Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

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, 2020
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	2,247	$	2,247	$	—	$	—
Equity securities	19,439		19,439		—		—
Securities available for sale
U.S. government agency securities	24,292		—		24,292		—
Agency mortgage-backed securities	258,784		—		258,784		—
Agency collateralized mortgage obligations	87,210		—		87,210		—
State, county, and municipal securities	1,144		—		1,144		—
Single issuer trust preferred securities issued by banks and insurers	436		—		436		—
Pooled trust preferred securities issued by banks and insurers	1,009		—		—		1,009
Small business administration pooled securities	64,421		—		64,421		—
Loans held for sale	43,756		—		43,756		—
Derivative instruments	205,815		—		205,815		—
Liabilities
Derivative instruments	149,539		—		149,539		—
Total recurring fair value measurements	$	559,014	$	21,686	$	536,319	$	1,009
Nonrecurring fair value measurements
Assets
Individually assessed collateral dependent loans	$	39,444	$	—	$	—	$	39,444
Total nonrecurring fair value measurements	$	39,444	$	—	$	—	$	39,444

			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, 2019
	(Dollars in thousands)
Recurring fair value measurements
Assets
Trading securities	$	2,179	$	2,179	$	—	$	—
Equity securities	21,261		21,261		—		—
Securities available for sale
U.S. government agency securities	33,115		—		33,115		—
Agency mortgage-backed securities	247,000		—		247,000		—
Agency collateralized mortgage obligations	88,511		—		88,511		—
State, county, and municipal securities	1,396		—		1,396		—
Single issuer trust preferred securities issued by banks and insurers	493		—		493		—
Pooled trust preferred securities issued by banks and insurers	1,114		—		—		1,114
Small business administration pooled securities	54,795		—		54,795		—
Loans held for sale	33,307		—		33,307		—
Derivative instruments	78,385		—		78,385		—
Liabilities
Derivative instruments	53,923		—		53,923		—
Total recurring fair value measurements	$	507,633	$	23,440	$	483,079	$	1,114
Nonrecurring fair value measurements:
Assets
Collateral dependent impaired loans	$	25,515	$	—	$	—	$	25,515
Total nonrecurring fair value measurements	$	25,515	$	—	$	—	$	25,515

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
	2020			2019
	(Dollars in thousands)
Pooled Trust Preferred Securities
Beginning balance	$	1,114		$	1,329
Gains and (losses) (realized/unrealized)
Included in earnings	—			—
Included in other comprehensive income	(60		)	3
Settlements	(45		)	(18		)
Ending balance	$	1,009		$	1,314

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 2020		December 31 2019			March 31 2020	December 31 2019	March 31 2020	December 31 2019
Valuation Technique	Fair Value				Unobservable Inputs	Range		Weighted Average
	(Dollars in thousands)
Discounted cash flow methodology
Pooled trust preferred securities	$	1,009	$	1,114	Cumulative prepayment	0% - 57%	0% - 57%	2.4%	2.6%
					Cumulative default	4% - 100%	2% - 100%	13.5%	13.5%
					Loss given default	85% - 100%	85% - 100%	93.6%	93.6%
					Cure given default	0% - 75%	0% - 75%	60.9%	60.9%
Appraisals of collateral(1)
Individually assessed collateral dependent loans	$	39,444	n/a
Collateral dependent impaired loans	n/a		$	25,515

 

(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, 2020
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. Treasury securities	$	4,029	$	4,139	$	—	$	4,139	$	—
Agency mortgage-backed securities	463,632		482,363		—		482,363		—
Agency collateralized mortgage obligations	277,921		289,902		—		289,902		—
Single issuer trust preferred securities issued by banks	1,500		1,490		—		1,490		—
Small business administration pooled securities	30,716		31,461		—		31,461		—
Loans, net of allowance for credit losses(b)	8,784,610		8,626,697		—		—		8,626,697
Federal Home Loan Bank stock(c)	23,274		23,274		—		23,274		—
Cash surrender value of life insurance policies(d)	197,772		197,772		—		197,772		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	8,146,490	$	8,146,490	$	—	$	8,146,490	$	—
Time certificates of deposits(f)	1,269,708		1,279,983		—		1,279,983		—
Federal Home Loan Bank borrowings(f)	358,591		359,249		—		359,249		—
Long-term borrowings(f)	74,920		73,572		—		73,572		—
Junior subordinated debentures(g)	62,849		61,528		—		61,528		—
Subordinated debentures(f)	49,625		51,896		—		—		51,896

 

					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, 2019
	(Dollars in thousands)
Financial assets
Securities held to maturity(a)
U.S. government agency securities	$	12,874	$	12,997	$	—	$	12,997	$	—
U.S. Treasury securities	4,032		4,053		$	—	4,053		$	—
Agency mortgage-backed securities	397,414		405,802		—		405,802		—
Agency collateralized mortgage obligations	293,662		297,314		—		297,314		—
Single issuer trust preferred securities issued by banks	1,500		1,490		—		1,490		—
Small business administration pooled securities	31,324		31,607		—		31,607		—
Loans, net of allowance for credit losses(b)	8,780,384		8,613,635		—		—		8,613,635
Federal Home Loan Bank stock(c)	14,424		14,424		—		14,424		—
Cash surrender value of life insurance policies(d)	197,372		197,372		—		197,372		—
Financial liabilities
Deposit liabilities, other than time deposits(e)	$	7,752,052	$	7,752,052	$	—	$	7,752,052	$	—
Time certificates of deposits(f)	1,395,315		1,396,760		—		1,396,760		—
Federal Home Loan Bank borrowings(f)	115,748		115,881		—		115,881		—
Long-term borrowings (f)	74,906		72,219		—		72,219		—
Junior subordinated debentures(g)	62,848		65,603		—		65,603		—
Subordinated debentures(f)	49,601		52,870		—		—		52,870

(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.