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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Assets And Liabilities Measured At Fair Value On A Recurring Basis
The following table presents assets and liabilities measured at fair value on a recurring basis:
 
Fair Value Measurements at June 30, 2013 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2013
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

Obligations of U.S. Treasury and other U.S. Government sponsored entities
 
$
—

 
$
594,732

 
$
—

 
$
594,732

Obligations of states and political subdivisions
 
—

 
809

 
—

 
809

U.S. Government sponsored entities’ asset-backed securities
 
—

 
449,282

 
—

 
449,282

Equity securities
 
1,757

 
—

 
795

 
2,552

Mortgage loans held for sale
 
—

 
13,138

 
—

 
13,138

Mortgage IRLCs
 
—

 
133

 
—

 
133

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
135

 
$
135

 
Fair Value Measurements at December 31, 2012 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2012
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

Obligations of U.S. Treasury and other U.S. Government sponsored entities
 
$
—

 
$
695,727

 
$
—

 
$
695,727

Obligations of states and political subdivisions
 
—

 
1,003

 
—

 
1,003

U.S. Government sponsored entities’ asset-backed securities
 
—

 
415,502

 
—

 
415,502

Equity securities
 
1,442

 
—

 
780

 
2,222

Mortgage loans held for sale
 
—

 
25,743

 
—

 
25,743

Mortgage IRLCs
 
—

 
372

 
—

 
372

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
135

 
$
135
Reconciliation Of Level 3 Input For Financial Instruments Measured On Recurring Basis
The table below is a reconciliation of the beginning and ending balances of the Level 3 inputs for the three and six months ended June 30, 2013 and 2012, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements
Three months ended June 30, 2013 and 2012
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at April 1, 2013
 
$
776

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
19

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2013
 
$
795

 
$
(135
)
 
 
 
 
 
Balance, at April 1, 2012
 
$
756

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
(18
)
 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2012
 
$
738

 
$
(135
)

Level 3 Fair Value Measurements
Six months ended June 30, 2013 and 2012
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at January 1, 2013
 
$
780

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
15

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2013
 
$
795

 
$
(135
)
 
 
 
 
 
Balance, at January 1, 2012
 
$
763

 
$
(700
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
(25
)
 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
565

Balance at June 30, 2012
 
$
738

 
$
(135
)
Assets And Liabilities Measured At Fair Value On A Nonrecurring Basis
The following tables present assets and liabilities measured at fair value on a nonrecurring basis. Collateral dependent impaired loans are carried at fair value if they have been charged down to fair value or if a specific valuation allowance has been established. A new cost basis is established at the time a property is initially recorded in OREO. OREO properties are carried at fair value if a devaluation has been taken to the property's value subsequent to the initial measurement.
Fair Value Measurements at June 30, 2013 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2013
Impaired loans:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
22,658

 
$
22,658

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
9,074

 
9,074

Remaining commercial
 
—

 
—

 
8,280

 
8,280

Residential real estate
 
—

 
—

 
6,737

 
6,737

Total impaired loans
 
$
—

 
$
—

 
$
46,749

 
$
46,749

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
5,755

 
$
—

 
$
5,755

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
4,255

 
4,255

Construction real estate
 
—

 
—

 
9,972

 
9,972

Residential real estate
 
—

 
—

 
2,983

 
2,983

Total OREO
 
$
—

 
$
—

 
$
17,210

 
$
17,210

 
Fair Value Measurements at December 31, 2012 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2012
Impaired loans:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
25,997

 
$
25,997

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
12,832

 
12,832

Remaining commercial
 
—

 
—

 
8,113

 
8,113

Residential real estate
 
—

 
—

 
6,990

 
6,990

Total impaired loans
 
$
—

 
$
—

 
$
53,932

 
$
53,932

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
6,642

 
$
—

 
$
6,642

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
3,485

 
3,485

Construction real estate
 
—

 
—

 
12,134

 
12,134

Residential real estate
 
—

 
—

 
4,307

 
4,307

Total OREO
 
$
—

 
$
—

 
$
19,926

 
$
19,926
Qualitative Information about Level 3 Fair Value Measurements Measured on Non-Recurring Basis
The following tables present qualitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2013 and December 31, 2012:

June 30, 2013
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range (Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
22,658

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 111.0% (23.3%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.6% - 20.9% (9.7%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
38.0% - 65.0% (53.0%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
9,074

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 218.0% (16.8%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
11.0% - 35.0% (17.1%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
8,280

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 75.0% (23.7%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
11.0% - 35.0% (17.6%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
6,737

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 178.0% (15.9%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.8% - 10.5% (8.2%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,255

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 85.0% (34.1%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.5% - 11.5% (10.2%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% (10.0%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
40.0% - 90.0% (65.0%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
9,972

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 312.0% (29.8%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
13.0% (13.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,983

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 173.7% (19.5%)
 
 
 
 
Income approach
 
Capitalization rate
 
9.75% (9.75%)

December 31, 2012
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range (Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
25,997

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 116.0% (22.3%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.5% - 20.9% (10.1%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
23.0% - 63.0% (50.4%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
12,832

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 218.0% (31.9%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
11.0% - 55.0% (23.4%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
8,113

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 75.0% (26.2%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 55.0% (18.3%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
6,990

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 178.0% (17.9%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
3,485

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 67.0% (25.8%)
 
 
 
 
Income approach
 
Capitalization rate
 
11.0% (11.0%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
13.0% (13.0%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
40.9% - 90.0% (65.0%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
12,134

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 273.0% (34.0%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.5% (8.5%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 12.0% (10.8%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
4,307

 
Sales comparison approach
 
Adj to comparables
 
1.0% - 61.0% (18.0%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.9% - 9.3% (8.7%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
6.0% (6.0%)
Fair Value, by Balance Sheet Grouping
The fair value of financial instruments at June 30, 2013 and December 31, 2012, was as follows:
 
 
June 30, 2013
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
353,926

 
$
353,926

 
$
—

 
$
—

 
$
353,926

Investment securities
 
1,279,162

 
1,757

 
1,283,342

 
795

 
1,285,894

Accrued interest receivable - securities
 
4,719

 
—

 
4,719

 
—

 
4,719

Accrued interest receivable - loans
 
14,121

 
—

 
—

 
14,121

 
14,121

Mortgage loans held for sale
 
13,138

 
—

 
13,138

 
—

 
13,138

Mortgage IRLCs
 
133

 
—

 
133

 
—

 
133

Impaired loans carried at fair value
 
46,749

 
—

 
—

 
46,749

 
46,749

Other loans, net
 
4,395,585

 
—

 
—

 
4,424,036

 
4,424,036

Loans receivable, net
 
$
4,455,605

 
$
—

 
$
13,271

 
$
4,470,785

 
$
4,484,056

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,095,454

 
$
1,095,454

 
$
—

 
$
—

 
$
1,095,454

Interest bearing transactions accounts
 
1,272,481

 
1,272,481

 
—

 
—

 
1,272,481

Savings accounts
 
1,093,804

 
1,093,804

 
—

 
—

 
1,093,804

Time deposits
 
1,385,469

 
—

 
1,392,678

 
—

 
1,392,678

Other
 
4,106

 
4,106

 
—

 
—

 
4,106

Total deposits
 
$
4,851,314

 
$
3,465,845

 
$
1,392,678

 
$
—

 
$
4,858,523

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
223,489

 
$
—

 
$
223,489

 
$
—

 
$
223,489

Long-term debt
 
783,136

 
—

 
841,234

 
—

 
841,234

Subordinated debentures/notes
 
80,250

 
—

 
85,245

 
—

 
85,245

Accrued interest payable – deposits
 
1,754

 
26

 
1,728

 
—

 
1,754

Accrued interest payable – debt/borrowings
 
1,478

 
14

 
1,464

 
—

 
1,478

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
135

 
$
—

 
$
—

 
$
135

 
$
135

 
 
 
December 31, 2012
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
201,305

 
$
201,305

 
$
—

 
$
—

 
$
201,305

Investment securities
 
1,515,844

 
1,442

 
1,522,937

 
780

 
1,525,159

Accrued interest receivable - securities
 
6,122

 
—

 
6,122

 
—

 
6,122

Accrued interest receivable - loans
 
13,588

 
—

 
2

 
13,586

 
13,588

Mortgage loans held for sale
 
25,743

 
—

 
25,743

 
—

 
25,743

Mortgage IRLCs
 
372

 
—

 
372

 
—

 
372

Impaired loans carried at fair value
 
53,932

 
—

 
—

 
53,932

 
53,932

Other loans, net
 
4,314,738

 
—

 
—

 
4,348,705

 
4,348,705

Loans receivable, net
 
$
4,394,785

 
$
—

 
$
26,115

 
$
4,402,637

 
$
4,428,752

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,137,290

 
$
1,137,290

 
$
—

 
—

 
$
1,137,290

Interest bearing transactions accounts
 
1,088,617

 
1,088,617

 
—

 
—

 
1,088,617

Savings accounts
 
1,038,356

 
1,038,356

 
—

 
—

 
1,038,356

Time deposits
 
1,450,424

 
—

 
1,458,793

 
—

 
1,458,793

Other
 
1,345

 
1,345

 
—

 
—

 
1,345

Total deposits
 
$
4,716,032

 
$
3,265,608

 
$
1,458,793

 
$
—

 
$
4,724,401

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
344,168

 
$
—

 
$
344,168

 
$
—

 
$
344,168

Long-term debt
 
781,658

 
—

 
861,466

 
—

 
861,466

Subordinated debentures/notes
 
80,250

 
—

 
79,503

 
—

 
79,503

Accrued interest payable – deposits
 
1,960

 
21

 
1,939

 
—

 
1,960

Accrued interest payable – debt/borrowings
 
1,499

 
8

 
1,491

 
—

 
1,499

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
135

 
$
—

 
$
—

 
$
135

 
$
135