Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring and Non-Recurring Basis

The following tables present for each of the fair-value hierarchy levels the Company’s assets that are measured at fair value on a recurring and nonrecurring basis as of the dates indicated (in thousands).

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
March 31, 2023
Measured on a recurring basis:
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	—	$	21,658		$	—	$	21,658
Mortgage-backed securities		—		923,784			—		923,784
Other assets:
Hedging derivative instruments		—		5,972			—		5,972
Fair value adjusted through comprehensive income	$	—	$	951,414		$	—	$	951,414
Other assets:
Derivative instruments – interest rate swaps		—		36,784			—		36,784
Derivative instruments – credit contracts		—		—			—		-
Derivative instruments – mortgage banking		—		93			—		93
Other liabilities:
Derivative instruments – interest rate swaps		—		(36,788	)		—		(36,788	)
Derivative instruments – credit contracts		—		—			—		-
Derivative instruments – mortgage banking		—		(21	)		—		(21	)
Fair value adjusted through net income	$	—	$	68		$	—	$	68
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	682		$	—	$	682
Collateral dependent loans		—		—			20,059		20,059
Other assets:
Long-lived assets held for sale		—		—			1,509		1,509
Loan servicing rights		—		—			1,453		1,453
Other real estate owned		—		—			101		101
Total	$	—	$	682		$	23,122	$	23,804

There were no transfers between Levels 1 and 2 during the three months ended March 31, 2023. There were no liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2023.

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
December 31, 2022
Measured on a recurring basis:
Securities available for sale:
U.S. Government agencies and government sponsored enterprises	$	—	$	21,115		$	—	$	21,115
Mortgage-backed securities		—		933,256			—		933,256
Other assets:
Hedging derivative instruments		—		6,725			—		6,725
Fair value adjusted through comprehensive income	$	—	$	961,096		$	—	$	961,096
Other assets:
Derivative instruments – interest rate products	$	—	$	47,736		$	—	$	47,736
Derivative instruments – mortgage banking		—		96			—		96
Other liabilities:
Derivative instruments – interest rate products		—		(47,738	)		—		(47,738	)
Derivative instruments – mortgage banking		—		(13	)		—		(13	)
Fair value adjusted through net income	$	—	$	81		$	—	$	81
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	550		$	—	$	550
Collateral dependent loans		—		—			21,454		21,454
Other assets:
Long-lived assets held for sale		—		—			1,509		1,509
Loan servicing rights		—		—			1,470		1,470
Other real estate owned		—		—			19		19
Total	$	—	$	550		$	24,452	$	25,002

Additional Quantitative Information about Assets Measured at Fair Value on Recurring and Non-Recurring Basis

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value as of March 31, 2023 (dollars in thousands).

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Collateral dependent loans	$	20,059	Appraisal of collateral (1)	Appraisal adjustments (2)	15.7%(3) / 0 - 40%
Loan servicing rights	$	1,453	Discounted cash flow	Discount rate	10.4% (3)
				Constant prepayment rate	11.6% (3)
Long-lived assets held for sale	$	1,509	Appraisal of collateral (1)	Appraisal adjustments (2)	10 - 108%
Other real estate owned	$	101	Appraisal of collateral (1)	Appraisal adjustments (2)	39.0%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

(3) Weighted averages.

Carrying Amount, Estimated Fair Value, and Placement in Fair Value Hierarchy of Financial Instruments

The following table presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value measurement hierarchy of the Company’s financial instruments as of the dates indicated.

	Level in	March 31, 2023				December 31, 2022
	Fair Value			Estimated				Estimated
	Measurement	Carrying		Fair		Carrying		Fair
	Hierarchy	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	139,974	$	139,974	$	130,466	$	130,466
Securities available for sale	Level 2		945,442		945,442		954,371		954,371
Securities held to maturity, net	Level 2		180,052		167,812		188,975		174,188
Loans held for sale	Level 2		682		682		550		550
Loans	Level 2		4,175,745		4,069,579		3,983,582		3,867,285
Loans (1)	Level 3		20,059		20,059		21,454		21,454
Long-lived assets held for sale	Level 3		1,509		1,509		1,509		1,509
Accrued interest receivable	Level 1		20,167		20,167		19,371		19,371
Derivative instruments – cash flow hedges	Level 2		5,972		5,972		6,725		6,725
Derivative instruments – interest rate products	Level 2		36,784		36,784		47,736		47,736
Derivative instruments – mortgage banking	Level 2		93		93		96		96
FHLB and FRB stock	Level 2		17,630		17,630		19,385		19,385
Financial liabilities:
Non-maturity deposits	Level 1		3,669,925		3,669,925		3,646,552		3,646,552
Time deposits	Level 2		1,471,382		1,460,737		1,282,872		1,268,957
Short-term borrowings	Level 1		116,000		116,000		205,000		205,000
Long-term borrowings	Level 2		124,299		121,042		74,222		70,814
Accrued interest payable	Level 1		12,693		12,693		5,983		5,983
Derivative instruments – interest rate products	Level 2		36,788		36,788		47,738		47,738
Derivative instruments – credit contracts	Level 2		—		—		—		—
Derivative instruments – mortgage banking	Level 2		21		21		13		13

(1) Comprised of collateral dependent loans.