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FAIR VALUE | 3 Months Ended
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Mar. 31, 2024
FAIR VALUE |
FAIR VALUE | 10. FAIR VALUE ​ Fair value represents 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. There are three levels of inputs that may be used to measure fair values: ​ Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. ​ Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. ​ Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. ​ The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: ​ Available-for-sale debt securities: Except for the Bank’s U.S. Treasury securities, its private label mortgage-backed security, and its TRUP investment, the fair value of AFS debt securities is typically determined by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). ​ The Bank’s U.S. Treasury securities are based on quoted market prices (Level 1 inputs) and considered highly liquid. ​ The Bank’s private label mortgage-backed security remains illiquid, and as such, the Bank classifies this security as a Level 3 security in accordance with ASC Topic 820, Fair Value Measurement. Based on this determination, the Bank utilized an income valuation model (present value model) approach in determining the fair value of this security. ​ See in this section of the filing under Footnote 3 “Investment Securities” for additional discussion regarding the Bank’s private label mortgage-backed security. ​ The Company acquired its TRUP investment in 2015 and considered the most recent bid price for the same instrument to approximate market value as of March 31, 2024. The Company’s TRUP investment is considered highly illiquid and also valued using Level 3 inputs, as the most recent bid price for this instrument is not always considered generally observable. ​ Equity securities with readily determinable fair value: Quoted market prices in an active market are available for the Bank’s CRA mutual fund investment and fall within Level 1 of the fair value hierarchy. ​ The fair value of the Company’s Freddie Mac preferred stock is determined by matrix pricing, as described above (Level 2 inputs). ​ Mortgage loans held for sale, at fair value: The fair value of mortgage loans held for sale is determined using quoted secondary market prices. Mortgage loans held for sale are classified as Level 2 in the fair value hierarchy. ​ Consumer loans held for sale, at fair value: The fair value for these loans is based on contractual sales terms, Level 3 inputs. ​ Consumer loans held for investment, at fair value: The Bank held an immaterial amount of consumer loans at fair value through a consumer loan program the Company is currently unwinding. The fair value of these loans was based on the discounted cash flows of the underlying loans, Level 3 inputs. Further disclosure of these loans is considered immaterial and thus omitted. ​ ​ Mortgage banking derivatives: Mortgage banking derivatives used in the ordinary course of business primarily consist of mandatory forward sales contracts (“forward contracts”) and interest rate lock loan commitments. The fair value of the Bank’s derivative instruments is primarily measured by obtaining pricing from broker-dealers recognized to be market participants. The pricing is derived from market observable inputs that can generally be verified and do not typically involve significant judgment by the Bank. Forward contracts and rate lock loan commitments are classified as Level 2 in the fair value hierarchy. ​ Interest rate swap agreements: Interest rate swaps are recorded at fair value on a recurring basis. The Company values its interest rate swaps using a third-party valuation service and classifies such valuations as Level 2. Valuations of these interest rate swaps are also received from the relevant dealer counterparty and validated against the Company’s calculations. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities. ​ Collateral-dependent loans: Collateral-dependent loans generally reflect partial charge-downs to their respective fair value, which is commonly based on recent real estate appraisals or BPOs. These appraisals or BPOs may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Collateral-dependent loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. ​ Other real estate owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals or BPOs. These appraisals or BPOs may utilize a single approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the process by the independent experts to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and typically result in a Level 3 classification of the inputs for determining fair value. ​ Appraisals for collateral-dependent loans, impaired premises and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Bank. Once the appraisal is received, a member of the Bank’s CCAD reviews the assumptions and approaches utilized in the appraisal, as well as the overall resulting fair value in comparison with independent data sources, such as recent market data or industry-wide statistics. On at least an annual basis, the Bank performs a back test of collateral appraisals by comparing actual selling prices on recent collateral sales to the most recent appraisal of such collateral. Back tests are performed for each collateral class, e.g., residential real estate or commercial real estate, and may lead to additional adjustments to the value of unliquidated collateral of similar class. ​ Mortgage servicing rights: At least quarterly, MSRs are evaluated for impairment based upon the fair value of the MSRs as compared to carrying amount. If the carrying amount of an individual tranche exceeds fair value, impairment is recorded, and the respective individual tranche is carried at fair value. If the carrying amount of an individual tranche does not exceed fair value, impairment is reversed if previously recognized and the carrying value of the individual tranche is based on the amortization method. The valuation model utilizes assumptions that market participants would use in estimating future net servicing income and can generally be validated against available market data (Level 2). ​ Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Bank has elected the fair value option, are summarized below. Information as of March 31, 2024 is presented net of any applicable ACL. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements at | ​ | ​ | ​ |
​ | ​ | March 31, 2024 Using: | ​ | ​ | ​ |
​ |  | Quoted Prices in |  | Significant |  |  | ​ |  |  | ​ |
​ | ​ | Active Markets | ​ | Other | ​ | Significant | ​ | ​ | ​ |
​ | ​ | for Identical | ​ | Observable | ​ | Unobservable | ​ | Total |
​ | ​ | Assets | ​ | Inputs | ​ | Inputs | ​ | Fair |
(in thousands) | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Value |
Financial assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available-for-sale debt securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury securities and U.S. Government agencies | ​ | $ | 148,755 | ​ | $ | 264,370 | ​ | $ | — | ​ | $ | 413,125 | ​
Private label mortgage-backed security | ​ |  | — | ​ |  | — | ​ |  | 1,772 | ​ |  | 1,772 | ​
Mortgage-backed securities - residential | ​ |  | — | ​ |  | 145,822 | ​ |  | — | ​ |  | 145,822 | ​
Collateralized mortgage obligations | ​ |  | — | ​ |  | 21,040 | ​ |  | — | ​ |  | 21,040 | ​
Corporate bonds | ​ | ​ | — | ​ | ​ | 2,019 | ​ | ​ | — | ​ | ​ | 2,019 | ​
Trust preferred security | ​ |  | — | ​ |  | — | ​ |  | 4,027 | ​ |  | 4,027 | ​
Total available-for-sale debt securities | ​ | $ | 148,755 | ​ | $ | 433,251 | ​ | $ | 5,799 | ​ | $ | 587,805 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity securities with readily determinable fair value: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Freddie Mac preferred stock | ​ | $ | — | ​ | $ | 235 | ​ | $ | — | ​ | $ | 235 | ​
Total equity securities with readily determinable fair value | ​ | $ | — | ​ | $ | 235 | ​ | $ | — | ​ | $ | 235 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage loans held for sale | ​ | $ | — | ​ | $ | 80,884 | ​ | $ | — | ​ | $ | 80,884 | ​
Consumer loans held for sale | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,093 | ​ | ​ | 6,093 | ​
Rate lock commitments | ​ |  | — | ​ |  | 466 | ​ |  | — | ​ |  | 466 | ​
Interest rate swap agreements | ​ | ​ | — | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financial liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mandatory forward contracts | ​ | $ | — | ​ | $ | 77 | ​ | $ | — | ​ | $ | 77 | ​
Interest rate swap agreements | ​ | ​ | — | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements at | ​ | ​ | ​ |
​ | ​ | December 31, 2023 Using: | ​ | ​ | ​ |
​ |  | Quoted Prices in |  | Significant |  |  | ​ |  |  | ​ |
​ | ​ | Active Markets | ​ | Other | ​ | Significant | ​ | ​ | ​ |
​ | ​ | for Identical | ​ | Observable | ​ | Unobservable | ​ | Total |
​ | ​ | Assets | ​ | Inputs | ​ | Inputs | ​ | Fair |
(in thousands) | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Value |
Financial assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Available-for-sale debt securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Treasury securities and U.S. Government agencies | ​ | $ | 177,784 | ​ | $ | 229,249 | ​ | $ | — | ​ | $ | 407,033 | ​
Private label mortgage-backed security | ​ |  | — | ​ |  | — | ​ |  | 1,773 | ​ |  | 1,773 | ​
Mortgage-backed securities - residential | ​ |  | — | ​ |  | 154,710 | ​ |  | — | ​ |  | 154,710 | ​
Collateralized mortgage obligations | ​ |  | — | ​ |  | 21,659 | ​ |  | — | ​ |  | 21,659 | ​
Corporate bonds | ​ | ​ | — | ​ | ​ | 2,020 | ​ | ​ | — | ​ | ​ | 2,020 | ​
Trust preferred security | ​ |  | — | ​ |  | — | ​ |  | 4,118 | ​ |  | 4,118 | ​
Total available-for-sale debt securities | ​ | $ | 177,784 | ​ | $ | 407,638 | ​ | $ | 5,891 | ​ | $ | 591,313 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Equity securities with readily determinable fair value: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Freddie Mac preferred stock | ​ | $ | — | ​ | $ | 174 | ​ | $ | — | ​ | $ | 174 | ​
Total equity securities with readily determinable fair value | ​ | $ | — | ​ | $ | 174 | ​ | $ | — | ​ | $ | 174 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage loans held for sale | ​ | $ | — | ​ | $ | 3,227 | ​ | $ | — | ​ | $ | 3,227 | ​
Consumer loans held for sale | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 7,914 | ​ | ​ | 7,914 | ​
Rate lock commitments | ​ |  | — | ​ |  | 243 | ​ |  | — | ​ |  | 243 | ​
Interest rate swap agreements | ​ |  | — | ​ |  | 8,933 | ​ |  | — | ​ |  | 8,933 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financial liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Mandatory forward contracts | ​ | $ | — | ​ | $ | 61 | ​ | $ | — | ​ | $ | 61 | ​
Interest rate swap agreements | ​ | ​ | — | ​ | ​ | 8,933 | ​ | ​ | — | ​ |  | 8,933 | ​
​ All transfers between levels are generally recognized at the end of each quarter. There were no transfers into or out of Level 1, 2, or 3 assets during the three months ended March 31, 2024 and 2023. ​ Private Label Mortgage-Backed Security ​ The following table presents a reconciliation of the Bank’s private label mortgage-backed security measured at fair value on a recurring basis using significant unobservable inputs (Level 3): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended | ​
​ | ​ | March 31, | ​
(in thousands) | ​ | 2024 | ​ | 2023 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance, beginning of period | ​ | $ | 1,773 | ​ | $ | 2,127 | ​
Total gains or losses included in earnings: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net change in unrealized gain (loss) | ​ |  | 57 | ​ |  | 5 | ​
Principal paydowns | ​ |  | (58) | ​ |  | (122) | ​
Balance, end of period | ​ | $ | 1,772 | ​ | $ | 2,010 | ​
​ The fair value of the Bank’s single private label mortgage-backed security is supported by analysis prepared by an independent third-party. The third-party’s approach to determining fair value involved several steps: 1) detailed collateral analysis of the underlying mortgages, including consideration of geographic location, original loan-to-value and the weighted average FICO score of the borrowers; 2) collateral performance projections for each pool of mortgages underlying the security (probability of default, severity of default, and prepayment probabilities) and 3) discounted cash flow modeling. ​ The significant unobservable inputs in the fair value measurement of the Bank’s single private label mortgage-backed security are prepayment rates, probability of default and loss severity in the event of default. Significant fluctuations in any of those inputs in isolation would result in a significantly different fair value measurement. ​ Quantitative information about recurring Level 3 fair value measurement inputs for the Bank’s single private label mortgage-backed security follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair |  | Valuation |  |  |  | ​ |
March 31, 2024 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Unobservable Inputs | ​ | Range |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Private label mortgage-backed security | ​ | $ | 1,772 |  | Discounted cash flow |  | (1) Constant prepayment rate |  | 3.9% - 4.6% | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (2) Probability of default |  | 1.8% - 9.4% | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (3) Loss severity |  | 22% - 35% | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair |  | Valuation |  |  |  | ​ |
December 31, 2023 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Unobservable Inputs | ​ | Range |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Private label mortgage-backed security | ​ | $ | 1,773 |  | Discounted cash flow |  | (1) Constant prepayment rate |  | 3.9% - 4.5% | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (2) Probability of default |  | 1.8% - 9.4% | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (3) Loss severity |  | 25% - 35% | ​
​ ​ Trust Preferred Security ​ The following table presents a reconciliation of the Company’s TRUP measured at fair value on a recurring basis using significant unobservable inputs (Level 3): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Three Months Ended | ​
​ | ​ | March 31, | ​
(in thousands) | ​ | 2024 | ​ | 2023 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance, beginning of period | ​ | $ | 4,118 | ​ | $ | 3,855 | ​
Total gains or losses included in earnings: | ​ | ​ | ​ | ​ | ​ | ​ | ​
Discount accretion | ​ | ​ | 15 | ​ | ​ | 14 | ​
Net change in unrealized gain (loss) | ​ |  | (106) | ​ |  | 132 | ​
Balance, end of period | ​ | $ | 4,027 | ​ | $ | 4,001 | ​
​ The fair value of the Company’s TRUP investment is based on the most recent bid price for this instrument, as provided by a third-party broker. ​ Mortgage Loans Held for Sale ​ The Bank has elected the fair value option for mortgage loans held for sale. These loans are intended for sale and the Bank believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loans and in accordance with Bank policy for such instruments. None of these loans were past due 90-days-or-more or on nonaccrual as of March 31, 2024 and December 31, 2023. ​ The aggregate fair value, contractual balance, and unrealized gain were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Aggregate fair value | ​ | $ | 80,884 | ​ | $ | 3,227 | ​
Contractual balance | ​ |  | 80,681 | ​ |  | 3,168 | ​
Unrealized gain | ​ |  | 203 | ​ |  | 59 | ​
​ The total amount of gains and losses from changes in fair value included in earnings for the three months ended March 31, 2024 and 2023 for mortgage loans held for sale are presented in the following table: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |  | ​
​ | ​ | March 31, | ​ | ​
(in thousands) |  | 2024 |  | 2023 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | $ | 86 | ​ | $ | 61 | ​ | ​
Change in fair value | ​ |  | 145 | ​ |  | (8) | ​ | ​
Total included in earnings | ​ | $ | 231 | ​ | $ | 53 | ​ | ​
​ Consumer Loans Held for Sale ​ RCS carries loans originated through its installment loan program at fair value. Interest income is recorded based on the contractual terms of the loan and in accordance with Bank policy for such instruments. None of these loans were past due 90-days-or-more or on nonaccrual as of March 31, 2024 and December 31, 2023. ​ The significant unobservable inputs in the fair value measurement of the Bank’s short-term installment loans are the net contractual premiums and level of loans sold at a discount price. Significant fluctuations in any of those inputs in isolation would result in a significantly lower/higher fair value measurement. ​ ​ The following table presents quantitative information about recurring Level 3 fair value measurement inputs for installment loans: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair |  | Valuation |  |  |  | ​
March 31, 2024 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Unobservable Inputs | ​ | Rate
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer loans held for sale | ​ | $ | 6,093 |  | Contract Terms |  | (1) Net Premium |  | 0.15%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (2) Discounted Sales |  | 10.00%
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair |  | Valuation |  |  |  | ​
December 31, 2023 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Unobservable Inputs | ​ | Rate
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer loans held for sale | ​ | $ | 7,914 |  | Contract Terms |  | (1) Net Premium |  | 0.15%
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ |  | (2) Discounted Sales |  | 10.00%
​ The aggregate fair value, contractual balance, and unrealized gain on consumer loans held for sale, at fair value, were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) |  | March 31, 2024 |  | December 31, 2023 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Aggregate fair value | ​ | $ | 6,093 | ​ | $ | 7,914 | ​
Contractual balance | ​ |  | 6,129 | ​ |  | 7,964 | ​
Unrealized loss | ​ |  | (36) | ​ |  | (50) | ​
​ The total amount of net gains from changes in fair value included in earnings for consumer loans held for sale, at fair value, are presented in the following table: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | ​
​ | ​ | March 31, | ​ | ​
(in thousands) |  | 2024 |  | 2023 | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest income | ​ | $ | 1,173 | ​ | $ | 765 | ​ | ​
Change in fair value | ​ |  | 14 | ​ |  | 3 | ​ | ​
Total included in earnings | ​ | $ | 1,187 | ​ | $ | 768 | ​ | ​
​ ​ Assets measured at fair value on a non-recurring basis are summarized below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements at | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024 Using: | ​ | ​ | ​ | ​
​ |  | Quoted Prices in |  | Significant |  | ​ | ​ |  |  | ​ | ​
​ | ​ | Active Markets | ​ | Other | ​ | Significant | ​ | ​ | ​ | ​
​ | ​ | for Identical | ​ | Observable | ​ | Unobservable | ​ | Total | ​
​ | ​ | Assets | ​ | Inputs | ​ | Inputs | ​ | Fair | ​
(in thousands) | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Value | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate | ​ | $ | — | ​ | $ | — | ​ | $ | 1,486 | ​ | $ | 1,486 | ​
Total other real estate owned | ​ | $ | — | ​ | $ | — | ​ | $ | 1,486 | ​ | $ | 1,486 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements at | ​ | ​ | ​
​ | ​ | December 31, 2023 Using: | ​ | ​ | ​
​ |  | Quoted Prices in |  | Significant |  | ​ | ​ |  |  | ​
​ | ​ | Active Markets | ​ | Other | ​ | Significant | ​ | ​ | ​
​ | ​ | for Identical | ​ | Observable | ​ | Unobservable | ​ | Total
​ | ​ | Assets | ​ | Inputs | ​ | Inputs | ​ | Fair
(in thousands) | ​ | (Level 1) | ​ | (Level 2) | ​ | (Level 3) | ​ | Value
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Collateral-dependent loans: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential real estate: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Owner-occupied | ​ | $ | — | ​ | $ | — | ​ | $ | 1,580 | ​ | $ | 1,580
Commercial real estate | ​ |  | — | ​ |  | — | ​ |  | 795 | ​ |  | 795
Home equity | ​ |  | — | ​ |  | — | ​ |  | 104 | ​ |  | 104
Total collateral-dependent loans* | ​ | $ | — | ​ | $ | — | ​ | $ | 2,479 | ​ | $ | 2,479
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential real estate | ​ | $ | — | ​ | $ | — | ​ | $ | 1,370 | ​ | $ | 1,370
Total other real estate owned | ​ | $ | — | ​ | $ | — | ​ | $ | 1,370 | ​ | $ | 1,370
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  | ​ |  |  |  |  |  | Range
​ | ​ | Fair | ​ | Valuation | ​ | Unobservable | ​ | (Weighted
March 31, 2024 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Inputs | ​ | Average)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned - commercial real estate | ​ | $ | 1,486 |  | Sales comparison approach |  | Adjustments determined for differences between comparable sales |  | 39% (39%)
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  | ​ |  |  |  |  |  | Range
​ | ​ | Fair | ​ | Valuation | ​ | Unobservable | ​ | (Weighted
December 31, 2023 (dollars in thousands) | ​ | Value | ​ | Technique | ​ | Inputs | ​ | Average)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Collateral-dependent loans - residential real estate owner-occupied | ​ | $ | 1,580 |  | Sales comparison approach |  | Adjustments determined for differences between comparable sales |  | 0% - 27% (4%)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Collateral-dependent loans - commercial real estate | ​ | $ | 795 |  | Sales comparison approach |  | Adjustments determined for differences between comparable sales |  | 11% (11%)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Collateral-dependent loans - home equity | ​ | $ | 104 |  | Sales comparison approach |  | Adjustments determined for differences between comparable sales |  | 5% (5%)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned - commercial real estate | ​ | $ | 1,370 |  | Sales comparison approach |  | Adjustments determined for differences between comparable sales |  | 39% (39%)
​ Collateral-Dependent Loans ​ Collateral-dependent loans are generally measured for loss using the fair value for reasonable disposition of the underlying collateral. The Bank’s practice is to obtain new or updated appraisals or BPOs on the loans subject to the initial review and then to evaluate the need for an update to this value on an as-necessary or possibly annual basis thereafter (depending on the market conditions impacting the value of the collateral). The Bank may discount the valuation amount as necessary for selling costs and past due real estate taxes. If a new or updated appraisal or BPO is not available at the time of a loan’s loss review, the Bank may apply a discount to the existing value of an old valuation to reflect the property’s current estimated value if it is believed to have deteriorated in either: (i) the physical or economic aspects of the subject property or (ii) material changes in market conditions. The review generally results in a partial charge-off of the loan if fair value, less selling costs, are below the loan’s carrying value. Collateral-dependent loans are valued within Level 3 of the fair value hierarchy. ​ Collateral-dependent loans are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​
​ | ​ | March 31, | ​
(in thousands) |  | 2024 |  | 2023 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Provision on collateral-dependent loans | ​ | $ | (7) | ​ | $ | (19) | ​
​ Other Real Estate Owned ​ Details of other real estate owned carrying value and write downs follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | ​
(in thousands) | ​ | March 31, 2024 |  | December 31, 2023 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned carried at fair value | ​ | $ | 1,486 | ​ | $ | 1,370 | ​
Total carrying value of other real estate owned | ​ | $ | 1,486 | ​ | $ | 1,370 | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended |
​ | ​ | March 31, | ​
(in thousands) |  | 2024 |  | 2023 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other real estate owned write-downs during the period | ​ | $ | 53 | ​ | $ | 52 | ​
​ The carrying amounts and estimated exit price fair values of all financial instruments follow: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements at |
​ | ​ | ​ | ​ | ​ | March 31, 2024: |
​ |  | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | Total |
​ | ​ | Carrying | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fair |
(in thousands) | ​ | Value | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Value |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 546,363 | ​ | $ | 546,363 | ​ | $ | — | ​ | $ | — | ​ | $ | 546,363 | ​
Available-for-sale debt securities | ​ |  | 587,805 | ​ |  | 148,755 | ​ |  | 433,251 | ​ |  | 5,799 | ​ |  | 587,805 | ​
Held-to-maturity debt securities | ​ |  | 76,254 | ​ |  | — | ​ |  | 76,119 | ​ |  | — | ​ |  | 76,119 | ​
Equity securities with readily determinable fair values | ​ | ​ | 235 | ​ | ​ | — | ​ | ​ | 235 | ​ | ​ | — | ​ | ​ | 235 | ​
Mortgage loans held for sale, at fair value | ​ |  | 80,884 | ​ |  | — | ​ |  | 80,884 | ​ |  | — | ​ |  | 80,884 | ​
Consumer loans held for sale, at fair value | ​ | ​ | 6,093 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,093 | ​ | ​ | 6,093 | ​
Consumer loans held for sale, at the lower of cost or fair value | ​ | ​ | 13,083 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 13,083 | ​ | ​ | 13,083 | ​
Loans, net | ​ |  | 5,115,590 | ​ |  | — | ​ |  | — | ​ |  | 4,843,728 | ​ |  | 4,843,728 | ​
Federal Home Loan Bank stock | ​ |  | 43,729 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | NA | ​
Accrued interest receivable | ​ |  | 20,325 | ​ |  | — | ​ |  | 4,111 | ​ |  | 16,214 | ​ |  | 20,325 | ​
Mortgage servicing rights | ​ | ​ | 7,102 | ​ | ​ | — | ​ | ​ | 16,054 | ​ | ​ | — | ​ | ​ | 16,054 | ​
Rate lock commitments | ​ | ​ | 466 | ​ | ​ | — | ​ | ​ | 466 | ​ | ​ | — | ​ | ​ | 466 | ​
Interest rate swap agreements | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest-bearing deposits | ​ | $ | 1,359,516 | ​ | $ | — | ​ | $ | 1,359,516 | ​ | $ | — | ​ | $ | 1,359,516 | ​
Transaction deposits | ​ |  | 3,583,714 | ​ |  | — | ​ |  | 3,583,714 | ​ |  | — | ​ |  | 3,583,714 | ​
Time deposits | ​ |  | 477,419 | ​ |  | — | ​ |  | 473,818 | ​ |  | — | ​ |  | 473,818 | ​
Securities sold under agreements to repurchase and other short-term borrowings | ​ |  | 86,171 | ​ |  | — | ​ |  | 86,171 | ​ |  | — | ​ |  | 86,171 | ​
Federal Home Loan Bank advances | ​ |  | 270,000 | ​ |  | — | ​ |  | 270,565 | ​ |  | — | ​ |  | 270,565 | ​
Accrued interest payable | ​ |  | 6,905 | ​ |  | — | ​ |  | 6,905 | ​ |  | — | ​ |  | 6,905 | ​
Rate lock commitments | ​ | ​ | 466 | ​ | ​ | — | ​ | ​ | 466 | ​ | ​ | — | ​ | ​ | 466 | ​
Mandatory forward contracts | ​ | ​ | (77) | ​ | ​ | — | ​ | ​ | (77) | ​ | ​ | — | ​ | ​ | (77) | ​
Interest rate swap agreements | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​ | ​ | — | ​ | ​ | 7,870 | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Fair Value Measurements at |
​ | ​ | ​ | ​ | ​ | December 31, 2023: |
​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | Total |
​ | ​ | Carrying | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Fair |
(in thousands) | ​ | Value | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Value |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 316,567 | ​ | $ | 316,567 | ​ | $ | — | ​ | $ | — | ​ | $ | 316,567 | ​
Available-for-sale debt securities | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Held-to-maturity debt securities | ​ |  | 76,387 | ​ |  | — | ​ |  | 76,167 | ​ |  | — | ​ |  | 76,167 | ​
Equity securities with readily determinable fair values | ​ | ​ | 174 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​
Mortgage loans held for sale, at fair value | ​ |  | 3,227 | ​ |  | — | ​ |  | 3,227 | ​ |  | — | ​ |  | 3,227 | ​
Consumer loans held for sale, at fair value | ​ | ​ | 7,914 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 7,914 | ​ | ​ | 7,914 | ​
Consumer loans held for sale, at the lower of cost or fair value | ​ | ​ | 16,094 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 16,094 | ​ | ​ | 16,094 | ​
Loans, net | ​ |  | 5,157,731 | ​ |  | — | ​ |  | — | ​ |  | 4,874,974 | ​ |  | 4,874,974 | ​
Federal Home Loan Bank stock | ​ |  | 23,770 | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | NA | ​
Accrued interest receivable | ​ |  | 18,447 | ​ |  | — | ​ |  | 4,097 | ​ |  | 14,350 | ​ |  | 18,447 | ​
Mortgage servicing rights | ​ | ​ | 7,411 | ​ | ​ | — | ​ | ​ | 16,054 | ​ | ​ | — | ​ | ​ | 16,054 | ​
Rate lock commitments | ​ | ​ | 243 | ​ | ​ | — | ​ | ​ | 243 | ​ | ​ | — | ​ | ​ | 243 | ​
Interest rate swap agreements | ​ | ​ | 8,933 | ​ | ​ | — | ​ | ​ | 8,933 | ​ | ​ | — | ​ | ​ | 8,933 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Noninterest-bearing deposits | ​ | $ | 1,676,998 | ​ | $ | — | ​ | $ | 1,676,998 | ​ | $ | — | ​ | $ | 1,676,998 | ​
Transaction deposits | ​ |  | 2,924,114 | ​ |  | — | ​ |  | 2,924,114 | ​ |  | — | ​ |  | 2,924,114 | ​
Time deposits | ​ |  | 452,051 | ​ |  | — | ​ |  | 446,218 | ​ |  | — | ​ |  | 446,218 | ​
Securities sold under agreements to repurchase and other short-term borrowings | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​
Federal Home Loan Bank advances | ​ |  | 380,000 | ​ |  | — | ​ |  | 382,062 | ​ |  | — | ​ |  | 382,062 | ​
Accrued interest payable | ​ |  | 4,073 | ​ |  | — | ​ |  | 4,073 | ​ |  | — | ​ |  | 4,073 | ​
Rate lock commitments | ​ |  | 243 | ​ | ​ | — | ​ | ​ | 243 | ​ | ​ | — | ​ | ​ | 243 | ​
Mandatory forward contracts | ​ | ​ | 61 | ​ | ​ | — | ​ | ​ | 61 | ​ | ​ | — | ​ | ​ | 61 | ​
Interest rate swap agreements | ​ | ​ | 8,933 | ​ | ​ | — | ​ | ​ | 8,933 | ​ | ​ | — | ​ | ​ | 8,933 | ​
​ ​

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X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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