Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Mortgage Loans Held For Sale, Interest Rate Lock Commitments and Commitments to Sell

The following table presents the changes in fair value related to mortgage loans held for sale, interest rate lock commitments and commitments to sell residential real estate mortgage loans. Changes in fair values are reported as a component of net gains on loan sales and commissions on loans originated for others in the Consolidated Statements of Income.

(Dollars in thousands)
Years ended December 31,	2014			2013			2012
Mortgage loans held for sale		$598			($1,505	)		$970
Interest rate lock commitments	800			(2,121		)	649
Commitments to sell	(1,442		)	3,618			(1,611		)
Total changes in fair value		($44	)		($8	)		$8

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the balances of assets and liabilities reported at fair value on a recurring basis:

(Dollars in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014
Assets:
Securities available for sale:
Obligations of U.S. government-sponsored enterprises		$31,172		$—		$31,172		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	245,366		—		245,366		—
Obligations of states and political subdivisions	49,176		—		49,176		—
Individual name issuer trust preferred debt securities	25,774		—		25,774		—
Corporate bonds	6,174		—		6,174		—
Mortgage loans held for sale	30,321		—		30,321		—
Derivative assets (1):
Interest rate swap contracts with customers	4,582		—		4,582		—
Forward loan commitments	1,225		—		1,225		—
Total assets at fair value on a recurring basis		$393,790		$—		$393,790		$—
Liabilities:
Derivative liabilities (1):
Mirror swap contracts with counterparties		$4,771		$—		$4,771		$—
Interest rate risk management swap contracts	497		—		497		—
Forward loan commitments	2,048		—		2,048		—
Total liabilities at fair value on a recurring basis		$7,316		$—		$7,316		$—

(1) Derivative assets are included in other assets and derivative liabilities are reported in other liabilities in the Consolidated Balance Sheets.

(Dollars in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013
Assets:
Securities available for sale:
Obligations of U.S. government-sponsored enterprises		$55,115		$—		$55,115		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	238,355		—		238,355		—
Obligations of states and political subdivisions	62,859		—		62,859		—
Individual name issuer trust preferred debt securities	24,684		—		24,684		—
Pooled trust preferred debt securities	547		—		547		—
Corporate bonds	11,343		—		11,343		—
Mortgage loans held for sale	11,636		—		11,636		—
Derivative assets (1):
Interest rate swap contracts with customers	2,733		—		2,733		—
Forward loan commitments	402		—		402		—
Total assets at fair value on a recurring basis		$407,674		$—		$407,674		$—
Liabilities:
Derivative liabilities (1):
Mirror swap contracts with counterparties		$2,703		$—		$2,703		$—
Interest rate risk management swap contracts	1,012		—		1,012		—
Forward loan commitments	583		—		583		—
Total liabilities at fair value on a recurring basis		$4,298		$—		$4,298		$—

(1) Derivatives assets are included in other assets and derivative liabilities are reported in other liabilities in the Consolidated Balance Sheets.

Schedule of Changes in Level Three Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis during 2013:

(Dollars in thousands)	Total			Securities Available for Sale (1)			Mortgage Loans Held for Sale (2)			Derivative Assets/(Liabilities) (3)
Year ended December 31, 2013
Balance at beginning of period		$10,514			$843			$9,813			($142	)
Gains and losses (realized and unrealized):
Included in earnings (4)	(3,497		)	(3,489		)	(150		)	142
Included in other comprehensive income	3,326			3,326			—			—
Purchases	—			—			—			—
Issuances	12,692			—			12,692			—
Sales	(22,355		)	—			(22,355		)	—
Settlements	(133		)	(133		)	—			—
Transfers into Level 3	—			—			—			—
Transfers out of Level 3	(547		)	(547		)	—			—
Balance at end of period		$—			$—			$—			$—

(1) Level 3 securities available for sale were comprised of pooled trust preferred debt securities in the form of collateralized debt obligations. The Corporation utilized a broker quote to value its remaining pooled trust preferred debt security at December 31, 2013, therefore this security was transferred out of Level 3 and into Level 2.

(2) Level 3 mortgage loans held for sale consisted of certain mortgage loans whose fair value was determined utilizing a discounted cash flow analysis.

(3) Level 3 derivative assets / liabilities consisted of forward loan commitments (interest rate lock commitments and commitments to sell residential real estate mortgages) whose fair value was determined utilizing a discounted cash flow analysis.

(4) Losses included in earnings for Level 3 securities available for sale were included in net impairment losses recognized in earnings in the Consolidated Statements of Income. Losses included in earnings for Level 3 mortgage loans held for sale and derivative assets and liabilities were included in net gains on loan sales and commissions on loans originated for others in the Consolidated Statements of Income.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following tables summarizes such assets, which were written down to fair value during the during the year ended December 31, 2014:

(Dollars in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Collateral dependent impaired loans		$5,728		$—		$—		$5,728
Property acquired through foreclosure or repossession	348		—		—		348
Total assets at fair value on a nonrecurring basis		$6,076		$—		$—		$6,076

The allowance for loan losses on the collateral dependent impaired loans amounted to $1.3 million at December 31, 2014.

The following tables summarizes such assets, which were written down to fair value during the during the year ended December 31, 2013:

(Dollars in thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Collateral dependent impaired loans		$11,177		$—		$—		$11,177
Property acquired through foreclosure or repossession	435		—		—		435
Total assets at fair value on a nonrecurring basis		$11,612		$—		$—		$11,612

Qualitative Information About Level 3 Assets Measured at Fair Value on a Nonrecurring Basis

The following tables present additional qualitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:

(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range of Inputs Utilized (Weighted Average)
December 31, 2014
Collateral dependent impaired loans		$5,728	Appraisals of collateral	Discount for costs to sell	0% - 10% (2%)
				Appraisal adjustments (1)	0% - 40% (3%)
Property acquired through foreclosure or repossession	348		Appraisals of collateral	Discount for costs to sell	6% - 10% (8%)
				Appraisal adjustments (1)	5% - 23% (14%)

(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range of Inputs Utilized (Weighted Average)
December 31, 2013
Collateral dependent impaired loans		$11,177	Appraisals of collateral	Discount for costs to sell	1% - 45% (11%)
				Appraisal adjustments (1)	0% - 50% (2%)
Property acquired through foreclosure or repossession	435		Appraisals of collateral	Discount for costs to sell	2% - 10% (9%)
				Appraisal adjustments (1)	0% - 22% (13%)

(1) Management may adjust appraisal values to reflect market value declines or other discounts resulting from its knowledge of the property.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The following tables present the carrying amount, estimated fair value and placement in the fair value hierarchy of the Corporation’s financial instruments . The tables exclude financial instruments for which the carrying value approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, FHLBB stock, accrued interest receivable and bank-owned life insurance. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits and accrued interest payable.

(Dollars in thousands)	Carrying Amount		Total  Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014
Financial Assets:
Securities held to maturity		$25,222		$26,008		$—		$26,008		$—
Loans, net of allowance for loan losses	2,831,253		2,866,907		—		—		2,866,907
Financial Liabilities:
Time deposits		$874,102		$872,570		$—		$872,570		$—
FHLBB advances	406,297		418,005		—		418,005		—
Junior subordinated debentures	22,681		17,201		—		17,201		—

(Dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013
Financial Assets:
Securities held to maturity		$29,905		$29,865		$—		$29,865		$—
Loans, net of allowance for loan losses	2,434,998		2,479,527		—		—		2,479,527
Financial Liabilities:
Time deposits		$790,762		$797,748		$—		$797,748		$—
FHLBB advances	288,082		308,317		—		308,317		—
Junior subordinated debentures	22,681		16,282		—		16,282		—