Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2019

FASB ASC 825, “Disclosures about Fair Value of Financial Instruments” requires disclosure of the fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate such value. The methodologies for estimating the fair value of financial assets and financial liabilities measured at fair value on a recurring and non-recurring basis are discussed above. The estimated fair value amounts have been determined by management using available market information and appropriate valuation methodologies, are based on the exit price notion. In cases where quoted market prices are not available, fair values are based on estimates using present value or other market value techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. The aggregate fair value amounts presented below do not represent the underlying value of the Corporation.

The carrying amount and fair value of the Corporation’s financial instruments are as follows:



		As of June 30, 2019				As of December 31, 2018
(dollars in thousands)	Fair Value Hierarchy Level⁽¹⁾	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and cash equivalents	Level 1	$	63,385	$	63,385	$	48,456	$	48,456
Investment securities - available for sale	See Note 20	588,119		588,119		737,442		737,442
Investment securities - trading	See Note 20	8,516		8,516		7,502		7,502
Investment securities – held to maturity	Level 2	10,209		10,205		8,684		8,438
Loans held for sale	Level 2	6,333		6,333		1,749		1,749
Net portfolio loans and leases	Level 3	3,513,483		3,509,533		3,407,728		3,414,921
MSRs	Level 3	4,744		5,175		5,047		6,277
Interest rate swaps	Level 2	44,256		44,256		12,550		12,550
FX forwards	Level 2	105		105		—		—
RPAs purchased	Level 2	124		124		71		71
Other assets	Level 3	44,507		44,507		43,641		43,641
Total financial assets		$	4,283,781	$	4,280,258	$	4,272,870	$	4,281,047
Financial liabilities:
Deposits	Level 2	$	3,632,413	$	3,631,844	$	3,599,087	$	3,594,123
Short-term borrowings	Level 2	207,828		207,828		252,367		252,367
Long-term FHLB advances	Level 2	47,941		47,951		55,374		54,803
Subordinated notes	Level 2	98,616		99,187		98,526		100,120
Junior subordinated debentures	Level 2	21,665		24,385		21,580		31,176
Interest rate swaps	Level 2	44,101		44,101		12,549		12,549
FX forwards	Level 2	82		82		—		—
RPAs sold	Level 2	19		19		2		2
Other liabilities	Level 3	46,350		46,350		60,847		60,847
Total financial liabilities		$	4,099,015	$	4,101,747	$	4,100,332	$	4,105,987

(1) See Note 20 in the Notes to Unaudited Consolidated Financial Statements above for a description of hierarchy levels.