Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair values of financial assets and liabilities measured on a recurring basis

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:



	Level 1		Level 2		Level 3		Totals
March 31, 2017
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	2,149	$	—	$	2,149
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		411,255		—		411,255
Government agency collateralized mortgage obligations	—		190,386		—		190,386
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		50,872		—		50,872
Government agency collateralized mortgage obligations	—		1,744		—		1,744
Trust preferred securities	—		—		17,823		17,823
Other debt securities	—		22,656		—		22,656
Total securities available for sale	—		679,062		17,823		696,885
Derivative instruments:
Interest rate contracts	—		1,713		—		1,713
Interest rate lock commitments	—		5,252		—		5,252
Forward commitments	—		17		—		17
Total derivative instruments	—		6,982		—		6,982
Mortgage loans held for sale	—		158,619		—		158,619
Total financial assets	$	—	$	844,663	$	17,823	$	862,486
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	3,134	$	—	$	3,134
Interest rate contracts	—		1,713		—		1,713
Interest rate lock commitments	—		2		—		2
Forward commitments	—		1,675		—		1,675
Total derivative instruments	—		6,524		—		6,524
Total financial liabilities	$	—	$	6,524	$	—	$	6,524



	Level 1		Level 2		Level 3		Totals
December 31, 2016
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	2,158	$	—	$	2,158
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		409,317		—		409,317
Government agency collateralized mortgage obligations	—		168,826		—		168,826
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		50,863		—		50,863
Government agency collateralized mortgage obligations	—		2,550		—		2,550
Trust preferred securities	—		—		18,389		18,389
Other debt securities	—		22,145		—		22,145
Total securities available for sale	—		655,859		18,389		674,248
Derivative instruments:
Interest rate contracts	—		1,985		—		1,985
Interest rate lock commitments	—		2,643		—		2,643
Forward commitments	—		4,480		—		4,480
Total derivative instruments	—		9,108		—		9,108
Mortgage loans held for sale	—		177,866		—		177,866
Total financial assets	$	—	$	842,833	$	18,389	$	861,222
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	3,410	$	—	$	3,410
Interest rate contracts	—		1,985		—		1,985
Forward commitments	—		269		—		269
Total derivative instruments	—		5,910		—		5,910
Total financial liabilities	$	—	$	5,910	$	—	$	5,910

Reconciliation for assets and liabilities measured at fair value on a recurring basis

The following tables provide a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, during the three months ended March 31, 2017 and 2016, respectively:



Three Months Ended March 31, 2017	Trust preferred securities
Balance at January 1, 2017	$	18,389
Accretion included in net income	8
Unrealized losses included in other comprehensive income	537
Purchases	—
Sales	—
Issues	—
Settlements	(1,111		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at March 31, 2017	$	17,823



Three Months Ended March 31, 2016	Trust preferred securities
Balance at January 1, 2016	$	19,469
Accretion included in net income	7
Unrealized losses included in other comprehensive income	(481		)
Purchases	—
Sales	—
Issues	—
Settlements	(48		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at March 31, 2016	$	18,947

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on recurring basis

The following table presents information as of March 31, 2017 about significant unobservable inputs (Level 3) used in the valuation of assets and liabilities measured at fair value on a recurring basis:



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Trust preferred securities	$	17,823	Discounted cash flows	Default rate	0-100%

Assets measured at fair value on a nonrecurring basis

The following table provides the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets as of the dates presented and the level within the fair value hierarchy each is classified:



March 31, 2017	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	11,943	$	11,943
OREO	—		—		6,027		6,027
Total	$	—	$	—	$	17,970	$	17,970



December 31, 2016	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	4,101	$	4,101
OREO	—		—		6,741		6,741
Mortgage servicing rights	—		—		26,302		26,302
Total	$	—	$	—	$	37,144	$	37,144

OREO measured at fair value on a nonrecurring basis

The following table presents OREO measured at fair value on a nonrecurring basis that was still held in the Consolidated Balance Sheets as of the dates presented:



	March 31, 2017			December 31, 2016
Carrying amount prior to remeasurement	$	6,406		$	8,290
Impairment recognized in results of operations	(379		)	(1,549		)
Fair value	$	6,027		$	6,741

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on non recurring basis



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Impaired loans	$	11,943	Appraised value of collateral less estimated costs to sell	Estimated costs to sell	4-10%
OREO	6,027		Appraised value of property less estimated costs to sell	Estimated costs to sell	4-10%

Summarizes differences between fair value and principal balance for mortgage loans held for sale measure at fair value

The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of:



March 31, 2017	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	158,619	$	152,719	$	5,900
Past due loans of 90 days or more	—		—		—
Nonaccrual loans	—		—		—

Assets and liabilities not measured and reported at fair value on a recurring basis or nonrecurring basis

The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows as of the dates presented:



			Fair Value
As of March 31, 2017	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	370,744	$	370,744	$	—	$	—	$	370,744
Securities held to maturity	347,977		—		357,216		—		357,216
Securities available for sale	696,885		—		679,062		17,823		696,885
Mortgage loans held for sale	158,619		—		158,619		—		158,619
Loans, net	6,192,882		—		—		6,122,605		6,122,605
Mortgage servicing rights	28,776		—		—		36,996		36,996
Derivative instruments	6,982		—		6,982		—		6,982
Financial liabilities
Deposits	$	7,230,850	$	5,624,281	$	1,607,568	$	—	$	7,231,849
Short-term borrowings	9,955		9,955		—		—		9,955
Other long-term borrowings	135		135		—		—		135
Federal Home Loan Bank advances	8,284		—		8,917		—		8,917
Junior subordinated debentures	85,470		—		64,908		—		64,908
Subordinated notes	98,162		—		101,300		—		101,300
Derivative instruments	6,524		—		6,524		—		6,524



			Fair Value
As of December 31, 2016	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	306,224	$	306,224	$	—	$	—	$	306,224
Securities held to maturity	356,282		—		362,893		—		362,893
Securities available for sale	674,248		—		655,859		18,389		674,248
Mortgage loans held for sale	177,866		—		177,866		—		177,866
Loans, net	6,159,972		—		—		5,989,790		5,989,790
Mortgage servicing rights	26,302		—		—		32,064		32,064
Derivative instruments	9,108		—		9,108		—		9,108
Financial liabilities
Deposits	$	7,059,137	$	5,438,384	$	1,631,027	$	—	$	7,069,411
Short-term borrowings	109,676		109,676		—		—		109,676
Other long-term borrowings	147		147		—		—		147
Federal Home Loan Bank advances	8,542		—		8,777		—		8,777
Junior subordinated debentures	95,643		—		73,301		—		73,301
Subordinated notes	98,127		—		101,000		—		101,000
Derivative instruments	5,910		—		5,910		—		5,910

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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