FAIR VALUE OF ASSETS AND LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

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)
June 30, 2023
Assets
Securities available for sale	$	—	$	292,012	$	—	$	292,012
Loans held for sale		—		20,949		—		20,949
Mortgage servicing rights		—		48,176		—		48,176
Derivatives		—		36,133		783		36,916
	$	—	$	397,270	$	783	$	398,053
Liabilities
Derivatives	$	—	$	28,127	$	85	$	28,212
December 31, 2022
Assets
Securities available for sale	$	—	$	301,149	$	—	$	301,149
Loans held for sale		—		18,544		—		18,544
Mortgage servicing rights		—		48,138		—		48,138
Derivatives		—		36,839		487		37,326
	$	—	$	404,670	$	487	$	405,157
Liabilities
Derivatives	$	—	$	28,525	$	104	$	28,629

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Assets: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	766	$	2,864	$	487	$	1,583
Total gains (losses) included in net income (1)		17		(1,520)		296		(239)
Balance at end of period	$	783	$	1,344	$	783	$	1,344
Changes in unrealized gains relating to instruments at period end	$	783	$	1,344	$	783	$	1,344

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

Liabilities: Derivative and Forward Loan Sale Commitments:
Balance at beginning of period	$	(302)	$	(452)	$	(104)	$	(189)
Total gains (losses) included in net income (1)		217		213		19		(50)
Balance at end of period	$	(85)	$	(239)	$	(85)	$	(239)
Changes in unrealized losses relating to instruments at period end	$	(85)	$	(239)	$	(85)	$	(239)
(1) Included in mortgage banking income on the Consolidated Statements of Income.

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

	June 30,						December 31,
	2023						2022
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in thousands)
Collateral-dependent impaired loans	$	—	$	—	$	7,108	$	—	$	—	$	349

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Collateral-dependent impaired loans	$	2,977	$	9	$	2,982	$	819

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

The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a nonrecurring basis at the dates indicated.

	Fair Value
	June 30,		December 31,		Valuation Technique
	2023		2022
	(in thousands)
Collateral-dependent impaired loans	$	7,108	$	349	Sales Comparison Approach (1)
(1) Fair value is generally determined through independent appraisals of the underlying collateral which includes unobservable inputs such as adjustments for differences between the comparable sales. 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. Generally, appraisals for residential real estate and commercial real estate loan are discounted 20%. Commercial and industrial appraisals are generally discounted 25%-50%. Management may take larger discounts to reflect market liquidity for certain types of assets not addressed in the appraisals.

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

	June 30, 2023
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets:
Cash and cash equivalents	$	252,851	$	252,851	$	—	$	—	$	252,851
Securities available for sale		292,012		—		292,012		—		292,012
Securities held to maturity		19,839		—		19,005		—		19,005
Federal Home Loan Bank stock		27,123		N/A		N/A		N/A		N/A
Loans held for sale		20,949		—		20,949		—		20,949
Loans, net		4,650,382		—		—		4,464,164		4,464,164
Retirement plan annuities		14,877		—		—		14,877		14,877
Accrued interest receivable		16,948		—		16,948		—		16,948
Derivatives		36,916		—		36,133		783		36,916
Financial liabilities:
Deposits		4,287,488		—		—		4,262,936		4,262,936
Borrowed funds		604,568		—		602,341		—		602,341
Subordinated debt		34,348		—		—		33,892		33,892
Mortgagors' escrow accounts		11,073		—		—		11,073		11,073
Accrued interest payable		4,845		—		4,845		—		4,845
Derivatives		28,212		—		28,127		85		28,212

	December 31, 2022
	Carrying		Fair Value
	Amount		Level 1		Level 2		Level 3		Total
	(in thousands)
Financial assets:
Cash and cash equivalents	$	98,017	$	98,017	$	—	$	—	$	98,017
Securities available for sale		301,149		—		301,149		—		301,149
Securities held to maturity		19,949		—		19,274		—		19,274
Federal Home Loan Bank stock		20,071		N/A		N/A		N/A		N/A
Loans held for sale		18,544		—		18,544		—		18,544
Loans, net		4,504,434		—		—		4,383,613		4,383,613
Retirement plan annuities		14,630		—		—		14,630		14,630
Accrued interest receivable		15,139		—		15,139		—		15,139
Derivatives		37,326		—		36,839		487		37,326
Financial liabilities:
Deposits		4,189,499		—		—		4,166,796		4,166,796
Borrowed funds		400,675		—		399,655		—		399,655
Subordinated debt		34,285		—		—		28,221		28,221
Mortgagors' escrow accounts		9,537		—		—		9,537		9,537
Accrued interest payable		2,325		—		2,325		—		2,325
Derivatives		28,629		—		28,525		104		28,629