42,970
Accrued interest receivable	8,399		8,399		7,956		7,956

Balance sheet liabilities
Deposits	2,784,591		2,784,654		2,491,510		2,494,624
Subordinated debentures	56,807		35,432		56,807		34,124
Federal Home Loan Bank advances	110,000		109,994		144,000		144,000
Other borrowings	270,326		270,286		239,883		239,950
Derivative financial instruments	1,155		1,155		907		907
Accrued interest payable	629		629		843		843

Schedule of Estimated Fair Values of Financial Instruments Not Recorded at Fair Value on Balance Sheet

The following table presents the level in the fair value hierarchy for the estimated fair values of only the Company’s financial instruments that are not already on the consolidated balance sheets at fair value at December 31, 2015, and December 31, 2014.



	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2015
(in thousands)	Level 1		Level 2		Level 3
Financial Assets:
Securities held to maturity	$	—	$	43,441	$	—	$	43,441
Portfolio loans, net	—		—		2,782,704		2,782,704
State tax credits, held for sale	—		—		43,647		43,647
Financial Liabilities:
Deposits	2,428,403		—		356,251		2,784,654
Subordinated debentures	—		35,432		—		35,432
Federal Home Loan Bank advances	—		109,994		—		109,994
Other borrowings	—		270,286		—		270,286

	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2014
(in thousands)	Level 1		Level 2		Level 3
Financial Assets:
Securities held to maturity	$	—	$	45,795	$	—	$	45,795
Portfolio loans, net	—		—		2,482,700		2,482,700
State tax credits, held for sale	—		—		31,281		31,281
Financial Liabilities:
Deposits	1,986,158		—		508,466		2,494,624
Subordinated debentures	—		34,124		—		34,124
Federal Home Loan Bank advances	—		144,000		—		144,000
Other borrowings	—		239,950		—		239,950