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Fair Value Information
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Information

8. FAIR VALUE INFORMATION

 

Fair Value Hierarchy

 

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

 

The valuation methodologies for financial assets and liabilities measured at fair value on a recurring and non-recurring basis are described in Note 18 — Fair Value Information, included in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The tables below present the balances of assets and liabilities measured at fair value on a recurring basis as of the dates presented.

 

 

 

Carrying Value at
June 30, 2024

 

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant Other Observable Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

 

 

(Dollars in thousands)

 

Description of assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities - AFS:

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

 

$

33,477

 

 

$

—

 

 

$

33,477

 

 

$

—

 

Mortgage-backed securities

 

 

2,316,075

 

 

 

—

 

 

 

2,316,075

 

 

 

—

 

CMO/REMIC

 

 

370,491

 

 

 

—

 

 

 

370,491

 

 

 

—

 

Municipal bonds

 

 

24,426

 

 

 

—

 

 

 

24,426

 

 

 

—

 

Other securities

 

 

1,327

 

 

 

—

 

 

 

1,327

 

 

 

—

 

Total investment securities - AFS

 

 

2,745,796

 

 

 

—

 

 

 

2,745,796

 

 

 

—

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

 

28

 

 

 

—

 

 

 

28

 

 

 

—

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

      Fair value hedges: interest rate swaps

 

 

13,728

 

 

 

—

 

 

 

13,728

 

 

 

—

 

   Cash flow hedges: interest rate swaps

 

 

1,584

 

 

 

—

 

 

 

1,584

 

 

 

—

 

Total assets

 

$

2,761,136

 

 

$

—

 

 

$

2,761,136

 

 

$

—

 

Description of liability

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

$

28

 

 

$

—

 

 

$

28

 

 

$

—

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

      Fair value hedges: interest rate swaps

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

   Cash flow hedges: interest rate swaps

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total liabilities

 

$

28

 

 

$

—

 

 

$

28

 

 

$

—

 

 

 

 

 

Carrying Value at
December 31, 2023

 

 

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

 

 

Significant Other Observable Inputs
(Level 2)

 

 

Significant Unobservable Inputs
(Level 3)

 

 

 

(Dollars in thousands)

 

Description of assets

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities - AFS:

 

 

 

 

 

 

 

 

 

 

 

 

Government agency/GSE

 

$

32,253

 

 

$

—

 

 

$

32,253

 

 

$

—

 

Mortgage-backed securities

 

 

2,507,679

 

 

 

—

 

 

 

2,507,679

 

 

 

—

 

CMO/REMIC

 

 

389,362

 

 

 

—

 

 

 

389,362

 

 

 

—

 

Municipal bonds

 

 

25,635

 

 

 

—

 

 

 

25,635

 

 

 

—

 

Other securities

 

 

1,196

 

 

 

—

 

 

 

1,196

 

 

 

—

 

Total investment securities - AFS

 

 

2,956,125

 

 

 

—

 

 

 

2,956,125

 

 

 

—

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

 

112

 

 

 

—

 

 

 

112

 

 

 

—

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total assets

 

$

2,956,237

 

 

$

—

 

 

$

2,956,237

 

 

$

—

 

Description of liability

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

$

112

 

 

$

—

 

 

$

112

 

 

$

—

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

    Interest rate swaps

 

 

6,938

 

 

 

—

 

 

 

6,938

 

 

 

—

 

Total liabilities

 

$

7,050

 

 

$

—

 

 

$

7,050

 

 

$

—

 

 

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

 

We may be required to measure certain assets at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or fair value accounting or impairment write-downs of individual assets.

 

For assets measured at fair value on a non-recurring basis that were held on the balance sheet at June 30, 2024 and December 31, 2023, the following tables provide the level of valuation assumptions used to determine each adjustment and the carrying value of the related assets that had losses during the period.

 

 

 

Carrying Value at June 30, 2024

 

 

Quoted Prices in Active Markets for Identical Assets (Level 1)

 

 

Significant Other Observable Inputs (Level 2)

 

 

Significant Unobservable Inputs (Level 3)

 

 

Total Losses For the Six Months Ended June 30, 2024

 

 

 

(Dollars in thousands)

 

Description of assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

33,804

 

 

$

—

 

 

$

—

 

 

$

33,804

 

 

$

2,273

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

SBA

 

 

493

 

 

 

—

 

 

 

—

 

 

 

493

 

 

 

75

 

SBA - PPP

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and industrial

 

 

6,360

 

 

 

—

 

 

 

—

 

 

 

6,360

 

 

 

40

 

Dairy & livestock and
   agribusiness

 

 

10,820

 

 

 

—

 

 

 

—

 

 

 

10,820

 

 

 

176

 

Municipal lease finance
   receivables

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

SFR mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other real estate owned

 

 

647

 

 

 

—

 

 

 

—

 

 

 

647

 

 

 

28

 

Asset held-for-sale

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total assets

 

$

52,124

 

 

$

—

 

 

$

—

 

 

$

52,124

 

 

$

2,592

 

 

 

 

 

 

Carrying Value at December 31, 2023

 

 

Quoted Prices in Active Markets for Identical Assets (Level 1)

 

 

Significant Other Observable Inputs (Level 2)

 

 

Significant Unobservable Inputs (Level 3)

 

 

Total Losses For the Year Ended December 31, 2023

 

 

 

(Dollars in thousands)

 

Description of assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

18,678

 

 

$

—

 

 

$

—

 

 

$

18,678

 

 

$

2,128

 

Construction

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

SBA

 

 

995

 

 

 

—

 

 

 

—

 

 

 

995

 

 

 

57

 

SBA - PPP

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial and industrial

 

 

6,092

 

 

 

—

 

 

 

—

 

 

 

6,092

 

 

 

3,510

 

Dairy & livestock and
   agribusiness

 

 

4,700

 

 

 

—

 

 

 

—

 

 

 

4,700

 

 

 

27

 

Municipal lease finance
   receivables

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

SFR mortgage

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Consumer and other loans

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other real estate owned

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Asset held-for-sale

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total assets

 

$

30,465

 

 

$

—

 

 

$

—

 

 

$

30,465

 

 

$

5,722

 

 

 

Fair Value of Financial Instruments

 

The following disclosure presents estimated fair value of our financial instruments. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company may realize in a current market exchange as of June 30, 2024 and December 31, 2023, respectively. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

 

 

June 30, 2024

 

 

Carrying

 

 

Estimated Fair Value

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

(Dollars in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and cash equivalents

$

844,194

 

 

$

844,194

 

 

$

—

 

 

$

—

 

 

$

844,194

 

Interest-earning balances due from
   depository institutions

 

7,345

 

 

 

—

 

 

 

7,345

 

 

 

—

 

 

 

7,345

 

Investment securities available-for-sale

 

2,745,796

 

 

 

—

 

 

 

2,745,796

 

 

 

—

 

 

 

2,745,796

 

Investment securities held-to-maturity

 

2,429,886

 

 

 

—

 

 

 

2,006,090

 

 

 

—

 

 

 

2,006,090

 

Total loans, net of allowance for credit losses

 

8,599,060

 

 

 

—

 

 

 

—

 

 

 

8,217,593

 

 

 

8,217,593

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

28

 

 

 

—

 

 

 

28

 

 

 

—

 

 

 

28

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fair value hedges: interest rate swaps

 

13,728

 

 

 

—

 

 

 

13,728

 

 

 

—

 

 

 

13,728

 

 Cash flow hedges: interest rate swaps

 

1,584

 

 

 

—

 

 

 

1,584

 

 

 

—

 

 

 

1,584

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing

$

4,700,230

 

 

$

—

 

 

$

4,695,747

 

 

$

—

 

 

$

4,695,747

 

Borrowings

 

2,068,826

 

 

 

—

 

 

 

2,009,323

 

 

 

—

 

 

 

2,009,323

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

28

 

 

 

—

 

 

 

28

 

 

 

—

 

 

 

28

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fair value hedges: interest rate swaps

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 Cash flow hedges: interest rate swaps

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

December 31, 2023

 

 

Carrying

 

 

Estimated Fair Value

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

(Dollars in thousands)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total cash and cash equivalents

$

281,285

 

 

$

281,285

 

 

$

—

 

 

$

—

 

 

$

281,285

 

Interest-earning balances due from
   depository institutions

 

8,216

 

 

 

—

 

 

 

8,216

 

 

 

—

 

 

 

8,216

 

Investment securities available-for-sale

 

2,956,125

 

 

 

—

 

 

 

2,956,125

 

 

 

—

 

 

 

2,956,125

 

Investment securities held-to-maturity

 

2,464,610

 

 

 

—

 

 

 

2,082,881

 

 

 

—

 

 

 

2,082,881

 

Total loans, net of allowance for credit losses

 

8,818,068

 

 

 

—

 

 

 

—

 

 

 

8,503,518

 

 

 

8,503,518

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest rate swaps

 

112

 

 

 

—

 

 

 

112

 

 

 

—

 

 

 

112

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fair value hedges: interest rate swaps

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest-bearing

$

4,227,467

 

 

$

—

 

 

$

4,222,773

 

 

$

—

 

 

$

4,222,773

 

Borrowings

 

2,341,642

 

 

 

—

 

 

 

2,283,631

 

 

 

—

 

 

 

2,283,631

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest rate swaps

 

112

 

 

 

—

 

 

 

112

 

 

 

—

 

 

 

112

 

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Fair value hedges: interest rate swaps

 

6,938

 

 

 

—

 

 

 

6,938

 

 

 

—

 

 

 

6,938

 

 

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2024 and December 31, 2023. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and therefore, current estimates of fair value may differ significantly from the amounts presented above.