Fair Value (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:



	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2017
Financial assets:
Loans held for sale	$	8,103	$	—	$	8,103	$	—
AFS securities:
Obligations of states and political subdivisions	7,335		—		7,335		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	503,302		—		503,302		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	272,799		—		272,799		—
Subordinated corporate bonds	5,657		—		5,657		—
Equity securities	806		—		806		—
Customer loan swaps	5,036		—		5,036		—
Fixed-rate mortgage interest rate lock commitments	307		—		307		—
Forward delivery commitments	158		—		158		—
FHLBB advance interest rate swaps	21		—		21		—
Financial liabilities:
Junior subordinated debt interest rate swaps	7,571		—		7,571		—
Customer loan swaps	5,036		—		5,036		—
Fixed-rate mortgage interest rate lock commitments	22		—		22		—
Forward delivery commitments	16		—		16		—
December 31, 2016
Financial assets:
Loans held for sale	$	14,836	$	—	$	14,836	$	—
AFS securities:
Obligations of states and political subdivisions	9,001		—		9,001		—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises	480,622		—		480,622		—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises	283,890		—		283,890		—
Subordinated corporate bonds	5,613		—		5,613		—
Equity securities	741		—		741		—
Customer loan swaps	1,945		—		1,945		—
Fixed-rate mortgage interest rate lock commitments	202		—		202		—
Forward delivery commitments	587		—		587		—
Financial liabilities:
Junior subordinated debt interest rate swaps	8,372		—		8,372		—
FHLBB advance interest rate swaps	389		—		389		—
Customer loan swaps	1,945		—		1,945		—
Fixed-rate mortgage interest rate lock commitments	15		—		15		—
Forward delivery commitments	309		—		309		—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis as of December 31, 2017 and 2016:



	Fair Value		Readily Available Market Prices (Level 1)		Observable Market Data (Level 2)		Company Determined Fair Value (Level 3)
December 31, 2017
Financial assets:
Collateral-dependent impaired loans	$	3,696	$	—	$	—	$	3,696
Servicing assets⁽¹⁾	—		—		—		—
Non-financial assets:
OREO	130		—		—		130
December 31, 2016
Financial assets:
Collateral-dependent impaired loans	$	500	$	—	$	—	$	500
Servicing assets⁽¹⁾	1,090		—		—		1,090
Non-financial assets:
OREO	922		—		—		922


(1)	Represents mortgage serving assets deemed to be impaired and a valuation allowance was established to carry at fair value at December 31, 2017 and 2016.

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2017 and 2016:



	Fair Value		Valuation Methodology	Unobservable input	Discount Range (Weighted-Average)
December 31, 2017
Collateral-dependent impaired loans:
Partially charged-off	$	86	Market approach appraisal of collateral	Management adjustment of appraisal	0 - 50%	(18%)
				Estimated selling costs	0 - 10%	(6%)
Specifically reserved	3,610		Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	10%	(10%)
OREO	130		Market approach appraisal of collateral	Management adjustment of appraisal	20%	(20%)
				Estimated selling costs	10%	(10%)
December 31, 2016
Collateral-dependent impaired loans:
Partially charged-off	$	166	Market approach appraisal of collateral	Management adjustment of appraisal	0%	(0%)
				Estimated selling costs	0 - 10%	(5%)
Specifically reserved	334		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 50%	(13%)
				Estimated selling costs	10%	(10%)
OREO	922		Market approach appraisal of collateral	Management adjustment of appraisal	0 - 73%	(7%)
				Estimated selling costs	10%	(10%)

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities at December 31, 2017:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	102,971	$	102,971	$	102,971	$	—	$	—
AFS securities	789,899		789,899		—		789,899		—
HTM securities	94,073		94,913		—		94,913		—
Loans held for sale	8,103		8,103		—		8,103		—
Residential real estate loans⁽¹⁾	853,283		853,056		—		—		853,056
Commercial real estate loans⁽¹⁾	1,152,160		1,115,618		—		—		1,115,618
Commercial loans⁽¹⁾⁽²⁾	413,898		401,902		—		—		401,902
Home equity loans⁽¹⁾	321,011		318,230		—		—		318,230
Consumer loans⁽¹⁾	17,916		17,335		—		—		17,335
Servicing assets	1,025		1,766		—		1,766		—
Interest receivable	9,595		9,595		—		9,595		—
Customer loan swaps	5,036		5,036		—		5,036		—
Fixed-rate mortgage interest rate lock commitments	307		307		—		307		—
Forward delivery commitments	158		158		—		158		—
FHLBB advance interest rate swaps	21		21		—		21		—
Financial liabilities:
Deposits	$	3,000,491	$	2,995,269	$	—	$	2,995,269	$	—
Short-term borrowings	541,867		541,683		—		541,683		—
Long-term borrowings	10,720		10,699		—		10,699		—
Subordinated debentures	58,911		44,333		—		44,333		—
Interest payable	564		564		—		564		—
Junior subordinated debt interest rate swaps	7,571		7,571		—		7,571		—
Customer loan swaps	5,036		5,036		—		5,036		—
Fixed-rate mortgage interest rate lock commitments	22		22		—		22		—
Forward delivery commitments	16		16		—		16		—


(1)	The presented carrying amount is net of the allocated ALL.


(2)	Includes the HPFC loan portfolio.

The following table presents the carrying amounts and estimated fair value for financial instrument assets and liabilities at December 31, 2016:



	Carrying Amount		Fair Value		Readily Available Market Prices (Level 1)		Observable Market Prices (Level 2)		Company Determined Market Prices (Level 3)
Financial assets:
Cash and due from banks	$	87,707	$	87,707	$	87,707	$	—	$	—
AFS securities	779,867		779,867		—		779,867		—
HTM securities	94,609		94,596		—		94,596		—
Loans held for sale	14,836		14,836		—		14,836		—
Residential real estate loans⁽¹⁾	798,334		800,122		—		—		800,122
Commercial real estate loans⁽¹⁾	1,038,626		1,006,249		—		—		1,006,249
Commercial loans⁽¹⁾⁽²⁾	389,624		391,493		—		—		391,493
Home equity loans⁽¹⁾	327,713		327,292		—		—		327,292
Consumer loans⁽¹⁾	17,151		16,845		—		—		16,845
Servicing assets	1,210		1,701		—		1,701		—
Interest receivable	8,654		8,654		—		8,654		—
Customer loan swaps	1,945		1,945		—		1,945		—
Fixed-rate mortgage interest rate lock commitments	202		202		—		202		—
Forward delivery commitments	587		587		—		587		—
Financial liabilities:
Deposits	$	2,828,529	$	2,826,484	$	—	$	2,826,484	$	—
Short-term borrowings	530,129		530,435		—		530,435		—
Long-term borrowings	10,791		10,836		—		10,836		—
Subordinated debentures	58,755		41,660		—		41,660		—
Interest payable	534		534		—		534		—
Junior subordinated debt interest rate swaps	8,372		8,372		—		8,372		—
FHLBB advance interest rate swaps	389		389		—		389		—
Customer loan swaps	1,945		1,945		—		1,945		—
Fixed-rate mortgage interest rate lock commitments	15		15		—		15		—
Forward delivery commitments	309		309		—		309		—


(1)	The presented carrying amount is net of the allocated ALL.


(2)	Includes the HPFC loan portfolio.