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Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2017
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows as of the dates indicated:
 
 
 
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)
 
March 31, 2017
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Trading securities
$
1,289

 
$
1,289

 
$
—

 
$
—

Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
24,269

 
—

 
24,269

 
$
—

Agency mortgage-backed securities
188,334

 
—

 
188,334

 
—

Agency collateralized mortgage obligations
124,868

 
—

 
124,868

 
—

State, county, and municipal securities
3,787

 
—

 
3,787

 
—

Single issuer trust preferred securities issued by banks and insurers
2,320

 
—

 
2,320

 
—

Pooled trust preferred securities issued by banks and insurers
1,596

 
—

 
—

 
1,596

Small business administration pooled securities
37,002

 
—

 
37,002

 
—

Equity securities
19,661

 
19,661

 
—

 
—

Loans held for sale
3,398

 
—

 
3,398

 
—

Derivative instruments
20,119

 
—

 
20,119

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
19,025

 
—

 
19,025

 
—

Total recurring fair value measurements
$
407,618

 
$
20,950

 
$
385,072

 
$
1,596

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
35,247

 
$
—

 
$
—

 
$
35,247

Other real estate owned and other foreclosed assets
3,404

 
—

 
—

 
3,404

Total nonrecurring fair value measurements
$
38,651

 
$
—

 
$
—

 
$
38,651


 
 
 
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)
 
December 31, 2016
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Trading securities
$
804

 
$
804

 
$
—

 
$
—

Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
$
24,244

 
$
—

 
$
24,244

 
$
—

Agency mortgage-backed securities
175,384

 
—

 
175,384

 
—

Agency collateralized mortgage obligations
99,868

 
—

 
99,868

 
—

State, county, and municipal securities
3,793

 
—

 
3,793

 
—

Single issuer trust preferred securities issued by banks and insurers
2,311

 
—

 
2,311

 
—

Pooled trust preferred securities issued by banks and insurers
1,584

 
—

 
—

 
1,584

Small business administration pooled securities
37,189

 
—

 
37,189

 
—

Equity securities
19,271

 
19,271

 
—

 
—

Loans held for sale
6,139

 
—

 
6,139

 
—

Derivative instruments
22,761

 
—

 
22,761

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
21,916

 
—

 
21,916

 
—

Total recurring fair value measurements
$
371,432

 
$
20,075

 
$
349,773

 
$
1,584

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements:
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
33,974

 
$
—

 
$
—

 
$
33,974

Other real estate owned and other foreclosed assets
4,173

 
—

 
—

 
4,173

Total nonrecurring fair value measurements
$
38,147

 
$
—

 
$
—

 
$
38,147

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), which were valued using pricing models and discounted cash flow methodologies, as of the dates indicated:
 
Three Months Ended
 
March 31
 
2017
 
2016
 
(Dollars in thousands)
Pooled Trust Preferred Securities
 
 
 
Beginning balance
$
1,584

 
$
1,572

Gains and (losses) (realized/unrealized)
 
 
 
Included in other comprehensive income
11

 
(71
)
Settlements
1

 
(1
)
Ending balance
$
1,596

 
$
1,500


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:
 
 
March 31
2017
 
December 31
2016
 
 
 
March 31
2017
 
December 31
2016
 
March 31
2017
 
December 31
2016
Valuation Technique
 
Fair Value
 
Unobservable Inputs
 
Range
 
Weighted Average
 
 
(Dollars in thousands)
 
 
Discounted cash flow methodology
 
 
 
 
 
 
 
 
 
 
Pooled trust preferred securities
 
$
1,596

 
$
1,584

 
Cumulative prepayment
 
0% - 62%
 
0% - 62%
 
2.5%
 
2.5%
 
 
 
 
 
 
Cumulative default
 
5% - 100%
 
5% - 100%
 
12.8%
 
12.8%
 
 
 
 
 
 
Loss given default
 
85% - 100%
 
85% - 100%
 
94.3%
 
94.2%
 
 
 
 
 
 
Cure given default
 
0% - 75%
 
0% - 75%
 
60.9%
 
60.9%
Appraisals of collateral(1)
 
 
 
 
 
 
 
 
 
 
Collateral dependent impaired loans
 
$
35,247

 
$
33,974

 
 
 
 
 
 
 
 
 
 
Other real estate owned and foreclosed assets
 
$
3,404

 
$
4,173

 
 
 
 
 
 
 
 
 
 
 
(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)
  
March 31, 2017
 
(Dollars in thousands)
Financial assets
 
 
 
Securities held to maturity(a)
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
$
1,007

 
$
1,052

 
$
—

 
$
1,052

 
$
—

Agency mortgage-backed securities
184,317

 
185,576

 
—

 
185,576

 
—

Agency collateralized mortgage obligations
284,716

 
282,124

 
—

 
282,124

 
—

Single issuer trust preferred securities issued by banks
1,500

 
1,538

 
—

 
1,538

 
—

Small business administration pooled securities
30,583

 
30,627

 
—

 
30,627

 
—

Loans, net of allowance for loan losses(b)
5,966,801

 
5,839,125

 
—

 
—

 
5,839,125

Federal Home Loan Bank stock(c)
11,497

 
11,497

 
—

 
11,497

 
—

Cash surrender value of life insurance policies(d)
145,560

 
145,560

 
—

 
145,560

 
—

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities, other than time deposits(e)
$
5,854,822

 
5,854,822

 
—

 
5,854,822

 
—

Time certificates of deposits(f)
$
615,852

 
613,566

 
—

 
613,566

 
—

Federal Home Loan Bank borrowings(f)
50,811

 
50,831

 
—

 
50,831

 
—

Customer repurchase agreements and other short-term borrowings(f)
145,772

 
145,772

 
—

 
—

 
145,772

Junior subordinated debentures(g)
73,067

 
73,611

 
—

 
73,611

 
—

Subordinated debentures(f)
34,647

 
33,034

 
—

 
—

 
33,034

 

 
 
 
 
 
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, 2016
 
(Dollars in thousands)
Financial assets
 
Securities held to maturity(a)
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
$
1,007

 
$
1,054

 
$
—

 
$
1,054

 
$
—

Agency mortgage-backed securities
156,088

 
157,504

 
—

 
157,504

 
—

Agency collateralized mortgage obligations
297,445

 
294,650

 
—

 
294,650

 
—

Single issuer trust preferred securities issued by banks
1,500

 
1,544

 
—

 
1,544

 
—

Small business administration pooled securities
31,036

 
30,898

 
—

 
30,898

 
—

Loans, net of allowance for loan losses(b)
5,904,065

 
5,784,778

 
—

 
—

 
5,784,778

Federal Home Loan Bank stock(c)
11,497

 
11,497

 
—

 
11,497

 
—

Cash surrender value of life insurance policies(d)
144,503

 
144,503

 
—

 
144,503

 
—

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities, other than time deposits(e)
5,763,101

 
5,763,101

 
—

 
5,763,101

 
—

Time certificates of deposits(f)
649,152

 
647,038

 
—

 
647,038

 
—

Federal Home Loan Bank borrowings(f)
50,819

 
50,898

 
—

 
50,898

 
—

Customer repurchase agreements and other short-term borrowings(f)
176,913

 
176,913

 
—

 
—

 
176,913

Junior subordinated debentures(g)
73,107

 
72,510

 
—

 
72,510

 
—

Subordinated debentures(f)
34,635

 
34,241

 
—

 
—

 
34,241


(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 analysis.
(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. Additionally, this amount excludes collateral dependent impaired loans, which are deemed to be marked to fair value on a nonrecurring basis.
(c)
FHLB stock has no quoted market value and is carried at cost, therefore the carrying amount approximates fair value.
(d)
Cash surrender value of life insurance is recorded at its cash surrender value (or the amount that can be realized upon surrender of the policy), therefore carrying amount approximates fair value.
(e)
Fair value of demand deposits, savings and interest checking accounts and money market deposits is the amount payable on demand at the reporting date.
(f)
Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.
(g)
Fair value was determined based upon market prices of securities with similar terms and maturities.