Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present summaries of the Corporation’s assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets:



	September 30, 2018
	Level 1		Level 2		Level 3		Total
	(in thousands)
Loans held for sale	$	—	$	27,525	$	—	$	27,525
Available for sale investment securities:
U.S. Government sponsored agency securities	—		31,091		—		31,091
State and municipal securities	—		261,140		—		261,140
Corporate debt securities	—		88,940		3,350		92,290
Collateralized mortgage obligations	—		797,234		—		797,234
Residential mortgage-backed securities	—		478,177		—		478,177
Commercial mortgage-backed securities	—		245,751		—		245,751
Auction rate securities	—		—		103,133		103,133
Total available for sale investment securities	—		1,902,333		106,483		2,008,816
Investments held in Rabbi Trust	20,038		—		—		20,038
Other assets	530		67,079		—		67,609
Total assets	$	20,568	$	1,996,937	$	106,483	$	2,123,988
Other liabilities	$	20,509	$	75,031	$	—	$	95,540



	December 31, 2017
	Level 1		Level 2		Level 3		Total
	(in thousands)
Loans held for sale	$	—	$	31,530	$	—	$	31,530
Available for sale investment securities:
Equity securities	918		—		—		918
U.S. Government sponsored agency securities	—		5,938		—		5,938
State and municipal securities	—		408,949		—		408,949
Corporate debt securities	—		93,552		3,757		97,309
Collateralized mortgage obligations	—		602,623		—		602,623
Residential mortgage-backed securities	—		1,120,796		—		1,120,796
Commercial mortgage-backed securities	—		212,755		—		212,755
Auction rate securities	—		—		98,668		98,668
Total available for sale investment securities	918		2,444,613		102,425		2,547,956
Investments held in Rabbi Trust	18,982		—		—		18,982
Other assets	469		44,539		—		45,008
Total assets	$	20,369	$	2,520,682	$	102,425	$	2,643,476
Other liabilities	$	19,357	$	39,014	$	—	$	58,371

Schedule of Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis using Level 3 Inputs

The following table presents the changes in the Corporation’s available for sale investment securities measured at fair value on a recurring basis using unobservable inputs (Level 3):



	Pooled Trust Preferred Securities		Single-issuer Trust Preferred Securities			ARCs
Three months ended September 30, 2018	(in thousands)
Balance at June 30, 2018	$	875	$	3,200		$	103,122
Realized adjustment to fair value	—		71			—
Unrealized adjustment to fair value ⁽¹⁾	—		153			11
Settlements - calls	—		(950		)	—
Discount accretion ⁽²⁾	—		1			—
Balance at September 30, 2018	$	875	$	2,475		$	103,133

Three months ended September 30, 2017
Balance at June 30, 2017	$	422	$	2,775		$	97,923
Unrealized adjustment to fair value ⁽¹⁾	—		(28		)	233
Discount accretion ⁽²⁾	—		3			—
Balance at September 30, 2017	$	422	$	2,750		$	98,156

Nine months ended September 30, 2018
Balance at December 31, 2017	$	707	$	3,050		$	98,668
Realized adjustment to fair value			71
Unrealized adjustment to fair value ⁽¹⁾	168		297			4,465
Settlements - calls	—		(950		)	—
Discount accretion ⁽²⁾	—		7			—
Balance at September 30, 2018	$	875	$	2,475		$	103,133

Nine months ended September 30, 2017
Balance at December 31, 2017	$	422	$	2,450		$	97,256
Unrealized adjustment to fair value ⁽¹⁾	—		291			705
Discount accretion ⁽²⁾	—		9			195
Balance at September 30, 2017	$	422	$	2,750		$	98,156


(1)	Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of "available for sale investment securities" on the consolidated balance sheets.


(2)	Included as a component of "net interest income" on the consolidated statements of income.

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

The following table presents the Corporation’s Level 3 financial assets measured at fair value on a nonrecurring basis and reported on the Corporation’s consolidated balance sheets:



	September 30, 2018		December 31, 2017
	(in thousands)
Net loans	$	136,024	$	149,608
OREO	10,684		9,823
MSRs	38,228		37,663
Total assets	$	184,936	$	197,094

Details of Book Value and Fair Value of Financial Instruments

As required by FASB ASC Section 825-10-50, the following table details the book values and estimated fair values of the Corporation’s financial instruments as of September 30, 2018 and December 31, 2017. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.



	September 30, 2018
	Amortized Cost		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	90,361	$	90,361	$	—	$	—	$	90,361
Interest-bearing deposits with other banks	322,330		322,330		—		—		322,330
Federal Reserve Bank and Federal Home Loan Bank stock	65,926		—		65,926		—		65,926
Loans held for sale	27,525		—		27,525		—		27,525
Securities held to maturity	626,597		622,852		—		—		622,852
Available for sale investment securities	2,008,816		—		1,902,333		106,483		2,008,816
Net Loans	15,767,283		—		—		15,124,455		15,124,455
Accrued interest receivable	58,584		58,584		—		—		58,584
Other financial assets	242,140		126,148		67,079		48,912		242,139
FINANCIAL LIABILITIES
Demand and savings deposits	$	13,384,227	$	13,384,227	$	—	$	—	$	13,384,227
Brokered deposits	164,601		164,601		—		—		164,601
Time deposits	2,700,186		—		2,684,783		—		2,684,783
Short-term borrowings	485,565		485,565		—		—		485,565
Accrued interest payable	11,151		11,151		—		—		11,151
Other financial liabilities	251,460		176,429		75,031		—		251,460
Federal Home Loan Bank advances and long-term debt	992,115		—		960,168		—		960,168
	December 31, 2017
	Amortized Cost		Level 1		Level 2		Level 3		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	108,291	$	108,291	$	—	$	—	$	108,291
Interest-bearing deposits with other banks	293,805		293,805		—		—		293,805
Federal Reserve Bank and Federal Home Loan Bank stock	60,761		—		60,761		—		60,761
Loans held for sale	31,530		—		31,530		—		31,530
Available for sale investment securities	2,547,956		918		2,444,613		102,425		2,547,956
Net Loans	15,598,337		—		—		15,380,974		15,380,974
Accrued interest receivable	52,910		52,910		—		—		52,910
Other financial assets	215,464		123,439		44,539		47,486		215,464
FINANCIAL LIABILITIES
Demand and savings deposits	$	13,042,147	$	13,042,147	$	—	$	—	$	13,042,147
Brokered deposits	90,473		90,473		—		—		90,473
Time deposits	2,664,912		—		2,664,912		—		2,664,912
Short-term borrowings	617,524		617,524		—		—		617,524
Accrued interest payable	9,317		9,317		—		—		9,317
Other financial liabilities	227,569		188,555		39,014		—		227,569
Federal Home Loan Bank advances and long-term debt	1,038,346		—		1,038,346		—		1,038,346