Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

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
September 30, 2016
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	2,209	$	—	$	2,209
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		412,200		—		412,200
Government agency collateralized mortgage obligations	—		170,290		—		170,290
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		54,906		—		54,906
Government agency collateralized mortgage obligations	—		2,668		—		2,668
Trust preferred securities	—		—		18,092		18,092
Other debt securities	—		17,273		—		17,273
Other equity securities	—		—		—		—
Total securities available for sale	—		659,546		18,092		677,638
Derivative instruments:
Interest rate contracts	—		4,784		—		4,784
Interest rate lock commitments	—		7,866		—		7,866
Forward commitments	—		12		—		12
Total derivative instruments	—		12,662		—		12,662
Mortgage loans held for sale	—		189,965		—		189,965
Total financial assets	$	—	$	862,173	$	18,092	$	880,265
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	6,225	$	—	$	6,225
Interest rate contracts	—		4,784		—		4,784
Interest rate lock commitments	—		—		—		—
Forward commitments	—		1,674		—		1,674
Total derivative instruments	—		12,683		—		12,683
Total financial liabilities	$	—	$	12,683	$	—	$	12,683



	Level 1		Level 2		Level 3		Totals
December 31, 2015
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	6,200	$	—	$	6,200
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		364,540		—		364,540
Government agency collateralized mortgage obligations	—		168,060		—		168,060
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		59,759		—		59,759
Government agency collateralized mortgage obligations	—		5,104		—		5,104
Trust preferred securities	—		—		19,469		19,469
Other debt securities	—		19,333		—		19,333
Other equity securities	—		4,340		—		4,340
Total securities available for sale	—		627,336		19,469		646,805
Derivative instruments:
Interest rate contracts	—		2,544		—		2,544
Interest rate lock commitments	—		4,508		—		4,508
Forward commitments	—		446		—		446
Total derivative instruments	—		7,498		—		7,498
Mortgage loans held for sale	—		225,254		—		225,254
Total financial assets	$	—	$	860,088	$	19,469	$	879,557
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	4,266	$	—	$	4,266
Interest rate contracts	—		2,544		—		2,544
Forward commitments	—		509		—		509
Total derivative instruments	—		7,319		—		7,319
Total financial liabilities	$	—	$	7,319	$	—	$	7,319

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 nine months ended September 30, 2016 and 2015, respectively:



Three Months Ended September 30, 2016	Trust preferred securities
Balance at July 1, 2016	$	18,179
Accretion included in net income	8
Unrealized losses included in other comprehensive income	(41		)
Purchases	—
Sales	—
Issues	—
Settlements	(54		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2016	$	18,092



Three Months Ended September 30, 2015	Trust preferred securities
Balance at July 1, 2015	$	19,127
Accretion included in net income	8
Unrealized losses included in other comprehensive income	(200		)
Purchases	—
Sales	—
Issues	—
Settlements	(45		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2015	$	18,890



Nine Months Ended September 30, 2016	Trust preferred securities
Balance at January 1, 2016	$	19,469
Accretion included in net income	23
Unrealized losses included in other comprehensive income	(168		)
Purchases	—
Sales	—
Issues	—
Settlements	(1,232		)
Transfers into Level 3
Transfers out of Level 3	—
Balance at September 30, 2016	$	18,092



Nine Months Ended September 30, 2015	Trust preferred securities
Balance at January 1, 2015	$	19,756
Accretion included in net income	(70		)
Unrealized gains included in other comprehensive income	822
Purchases	—
Sales	(1,117		)
Issues	—
Settlements	(501		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2015	$	18,890

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 September 30, 2016 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	$	18,092	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:



September 30, 2016	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	7,187	$	7,187
OREO	—		—		8,810		8,810
Mortgage servicing rights	—		—		22,606		22,606
Total	$	—	$	—	$	38,603	$	38,603



December 31, 2015	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	6,508	$	6,508
OREO	—		—		12,839		12,839
Total	$	—	$	—	$	19,347	$	19,347

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:



	September 30, 2016			December 31, 2015
OREO covered under loss-share agreements:
Carrying amount prior to remeasurement	$	84		$	—
Impairment recognized in results of operations	(9		)	—
Increase in FDIC loss-share indemnification asset	(37		)	—
Receivable from other guarantor	—			—
Fair value	$	38		$	—
OREO not covered under loss-share agreements:
Carrying amount prior to remeasurement	$	10,856		$	14,726
Impairment recognized in results of operations	(2,084		)	(1,887		)
Fair value	$	8,772		$	12,839

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	$	7,187	Appraised value of collateral less estimated costs to sell	Estimated costs to sell	4-10%
OREO	8,810		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:



September 30, 2016	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	189,965	$	183,357	$	6,608
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 September 30, 2016	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	217,391	$	217,391	$	—	$	—	$	217,391
Securities held to maturity	362,319		—		381,950		—		381,950
Securities available for sale	677,638		—		659,546		18,092		677,638
Mortgage loans held for sale	189,965		—		189,965		—		189,965
Loans covered under loss-share agreements	30,533		—		—		30,704		30,704
Loans not covered under loss-share agreements, net	6,028,776		—		—		6,016,370		6,016,370
FDIC loss-share indemnification asset	4,053		—		—		4,053		4,053
Mortgage servicing rights	22,125		—		—		22,606		22,606
Derivative instruments	12,662		—		12,662		—		12,662
Financial liabilities
Deposits	$	6,817,798	$	5,190,976	$	1,631,027	$	—	$	6,822,003
Short-term borrowings	266,943		266,943		—		—		266,943
Other long-term borrowings	158		158		—		—		158
Federal Home Loan Bank advances	8,807		—		9,363		—		9,363
Junior subordinated debentures	95,506		—		73,301		—		73,301
Subordinated notes	98,167		—		102,500		—		102,500
Derivative instruments	12,683		—		12,683		—		12,683



			Fair Value
As of December 31, 2015	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	211,571	$	211,571	$	—	$	—	$	211,571
Securities held to maturity	458,400		—		473,753		—		473,753
Securities available for sale	646,805		—		627,336		19,469		646,805
Mortgage loans held for sale	225,254		—		225,254		—		225,254
Loans covered under loss-share agreements	93,142		—		—		92,528		92,528
Loans not covered under loss-share agreements, net	5,277,883		—		—		5,208,630		5,208,630
FDIC loss-share indemnification asset	7,149		—		—		7,149		7,149
Mortgage servicing rights	29,642		—		—		33,283		33,283
Derivative instruments	7,498		—		7,498		—		7,498
Financial liabilities
Deposits	$	6,218,602	$	4,723,312	$	1,502,202	$	—	$	6,225,514
Short-term borrowings	422,279		422,279		—		—		422,279
Other long-term borrowings	192		192		—		—		192
Federal Home Loan Bank advances	52,930		—		56,101		—		56,101
Junior subordinated debentures	95,095		—		78,095		—		78,095
Derivative instruments	7,319		—		7,319		—		7,319

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- 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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