Fair Value Measurement and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During the nine months ended September 30, 2022 and during 2021, the Company did not make any transfers between any levels within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:


September 30, 2022	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
(in thousands)
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	161,796	$	196,053	$	—	$	357,849
Mortgage-backed securities, residential	—		314,345		—		314,345
Collateralized mortgage obligations, residential	—		161,224		—		161,224
Mortgage-backed securities, multifamily	—		785		—		785
Collateralized mortgage obligations, multifamily	—		46,724		—		46,724
Asset-backed securities	—		57,543		—		57,543
Obligations of states and political subdivisions	—		21,519		—		21,519
Corporate bonds	—		114,024		—		114,024
Total investment securities, available for sale	161,796		912,217		—		1,074,013
Equity securities, at fair value	—		17,180		—		17,180
Derivative assets	—		105,098		—		105,098
Total Assets	$	161,796	$	1,034,495	$	—	$	1,196,291
Liabilities:
Derivative liabilities	$	—	$	105,098	$	—	$	105,098
Total Liabilities	$	—	$	105,098	$	—	$	105,098


December 31, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
(in thousands)
Assets:
Investment securities, available for sale
U.S. Treasury and government agencies	$	104,861	$	98,526	$	—	$	203,387
Mortgage-backed securities, residential	—		237,975		—		237,975
Collateralized mortgage obligations, residential	—		191,291		—		191,291
Mortgage-backed securities, multifamily	—		1,741		—		1,741
Collateralized mortgage obligations, multifamily	—		32,519		—		32,519
Asset-backed securities	—		52,584		—		52,584

Corporate bonds	—		50,459		—		50,459
Total investment securities, available for sale	104,861		665,095		—		769,956
Equity securities, at fair value	—		17,368		—		17,368
Derivative assets	—		43,799		—		43,799
Total Assets	$	104,861	$	726,262	$	—	$	831,123
Liabilities:
Derivative liabilities	$	—	$	43,799	$	—	$	43,799
Total Liabilities	$	—	$	43,799	$	—	$	43,799

Fair Value of Assets Measured on Non-recurring Basis

The following table summarized the Company’s financial assets that are measured at fair value on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:


(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
September 30, 2022
Assets:
Individually evaluated loans	$	—	$	—	$	4,775	$	4,775




December 31, 2021
Assets:
Individually evaluated loans	$	—	$	—	$	7,113	$	7,113

Carrying Values and Fair Values of Company's Financial Instruments

The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments not carried at fair value as of September 30, 2022 and December 31, 2021:


September 30, 2022	Carrying 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:
Investment securities, held to maturity
U.S. government agencies	$	16,296	$	15,576	$	—	$	15,576	$	—
Mortgage-backed securities, residential	357,453		295,488		—		295,488		—
Collateralized mortgage obligations, residential	13,328		10,948		—		10,948		—
Mortgage-backed securities, multifamily	5,117		4,349		—		4,349		—

Obligations of states and political subdivisions	539,888		424,722		—		400,378		24,344
Corporate bonds	2,865		2,482		—		2,482		—
Total investment securities, held to maturity	$	934,947	$	753,565	$	—	$	729,221	$	24,344
Federal Home Loan Bank and other membership bank stocks	21,046		21,046		—		21,046		—
Loans, net	7,499,947		7,349,734		—		—		7,349,734
Financial Liabilities:
Certificates of deposit	1,034,181		998,659		—		998,659		—
Other borrowings	25,000		22,902		—		22,902		—
Subordinated debentures	194,148		157,228		—		—		157,228


December 31, 2021	Carrying 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:
Investment securities, held to maturity
U.S. government agencies	$	18,672	$	18,965	$	—	$	18,965	$	—
Mortgage-backed securities, residential	370,247		364,976		—		364,976		—
Collateralized mortgage obligations, residential	13,921		14,089		—		14,089		—
Mortgage-backed securities, multifamily	2,710		2,734		—		2,734		—

Obligations of states and political subdivisions	416,566		411,576		—		410,744		832
Corporate bonds	2,840		2,871		—		2,871		—
Total investment securities, held to maturity	824,956		815,211		—		814,379		832
Federal Home Loan Bank and other membership bank stocks	9,049		9,049		—		9,049		—
Loans, net	5,918,101		5,900,876		—		—		5,900,876
Financial Liabilities:
Certificates of deposit	759,227		753,483		—		753,483		—
Other borrowings	25,000		24,604		—		24,604		—
Subordinated debentures	179,043		175,243		—		—		175,243