Fair Value Disclosures (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2016 and 2015, classified using the fair value hierarchy:



	At December 31, 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	$	—	$	32,266	$	—	$	32,266
State and political subdivisions	—		88,350		—		88,350
Residential mortgage-backed securities	—		198,570		—		198,570
Collateralized mortgage obligations	—		4,554		—		4,554
Corporate bonds	—		79,420		28,778		108,198
Money market mutual funds	10,784		—		—		10,784
Equity securities	915		—		—		915
Total available-for-sale securities	11,699		403,160		28,778		443,637
Loans*	—		—		2,138		2,138
Interest rate locks with customers*	—		801		—		801
Forward loan sale commitments*	—		257		—		257
Total assets	$	11,699	$	404,218	$	30,916	$	446,833
Liabilities:
Contingent consideration liability	$	—	$	—	$	5,999	$	5,999
Interest rate swaps*	—		319		—		319
Credit derivatives*	—		—		9		9
Total liabilities	$	—	$	319	$	6,008	$	6,327



	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
Total assets	$	22,420	$	308,439	$	—	$	330,859
Liabilities:
Contingent consideration liability	$	—	$	—	$	5,577	$	5,577
Interest rate swaps*	—		438		—		438
Forward loan sale commitments*	—		102		—		102
Total liabilities	$	—	$	540	$	5,577	$	6,117

*Such financial instruments are recorded at fair value as further described in Note 17 - Derivative Instruments.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table includes a rollfoward of loans and credit derivatives for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for year ended December 31, 2016. These loans and credit derivatives were acquired from Fox Chase on July 1, 2016.



	For the Year Ended December 31, 2016
(Dollars in thousands)	Balance at December 31, 2015		Purchases/additions			Sales		Payments received			Premium amortization, net		(Decrease) increase in value			Transfer into Level 3		Balance at December 31, 2016
Corporate bonds	$	—	$	—		$	—	$	—		$	—	$	—		$	28,778	$	28,778
Loans	—		2,313			—		(65		)	—		(110		)	—		2,138
Credit derivatives	—		(102		)	—		—			—		93			—		(9		)
Net total	$	—	$	2,211		$	—	$	(65	)	$	—	$	(17	)	$	28,778	$	30,907

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation



	For the Year Ended December 31, 2016
(Dollars in thousands)	Balance at December 31, 2015		Purchases/additions			Sales		Payments received			Premium amortization, net		(Decrease) increase in value			Transfer into Level 3		Balance at December 31, 2016
Corporate bonds	$	—	$	—		$	—	$	—		$	—	$	—		$	28,778	$	28,778
Loans	—		2,313			—		(65		)	—		(110		)	—		2,138
Credit derivatives	—		(102		)	—		—			—		93			—		(9		)
Net total	$	—	$	2,211		$	—	$	(65	)	$	—	$	(17	)	$	28,778	$	30,907

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 years ended December 31, 2016 and 2015:



	For the Year Ended December 31, 2016
(Dollars in thousands)	Balance at December 31, 2015		Contingent Consideration from New Acquisition		Payment of Contingent Consideration		Adjustment of Contingent Consideration		Balance at December 31, 2016
Sterner Insurance Associates	$	1,144	$	—	$	1,325	$	512	$	331
Girard Partners	4,241		—		967		2,394		5,668
John T. Fretz Insurance Agency	192		—		260		68		—
Total contingent consideration liability	$	5,577	$	—	$	2,552	$	2,974	$	5,999



	For the Year Ended December 31, 2015
(Dollars in thousands)	Balance at December 31, 2014		Contingent Consideration from New Acquisition*		Payment of Contingent Consideration		Adjustment of Contingent Consideration			Balance at December 31, 2015
Sterner Insurance Associates	$	680	$	1,525	$	1,751	$	690		$	1,144
Girard Partners	5,503		—		620		(642		)	4,241
John T. Fretz Insurance Agency	358		—		260		94			192
Total contingent consideration liability	$	6,541	$	1,525	$	2,631	$	142		$	5,577

Assets Measured at Fair Value on Non-Recurring Basis

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



	At December 31, 2016
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/Liabilities at Fair Value
Impaired loans held for investment	$	—	$	—	$	43,680	$	43,680
Other real estate owned	—		—		4,969		4,969
Total	$	—	$	—	$	48,649	$	48,649



	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 December 31, 2016 and 2015. The disclosed fair values are classified using the fair value hierarchy.



	At December 31, 2016
(Dollars in thousands)	Level 1		Level 2			Level 3		Fair Value			Carrying Amount
Assets:
Cash and short-term interest-earning assets	$	57,825	$	—		$	—	$	57,825		$	57,825
Held-to-maturity securities	—		24,871			—		24,871			24,881
Federal Home Loan Bank, Federal Reserve Bank and other stock	N/A		N/A			N/A		N/A			24,869
Loans held for sale	—		5,943			—		5,943			5,890
Net loans and leases held for investment	—		—			3,193,886		3,193,886			3,222,569
Mortgage servicing rights	—		—			9,548		9,548			6,485
Total assets	$	57,825	$	30,814		$	3,203,434	$	3,292,073		$	3,342,519
Liabilities:
Deposits:
Demand and savings deposits, non-maturity	$	2,631,378	$	—		$	—	$	2,631,378		$	2,631,378
Time deposits	—		628,096			—		628,096			626,189
Total deposits	2,631,378		628,096			—		3,259,474			3,257,567
Short-term borrowings	—		195,572			—		195,572			196,171
Long-term debt	—		130,157			—		130,157			127,522
Subordinated notes	—		95,188			—		95,188			94,087
Total liabilities	$	2,631,378	$	1,049,013		$	—	$	3,680,391		$	3,675,347
Off-Balance-Sheet:
Commitments to extend credit	$	—	$	(2,218	)	$	—	$	(2,218	)	$	—



	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
Federal Home Loan Bank, Federal Reserve Bank and other stock	N/A		N/A			N/A		N/A			8,880
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		$	2,235,276
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	)	$	—