FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

FAIR VALUE OF ASSETS AND LIABILITIES

Schedule of assets and liabilities measured at fair value on a recurring basis

							Total
	Level 1		Level 2		Level 3		Fair Value
	(in thousands)
December 31, 2020
Assets
Securities available for sale	$	—	$	276,498	$	—	$	276,498
Loans held for sale		—		208,612		—		208,612
Mortgage servicing rights		—		24,833		—		24,833
Derivative loan commitments		—		—		12,623		12,623
Forward loan sale commitments		—		—		—		—
Interest rate swaps		—		39,320		—		39,320
	$	—	$	549,263	$	12,623	$	561,886
Liabilities
Derivative loan commitments	$	—	$	—	$	341	$	341
Forward loan sale commitments		—		—		2,204		2,204
Interest rate management agreements		—		1,407		—		1,407
Interest rate swaps		—		39,320		—		39,320
	$	—	$	40,727	$	2,545	$	43,272
December 31, 2019
Assets
Securities available for sale	$	—	$	239,473	$	—	$	239,473
Loans held for sale		—		110,552		—		110,552
Mortgage servicing rights		—		17,150		—		17,150
Derivative loan commitments		—		—		1,385		1,385
Forward loan sale commitments		—		—		26		26
Interest rate swaps		—		15,092		—		15,092
	$	—	$	382,267	$	1,411	$	383,678
Liabilities
Derivative loan commitments	$	—	$	—	$	174	$	174
Forward loan sale commitments		—		—		158		158
Interest rate swaps		—		15,092		—		15,092
	$	—	$	15,092	$	332	$	15,424

Schedule of changes in Level 3 assets measured at fair value on a recurring basis

	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Assets: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	1,411	$	1,261	$	1,093
Total gains included in net income (1)		11,212		150		168
Balance at end of period	$	12,623	$	1,411	$	1,261
Changes in unrealized gains relating to instruments at period end	$	12,623	$	1,411	$	1,261

Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis

	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Liabilities: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	(332)	$	(630)	$	(119)
Total gains (losses) included in net income (1)		(2,213)		298		(511)
Balance at end of period	$	(2,545)	$	(332)		(630)
Changes in unrealized losses relating to instruments at period end	$	(2,545)	$	(332)		(630)
(1) Included in mortgage banking income on the Consolidated Statements of Net Income.

Schedule of assets measured at fair value on a non-recurring basis

The following table summarizes the fair value hierarchy used to determine each adjustment and the carrying value of the related individual assets.

	December 31,
	2020						2019
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in thousands)
Asset held for sale	$	—	$	—	$	—	$	—	$	—	$	8,536
Impaired loans:
Residential		—		—		919		—		—		2,272
Commercial		—		—		7,242		—		—		1,606
Other real estate owned and repossessed assets		—		—		595		—		—		719
	$	—	$	—	$	8,756	$	—	$	—	$	13,133

Losses in the following table represent the amount of the fair value adjustments recorded during the year on the carrying value of the assets held at December 31, 2020 and 2019, respectively. Losses on fully charged off loans are not included in the table.

	Year Ended December 31,
	2020		2019
	(in thousands)
Asset held for sale	$	—	$	482
Impaired loans
Residential		118		28
Commercial		2,197		605
	$	2,315	$	1,115

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis

	Fair Value
	December 31,				Valuation Technique
	2020		2019
	(in thousands)
Impaired loans:
Residential	$	919	$	2,272	Sales Comparison Approach (1)
Commercial	$	7,242	$	1,606	Sales Comparison Approach (1)
Real estate owned:
Residential	$	298	$	298	Sales Comparison Approach (1)
(1) Fair value is generally determined through independent appraisals of the underlying collateral. The Company may also use another source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by management for qualitative factors and estimated liquidation expenses. Unobservable inputs are adjustments for differences between the comparable sales. Residential real estate appraisals are generally discounted 0% - 20%. The weighted average for 2020 was 15%. Commercial loan appraisals are discounted 0% - 50%. The weighted average for 2020 was 27%.

Schedule of estimated fair values and related carrying amounts of financial instruments

	December 31, 2020
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets:
Cash and cash equivalents	$	205,870	$	205,870	$	—	$	—	$	205,870
Securities available for sale		276,498		—		276,498		—		276,498
Federal Home Loan Bank stock		8,738		N/A		N/A		N/A		N/A
Loans held for sale		208,612		—		208,612		—		208,612
Loans, net		3,439,247		—		—		3,473,751		3,473,751
Retirement plan annuities		13,747		—		—		13,747		13,747
Accrued interest receivable		11,874		—		11,874		—		11,874
Financial liabilities:
Deposits		3,506,209		—		—		3,509,996		3,509,996
Borrowed funds		149,097		—		152,373		—		152,373
Subordinated debt		34,033		—		—		34,799		34,799
Mortgagors' escrow accounts		7,736		—		—		7,736		7,736
Accrued interest payable		1,262		—		1,262		—		1,262
Derivative loan commitments:
Assets		12,623		—		—		12,623		12,623
Liabilities		341		—		—		341		341
Interest rate management agreements:
Liabilities		1,407		—		1,407		—		1,407
Interest rate swap agreements:
Assets		39,320		—		39,320		—		39,320
Liabilities		39,320		—		39,320		—		39,320
Forward loan sale commitments:
Assets		—		—		—		—		—
Liabilities		2,204		—		—		2,204		2,204

	December 31, 2019
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets:
Cash and cash equivalents	$	211,616	$	211,616	$	—	$	—	$	211,616
Securities available for sale		239,473		—		239,473		—		239,473
Securities held to maturity		26,372		—		26,927		—		26,927
Federal Home Loan Bank stock		17,121		N/A		N/A		N/A		N/A
Loans held for sale		110,552		—		110,552		—		110,552
Loans, net		3,147,498		—		—		3,176,442		3,176,442
Retirement plan annuities		13,333		—		—		13,333		13,333
Accrued interest receivable		9,807		—		9,807		—		9,807
Financial liabilities:
Deposits		2,942,873		—		—		2,943,899		2,943,899
Borrowed funds		354,132		—		354,881		—		354,881
Subordinated debt		33,907		—		—		34,619		34,619
Mortgagors' escrow accounts		6,053		—		—		6,053		6,053
Accrued interest payable		1,669		—		1,669		—		1,669
Derivative loan commitments:
Assets		1,385		—		—		1,385		1,385
Liabilities		174		—		—		174		174
Interest rate swap agreements:
Assets		15,092		—		15,092		—		15,092
Liabilities		15,092		—		15,092		—		15,092
Forward loan sale commitments:
Assets		26		—		—		26		26
Liabilities		158		—		—		158		158