Fair Value Measurement of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

Assets and Liabilities Measured at Fair Value on Recurring and Non-Recurring Basis

The following tables present the assets and liabilities that are measured at fair value on a recurring and non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial condition at December 31, 2016 and 2015. The assets presented under “non-recurring fair value measurements” in the table below are not measured at fair value on an ongoing basis but are subject to fair value adjustments under certain circumstances (e.g., when an impairment loss is recognized).



			Fair Value Measurements at Reporting Date Using:
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	49,591	$	49,591	$	—	$	—
U.S. government agency securities	23,041		—		23,041		—
Obligations of states and political subdivisions	119,767		—		119,767		—
Residential mortgage-backed securities	1,015,542		—		1,005,589		9,953
Trust preferred securities	8,009		—		6,074		1,935
Corporate and other debt securities	60,565		8,064		52,501		—
Equity securities	20,858		1,306		19,552		—
Total available for sale	1,297,373		58,961		1,226,524		11,888
Loans held for sale ⁽¹⁾	57,708		—		57,708		—
Other assets ⁽²⁾	29,055		—		29,055		—
Total assets	$	1,384,136	$	58,961	$	1,313,287	$	11,888
Liabilities
Other liabilities ⁽²⁾	$	44,077	$	—	$	44,077	$	—
Total liabilities	$	44,077	$	—	$	44,077	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans ⁽³⁾	$	5,385	$	—	$	—	$	5,385
Loan servicing rights	6,489		—		—		6,489
Foreclosed assets ⁽⁴⁾	4,532		—		—		4,532
Total	$	16,406	$	—	$	—	$	16,406



			Fair Value Measurements at Reporting Date Using:
	December 31, 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Recurring fair value measurements:
Assets
Investment securities:
Available for sale:
U.S. Treasury securities	$	549,473	$	549,473	$	—	$	—
U.S. government agency securities	29,963		—		29,963		—
Obligations of states and political subdivisions	124,966		—		124,966		—
Residential mortgage-backed securities	696,428		—		684,777		11,651
Trust preferred securities	8,404		—		6,262		2,142
Corporate and other debt securities	77,552		17,710		59,842		—
Equity securities	20,075		1,198		18,877		—
Total available for sale	1,506,861		568,381		924,687		13,793
Loans held for sale ⁽¹⁾	16,382		—		16,382		—
Other assets ⁽²⁾	33,774		—		33,774		—
Total assets	$	1,557,017	$	568,381	$	974,843	$	13,793
Liabilities
Other liabilities ⁽²⁾	$	50,844	$	—	$	50,844	$	—
Total liabilities	$	50,844	$	—	$	50,844	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans ⁽³⁾	$	15,427	$	—	$	—	$	15,427
Loan servicing rights	2,571		—		—		2,571
Foreclosed assets ⁽⁴⁾	16,672		—		—		16,672
Total	$	34,670	$	—	$	—	$	34,670


⁽¹⁾	Loans held for sale (which consist of residential mortgages) are carried at fair value and had contractual unpaid principal balances totaling approximately $58.2 million and $16.1 million at December 31, 2016 and 2015, respectively.


⁽²⁾	Amount represents derivative financial instruments.


⁽³⁾	Excludes PCI loans.


⁽⁴⁾	Includes covered other real estate owned totaling $300 thousand and $4.2 million at December 31, 2016 and 2015, respectively.

Changes in Level 3 Assets Measured at Fair Value on Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis for the years ended December 31, 2016, 2015 and 2014 are summarized below:



	Available For Sale Securities
	2016			2015			2014
	(in thousands)
Balance, beginning of the period	$	13,793		$	19,309		$	28,523
Net (losses) gains included in other comprehensive income	(203		)	(1,072		)	1,648
Sales	—			(2,674		)	(7,718		)
Settlements, net	(1,702		)	(1,770		)	(3,144		)
Balance, end of the period	$	11,888		$	13,793		$	19,309

Schedule of Quantitative Information about Level 3 Inputs Used to Measure Fair Value of Available for Sale Securities

The following table presents quantitative information about Level 3 inputs used to measure the fair value of these securities at December 31, 2016:



Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	15.0 - 22.5%	19.1	%
		Default rate	3.6 - 33.2	9.0
		Loss severity	45.6 - 66.0	60.0

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not measured and not reported at fair value on the consolidated statements of financial condition at December 31, 2016 and 2015 were as follows:



		December 31,
		2016				2015
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	220,791	$	220,791	$	243,575	$	243,575
Interest bearing deposits with banks	Level 1	171,710		171,710		170,225		170,225
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,830		147,495		138,978		149,483
U.S. government agency securities	Level 2	11,329		11,464		12,859		13,130
Obligations of states and political subdivisions	Level 2	566,590		577,826		504,865		527,263
Residential mortgage-backed securities	Level 2	1,112,460		1,102,802		852,289		855,272
Trust preferred securities	Level 2	59,804		47,290		59,785		46,437
Corporate and other debt securities	Level 2	36,559		37,720		27,609		29,454
Total investment securities held to maturity		1,925,572		1,924,597		1,596,385		1,621,039
Net loans	Level 3	17,121,684		16,756,655		15,936,929		15,824,475
Accrued interest receivable	Level 1	66,816		66,816		63,554		63,554
Federal Reserve Bank and Federal Home Loan Bank stock ⁽¹⁾	Level 1	147,127		147,127		145,068		145,068
Financial liabilities
Deposits without stated maturities	Level 1	14,591,837		14,591,837		13,095,647		13,095,647
Deposits with stated maturities	Level 2	3,138,871		3,160,572		3,157,904		3,203,389
Short-term borrowings	Level 1	1,080,960		1,081,751		1,076,991		1,076,991
Long-term borrowings	Level 2	1,433,906		1,523,386		1,810,728		1,945,741
Junior subordinated debentures issued to capital trusts	Level 2	41,577		45,785		41,414		44,127
Accrued interest payable ⁽²⁾	Level 1	10,675		10,675		13,110		13,110


⁽¹⁾	Included in other assets.


⁽²⁾	Included in accrued expenses and other liabilities.