Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of financial assets and financial liabilities measured at fair value on a recurring basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
September 30, 2018	Inputs		Inputs		Inputs		Fair Value
Fair value adjusted through comprehensive income:
Securities available for sale
U.S. Treasury securities	$	—	$	59,854	$	—	$	59,854
Obligations of U.S. government corporations and agencies		—		89,666		—		89,666
Obligations of states and political subdivisions		—		241,925		—		241,925
Residential mortgage-backed securities		—		331,582		—		331,582
Corporate debt securities		—		140,354		—		140,354
Fair value adjusted through current period earnings:
Securities equity investments		7,317		—		—		7,317
Loans held for sale		—		32,617		—		32,617
Derivative assets		—		2,750		—		2,750
Derivative liabilities		—		2,989		—		2,989


	Level 1		Level 2		Level 3		Total
December 31, 2017	Inputs		Inputs		Inputs		Fair Value
Securities available for sale
U.S. Treasury securities	$	—	$	60,348	$	—	$	60,348
Obligations of U.S. government corporations and agencies		—		103,665		—		103,665
Obligations of states and political subdivisions		—		280,199		—		280,199
Residential mortgage-backed securities		—		397,436		—		397,436
Corporate debt securities		—		31,034		—		31,034
Securities equity investments		5,378		—		—		5,378
Loans held for sale		—		94,848		—		94,848
Derivative assets		—		937		—		937
Derivative liabilities		—		2,410		—		2,410

Schedule of assets and liabilities measured at fair value on a non-recurring basis

The following table summarizes assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2018 and December 31, 2017, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
September 30, 2018
Impaired loans	$	—	$	—	$	12,647	$	12,647
OREO		—		—		55		55
Bank property held for sale		—		—		3,711		3,711


December 31, 2017
Impaired loans	$	—	$	—	$	1,313	$	1,313
OREO(1)		—		—		—		—

(1)

OREO fair value was less than one thousand dollars.

Schedule of quantitative information about Level 3 fair value measurements

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized level 3 inputs to determine fair value (dollars in thousands):


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
	Estimate		Techniques	Input	(Weighted Average)
September 30, 2018
Impaired loans	$	12,647	Appraisal of collateral	Appraisal adjustments	- 2.3	%	to	- 100.0	%
					(-20.3)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		3,711	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 0.0	%	to	- 35.1	%
					(-18.0)%

December 31, 2017
Impaired loans	$	1,313	Appraisal of collateral	Appraisal adjustments	- 20.3	%	to	- 100.0	%
					(-30.8)%
OREO(1)		—	Appraisal of collateral	Appraisal adjustments	-100.0%
					(-100.0)%

(1)

OREO fair value was less than one thousand dollars.

Schedule of estimated fair values of financial instruments

The estimated fair values of financial instruments that are reported at amortized cost in the Company’s Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands):


	September 30, 2018				December 31, 2017
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	160,652	$	160,652	$	353,272	$	353,272
Level 2 inputs:
Securities held to maturity		626,250		611,302		443,550		441,052
Accrued interest receivable		25,321		25,321		22,591		22,591
Level 3 inputs:
Portfolio loans, net		5,570,998		5,424,280		5,465,918		5,361,406
Mortgage servicing rights		3,456		11,147		3,680		8,635
Other servicing rights		616		1,236		280		901

Financial liabilities:
Level 2 inputs:
Time deposits(2)	$	1,552,283	$	1,536,729	$	—	$	—
Deposits(2)		—		—		6,125,965		6,119,135
Securities sold under agreements to repurchase		255,906		255,906		304,566		304,566
Short-term borrowings		200,000		200,000		220,000		220,000
Long-term debt		50,000		49,562		50,000		50,000
Junior subordinated debt owed to unconsolidated trusts		71,118		71,118		71,008		71,008
Accrued interest payable		6,731		6,731		2,581		2,581
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,505		38,382		39,404		39,104
Subordinated notes, net of unamortized issuance costs		59,121		57,470		64,715		64,350

(1)

In connection with the adoption of ASU 2016-01 in 2018, only deposits with stated maturities are required to be disclosed.