Fair Value (Tables)

3 Months Ended

Mar. 31, 2016

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 are summarized below:



(Dollars in thousands)			Fair Value Measurement Using:
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Trading securities	$	3,418	$	—	$	3,418	$	—
Available-for-sale securities:
Mortgage-backed securities—residential	620,864		—		620,864		—
Industrial revenue bonds	3,249		—		—		3,249
Corporate bonds	39,812		—		39,812		—
Available-for-sale securities	$	663,925	$	—	$	660,676	$	3,249
Gross asset value of derivatives	$	5,683	$	—	$	5,683	$	—
Liabilities
Gross liability value of derivatives	$	3	$	—	$	3	$	—

There were no transfers of assets and liabilities between levels of the fair value hierarchy during the three months ended March 31, 2016.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 are summarized below:



(Dollars in thousands)			Fair Value Measurement Using:
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Trading securities	$	3,013	$	—	$	3,013	$	—
Available-for-sale securities:
Mortgage-backed securities-residential	611,137		—		611,137		—
Industrial revenue bonds	3,437		—		—		3,437
Corporate bonds	22,755		$	—	22,755		—
Available-for-sale securities	$	637,329	$	—	$	633,892	$	3,437
Gross asset value of derivatives	$	933	$	—	$	933	$	—
Liabilities
Gross liability value of derivatives	$	110	$	—	$	110	$	—

Fair Value Measurements on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The table below presents the activity and income statement classifications of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended and held at March 31, 2016 and March 31, 2015:



(Dollars in thousands)	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Industrial Revenue Bonds
Beginning balance, January 1, 2016	$	3,437
Principal reduction	(170		)
Included in other comprehensive income	(18		)
Ending balance, March 31, 2016	$	3,249



(Dollars in thousands)	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Industrial Revenue Bonds
Beginning balance, January 1, 2015	$	3,690
Principal reduction	(170		)
Included in other comprehensive income	17
Ending balance, March 31, 2015	$	3,537

Quantitative Information About Recurring Level 3 Fair Value Measurements



(Dollars in thousands)	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Range
Industrial revenue bonds	$	3,249	Discounted cash flow	Discount rate	2.89% - 3.04%
				Illiquidity factor	0.5%



(Dollars in thousands)	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Range
Industrial revenue bonds	$	3,437	Discounted cash flow	Discount rate	3.75% - 3.78%
				Illiquidity factor	0.5%

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2015 are summarized below:



(Dollars in thousands)	Fair Value Measurement Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Other real estate owned	$	—	$	—	$	34,645
Other repossessed assets	—		375		—
Impaired loans	—		—		254

Assets and liabilities measured at fair value on a nonrecurring basis as of March 31, 2016 are summarized below:



(Dollars in thousands)	Fair Value Measurement Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Other real estate owned	$	—	$	—	$	35,978
Other repossessed assets	—		178		—
Impaired loans	—		—		256

Quantitative Information About Nonrecurring Level 3 Fair Value Measurements



(Dollars in thousands)	Fair Value at March 31, 2016		Valuation Technique	Significant Unobservable Input	Weighted Average
Other real estate owned	$	35,978	Fair value of property	Appraised value and other market conditions	8.00%
Impaired loans	256		Fair value of collateral	Appraised value and other market conditions	7.28%



(Dollars in thousands)	Fair Value at December 31, 2015		Valuation Technique	Significant Unobservable Input	Weighted Average
Other real estate owned	$	34,645	Fair value of property	Appraised value and other market conditions	7.86%
Impaired loans	254		Fair value of collateral	Appraised value and other market conditions	7.29%

Carrying Amounts and Estimated Fair Values of Financial Instruments

Carrying amount and estimated fair values of financial instruments were as follows:



(Dollars in thousands)	Fair Value Measurement
March 31, 2016	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	182,020	$	182,020	$	182,020	$	—	$	—
Trading securities	3,418		3,418		—		3,418		—
Investment securities available-for-sale	663,925		663,925		—		660,676		3,249
Investment securities held-to-maturity	460,483		467,372		—		467,372		—
Loans, net	5,589,694		5,709,174		—		8,070		5,701,104
Other earning assets (1)	23,743		23,743		—		—		23,743
Gross asset value of derivatives	5,683		5,683		—		5,683		—
Total financial assets	$	6,928,966	$	7,055,335	$	182,020	$	1,145,219	$	5,728,096
Financial Liabilities
Non-contractual deposits	$	4,275,827	$	4,275,827	$	—	$	4,275,827	$	—
Contractual deposits	1,663,906		1,664,359		—		1,664,359		—
Federal Home Loan Bank advances	400,849		401,077		—		401,077		—
Short-term borrowings	16,200		16,201		—		16,201		—
Subordinated debentures	86,328		85,721		—		—		85,721
Gross liability value of derivatives	3		3		—		3		—
Total financial liabilities	$	6,443,113	$	6,443,188	$	—	$	6,357,467	$	85,721

(1) Includes Federal Home Loan Bank stock.



(Dollars in thousands)	Fair Value Measurement
December 31, 2015	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	144,696	$	144,696	$	144,696	$	—	$	—
Trading securities	3,013		3,013		—		3,013		—
Investment securities available-for-sale	637,329		637,329		—		633,892		3,437
Investment securities held-to-maturity	472,505		475,134		—		475,134		—
Loans, net	5,587,682		5,636,518		—		10,569		5,625,949
FDIC indemnification asset	6,725		6,725		—		—		6,725
Receivable from FDIC	678		678		—		678		—
Other earning assets (1)	25,736		25,736		—		—		25,736
Gross asset value of derivatives	933		933		—		933		—
Total financial assets	$	6,879,297	$	6,930,762	$	144,696	$	1,124,219	$	5,661,847
Financial Liabilities
Non-contractual deposits	$	4,112,892	$	4,112,892	$	—	$	4,112,892	$	—
Contractual deposits	1,747,318		1,735,587		—		1,735,587		—
Federal Home Loan Bank advances	460,898		461,128		—		461,128		—
Short-term borrowings	12,410		12,410		—		12,410		—
Subordinated debentures	85,777		92,517		—		—		92,517
Gross liability value of derivatives	110		110		—		110		—
Total financial liabilities	$	6,419,405	$	6,414,644	$	—	$	6,322,127	$	92,517

(1) Includes Federal Home Loan Bank stock.