Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Summary of financial assets and financial liabilities measured at fair value on recurring basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, segregated by the level of valuation inputs within the fair value hierarchy used to measure fair value.


Recurring Fair Value Measurements
September 30, 2021
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities
U.S. Treasuries	$	138,928	$	0	$	138,928	$	0
Obligations of U.S. Government sponsored entities	810,343		0		810,343		0
Obligations of U.S. states and political subdivisions	109,911		0		109,911		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	89,320		0		89,320		0
U.S. Government sponsored entities	916,004		0		916,004		0

U.S. corporate debt securities	2,421		0		2,421		0
Total Available-for-sale debt securities	$	2,066,927	$	0	$	2,066,927	$	0

Equity securities, at fair value	$	910	$	0	$	0	$	910


Recurring Fair Value Measurements
December 31, 2020
(In thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Available-for-sale debt securities

Obligations of U.S. Government sponsored entities	$	607,480	$	0	$	607,480	$	0
Obligations of U.S. states and political subdivisions	129,746		0		129,746		0
Mortgage-backed securities – residential, issued by:
U.S. Government agencies	182,108		0		182,108		0
U.S. Government sponsored entities	705,480		0		705,480		0

U.S. corporate debt securities	2,379		0		2,379		0
Total Available-for-sale debt securities	$	1,627,193	$	0	$	1,627,193	$	0

Equity securities, at fair value	$	929	$	0	$	0	$	929

Schedule of assets measured at fair value on nonrecurring basis


Three months ended September 30, 2021
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 09/30/2021		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 9/30/2021
Individually evaluated	$	1,122	$	0	$	0	$	1,122	$	(150)
Other real estate owned	46		0		46		0		0


Three months ended September 30, 2020
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 09/30/2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended 9/30/2020
Individually evaluated	$	6,330	$	0	$	6,330	$	0	$	0
Other real estate owned	36		0		36		0		(4)


Nine months ended September 30, 2021
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 09/30/2021		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Nine months ended 9/30/2021
Individually evaluated	$	30,848	$	0	$	0	$	30,848	$	(150)
Other real estate owned	46		0		46		0		(8)


Nine months ended September 30, 2020
(In thousands)			Fair value measurements at reporting date using:						Gain (losses) from fair value changes
Assets:	As of 09/30/2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Nine months ended 9/30/2020
Individually evaluated	$	10,759	$	0	$	10,759	$	0	$	(1,305)
Other real estate owned	124		0		124		0		(27)

Schedule of carrying amount and estimated fair value of financial instruments

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at September 30, 2021 and December 31, 2020. The carrying amounts shown in the table are included in the Consolidated Statements of Condition under the indicated captions.

The fair value estimates, methods and assumptions set forth below for the Company's financial instruments, including those financial instruments carried at cost, are made solely to comply with disclosures required by U.S. GAAP and should be read in conjunction with the financial statements and notes included in this Report.

For loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. For real estate loans, fair value of the loan’s collateral is determined by third party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Company reviews the third party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 8% of the appraised value. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business.


Estimated Fair Value of Financial Instruments
September 30, 2021
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	333,487	$	333,487	$	333,487	$	0	$	0

Securities - held-to-maturity	269,268		268,283		0		268,283		0
FHLB and other stock	10,366		10,366		0		10,366		0
Accrued interest receivable	23,350		23,350		0		23,350		0
Loans/leases, net1	5,050,519		5,072,855		0		0		5,072,855

Financial Liabilities:

Time deposits	$	675,499	$	679,335	$	0	$	679,335	$	0
Other deposits	6,415,399		6,415,399		0		6,415,399		0
Fed funds purchased and securities sold
under agreements to repurchase	72,490		72,490		0		72,490		0
Other borrowings	110,000		112,573		0		112,573		0
Trust preferred debentures	0		0		0		0		0
Accrued interest payable	900		900		0		900		0


Estimated Fair Value of Financial Instruments
December 31, 2020
(In thousands)	Carrying Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Cash and cash equivalents	$	388,462	$	388,462	$	388,462	$	0	$	0

FHLB and other stock	16,382		16,382		0		16,382		0
Accrued interest receivable	32,025		32,025		0		32,025		0
Loans/leases, net1	5,208,658		5,226,301		0		22,171		5,204,130

Financial Liabilities:

Time deposits	$	746,234	$	753,045	$	0	$	753,045	$	0
Other deposits	5,691,518		5,691,518		0		5,691,518		0
Fed funds purchased and securities
sold under agreements to repurchase	65,845		65,845		0		65,845		0
Other borrowings	265,000		274,238		0		274,238		0
Trust preferred debentures	13,220		18,483		0		18,483		0
Accrued interest payable	1,727		1,727		0		1,727		0

1 Lease receivables, although excluded from the scope of ASC Topic 825, are included in the estimated fair value amounts at their carrying value.