XML 48 R37.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value (Tables)
 6 Months Ended
Jun. 30, 2016
Schedule of Impaired Financing Receivables Additional Information [Line Items]  
Schedule of impaired financing receivables additional info [Abstract]
The table below provides additional detail on those impaired loans which are recorded at fair value as well as the remaining impaired loan portfolio not included above. The remaining impaired loans consist of loans which are not collateral dependent as well as loans carried at cost as the fair value of the underlying collateral or the present value of expected future cash flows on each of the loans exceeded the book value for each respective credit.

 
 
June 30, 2016
(In thousands)
 
Recorded Investment
 
Prior Charge-Offs
 
Specific Valuation Allowance
 
Carrying Balance
Impaired loans recorded at fair value
 
$
9,508

 
$
6,118

 
$
1,992

 
$
7,516

Remaining impaired loans
 
81,336

 
18,240

 
4,295

 
77,041

Total impaired loans
 
$
90,844

 
$
24,358

 
$
6,287

 
$
84,557


 
 
December 31, 2015
(In thousands)
 
Recorded Investment
 
Prior Charge-Offs
 
Specific Valuation Allowance
 
Carrying Balance
Impaired loans recorded at fair value
 
$
11,783

 
$
10,512

 
$
2,287

 
$
9,496

Remaining impaired loans
 
68,881

 
18,193

 
1,904

 
66,977

Total impaired loans
 
$
80,664

 
$
28,705

 
$
4,191

 
$
76,473
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, 2016 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2016
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
360,367

 
$
—

 
$
360,367

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

 
942,579

 
—

 
942,579

Equity securities
 
1,807

 
—

 
821

 
2,628

Mortgage loans held for sale
 
—

 
12,125

 
—

 
12,125

Mortgage IRLCs
 
—

 
277

 
—

 
277

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
226

 
$
226

 
Fair Value Measurements at December 31, 2015 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2015
Assets
 
 

 
 

 
 

 
 

Investment securities:
 
 

 
 

 
 

 
 

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

 
$
522,063

 
$
—

 
$
522,063

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

 
911,493

 
—

 
911,493

Equity securities
 
1,941

 
—

 
769

 
2,710

Mortgage loans held for sale
 
—

 
7,306

 
—

 
7,306

Mortgage IRLCs
 
—

 
165

 
—

 
165

 
 
 
 
 
 
 
 
 
Liabilities
 
 

 
 

 
 

 
 

Fair value swap
 
$
—

 
$
—

 
$
226

 
$
226
Reconciliation Of Level 3 Input For Financial Instruments Measured On Recurring Basis
The tables below are a reconciliation of the beginning and ending balances of the Level 3 inputs for the three and six months ended June 30, 2016 and 2015, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements
Three months ended June 30, 2016 and 2015
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance at April 1, 2016
 
$
813

 
$
(226
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
8

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

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

 
—

Balance at June 30, 2016
 
$
821

 
$
(226
)
 
 
 
 
 
Balance at April 1, 2015
 
$
739

 
$
(226
)
Total gains/(losses)
 
 

 
 

Included in earnings – realized
 
—

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
5

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap
 
—

 
—

Balance at June 30, 2015
 
$
744

 
$
(226
)

Level 3 Fair Value Measurements
Six months ended June 30, 2016 and 2015
(In thousands)
 
Equity
Securities
 
Fair value
swap
Balance at January 1, 2016
 
$
769

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

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
52

 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

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

 
—

Balance at June 30, 2016
 
$
821

 
$
(226
)
 
 
 
 
 
Balance at January 1, 2015
 
$
776

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

 
—

Included in earnings – unrealized
 
—

 
—

Included in other comprehensive income
 
(32
)
 
—

Purchases, sales, issuances and settlements, other
 
—

 
—

Re-evaluation of fair value swap
 
—

 
—

Balance at June 30, 2015
 
$
744

 
$
(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 June 30, 2016 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at June 30, 2016
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
2,465

 
$
2,465

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
1,700

 
1,700

Remaining commercial
 
—

 
—

 
1,422

 
1,422

Residential real estate
 
—

 
—

 
1,929

 
1,929

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
7,516

 
$
7,516

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
4,872

 
$
—

 
$
4,872

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
3,184

 
3,184

Construction real estate
 
—

 
—

 
3,419

 
3,419

Residential real estate
 
—

 
—

 
1,516

 
1,516

Total OREO
 
$
—

 
$
—

 
$
8,119

 
$
8,119

 
Fair Value Measurements at December 31, 2015 using:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Balance at December 31, 2015
Impaired loans recorded at fair value:
 
 

 
 

 
 

 
 

Commercial real estate
 
$
—

 
$
—

 
$
3,698

 
$
3,698

Construction real estate:
 
 

 
 

 
 

 
 

SEPH commercial land and development
 
—

 
—

 
2,044

 
2,044

Remaining commercial
 
—

 
—

 
1,872

 
1,872

Residential real estate
 
—

 
—

 
1,882

 
1,882

Total impaired loans recorded at fair value
 
$
—

 
$
—

 
$
9,496

 
$
9,496

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
 
$
—

 
$
1,867

 
$
—

 
$
1,867

 
 
 
 
 
 
 
 
 
OREO:
 
 
 
 
 
 
 
 
Commercial real estate
 
—

 
—

 
2,796

 
2,796

Construction real estate
 
—

 
—

 
3,387

 
3,387

Residential real estate
 
—

 
—

 
2,332

 
2,332

Total OREO
 
$
—

 
$
—

 
$
8,515

 
$
8,515
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, 2016 and December 31, 2015:

June 30, 2016
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
2,465

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 90.0% (20.1%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.0% - 9.2% (8.3%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
50.0% (50.0%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
1,700

 
Sales comparison approach
 
Adj to comparables
 
5.0% - 40.0% (22.5%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
1,422

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 15.6% (1.0%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% (10.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,929

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 87.4% (16.8%)
 
 
 
 
Income approach
 
Capitalization rate
 
10.0% - 10.1% (10.0%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
50.0% (50.0%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
3,184

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 69.0% (22.6%)
 
 
 
 
Income approach
 
Capitalization rate
 
9.5% - 14.0% (9.9%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
3,419

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 85.0% (27.2%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
15.0% (15.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,516

 
Sales comparison approach
 
Adj to comparables
 
0.1% - 61.8% (26.0%)

Balance at December 31, 2015
(In thousands)
 
Fair Value
 
Valuation Technique
 
Unobservable Input(s)
 
Range
(Weighted Average)
Impaired loans:
 
 

 
 
 
 
 
 
Commercial real estate
 
$
3,698

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 45.9% (20.3%)
 
 
 
 
Income approach
 
Capitalization rate
 
7.0% - 13.3% (9.5%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
50.0% (50.0%)
 
 
 
 
 
 
 
 
 
Construction real estate:
 
 

 
 
 
 
 
 
SEPH commercial land and development
 
$
2,044

 
Sales comparison approach
 
Adj to comparables
 
5.0% - 40.0% (22.1%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.7% (10.7%)
 
 
 
 
 
 
 
 
 
Remaining commercial
 
$
1,872

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 25.3% (1.0%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
10.0% - 10.7% (10.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
1,882

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 96.7% (12.5%)
 
 
 
 
Income approach
 
Capitalization rate
 
3.8% - 10.1% (9.1%)
 
 
 
 
Cost approach
 
Accumulated depreciation
 
33.3% - 50.0% (43.4%)
 
 
 
 
 
 
 
 
 
Other real estate owned:
 
 
 
 
 
 
 
 
Commercial real estate
 
$
2,796

 
Sales comparison approach
 
Adj to comparables
 
2.0% - 71.0% (26.9%)
 
 
 
 
Income approach
 
Capitalization rate
 
9.5% (9.5%)
 
 
 
 
 
 
 
 
 
Construction real estate
 
$
3,387

 
Sales comparison approach
 
Adj to comparables
 
0.0% - 85.0% (24.3%)
 
 
 
 
Bulk sale approach
 
Discount rate
 
15.0% (15.0%)
 
 
 
 
 
 
 
 
 
Residential real estate
 
$
2,332

 
Sales comparison approach
 
Adj to comparables
 
0.1% - 61.8% (23.0%)
Fair Value, by Balance Sheet Grouping
The fair value of financial instruments at June 30, 2016 and December 31, 2015, was as follows:

 
 
June 30, 2016
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
315,889

 
$
315,889

 
$
—

 
$
—

 
$
315,889

Investment securities
 
1,489,695

 
1,807

 
1,494,503

 
821

 
1,497,131

Accrued interest receivable - securities
 
3,481

 
—

 
3,481

 
—

 
3,481

Accrued interest receivable - loans
 
14,016

 
—

 
—

 
14,016

 
14,016


 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
12,125

 
—

 
12,125

 
—

 
12,125

Mortgage IRLCs
 
277

 
—

 
277

 
—

 
277

Impaired loans carried at fair value
 
7,516

 
—

 
—

 
7,516

 
7,516

Other loans, net
 
5,049,027

 
—

 
—

 
5,030,111

 
5,030,111

Loans receivable, net
 
$
5,068,945

 
$
—

 
$
12,402

 
$
5,037,627

 
$
5,050,029

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,378,053

 
$
1,378,053

 
$
—

 
$
—

 
$
1,378,053

Interest bearing transactions accounts
 
1,227,177

 
1,227,177

 
—

 
—

 
1,227,177

Savings accounts
 
1,763,907

 
1,763,907

 
—

 
—

 
1,763,907

Time deposits
 
1,250,676

 
—

 
1,257,108

 
—

 
1,257,108

Other
 
4,066

 
4,066

 
—

 
—

 
4,066

Total deposits
 
$
5,623,879

 
$
4,373,203

 
$
1,257,108

 
$
—

 
$
5,630,311

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
210,731

 
$
—

 
$
210,731

 
$
—

 
$
210,731

Long-term debt
 
741,174

 
—

 
781,862

 
—

 
781,862

Subordinated debentures/notes
 
45,000

 
—

 
40,857

 
—

 
40,857

Accrued interest payable – deposits
 
1,023

 
72

 
951

 
—

 
1,023

Accrued interest payable – debt/borrowings
 
1,313

 
—

 
1,313

 
—

 
1,313

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
226

 
$
—

 
$
—

 
$
226

 
$
226

 
 
December 31, 2015
 
 
 
 
Fair Value Measurements
(In thousands)
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
 
Total fair value
Financial assets:
 
 
 
 
 
 
 
 
 
 
Cash and money market instruments
 
$
149,459

 
$
149,459

 
$
—

 
$
—

 
$
149,459

Investment securities
 
1,585,568

 
1,941

 
1,584,984

 
769

 
1,587,694

Accrued interest receivable - securities
 
4,436

 
—

 
4,436

 
—

 
4,436

Accrued interest receivable - loans
 
14,239

 
—

 
—

 
14,239

 
14,239


 
 
 
 
 
 
 
 
 
 
Loans held for sale
 
7,306

 
—

 
7,306

 
—

 
7,306

Mortgage IRLCs
 
165

 
—

 
165

 
—

 
165

Impaired loans carried at fair value
 
9,496

 
—

 
—

 
9,496

 
9,496

Other loans, net
 
4,994,624

 
—

 
—

 
4,997,318

 
4,997,318

Loans receivable, net
 
$
5,011,591

 
$
—

 
$
7,471

 
$
5,006,814

 
$
5,014,285

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities:
 
 

 
 

 
 

 
 

 
 

Noninterest bearing checking accounts
 
$
1,404,032

 
$
1,404,032

 
$
—

 
$
—

 
$
1,404,032

Interest bearing transactions accounts
 
1,107,200

 
1,107,200

 
—

 
—

 
1,107,200

Savings accounts
 
1,544,708

 
1,544,708

 
—

 
—

 
1,544,708

Time deposits
 
1,290,412

 
—

 
1,295,329

 
—

 
1,295,329

Other
 
1,290

 
1,290

 
—

 
—

 
1,290

Total deposits
 
$
5,347,642

 
$
4,057,230

 
$
1,295,329

 
$
—

 
$
5,352,559

 
 
 
 
 
 
 
 
 
 
 
Short-term borrowings
 
$
394,242

 
$
—

 
$
394,242

 
$
—

 
$
394,242

Long-term debt
 
738,105

 
—

 
771,420

 
—

 
771,420

Subordinated debentures/notes
 
45,000

 
—

 
41,596

 
—

 
41,596

Accrued interest payable – deposits
 
987

 
66

 
921

 
—

 
987

Accrued interest payable – debt/borrowings
 
1,351

 
4

 
1,347

 
—

 
1,351

 
 
 
 
 
 
 
 
 
 
 
Derivative financial instruments:
 
 

 
 

 
 

 
 

 
 

Fair value swap
 
$
226

 
$
—

 
$
—

 
$
226

 
$
226