Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

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
June 30, 2022
Measured on a recurring basis:
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	—	$	22,190		$	—	$	22,190
Mortgage-backed securities		—		1,034,828			—		1,034,828
Other assets:
Hedging derivative instruments		—		5,048			—		5,048
Fair value adjusted through comprehensive income	$	—	$	1,062,066		$	—	$	1,062,066
Other assets:
Derivative instruments - interest rate swaps		—		33,033			—		33,033
Derivative instruments - credit contracts		—		—			—		-
Derivative instruments - mortgage banking		—		117			—		117
Other liabilities:
Derivative instruments - interest rate swaps		—		(33,037	)		—		(33,037	)
Derivative instruments - credit contracts		—		—			—		-
Derivative instruments - mortgage banking		—		(90	)		—		(90	)
Fair value adjusted through net income	$	—	$	23		$	—	$	23
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	4,265		$	—	$	4,265
Collateral dependent loans		—		—			21,008		21,008
Other assets:
Long-lived assets held for sale		—		—			1,813		1,813
Loan servicing rights		—		—			1,498		1,498
Total	$	—	$	4,265		$	24,319	$	28,584

There were no transfers between Levels 1 and 2 during the six months ended June 30, 2022. There were no liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2022.

	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, 2021
Measured on a recurring basis:
Securities available for sale:
U.S. Government agencies and government sponsored enterprises	$	—	$	15,891		$	—	$	15,891
Mortgage-backed securities		—		1,162,624			—		1,162,624
Other assets:
Hedging derivative instruments		—		1,559			—		1,559
Fair value adjusted through comprehensive income	$	—	$	1,180,074		$	—	$	1,180,074
Other assets:
Derivative instruments – interest rate products	$	—	$	14,702		$	—	$	14,702
Derivative instruments – credit contracts		—		—			—		—
Derivative instruments – mortgage banking		—		243			—		243
Other liabilities:
Derivative instruments – interest rate products		—		(14,708	)		—		(14,708	)
Derivative instruments – credit contracts		—		(1	)		—		(1	)
Derivative instruments – mortgage banking		—		(4	)		—		(4	)
Fair value adjusted through net income	$	—	$	232		$	—	$	232
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	6,202		$	—	$	6,202
Collateral dependent loans		—		—			33,484		33,484
Other assets:
Long-lived assets held for sale		—		—			2,560		2,560
Loan servicing rights		—		—			1,517		1,517
Total	$	—	$	6,202		$	37,561	$	43,763

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 June 30, 2022 (dollars in thousands).

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Collateral dependent loans	$	21,008	Appraisal of collateral (1)	Appraisal adjustments (2)	24.7% (3) / 0 - 45%
Loan servicing rights	$	1,498	Discounted cash flow	Discount rate	10.2% (3)
				Constant prepayment rate	14.4% (3)
Long-lived assets held for sale	$	1,813	Appraisal of collateral (1)	Appraisal adjustments (2)	11-40%

(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 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	June 30, 2022				December 31, 2021
	Fair Value			Estimated				Estimated
	Measurement	Carrying		Fair		Carrying		Fair
	Hierarchy	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	109,705	$	109,705	$	79,112	$	79,112
Securities available for sale	Level 2		1,057,018		1,057,018		1,178,515		1,178,515
Securities held to maturity, net	Level 2		204,933		195,451		205,581		209,820
Loans held for sale	Level 2		4,265		4,265		6,202		6,202
Loans	Level 2		3,700,558		3,643,397		3,606,276		3,642,351
Loans (1)	Level 3		21,008		21,008		33,484		33,484
Long-lived assets held for sale	Level 3		1,813		1,813		2,560		2,560
Accrued interest receivable	Level 1		15,872		15,872		15,482		15,482
Derivative instruments – cash flow hedges	Level 2		5,048		5,048		1,559		1,559
Derivative instruments – interest rate products	Level 2		33,033		33,033		14,702		14,702
Derivative instruments – credit contracts	Level 2		—		—		—		—
Derivative instruments – mortgage banking	Level 2		117		117		243		243
FHLB and FRB stock	Level 2		15,098		15,098		10,770		10,770
Financial liabilities:
Non-maturity deposits	Level 1		3,837,307		3,837,307		3,905,136		3,905,136
Time deposits	Level 2		983,209		975,166		921,954		920,699
Short-term borrowings	Level 1		109,000		109,000		30,000		30,000
Long-term borrowings	Level 2		74,067		72,519		73,911		77,792
Accrued interest payable	Level 1		1,805		1,805		2,147		2,147
Derivative instruments – cash flow hedges	Level 2		—		—		—		—
Derivative instruments – interest rate products	Level 2		33,037		33,037		14,708		14,708
Derivative instruments – credit contracts	Level 2		—		—		1		1
Derivative instruments – mortgage banking	Level 2		90		90		4		4

(1) Comprised of collateral dependent loans.