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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Schedule of fair value, assets and liabilities measured on recurring basis

The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall:



	As of June 30, 2019		Fair value measurements at reporting date using:
			Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies	$	19,941	$	—	$	19,941	$	—
Government-sponsored entities	181,978		—		181,978		—
Municipal bonds	324,145		—		324,145		—
Mortgage-backed securities	440,667		—		440,667		—
Total available-for-sale securities	966,731		—		966,731		—
Equity securities	19,092		19,092		—		—
Derivatives - interest rate customer swaps	33,835		—		33,835		—
Derivatives - interest rate swaps	5		—		5		—
Derivatives - risk participation agreement	12		—		12		—
Trading securities held in the “rabbi trust” (1)	6,335		6,335		—		—

Liabilities:
Derivatives - interest rate customer swaps	$	34,586	$	—	$	34,586	$	—
Derivatives - risk participation agreement	272		—		272		—
Deferred compensation “rabbi trust” (1)	6,335		6,335		—		—



			Fair value measurements at reporting date using:
	As of December 31, 2018		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In thousands)
Assets:
Available-for-sale securities:
U.S. government and agencies	$	29,114	$	—	$	29,114	$	—
Government-sponsored entities	207,703		—		207,703		—
Municipal bonds	308,959		—		308,959		—
Mortgage-backed securities	448,289		—		448,289		—
Total available-for-sale securities	994,065		—		994,065		—
Equity securities	14,228		14,228		—		—
Derivatives - interest rate customer swaps	21,889		—		21,889		—
Derivatives - interest rate swaps	553		—		553		—
Derivatives - risk participation agreements	2		—		2		—
Trading securities held in the “rabbi trust” (1)	6,839		6,839		—		—

Liabilities:
Derivatives - interest rate customer swaps	$	22,385	$	—	$	22,385	$	—
Derivatives - risk participation agreements	152		—		152		—
Deferred compensation “rabbi trust” (1)	6,839		6,839		—		—

_____________________

(1)

The Company has adopted a special trust for the Deferred Compensation Plan called a “rabbi trust”. The rabbi trust is an arrangement that is used to accumulate assets that may be used to fund the Company’s obligation to pay benefits under the Deferred Compensation Plan. To prevent immediate taxation to the executives who participate in the Deferred Compensation Plan, the amounts placed in the rabbi trust must remain subject to the claims of the Company’s creditors. The investments chosen by the participants in the Deferred Compensation Plan are mirrored by the rabbi trust as a way to minimize the earnings volatility of the Deferred Compensation Plan.

Fair value, assets and liabilities measured on nonrecurring basis

The following tables present the Company’s assets and liabilities measured at fair value on a non-recurring basis during the periods ended June 30, 2019 and 2018, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall.



	As of June 30, 2019		Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of June 30, 2019		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended June 30, 2019		Six months ended June 30, 2019
	(In thousands)
Assets:
Impaired loans (1)	$	1,144	$	—	$	—	$	1,144	$	220	$	592

_____________________


(1)	Collateral-dependent impaired loans held as of June 30, 2019 that had write-downs in fair value or whose specific reserve changed during the six months ended June 30, 2019.



	As of June 30, 2018		Fair value measurements at reporting date using:						Gain (losses) from fair value changes
	As of June 30, 2018		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Three months ended June 30, 2018			Six months ended June 30, 2018
	(In thousands)
Assets:
Impaired loans (1)	$	3,051	$	—	$	—	$	3,051	$	(711	)	$	(927	)

_____________________

(1)

Collateral-dependent impaired loans held as of June 30, 2018 that had write-downs in fair value or whose specific reserve changed during the six months ended June 30, 2018.

Fair value, assets and liabilities measured on recurring and nonrecurring basis, valuation techniques

The following tables present additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:



	As of June 30, 2019
	Fair Value		Valuation Technique	Unobservable Input	Range of Inputs Utilized	Weighted Average of Inputs Utilized
	(In thousands)
Impaired Loans	$	1,144	Appraisals of Collateral	Discount for costs to sell	0% - 5%	4%
Impaired Loans	$	1,144	Appraisals of Collateral	Appraisal adjustments	—%	—%



	As of June 30, 2018
	Fair Value		Valuation Technique	Unobservable Input	Range of Inputs Utilized	Weighted Average of Inputs Utilized
	(In thousands)
Impaired Loans	$	3,051	Appraisals of Collateral	Discount for costs to sell	0% - 24%	9%
Impaired Loans	$	3,051	Appraisals of Collateral	Appraisal adjustments	0% - 20%	7%

Fair value, by balance sheet grouping

The following tables present the carrying values and fair values of the Company’s financial instruments that are not measured at fair value on a recurring basis:



	As of June 30, 2019
	Book Value		Fair Value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents	$	65,756	$	65,756	$	65,756	$	—	$	—
Investment securities held-to-maturity	54,482		53,929		—		53,929		—
Loans held for sale	3,640		3,713		—		3,713		—
Loans, net	7,005,193		6,988,207		—		—		6,988,207
Other financial assets	94,475		94,475		—		94,475		—
FINANCIAL LIABILITIES:
Deposits	6,437,963		6,437,827		—		6,437,827		—
Securities sold under agreements to repurchase	62,372		62,372		—		62,372		—
Federal funds purchased	135,000		135,000		—		135,000		—
Federal Home Loan Bank borrowings	920,068		920,615		—		920,615		—
Junior subordinated debentures	106,363		96,363		—		—		96,363
Other financial liabilities	4,386		4,386		—		4,386		—



	As of December 31, 2018
	Book Value		Fair Value		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In thousands)
FINANCIAL ASSETS:
Cash and cash equivalents	$	127,259	$	127,259	$	127,259	$	—	$	—
Investment securities held-to-maturity	70,438		68,595		—		68,595		—
Loans held for sale	2,812		2,837		—		2,837		—
Loans, net	6,817,846		6,734,216		—		—		6,734,216
Other financial assets	78,730		78,730		—		78,730		—
FINANCIAL LIABILITIES:
Deposits	6,781,170		6,777,928		—		6,777,928		—
Securities sold under agreements to repurchase	36,928		36,928		—		36,928		—
Federal funds purchased	250,000		250,000		—		250,000		—
Federal Home Loan Bank borrowings	420,144		417,092		—		417,092		—
Junior subordinated debentures	106,363		96,363		—		—		96,363
Other financial liabilities	2,001		2,001		—		2,001		—