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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

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 March 31, 2021 and December 31, 2020, aggregated by the level in the fair value hierarchy within which those measurements fall:


	As of March 31, 2021		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:
Investment securities available-for-sale:
U.S. government and agencies	$	20,614	$	—	$	20,614	$	—
Government-sponsored entities	141,485		—		141,485		—
Municipal bonds	342,395		—		342,395		—
Mortgage-backed securities	834,914		—		834,914		—

Total	1,339,408		—		1,339,408		—
Equity securities	39,708		39,708		—		—
Derivatives - interest rate customer swaps	53,682		—		53,682		—

Derivatives - risk participation agreement	28		—		28		—

Trading securities held in the “rabbi trust” (1)	7,633		7,633		—		—

Liabilities:
Derivatives - interest rate customer swaps	$	54,529	$	—	$	54,529	$	—
Derivatives - interest rate swaps	157		—		157		—
Derivatives - risk participation agreement	211		—		211		—

Deferred compensation “rabbi trust” (1)	7,633		7,633		—		—


			Fair value measurements at reporting date using:
	As of December 31, 2020		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(In thousands)
Assets:
Investment securities available-for-sale:
U.S. government and agencies	$	20,984	$	—	$	20,984	$	—
Government-sponsored entities	147,786		—		147,786		—
Municipal bonds	346,588		—		346,588		—
Mortgage-backed securities	728,335		—		728,335		—

Total	1,243,693		—		1,243,693		—
Equity securities	41,452		41,452		—		—
Derivatives - interest rate customer swaps	83,255		—		83,255		—

Derivatives - risk participation agreements	49		—		49		—

Trading securities held in the “rabbi trust” (1)	7,204		7,204		—		—

Liabilities:
Derivatives - interest rate customer swaps	$	84,590	$	—	$	84,590	$	—
Derivatives - interest rate swaps	228		—		228		—
Derivatives - risk participation agreements	375		—		375		—

Deferred compensation “rabbi trust” (1)	7,204		7,204		—		—

_____________________

(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 March 31, 2021 and March 31, 2020, aggregated by the level in the fair value hierarchy within which those measurements fall.


	As of March 31, 2021		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 March 31, 2021
	(In thousands)
Assets:
Impaired loans (1)	$	5,205	$	—	$	—	$	5,205	$	(435)

_____________________

(1)Collateral-dependent impaired loans held as of March 31, 2021 that had write-downs or recoveries in fair value or whose specific reserve changed during the three months ended March 31, 2021.


	As of March 31, 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 March 31, 2020
	(In thousands)
Assets:
Impaired loans (1)	$	97	$	—	$	—	$	97	$	21

_____________________

(1)Collateral-dependent impaired loans held as of March 31, 2020 that had write-downs or recoveries in fair value or whose specific reserve changed during the three months ended March 31, 2020.

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 March 31, 2021

Fair Value

Valuation
Technique

Unobservable
Input

Range of
Inputs
Utilized

Weighted
Average of
Inputs
Utilized

(In thousands)

Impaired Loans

5,205

Appraisals of Collateral

Discount for costs to sell

5% - 10%

Appraisal adjustments

—%

As of March 31, 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

—%

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 March 31, 2021
	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	$	1,389,943	$	1,389,943	$	1,389,943	$	—	$	—
Investment securities held-to-maturity	31,943		32,631		—		32,631		—
Loans held for sale	8,434		8,431		—		8,431		—
Loans, net	7,142,315		7,035,003		—		—		7,035,003
Other financial assets	56,917		56,917		—		56,917		—
FINANCIAL LIABILITIES:
Deposits	9,147,618		9,148,568		—		9,148,568		—

Securities sold under agreements to repurchase	46,262		46,262		—		46,262		—

Federal Home Loan Bank borrowings	115,019		115,410		—		115,410		—
Junior subordinated debentures	106,363		69,863		—		—		69,863
Other financial liabilities	1,751		1,751		—		1,751		—


	As of December 31, 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	$	1,055,588	$	1,055,588	$	1,055,588	$	—	$	—
Investment securities held-to-maturity	35,223		35,942		—		35,942		—
Loans held for sale	17,421		17,782		—		17,782		—
Loans, net	7,023,071		6,980,202		—		—		6,980,202
Other financial assets	57,654		57,654		—		57,654		—
FINANCIAL LIABILITIES:
Deposits	8,595,366		8,596,193		—		8,596,193		—
Securities sold under agreements to repurchase	53,472		53,472		—		53,472		—

Federal Home Loan Bank borrowings	114,659		115,284		—		115,284		—
Junior subordinated debentures	106,363		69,863		—		—		69,863
Other financial liabilities	1,734		1,734		—		1,734		—