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Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2019
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, 2019
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Trading securities
$
1,837

 
$
1,837

 
$
—

 
$
—

Equity securities
20,357

 
20,357

 
—

 
—

Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
32,455

 
—

 
32,455

 
—

Agency mortgage-backed securities
217,795

 
—

 
217,795

 
—

Agency collateralized mortgage obligations
131,531

 
—

 
131,531

 
—

State, county, and municipal securities
1,739

 
—

 
1,739

 
—

Single issuer trust preferred securities issued by banks and insurers
721

 
—

 
721

 
—

Pooled trust preferred securities issued by banks and insurers
1,314

 
—

 
—

 
1,314

Small business administration pooled securities
52,134

 
—

 
52,134

 
—

Loans held for sale
5,586

 
—

 
5,586

 
—

Derivative instruments
33,192

 
—

 
33,192

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
19,762

 
—

 
19,762

 
—

Total recurring fair value measurements
$
478,899

 
$
22,194

 
$
455,391

 
$
1,314

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
28,261

 
$
—

 
$
—

 
$
28,261

Total nonrecurring fair value measurements
$
28,261

 
$
—

 
$
—

 
$
28,261


 
 
 
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, 2018
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Trading securities
$
1,504

 
$
1,504

 
$
—

 
$
—

Equity securities
19,477

 
19,477

 
—

 
—

Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
32,038

 
—

 
32,038

 
—

Agency mortgage-backed securities
220,105

 
—

 
220,105

 
—

Agency collateralized mortgage obligations
134,911

 
—

 
134,911

 
—

State, county, and municipal securities
1,735

 
—

 
1,735

 
—

Single issuer trust preferred securities issued by banks and insurers
707

 
—

 
707

 
—

Pooled trust preferred securities issued by banks and insurers
1,329

 
—

 
—

 
1,329

Small business administration pooled securities
51,927

 
—

 
51,927

 
—

Loans held for sale
6,431

 
—

 
6,431

 
—

Derivative instruments
26,310

 
—

 
26,310

 
—

Liabilities
 
 
 
 
 
 
 
Derivative instruments
17,523

 
—

 
17,523

 
—

Total recurring fair value measurements
$
478,951

 
$
20,981

 
$
456,641

 
$
1,329

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements:
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
29,109

 
$
—

 
$
—

 
$
29,109

Total nonrecurring fair value measurements
$
29,109

 
$
—

 
$
—

 
$
29,109

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
 
2019
 
2018
 
(Dollars in thousands)
Pooled Trust Preferred Securities
 
 
 
Beginning balance
$
1,329

 
$
1,640

Gains and (losses) (realized/unrealized)
 
 
 
Included in other comprehensive income
3

 
21

Settlements
(18
)
 
(6
)
Ending balance
$
1,314

 
$
1,655

 
 
 
 


Investments in securities that are classified as level 3 The following table sets forth certain unobservable inputs regarding the Company’s financial instruments that are classified as Level 3 for the periods indicated:
 
 
March 31
2019
 
December 31
2018
 
 
 
March 31
2019
 
December 31
2018
 
March 31
2019
 
December 31
2018
Valuation Technique
 
Fair Value
 
Unobservable Inputs
 
Range
 
Weighted Average
 
 
(Dollars in thousands)
 
 
Discounted cash flow methodology
 
 
 
 
 
 
 
 
 
 
Pooled trust preferred securities
 
$
1,314

 
$
1,329

 
Cumulative prepayment
 
0% - 58%
 
0% - 59%
 
2.5%
 
2.1%
 
 
 
 
 
 
Cumulative default
 
5% - 100%
 
5% - 100%
 
16.1%
 
16.2%
 
 
 
 
 
 
Loss given default
 
85% - 100%
 
85% - 100%
 
92.1%
 
94.8%
 
 
 
 
 
 
Cure given default
 
0% - 75%
 
0% - 75%
 
60.9%
 
60.9%
Appraisals of collateral(1)
 
 
 
 
 
 
 
 
 
 
Collateral dependent impaired loans
 
$
28,261

 
$
29,109

 
 
 
 
 
 
 
 
 
 
 
(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, 2019
 
(Dollars in thousands)
Financial assets
 
 
 
Securities held to maturity(a)
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
$
1,004

 
$
1,017

 
$
—

 
$
1,017

 
$
—

Agency mortgage-backed securities
259,599

 
261,882

 
—

 
261,882

 
—

Agency collateralized mortgage obligations
337,804

 
335,705

 
—

 
335,705

 
—

Single issuer trust preferred securities issued by banks
1,500

 
1,490

 
—

 
1,490

 
—

Small business administration pooled securities
23,336

 
23,062

 
—

 
23,062

 
—

Loans, net of allowance for loan losses(b)
6,883,471

 
6,763,125

 
—

 
—

 
6,763,125

Federal Home Loan Bank stock(c)
7,667

 
7,667

 
—

 
7,667

 
—

Cash surrender value of life insurance policies(d)
161,521

 
161,521

 
—

 
161,521

 
—

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities, other than time deposits(e)
$
6,740,051

 
$
6,740,051

 
$
—

 
$
6,740,051

 
$
—

Time certificates of deposits(f)
723,551

 
718,532

 
—

 
718,532

 
—

Federal Home Loan Bank borrowings(f)
25,752

 
25,699

 
—

 
25,699

 
—

Line of credit(f)
49,993

 
49,061

 
—

 
49,061

 
—

Long-term borrowings(f)
74,914

 
71,694

 
—

 
71,694

 
—

Junior subordinated debentures(g)
73,082

 
73,025

 
—

 
73,025

 
—

Subordinated debentures(f)
84,299

 
87,425

 
—

 
—

 
87,425

 

 
 
 
 
 
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, 2018
 
(Dollars in thousands)
Financial assets
 
Securities held to maturity(a)
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
$
1,004

 
$
1,015

 
$
—

 
$
1,015

 
$
—

Agency mortgage-backed securities
252,484

 
250,928

 
—

 
250,928

 
—

Agency collateralized mortgage obligations
332,775

 
326,724

 
—

 
326,724

 
—

Single issuer trust preferred securities issued by banks
1,500

 
1,490

 
—

 
1,490

 
—

Small business administration pooled securities
23,727

 
23,483

 
—

 
23,483

 
—

Loans, net of allowance for loan losses(b)
6,812,792

 
6,635,209

 
—

 
—

 
6,635,209

Federal Home Loan Bank stock(c)
15,683

 
15,683

 
—

 
15,683

 
—

Cash surrender value of life insurance policies(d)
160,456

 
160,456

 
—

 
160,456

 
—

Financial liabilities
 
 
 
 
 
 
 
 
 
Deposit liabilities, other than time deposits(e)
$
6,716,017

 
$
6,716,017

 
$
—

 
$
6,716,017

 
$
—

Time certificates of deposits(f)
711,103

 
703,728

 
—

 
703,728

 
—

Federal Home Loan Bank borrowings(f)
147,806

 
147,603

 
—

 
147,603

 
—

Junior subordinated debentures(g)
76,173

 
73,827

 
—

 
73,827

 
—

Subordinated debentures(f)
34,728

 
32,509

 
—

 
—

 
32,509


(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 of loans is 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. 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.