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Fair Value (Tables)
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Schedule of financial assets measured at fair value on a recurring basis

The following table summarizes the financial assets measured at fair value on a recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured on a Recurring Basis

 

September 30, 2022

 

Level 1
Inputs

 

 

Level 2
Inputs

 

 

Level 3
Inputs

 

 

Total
Fair Value

 

 

 

(In Thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. federal government corporations and
        agencies

 

$

47,908

 

 

$

96,117

 

 

$

—

 

 

$

144,025

 

Mortgage-backed securities

 

 

—

 

 

 

169,108

 

 

 

—

 

 

 

169,108

 

Collateralized mortgage obligations

 

 

—

 

 

 

257,055

 

 

 

—

 

 

 

257,055

 

Asset-backed securities

 

 

—

 

 

 

198,548

 

 

 

—

 

 

 

198,548

 

Corporate bonds

 

 

—

 

 

 

67,422

 

 

 

—

 

 

 

67,422

 

Obligations of state and political subdivisions

 

 

—

 

 

 

227,555

 

 

 

—

 

 

 

227,555

 

Equity securities

 

 

15,336

 

 

 

—

 

 

 

—

 

 

 

15,336

 

Loans held for sale, at fair value

 

 

—

 

 

 

23,689

 

 

 

105,453

 

 

 

129,142

 

Interest rate swaps

 

 

—

 

 

 

4,739

 

 

 

—

 

 

 

4,739

 

Mortgage banking derivatives

 

 

—

 

 

 

15,237

 

 

 

—

 

 

 

15,237

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

     Interest rate swaps

 

 

—

 

 

 

4,739

 

 

 

—

 

 

 

4,739

 

Cash flow hedge derivative

 

 

—

 

 

 

41,458

 

 

 

—

 

 

 

41,458

 

 

December 31, 2021

 

Level 1
Inputs

 

 

Level 2
Inputs

 

 

Level 3
Inputs

 

 

Total
Fair Value

 

 

 

(In Thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of U.S. federal government corporations and
  agencies

 

$

—

 

 

$

174,710

 

 

$

—

 

 

$

174,710

 

Mortgage-backed securities

 

 

—

 

 

 

206,751

 

 

 

—

 

 

 

206,751

 

Collateralized mortgage obligations

 

 

—

 

 

 

260,168

 

 

 

—

 

 

 

260,168

 

Asset-backed securities

 

 

—

 

 

 

220,536

 

 

 

—

 

 

 

220,536

 

Corporate bonds

 

 

—

 

 

 

70,893

 

 

 

—

 

 

 

70,893

 

Obligations of state and political subdivisions

 

 

—

 

 

 

273,202

 

 

 

—

 

 

 

273,202

 

Equity securities

 

 

14,097

 

 

 

—

 

 

 

—

 

 

 

14,097

 

Loans held for sale, at fair value

 

 

—

 

 

 

28,780

 

 

 

134,167

 

 

 

162,947

 

Interest rate swaps

 

 

—

 

 

 

1,287

 

 

 

—

 

 

 

1,287

 

 Cash flow hedge derivative

 

 

—

 

 

 

854

 

 

 

—

 

 

 

854

 

Mortgage banking derivatives

 

 

—

 

 

 

2,336

 

 

 

—

 

 

 

2,336

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps

 

 

—

 

 

 

1,292

 

 

 

—

 

 

 

1,292

 
Summary of Reconciliation of all Assets Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of assets that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2022 and

2021. There were no securities that were measured at Level 3 for the three and nine months ended September 30, 2022 and 2021.

 

 

Construction loans held for sale

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Balance of recurring Level 3 assets at beginning of period

$

117,015

 

 

$

148,659

 

 

$

134,167

 

 

$

123,029

 

Total gains (losses) for the period

 

 

 

 

 

 

 

 

 

 

 

      Included in change in fair value of loans held for sale

 

(7,627

)

 

 

(3

)

 

 

(27,417

)

 

 

(3,757

)

Originations

 

31,245

 

 

 

32,055

 

 

 

95,311

 

 

 

96,983

 

Sales

 

(35,180

)

 

 

(41,141

)

 

 

(96,608

)

 

 

(76,685

)

Balance of recurring Level 3 assets at end of period

$

105,453

 

 

$

139,570

 

 

$

105,453

 

 

$

139,570

 
Schedule of Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis

For Level 3 assets and liabilities measured at fair value on a recurring basis, the significant unobservable inputs used in the fair value measurements were as follows:

 

September 30, 2022

 

Fair Value

 

 

Valuation Technique

 

Unobservable Inputs

 

Range of
Inputs

 

 

 

 

 

(Dollars in Thousands)

Construction loans held for sale

 

$

105,453

 

 

Quoted market price

 

Time discount using the 60 day forward contract

 

0.00% - 0.30%

 

 

December 31, 2021

 

Fair Value

 

 

Valuation Technique

 

Unobservable Inputs

 

Range of
Inputs

 

 

 

 

 

(Dollars in Thousands)

Construction loans held for sale

 

$

134,167

 

 

Quoted market price

 

Time discount using the 60 day forward contract

 

0.00% - 1.86%

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

 

 

 

Fair
Value

 

 

Valuation
Technique

 

Unobservable
Inputs

 

Range of
Inputs

 

 

Weighted
Average

 

 

 

 

 

 

(Dollars in Thousands)

 

Individually analyzed Loans-
   Applies to loan classes with an
   appraisal valuation

 

$

7,386

 

 

Appraisals which utilize sales comparison, net income and cost approach

 

Discounts for collection issues and changes in market conditions

 

10-70%

 

 

 

22.03

%

Individually analyzed Loans-
   Applies to loan classes without
   an appraisal valuation

 

$

3,858

 

 

Equitable Recoupment claim estimate

 

Discounts for collection issues

 

 

0

%

 

 

0

%

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows:

 

 

 

Fair
Value

 

 

Valuation
Technique

 

Unobservable
Inputs

 

Range of
Inputs

 

 

Weighted
Average

 

 

 

 

 

 

(Dollars in Thousands)

 

Individually analyzed Loans-
   Applies to loan classes with an
   appraisal valuation

 

$

5,821

 

 

Appraisals which utilize sales comparison, net income and cost approach

 

Discounts for collection issues and changes in market conditions

 

20-50%

 

 

 

35.18

%

Individually analyzed Loans-
   Applies to loan classes without
   an appraisal valuation

 

$

5,492

 

 

Equitable Recoupment claim estimate

 

Discounts for collection issues

 

 

25

%

 

 

25.00

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

The following table summarizes the financial assets measured at fair value on a non-recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured on a Non-Recurring Basis

 

September 30, 2022

 

Level 1
Inputs

 

 

Level 2
Inputs

 

 

Level 3
Inputs

 

 

Total Fair
Value

 

 

 

(In Thousands)

 

Individually analyzed loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

—

 

 

$

—

 

 

$

6,213

 

 

$

6,213

 

Commercial

 

 

—

 

 

 

—

 

 

 

5,031

 

 

 

5,031

 

Total individually analyzed loans

 

$

—

 

 

$

—

 

 

$

11,244

 

 

$

11,244

 

Mortgage servicing rights

 

$

—

 

 

$

20,832

 

 

$

—

 

 

$

20,832

 

 

December 31, 2021

 

Level 1
Inputs

 

 

Level 2
Inputs

 

 

Level 3
Inputs

 

 

Total Fair
Value

 

 

 

(In Thousands)

 

Individually analyzed loans

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

—

 

 

$

—

 

 

$

2,749

 

 

$

2,749

 

Commercial

 

 

—

 

 

 

—

 

 

 

8,564

 

 

 

8,564

 

Total individually analyzed loans

 

$

—

 

 

$

—

 

 

$

11,313

 

 

$

11,313

 

Mortgage servicing rights

 

$

—

 

 

$

19,538

 

 

$

—

 

 

$

19,538

 

 

 

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

 

 

 

Fair
Value

 

 

Valuation
Technique

 

Unobservable
Inputs

 

Range of
Inputs

 

 

Weighted
Average

 

 

 

 

 

 

(Dollars in Thousands)

 

Individually analyzed Loans-
   Applies to loan classes with an
   appraisal valuation

 

$

7,386

 

 

Appraisals which utilize sales comparison, net income and cost approach

 

Discounts for collection issues and changes in market conditions

 

10-70%

 

 

 

22.03

%

Individually analyzed Loans-
   Applies to loan classes without
   an appraisal valuation

 

$

3,858

 

 

Equitable Recoupment claim estimate

 

Discounts for collection issues

 

 

0

%

 

 

0

%

 

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2021, the significant unobservable inputs used in the fair value measurements were as follows:

 

 

 

Fair
Value

 

 

Valuation
Technique

 

Unobservable
Inputs

 

Range of
Inputs

 

 

Weighted
Average

 

 

 

 

 

 

(Dollars in Thousands)

 

Individually analyzed Loans-
   Applies to loan classes with an
   appraisal valuation

 

$

5,821

 

 

Appraisals which utilize sales comparison, net income and cost approach

 

Discounts for collection issues and changes in market conditions

 

20-50%

 

 

 

35.18

%

Individually analyzed Loans-
   Applies to loan classes without
   an appraisal valuation

 

$

5,492

 

 

Equitable Recoupment claim estimate

 

Discounts for collection issues

 

 

25

%

 

 

25.00

%
Schedule of FHLB advances with maturities

FHLB advances with maturities greater than 90 days are valued based on a DCF analysis, using interest rates currently being quoted for similar characteristics and maturities resulting in a Level 2 classification. The cost or value of any call or put options is based on the estimated cost to settle the option at September 30, 2022.

The carrying value and estimated fair values of financial instruments at September 30, 2022 and December 31, 2021, were as follows:

 

 

 

 

 

 

Fair Value Measurements at September 30, 2022

 

 

 

 

 

 

(In Thousands)

 

 

 

Carrying
Value

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

104,992

 

 

$

104,992

 

 

$

104,992

 

 

$

—

 

 

$

—

 

Securities available for sale

 

 

1,063,713

 

 

 

1,063,713

 

 

 

47,908

 

 

 

1,015,805

 

 

 

—

 

Equity securities

 

 

15,336

 

 

 

15,336

 

 

 

15,336

 

 

 

—

 

 

 

—

 

Federal Home Loan Bank Stock

 

 

28,262

 

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

Loans receivable, net

 

 

6,137,082

 

 

 

5,940,156

 

 

 

—

 

 

 

—

 

 

 

5,940,156

 

Loans held for sale, carried at fair value

 

 

129,142

 

 

 

129,142

 

 

 

—

 

 

 

23,689

 

 

 

105,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

6,732,505

 

 

$

6,706,619

 

 

$

5,844,616

 

 

$

862,003

 

 

$

—

 

Advances from Federal Home Loan Bank

 

 

411,000

 

 

 

410,998

 

 

 

—

 

 

 

410,998

 

 

 

—

 

Subordinated debentures

 

 

85,071

 

 

 

77,175

 

 

 

—

 

 

 

77,175

 

 

 

—

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2021

 

 

 

 

 

 

(In Thousands)

 

 

 

Carrying
Value

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

161,566

 

 

$

161,566

 

 

$

161,566

 

 

$

—

 

 

$

—

 

Securities available for sale

 

 

1,206,260

 

 

 

1,206,260

 

 

 

—

 

 

 

1,206,260

 

 

 

—

 

Equity securities

 

 

14,097

 

 

 

14,097

 

 

 

14,097

 

 

 

—

 

 

 

—

 

Federal Home Loan Bank Stock

 

 

11,585

 

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

Loans receivable, net

 

 

5,229,700

 

 

 

5,265,689

 

 

 

—

 

 

 

—

 

 

 

5,265,689

 

Loans held for sale, carried at fair value

 

 

162,947

 

 

 

162,947

 

 

 

—

 

 

 

28,780

 

 

 

134,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

6,282,051

 

 

$

6,280,336

 

 

$

5,481,928

 

 

$

798,408

 

 

$

—

 

Subordinated debentures

 

 

84,976

 

 

 

85,417

 

 

 

—

 

 

 

85,417

 

 

 

—