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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair value measurements of assets on a recurring basis

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:


	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	65,668	$	19,939	$	45,729	$	—
Municipal securities	200,010		—		200,010		—
Residential CMO and MBS	398,156		—		398,156		—


	June 30, 2022
	Total		Level 1		Level 2		Level 3
	(In thousands)
Commercial CMO and MBS	493,620		—		493,620		—
Corporate obligations	5,978		—		5,978		—
Other asset-backed securities	24,156		—		24,156		—
Total investment securities available for sale	1,187,588		19,939		1,167,649		—
Equity security	186		186		—		—
Derivative assets - interest rate swaps	19,842		—		19,842		—
Liabilities
Derivative liabilities - interest rate swaps	$	19,842	$	—	$	19,842	$	—


	December 31, 2021
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities	$	21,373	$	—	$	21,373	$	—
Municipal securities	221,212		—		221,212		—
Residential CMO and MBS	306,884		—		306,884		—
Commercial CMO and MBS	315,861		—		315,861		—
Corporate obligations	2,014		—		2,014		—
Other asset-backed securities	26,991		—		26,991		—
Total investment securities available for sale	894,335		—		894,335		—
Equity security	240		240		—		—
Derivative assets - interest rate swaps	15,219		—		15,219		—
Liabilities
Derivative liabilities - interest rate swaps	$	15,286	$	—	$	15,286	$	—

Fair value measurements of assets on a nonrecurring basis

The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:


			Fair Value at June 30, 2022
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,054	$	969	$	—	$	—	$	969
Owner-occupied CRE	613		186		—		—		186











Total assets measured at fair value on a nonrecurring basis	$	1,667	$	1,155	$	—	$	—	$	1,155

(1) Basis represents the outstanding principal balance of collateral-dependent loans.


			Fair Value at December 31, 2021
	Basis(1)		Total		Level 1		Level 2		Level 3
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	1,911	$	1,049	$	—	$	—	$	1,049
Owner-occupied CRE	613		189		—		—		189

Total commercial business	2,524		1,238		—		—		1,238


Real estate construction and land development:

Commercial and multifamily	991		$	534	—		—		534


Total	3,515		1,772		—		—		1,772
Prepaid expenses and other assets:
Branch held for sale (2)	698		698		—		—		698
Total assets measured at fair value on a nonrecurring basis	$	4,213	$	2,470	$	—	$	—	$	2,470

(1) Basis represents the outstanding principal balance of collateral-dependent loans and the carrying value of the branch held for sale.

(2) In December 2021, one branch was written down to its net realizable value concurrent with the signing of an agreement for sale at a future date.

The following table represents the net (loss) gain recorded in earnings as a result of nonrecurring fair value adjustments recorded during the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Collateral-dependent loans:
Commercial business:
Commercial and industrial	$	35	$	6	$	23	$	(28)
Owner-occupied CRE	(3)		(76)		(3)		(76)

Total commercial business	32		(70)		20		(104)

Real estate construction and land development:

Commercial and multifamily	—		(23)		—		(38)



Net loss from nonrecurring fair value adjustments	$	32	$	(93)	$	20	$	(142)

Fair value measurements for financial instruments measured at fair value on a non-recurring basis

The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:

June 30, 2022

Fair
Value

Valuation
Technique(s)

Unobservable Input(s)

Range of Inputs; Weighted
Average

(Dollars in thousands)

Collateral-dependent loans

1,155

Market approach

Adjustment for differences between the comparable sales

N/A(1)

(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.

December 31, 2021

Fair
Value

Valuation
Technique(s)

Unobservable Input(s)

Range of Inputs; Weighted
Average

(Dollars in thousands)

Collateral-dependent loans

1,772

Market approach

Adjustment for differences between the comparable sales

35.0% - (11.0%); 13.8%

Branch held for sale

698

Market approach

Sale agreement

Not applicable

Schedule of carrying value and fair value of financial instruments

The following tables present the carrying value amount of the Company’s financial instruments and their corresponding

estimated fair values at the dates indicated:


	June 30, 2022
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	994,055	$	994,055	$	994,055	$	—	$	—
Investment securities available for sale	1,187,588		1,187,588		19,939		1,167,649		—
Investment securities held to maturity	615,653		559,312		—		559,312		—
Loans held for sale	1,311		1,353		—		1,353		—
Loans receivable, net	3,834,368		3,760,294		—		—		3,760,294
Accrued interest receivable	15,908		15,908		272		6,185		9,451
Derivative assets - interest rate swaps	19,842		19,842		—		19,842		—
Equity security	186		186		186		—		—
Financial Liabilities:
Non-maturity deposits	$	6,019,421	$	6,019,421	$	6,019,421	$	—	$	—
Certificates of deposit	310,769		311,481		—		311,481		—

Securities sold under agreement to repurchase	41,827		41,827		41,827		—		—
Junior subordinated debentures	21,326		19,250		—		—		19,250
Accrued interest payable	83		83		31		16		36
Derivative liabilities - interest rate swaps	19,842		19,842		—		19,842		—


	December 31, 2021
	Carrying Value		Fair Value		Fair Value Measurements Using:
					Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	1,723,292	$	1,723,292	$	1,723,292	$	—	$	—
Investment securities available for sale	894,335		894,335		—		894,335		—
Investment securities held to maturity	383,393		376,331		—		376,331		—
Loans held for sale	1,476		1,527		—		1,527		—
Loans receivable, net	3,773,301		3,849,602		—		—		3,849,602
Accrued interest receivable	14,657		14,657		14		4,582		10,061
Derivative assets - interest rate swaps	15,219		15,219		—		15,219		—
Equity security	240		240		240		—		—
Financial Liabilities:
Non-maturity deposits	$	6,038,498	$	6,038,498	$	6,038,498	$	—	$	—
Certificates of deposit	342,839		344,025		—		344,025		—

Securities sold under agreement to repurchase	50,839		50,839		50,839		—		—
Junior subordinated debentures	21,180		18,750		—		—		18,750
Accrued interest payable	73		73		33		19		21
Derivative liabilities - interest rate swaps	15,286		15,286		—		15,286		—