Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Financial Instruments Measured at Fair Value on a Recurring Basis

The following table summarizes financial instruments measured at fair value on a recurring basis as of June 30, 2014, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	June 30, 2014
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	92,971	$	—	$	92,971
Obligations of states and political subdivisions	—		46,882		3,051		49,933
Agency mortgage-backed securities	—		305,145		—		305,145
Total securities available for sale	$	—	$	444,998	$	3,051	$	448,049
State tax credits held for sale	—		—		14,985		14,985
Derivative financial instruments	—		1,186		—		1,186
Total assets	$	—	$	446,184	$	18,036	$	464,220

Liabilities
Derivative financial instruments	$	—	$	1,184	$	—	$	1,184
Total liabilities	$	—	$	1,184	$	—	$	1,184

Fair Value, Financial Instruments, Unobservable Input Reconciliation



	Securities available for sale, at fair value
	Three months ended June 30,					Six months ended June 30,
(in thousands)	2014		2013			2014		2013
Beginning balance	$	3,046	$	3,051		$	3,040	$	3,049
Total (losses) gains:
Included in other comprehensive income	5		(12		)	11		(10		)
Purchases, sales, issuances and settlements:
Purchases	—		—			—		—
Transfer in and/or out of Level 3	—		—			—		—
Ending balance	$	3,051	$	3,039		$	3,051	$	3,039

Change in unrealized (losses) gains relating to assets still held at the reporting date	$	5	$	(12	)	$	11	$	(10	)



	State tax credits held for sale
	Three months ended June 30,						Six months ended June 30,
(in thousands)	2014			2013			2014			2013
Beginning balance	$	14,900		$	20,053		$	16,491		$	23,020
Total gains:
Included in earnings	142			(51		)	260			105
Purchases, sales, issuances and settlements:
Sales	(57		)	(180		)	(1,766		)	(3,303		)
Ending balance	$	14,985		$	19,822		$	14,985		$	19,822

Change in unrealized gains relating to assets still held at the reporting date	$	130		$	(99	)	$	(204	)	$	(773	)

Fair Value Measurements, Nonrecurring

The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of June 30, 2014:



	(1)		(1)		(1)		(1)
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total losses for the three months ended June 30, 2014			Total losses for the six months ended June 30, 2014
Impaired loans	$	4,193	$	—	$	—	$	4,193	$	(1,093	)	$	(2,462	)
Other real estate	5,444		—		—		5,444		(246		)	(590		)
Total	$	9,637	$	—	$	—	$	9,637	$	(1,339	)	$	(3,052	)

(1) The amounts represent only balances measured at fair value during the period and still held as of the reporting date.

Summary of Carrying Amount and Fair Values of Financial Instruments Reported on the Balance Sheets

Following is a summary of the carrying amounts and fair values of the Company’s financial instruments on the consolidated balance sheets at June 30, 2014, and December 31, 2013.



	June 30, 2014				December 31, 2013
(in thousands)	Carrying Amount		Estimated fair value		Carrying Amount		Estimated fair value
Balance sheet assets
Cash and due from banks	$	32,993	$	32,993	$	19,573	$	19,573
Federal funds sold	44		44		76		76
Interest-bearing deposits	94,692		94,692		196,220		196,220
Securities available for sale	448,049		448,049		434,587		434,587
Other investments, at cost	16,110		16,110		12,605		12,605
Loans held for sale	5,375		5,375		1,834		1,834
Derivative financial instruments	1,186		1,186		1,000		1,000
Portfolio loans, net	2,323,645		2,319,524		2,235,124		2,232,134
State tax credits, held for sale	45,529		49,834		48,457		52,159
Accrued interest receivable	7,009		7,009		7,303		7,303

Balance sheet liabilities
Deposits	2,465,450		2,470,523		2,534,953		2,540,822
Subordinated debentures	56,807		33,857		62,581		39,358
Federal Home Loan Bank advances	153,600		157,155		50,000		54,137
Other borrowings	172,243		172,261		214,331		214,377
Derivative financial instruments	1,184		1,184		990		990
Accrued interest payable	862		862		957		957

Estimate of the Fair Value of Financial Instruments Not Recorded at Fair Value on Balance Sheet

The following table presents the level in the fair value hierarchy for the estimated fair values of only the Company’s financial instruments that are not already presented on the condensed consolidated balance sheets at fair value at June 30, 2014, and December 31, 2013:



	Estimated Fair Value Measurement at Reporting Date Using						Balance at June 30, 2014
(in thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2014
Financial Assets:
Portfolio loans, net	$	—	$	—	$	2,319,524	$	2,319,524
State tax credits, held for sale	$	—	$	—	$	34,849	$	34,849
Financial Liabilities:
Deposits	1,867,330		—		603,193		2,470,523
Subordinated debentures	—		33,857		—		33,857
Federal Home Loan Bank advances	—		157,155		—		157,155
Other borrowings	—		172,261		—		172,261

	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2013
(in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2013
Financial Assets:
Portfolio loans, net	$	—	$	—	$	2,232,134	$	2,232,134
State tax credits, held for sale	$	—	$	—	$	35,668	$	35,668
Financial Liabilities:
Deposits	1,902,038		—		638,784		2,540,822
Subordinated debentures	—		39,358		—		39,358
Federal Home Loan Bank advances	—		54,137		—		54,137
Other borrowings	—		214,377		—		214,377

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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