Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2024

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 June 30, 2024 and December 31, 2023 are set forth below:

	Level in fair value	June 30, 2024				December 31, 2023
	measurement	Carrying		Estimated		Carrying		Estimated
	hierarchy	amount		fair value		amount		fair value
ASSETS
Cash and cash equivalents	Level 1	$	144,993	$	144,993	$	190,826	$	190,826
U.S. Treasury securities - AFS	Level 1		73,188		73,188		73,044		73,044
U.S. Treasury securities - HTM	Level 1		49,487		48,342		49,338		48,334
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale	Level 2		197,060		197,060		201,809		201,809
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises available-for-sale	Level 2		418,129		418,129		351,242		351,242
Municipal securities available-for-sale	Level 2		80		80		79		79
Corporate debt available-for-sale	Level 2		1,888		1,888		1,843		1,843
Other available-for-sale securities	Level 3		731		731		812		812
Mortgage-backed securities—residential mortgage pass-through securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity	Level 2		279,941		242,545		299,337		265,011
Mortgage-backed securities—other residential mortgage-backed securities issued or guaranteed by U.S. government agencies or sponsored enterprises held-to-maturity	Level 2		225,258		178,002		236,377		190,983
FHLB and FRB stock	Level 2		27,476		27,476		40,890		40,890
Loans receivable	Level 3		7,722,153		7,513,690		7,698,758		7,411,687
Loans held for sale	Level 2		18,787		18,787		18,854		18,854
Accrued interest receivable	Level 2		45,242		45,242		44,944		44,944
Interest rate swap derivatives	Level 2		42,660		42,660		37,408		37,408
Mortgage banking derivatives	Level 3		506		506		287		287
LIABILITIES
Deposit transaction accounts	Level 2		7,354,184		7,354,184		7,208,421		7,208,421
Time deposits	Level 2		1,022,741		1,023,443		981,970		972,793
Securities sold under agreements to repurchase	Level 2		19,465		19,465		19,627		19,627
Long-term debt	Level 2		55,000		51,414		55,000		43,760
Federal Home Loan Bank advances	Level 2		35,000		35,000		340,000		340,000
Accrued interest payable	Level 2		14,106		14,106		12,239		12,239
Interest rate swap derivatives	Level 2		11,402		11,402		15,284		15,284
Mortgage banking derivatives	Level 3		36		36		115		115