Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair values of financial assets and liabilities measured on a recurring basis

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:



	Level 1		Level 2		Level 3		Totals
June 30, 2015
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	6,203	$	—	$	6,203
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		283,411		—		283,411
Government agency collateralized mortgage obligations	—		150,511		—		150,511
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		42,693		—		42,693
Government agency collateralized mortgage obligations	—		3,665		—		3,665
Trust preferred securities	—		—		19,127		19,127
Other debt securities	—		16,781		—		16,781
Other equity securities	—		3,829		—		3,829
Total securities available for sale	—		507,093		19,127		526,220
Derivative instruments:
Interest rate swaps	—		—		—		—
Interest rate contracts	—		2,002		—		2,002
Interest rate lock commitments	—		3,191		—		3,191
Forward commitments	—		1,543		—		1,543
Total derivative instruments	—		6,736		—		6,736
Mortgage loans held for sale	—		108,023		—		108,023
Total financial assets	$	—	$	621,852	$	19,127	$	640,979
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	3,532	$	—	$	3,532
Interest rate contracts	—		2,002		—		2,002
Interest rate lock commitments	—		150		—		150
Forward commitments	—		130		—		130
Total derivative instruments	—		5,814		—		5,814
Total financial liabilities	$	—	$	5,814	$	—	$	5,814



	Level 1		Level 2		Level 3		Totals
December 31, 2014
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	6,147	$	—	$	6,147
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		296,359		—		296,359
Government agency collateralized mortgage obligations	—		157,436		—		157,436
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		47,185		—		47,185
Government agency collateralized mortgage obligations	—		5,172		—		5,172
Trust preferred securities	—		—		19,756		19,756
Other debt securities	—		17,930		—		17,930
Other equity securities	—		3,599		—		3,599
Total securities available for sale	—		533,828		19,756		553,584
Derivative instruments:
Interest rate swap	—		—		—		—
Interest rate contracts	—		2,142		—		2,142
Interest rate lock commitments	—		1,584		—		1,584
Forward commitments	—		5		—		5
Total derivative instruments	—		3,731		—		3,731
Mortgage loans held for sale	—		25,628		—		25,628
Total financial assets	$	—	$	563,187	$	19,756	$	582,943
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	3,847	$	—	$	3,847
Interest rate contracts	—		2,143		—		2,143
Interest rate lock commitments	—		—		—		—
Forward commitments	—		303		—		303
Total derivative instruments	—		6,293		—		6,293
Total financial liabilities	$	—	$	6,293	$	—	$	6,293

Reconciliation for assets and liabilities measured at fair value on a recurring basis

The following tables provide a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, during the three and six months ended June 30, 2015 and 2014, respectively:



	Securities available for sale
Three Months Ended June 30, 2015	Trust preferred securities			Total
Balance at April 1, 2015	$	20,126		$	20,126
Accretion included in net income	(86		)	(86		)
Unrealized gains included in other comprehensive income	308			308
Purchases	—			—
Sales	(1,117		)	(1,117		)
Issues	—			—
Settlements	(104		)	(104		)
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Balance at June 30, 2015	$	19,127		$	19,127



	Securities available for sale
Three Months Ended June 30, 2014	Trust preferred securities			Total
Balance at April 1, 2014	$	19,378		$	19,378
Accretion included in net income	16			16
Unrealized gains included in other comprehensive income	(926		)	(926		)
Reclassification adjustment	—			—
Purchases	—			—
Sales	—			—
Issues	—			—
Settlements	(159		)	(159		)
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Balance at June 30, 2014	$	18,309		$	18,309




	Securities available for sale
Six Months Ended June 30, 2015	Trust preferred securities			Total
Balance at January 1, 2015	$	19,756		$	19,756
Realized gains included in net income	(78		)	(78		)
Unrealized gains included in other comprehensive income	1,022			1,022
Purchases	—			—
Sales	(1,117		)	(1,117		)
Issues	—			—
Settlements	(456		)	(456		)
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Balance at June 30, 2015	$	19,127		$	19,127




	Securities available for sale
Six Months Ended June 30, 2014	Trust preferred securities			Total
Balance at January 1, 2014	$	17,671		$	17,671
Realized gains included in net income	16			16
Unrealized gains included in other comprehensive income	798			798
Reclassification adjustment	—			—
Purchases	—			—
Sales	—			—
Issues	—			—
Settlements	(176		)	(176		)
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Balance at June 30, 2014	$	18,309		$	18,309

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on recurring basis

The following table presents information as of June 30, 2015 about significant unobservable inputs (Level 3) used in the valuation of assets and liabilities measured at fair value on a recurring basis:



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Trust preferred securities	$	19,127	Discounted cash flows	Default rate	0-100%

Impaired loans measured at fair value on a nonrecurring basis

The following table provides the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets as of the dates presented and the level within the fair value hierarchy each is classified:



June 30, 2015	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	6,485	$	6,485
OREO	—		—		6,402		6,402
Total	$	—	$	—	$	12,887	$	12,887



December 31, 2014	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	12,360	$	12,360
OREO	—		—		4,460		4,460
Total	$	—	$	—	$	16,820	$	16,820

OREO measured at fair value on a nonrecurring basis

The following table presents OREO measured at fair value on a nonrecurring basis that was still held in the Consolidated Balance Sheets as of the dates presented:



	June 30, 2015			December 31, 2014
OREO covered under loss-share agreements:
Carrying amount prior to remeasurement	$	589		$	3,162
Impairment recognized in results of operations	(50		)	(185		)
Increase in FDIC loss-share indemnification asset	(198		)	(742		)
Receivable from other guarantor	—			(422		)
Fair value	$	341		$	1,813
OREO not covered under loss-share agreements:
Carrying amount prior to remeasurement	$	7,403		$	3,513
Impairment recognized in results of operations	(1,342		)	(866		)
Fair value	$	6,061		$	2,647

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on non recurring basis



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Impaired loans	$	6,485	Appraised value of collateral less estimated costs to sell	Estimated costs to sell	4-10%
OREO	6,402		Appraised value of property less estimated costs to sell	Estimated costs to sell	4-10%

Summarizes differences between fair value and principal balance for mortgage loans held for sale measure at fair value

The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of:



June 30, 2015	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	108,023	$	107,831	$	192
Past due loans of 90 days or more	—		—		—
Nonaccrual loans	—		—		—

Assets and liabilities not measured and reported at fair value on a recurring basis or nonrecurring basis

The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows as of the dates presented:



			Fair Value
As of June 30, 2015	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	154,962	$	154,962	$	—	$	—	$	154,962
Securities held to maturity	439,070		—		447,660		—		447,660
Securities available for sale	526,220		—		507,093		19,127		526,220
Mortgage loans held for sale	108,023		—		108,023		—		108,023
Loans covered under loss-share agreements	121,626		—		—		122,120		122,120
Loans not covered under loss-share agreements, net	3,873,690		—		—		3,828,476		3,828,476
FDIC loss-share indemnification asset	6,659		—		—		6,659		6,659
Mortgage servicing rights	12,920		—		—		14,457		14,457
Derivative instruments	6,736		—		6,736		—		6,736
Financial liabilities
Deposits	$	4,890,444	$	3,339,035	$	1,177,938	$	—	$	4,516,973
Short-term borrowings	64,229		64,229		—		—		64,229
Federal Home Loan Bank advances	59,824		—		63,821		—		63,821
Junior subordinated debentures	94,821		—		80,971		—		80,971
Derivative instruments	5,814		—		5,814		—		5,814



			Fair Value
As of December 31, 2014	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	161,583	$	161,583	$	—	$	—	$	161,583
Securities held to maturity	430,163		—		442,488		—		442,488
Securities available for sale	553,584		—		533,828		19,756		553,584
Mortgage loans held for sale	25,628		—		25,628		—		25,628
Loans covered under loss-share agreements	143,041		—		—		143,487		143,487
Loans not covered under loss-share agreements, net	3,844,833		—		—		3,751,727		3,751,727
FDIC loss-share indemnification asset	12,516		—		—		12,516		12,516
Mortgage servicing rights	11,662		—		—		12,378		12,378
Derivative instruments	3,731		—		3,731		—		3,731
Financial liabilities
Deposits	$	4,838,418	$	3,532,266	$	1,309,421	$	—	$	4,841,687
Short-term borrowings	32,403		32,403		—		—		32,403
Federal Home Loan Bank advances	61,611		—		92,532		—		92,532
Junior subordinated debentures	94,574		—		80,971		—		80,971
Derivative instruments	6,293		—		6,293		—		6,293

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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