Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Summary of 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 December 31, 2014 and 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.



	December 31, 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	$	—	$	91,826	$	—	$	91,826
Obligations of states and political subdivisions	—		31,822		3,059		34,881
Residential mortgage-backed securities	—		273,439		—		273,439
Total securities available for sale	$	—	$	397,087	$	3,059	$	400,146
State tax credits held for sale	—		—		11,689		11,689
Derivative financial instruments	—		909		—		909
Total assets	$	—	$	397,996	$	14,748	$	412,744

Liabilities
Derivative financial instruments	$	—	$	907	$	—	$	907
Total liabilities	$	—	$	907	$	—	$	907



	December 31, 2013
(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	$	—	$	93,530	$	—	$	93,530
Obligations of states and political subdivisions	—		45,903		3,040		48,943
Residential mortgage-backed securities	—		292,114		—		292,114
Total securities available for sale	$	—	$	431,547	$	3,040	$	434,587
State tax credits held for sale	—		—		16,491		16,491
Derivative financial instruments	—		1,000		—		1,000
Total assets	$	—	$	432,547	$	19,531	$	452,078

Liabilities
Derivative financial instruments	$	—	$	990	$	—	$	990
Total liabilities	$	—	$	990	$	—	$	990

Schedule of Level 3 Financial Instruments Measured at Fair Value on a Recurring Basis

The following table presents the changes in Level 3 financial instruments measured at fair value on a recurring basis as of December 31, 2014 and 2013.


•	Purchases, sales, issuances and settlements. There were no Level 3 purchases during the year ended December 31, 2014.


•	Transfers in and/or out of Level 3. There were no transfers in an/or out of Level 3 for the years ending December 31, 2014 and 2013.



	Securities available for sale, at fair value
	Years ended December 31,
(in thousands)	2014		2013
Beginning balance	$	3,040	$	3,049
Total gains (losses):
Included in other comprehensive income	19		(9		)
Purchases, sales, issuances and settlements:
Purchases	—		—
Transfer in and/or out of Level 3	—		—
Ending balance	$	3,059	$	3,040

Change in unrealized gains (losses) relating to assets still held at the reporting date	$	19	$	(9	)



	State tax credits held for sale, at fair value
	Years ended December 31,
(in thousands)	2014			2013
Beginning balance	$	16,491		$	23,020
Total gains:
Included in earnings	558			564
Purchases, sales, issuances and settlements:
Sales	(5,360		)	(7,093		)
Ending balance	$	11,689		$	16,491

Change in unrealized gains relating to assets still held at the reporting date	$	(868	)	$	(1,317	)

Summary of Financial Instruments and Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

The following table presents financial instruments and non-financial assets measured at fair value on a non-recurring basis as of December 31, 2014 and 2013.



	December 31, 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) gains for the year ended December 31, 2014
Impaired loans	$	6,726	$	—	$	—	$	6,726	$	(5,556	)
Other real estate	3,788		—		—		3,788		(696		)
Total	$	10,514	$	—	$	—	$	10,514	$	(6,252	)



	December 31, 2013
	(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) gains for the year ended December 31, 2013
Impaired loans	$	7,031	$	—	$	—	$	7,031	$	(10,378	)
Other real estate	7,849		—		—		7,849		(1,443		)
Total	$	14,880	$	—	$	—	$	14,880	$	(11,821	)

(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 December 31, 2014 and 2013.



	December 31, 2014				December 31, 2013
(in thousands)	Carrying Amount		Estimated fair value		Carrying Amount		Estimated fair value
Balance sheet assets
Cash and due from banks	$	42,903	$	42,903	$	19,573	$	19,573
Federal funds sold	35		35		76		76
Interest-bearing deposits	63,058		63,058		196,220		196,220
Securities available for sale	400,146		400,146		434,587		434,587
Securities held to maturity	45,985		45,795		—		—
Other investments, at cost	17,037		17,037		12,605		12,605
Loans held for sale	4,033		4,033		1,834		1,834
Derivative financial instruments	909		909		1,000		1,000
Portfolio loans, net	2,487,424		2,482,700		2,235,124		2,232,134
State tax credits, held for sale	38,309		42,970		48,457		52,159
Accrued interest receivable	7,956		7,956		7,303		7,303

Balance sheet liabilities
Deposits	2,491,510		2,494,624		2,534,953		2,540,822
Subordinated debentures	56,807		34,124		62,581		39,358
Federal Home Loan Bank advances	144,000		144,000		50,000		54,137
Other borrowings	239,883		239,950		214,331		214,377
Derivative financial instruments	907		907		990		990
Accrued interest payable	843		843		957		957

Schedule of Estimated Fair Values 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 on the consolidated balance sheets at fair value at December 31, 2014, and December 31, 2013.



	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2014
(in thousands)	Level 1		Level 2		Level 3
Financial Assets:
Securities held to maturity	$	—	$	45,795	$	—	$	45,795
Portfolio loans, net	—		—		2,482,700		2,482,700
State tax credits, held for sale	—		—		31,281		31,281
Financial Liabilities:
Deposits	1,986,158		—		508,466		2,494,624
Subordinated debentures	—		34,124		—		34,124
Federal Home Loan Bank advances	—		144,000		—		144,000
Other borrowings	—		239,950		—		239,950

	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2013
(in thousands)	Level 1		Level 2		Level 3
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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