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Fair Value Disclosures (Tables)
 3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value
Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:

     
Fair Value Measurements Using
 
  
Fair Value
Measure-
ments
  
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
  
Significant
Other
Observable
Inputs
(Level 2)
  
Significant
Un-
observable
Inputs
(Level 3)
 
  
(In thousands)
 
March 31, 2019:
            
Measured at Fair Value on a Recurring Basis
            
Assets
            
Securities available for sale
            
U.S. agency
 
$
18,129
  
$
-
  
$
18,129
  
$
-
 
U.S. agency residential mortgage-backed
  
142,038
   
-
   
142,038
   
-
 
U.S. agency commercial mortgage-backed
  
11,313
   
-
   
11,313
   
-
 
Private label mortgage-backed
  
33,092
   
-
   
33,092
   
-
 
Other asset backed
  
110,290
   
-
   
110,290
   
-
 
Obligations of states and political subdivisions
  
108,385
   
-
   
108,385
   
-
 
Corporate
  
34,380
   
-
   
34,380
   
-
 
Trust preferred
  
1,883
   
-
   
1,883
   
-
 
Foreign government
  
2,021
   
-
   
2,021
   
-
 
Loans held for sale, carried at fair value
  
43,098
   
-
   
43,098
   
-
 
Capitalized mortgage loan servicing rights
  
19,909
   
-
   
-
   
19,909
 
Derivatives (1)
  
4,705
   
-
   
4,705
   
-
 
Liabilities
                
Derivatives (2)
  
2,219
   
-
   
2,219
   
-
 
                 
Measured at Fair Value on a Non-recurring Basis:
                
Assets
                
Impaired loans (3)
                
Commercial
                
Income producing - real estate
  
213
   
-
   
-
   
213
 
Land, land development & construction-real estate
  
106
   
-
   
-
   
106
 
Commercial and industrial
  
1,335
   
-
   
-
   
1,335
 
Mortgage
                
1-4 family
  
1,271
   
-
   
-
   
1,271
 
Resort lending
  
325
   
-
   
-
   
325
 
Home equity - 1st lien
  
35
   
-
   
-
   
35
 
Home equity - 2nd lien
  
185
   
-
   
-
   
185
 
Installment
                
Home equity - 1st lien
  
40
   
-
   
-
   
40
 
Home equity - 2nd lien
  
40
   
-
   
-
   
40
 
Boat lending
  
65
   
-
   
-
   
65
 
Recreational vehicle lending
  
4
   
-
   
-
   
4
 
Other
  
95
   
-
   
-
   
95
 
Other real estate (4)
                
Mortgage
                
1-4 family
  
129
   
-
   
-
   
129
 
Home equity - 2nd lien
  
59
   
-
   
-
   
59
 

(1)
Included in accrued income and other assets
(2)
Included in accrued expenses and other liabilities
(3)
Only includes impaired loans with specific loss allocations based on collateral value.
(4)
Only includes other real estate with subsequent write downs to fair value.


     
Fair Value Measurements Using
 
  
Fair Value
Measure-
ments
  
Quoted
Prices
in Active
Markets
for
Identical
Assets
(Level 1)
  
Significant
Other
Observable
Inputs
(Level 2)
  
Significant
Un-
observable
Inputs
(Level 3)
 
  
(In thousands)
 
December 31, 2018:
            
Measured at Fair Value on a Recurring Basis
            
Assets
            
Equity securities at fair value
 
$
393
  
$
393
  
$
-
  
$
-
 
Securities available for sale
                
U.S. agency
  
20,014
   
-
   
20,014
   
-
 
U.S. agency residential mortgage-backed
  
123,751
   
-
   
123,751
   
-
 
U.S. agency commercial mortgage-backed
  
5,726
   
-
   
5,726
   
-
 
Private label mortgage-backed
  
29,419
   
-
   
29,419
   
-
 
Other asset backed
  
83,319
   
-
   
83,319
   
-
 
Obligations of states and political subdivisions
  
127,555
   
-
   
127,555
   
-
 
Corporate
  
34,309
   
-
   
34,309
   
-
 
Trust preferred
  
1,819
   
-
   
1,819
   
-
 
Foreign government
  
2,014
   
-
   
2,014
   
-
 
Loans held for sale, carried at fair value
  
44,753
   
-
   
44,753
   
-
 
Capitalized mortgage loan servicing rights
  
21,400
   
-
   
-
   
21,400
 
Derivatives (1)
  
5,155
   
-
   
5,155
   
-
 
Liabilities
                
Derivatives (2)
  
2,326
   
-
   
2,326
   
-
 
                 
Measured at Fair Value on a Non-recurring basis:
                
Assets
                
Loans held for sale, carried at the lower of cost or fair value
  
41,471
   
41,471
   
-
   
-
 
Impaired loans (3)
                
Commercial
                
Income producing - real estate
  
217
   
-
   
-
   
217
 
Land, land development & construction-real estate
  
106
   
-
   
-
   
106
 
Commercial and industrial
  
2,243
   
-
   
-
   
2,243
 
Mortgage
                
1-4 family
  
333
   
-
   
-
   
333
 
Resort lending
  
572
   
-
   
-
   
572
 
Other real estate (4)
                
Mortgage
                
1-4 family
  
95
   
-
   
-
   
95
 
Home equity - 2nd lien
  
59
   
-
   
-
   
59
 

(1)
Included in accrued income and other assets
(2)
Included in accrued expenses and other liabilities
(3)
Only includes impaired loans with specific loss allocations based on collateral value.
(4)
Only includes other real estate with subsequent write downs to fair value.
Changes in Fair Value for Financial Assets
Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:

  
Changes in Fair Values for the Three-Month Periods
Ended March 31 for Items Measured at Fair Value
Pursuant to Election of the Fair Value Option
 
  
Net Gains (Losses)
on Assets
  
Mortgage
  
Total
Change
in Fair
Values
Included
in Current
 
 
Securities
  
Mortgage
Loans
 
Loan
Servicing, net
Period
Earnings
  
(In thousands)
 
2019
            
Equity securities at fair value
 
$
167
  
$
-
  
$
-
  
$
167
 
Loans held for sale
  
-
   
96
   
-
   
96
 
Capitalized mortgage loan servicing rights
  
-
   
-
   
(2,691
)
  
(2,691
)
                 
2018
                
Equity securities at fair value
 
$
(154
)
 
$
-
  
$
-
  
$
(154
)
Loans held for sale
  
-
   
(153
)
  
-
   
(153
)
Capitalized mortgage loan servicing rights
  
-
   
-
   
1,029
   
1,029
 
Reconciliation for all Assets and (Liabilities) Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)
A reconciliation for all assets and (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:


 
Capitalized Mortgage Loan
Servicing Rights
 
  
Three Months Ended
March 31,
 
  
2019
  
2018
 
  
(In thousands)
 
Beginning balance
 
$
21,400
  
$
15,699
 
Total gains (losses) realized and unrealized:
        
Included in results of operations
  
(2,691
)
  
1,029
 
Included in other comprehensive income (loss)
  
-
   
-
 
Purchases, issuances, settlements, maturities and calls
  
1,200
   
1,055
 
Transfers in and/or out of Level 3
  
-
   
-
 
Ending balance
 
$
19,909
  
$
17,783
 
Amount of total gains (losses) for the period included in  earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at March 31
 
$
(2,691
)
 
$
1,029
 
Quantitative Information About Level 3 Fair Value Measurements Measured on a Recurring Basis and Non-recurring Basis
Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:

  
Asset
Fair
Value
 
Valuation
Technique
 
Unobservable
Inputs
 
Range
  
Weighted
Average
 
  
(In thousands)
         
March 31, 2019
            
Capitalized mortgage loan servicing rights
 
$
19,909
 
Present value of net
 
Discount rate
 
10.00% to 13.00
%
  
10.14
%
     
  servicing revenue
 
Cost to service
 
$
66 to $217
  
$
80
 
         
Ancillary income
 
20 to 36
   
23
 
         
Float rate
  
2.29
%
  
2.29
%
                
December 31, 2018
               
Capitalized mortgage loan servicing rights
 
$
21,400
 
Present value of net
 
Discount rate
 
10.00% to 13.00
%
  
10.15
%
     
servicing revenue
 
Cost to service
 
$
68 to $216
  
$
81
 
         
Ancillary income
 
20 to 36
   
23
 
         
Float rate
  
2.57
%
  
2.57
%

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

  
Asset
Fair
Value
 
Valuation
Technique
Unobservable
Inputs
Range
 
Weighted
Average
 
  
(In thousands)
       

         
March 31, 2019
 

 


    
Impaired loans
    


    
Commercial(1)
 $
1,654
 
Sales comparison approach
Adjustment for differences between comparable sales
(48.0)% to 60.0
% 
(5.1
)%

  

 


     
Mortgage and
    


     
Installment(2)
  
2,060
 
Sales comparison approach
Adjustment for differences between comparable sales
(41.2) to 50.4
  
(1.9
)

  
 


     
Other real estate
    


     
Mortgage
  188 
Sales comparison approach
Adjustment for differences between comparable sales
(30.9) to 77.9
  
4.7
 

           
December 31, 2018
  

 


     
Impaired loans
    


     
Commercial(1)
 $
2,566
 
Sales comparison approach
Adjustment for differences between comparable sales
(32.5)% to 60.0
% 
(1.9
)%
     


     
Mortgage
  905 
Sales comparison approach
Adjustment for differences between comparable sales
(40.1) to 25.6
  
0.7
 

  
 


     
Other real estate
    


     
Mortgage
  154 
Sales comparison approach
Adjustment for differences between comparable sales
0.0 to 34.1
  
11.2
 

(1)
In addition to the valuation techniques and unobservable inputs discussed above, at March 31, 2019 and December 31, 2018, we had an impaired collateral dependent commercial relationship that totaled $0.4 million and $0.7 million, respectively that was secured by collateral other than real estate. Collateral securing this relationship primarily included accounts receivable, inventory and cash at March 31, 2019 and December 31, 2018. Valuation techniques at March 31, 2019 and December 31, 2018, included discounting financial statement values for each particular asset type. Discount rates used ranged from 5% to 97% of stated values at March 31, 2019 and 20% to 80% of stated values at December 31, 2018.
(2)
In addition to the valuation techniques and unobservable inputs discussed above, at March 31, 2019 certain impaired collateral dependent installment loans totaling approximately $0.2 million are secured by collateral other than real estate.  For the majority of these loans, we apply internal discount rates to industry valuation guides.
Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance for Loans Held for Sale
The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.

  
Aggregate
Fair Value
  
Difference
  
Contractual
Principal
 
  
(In thousands)
 
Loans held for sale
         
March 31, 2019
 
$
43,098
  
$
1,353
  
$
41,745
 
December 31, 2018
  
44,753
   
1,257
   
43,496