Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

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, 2018
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	1,601	$	1,601	$	—	$	—
Equity securities	20,075		20,075		—		—
Securities available for sale
U.S. Government agency securities	34,943		—		34,943		—
Agency mortgage-backed securities	223,211		—		223,211		—
Agency collateralized mortgage obligations	135,192		—		135,192		—
State, county, and municipal securities	2,254		—		2,254		—
Single issuer trust preferred securities issued by banks and insurers	2,005		—		2,005		—
Pooled trust preferred securities issued by banks and insurers	1,655		—		—		1,655
Small business administration pooled securities	46,490		—		46,490		—
Loans held for sale	3,937		—		3,937		—
Derivative instruments	21,040		—		21,040		—
Liabilities
Derivative instruments	18,891		—		18,891		—
Total recurring fair value measurements	$	473,512	$	21,676	$	450,181	$	1,655
Nonrecurring fair value measurements
Assets
Collateral dependent impaired loans	$	32,113	$	—	$	—	$	32,113
Other real estate owned and other foreclosed assets	358		—		—		358
Total nonrecurring fair value measurements	$	32,471	$	—	$	—	$	32,471

			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, 2017
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	1,324	$	1,324	$	—	$	—
Equity securities	20,584		20,584		—		—
Securities available for sale
U.S. Government agency securities	35,430		—		35,430		—
Agency mortgage-backed securities	215,764		—		215,764		—
Agency collateralized mortgage obligations	122,012		—		122,012		—
State, county, and municipal securities	2,274		—		2,274		—
Single issuer trust preferred securities issued by banks and insurers	2,016		—		2,016		—
Pooled trust preferred securities issued by banks and insurers	1,640		—		—		1,640
Small business administration pooled securities	47,778		—		47,778		—
Loans held for sale	4,768		—		4,768		—
Derivative instruments	17,476		—		17,476		—
Liabilities
Derivative instruments	15,693		—		15,693		—
Total recurring fair value measurements	$	455,373	$	21,908	$	431,825	$	1,640
Nonrecurring fair value measurements:
Assets
Collateral dependent impaired loans	$	33,567	$	—	$	—	$	33,567
Other real estate owned and other foreclosed assets	612		—		—		612
Total nonrecurring fair value measurements	$	34,179	$	—	$	—	$	34,179

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
	2018			2017
	(Dollars in thousands)
Pooled Trust Preferred Securities
Beginning balance	$	1,640		$	1,584
Gains and (losses) (realized/unrealized)
Included in other comprehensive income	21			11
Settlements	(6		)	1
Ending balance	$	1,655		$	1,596

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 2018		December 31 2017			March 31 2018	December 31 2017	March 31 2018	December 31 2017
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	1,655	$	1,640	Cumulative prepayment	0% - 60%	0% - 61%	2.4%	2.5%
					Cumulative default	5% - 100%	5% - 100%	12.3%	12.4%
					Loss given default	85% - 100%	85% - 100%	94.4%	94.3%
					Cure given default	0% - 75%	0% - 75%	60.9%	60.9%
Appraisals of collateral(1)
Collateral dependent impaired loans	$	32,113	$	33,567
Other real estate owned and foreclosed assets	$	358	$	612

(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, 2018
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	1,005	$	1,021	$	—	$	1,021	$	—
Agency mortgage-backed securities	192,961		190,409		—		190,409		—
Agency collateralized mortgage obligations	306,395		297,818		—		297,818		—
Single issuer trust preferred securities issued by banks	1,500		1,521		—		1,521		—
Small business administration pooled securities	27,000		26,786		—		26,786		—
Loans, net of allowance for loan losses(b)	6,269,081		6,103,312		—		—		6,103,312
Federal Home Loan Bank stock(c)	13,027		13,027		—		13,027		—
Cash surrender value of life insurance policies(d)	152,568		152,568		—		152,568		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	6,096,756	$	6,096,756	$	—	$	6,096,756	$	—
Time certificates of deposits(f)	654,755		646,819		—		646,819		—
Federal Home Loan Bank borrowings(f)	53,257		52,176		—		52,176		—
Customer repurchase agreements and other short-term borrowings(f)	137,914		137,914		—		—		137,914
Junior subordinated debentures(g)	73,075		72,283		—		72,283		—
Subordinated debentures(f)	34,693		32,429		—		—		32,429

					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, 2017
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	1,006	$	1,035	$	—	$	1,035	$	—
Agency mortgage-backed securities	204,768		205,823		—		205,823		—
Agency collateralized mortgage obligations	262,998		258,408		—		258,408		—
Single issuer trust preferred securities issued by banks	1,500		1,529		—		1,529		—
Small business administration pooled securities	27,416		27,399		—		27,399		—
Loans, net of allowance for loan losses(b)	6,261,343		6,116,051		—		—		6,116,051
Federal Home Loan Bank stock(c)	11,597		11,597		—		11,597		—
Cash surrender value of life insurance policies(d)	151,528		151,528		—		151,528		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	6,084,952	$	6,084,952	$	—	$	6,084,952	$	—
Time certificates of deposits(f)	644,301		639,060		—		639,060		—
Federal Home Loan Bank borrowings(f)	53,264		52,111		—		52,111		—
Customer repurchase agreements and other short-term borrowings(f)	162,679		162,679		—		—		162,679
Junior subordinated debentures(g)	73,073		74,680		—		74,680		—
Subordinated debentures(f)	34,682		32,707		—		—		32,707

(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) In accordance with recent accounting guidance, the fair value of loans as of March 31, 2018 was measured using the exit price valuation method, determined primarily 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, while incorporating liquidity and credit assumptions. Previously the fair value of loans as of December 31, 2017 was estimated solely 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.