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Fair Value (Tables)
 6 Months Ended
Jun. 30, 2014
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, 2014 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2014
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
551,936

 
$
—

 
$
551,936

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

 
642,710

 
—

 
642,710

Equity securities
 
1,902

 
—

 
747

 
2,649

Mortgage loans held for sale
 
—

 
6,577

 
—

 
6,577

Mortgage IRLCs
 
—

 
82

 
—

 
82

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
135

 
$
135

 
Fair Value Measurements at December 31, 2013 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2013
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
525,136

 
$
—

 
$
525,136

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

 
648,471

 
—

 
648,471

Equity securities
 
1,900

 
—

 
759

 
2,659

Mortgage loans held for sale
 
—

 
1,666

 
—

 
1,666

Mortgage IRLCs
 
—

 
61

 
—

 
61

 
 
 
 
 
 
 
 
 
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, 2014 and 2013, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements
Three months ended June 30, 2014 and 2013
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at April 1, 2014
 
$
711

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
36

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2014
 
$
747

 
$
(135
)
 
 
 
 
 
Balance, at April 1, 2013
 
$
776

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
19

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2013
 
$
795

 
$
(135
)

Level 3 Fair Value Measurements
Six months ended June 30, 2014 and 2013
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at January 1, 2014
 
$
759

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
(12
)
 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2014
 
$
747

 
$
(135
)
 
 
 
 
 
Balance, at January 1, 2013
 
$
780

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
15

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Periodic settlement of fair value swap
 
—

 
—

Balance at June 30, 2013
 
$
795

 
$
(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, 2014 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2014
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
17,799

 
$
17,799

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
4,378

 
4,378

Remaining commercial
 
—

 
—

 
4,982

 
4,982

Residential real estate
 
—

 
—

 
3,024

 
3,024

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
30,183

 
$
30,183

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
2,568

 
$
—

 
$
2,568

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
1,840

 
1,840

Construction real estate
 
—

 
—

 
9,157

 
9,157

Residential real estate
 
—

 
—

 
2,796

 
2,796

Total OREO
 
$
—

 
$
—

 
$
13,793

 
$
13,793

 
Fair Value Measurements at December 31, 2013 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2013
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
21,100

 
$
21,100

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
4,777

 
4,777

Remaining commercial
 
—

 
—

 
3,788

 
3,788

Residential real estate
 
—

 
—

 
4,154

 
4,154

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
33,819

 
$
33,819

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
2,259

 
$
—

 
$
2,259

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
4,119

 
4,119

Construction real estate
 
—

 
—

 
11,041

 
11,041

Residential real estate
 
—

 
—

 
3,366

 
3,366

Total OREO
 
$
—

 
$
—

 
$
18,526

 
$
18,526
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, 2014 and December 31, 2013:

June 30, 2014
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
17,799

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 96.0% (32.2%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.0% - 12.5% (9.4%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
11.7% - 65.0% (38.7%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
4,378

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 170.6% (16.7%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.8% - 20.0% (14.6%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
4,982

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 76.0% (41.8%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 25.0% (17.1%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
3,024

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 121.8% (14.0%)
 
 
 
 
Income approach
 
Capitalization rate
 
10.0% - 10.0% (10.0%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,840

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 140.0% (18.2%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.4% - 10.0% (9.5%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
60.0% - 95.0% (76.5%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
9,157

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 437.0% (33.3%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
15.0% - 15.0% (15.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,796

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 80.5% (26.2%)
 
 
 
 
Income approach
 
Capitalization rate
 
5.4% - 7.8% (7.4%)

Balance at December 31, 2013
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
21,100

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 109.0% (22.8%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.0% - 12.5% (9.1%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
11.7% - 65.0% (37.1%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
4,777

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 96.0% (13.9%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
11.0% - 20.0% (14.9%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
3,788

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 40.0% (22.4%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
11.0% - 20.0% (18.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
4,154

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 121.8% (14.9%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.8% - 10.0% (8.4%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
4,119

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 140.0% (17.7%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.0% - 11.5% (9.6%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
60.0% - 95.0% (80.0%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
11,041

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 484.0% (36.2%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
13.0% - 14.0% (13.6%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
3,366

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 273.0% (19.2%)
 
 
 
 
Income approach
 
Capitalization rate
 
5.4% - 7.8% (7.4%)
Fair Value, by Balance Sheet Grouping
The fair value of financial instruments at June 30, 2014 and December 31, 2013, was as follows:
 
 
June 30, 2014
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
196,966

 
$
196,966

 
$
—

 
$
—

 
$
196,966

Investment securities
 
1,359,599

 
1,902

 
1,360,432

 
747

 
1,363,081

Accrued interest receivable - securities
 
4,727

 
—

 
4,727

 
—

 
4,727

Accrued interest receivable - loans
 
13,111

 
—

 
—

 
13,111

 
13,111

Mortgage loans held for sale
 
6,577

 
—

 
6,577

 
—

 
6,577

Mortgage IRLCs
 
82

 
—

 
82

 
—

 
82

Impaired loans carried at fair value
 
30,183

 
—

 
—

 
30,183

 
30,183

Other loans, net
 
4,640,734

 
—

 
—

 
4,657,607

 
4,657,607

Loans receivable, net
 
$
4,677,576

 
$
—

 
$
6,659

 
$
4,687,790

 
$
4,694,449

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,163,288

 
$
1,163,288

 
$
—

 
$
—

 
$
1,163,288

Interest bearing transactions accounts
 
1,346,223

 
1,346,223

 
—

 
—

 
1,346,223

Savings accounts
 
1,162,352

 
1,162,352

 
—

 
—

 
1,162,352

Time deposits
 
1,251,285

 
—

 
1,255,881

 
—

 
1,255,881

Other
 
4,063

 
4,063

 
—

 
—

 
4,063

Total deposits
 
$
4,927,211

 
$
3,675,926

 
$
1,255,881

 
$
—

 
$
4,931,807

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
250,689

 
$
—

 
$
250,689

 
$
—

 
$
250,689

Long-term debt
 
787,465

 
—

 
835,850

 
—

 
835,850

Subordinated debentures/notes
 
80,250

 
—

 
86,850

 
—

 
86,850

Accrued interest payable – deposits
 
1,259

 
15

 
1,244

 
—

 
1,259

Accrued interest payable – debt/borrowings
 
1,490

 
9

 
1,481

 
—

 
1,490

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
135

 
$
—

 
$
—

 
$
135

 
$
135

 
 
December 31, 2013
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
147,030

 
$
147,030

 
$
—

 
$
—

 
$
147,030

Investment securities
 
1,358,327

 
1,900

 
1,361,009

 
759

 
1,363,668

Accrued interest receivable - securities
 
4,840

 
—

 
4,840

 
—

 
4,840

Accrued interest receivable - loans
 
13,495

 
—

 
—

 
13,495

 
13,495

Mortgage loans held for sale
 
1,666

 
—

 
1,666

 
—

 
1,666

Mortgage IRLCs
 
61

 
—

 
61

 
—

 
61

Impaired loans carried at fair value
 
33,819

 
—

 
—

 
33,819

 
33,819

Other loans, net
 
4,525,491

 
—

 
—

 
4,531,680

 
4,531,680

Loans receivable, net
 
$
4,561,037

 
$
—

 
$
1,727

 
$
4,565,499

 
$
4,567,226

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,193,553

 
$
1,193,553

 
$
—

 
—

 
$
1,193,553

Interest bearing transactions accounts
 
1,145,525

 
1,145,525

 
—

 
—

 
1,145,525

Savings accounts
 
1,124,994

 
1,124,994

 
—

 
—

 
1,124,994

Time deposits
 
1,324,659

 
—

 
1,331,129

 
—

 
1,331,129

Other
 
1,263

 
1,263

 
—

 
—

 
1,263

Total deposits
 
$
4,789,994

 
$
3,465,335

 
$
1,331,129

 
$
—

 
$
4,796,464

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
242,029

 
$
—

 
$
242,029

 
$
—

 
$
242,029

Long-term debt
 
810,541

 
—

 
860,963

 
—

 
860,963

Subordinated debentures/notes
 
80,250

 
—

 
83,140

 
—

 
83,140

Accrued interest payable – deposits
 
1,366

 
16

 
1,350

 
—

 
1,366

Accrued interest payable – debt/borrowings
 
1,535

 
4

 
1,531

 
—

 
1,535

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
135

 
$
—

 
$
—

 
$
135

 
$
135