Fair Value Measurement of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2017

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, 2017 and 2016. 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, 2017		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	$	49,642	$	49,642	$	—	$	—
U.S. government agency securities	42,505		—		42,505		—
Obligations of states and political subdivisions	112,884		—		112,884		—
Residential mortgage-backed securities	1,223,295		—		1,215,935		7,360
Trust preferred securities	3,214		—		3,214		—
Corporate and other debt securities	51,164		7,783		43,381		—
Equity securities	11,201		1,382		9,819		—
Total available for sale	1,493,905		58,807		1,427,738		7,360
Loans held for sale ⁽¹⁾	15,119		—		15,119		—
Other assets ⁽²⁾	26,417		—		26,417		—
Total assets	$	1,535,441	$	58,807	$	1,469,274	$	7,360
Liabilities
Other liabilities ⁽²⁾	$	24,330	$	—	$	24,330	$	—
Total liabilities	$	24,330	$	—	$	24,330	$	—
Non-recurring fair value measurements:
Collateral dependent impaired loans ⁽³⁾	$	48,373	$	—	$	—	$	48,373
Loan servicing rights	5,350		—		—		5,350
Foreclosed assets	3,472		—		—		3,472
Total	$	57,195	$	—	$	—	$	57,195



			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	4,532		—		—		4,532
Total	$	16,406	$	—	$	—	$	16,406


⁽¹⁾	Represents residential mortgage loans held for sale that are carried at fair value and had contractual unpaid principal balances totaling approximately $14.8 million and $58.2 million at December 31, 2017 and 2016, respectively.


⁽²⁾	Derivative financial instruments are included in this category.


⁽³⁾	Excludes PCI loans.

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

The changes in Level 3 assets measured at fair value on a recurring basis for the years ended December 31, 2017, 2016 and 2015 are summarized below:



	Available For Sale Securities
	2017			2016			2015
	(in thousands)
Balance, beginning of the period	$	11,888		$	13,793		$	19,309
Net losses included in other comprehensive income	(251		)	(203		)	(1,072		)
Sales	(1,935		)	—			(2,674		)
Settlements, net	(2,342		)	(1,702		)	(1,770		)
Balance, end of the period	$	7,360		$	11,888		$	13,793

Schedule of Quantitative Information of 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, 2017:



Security Type	Valuation Technique	Unobservable Input	Range	Weighted Average
Private label mortgage-backed securities	Discounted cash flow	Prepayment rate	11.5 - 27.3%	19.1	%
		Default rate	0.9 - 38.9	8.3
		Loss severity	45.0 - 62.6	57.1

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, 2017 and 2016 were as follows:



		December 31,
		2017				2016
	Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in thousands)
Financial assets
Cash and due from banks	Level 1	$	243,310	$	243,310	$	220,791	$	220,791
Interest bearing deposits with banks	Level 1	172,800		172,800		171,710		171,710
Investment securities held to maturity:
U.S. Treasury securities	Level 1	138,676		145,257		138,830		147,495
U.S. government agency securities	Level 2	9,859		9,981		11,329		11,464
Obligations of states and political subdivisions	Level 2	465,878		477,479		566,590		577,826
Residential mortgage-backed securities	Level 2	1,131,945		1,118,044		1,112,460		1,102,802
Trust preferred securities	Level 2	49,824		40,088		59,804		47,290
Corporate and other debt securities	Level 2	46,509		46,771		36,559		37,720
Total investment securities held to maturity		1,842,691		1,837,620		1,925,572		1,924,597
Net loans	Level 3	18,210,724		17,562,153		17,121,684		16,756,655
Accrued interest receivable	Level 1	73,990		73,990		66,816		66,816
Federal Reserve Bank and Federal Home Loan Bank stock ⁽¹⁾	Level 1	178,668		178,668		147,127		147,127
Financial liabilities
Deposits without stated maturities	Level 1	14,589,941		14,589,941		14,591,837		14,591,837
Deposits with stated maturities	Level 2	3,563,521		3,465,373		3,138,871		3,160,572
Short-term borrowings	Level 1	748,628		679,316		1,080,960		1,081,751
Long-term borrowings	Level 2	2,315,819		2,453,797		1,433,906		1,523,386
Junior subordinated debentures issued to capital trusts	Level 2	41,774		37,289		41,577		45,785
Accrued interest payable ⁽²⁾	Level 1	14,161		14,161		10,675		10,675


⁽¹⁾	Included in other assets.


⁽²⁾	Included in accrued expenses and other liabilities.