Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2023

Fair Value Measurements

Fair Value of Financial Instruments

Note 18 Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is determined based upon quoted market prices to the extent possible; however, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques that may be significantly impacted by the assumptions used, including the discount rate and estimates of future cash flows. Changes in any of these assumptions could significantly affect the fair value estimates. The fair value of the financial instruments listed below does not reflect a premium or discount that could result from offering all of the Company’s holdings of financial instruments at one time, nor does it reflect the underlying value of the Company, as ASC Topic 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies and are based on the exit price concept within ASC Topic 825 and applied to this disclosure on a prospective basis. Considerable judgment is required to interpret market data in order to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange.

The fair value of financial instruments at March 31, 2023 and December 31, 2022 are set forth below:

	Level in fair value	March 31, 2023				December 31, 2022
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	369,705	$	369,705	$	195,505	$	195,505
U.S. Treasury securities - AFS	Level 1		72,154		72,154		71,388		71,388
U.S. Treasury securities - HTM	Level 1		49,117		48,141		49,045		47,629
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		222,209		222,209		226,131		226,131
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises available-for-sale	Level 2		398,282		398,282		405,926		405,926
Municipal securities available-for-sale	Level 2		154		154		153		153
Corporate debt	Level 2		1,892		1,892		1,920		1,920
Other available-for-sale securities	Level 3		794		794		771		771
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		331,996		295,246		339,815		298,816
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. Government agencies or sponsored enterprises held-to-maturity	Level 2		256,808		211,869		262,667		213,479
FHLB and FRB stock	Level 2		69,319		69,319		38,390		38,390
Loans receivable	Level 3		7,345,298		7,090,982		7,220,469		6,964,107
Loans held for sale	Level 2		24,594		24,594		22,767		22,767
Accrued interest receivable	Level 2		39,608		39,608		34,587		34,587
Interest rate swap derivatives	Level 2		34,088		34,088		45,046		45,046
Mortgage banking derivatives	Level 3		707		707		407		407
LIABILITIES
Deposit transaction accounts	Level 2		6,603,191		6,603,191		6,999,226		6,999,226
Time deposits	Level 2		978,489		953,790		873,400		845,688
Securities sold under agreements to repurchase	Level 2		21,492		21,492		20,214		20,214
Long-term debt	Level 2		55,000		49,421		55,000		52,430
Federal Home Loan Bank advances	Level 2		1,000,000		1,000,000		385,000		385,000
Accrued interest payable	Level 2		6,498		6,498		3,201		3,201
Interest rate swap derivatives	Level 2		10,042		10,042		12,589		12,589
Mortgage banking derivatives	Level 3		318		318		278		278