Fair Value (Tables)

6 Months Ended

Jun. 30, 2018

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, 2018 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2018
Assets
Investment securities:
U.S. Government sponsored entities’ asset-backed securities	$	—	$	1,091,678	$	—	$	1,091,678
Equity securities	8,809		—		420		9,229
Mortgage loans held for sale	—		8,154		—		8,154
Mortgage IRLCs	—		141		—		141

Liabilities
Fair value swap	$	—	$	—	$	226	$	226



Fair Value Measurements at December 31, 2017 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2017
Assets
Investment securities:
Obligations of U.S. Treasury and other U.S. Government sponsored entities	$	—	$	242,720	$	—	$	242,720
U.S. Government sponsored entities’ asset-backed securities	—		849,161		—		849,161
Equity securities	1,518		—		417		1,935
Mortgage loans held for sale	—		4,148		—		4,148
Mortgage IRLCs	—		94		—		94

Liabilities
Fair value swap	$	—	$	—	$	226	$	226

Reconciliation Of Level 3 Input For Financial Instruments Measured On Recurring Basis

The table below presents a reconciliation of the beginning and ending balances of the Level 3 inputs for the three and six months ended June 30, 2018 and 2017, for financial instruments measured on a recurring basis and classified as Level 3:

Level 3 Fair Value Measurements

Three months ended June 30, 2018 and 2017



(In thousands)	Equity Securities			Fair value swap
Balance at April 1, 2018	$	420		$	(226	)
Total gains/(losses)
Included in other income	—			—
Balance at June 30, 2018	$	420		$	(226	)

Balance at April 1, 2017	$	776		$	(226	)
Total gains/(losses)
Transfers out of Level 3⁽¹⁾	(330		)	—
Included in other comprehensive income	12			—
Balance at June 30, 2017	$	458		$	(226	)

⁽¹⁾ Transfered from Level 3 to Level 1 as the result of a quoted market price becoming available.

Level 3 Fair Value Measurements

Six months ended June 30, 2018 and 2017



(In thousands)	Equity Securities			Fair value swap
Balance at January 1, 2018	$	417		$	(226	)
Total gains/(losses)
Included in other income	3			—
Balance at June 30, 2018	$	420		$	(226	)

Balance at January 1, 2017	$	790		$	(226	)
Total gains/(losses)
Transfers out of Level 3 ⁽¹⁾	(346		)	—
Included in other comprehensive income	14			—
Balance at June 30, 2017	$	458		$	(226	)

⁽¹⁾ Transfered from Level 3 to Level 1 as the result of a quoted market price becoming available.

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, 2018 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at June 30, 2018
Impaired loans recorded at fair value:
Commercial real estate	$	—	$	—	$	4,192	$	4,192
Construction real estate	—		—		1,635		1,635
Residential real estate	—		—		643		643
Total impaired loans recorded at fair value	$	—	$	—	$	6,470	$	6,470

Mortgage servicing rights	$	—	$	869	$	—	$	869

OREO:
Commercial real estate	—		—		2,295		2,295
Construction real estate	—		—		1,123		1,123
Residential real estate	—		—		887		887
Total OREO recorded at fair value	$	—	$	—	$	4,305	$	4,305



Fair Value Measurements at December 31, 2017 using:
(In thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2017
Impaired loans recorded at fair value:
Commercial real estate	$	—	$	—	$	2,735	$	2,735
Construction real estate	—		—		127		127
Residential real estate	—		—		712		712
Total impaired loans recorded at fair value	$	—	$	—	$	3,574	$	3,574

Mortgage servicing rights	$	—	$	7,316	$	—	$	7,316

OREO:
Commercial real estate	—		—		2,295		2,295
Construction real estate	—		—		3,204		3,204
Residential real estate	—		—		1,021		1,021
Total OREO recorded at fair value	$	—	$	—	$	6,520	$	6,520

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, 2018
(In thousands)	Recorded Investment		Prior Charge-Offs		Specific Valuation Allowance		Carrying Balance
Impaired loans recorded at fair value	$	6,499	$	4,075	$	29	$	6,470
Remaining impaired loans	55,251		7,309		1,367		53,884
Total impaired loans	$	61,750	$	11,384	$	1,396	$	60,354



	December 31, 2017
(In thousands)	Recorded Investment		Prior Charge-Offs		Specific Valuation Allowance		Carrying Balance
Impaired loans recorded at fair value	$	3,577	$	2,780	$	3	$	3,574
Remaining impaired loans	52,987		7,260		681		52,306
Total impaired loans	$	56,564	$	10,040	$	684	$	55,880

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 nonrecurring basis at June 30, 2018 and December 31, 2017:



June 30, 2018
(In thousands)	Fair Value		Valuation Technique	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
Commercial real estate	$	4,192	Sales comparison approach	Adj to comparables	0.0% - 55.0% (25.4%)
			Income approach	Capitalization rate	10.6% - 11.8% (11.5%)
			Cost approach	Accumulated depreciation	3.7% - 90.1% (13.1%)

Construction real estate	$	1,635	Sales comparison approach	Adj to comparables	5.0% - 90.0% (26.1%)

Residential real estate	$	643	Sales comparison approach	Adj to comparables	1.7% - 40.0% (18.5%)

			Income approach	Capitalization rate	10.5% (10.5%)

Other real estate owned:
Commercial real estate	$	2,295	Sales comparison approach	Adj to comparables	0.9% - 68.4% (34.7%)
			Income approach	Capitalization rate	13.0% (13.0%)
Construction real estate	$	1,123	Sales comparison approach	Adj to comparables	0.0% - 45.0% (21.7%)

Residential real estate	$	887	Sales comparison approach	Adj to comparables	0.4% - 54.6% (33.2%)



Balance at December 31, 2017
(In thousands)	Fair Value		Valuation Technique	Unobservable Input(s)	Range (Weighted Average)
Impaired loans:
Commercial real estate	$	2,735	Sales comparison approach	Adj to comparables	0.0% - 90.0% (22.7%)
			Income approach	Capitalization rate	9.0% - 11.0% (9.9%)
			Cost approach	Accumulated depreciation	90.1% (90.1%)

Construction real estate	$	127	Sales comparison approach	Adj to comparables	0.0% - 4.8% (2.4%)


Residential real estate	$	712	Sales comparison approach	Adj to comparables	0.3% - 33.0% (12.5%)
			Income approach	Capitalization rate	10.5% (10.5%)

Other real estate owned:
Commercial real estate	$	2,295	Sales comparison approach	Adj to comparables	0.9% - 68.4% (34.7%)
			Income approach	Capitalization rate	13.0% (13.0%)

Construction real estate	$	3,204	Sales comparison approach	Adj to comparables	0.0% - 90.0% (24.5%)
			Bulk sale approach	Discount rate	15.0% (15.0%)

Residential real estate	$	1,021	Sales comparison approach	Adj to comparables	1.2% - 79.7% (31.8%)

Fair Value, by Balance Sheet Grouping

The fair value of certain financial instruments at June 30, 2018 and December 31, 2017, was as follows:



	June 30, 2018
			Fair Value Measurements
(In thousands)	Carrying value		Level 1		Level 2		Level 3		Total fair value
Financial assets:
Cash and money market instruments	$	146,159	$	146,159	$	—	$	—	$	146,159
Investment securities ⁽¹⁾	1,443,109		—		1,439,870		—		1,439,870
Other investment securities ⁽²⁾	9,229		8,809		—		420		9,229

Loans held for sale	8,154		—		8,154		—		8,154
Mortgage IRLCs	141		—		141		—		141
Impaired loans carried at fair value	6,470		—		—		6,470		6,470
Other loans, net ⁽³⁾	5,260,757		—		—		5,204,775		5,204,775
Loans receivable, net	$	5,275,522	$	—	$	8,295	$	5,211,245	$	5,219,540

Financial liabilities:
Time deposits	1,026,920		—		1,026,550		—		1,026,550
Other	3,967		3,967				—		3,967
Deposits (excluding demand deposits)	$	1,030,887	$	3,967	$	1,026,550	$	—	$	1,030,517

Short-term borrowings	$	216,139	$	—	$	216,139	$	—	$	216,139
Long-term debt	400,000		—		398,668		—		398,668
Subordinated notes	15,000		—		13,161		—		13,161

Derivative financial instruments:
Fair value swap	$	226	$	—	$	—	$	226	$	226

(1) Includes debt securities AFS and debt securities HTM.

(2) Excludes FHLB and FRB stock which are carried at their respective redemption values. Additionally, excludes investment securities accounted for at modified cost, as these investments do not have a readily determinable fair value.

(3) Fair value calculated using an exit price notion consistent with Topic 820, Fair Value Measurement.



	December 31, 2017
			Fair Value Measurements
(In thousands)	Carrying value		Level 1		Level 2		Level 3		Total fair value
Financial assets:
Cash and money market instruments	$	169,112	$	169,112	$	—	$	—	$	169,112
Investment securities ⁽¹⁾	1,449,078		—		1,455,660		—		1,455,660
Other investment securities ⁽²⁾	1,935		1,518		—		417		1,935

Loans held for sale	4,148		—		4,148		—		4,148
Mortgage IRLCs	94		—		94		—		94
Impaired loans carried at fair value	3,574		—		—		3,574		3,574
Other loans, net	5,314,679		—		—		5,247,021		5,247,021
Loans receivable, net	$	5,322,495	$	—	$	4,242	$	5,250,595	$	5,254,837

Financial liabilities:
Time deposits	1,033,476		—		1,035,093		—		1,035,093
Other	1,269		1,269		—		—		1,269
Total deposits	$	1,034,745	$	1,269	$	1,035,093	$	—	$	1,036,362

Short-term borrowings	$	391,289	$	—	$	391,289	$	—	$	391,289
Long-term debt	500,000		—		504,503		—		504,503
Subordinated notes	15,000		—		13,370		—		13,370

Derivative financial instruments:
Fair value swap	$	226	$	—	$	—	$	226	$	226

(1) Includes debt securities AFS and debt securities HTM.

(2) Excludes FHLB and FRB stock which are carried at their respective redemption values. Additionally, excludes investment securities carried at their cost basis as these investments do not have a readily determinable fair value.