Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

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)
	September 30, 2014
	(Dollars in thousands)
Recurring fair value measurements
Assets
Securities available for sale
U.S. Government agency securities	$	41,287	$	—	$	41,287	$	—
Agency mortgage-backed securities	229,204		—		229,204		—
Agency collateralized mortgage obligations	65,586		—		65,586		—
State, county, and municipal securities	5,253		—		5,253		—
Single issuer trust preferred securities issued by banks	2,923		—		2,923		—
Pooled trust preferred securities issued by banks and insurers	5,386		—		—		5,386
Equity securities	11,816		11,816		—		—
Loans held for sale	12,580		—		12,580		—
Derivative instruments	19,150		—		19,150		—
Liabilities
Derivative instruments	24,778		—		24,778		—
Total recurring fair value measurements	$	368,407	$	11,816	$	351,205	$	5,386

Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	9,614	$	—	$	—	$	9,614
Other real estate owned and other foreclosed assets	9,632		—		—		9,632
Total nonrecurring fair value measurements	$	19,246	$	—	$	—	$	19,246



	December 31, 2013
	(Dollars in thousands)
Recurring fair value measurements
Assets
Securities available for sale
U.S. government agency securities	$	40,449	$	—	$	40,449	$	—
Agency mortgage-backed securities	234,591		—		234,591		—
Agency collateralized mortgage obligations	58,153		—		58,153		—
State, county, and municipal securities	5,412		—		5,412		—
Single issuer trust preferred securities issued by banks	2,952		—		2,952		—
Pooled trust preferred securities issued by banks and insurers	3,841		—		—		3,841
Equity securities	11,464		11,464		—		—
Loans held for sale	8,882		—		8,882		—
Derivative instruments	16,965		—		16,965		—
Liabilities
Derivative instruments	26,395		—		26,395		—
Total recurring fair value measurements	$	356,314	$	11,464	$	341,009	$	3,841

Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	10,328	$	—	$	—	$	10,328
Other real estate owned and other foreclosed assets	7,633		—		—		7,633
Total nonrecurring fair value measurements	$	17,961	$	—	$	—	$	17,961

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:
	(Dollars in thousands)
	Three Months Ended September 30, 2014								Three Months Ended September 30, 2013
	Pooled Trust Preferred Securities			Private Mortgage- Backed Securities		Total			Pooled Trust Preferred Securities			Private Mortgage- Backed Securities			Total
Beginning balance	$	5,091		$	—	$	5,091		$	3,617		$	3,036		$	6,653
Gains and (losses) (realized/unrealized)
Included in other comprehensive income	318			—		318			399			46			445
Settlements	(23		)	—		(23		)	(45		)	(219		)	(264		)
Ending balance	$	5,386		$	—	$	5,386		$	3,971		$	2,863		$	6,834



	Nine Months Ended September 30, 2014								Nine Months Ended September 30, 2013
	Pooled Trust Preferred Securities			Private Mortgage- Backed Securities		Total			Pooled Trust Preferred Securities			Private Mortgage- Backed Securities			Total
Beginning balance	$	3,841		$	—	$	3,841		$	2,981		$	3,532		$	6,513
Gains and (losses) (realized/unrealized)
Included in other comprehensive income	1,666			—		1,666			1,230			(43		)	1,187
Settlements	(121		)	—		(121		)	(240		)	(626		)	(866		)
Ending balance	$	5,386		$	—	$	5,386		$	3,971		$	2,863		$	6,834

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:



	September 30		December 31			September 30	December 31	September 30	December 31
	2014		2013			2014	2013	2014	2013
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in Thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	5,386	$	3,841	Cumulative prepayment	0% - 75%	0% - 76%	7.0%	7.2%
					Cumulative default	2.8% - 100%	3% - 100%	15.9%	18.1%
					Loss given default	85% - 100%	85% - 100%	95.9%	95.7%
					Cure given default	0% - 75%	0% - 75%	43.7%	39.9%
Appraisals of collateral (1)
Impaired loans	$	9,614	$	10,328
Other real estate owned and foreclosed assets	$	9,632	$	7,633


(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
	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	September 30, 2014
	(Dollars in thousands)
Financial assets
Securities held to maturity (a)
U.S. Treasury securities	$	1,010	$	1,060	$	—	$	1,060	$	—
Agency mortgage-backed securities	164,531		168,000		—		168,000		—
Agency collateralized mortgage obligations	199,950		197,277		—		197,277		—
State, county, and municipal securities	424		433		—		433		—
Single issuer trust preferred securities issued by banks	1,500		1,530		—		1,530		—
Corporate debt securities	5,003		5,165		—		5,165		—
Loans, net of allowance for loan losses (b)	4,892,850		4,855,967		—		—		4,855,967
Financial liabilities
Time certificates of deposits (c)	$	672,464	$	674,280	$	—	$	674,280	$	—
Federal Home Loan Bank borrowings (c)	60,127		60,087		—		60,087		—
Customer repurchase agreements and other short-term borrowings (c)	153,192		153,192		—		—		153,192
Wholesale repurchase agreements (c)	50,000		50,678		—		—		50,678
Junior subordinated debentures (d)	73,741		73,289		—		73,289		—
Subordinated debentures (c)	30,000		28,588		—		—		28,588



					Fair Value Measurements at Reporting Date Using
	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	December 31, 2013
	(Dollars in thousands)
Financial assets
Securities held to maturity (a)
U.S. Treasury securities	$	1,011	$	1,042	$	—	$	1,042	$	—
Agency mortgage-backed securities	155,067		155,951		—		155,951		—
Agency collateralized mortgage obligations	187,388		182,036		—		182,036		—
State, county, and municipal securities	678		685		—		685		—
Single issuer trust preferred securities issued by banks	1,503		1,526		—		1,526		—
Corporate debt securities	5,005		5,215		—		5,215		—
Loans, net of allowance for loan losses (b)	4,665,068		4,655,920		—		—		4,655,920
Financial liabilities
Time certificates of deposits (c)	$	743,628	$	746,908	$	—	$	746,908	$	—
Federal Home Loan Bank borrowings (c)	140,294		140,321		—		140,321		—
Customer repurchase agreements and other short-term borrowings (c)	154,288		154,349		—		—		154,349
Wholesale repurchase agreements (c)	50,000		51,298		—		—		51,298
Junior subordinated debentures (d)	73,906		67,481		—		67,481		—
Subordinated debentures (c)	30,000		28,396		—		—		28,396


(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.

- 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 fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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