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Fair Value Measurement (Tables)
 9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]  
Recorded Amount of Assets and Liabilities Measured at Fair Value on Recurring Basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis at the date indicated (in thousands):

 

Fair value at September 30, 2016    Total      Level 1      Level 2      Level 3  

Securities available for sale:

            

Obligations of U.S. government corporations and agencies

    $ 386,872         —         $ 386,872         —     

Obligations of states and political subdivisions

      120,304         —           120,304         —     

Corporate debt securities

      —           —           —           —     

Marketable equity securities

      3,033       $ 3,033         —           —     

Mortgage servicing rights

      6,208         —           —         $ 6,208   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total assets measured at fair value

    $ 516,417       $ 3,033       $ 507,176       $ 6,208   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis at the date indicated (in thousands):

 

Fair value at December 31, 2015    Total      Level 1      Level 2      Level 3  

Securities available-for-sale:

            

Obligations of U.S. government corporations and agencies

    $ 313,682         —         $ 313,682         —     

Obligations of states and political subdivisions

      88,218         —           88,218         —     

Corporate debt securities

      —           —           —           —     

Marketable equity securities

      2,985       $ 2,985         —           —     

Mortgage servicing rights

      7,618         —           —         $ 7,618   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total assets measured at fair value

    $ 412,503       $ 2,985       $ 401,900       $ 7,618   
  

 

 

     

 

 

     

 

 

     

 

 

  

Reconciliation of Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) on Recurring Basis

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the time periods indicated. Had there been any transfer into or out of Level 3 during the time periods indicated, the amount included in the “Transfers into (out of) Level 3” column would represent the beginning balance of an item in the period (interim quarter) during which it was transferred (in thousands):

 

     Three months ended September 30,      Nine months ended September 30,  
     2016      2015      2016      2015  

Mortgage servicing rights:

            

Balance at beginning of period

    $ 6,720       $ 7,814       $ 7,618       $ 7,378   

Additions

      287         238         788         659   

Change in fair value

      (799 )       (585 )       (2,198 )       (570 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

Balance at end of period

    $ 6,208       $ 7,467       $ 6,208       $ 7,467   
  

 

 

     

 

 

     

 

 

     

 

 

  

Quantitative Information about Recurring Level 3 Fair Value Measurements

The following table presents quantitative information about recurring Level 3 fair value measurements at September 30, 2016:

 

     Fair Value
(in thousands)		    

Valuation

Technique

  

Unobservable

Inputs

   Range,
Weighted Average

Mortgage Servicing Rights

    $ 6,208      Discounted cash flow   Constant prepayment rate   6.5%-20.6%, 12.8%
       Discount rate   12.0%-14.0%, 12.0%

The following table presents quantitative information about recurring Level 3 fair value measurements at December 31, 2015:

 

    Fair Value
(in thousands)		    

Valuation

Technique

  

Unobservable

Inputs

   Range,
Weighted Average

Mortgage Servicing Rights

   $ 7,618      Discounted cash flow   Constant prepayment rate   6.3%-20.5%, 9.5%
      Discount rate   10.0%-12.0%, 10.0%

Assets Measured at Fair Value on Nonrecurring Basis

The table below presents the recorded amount of certain assets measured at fair value on a nonrecurring basis, as of the dates indicated. For these purposes, an asset is deemed to be measured at fair value if it had a write-down or an additional allowance provided during the periods indicated, and the recorded value of the asset at the end of the period is equal to the net value of the underlying collateral (in thousands):

 

Nine months ended September 30, 2016    Total      Level 1      Level 2      Level 3      Total
Gains/(Losses)		  

Fair value:

               

Impaired Originated & PNCI loans

    $ 5,941         —           —         $ 5,941       $ (570 ) 

Foreclosed assets

      1,801         —           —           1,801         14   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total assets measured at fair value

    $ 7,742         —           —         $ 7,742       $ (556 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Year ended December 31, 2015    Total      Level 1      Level 2      Level 3     

Total Gains

(Losses)

  

Fair value:

               

Impaired Originated & PNCI loans

    $ 4,649         —           —         $ 4,649       $ (660 ) 

Foreclosed assets

      1,540               1,540         (102 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total assets measured at fair value

    $ 6,189         —           —         $ 6,189       $ (762 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Nine months ended September 30, 2015    Total      Level 1      Level 2      Level 3      Total
Gains/(Losses)		  

Fair value:

               

Impaired Originated & PNCI loans

    $ 4,399         —           —         $ 4,399       $ (38 ) 

Foreclosed assets

      2,223         —           —           2,223         (411 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total assets measured at fair value

    $ 6,622         —           —         $ 6,622       $ (449 ) 
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Schedule of Gains and Losses from Nonrecurring Fair Value Adjustments

The table below presents the gains and losses from nonrecurring fair value adjustments that occurred in the periods indicated (in thousands):

 

     Three months ended September 30,  
Losses from nonrecurring fair value adjustments:    2016      2015  

Impaired Originated & PNCI loans

    $ 874       $ 48   

Foreclosed assets

      (13 )       268   
  

 

 

     

 

 

  

Total losses from nonrecurring fair value adjustments

    $ 861       $ 316   
  

 

 

     

 

 

  

Quantitative Information about Level 3 Fair Value Measurements for Financial Instruments Measured at Fair Value on Nonrecurring Basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at September 30, 2016:

 

     Fair Value
(in thousands)		     

Valuation

Technique

   

Unobservable

Inputs

    Range,
Weighted Average

Impaired Originated & PNCI loans

    $ 5,941      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (0.0)%-(5.0)%, (5.0)%
     

Income approach

   

Capitalization rate

    N/A

Foreclosed assets (Land & construction)

    $ 15      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%

Foreclosed assets (Residential real estate)

    $ 1,038      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%

Foreclosed assets (Commercial real estate)

    $ 748      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a nonrecurring basis at December 31, 2015:

 

     Fair Value
(in thousands)		     

Valuation

Technique

   

Unobservable

Inputs

    Range,
Weighted Average

Impaired Originated & PNCI loans

    $ 4,649      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%
     

Income approach

   

Capitalization rate

    7.0%-8.0%, 7.25%

Foreclosed assets (Land & construction)

    $ 96      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%

Foreclosed assets (Residential real estate)

    $ 1,177      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%

Foreclosed assets (Commercial real estate)

    $ 267      

Sales comparison approach

   

Adjustment for differences between comparable sales

    (5.0)%-(5.0)%, (5.0)%
Estimated Fair Values of Financial Instruments that are Reported at Amortized Cost in Consolidated Balance Sheets

The estimated fair values of financial instruments that are reported at amortized cost in the Corporation’s consolidated balance sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (in thousands):

 

     September 30, 2016      December 31, 2015  
     Carrying
Amount		      Fair
Value		      Carrying
Amount		      Fair
Value		  

Financial assets:

            

Level 1 inputs:

            

Cash and due from banks

    $ 82,610       $ 82,610       $ 94,305       $ 94,305   

Cash at Federal Reserve and other banks

      232,478         232,478         209,156         209,156   

Level 2 inputs:

            

Securities held to maturity

      641,149         663,781         726,530         732,208   

Restricted equity securities

      16,956         N/A         16,956         N/A   

Loans held for sale

      7,777         7,777         1,873         1,873   

Level 3 inputs:

            

Loans, net

      2,678,742         2,761,975         2,486,926         2,555,297   

Financial liabilities:

            

Level 2 inputs:

            

Deposits

      3,836,012         3,835,424         3,631,266         3,630,129   

Other borrowings

      19,235         19,235         12,328         12,328   

Level 3 inputs:

            

Junior subordinated debt

    $ 56,617       $ 51,806       $ 56,470       $ 44,527   
Off-balance sheet:    Contract
Amount		      Fair
Value		      Contract
Amount		      Fair
Value		  

Level 3 inputs:

            

Commitments

    $ 805,284       $ 8,053       $ 705,316       $ 7,053   

Standby letters of credit

    $ 10,349       $ 103       $ 8,330       $ 83   

Overdraft privilege commitments

    $ 98,400       $ 984       $ 94,473       $ 945