Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair value of Mortgage Loans Held for Sale

The following table presents a summary of mortgage loans held for sale accounted for under the fair value option:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Aggregate fair value		$44,657		$20,996
Aggregate principal balance	43,696		20,498
Difference between fair value and principal balance		$961		$498

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)
September 30, 2019
Assets:
Available for sale debt securities:
Obligations of U.S. government-sponsored enterprises		$197,324		$—		$197,324		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	664,905		—		664,905		—
Individual name issuer trust preferred debt securities	12,421		—		12,421		—
Corporate bonds	12,370		—		12,370		—
Mortgage loans held for sale	44,657		—		44,657		—
Derivative assets	39,921		—		39,921		—
Total assets at fair value on a recurring basis		$971,598		$—		$971,598		$—
Liabilities:
Derivative liabilities		$39,817		$—		$39,817		$—
Total liabilities at fair value on a recurring basis		$39,817		$—		$39,817		$—

(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, 2018
Assets:
Available for sale debt securities:
Obligations of U.S. government-sponsored enterprises		$242,683		$—		$242,683		$—
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises	660,793		—		660,793		—
Obligations of states and political subdivisions	937		—		937		—
Individual name issuer trust preferred debt securities	11,772		—		11,772		—
Corporate bonds	11,625		—		11,625		—
Mortgage loans held for sale	20,996		—		20,996		—
Derivative assets	3,966		—		3,966		—
Total assets at fair value on a recurring basis		$952,772		$—		$952,772		$—
Liabilities:
Derivative liabilities		$3,202		$—		$3,202		$—
Total liabilities at fair value on a recurring basis		$3,202		$—		$3,202		$—

Items Recorded at Fair Value on a Nonrecurring Basis

The following table presents the carrying value of assets held at September 30, 2019, which were written down to fair value during the nine months ended September 30, 2019:

(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		$1,451		$—		$—		$1,451
Property acquired through foreclosure or repossession	2,000		—		—		2,000
Total assets at fair value on a nonrecurring basis		$3,451		$—		$—		$3,451

The allowance for loan losses on collateral dependent impaired loans amounted to $221 thousand at September 30, 2019.

The following table presents the carrying value of assets held at December 31, 2018, which were written down to fair value during the year ended December 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		$883		$—		$—		$883
Property acquired through foreclosure or repossession	2,142		—		—		2,142
Total assets at fair value on a nonrecurring basis		$3,025		$—		$—		$3,025

The allowance for loan losses on collateral dependent impaired loans amounted to $24 thousand at December 31, 2018.

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)
September 30, 2019
Collateral dependent impaired loans		$1,451	Appraisals of collateral	Discount for costs to sell	0% - 18% (13%)
				Appraisal adjustments (1)	0% - 100% (19%)
Property acquired through foreclosure or repossession		$2,000	Appraisals of collateral	Discount for costs to sell	20%
				Appraisal adjustments (1)	13%

(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, 2018
Collateral dependent impaired loans		$883	Appraisals of collateral	Discount for costs to sell	0% - 10% (10%)
				Appraisal adjustments (1)	0% - 100% (2%)
Property acquired through foreclosure or repossession		$2,142	Appraisals of collateral	Discount for costs to sell	13%
				Appraisal adjustments (1)	12% - 28% (20%)

(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 estimated fair values and related carrying amounts for financial instruments for which fair value is only disclosed are presented below as of the periods indicated. 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)
September 30, 2019	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:
Loans, net of allowance for loan losses		$3,751,109		$3,749,391		$—		$—		$3,749,391
Financial Liabilities:
Time deposits		$1,223,662		$1,239,646		$—		$1,239,646		$—
FHLB advances	956,786		962,160		—		962,160		—
Junior subordinated debentures	22,681		19,265		—		19,265		—

(Dollars in thousands)
December 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:
Held to maturity debt securities		$10,415		$10,316		$—		$10,316		$—
Loans, net of allowance for loan losses	3,653,288		3,598,025		—		—		3,598,025
Financial Liabilities:
Time deposits		$1,255,108		$1,269,433		$—		$1,269,433		$—
FHLB advances	950,722		950,691		—		950,691		—
Junior subordinated debentures	22,681		19,226		—		19,226		—