FAIR VALUE (Tables)
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12 Months Ended |
Dec. 31, 2022 |
Fair Value Disclosures |
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Assets and Liabilities Measured at Fair Value on Recurring Basis |
| | | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | | December 31, 2022 Using: | | | | | | | Quoted Prices in | | Significant | | | | | | | | | | Active Markets | | Other | | Significant | | | | | | | for Identical | | Observable | | Unobservable | | Total | | | | Assets | | Inputs | | Inputs | | Fair | | (in thousands) | | (Level 1) | | (Level 2) | | (Level 3) | | Value | | Financial assets: | | | | | | | | | | | | | | Available-for-sale debt securities: | | | | | | | | | | | | | | U.S. Treasury securities and U.S. Government agencies | | $ | 193,385 | | $ | 217,756 | | $ | — | | $ | 411,141 | | Private label mortgage-backed security | | | — | | | — | | | 2,127 | | | 2,127 | | Mortgage-backed securities - residential | | | — | | | 171,873 | | | — | | | 171,873 | | Collateralized mortgage obligations | | | — | | | 21,368 | | | — | | | 21,368 | | Corporate bonds | | | — | | | 10,001 | | | — | | | 10,001 | | Trust preferred security | | | — | | | — | | | 3,855 | | | 3,855 | | Total available-for-sale debt securities | | $ | 193,385 | | $ | 420,998 | | $ | 5,982 | | $ | 620,365 | | | | | | | | | | | | | | | | Equity securities with readily determinable fair value: | | | | | | | | | | | | | | Freddie Mac preferred stock | | $ | — | | $ | 111 | | $ | — | | $ | 111 | | Total equity securities with readily determinable fair value | | $ | — | | $ | 111 | | $ | — | | $ | 111 | | | | | | | | | | | | | | | | Mortgage loans held for sale | | $ | — | | $ | 1,302 | | $ | — | | $ | 1,302 | | Consumer loans held for sale | | | — | | | — | | | 4,706 | | | 4,706 | | Consumer loans held for investment | | | — | | | — | | | 2 | | | 2 | | Rate lock loan commitments | | | — | | | 2 | | | — | | | 2 | | | | | | | | | | | | | | | | Mandatory forward contracts | | | — | | | — | | | — | | | — | | Interest rate swap agreements | | | — | | | 8,127 | | | — | | | 8,127 | | | | | | | | | | | | | | | | Financial liabilities: | | | | | | | | | | | | | | Rate lock loan commitments | | $ | — | | $ | — | | $ | — | | $ | — | | Mandatory forward contracts | | | — | | | 67 | | | — | | | 67 | | Interest rate swap agreements | | | — | | | 8,127 | | | — | | | 8,127 | |
| | | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | | December 31, 2021 Using: | | | | | | | Quoted Prices in | | Significant | | | | | | | | | | Active Markets | | Other | | Significant | | | | | | | for Identical | | Observable | | Unobservable | | Total | | | | Assets | | Inputs | | Inputs | | Fair | | (in thousands) | | (Level 1) | | (Level 2) | | (Level 3) | | Value | | Financial assets: | | | | | | | | | | | | | | Available-for-sale debt securities: | | | | | | | | | | | | | | U.S. Treasury securities and U.S. Government agencies | | $ | 70,112 | | $ | 167,347 | | $ | — | | $ | 237,459 | | Private label mortgage-backed security | | | — | | | — | | | 2,731 | | | 2,731 | | Mortgage-backed securities - residential | | | — | | | 210,749 | | | — | | | 210,749 | | Collateralized mortgage obligations | | | — | | | 30,294 | | | — | | | 30,294 | | Corporate bonds | | | — | | | 10,046 | | | — | | | 10,046 | | Trust preferred security | | | — | | | — | | | 3,847 | | | 3,847 | | Total available-for-sale debt securities | | $ | 70,112 | | $ | 418,436 | | $ | 6,578 | | $ | 495,126 | | | | | | | | | | | | | | | | Equity securities with readily determinable fair value: | | | | | | | | | | | | | | Freddie Mac preferred stock | | $ | — | | $ | 170 | | $ | — | | $ | 170 | | Community Reinvestment Act mutual fund | | | 2,450 | | | — | | | — | | | 2,450 | | Total equity securities with readily determinable fair value | | $ | 2,450 | | $ | 170 | | $ | — | | $ | 2,620 | | | | | | | | | | | | | | | | Mortgage loans held for sale | | $ | — | | $ | 29,393 | | $ | — | | $ | 29,393 | | Consumer loans held for sale | | | — | | | — | | | 19,747 | | | 19,747 | | Consumer loans held for investment | | | — | | | — | | | 170 | | | 170 | | Rate lock loan commitments | | | — | | | 1,404 | | | — | | | 1,404 | | Mandatory forward contracts | | | — | | | 66 | | | — | | | 66 | | Interest rate swap agreements | | | — | | | 5,786 | | | — | | | 5,786 | | | | | | | | | | | | | | | | Financial liabilities: | | | | | | | | | | | | | | Interest rate swap agreements | | | — | | | 5,786 | | | — | | | 5,786 | |
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Assets Measured at Fair Value on a Non-Recurring Basis |
| | | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | | December 31, 2022 Using: | | | | | | | Quoted Prices in | | Significant | | | | | | | | | | Active Markets | | Other | | Significant | | | | | | | for Identical | | Observable | | Unobservable | | Total | | | | Assets | | Inputs | | Inputs | | Fair | | (in thousands) | | (Level 1) | | (Level 2) | | (Level 3) | | Value | | | | | | | | | | | | | | | | Collateral-dependent loans: | | | | | | | | | | | | | | Residential real estate: | | | | | | | | | | | | | | Owner occupied | | $ | — | | $ | — | | $ | 1,456 | | $ | 1,456 | | Commercial real estate | | | — | | | — | | | 906 | | | 906 | | Total collateral-dependent loans* | | $ | — | | $ | — | | $ | 2,362 | | $ | 2,362 | | | | | | | | | | | | | | | | Other real estate owned: | | | | | | | | | | | | | | Commercial real estate | | $ | — | | $ | — | | $ | 1,581 | | $ | 1,581 | | Total other real estate owned | | $ | — | | $ | — | | $ | 1,581 | | $ | 1,581 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | December 31, 2021 Using: | | | | | | Quoted Prices in | | Significant | | | | | | | | | Active Markets | | Other | | Significant | | | | | | for Identical | | Observable | | Unobservable | | Total | | | Assets | | Inputs | | Inputs | | Fair | (in thousands) | | (Level 1) | | (Level 2) | | (Level 3) | | Value | | | | | | | | | | | | | | Collateral-dependent loans: | | | | | | | | | | | | | Residential real estate: | | | | | | | | | | | | | Owner occupied | | $ | — | | $ | — | | $ | 1,626 | | $ | 1,626 | Commercial real estate | | | — | | | — | | | 2,841 | | | 2,841 | Home equity | | | — | | | — | | | 378 | | | 378 | Total collateral-dependent loans* | | $ | — | | $ | — | | $ | 4,845 | | $ | 4,845 | | | | | | | | | | | | | | Other real estate owned: | | | | | | | | | | | | | Residential real estate | | $ | — | | $ | — | | $ | 1,792 | | $ | 1,792 | Total other real estate owned | | $ | — | | $ | — | | $ | 1,792 | | $ | 1,792 | | | | | | | | | | | | | |
* The difference between the carrying value and the fair value of collateral dependent or impaired loans measured at fair value is reconciled in a subsequent table of this Footnote.
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Provisions for loss on collateral dependent impaired loans |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | | | Provision on collateral-dependent loans | | | $ | 7 | | $ | 960 | | $ | 559 | |
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Other Real Estate Owned |
| | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | | | Other real estate owned carried at fair value | | | $ | 1,581 | | $ | 1,792 | | $ | 2,003 | | Other real estate owned carried at cost | | | | — | | | — | | | 496 | | Total carrying value of other real estate owned | | | $ | 1,581 | | $ | 1,792 | | $ | 2,499 | | Other real estate owned write-downs during the years ended | | | $ | 211 | | $ | 211 | | $ | 105 | |
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Carrying amount and estimated fair values of financial instruments |
| | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | | December 31, 2022: | | | | | | | | | | | | | | | | Total | | | | Carrying | | | | | | | | | | | Fair | | (in thousands) | | Value | | Level 1 | | Level 2 | | Level 3 | | Value | | | | | | | | | | | | | | | | | | | Assets: | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 313,689 | | $ | 313,689 | | $ | — | | $ | — | | $ | 313,689 | | Available-for-sale debt securities | | | 620,365 | | | 193,385 | | | 420,998 | | | 5,982 | | | 620,365 | | Held-to-maturity debt securities | | | 87,386 | | | — | | | 87,357 | | | — | | | 87,357 | | Equity securities with readily determinable fair values | | | 111 | | | — | | | 111 | | | — | | | 111 | | Mortgage loans held for sale, at fair value | | | 1,302 | | | — | | | 1,302 | | | — | | | 1,302 | | Consumer loans held for sale, at fair value | | | 4,706 | | | — | | | — | | | 4,706 | | | 4,706 | | Consumer loans held for sale, at the lower of cost or fair value | | | 13,169 | | | — | | | — | | | 13,169 | | | 13,169 | | Loans, net | | | 4,445,389 | | | — | | | — | | | 4,276,423 | | | 4,276,423 | | Federal Home Loan Bank stock | | | 9,146 | | | — | | | — | | | — | | | NA | | Accrued interest receivable | | | 13,572 | | | — | | | 2,462 | | | 11,110 | | | 13,572 | | Mortgage servicing rights | | | 8,769 | | | — | | | 17,592 | | | — | | | 17,592 | | Mandatory forward contracts | | | — | | | — | | | — | | | — | | | — | | Interest rate swap agreements | | | 8,127 | | | — | | | 8,127 | | | — | | | 8,127 | | | | | | | | | | | | | | | | | | | Liabilities: | | | | | | | | | | | | | | | | | Noninterest-bearing deposits | | $ | 1,908,768 | | $ | — | | $ | 1,908,768 | | $ | — | | $ | 1,908,768 | | Transaction deposits | | | 2,398,853 | | | — | | | 2,398,853 | | | — | | | 2,398,853 | | Time deposits | | | 230,224 | | | — | | | 223,912 | | | — | | | 223,912 | | Securities sold under agreements to repurchase and other short-term borrowings | | | 216,956 | | | — | | | 216,956 | | | — | | | 216,956 | | Federal Home Loan Bank advances | | | 95,000 | | | — | | | 93,044 | | | — | | | 93,044 | | Accrued interest payable | | | 239 | | | — | | | 239 | | | — | | | 239 | | Rate lock loan commitments | | | — | | | — | | | — | | | — | | | — | | Interest rate swap agreements | | | 8,127 | | | — | | | 8,127 | | | — | | | 8,127 | |
NA - Not applicable | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements at | | | | | | | December 31, 2021: | | | | | | | | | | | | | | | | Total | | | | Carrying | | | | | | | | | | | Fair | | (in thousands) | | Value | | Level 1 | | Level 2 | | Level 3 | | Value | | | | | | | | | | | | | | | | | | | Assets: | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 756,971 | | $ | 756,971 | | $ | — | | $ | — | | $ | 756,971 | | Available-for-sale debt securities | | | 495,126 | | | 70,112 | | | 418,436 | | | 6,578 | | | 495,126 | | Held-to-maturity debt securities | | | 44,299 | | | — | | | 44,764 | | | — | | | 44,764 | | Equity securities with readily determinable fair values | | | 2,620 | | | 2,450 | | | 170 | | | — | | | 2,620 | | Mortgage loans held for sale, at fair value | | | 29,393 | | | — | | | 29,393 | | | — | | | 29,393 | | Consumer loans held for sale, at fair value | | | 19,747 | | | — | | | — | | | 19,747 | | | 19,747 | | Consumer loans held for sale, at the lower of cost or fair value | | | 2,937 | | | — | | | — | | | 2,937 | | | 2,937 | | Loans, net | | | 4,431,985 | | | — | | | — | | | 4,445,244 | | | 4,445,244 | | Federal Home Loan Bank stock | | | 10,311 | | | — | | | — | | | — | | | NA | | Accrued interest receivable | | | 9,877 | | | — | | | 1,441 | | | 8,436 | | | 1,441 | | Mortgage servicing rights | | | 9,196 | | | — | | | 11,540 | | | — | | | 11,540 | | Rate lock loan commitments | | | 1,404 | | | — | | | 1,404 | | | — | | | 1,404 | | Mandatory forward contracts | | | 66 | | | — | | | 66 | | | — | | | 66 | | Interest rate swap agreements | | | 5,786 | | | — | | | 5,786 | | | — | | | 5,786 | | | | | | | | | | | | | | | | | | | Liabilities: | | | | | | | | | | | | | | | | | Noninterest-bearing deposits | | $ | 1,989,679 | | $ | — | | $ | 1,989,679 | | $ | — | | $ | 1,989,679 | | Transaction deposits | | | 2,553,424 | | | — | | | 2,553,424 | | | — | | | 2,553,424 | | Time deposits | | | 296,213 | | | — | | | 298,236 | | | — | | | 298,236 | | Securities sold under agreements to repurchase and other short-term borrowings | | | 290,967 | | | — | | | 290,967 | | | — | | | 290,967 | | Federal Home Loan Bank advances | | | 25,000 | | | — | | | 25,000 | | | — | | | 25,000 | | Accrued interest payable | | | 159 | | | — | | | 159 | | | — | | | 159 | | Interest rate swap agreements | | | 5,786 | | | — | | | 5,786 | | | — | | | 5,786 | |
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Nonrecurring basis |
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Fair Value Disclosures |
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Fair value inputs quantitative information |
| | | | | | | | | | | | | | | | | | | Range | | | Fair | | Valuation | | Unobservable | | (Weighted | December 31, 2022 (dollars in thousands) | | Value | | Technique | | Inputs | | Average) | | | | | | | | | | | Collateral-dependent loans - residential real estate owner occupied | | $ | 1,456 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 0% - 41% (11%) | | | | | | | | | | | Collateral-dependent loans - commercial real estate | | $ | 906 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 16% (16%) | | | | | | | | | | | Other real estate owned - commercial real estate | | $ | 1,581 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 39% (39%) |
| | | | | | | | | | | | | | | | | | | Range | | | Fair | | Valuation | | Unobservable | | (Weighted | December 31, 2021 (dollars in thousands) | | Value | | Technique | | Inputs | | Average) | | | | | | | | | | | Collateral-dependent loans - residential real estate owner occupied | | $ | 1,626 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 0% - 51% (10%) | | | | | | | | | | | Collateral-dependent loans - commercial real estate | | $ | 2,841 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 12% - 13% (12%) | | | | | | | | | | | Collateral-dependent loans - home equity | | $ | 378 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 2%-4% (3%) | | | | | | | | | | | Other real estate owned - commercial real estate | | $ | 1,792 | | Sales comparison approach | | Adjustments determined for differences between comparable sales | | 33% (33%) |
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Private label mortgage backed security |
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Fair Value Disclosures |
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Reconciliation of the Bank's investments measured at fair value on a recurring basis using significant unobservable inputs |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | | Balance, beginning of period | | $ | 2,731 | | $ | 2,957 | | $ | 3,495 | | Total gains or losses included in earnings: | | | | | | | | | | | Net change in unrealized gain | | | (29) | | | 63 | | | (35) | | Principal paydowns | | | (575) | | | (289) | | | (503) | | Balance, end of period | | $ | 2,127 | | $ | 2,731 | | $ | 2,957 | |
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Private label mortgage backed security | Recurring basis |
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Fair Value Disclosures |
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Fair value inputs quantitative information |
| | | | | | | | | | | | | Fair | | Valuation | | | | | | December 31, 2022 (dollars in thousands) | | Value | | Technique | | Unobservable Inputs | | Range | | | | | | | | | | | | | Private label mortgage-backed security | | $ | 2,127 | | Discounted cash flow | | (1) Constant prepayment rate | | 4.5% - 4.7% | | | | | | | | | | | | | | | | | | | | (2) Probability of default | | 1.8% - 9.3% | | | | | | | | | | | | | | | | | | | | (3) Loss severity | | 25% - 35% | |
| | | | | | | | | | | | | Fair | | Valuation | | | | | | December 31, 2021 (dollars in thousands) | | Value | | Technique | | Unobservable Inputs | | Range | | | | | | | | | | | | | Private label mortgage-backed security | | $ | 2,731 | | Discounted cash flow | | (1) Constant prepayment rate | | 4.5% - 5.7% | | | | | | | | | | | | | | | | | | | | (2) Probability of default | | 1.8% - 9.3% | | | | | | | | | | | | | | | | | | | | (3) Loss severity | | 50% - 75% | |
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Trust Preferred Securities |
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Fair Value Disclosures |
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Reconciliation of the Bank's investments measured at fair value on a recurring basis using significant unobservable inputs |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | Balance, beginning of period | | | $ | 3,847 | | $ | 3,800 | | $ | 4,000 | Total gains or losses included in earnings: | | | | | | | | | | | Discount accretion | | | | 57 | | | 53 | | | 56 | Net change in unrealized gain | | | | (49) | | | (6) | | | (256) | Balance, end of period | | | $ | 3,855 | | $ | 3,847 | | $ | 3,800 |
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Mortgage Loans Held for Sale |
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Fair Value Disclosures |
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Schedule of aggregate fair value, contractual balance and unrealized gain |
| | | | | | | | | December 31, (in thousands) | | | 2022 | | 2021 | | | | | | | | | | | Aggregate fair value | | | $ | 1,302 | | $ | 29,393 | | Contractual balance | | | | 1,265 | | | 28,668 | | Unrealized (loss) gain | | | | 37 | | | 725 | |
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Schedule of gains and losses from changes in fair value included in earnings |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | | | Interest income | | | $ | 519 | | $ | 1,081 | | $ | 1,362 | | Change in fair value | | | | (688) | | | (1,361) | | | 1,552 | | Total included in earnings | | | $ | (169) | | $ | (280) | | $ | 2,914 | |
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Consumer loans |
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Fair Value Disclosures |
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Schedule of aggregate fair value, contractual balance and unrealized gain |
| | | | | | | | December 31, (in thousands) | | | 2022 | | 2021 | | | | | | | | | Aggregate fair value | | | $ | 4,706 | | $ | 19,747 | Contractual balance | | | | 4,734 | | | 19,633 | Unrealized (loss) gain | | | | (28) | | | 114 |
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Schedule of gains and losses from changes in fair value included in earnings |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Years Ended December 31, (in thousands) | | | 2022 | | 2021 | | 2020 | | | | | | | | | | | | Interest income | | | $ | 9,970 | | $ | 7,708 | | $ | 1,808 | Change in fair value | | | | (142) | | | 100 | | | 9 | Total included in earnings | | | $ | 9,828 | | $ | 7,808 | | $ | 1,817 |
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Consumer loans | Nonrecurring basis |
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Fair Value Disclosures |
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Reconciliation of the Bank's investments measured at fair value on a recurring basis using significant unobservable inputs |
| | | | | | | | | | | | Fair | | Valuation | | | | | December 31, 2022 (dollars in thousands) | | Value | | Technique | | Unobservable Inputs | | Rate | | | | | | | | | | | Consumer loans held for sale | | $ | 4,706 | | Contract Terms | | (1) Net Premium | | 0.15% | | | | | | | | | | | | | | | | | | (2) Discounted Sales | | 10.00% |
| | | | | | | | | | | | Fair | | Valuation | | | | | December 31, 2021 (dollars in thousands) | | Value | | Technique | | Unobservable Inputs | | Rate | | | | | | | | | | | Consumer loans held for sale | | $ | 19,747 | | Contract Terms | | (1) Net Premium | | 1.4% | | | | | | | | | | | | | | | | | | (2) Discounted Sales | | 5.00% |
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