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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
Assets and liabilities measured at fair value at the periods indicated were as follows:

 
 
 
Fair Value Measurements at Reporting Date Using
 
Balance
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
September 30, 2013
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
U.S. Government agency securities
$
19,599

 
$

 
$
19,599

 
$

Agency mortgage-backed securities
183,361

 

 
183,361

 

Agency collateralized mortgage obligations
61,255

 

 
61,255

 

Private mortgage-backed securities
2,863

 

 

 
2,863

Single issuer trust preferred securities issued by banks
2,173

 

 
2,173

 

Pooled trust preferred securities issued by banks and insurers
3,971

 

 

 
3,971

Marketable securities
11,176

 
11,176

 

 

Loans held for sale
10,667

 

 
10,667

 

Derivative instruments
20,127

 

 
20,127

 

Liabilities
 
 
 
 
 
 
 
Derivative instruments
31,128

 

 
31,128

 

Total recurring fair value measurements
$
284,064

 
$
11,176

 
$
266,054

 
$
6,834

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
13,085

 
$

 
$

 
$
13,085

Other real estate owned
9,188

 

 

 
9,188

Total nonrecurring fair value measurements
$
22,273

 
$

 
$

 
$
22,273


 
December 31, 2012
 
(Dollars in thousands)
Recurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
U.S. government agency securities
$
20,822

 
$

 
$
20,822

 
$

Agency mortgage-backed securities
221,425

 

 
221,425

 

Agency collateralized mortgage obligations
68,376

 

 
68,376

 

Private mortgage-backed securities
3,532

 

 

 
3,532

Single issuer trust preferred securities issued by banks
2,240

 

 
2,240

 

Pooled trust preferred securities issued by banks and insurers
2,981

 

 

 
2,981

Marketable securities
9,910

 
9,910

 

 

Loans held for sale
48,187

 

 
48,187

 

Derivative instruments
30,528

 

 
30,528

 

Liabilities
 
 
 
 
 
 
 
Derivative instruments
46,793

 

 
46,793

 

Total recurring fair value measurements
$
361,208

 
$
9,910

 
$
344,785

 
$
6,513

 
 
 
 
 
 
 
 
Nonrecurring fair value measurements
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
Collateral dependent impaired loans
$
7,817

 
$

 
$

 
$
7,817

Other real estate owned
11,974

 

 

 
11,974

Total nonrecurring fair value measurements
$
19,791

 
$

 
$

 
$
19,791

Reconciliation for all assets and liabilities measured at fair value on a recurring basis
The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3). These instruments were valued using pricing models and discounted cash flow methodologies.

 
Securities Available for Sale:
 
Pooled Trust
Preferred
Securities
 
Single Trust
Preferred
Securities
 
Private
Mortgage-
Backed
Securities
 
Total
 
(Dollars in thousands)
Balance at June 30, 2013
$
3,617

 
$

 
$
3,036

 
$
6,653

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in other comprehensive income
399

 

 
46

 
445

Settlements
(45
)
 

 
(219
)
 
(264
)
Balance at September 30, 2013
$
3,971

 
$

 
$
2,863

 
$
6,834

 
 
 
 
 
 
 
 
Balance at January 1, 2012
$
2,820

 
$
4,210

 
$
6,110

 
$
13,140

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in earnings

 

 
(76
)
 
(76
)
Included in other comprehensive income
313

 
703

 
411

 
1,427

Settlements
(152
)
 

 
(2,913
)
 
(3,065
)
Transfers into (out of) level 3

 
(4,913
)
 

 
(4,913
)
Balance at December 31, 2012
$
2,981

 
$

 
$
3,532

 
$
6,513

Gains and (losses) (realized/unrealized)
 
 
 
 
 
 
 
Included in other comprehensive income
1,230

 

 
(43
)
 
1,187

Settlements
(240
)
 

 
(626
)
 
(866
)
Balance at September 30, 2013
$
3,971

 
$

 
$
2,863

 
$
6,834

Investments in securities that are classified as level 3
The following table sets forth certain unobservable inputs regarding the Company’s investment in securities that are classified as Level 3 for the periods indicated:

 
Fair Value
 
Valuation Technique(s)
 
Unobservable Inputs
 
Range
 
Weighted
Average
 
(Dollars in thousands)
 
September 30, 2013
Pooled trust preferred securities
$
3,971

 
Discounted cash flow methodology
 
Cumulative Prepayment
 
0%-76.0%
 
7.2
%
 
 
 
 
 
Cumulative Default
 
2.9%-100.0%
 
17.8
%
 
 
 
 
 
Loss Given Default
 
85.0% - 100.0%
 
95.7
%
 
 
 
 
 
Cure Given Default
 
0% - 75.0%
 
42.7
%
Private mortgage-backed securities
$
2,863

 
Multi-dimensional spread tables
 
Cumulative Prepayment Rate
 
14.4%-14.5%
 
14.5
%
 
 
 
 
 
Constant Default Rate
 
0.8% -20.3%
 
4.1
%
 
 
 
 
 
Severity
 
21.0% -50.0%
 
33.9
%
Impaired loans
$
13,085

 
Appraisals of collateral (1)
 
 
 
 
 
 
Other real estate owned
$
9,188

 
Appraisals of collateral (1)
 
 
 
 
 
 
 
December 31, 2012
Pooled trust preferred securities
$
2,981

 
Discounted cash flow methodology
 
Cumulative Prepayment
 
0%-76.0%
 
7.5
%
 
 
 
 
 
Cumulative Default
 
3.0%-100.0%
 
19.6
%
 
 
 
 
 
Loss Given Default
 
85.0% - 100.0%
 
94.9
%
 
 
 
 
 
Cure Given Default
 
0% - 75.0%
 
33.8
%
Private mortgage-backed securities
$
3,532

 
Multi-dimensional spread tables
 
Cumulative Prepayment Rate
 
10.3%-14.5%
 
13.9
%
 
 
 
 
 
Constant Default Rate
 
0.9% -20.4%
 
4.0
%
 
 
 
 
 
Severity
 
20.0% -55.0%
 
33.6
%
Impaired loans
$
7,817

 
Appraisals of collateral (1)
 
 
 
 
 
 
Other real estate owned
$
11,974

 
Appraisals of collateral (1)
 
 
 
 
 
 
 
(1)
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of these possible adjustments may vary.
The estimated fair values and related carrying amounts for assets and liabilities
The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the periods indicated:

 
 
 
 
 
Fair Value Measurements at Reporting Date Using
 
Book
Value
 
Fair
Value
 
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
  
September 30, 2013
 
(Dollars in thousands)
Financial assets
 
 
 
 
 
 
 
 
 
Securities held to maturity (a)
 
U.S. Treasury securities
$
1,012

 
$
1,069

 

 
$
1,069

 

Agency mortgage-backed securities
115,983

 
118,830

 

 
118,830

 

Agency collateralized mortgage obligations
193,190

 
189,256

 

 
189,256

 

State, county, and municipal securities
676

 
687

 

 
687

 

Single issuer trust preferred securities issued by banks
1,507

 
1,529

 

 
1,529

 

Corporate debt securities
5,005

 
5,226

 

 
5,226

 

Loans, net of allowance for loan losses (b)
4,502,467

 
4,504,271

 

 

 
4,504,271

Financial liabilities
 
 
 
 
 
 
 
 
 
Time certificates of deposits (c)
$
691,616

 
$
695,350

 

 
$
695,350

 

Federal home loan bank advances and other borrowings (c)
189,539

 
188,238

 

 
188,238

 

Wholesale and customer repurchase agreements (c)
214,180

 
215,704

 

 

 
215,704

Junior subordinated debentures (d)
73,962

 
72,573

 

 
72,573

 

Subordinated debentures (c)
30,000

 
24,890

 

 

 
24,890

  
December 31, 2012
 
(Dollars in thousands)
Financial assets
 
 
 
 
 
 
 
 
 
Securities held to maturity (a)
 
U.S. Treasury securities
$
1,013

 
$
1,134

 
$

 
$
1,134

 
$

Agency mortgage-backed securities
72,360

 
76,593

 

 
76,593

 

Agency collateralized mortgage obligations
97,507

 
100,380

 

 
100,380

 

State, county, and municipal securities
915

 
926

 

 
926

 

Single issuer trust preferred securities issued by banks
1,516

 
1,526

 

 
1,526

 

Corporate debt securities
5,007

 
5,265

 

 
5,265

 

Loans, net of allowance for loan losses (b)
4,467,177

 
4,462,580

 

 

 
4,462,580

Financial liabilities
 
 
 
 
 
 
 
 
 
Time certificates of deposits (c)
$
753,125

 
$
759,516

 
$

 
$
759,516

 
$

Federal home loan bank advances and other borrowings (c)
283,569

 
293,580

 

 
293,580

 

Wholesale and customer repurchase agreements (c)
203,359

 
201,189

 

 

 
201,189

Junior subordinated debentures (d)
74,127

 
74,416

 

 
74,416

 

Subordinated debentures (c)
30,000

 
22,762

 

 

 
22,762

 
(a)
The fair values presented are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments and/or discounted cash flow analyses.
(b)
Fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities or cash flows.
(c)
Fair value was determined by discounting anticipated future cash payments using rates currently available for instruments with similar remaining maturities.
(d)
Fair value was determined based upon market prices of securities with similar terms and maturities.