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Fair Value (Tables)
6 Months Ended
Jun. 30, 2014
Fair Value Disclosures [Abstract]  
Assets and Liabilities Reported on Consolidated Statements of Financial Condition at Fair Value on a Recurring Basis

The following tables present the assets and liabilities reported on the consolidated statements of financial condition at their fair value on a recurring basis as of June 30, 2014 and December 31, 2013 by level within the fair value hierarchy. As required by GAAP, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

     As of June 30, 2014  
(Dollar amounts in thousands)    Quoted Prices
in Active
Markets for
Identical Assets
or Liabilities
(Level I)
     Significant Other
Observable
Inputs

(Level II)
     Significant
Unobservable
Inputs

(Level III)
     Total  

Assets:

           

Securities available for sale

           

Trust preferred securities

   $ —         $ 1,799       $ 37,055       $ 38,854   

Municipal securities

     —           180,312         —           180,312   

Equity securities

     1,453         —           —           1,453   

Corporate bonds

     —           186,618         —           186,618   

Mortgage backed securities

           

U.S. sponsored entities

     —           684,545         —           684,545   

Private label

     —           1,572         —           1,572   
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal mortgage-backed securities

     —           686,117         —           686,117   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total securities available for sale

   $ 1,453       $ 1,054,846       $ 37,055       $ 1,093,354   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other Assets

           

Interest rate caps

   $ —         $ 462       $ —         $ 462   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other assets

   $ —         $ 462       $ —         $ 462   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities

           

Other Liabilities

           

Interest rate swaps

   $ —         $ 3,618       $ —         $ 3,618   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other liabilities

   $ —         $ 3,618       $ —         $ 3,618   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     As of December 31, 2013  
(Dollar amounts in thousands)    Quoted Prices
in Active
Markets for

Identical Assets
or Liabilities
(Level I)
     Significant Other
Observable
Inputs

(Level II)
     Significant
Unobservable
Inputs

(Level III)
     Total  

Assets:

           

Securities available for sale

           

Trust preferred securities

   $ —         $ 1,697       $ 37,209       $ 38,906   

Municipal securities

     —           179,740         —           179,740   

Equity securities

     1,921         —           —           1,921   

Corporate bonds

     —           206,220         —           206,220   

Mortgage backed securities

           

U.S. sponsored entities

     —           634,424         —           634,424   

Private label

     —           1,805         —           1,805   
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal mortgage-backed securities

     —           636,229         —           636,229   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total securities available for sale

   $ 1,921       $ 1,023,886       $ 37,209       $ 1,063,016   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other Assets

           

Interest rate caps

   $ —         $ 717       $ —         $ 717   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other assets

   $ —         $ 717       $ —         $ 717   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

           

Other Liabilities

           

Interest rate swaps

   $ —         $ 3,870       $ —         $ 3,870   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other liabilities

   $ —         $ 3,870       $ —         $ 3,870   
  

 

 

    

 

 

    

 

 

    

 

 

 
Fair Value Measurements Using Significant Unobservable Inputs (Level III)

The following table presents the changes in the Level III assets measured at fair value on a recurring basis for the three and six month periods ended June 30, 2014 and 2013.

Fair value measurements using significant unobservable inputs (Level III).

 

     Securities available for sale      Securities available for sale  
     Three months ended      Six months ended  
     June 30,      June 30,  
     2014     2013      2014     2013  

Beginning balance January 1,

   $ 37,146      $ 36,353       $ 37,209      $ 36,179   

Total net realized/unrealized gains (losses)

         

Included in earnings:

         

Interest income on securities

     4        4         7        7   

Net realized loss on securities available for sale

     —          —           (193     —     

Included in other comprehensive income

     (95     577         32        748   

Transfers in and/or out of Level III

     —          —           —          —     

Purchases, issuances and settlements

         

Purchases

     —          —           —          —     

Issuances

     —          —           —          —     

Sales

     —          —           —          —     

Settlements

     —          —           —          —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Ending balance, June 30,

   $ 37,055      $ 36,934       $ 37,055      $ 36,934   
  

 

 

   

 

 

    

 

 

   

 

 

 
Changes in Unrealized Gains and Losses Recorded in Earnings for Level III Assets and Liabilities

The following table summarizes changes in unrealized gains and losses recorded in earnings for the three and six month period ended June 30, 2014 and 2013 for Level III assets and liabilities that are still held at June 30, 2014 and 2013.

 

     Securities available for sale      Securities available for sale  
     Three months ended      Six months ended  
     June 30,      June 30,  
     2014      2013      2014     2013  

Interest income on securities

   $ 4       $ 4       $          7      $ 7   

Net realized loss on securities available for sale

     —           —           (193     —     
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $          4       $          4       $ (186   $          7   
  

 

 

    

 

 

    

 

 

   

 

 

 
Schedule of Fair Value Level III Assets Measured at Fair Value on a Recurring or Non-Recurring Basis

For Level III assets measured at fair value on a recurring or non-recurring basis as of June 30, 2014, the significant observable inputs used in the fair value measurements were as follows:

 

(Dollar amounts in thousands)

  Fair Value at
June 30, 2014
    Fair Value at
December 31,
2013
   

Valuation
Technique

 

Significant Unobservable
Inputs

  2014 Range
(Weighted Average)
  2013 Range
(Weighted Average)

Trust Preferred Securities

  $ 37,055      $ 37,209      Discounted Cash Flow   Credit Spreads   35-65 (52.5) basis points   40-75 (62.5) basis points
        Liquidity Risk Adjustments   20-55 (36) basis points   20-55 (36) basis points
        Default Rates   .6%-1%   .6%-1%

Impaired Loans

    15,479        15,961      Appraisal of collateral (1)   Appraisal value and liquidation expense   2.84%-48.93%(9.91%)   2.84%-48.93%(9.95%)

Real estate acquired through foreclosure

    2,141        1,977      Appraisal of collateral (1)   N/A   N/A   N/A

Servicing assets

    5        9      Discounted Cash Flow   Remaining term   .75 yrs to 16.40 yrs (12 yrs)   1 yrs to 16.65 yrs (12.5 yrs)
        Discount Rate   11.25%-12.25% (11.36%)   11.25%-12.25%(11.36%)

 

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level III inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.