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Fair Value (Tables)
 9 Months Ended
Sep. 30, 2015
Schedule of impaired financing receivables additional info [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 September 30, 2015 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at September 30, 2015
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
545,051

 
$
—

 
$
545,051

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

 
745,780

 
—

 
745,780

Equity securities
 
1,876

 
—

 
757

 
2,633

Mortgage loans held for sale
 
—

 
11,403

 
—

 
11,403

Mortgage IRLCs
 
—

 
195

 
—

 
195

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
226

 
$
226

 
Fair Value Measurements at December 31, 2014 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2014
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
538,064

 
$
—

 
$
538,064

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

 
761,153

 
—

 
761,153

Equity securities
 
1,922

 
—

 
776

 
2,698

Mortgage loans held for sale
 
—

 
5,264

 
—

 
5,264

Mortgage IRLCs
 
—

 
70

 
—

 
70

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
226

 
$
226
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 nine months ended September 30, 2015 and 2014, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements
Three months ended September 30, 2015 and 2014
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at July 1, 2015
 
$
744

 
$
(226
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
13

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap, recorded in other expense
 
—

 
—

Balance at September 30, 2015
 
$
757

 
$
(226
)
 
 
 
 
 
Balance, at July 1, 2014
 
$
747

 
$
(135
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
14

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap
 
—

 
(91
)
Balance at September 30, 2014
 
$
761

 
$
(226
)

Level 3 Fair Value Measurements
Nine months ended September 30, 2015 and 2014
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance, at January 1, 2015
 
$
776

 
$
(226
)
Total gains/(losses)
 
 
 
 
Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
(19
)
 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap, recorded in other expense
 
—

 
—

Balance at September 30, 2015
 
$
757

 
$
(226
)
 
 
 
 
 
Balance, at January 1, 2014
 
$
759

 
$
(135
)
Total gains/(losses)
 
 
 
 
Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income (loss)
 
2

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap
 
—

 
(91
)
Balance at September 30, 2014
 
$
761

 
$
(226
)
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 September 30, 2015 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at September 30, 2015
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
5,785

 
$
5,785

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
2,045

 
2,045

Remaining commercial
 
—

 
—

 
2,696

 
2,696

Residential real estate
 
—

 
—

 
2,073

 
2,073

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
12,599

 
$
12,599

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
3,023

 
$
—

 
$
3,023

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
2,804

 
2,804

Construction real estate
 
—

 
—

 
4,354

 
4,354

Residential real estate
 
—

 
—

 
1,757

 
1,757

Total OREO
 
$
—

 
$
—

 
$
8,915

 
$
8,915

 
Fair Value Measurements at December 31, 2014 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2014
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
8,481

 
$
8,481

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
2,078

 
2,078

Remaining commercial
 
—

 
—

 
3,483

 
3,483

Residential real estate
 
—

 
—

 
2,921

 
2,921

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
16,963

 
$
16,963

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
2,928

 
$
—

 
$
2,928

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
1,470

 
1,470

Construction real estate
 
—

 
—

 
6,473

 
6,473

Residential real estate
 
—

 
—

 
2,369

 
2,369

Total OREO
 
$
—

 
$
—

 
$
10,312

 
$
10,312
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 September 30, 2015 and December 31, 2014:

September 30, 2015
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
5,785

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 68.0% (25.8%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
8.0% (8.0%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.0% - 13.3% (10.2%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
23.0% - 50.0% (42.1%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
2,045

 
Sales comparison approach
 
Adj to comparables
 
5.0% - 40.0% (22.1%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.7% (10.7%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
2,696

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 67.0% (13.1%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 20.0% (13.7%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,073

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 61.8% (13.6%)
 
 
 
 
Income approach
 
Capitalization rate
 
3.8% - 10.1% (9.1%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
33.3% - 50.0% (42.5%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
2,804

 
Sales comparison approach
 
Adj to comparables
 
5.0% - 71.0% (27.1%)
 
 
 
 
Income approach
 
Capitalization rate
 
9.5% (9.5%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
4,354

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 54.7% (21.2%)
 
 
 
 
Income approach
 
Capitalization rate
 
15.0% (15.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,757

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 45.6% (11.8%)

Balance at December 31, 2014
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
8,481

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 84.0% (38.8%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.0% - 9.5% (9.4%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
23.0% (23.0%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
2,078

 
Sales comparison approach
 
Adj to comparables
 
5.0% - 35.0% (17.5%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.8% (10.8%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
3,483

 
Sales comparison approach
 
Adj to comparables
 
0.2% - 76.0% (45.4%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 22.0% (16.5%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,921

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 120.6% (11.1%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.9% - 10.0% (8.0%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
1,470

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 87.0% (30.5%)
 
 
 
 
Income approach
 
Capitalization rate
 
8.4% - 10.0% (9.4%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
60.0% - 95.0% (77.5%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
6,473

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 82.9% (27.1%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
15.0% (15.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,369

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 38.3% (10.1%)
 
 
 
 
Income approach
 
Capitalization rate
 
6.8% - 7.8% (7.6%)
Fair Value, by Balance Sheet Grouping
The fair value of financial instruments at September 30, 2015 and December 31, 2014, was as follows:

 
 
September 30, 2015
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
382,255

 
$
382,255

 
$
—

 
$
—

 
$
382,255

Investment securities
 
1,410,973

 
1,876

 
1,410,416

 
757

 
1,413,049

Federal Home Loan Bank stock
 
50,086

 
N/A

 
N/A

 
N/A

 
N/A

Federal Reserve Bank stock
 
8,225

 
N/A

 
N/A

 
N/A

 
N/A

Accrued interest receivable - securities
 
4,324

 
—

 
4,324

 
—

 
4,324

Accrued interest receivable - loans
 
14,652

 
—

 
—

 
14,652

 
14,652


 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
11,403

 
—

 
11,403

 
—

 
11,403

Mortgage IRLCs
 
195

 
—

 
195

 
—

 
195

Impaired loans carried at fair value
 
12,599

 
—

 
—

 
12,599

 
12,599

Other loans, net
 
4,917,232

 
—

 
—

 
4,916,210

 
4,916,210

Loans receivable, net
 
$
4,941,429

 
$
—

 
$
11,598

 
$
4,928,809

 
$
4,940,407

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,288,750

 
$
1,288,750

 
$
—

 
$
—

 
$
1,288,750

Interest bearing transactions accounts
 
1,212,244

 
1,212,244

 
—

 
—

 
1,212,244

Savings accounts
 
1,623,832

 
1,623,832

 
—

 
—

 
1,623,832

Time deposits
 
1,324,831

 
—

 
1,330,003

 
—

 
1,330,003

Other
 
5,325

 
5,325

 
—

 
—

 
5,325

Total deposits
 
$
5,454,982

 
$
4,130,151

 
$
1,330,003

 
$
—

 
$
5,460,154

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
278,324

 
$
—

 
$
278,324

 
$
—

 
$
278,324

Long-term debt
 
736,580

 
—

 
778,621

 
—

 
778,621

Subordinated debentures/notes
 
45,000

 
—

 
42,847

 
—

 
42,847

Accrued interest payable – deposits
 
1,143

 
63

 
1,080

 
—

 
1,143

Accrued interest payable – debt/borrowings
 
1,327

 
12

 
1,315

 
—

 
1,327

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
226

 
$
—

 
$
—

 
$
226

 
$
226

 
 
December 31, 2014
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
237,699

 
$
237,699

 
$
—

 
$
—

 
$
237,699

Investment securities
 
1,442,477

 
1,922

 
1,442,708

 
775

 
1,445,405

Federal Home Loan Bank stock
 
50,086

 
N/A

 
N/A

 
N/A

 
N/A

Federal Reserve Bank stock
 
8,225

 
N/A

 
N/A

 
N/A

 
N/A

Accrued interest receivable - securities
 
4,048

 
—

 
4,048

 
—

 
4,048

Accrued interest receivable - loans
 
13,629

 
—

 
—

 
13,629

 
13,629


 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
5,264

 
—

 
5,264

 
—

 
5,264

Mortgage IRLCs
 
70

 
—

 
70

 
—

 
70

Impaired loans carried at fair value
 
16,963

 
—

 
—

 
16,963

 
16,963

Other loans, net
 
4,753,033

 
—

 
—

 
4,757,461

 
4,757,461

Loans receivable, net
 
$
4,775,330

 
$
—

 
$
5,334

 
$
4,774,424

 
$
4,779,758

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,269,296

 
$
1,269,296

 
$
—

 
—

 
$
1,269,296

Interest bearing transactions accounts
 
1,122,079

 
1,122,079

 
—

 
—

 
1,122,079

Savings accounts
 
1,325,445

 
1,325,445

 
—

 
—

 
1,325,445

Time deposits
 
1,409,911

 
—

 
1,422,885

 
—

 
1,422,885

Other
 
1,269

 
1,269

 
—

 
—

 
1,269

Total deposits
 
$
5,128,000

 
$
3,718,089

 
$
1,422,885

 
$
—

 
$
5,140,974

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
276,980

 
$
—

 
$
276,980

 
$
—

 
$
276,980

Long-term debt
 
786,602

 
—

 
827,500

 
—

 
827,500

Subordinated debentures/notes
 
45,000

 
—

 
42,995

 
—

 
42,995

Accrued interest payable – deposits
 
1,125

 
14

 
1,111

 
—

 
1,125

Accrued interest payable – debt/borrowings
 
1,426

 
3

 
1,423

 
—

 
1,426

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
226

 
$
—

 
$
—

 
$
226

 
$
226