Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair value measurements of assets on a recurring basis

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016.



	June 30, 2017
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. Treasury and U.S. Government-sponsored agencies	$	9,448	$	—	$	9,448	$	—
Municipal securities	244,330		—		244,330		—
Mortgage-backed securities and collateralized mortgage obligations:
Residential	281,836		—		281,836		—
Commercial	208,659		—		208,659		—
Collateralized loan obligations	6,795		—		6,795		—
Corporate obligations	13,765		—		13,765		—
Other securities	25,761		128		25,633		—
Total investment securities available for sale	790,594		128		790,466		—
Derivative assets - interest rate swaps	3,055		—		3,055		—
Liabilities
Derivative liabilities - interest rate swaps	$	3,055	$	—	$	3,055	$	—



	December 31, 2016
	Total		Level 1		Level 2		Level 3
	(In thousands)
Assets
Investment securities available for sale:
U.S. Treasury and U.S. Government-sponsored agencies	$	1,569	$	—	$	1,569	$	—
Municipal securities	237,256		—		237,256		—
Mortgage-backed securities and collateralized mortgage obligations:
Residential	309,176		—		309,176		—
Commercial	208,318		—		208,318		—
Collateralized loan obligations	10,478		—		10,478		—
Corporate obligations	16,706		—		16,706		—
Other securities	11,142		123		11,019		—
Total investment securities available for sale	794,645		123		794,522		—
Derivative assets - interest rate swaps	2,804		—		2,804		—
Liabilities
Derivative liabilities - interest rate swaps	$	2,804	$	—	$	2,804	$	—

Fair value measurements of assets on a nonrecurring basis

The tables below represent assets measured at fair value on a nonrecurring basis at June 30, 2017 and December 31, 2016 and the net losses (gains) recorded in earnings during three and six months ended June 30, 2017 and 2016.



	Basis⁽¹⁾		Fair Value at June 30, 2017
	Basis⁽¹⁾		Total		Level 1		Level 2		Level 3		Net Losses Recorded in Earnings During the Three Months Ended June 30, 2017		Net Losses (Gains) Recorded in Earnings During the Six Months Ended June 30, 2017
	(In thousands)
Impaired loans:
Commercial business:
Commercial and industrial	$	172	$	164	$	—	$	—	$	164	$	—	$	7
Owner-occupied commercial real estate	182		179		—		—		179		3		8
Total commercial business	354		343		—		—		343		3		15
Consumer	18		16		—		—		16		—		(3		)
Total assets measured at fair value on a nonrecurring basis	$	372	$	359	$	—	$	—	$	359	$	3	$	12


⁽¹⁾	Basis represents the unpaid principal balance of impaired loans.



	Basis⁽¹⁾		Fair Value at December 31, 2016
	Basis⁽¹⁾		Total		Level 1		Level 2		Level 3		Net Losses (Gains) Recorded in Earnings During the Three Months Ended June 30, 2016			Net Losses (Gains) Recorded in Earnings During the Six Months Ended June 30, 2016
	(In thousands)
Impaired loans:
Commercial business:
Commercial and industrial	$	205	$	200	$	—	$	—	$	200	$	60		$	60
Owner-occupied commercial real estate	780		603		—		—		603		—			—
Total commercial business	985		803		—		—		803		60			60
Real estate construction and land development:
One-to-four family residential	828		822		—		—		822		(6		)	(13		)
Total real estate construction and land development	828		822		—		—		822		(6		)	(13		)
Consumer	16		9		—		—		9		—			—
Total assets measured at fair value on a nonrecurring basis	$	1,829	$	1,634	$	—	$	—	$	1,634	$	54		$	47


⁽¹⁾	Basis represents the unpaid principal balance of impaired loans.

Fair value measurements for financial instruments measured at fair value on a non-recurring basis

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at June 30, 2017 and December 31, 2016.



	June 30, 2017
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Impaired loans	$	359	Market approach	Adjustment for differences between the comparable sales	(23.8%) - 23.0%; (2.6%)



	December 31, 2016
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs; Weighted Average
	(Dollars in thousands)
Impaired loans	$	1,634	Market approach	Adjustment for differences between the comparable sales	(23.8%) - 63.9%; 20.4%

Schedule of carrying value and fair value of financial instruments

The tables below present the carrying value amount of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated.



	June 30, 2017
	Carrying Value		Fair Value		Fair Value Measurements Using:
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	124,234	$	124,234	$	124,234	$	—	$	—
Investment securities available for sale	790,594		790,594		112		790,482		—
Federal Home Loan Bank stock	9,083		N/A		N/A		N/A		N/A
Loans held for sale	5,787		5,961		—		5,961		—
Total loans receivable, net	2,716,756		2,725,031		—		—		2,725,031
Accrued interest receivable	11,081		11,081		11		3,515		7,555
Derivative assets - interest rate swaps	3,055		3,055		—		3,055		—
Financial Liabilities:
Noninterest deposits, NOW accounts, money market accounts and savings accounts	$	2,900,997	$	2,900,997	$	2,900,997	$	—	$	—
Certificate of deposit accounts	390,253		389,373		—		389,373		—
Federal Home Loan Bank advances	110,900		110,900		—		110,900		—
Securities sold under agreement to repurchase	21,255		21,255		21,255		—		—
Junior subordinated debentures	19,863		15,000		—		—		15,000
Accrued interest payable	151		151		41		80		30
Derivative liabilities - interest rate swaps	3,055		3,055		—		3,055		—



	December 31, 2016
	Carrying Value		Fair Value		Fair Value Measurements Using:
	Carrying Value		Fair Value		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and cash equivalents	$	103,745	$	103,745	$	103,745	$	—	$	—
Investment securities available for sale	794,645		794,645		123		794,522		—
Federal Home Loan Bank stock	7,564		N/A		N/A		N/A		N/A
Loans held for sale	11,662		11,988		—		11,988		—
Loans receivable, net of allowance for loan losses	2,609,666		2,675,811		—		—		2,675,811
Accrued interest receivable	10,925		10,925		3		3,472		7,450
Derivative assets - interest rate swaps	2,804		2,804		—		2,804		—
Financial Liabilities:
Noninterest deposits, NOW accounts, money market accounts and savings accounts	$	2,872,247	$	2,872,247	$	2,872,247	$	—	$	—
Certificate of deposit accounts	357,401		357,536		—		357,536		—
Federal Home Loan Bank advances	79,600		79,600		—		79,600		—
Securities sold under agreement to repurchase	22,104		22,104		22,104		—		—
Junior subordinated debentures	19,717		15,000		—		—		15,000
Accrued interest payable	215		215		44		142		29
Derivative liabilities - interest rate swaps	2,804		2,804		—		2,804		—