Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2016

Fair values of financial assets and liabilities measured on a recurring basis

The following table presents assets and liabilities that are measured at fair value on a recurring basis as of the dates presented:



	Level 1		Level 2		Level 3		Totals
June 30, 2016
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	2,220	$	—	$	2,220
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		408,304		—		408,304
Government agency collateralized mortgage obligations	—		168,047		—		168,047
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		54,898		—		54,898
Government agency collateralized mortgage obligations	—		4,638		—		4,638
Trust preferred securities	—		—		18,179		18,179
Other debt securities	—		18,161		—		18,161
Other equity securities	—		—		—		—
Total securities available for sale	—		656,268		18,179		674,447
Derivative instruments:
Interest rate contracts	—		5,403		—		5,403
Interest rate lock commitments	—		5,570		—		5,570
Forward commitments	—		—		—		—
Total derivative instruments	—		10,973		—		10,973
Mortgage loans held for sale	—		276,782		—		276,782
Total financial assets	$	—	$	944,023	$	18,179	$	962,202
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	7,032	$	—	$	7,032
Interest rate contracts	—		5,403		—		5,403
Interest rate lock commitments	—		1		—		1
Forward commitments	—		4,682		—		4,682
Total derivative instruments	—		17,118		—		17,118
Total financial liabilities	$	—	$	17,118	$	—	$	17,118



	Level 1		Level 2		Level 3		Totals
December 31, 2015
Financial assets:
Securities available for sale:
Obligations of other U.S. Government agencies and corporations	$	—	$	6,200	$	—	$	6,200
Residential mortgage-backed securities:
Government agency mortgage backed securities	—		364,540		—		364,540
Government agency collateralized mortgage obligations	—		168,060		—		168,060
Commercial mortgage-backed securities:
Government agency mortgage backed securities	—		59,759		—		59,759
Government agency collateralized mortgage obligations	—		5,104		—		5,104
Trust preferred securities	—		—		19,469		19,469
Other debt securities	—		19,333		—		19,333
Other equity securities	—		4,340		—		4,340
Total securities available for sale	—		627,336		19,469		646,805
Derivative instruments:
Interest rate contracts	—		2,544		—		2,544
Interest rate lock commitments	—		4,508		—		4,508
Forward commitments	—		446		—		446
Total derivative instruments	—		7,498		—		7,498
Mortgage loans held for sale	—		225,254		—		225,254
Total financial assets	$	—	$	860,088	$	19,469	$	879,557
Financial liabilities:
Derivative instruments:
Interest rate swaps	$	—	$	4,266	$	—	$	4,266
Interest rate contracts	—		2,544		—		2,544
Forward commitments	—		509		—		509
Total derivative instruments	—		7,319		—		7,319
Total financial liabilities	$	—	$	7,319	$	—	$	7,319

Reconciliation for assets and liabilities measured at fair value on a recurring basis

The following tables provide a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs, or Level 3 inputs, during the three and six months ended June 30, 2016 and 2015, respectively:



Three Months Ended June 30, 2016	Trust preferred securities
Balance at April 1, 2016	$	18,947
Accretion included in net income	8
Unrealized losses included in other comprehensive income	(711		)
Purchases	—
Sales	—
Issues	—
Settlements	(65		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at June 30, 2016	$	18,179



Three Months Ended June 30, 2015	Trust preferred securities
Balance at April 1, 2015	$	20,126
Accretion included in net income	(86		)
Unrealized gains included in other comprehensive income	308
Purchases	—
Sales	(1,117		)
Issues	—
Settlements	(104		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at June 30, 2015	$	19,127



Six Months Ended June 30, 2016	Trust preferred securities
Balance at January 1, 2016	$	19,469
Accretion included in net income	16
Unrealized losses included in other comprehensive income	(1,195		)
Purchases	—
Sales	—
Issues	—
Settlements	(111		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at June 30, 2016	$	18,179



Six Months Ended June 30, 2015	Trust preferred securities
Balance at January 1, 2015	$	19,756
Accretion included in net income	(78		)
Unrealized gains included in other comprehensive income	1,022
Purchases	—
Sales	(1,117		)
Issues	—
Settlements	(456		)
Transfers into Level 3	—
Transfers out of Level 3	—
Balance at June 30, 2015	$	19,127

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on recurring basis

The following table presents information as of June 30, 2016 about significant unobservable inputs (Level 3) used in the valuation of assets and liabilities measured at fair value on a recurring basis:



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Trust preferred securities	$	18,179	Discounted cash flows	Default rate	0-100%

Impaired loans measured at fair value on a nonrecurring basis

The following table provides the fair value measurement for assets measured at fair value on a nonrecurring basis that were still held on the Consolidated Balance Sheets as of the dates presented and the level within the fair value hierarchy each is classified:



June 30, 2016	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	6,614	$	6,614
OREO	—		—		4,976		4,976
Mortgage servicing rights	—		—		17,206		17,206
Total	$	—	$	—	$	28,796	$	28,796



December 31, 2015	Level 1		Level 2		Level 3		Totals
Impaired loans	$	—	$	—	$	6,508	$	6,508
OREO	—		—		12,839		12,839
Total	$	—	$	—	$	19,347	$	19,347

OREO measured at fair value on a nonrecurring basis

The following table presents OREO measured at fair value on a nonrecurring basis that was still held in the Consolidated Balance Sheets as of the dates presented:



	June 30, 2016			December 31, 2015
OREO covered under loss-share agreements:
Carrying amount prior to remeasurement	$	111		$	—
Impairment recognized in results of operations	(9		)	—
Increase in FDIC loss-share indemnification asset	(37		)	—
Receivable from other guarantor	—			—
Fair value	$	65		$	—
OREO not covered under loss-share agreements:
Carrying amount prior to remeasurement	$	6,115		$	14,726
Impairment recognized in results of operations	(1,204		)	(1,887		)
Fair value	$	4,911		$	12,839

Significant unobservable inputs (Level 3) used in valuation of assets and liabilities measured at fair value on non recurring basis



Financial instrument	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Impaired loans	$	6,614	Appraised value of collateral less estimated costs to sell	Estimated costs to sell	4-10%
OREO	4,976		Appraised value of property less estimated costs to sell	Estimated costs to sell	4-10%

Summarizes differences between fair value and principal balance for mortgage loans held for sale measure at fair value

The following table summarizes the differences between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of:



June 30, 2016	Aggregate Fair Value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	276,782	$	263,858	$	12,924
Past due loans of 90 days or more	—		—		—
Nonaccrual loans	—		—		—

Assets and liabilities not measured and reported at fair value on a recurring basis or nonrecurring basis

The carrying amounts and estimated fair values of the Company’s financial instruments, including those assets and liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis, were as follows as of the dates presented:



			Fair Value
As of June 30, 2016	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	210,808	$	210,808	$	—	$	—	$	210,808
Securities held to maturity	389,145		—		409,768		—		409,768
Securities available for sale	674,447		—		656,268		18,179		674,447
Mortgage loans held for sale	276,782		—		276,782		—		276,782
Loans covered under loss-share agreements	42,171		—		—		40,637		40,637
Loans not covered under loss-share agreements, net	5,879,160		—		—		5,883,645		5,883,645
FDIC loss-share indemnification asset	5,547		—		—		5,547		5,547
Mortgage servicing rights	17,184		—		—		17,206		17,206
Derivative instruments	10,973		—		10,973		—		10,973
Financial liabilities
Deposits	$	6,702,487	$	5,093,407	$	1,610,539	$	—	$	6,703,946
Short-term borrowings	444,989		444,989		—		—		444,989
Other long-term borrowings	170		170		—		—		170
Federal Home Loan Bank advances	48,122		—		51,024		—		51,024
Junior subordinated debentures	95,369		—		73,301		—		73,301
Derivative instruments	17,118		—		17,118		—		17,118



			Fair Value
As of December 31, 2015	Carrying Value		Level 1		Level 2		Level 3		Total
Financial assets
Cash and cash equivalents	$	211,571	$	211,571	$	—	$	—	$	211,571
Securities held to maturity	458,400		—		473,753		—		473,753
Securities available for sale	646,805		—		627,336		19,469		646,805
Mortgage loans held for sale	225,254		—		225,254		—		225,254
Loans covered under loss-share agreements	93,142		—		—		92,528		92,528
Loans not covered under loss-share agreements, net	5,277,883		—		—		5,208,630		5,208,630
FDIC loss-share indemnification asset	7,149		—		—		7,149		7,149
Mortgage servicing rights	29,642		—		—		33,283		33,283
Derivative instruments	7,498		—		7,498		—		7,498
Financial liabilities
Deposits	$	6,218,602	$	4,723,312	$	1,502,202	$	—	$	6,225,514
Short-term borrowings	422,279		422,279		—		—		422,279
Other long-term borrowings	192		192		—		—		192
Federal Home Loan Bank advances	52,930		—		56,101		—		56,101
Junior subordinated debentures	95,095		—		78,095		—		78,095
Derivative instruments	7,319		—		7,319		—		7,319

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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