Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2016

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the assets and liabilities measured at fair value on a recurring basis at June 30, 2016 and December 31, 2015, classified using the fair value hierarchy:



	At June 30, 2016
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Available-for-sale securities:
U.S. government corporations and agencies	$	—	$	47,446	$	—	$	47,446
State and political subdivisions	—		98,867		—		98,867
Residential mortgage-backed securities	—		3,635		—		3,635
Collateralized mortgage obligations	—		2,928		—		2,928
Corporate bonds	—		93,445		—		93,445
Money market mutual funds	7,009		—		—		7,009
Equity securities	765		—		—		765
Total available-for-sale securities	7,774		246,321		—		254,095
Interest rate locks with customers	—		2,432		—		2,432
Total assets	$	7,774	$	248,753	$	—	$	256,527
Liabilities:
Contingent consideration liability	$	—	$	—	$	5,213	$	5,213
Interest rate swap	—		1,203		—		1,203
Forward loan sale commitments	—		510		—		510
Total liabilities	$	—	$	1,713	$	5,213	$	6,926



	At December 31, 2015
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Available-for-sale securities:
U.S. treasuries	$	4,887	$	—	$	—	$	4,887
U.S. government corporations and agencies	—		102,156		—		102,156
State and political subdivisions	—		102,032		—		102,032
Residential mortgage-backed securities	—		13,354		—		13,354
Collateralized mortgage obligations	—		3,133		—		3,133
Corporate bonds	—		86,675		—		86,675
Money market mutual funds	16,726		—		—		16,726
Equity securities	807		—		—		807
Total available-for-sale securities	22,420		307,350		—		329,770
Interest rate locks with customers	—		1,089		—		1,089
Forward loan sale commitments	—		—		—		—
Total assets	$	22,420	$	308,439	$	—	$	330,859
Liabilities:
Contingent consideration liability	$	—	$	—	$	5,577	$	5,577
Interest rate swap	—		438		—		438
Forward loan sale commitments	—		102		—		102
Total liabilities	$	—	$	540	$	5,577	$	6,117

Contingent Consideration Liability Change in Amount

The following table presents the change in the balance of the contingent consideration liability related to acquisitions for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the six months ended June 30, 2016 and 2015:



	Six Months Ended June 30, 2016
(Dollars in thousands)	Balance at December 31, 2015		Contingent Consideration from New Acquisition		Payment of Contingent Consideration		Adjustment of Contingent Consideration		Balance at June 30, 2016
Sterner Insurance Associates	$	1,144	$	—	$	—	$	490	$	1,634
Girard Partners	4,241		—		900		238		3,579
John T. Fretz Insurance Agency	192		—		260		68		—
Total contingent consideration liability	$	5,577	$	—	$	1,160	$	796	$	5,213



	Six Months Ended June 30, 2015
(Dollars in thousands)	Balance at December 31, 2014		Contingent Consideration from New Acquisition*		Payment of Contingent Consideration		Adjustment of Contingent Consideration			Balance at June 30, 2015
Sterner Insurance Associates	$	680	$	1,525	$	—	$	402		$	2,607
Girard Partners	5,503		$	—	$	620	$	(112	)	4,771
John T. Fretz Insurance Agency	358		—		260		80			178
Total contingent consideration liability	$	6,541	$	1,525	$	880	$	370		$	7,556

Assets Measured at Fair Value on Non-Recurring Basis

The following table represents assets measured at fair value on a non-recurring basis at June 30, 2016 and December 31, 2015:



	At June 30, 2016
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Impaired loans held for investment	$	—	$	—	$	43,624	$	43,624
Total	$	—	$	—	$	43,624	$	43,624



	At December 31, 2015
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Impaired loans held for investment	$	—	$	—	$	48,611	$	48,611
Total	$	—	$	—	$	48,611	$	48,611

Assets, Liabilities and Off-Balance Sheet Items Not Measured at Fair Value

The following table presents assets and liabilities and off-balance sheet items not measured at fair value on a recurring or non-recurring basis in the Corporation’s consolidated balance sheets but for which the fair value is required to be disclosed at June 30, 2016 and December 31, 2015. The disclosed fair values are classified using the fair value hierarchy.



	At June 30, 2016
(Dollars in thousands)	Level 1		Level 2			Level 3		Fair Value			Carrying Amount
Assets:
Cash and short-term interest-earning assets	$	93,190	$	—		$	—	$	93,190		$	93,190
Held-to-maturity securities	—		32,946			—		32,946			32,885
Loans held for sale	—		4,766			—		4,766			4,657
Net loans and leases held for investment	—		—			2,233,013		2,233,013			2,284,260
Mortgage servicing rights	—		—			6,785		6,785			5,896
Other real estate owned	—		3,131			—		3,131			3,131
Total assets	$	93,190	$	40,843		$	2,239,798	$	2,373,831		$	2,424,019
Liabilities:
Deposits:
Demand and savings deposits, non-maturity	$	2,016,892	$	—		$	—	$	2,016,892		$	2,016,892
Time deposits	—		361,256			—		361,256			360,192
Total deposits	2,016,892		361,256			—		2,378,148			2,377,084
Short-term borrowings	—		259,971			—		259,971			260,216
Subordinated notes	—		50,250			—		50,250			49,450
Total liabilities	$	2,016,892	$	671,477		$	—	$	2,688,369		$	2,686,750
Off-Balance-Sheet:
Commitments to extend credit	$	—	$	(1,874	)	$	—	$	(1,874	)	$	—



	At December 31, 2015
(Dollars in thousands)	Level 1		Level 2			Level 3		Fair Value			Carrying Amount
Assets:
Cash and short-term interest-earning assets	$	60,799	$	—		$	—	$	60,799		$	60,799
Held-to-maturity securities	—		41,061			—		41,061			40,990
Loans held for sale	—		4,708			—		4,708			4,680
Net loans and leases held for investment	—		—			2,099,082		2,099,082			2,112,774
Mortgage servicing rights	—		—			8,047		8,047			5,877
Other real estate owned	—		1,276			—		1,276			1,276
Total assets	$	60,799	$	47,045		$	2,107,129	$	2,214,973		$	2,226,396
Liabilities:
Deposits:
Demand and savings deposits, non-maturity	$	1,939,954	$	—		$	—	$	1,939,954		$	1,939,954
Time deposits	—		455,527			—		455,527			454,406
Total deposits	1,939,954		455,527			—		2,395,481			2,394,360
Short-term borrowings	—		22,302			—		22,302			24,211
Subordinated notes	$	—	$	50,375		$	—	$	50,375		$	49,377
Total liabilities	$	1,939,954	$	528,204		$	—	$	2,468,158		$	2,467,948
Off-Balance-Sheet:
Commitments to extend credit	$	—	$	(1,788	)	$	—	$	(1,788	)	$	—