Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

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

hanges in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to a decrease of $329 thousand in the three months ended March 31, 2018, compared to an increase of $451 thousand in the three months ended March 31, 2017. These amounts were offset in earnings by the changes in fair value of forward sale commitments used to economically hedge them. The changes in fair value are reported as a component of mortgage banking revenues in the Unaudited Consolidated Statements of Income.

Items Recorded 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)
March 31, 2018
Assets:
Securities available for sale:
Obligations of U.S. government-sponsored enterprises		$165,614		$—		$165,614		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	589,747		—		589,747		—
Obligations of states and political subdivisions	2,359		—		2,359		—
Individual name issuer trust preferred debt securities	17,096		—		17,096		—
Corporate bonds	13,026		—		13,026		—
Mortgage loans held for sale	17,494		—		17,494		—
Derivative assets	13,489		—		13,489		—
Total assets at fair value on a recurring basis		$818,825		$—		$818,825		$—
Liabilities:
Derivative liabilities		$11,568		$—		$11,568		$—
Contingent consideration liability	187		—		—		187
Total liabilities at fair value on a recurring basis		$11,755		$—		$11,568		$187

(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, 2017
Assets:
Securities available for sale:
Obligations of U.S. government-sponsored enterprises		$157,604		$—		$157,604		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	590,882		—		590,882		—
Obligations of states and political subdivisions	2,359		—		2,359		—
Individual name issuer trust preferred debt securities	16,984		—		16,984		—
Corporate bonds	13,125		—		13,125		—
Mortgage loans held for sale	26,943		—		26,943		—
Derivative assets	2,759		—		2,759		—
Total assets at fair value on a recurring basis		$810,656		$—		$810,656		$—
Liabilities:
Derivative liabilities		$3,047		$—		$3,047		$—
Contingent consideration liability	1,404		—		—		1,404
Total liabilities at fair value on a recurring basis		$4,451		$—		$3,047		$1,404

Change in Contingent Consideration Liability

The following table presents the change in the contingent consideration liability, which is included in other liabilities in the Unaudited Consolidated Balance Sheets.

(Dollars in thousands)
Three months ended March 31,	2018			2017
Balance at beginning of period		$1,404			$2,047
Change in fair value	—			(310		)
Payments	(1,217		)	—
Balance at end of period		$187			$1,737

Items Recorded at Fair Value on a Nonrecurring Basis

The following table presents the carrying value of assets held at March 31, 2018, which were written down to fair value during the three months endedMarch 31, 2018:

(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		$1,086		$—		$—		$1,086
Property acquired through foreclosure or repossession	3,074		—		—		3,074
Total assets at fair value on a nonrecurring basis		$4,160		$—		$—		$4,160

The allowance for loan losses on collateral dependent impaired loans amounted to $169 thousand at March 31, 2018.

The following table presents the carrying value of assets held at December 31, 2017, which were written down to fair value during the year ended December 31, 2017:

(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		$1,425		$—		$—		$1,425
Property acquired through foreclosure or repossession	131		—		—		131
Total assets at fair value on a nonrecurring basis		$1,556		$—		$—		$1,556

The allowance for loan losses on collateral dependent impaired loans amounted to $690 thousand at December 31, 2017.

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

The following tables present valuation techniques and unobservable inputs for 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)
March 31, 2018
Collateral dependent impaired loans		$1,086	Appraisals of collateral	Discount for costs to sell	6% - 15% (10%)
Property acquired through foreclosure or repossession		$3,074	Appraisals of collateral	Discount for costs to sell	13%
				Appraisal adjustments (1)	12%

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

(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range of Inputs Utilized (Weighted Average)
December 31, 2017
Collateral dependent impaired loans		$1,425	Appraisals of collateral	Discount for costs to sell	0% - 15% (15%)
Property acquired through foreclosure or repossession		$131	Appraisals of collateral	Discount for costs to sell	10%
				Appraisal adjustments (1)	12% - 17% (15%)

(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 such as cash and cash equivalents, FHLB stock, accrued interest receivable, bank-owned life insurance, non-maturity deposits and accrued interest payable.

(Dollars in thousands)
March 31, 2018	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)
Financial Assets:
Securities held to maturity		$11,973		$11,995		$—		$11,995		$—
Loans, net of allowance for loan losses	3,361,542		3,355,384		—		—		3,355,384
Financial Liabilities:
Time deposits		$1,031,239		$1,033,989		$—		$1,033,989		$—
FHLB advances	808,677		807,294		—		807,294		—
Junior subordinated debentures	22,681		19,340		—		19,340		—

(Dollars in thousands)
December 31, 2017	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)
Financial Assets:
Securities held to maturity		$12,541		$12,721		$—		$12,721		$—
Loans, net of allowance for loan losses	3,347,583		3,369,932		—		—		3,369,932
Financial Liabilities:
Time deposits		$1,015,095		$1,018,396		$—		$1,018,396		$—
FHLB advances	791,356		792,887		—		792,887		—
Junior subordinated debentures	22,681		18,559		—		18,559		—