Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

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 June 30, 2016 and December 31, 2015, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:



	June 30, 2016
(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	$	—	$	99,686	$	—	$	99,686
Obligations of states and political subdivisions	—		35,872		3,093		38,965
Residential mortgage-backed securities	—		339,863		—		339,863
Total securities available for sale	$	—	$	475,421	$	3,093	$	478,514
State tax credits held for sale	—		—		4,774		4,774
Derivative financial instruments	—		2,264		—		2,264
Total assets	$	—	$	477,685	$	7,867	$	485,552

Liabilities
Derivative financial instruments	$	—	$	2,264	$	—	$	2,264
Total liabilities	$	—	$	2,264	$	—	$	2,264



	December 31, 2015
(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	$	—	$	99,008	$	—	$	99,008
Obligations of states and political subdivisions	—		38,624		3,077		41,701
Residential mortgage-backed securities	—		311,061		—		311,061
Total securities available for sale	$	—	$	448,693	$	3,077	$	451,770
State tax credits held for sale	—		—		5,941		5,941
Derivative financial instruments	—		1,155		—		1,155
Total assets	$	—	$	449,848	$	9,018	$	458,866

Liabilities
Derivative financial instruments	$	—	$	1,155	$	—	$	1,155
Total liabilities	$	—	$	1,155	$	—	$	1,155

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 June 30, 2016 and 2015.


•	Purchases, sales, issuances and settlements. There were no Level 3 purchases during the quarter ended June 30, 2016 or 2015.


•	Transfers in and/or out of Level 3. There were no Level 3 transfers during the quarter ended June 30, 2016 and 2015.



	Securities available for sale, at fair value
	Three months ended June 30,					Six months ended June 30,
(in thousands)	2016		2015			2016		2015
Beginning balance	$	3,085	$	3,071		$	3,077	$	3,059
Total gains:
Included in other comprehensive income	8		(1		)	16		11
Purchases, sales, issuances and settlements:
Purchases	—		—			—		—
Ending balance	$	3,093	$	3,070		$	3,093	$	3,070

Change in unrealized gains (losses) relating to assets still held at the reporting date	$	8	$	(1	)	$	16	$	11



	State tax credits held for sale
	Three months ended June 30,					Six months ended June 30,
(in thousands)	2016		2015			2016			2015
Beginning balance	$	4,733	$	10,286		$	5,941		$	11,689
Total gains:
Included in earnings	41		66			117			194
Purchases, sales, issuances and settlements:
Sales	—		(387		)	(1,284		)	(1,918		)
Ending balance	$	4,774	$	9,965		$	4,774		$	9,965

Change in unrealized gains (losses) relating to assets still held at the reporting date	$	41	$	(36	)	$	(264	)	$	(310	)

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 June 30, 2016.



	(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 gains (losses) for the three months ended June 30, 2016			Total gains (losses) for the six months ended June 30, 2016
Impaired loans	$	—	$	—	$	—	$	—	$	(163	)	$	(236	)
Other real estate	—		—		—		—		—			(1		)
Total	$	—	$	—	$	—	$	—	$	(163	)	$	(237	)

(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, 2016 and December 31, 2015.



	June 30, 2016				December 31, 2015
(in thousands)	Carrying Amount		Estimated fair value		Carrying Amount		Estimated fair value
Balance sheet assets
Cash and due from banks	$	50,370	$	50,370	$	47,935	$	47,935
Federal funds sold	317		317		91		91
Interest-bearing deposits	60,609		60,609		47,131		47,131
Securities available for sale	478,514		478,514		451,770		451,770
Securities held to maturity	42,514		43,837		43,714		43,441
Other investments, at cost	17,403		17,403		17,455		17,455
Loans held for sale	9,669		9,669		6,598		6,598
Derivative financial instruments	2,264		2,264		1,155		1,155
Portfolio loans, net	2,896,389		2,902,083		2,781,879		2,782,704
State tax credits, held for sale	44,918		49,961		45,850		49,588
Accrued interest receivable	8,123		8,123		8,399		8,399

Balance sheet liabilities
Deposits	3,028,236		3,030,334		2,784,591		2,784,654
Subordinated debentures	56,807		35,771		56,807		35,432
Federal Home Loan Bank advances	78,000		78,000		110,000		109,994
Other borrowings	200,362		200,332		270,326		270,286
Derivative financial instruments	2,264		2,264		1,155		1,155
Accrued interest payable	625		625		629		629

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 presented on the condensed consolidated balance sheets at fair value at June 30, 2016, and December 31, 2015.



	Estimated Fair Value Measurement at Reporting Date Using						Balance at June 30, 2016
(in thousands)	Level 1		Level 2		Level 3
Financial Assets:
Securities held to maturity	$	—	$	43,837	$	—	$	43,837
Portfolio loans, net	—		—		2,902,083		2,902,083
State tax credits, held for sale	—		—		45,187		45,187
Financial Liabilities:
Deposits	2,506,206		—		524,128		3,030,334
Subordinated debentures	—		35,771		—		35,771
Federal Home Loan Bank advances	—		78,000		—		78,000
Other borrowings	—		200,332		—		200,332

	Estimated Fair Value Measurement at Reporting Date Using						Balance at December 31, 2015
(in thousands)	Level 1		Level 2		Level 3
Financial Assets:
Securities held to maturity	$	—	$	43,441	$	—	$	43,441
Portfolio loans, net	—		—		2,782,704		2,782,704
State tax credits, held for sale	—		—		43,647		43,647
Financial Liabilities:
Deposits	2,428,403		—		356,251		2,784,654
Subordinated debentures	—		35,432		—		35,432
Federal Home Loan Bank advances	—		109,994		—		109,994
Other borrowings	—		270,286		—		270,286