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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

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

The following tables present for each of the fair-value hierarchy levels the Company’s assets that are measured at fair value on a recurring and nonrecurring basis as of the dates indicated (in thousands).


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
September 30, 2023
Measured on a recurring basis:
Securities available for sale:
U.S. Government agency and government sponsored enterprises		$	—			$	20,909			$	—			$	20,909
Mortgage-backed securities			—				833,306				—				833,306
Other assets:
Hedging derivative instruments			—				8,548				—				8,548
Fair value adjusted through comprehensive income		$	—			$	862,763			$	—			$	862,763
Other assets:
Derivative instruments – interest rate swaps			—				56,724				—				56,724
Derivative instruments – credit contracts			—				—				—				-
Derivative instruments – mortgage banking			—				218				—				218
Other liabilities:
Derivative instruments – interest rate swaps			—				(56,725	)			—				(56,725	)
Derivative instruments – credit contracts			—				—				—				-
Derivative instruments – mortgage banking			—				(44	)			—				(44	)
Fair value adjusted through net income		$	—			$	173			$	—			$	173
Measured on a nonrecurring basis:
Loans:
Loans held for sale		$	—			$	1,873			$	—			$	1,873
Collateral dependent loans			—				—				30,124				30,124
Other assets:
Long-lived assets held for sale			—				—				1,299				1,299
Loan servicing rights			—				—				1,430				1,430
Other real estate owned			—				—				162				162
Total		$	—			$	1,873			$	33,015			$	34,888

There were no transfers between Levels 1 and 2 during the nine months ended September 30, 2023. There were no liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2023.


		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)				Total
December 31, 2022
Measured on a recurring basis:
Securities available for sale:
U.S. Government agencies and government sponsored enterprises		$	—			$	21,115			$	—			$	21,115
Mortgage-backed securities			—				933,256				—				933,256
Other assets:
Hedging derivative instruments			—				6,725				—				6,725
Fair value adjusted through comprehensive income		$	—			$	961,096			$	—			$	961,096
Other assets:
Derivative instruments – interest rate products		$	—			$	47,736			$	—			$	47,736
Derivative instruments – mortgage banking			—				96				—				96
Other liabilities:
Derivative instruments – interest rate products			—				(47,738	)			—				(47,738	)
Derivative instruments – mortgage banking			—				(13	)			—				(13	)
Fair value adjusted through net income		$	—			$	81			$	—			$	81
Measured on a nonrecurring basis:
Loans:
Loans held for sale		$	—			$	550			$	—			$	550
Collateral dependent loans			—				—				21,454				21,454
Other assets:
Long-lived assets held for sale			—				—				1,509				1,509
Loan servicing rights			—				—				1,470				1,470
Other real estate owned			—				—				19				19
Total		$	—			$	550			$	24,452			$	25,002

Additional Quantitative Information about Assets Measured at Fair Value on Recurring and Non-Recurring Basis

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value as of September 30, 2023 (dollars in thousands).


Asset		Fair Value				Valuation Technique		Unobservable Input		Unobservable Input Value or Range
Collateral dependent loans		$	30,124			Appraisal of collateral (1)		Appraisal adjustments (2)		45.8%(3) / 0 - 77.4%
Loan servicing rights		$	1,430			Discounted cash flow		Discount rate		10.4% (3)
								Constant prepayment rate		11.9% (3)
Long-lived assets held for sale		$	1,299			Appraisal of collateral (1)		Appraisal adjustments (2)		9.7 - 33.9%
Other real estate owned		$	162			Appraisal of collateral (1)		Appraisal adjustments (2)		42.7%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3) Weighted averages.

Carrying Amount, Estimated Fair Value, and Placement in Fair Value Hierarchy of Financial Instruments

The following table presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value measurement hierarchy of the Company’s financial instruments as of the dates indicated.


		Level in		September 30, 2023								December 31, 2022
		Fair Value						Estimated								Estimated
		Measurement		Carrying				Fair				Carrying				Fair
		Hierarchy		Amount				Value				Amount				Value
Financial assets:
Cash and cash equivalents		Level 1		$	192,111			$	192,111			$	130,466			$	130,466
Securities available for sale		Level 2			854,215				854,215				954,371				954,371
Securities held to maturity, net		Level 2			154,204				136,540				188,975				174,188
Loans held for sale		Level 2			1,873				1,873				550				550
Loans		Level 2			4,351,412				4,150,752				3,983,582				3,867,285
Loans (1)		Level 3			30,124				30,124				21,454				21,454
Long-lived assets held for sale		Level 3			1,299				1,299				1,509				1,509
Accrued interest receivable		Level 1			23,541				23,541				19,371				19,371
Derivative instruments – cash flow hedges		Level 2			8,548				8,548				6,725				6,725
Derivative instruments – interest rate products		Level 2			56,724				56,724				47,736				47,736
Derivative instruments – mortgage banking		Level 2			218				218				96				96
FHLB and FRB stock		Level 2			15,067				15,067				19,385				19,385
Financial liabilities:
Non-maturity deposits		Level 1			3,806,986				3,806,986				3,646,552				3,646,552
Time deposits		Level 2			1,508,987				1,498,696				1,282,872				1,268,957
Short-term borrowings		Level 1			70,000				70,000				205,000				205,000
Long-term borrowings		Level 2			124,454				119,855				74,222				70,814
Accrued interest payable		Level 1			18,138				18,138				5,983				5,983
Derivative instruments – interest rate products		Level 2			56,725				56,725				47,738				47,738
Derivative instruments – credit contracts		Level 2			—				—				—				—
Derivative instruments – mortgage banking		Level 2			44				44				13				13

(1) Comprised of collateral dependent loans.