Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Assets and liabilities measured at fair value 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, 2018
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	3,506	$	—	$	3,506
Obligations of states and political subdivisions	—		210,319		—		210,319
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		560,587		—		560,587
Government agency collateralized mortgage obligations	—		307,228		—		307,228
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		21,735		—		21,735
Government agency collateralized mortgage obligations	—		28,962		—		28,962
Trust preferred securities	—		—		10,304		10,304
Other debt securities	—		34,965		—		34,965
Total securities available for sale	—		1,167,302		10,304		1,177,606
Derivative instruments:
Interest rate swaps	—		772		—		772
Interest rate contracts	—		4,370		—		4,370
Interest rate lock commitments	—		4,309		—		4,309
Forward commitments	—		1,665		—		1,665
Total derivative instruments	—		11,116		—		11,116
Mortgage loans held for sale in loans held for sale	—		252,025		—		252,025
Total financial assets	$	—	$	1,430,443	$	10,304	$	1,440,747
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	781	$	—	$	781
Interest rate contracts	—		4,370		—		4,370
Interest rate lock commitments	—		83		—		83
Forward commitments	—		79		—		79
Total derivative instruments	—		5,313		—		5,313
Total financial liabilities	$	—	$	5,313	$	—	$	5,313



	Level 1		Level 2		Level 3		Totals
December 31, 2017
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	3,564	$	—	$	3,564
Obligations of states and political subdivisions	—		234,481		—		234,481
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		193,950		—		193,950
Government agency collateralized mortgage obligations	—		176,639		—		176,639
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		31,170		—		31,170
Government agency collateralized mortgage obligations	—		5,006		—		5,006
Trust preferred securities	—		—		9,388		9,388
Other debt securities	—		17,290		—		17,290
Total securities available for sale	—		662,100		9,388		671,488
Derivative instruments:
Interest rate contracts	—		3,171		—		3,171
Interest rate lock commitments	—		2,756		—		2,756
Forward commitments	—		50		—		50
Total derivative instruments	—		5,977		—		5,977
Mortgage loans held for sale	—		108,316		—		108,316
Total financial assets	$	—	$	776,393	$	9,388	$	785,781
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	2,536	$	—	$	2,536
Interest rate contracts	—		3,171		—		3,171
Interest rate lock commitments	—		4		—		4
Forward commitments	—		328		—		328
Total derivative instruments	—		6,039		—		6,039
Total financial liabilities	$	—	$	6,039	$	—	$	6,039

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, as of the dates presented:



Three Months Ended September 30, 2018	Trust preferred securities
Balance at July 1, 2018	$	10,401
Accretion included in net income	8
Unrealized gains included in other comprehensive income	(45		)
Purchases	—
Sales	—
Issues	—
Settlements	(60		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2018	$	10,304



Three Months Ended September 30, 2017	Trust preferred securities
Balance at July 1, 2017	$	16,992
Accretion included in net income	28
Unrealized gains included in other comprehensive income	1,307
Purchases	—
Sales	(9,346		)
Issues	—
Settlements	(21		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2017	$	8,960




Nine Months Ended September 30, 2018	Trust preferred securities
Balance at January 1, 2018	$	9,388
Accretion included in net income	25
Unrealized gains included in other comprehensive income	1,007
Purchases	—
Sales	—
Issues	—
Settlements	(116		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2018	$	10,304



Nine Months Ended September 30, 2017	Trust preferred securities
Balance at January 1, 2017	$	18,389
Accretion included in net income	74
Unrealized losses included in other comprehensive income	1,866
Reclassification adjustment	—
Purchases	—
Sales	(9,346		)
Issues	—
Settlements	(2,023		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at September 30, 2017	$	8,960

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, 2018 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	$	10,304	Discounted cash flows	Default rate	0-100%

Assets 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, 2018	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	14,207	$	14,207
OREO	—		—		4,162		4,162
Total	$	—	$	—	$	18,369	$	18,369



December 31, 2017	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	9,251	$	9,251
OREO	—		—		7,392		7,392
Total	$	—	$	—	$	16,643	$	16,643

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, 2018			December 31, 2017
Carrying amount prior to remeasurement	$	4,989		$	8,732
Impairment recognized in results of operations	(827		)	(1,340		)
Fair value	$	4,162		$	7,392

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	$	14,207	Appraised value of collateral less estimated costs to sell	Estimated costs to sell	4-10%
OREO	4,162		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, 2018:



	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	252,025	$	246,806	$	5,219
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, 2018	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	369,596	$	369,596	$	—	$	—	$	369,596
Securities available for sale	1,177,606		—		1,167,302		10,304		1,177,606
Loans held for sale	463,287		—		252,025		211,262		463,287
Loans, net	9,074,297		—		—		8,872,325		8,872,325
Mortgage servicing rights	46,413		—		—		61,655		61,655
Derivative instruments	11,116		—		11,116		—		11,116
Financial liabilities
Deposits	$	10,171,948	$	7,768,192	$	2,397,492	$	—	$	10,165,684
Short-term borrowings	175,559		175,559		—		—		175,559
Other long-term borrowings	61		61		—		—		61
Federal Home Loan Bank advances	6,887		—		6,906		—		6,906
Junior subordinated debentures	109,492		—		107,285		—		107,285
Subordinated notes	147,517		—		149,762		—		149,762
Derivative instruments	5,313		—		5,313		—		5,313



			Fair Value
As of December 31, 2017	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	281,453	$	281,453	$	—	$	—	$	281,453
Securities available for sale	671,488		—		662,100		9,388		671,488
Loans held for sale	108,316		—		108,316		—		108,316
Loans, net	7,574,111		—		—		7,514,185		7,514,185
Mortgage servicing rights	39,339		—		—		47,868		47,868
Derivative instruments	5,977		—		5,977		—		5,977
Financial liabilities
Deposits	$	7,921,075	$	6,114,391	$	1,809,085	$	—	$	7,923,476
Short-term borrowings	89,814		89,814		—		—		89,814
Other long-term borrowings	98		98		—		—		98
Federal Home Loan Bank advances	7,493		—		7,661		—		7,661
Junior subordinated debentures	85,881		—		69,702		—		69,702
Subordinated notes	114,074		—		118,650		—		118,650
Derivative instruments	6,039		—		6,039		—		6,039

- 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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