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Fair Value (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of financial assets measured at fair value on a recurring basis

The following table summarizes the financial assets measured at fair value on a recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured on a Recurring Basis

September 30, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In Thousands)
Assets:
Available for sale securities:
Obligations of U.S. federal government corporations and agencies	$	—	$	40,926	$	—	$	40,926
Mortgage-backed securities		—		215,639		—		215,639
Collateralized mortgage obligations		—		122,284		—		122,284
Corporate bonds		—		29,988		—		29,988
Obligations of state and political subdivisions		—		169,387		—		169,387
Equity securities		1,014		—		—		1,014
Loans held for sale, at fair value		—		96,032		112,022		208,054
Purchased certificate of deposit option		—		56		—		56
Interest rate swaps		—		2,312		—		2,312
Mortgage banking derivative		—		7,913		—		7,913
Liabilities:
Written certificate of deposit option		—		56		—		56
Interest rate swaps		—		2,560		—		2,560

December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In Thousands)
Available for sale securities:
Obligations of U.S. federal government corporations and agencies	$	—	$	2,524	$	—	$	2,524
Mortgage-backed securities		—		89,647		—		89,647
REMICs		—		1,636		—		1,636
Collateralized mortgage obligations		—		82,101		—		82,101
Corporate bonds		—		12,101		—		12,101
Obligations of state and political subdivisions		—		92,028		3,411		95,439
Mortgage banking derivative - asset		—		892		—		892

Summary of Reconciliation of all Assets Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Level 3)

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine month periods ended September 30, 2020 and 2019.

	Construction loans held for sale
	Three Months Ended September 30,					Nine Months Ended September 30,
	2020			2019		2020			2019
Balance of recurring Level 3 assets at beginning of period	$	75,739		$	—	$	—		$	—
Total gains (losses) for the period
Included in change in fair value of loans held for sale		4,012			—		11,213			—
Originations		40,767			—		83,032			—
Acquired in acquisition		—			—		37,711			—
Sales		(8,496	)		—		(19,934	)		—
Balance of recurring Level 3 assets at end of period	$	112,022		$	—	$	112,022		$	—

	Securities available-for-sale
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020			2019
Balance of recurring Level 3 assets at beginning of period	$	—	$	—	$	3,411		$	—
Balance of Level 3 assets moved to Level 2 during the period		—		—		(3,411	)		—
Balance of recurring Level 3 assets at end of period	$	—	$	—	$	—		$	—

Schedule of Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis

For Level 3 assets and liabilities measured at fair value on a recurring basis as of September 30, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

Fair Value

Valuation Technique

Unobservable Inputs

Range of

Inputs

(Dollars in Thousands)

Construction loans held for sale

112,022

Comparable sales

Time discount using the 60 day forward contract

0.00% - 0.60%

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of September 30, 2020, the significant unobservable inputs used in the fair value measurements were as follows:

Fair

Value

Valuation

Technique

Unobservable

Inputs

Range of

Inputs

Weighted

Average

(Dollars in Thousands)

Impaired Loans- Applies to all loan

classes

17,501

Appraisals which utilize sales comparison, net income and cost approach

Discounts for collection issues and changes in market conditions

5-43%

20.54

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:

Fair

Value

Valuation

Technique

Unobservable

Inputs

Range of

Inputs

Weighted

Average

(Dollars in Thousands)

Impaired Loans- Applies to all loan

classes

106

Appraisals which utilize sales comparison, net income and cost approach

Discounts for collection issues and changes in market conditions

10-13%

10.86

Schedule of financial assets measured at fair value on a non-recurring basis

The following table summarizes the financial assets measured at fair value on a non-recurring basis segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

Assets and Liabilities Measured on a Non-Recurring Basis

September 30, 2020	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In Thousands)
Impaired loans
Commercial real estate		—		—		6,342		6,342
Commercial		—		—		11,159		11,159
Total impaired loans		—		—		17,501		17,501
Mortgage servicing rights		—		13,477		—		13,477

December 31, 2019	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(In Thousands)
Impaired loans
Commercial real estate	$	—	$	—	$	68	$	68
Commercial		—		—		38		38
Total impaired loans		—		—		106		106
Mortgage servicing rights		—		273		—		273

Schedule of FHLB advances with maturities

FHLB advances with maturities greater than 90 days are valued based on a DCF analysis, using interest rates currently being quoted for similar characteristics and maturities resulting in a Level 2 classification. The cost or value of any call or put options is based on the estimated cost to settle the option at September 30, 2020.

			Fair Value Measurements at September 30, 2020
			(In Thousands)
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	103,073	$	103,073	$	103,073	$	—	$	—
Securities available for sale		578,224		578,224		—		578,224		—
Equity securities		1,014		1,014		1,014		—		—
Federal Home Loan Bank Stock		23,492	N/A		N/A		N/A		N/A
Loans receivable, net		5,381,631		5,408,788		—		—		5,408,788
Loans held for sale, carried at fair value		208,054		208,054		—		96,032		112,022

Financial Liabilities:
Deposits	$	5,795,757	$	5,808,414	$	4,622,424	$	1,185,990	$	—
Advances from Federal Home Loan Bank		30,000		30,000		—		30,000		—
Subordinated debentures		84,818		84,818		—		84,818		—

			Fair Value Measurements at December 31, 2019
			(In Thousands)
	Carrying Value		Total		Level 1		Level 2		Level 3
Financial Assets:
Cash and cash equivalents	$	131,254	$	131,254	$	131,254	$	—	$	—
Investment securities		283,448		283,448		—		280,037		3,411
FHLB Stock		11,915	N/A		N/A		N/A		N/A
Loans, net, including loans held for sale		2,764,329		2,756,092		—		18,456		2,737,636

Financial Liabilities:
Deposits	$	2,870,325	$	2,871,166	$	2,131,537	$	739,629	$	—
Advances from FHLB		85,063		85,003		—		85,003		—
Securities sold under repurchase agreements		2,999		2,999		2,999		—		—
Subordinated debentures		36,083		36,083		—		36,083		—