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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:


	As of June 30, 2020			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	$	21,121		$	—	$	21,121		$	—
Government-sponsored entities	158,943			—		158,943			—
Municipal bonds	333,955			—		333,955			—
Mortgage-backed securities	488,951			—		488,951			—

Total available-for-sale securities	1,002,970			—		1,002,970			—
Equity securities	24,492			24,492		—			—
Derivatives - interest rate customer swaps	96,968			—		96,968			—

Derivatives - risk participation agreement	21			—		21			—

Trading securities held in the “rabbi trust” (1)	6,328			6,328		—			—

Liabilities:
Derivatives - interest rate customer swaps	$	97,760		$	—	$	97,760		$	—
Derivatives - interest rate swaps	274			—		274			—
Derivatives - risk participation agreement	478			—		478			—

Deferred compensation “rabbi trust” (1)	6,320			6,320		—			—


				Fair value measurements at reporting date using:
			As of December 31, 2019			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	$	19,940		$	—		$	19,940		$	—
Government-sponsored entities	156,255			—			156,255			—
Municipal bonds	325,455			—			325,455			—
Mortgage-backed securities	476,634			—			476,634			—

Total available-for-sale securities	978,284			—			978,284			—
Equity securities	18,810			18,810			—			—
Derivatives - interest rate customer swaps	36,089			—			36,089			—

Derivatives - risk participation agreements	10			—			10			—

Trading securities held in the “rabbi trust” (1)	6,119			6,119			—			—

Liabilities:
Derivatives - interest rate customer swaps	$	36,580		$	—		$	36,580		$	—

Derivatives - risk participation agreements	242			—			242			—

Deferred compensation “rabbi trust” (1)	6,112			6,112			—			—

_____________________

(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 measured at fair value on a non-recurring basis during the periods ended June 30, 2020 and June 30, 2019, respectively, aggregated by the level in the fair value hierarchy within which those measurements fall.


	As of June 30, 2020			Fair value measurements at reporting date using:														Gain (losses) from fair value changes
								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, 2020		Six months ended June 30, 2020
			(In thousands)
Assets:
Impaired loans (1)	$	98		$	—	$	—		$	98		$	(1,219)		$	(1,198)

_____________________

(1)Collateral-dependent impaired loans held as of June 30, 2020 that had write-downs or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2020.


	As of June 30, 2019			Fair value measurements at reporting date using:														Gain (losses) from fair value changes
								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 or recoveries in fair value or whose specific reserve changed during the six months ended June 30, 2019.

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, 2020

Fair Value

Valuation
Technique

Unobservable
Input

Range of
Inputs
Utilized

Weighted
Average of
Inputs
Utilized

(In thousands)

Impaired Loans

Appraisals of Collateral

Discount for costs to sell

10% - 10%

10%

Appraisal adjustments

—%

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

—% - 5%

Appraisal adjustments

—%

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, 2020
			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	$	179,027		$	179,027		$	179,027		$	—		$	—
Investment securities held-to-maturity	42,495			43,351			—			43,351			—
Loans held for sale	9,786			9,958			—			9,958			—
Loans, net	7,243,630			7,082,051			—			—			7,082,051
Other financial assets	71,246			71,246			—			71,246			—
FINANCIAL LIABILITIES:
Deposits	7,427,397			7,429,520			—			7,429,520			—

Securities sold under agreements to repurchase	46,623			46,623			—			46,623			—

Federal Home Loan Bank borrowings	426,313			428,014			—			428,014			—
Junior subordinated debentures	106,363			69,863			—			—			69,863
Other financial liabilities	2,557			2,557			—			2,557			—


	As of December 31, 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	$	292,479		$	292,479		$	292,479		$	—		$	—
Investment securities held-to-maturity	48,212			47,949			—			47,949			—
Loans held for sale	7,386			7,475			—			7,475			—
Loans, net	6,904,722			6,883,360			—			—			6,883,360
Other financial assets	67,348			67,348			—			67,348			—
FINANCIAL LIABILITIES:
Deposits	7,241,476			7,241,739			—			7,241,739			—
Securities sold under agreements to repurchase	53,398			53,398			—			53,398			—

Federal Home Loan Bank borrowings	350,829			351,233			—			351,233			—
Junior subordinated debentures	106,363			96,363			—			—			96,363
Other financial liabilities	1,957			1,957			—			1,957			—