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FAIR VALUE MEASUREMENT AND DISCLOSURE (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, for the dates indicated:

(In thousands)						Fair Value						Readily Available Market Prices (Level 1)						Observable Market Data (Level 2)						Company Determined Fair Value (Level 3)
September 30, 2020
Financial assets:
Loans held for sale						$	37,935					$	—					$	37,935					$	—
AFS investments:
Obligations of states and political subdivisions						127,613						—						127,613						—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises						568,102						—						568,102						—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises						400,566						—						400,566						—
Subordinated corporate bonds						10,788						—						10,788						—
Equity securities - bank stock						1,674						—						1,674						—
Customer loan swaps						44,123						—						44,123						—
Interest rate swap on loans						5,717						—						5,717						—
Fixed-rate mortgage interest rate lock commitments						977						—						977						—
Forward delivery commitments						505						—						505						—
Financial liabilities:
Junior subordinated debt interest rate swaps						11,747						—						11,747						—
Customer loan swaps						44,213						—						44,213						—
Interest rate swap on borrowings						1,714						—						1,714						—
Fixed-rate mortgage interest rate lock commitments						405						—						405						—
Forward delivery commitments						241						—						241						—
December 31, 2019
Financial assets:
Loans held for sale						$	11,854					$	—					$	11,854					$	—
AFS investments:
Obligations of states and political subdivisions						118,083						—						118,083						—
Mortgage-backed securities issued or guaranteed by U.S. government-sponsored enterprises						463,386						—						463,386						—
Collateralized mortgage obligations issued or guaranteed by U.S. government-sponsored enterprises						325,905						—						325,905						—
Subordinated corporate bonds						10,744						—						10,744						—
Equity securities - bank stock						1,674						—						1,674						—
Customer loan swaps						17,756						—						17,756						—
Interest rate swap on loans						483						—						483						—
Fixed-rate mortgage interest rate lock commitments						480						—						480						—
Forward delivery commitments						312						—						312						—
Financial liabilities:
Junior subordinated debt interest rate swaps						8,187						—						8,187						—
Customer loan swaps						17,756						—						17,756						—
Fixed-rate mortgage interest rate lock commitments						18						—						18						—
Forward delivery commitments						15						—						15						—

Summary of Assets Measured at Fair Value on Non Recurring Basis

The table below highlights financial and non-financial assets measured and recorded at fair value on a non-recurring basis for the dates indicated:

(In thousands)						Fair Value						Readily Available Market Prices (Level 1)						Observable Market Data (Level 2)						Company Determined Fair Value (Level 3)
September 30, 2020
Financial assets:
Collateral-dependent impaired loans						$	3					$	—					$	—					$	3
Servicing assets						764						—						—						764
December 31, 2019
Non-financial assets:
OREO						$	94					$	—					$	—					$	94

Valuation Methodology and Unobservable Inputs for Level Three Assets Measured at Fair Value on Non Recurring Basis

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis for the dates indicated:

(Dollars in thousands)

Fair Value

Valuation Methodology

Unobservable Input

Discount

September 30, 2020

Collateral-dependent impaired loans:

Partially charged-off

$

3

Market approach appraisal of collateral

Management adjustment of appraisal

—%

Estimated selling costs

10%

Servicing assets

$

764

Discounted cash flow

Weighted-average constant prepayment rate

19%

Weighted average discount rate

10%

December 31, 2019

OREO

$

94

Market approach appraisal of collateral

Management adjustment of appraisal

18%

Estimated selling cost

13%

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets and Liabilities

The estimated fair values and related carrying amounts for assets and liabilities for which fair value is only disclosed are shown below as of the dates indicated:

(In thousands)						Carrying Amount						Fair Value						Readily Available Market Prices (Level 1)						Observable Market Prices (Level 2)						Company Determined Market Prices (Level 3)
September 30, 2020
Financial assets:
HTM securities						$	1,298					$	1,403					$	—					$	1,403					$	—
Commercial real estate loans(1)						1,314,204						$	1,282,149					—						—						1,282,149
Commercial loans(1)(2)						371,011						$	364,655					—						—						364,655
SBA PPP loans(1)						223,723						$	229,137					—						—						229,137
Residential real estate loans(1)						1,035,397						1,054,587						—						—						1,054,587
Home equity loans(1)						271,720						271,416						—						—						271,416
Consumer loans(1)						22,373						20,499						—						—						20,499
Servicing assets						1,143						1,411						—						—						1,411
Financial liabilities:
Time deposits						$	505,451					$	508,785					$	—					$	508,785					$	—
Short-term borrowings						210,055						210,030						—						210,030						—
Long-term borrowings						25,000						25,465						—						25,465						—
Subordinated debentures						59,306						46,032						—						46,032						—
December 31, 2019
Financial assets:
HTM securities						$	1,302					$	1,359					$	—					$	1,359					$	—
Commercial real estate loans(1)						1,230,983						1,196,297						—						—						1,196,297
Commercial loans(1)(2)						438,716						431,892						—						—						431,892
Residential real estate loans(1)						1,064,532						1,066,544						—						—						1,066,544
Home equity loans(1)						310,356						293,565						—						—						293,565
Consumer loans(1)						25,265						23,355						—						—						23,355
Servicing assets						877						1,496						—						—						1,496
Financial liabilities:
Time deposits						$	595,549					$	594,881					$	—					$	594,881					$	—
Short-term borrowings						268,809						268,631						—						268,631						—
Long-term borrowings						10,000						10,002						—						10,002						—
Subordinated debentures						59,080						50,171						—						50,171						—

(1)    The presented carrying amount is net of the allocated ALL.

(2)    Includes the HPFC loan portfolio.

X

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique used to measure similar asset in prior period by class of asset or liability on non-recurring basis.

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

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