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Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value at the periods indicated were as follows:

 
 
 
Fair Value Measurements at Reporting Date Using
 
Balance
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
June 30, 2013
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
$
19,593

 
$
—

 
$
19,593

 
$
—

Agency mortgage-backed securities
198,301

 
—

 
198,301

 
—

Agency collateralized mortgage obligations
66,096

 
—

 
66,096

 
—

Private mortgage-backed securities
3,036

 
—

 
—

 
3,036

Single issuer trust preferred securities issued by banks
2,244

 
—

 
2,244

 
—

Pooled trust preferred securities issued by banks and insurers
3,617

 
—

 
—

 
3,617

Marketable securities
10,968

 
10,968

 
—

 
—

Loans held for sale
32,497

 
—

 
32,497

 
—

Derivative instruments
20,796

 
—

 
20,796

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
31,501

 
—

 
31,501

 
—

Total recurring fair value measurements
$
325,647

 
$
10,968

 
$
308,026

 
$
6,653

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
10,105

 
$
—

 
$
—

 
$
10,105

Other real estate owned
9,211

 
—

 
—

 
9,211

Total nonrecurring fair value measurements
$
19,316

 
$
—

 
$
—

 
$
19,316


 
December 31, 2012
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
U.S. government agency securities
$
20,822

 
$
—

 
$
20,822

 
$
—

Agency mortgage-backed securities
221,425

 
—

 
221,425

 
—

Agency collateralized mortgage obligations
68,376

 
—

 
68,376

 
—

Private mortgage-backed securities
3,532

 
—

 
—

 
3,532

Single issuer trust preferred securities issued by banks
2,240

 
—

 
2,240

 
—

Pooled trust preferred securities issued by banks and insurers
2,981

 
—

 
—

 
2,981

Marketable securities
9,910

 
9,910

 
—

 
—

Loans held for sale
48,187

 
—

 
48,187

 
—

Derivative instruments
30,528

 
—

 
30,528

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
46,793

 
—

 
46,793

 
—

Total recurring fair value measurements
$
361,208

 
$
9,910

 
$
344,785

 
$
6,513

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
7,817

 
$
—

 
$
—

 
$
7,817

Other real estate owned
11,974

 
—

 
—

 
11,974

Total nonrecurring fair value measurements
$
19,791

 
$
—

 
$
—

 
$
19,791

Reconciliation for all assets and liabilities measured at fair value on a recurring basis
The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). These instruments were valued using pricing models and discounted cash flow methodologies.

 
Securities Available for Sale:
 
Pooled Trust
Preferred
Securities
 
Single Trust
Preferred
Securities
 
Private
Mortgage-
Backed
Securities
 
Total
 
(Dollars in thousands)
Balance at March 31, 2013
$
3,292

 
$
—

 
$
3,370

 
$
6,662

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in earnings
—

 
—

 
—

 
—

Included in other comprehensive income
351

 
—

 
(51
)
 
300

Purchases
—

 
—

 
—

 
—

Sales
—

 
—

 
—

 
—

Issuances
—

 
—

 
—

 
—

Settlements
(26
)
 
—

 
(283
)
 
(309
)
Transfers into (out of) level 3
—

 
—

 
—

 
—

Balance at June 30, 2013
$
3,617

 
$
—

 
$
3,036

 
$
6,653

 
 
 
 
 
 
 
 
Balance at January 1, 2012
$
2,820

 
$
4,210

 
$
6,110

 
$
13,140

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in earnings
—

 
—

 
(76
)
 
(76
)
Included in other comprehensive income
313

 
703

 
411

 
1,427

Purchases
—

 
—

 
—

 
—

Sales
—

 
—

 
—

 
—

Issuances
—

 
—

 
—

 
—

Settlements
(152
)
 
—

 
(2,913
)
 
(3,065
)
Transfers into (out of) level 3
—

 
(4,913
)
 
—

 
(4,913
)
Balance at December 31, 2012
$
2,981

 
$
—

 
$
3,532

 
$
6,513

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in earnings
—

 
—

 
—

 
—

Included in other comprehensive income
831

 
—

 
(89
)
 
742

Purchases
—

 
—

 
—

 
—

Sales
—

 
—

 
—

 
—

Issuances
—

 
—

 
—

 
—

Settlements
(195
)
 
—

 
(407
)
 
(602
)
Transfers into (out of) level 3
—

 
—

 
—

 
—

Balance at June 30, 2013
$
3,617

 
$
—

 
$
3,036

 
$
6,653

Investments in securities that are classified as level 3
The following table sets forth certain unobservable inputs regarding the Company’s investment in securities that are classified as Level 3 for the periods indicated:

 
Fair Value
 
Valuation Technique(s)
 
Unobservable Inputs
 
Range
 
Weighted
Average
 
(Dollars in thousands)
 
June 30, 2013
Pooled trust preferred securities
$
3,617

 
Discounted cash flow methodology
 
Cumulative Prepayment
 
0%-76.0%
 
7.2
%
 
 
 
 
 
Cumulative Default
 
2.0%-100.0%
 
18.6
%
 
 
 
 
 
Loss Given Default
 
85.0% - 100.0%
 
95.4
%
 
 
 
 
 
Cure Given Default
 
0% - 75.0%
 
36.6
%
Private mortgage-backed securities
$
3,036

 
Multi-dimensional spread tables
 
Cumulative Prepayment Rate
 
14.4%-14.5%
 
14.5
%
 
 
 
 
 
Constant Default Rate
 
0.8% -20.3%
 
4.0
%
 
 
 
 
 
Severity
 
21.0% -52.0%
 
34.1
%
Impaired loans
$
10,105

 
Appraisals of collateral (1)
 
 
 
 
 
 
Other real estate owned
$
9,211

 
Appraisals of collateral (1)
 
 
 
 
 
 
 
December 31, 2012
Pooled trust preferred securities
$
2,981

 
Discounted cash flow methodology
 
Cumulative Prepayment
 
0%-76.0%
 
7.5
%
 
 
 
 
 
Cumulative Default
 
3.0%-100.0%
 
19.6
%
 
 
 
 
 
Loss Given Default
 
85.0% - 100.0%
 
94.9
%
 
 
 
 
 
Cure Given Default
 
0% - 75.0%
 
33.8
%
Private mortgage-backed securities
$
3,532

 
Multi-dimensional spread tables
 
Cumulative Prepayment Rate
 
10.3%-14.5%
 
13.9
%
 
 
 
 
 
Constant Default Rate
 
0.9% -20.4%
 
4.0
%
 
 
 
 
 
Severity
 
20.0% -55.0%
 
33.6
%
Impaired loans
$
7,817

 
Appraisals of collateral (1)
 
 
 
 
 
 
Other real estate owned
$
11,974

 
Appraisals of collateral (1)
 
 
 
 
 
 
 
(1)
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.
The estimated fair values and related carrying amounts for assets and liabilities
The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the periods indicated:

 
 
 
 
 
Fair Value Measurements at Reporting Date Using
 
Book
Value
 
Fair
Value
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
  
June 30, 2013
 
(Dollars in thousands)
Financial assets
 
 
 
 
 
 
 
 
 
Securities held to maturity (a)
 
U.S. Treasury securities
$
1,012

 
$
1,074

 
—

 
$
1,074

 
—

Agency mortgage-backed securities
56,889

 
58,869

 
—

 
58,869

 
—

Agency collateralized mortgage obligations
159,945

 
158,211

 
—

 
158,211

 
—

State, county, and municipal securities
916

 
926

 
—

 
926

 
—

Single issuer trust preferred securities issued by banks
1,510

 
1,530

 
—

 
1,530

 
—

Corporate debt securities
5,006

 
5,241

 
—

 
5,241

 
—

Loans, net of allowance for loan losses (b)
4,477,135

 
4,433,316

 
—

 
—

 
4,433,316

Financial liabilities
 
 
 
 
 
 
 
 
 
Time certificates of deposits (c)
$
709,971

 
$
713,800

 
—

 
$
713,800

 
—

Federal home loan bank advances and other borrowings (c)
261,456

 
268,993

 
—

 
268,993

 
—

Wholesale and customer repurchase agreements (c)
191,826

 
193,497

 
—

 
—

 
193,497

Junior subordinated debentures (d)
74,018

 
75,805

 
—

 
75,805

 
—

Subordinated debentures (c)
30,000

 
20,758

 
—

 
—

 
20,758

  
December 31, 2012
 
(Dollars in thousands)
Financial assets
 
 
 
 
 
 
 
 
 
Securities held to maturity (a)
 
U.S. Treasury securities
$
1,013

 
$
1,134

 
$
—

 
$
1,134

 
$
—

Agency mortgage-backed securities
72,360

 
76,593

 
—

 
76,593

 
—

Agency collateralized mortgage obligations
97,507

 
100,380

 
—

 
100,380

 
—

State, county, and municipal securities
915

 
926

 
—

 
926

 
—

Single issuer trust preferred securities issued by banks
1,516

 
1,526

 
—

 
1,526

 
—

Corporate debt securities
5,007

 
5,265

 
—

 
5,265

 
—

Loans, net of allowance for loan losses (b)
4,467,177

 
4,462,580

 
—

 
—

 
4,462,580

Financial liabilities
 
 
 
 
 
 
 
 
 
Time certificates of deposits (c)
$
753,125

 
$
759,516

 
$
—

 
$
759,516

 
$
—

Federal home loan bank advances and other borrowings (c)
283,569

 
293,580

 
—

 
293,580

 
—

Wholesale and customer repurchase agreements (c)
203,359

 
201,189

 
—

 
—

 
201,189

Junior subordinated debentures (d)
74,127

 
74,416

 
—

 
74,416

 
—

Subordinated debentures (c)
30,000

 
22,762

 
—

 
—

 
22,762

 
(a)
The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analyses.
(b)
Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows.
(c)
Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.
(d)
Fair value was determined based upon market prices of securities with similar terms and maturities.