Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.21.2
Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2021
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis

As of September 30, 2021 and December 31, 2020, assets and liabilities measured at fair value on a recurring basis are as follows:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Observable

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices in

 

 

Inputs with No

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Active Market

 

 

Significant

 

 

 

 

 

 

 

for Identical

 

 

with Identical

 

 

Unobservable

 

 

 

 

 

 

 

Assets

 

 

Characteristics

 

 

Inputs

 

 

Total Fair Value

 

 

 

(in thousands)

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

4,945

 

 

$

 

 

$

 

 

$

4,945

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

636,062

 

 

 

 

 

 

636,062

 

Collateralized mortgage obligations

 

 

 

 

 

99,883

 

 

 

 

 

 

99,883

 

Debt securities

 

 

 

 

 

98,436

 

 

 

 

 

 

98,436

 

Total U.S. government agency and sponsored agency obligations

 

 

 

 

 

834,381

 

 

 

 

 

 

834,381

 

Municipal bonds-tax exempt

 

 

 

 

 

67,670

 

 

 

 

 

 

67,670

 

Total securities available for sale

 

$

4,945

 

 

$

902,051

 

 

$

 

 

$

906,996

 

Derivative financial instruments

 

$

 

 

$

800

 

 

$

 

 

$

800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

 

 

$

769

 

 

$

 

 

$

769

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

10,132

 

 

$

 

 

$

 

 

$

10,132

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

519,241

 

 

 

 

 

 

519,241

 

Collateralized mortgage obligations

 

 

 

 

 

133,601

 

 

 

 

 

 

133,601

 

Debt securities

 

 

 

 

 

90,807

 

 

 

 

 

 

90,807

 

Total U.S. government agency and sponsored agency obligations

 

 

 

 

 

743,649

 

 

 

 

 

 

743,649

 

Total securities available for sale

 

$

10,132

 

 

$

743,649

 

 

$

 

 

$

753,781

 

Derivative financial instruments

 

$

 

 

$

1,088

 

 

$

 

 

$

1,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

$

 

 

$

1,149

 

 

$

 

 

$

1,149

 

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

As of September 30, 2021 and December 31, 2020, assets and liabilities measured at fair value on a non-recurring basis are as follows:

 

 

 

 

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Significant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Observable

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices in

 

 

Inputs With No

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Active Market

 

 

Significant

 

 

 

 

 

 

 

for Identical

 

 

With Identical

 

 

Unobservable

 

 

 

Total

 

 

Assets

 

 

Characteristics

 

 

Inputs

 

 

 

(in thousands)

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans (1)

 

$

12,325

 

 

$

 

 

$

 

 

$

12,325

 

Other real estate owned

 

 

675

 

 

 

 

 

 

 

 

 

675

 

Repossessed personal property

 

 

180

 

 

 

 

 

 

 

 

 

180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans (2)

 

$

63,114

 

 

$

 

 

$

 

 

$

63,114

 

Other real estate owned

 

 

2,360

 

 

 

 

 

 

 

 

 

2,360

 

Repossessed personal property

 

 

857

 

 

 

 

 

 

 

 

 

857

 

 

(1)

Consisted of real estate loans of $12.3 million.

(2)

Consisted of real estate loans of $63.1 million and commercial and industrial loans of $41,000.

 

Quantitative Information about Level 3 Fair Value Assumptions for Assets Measured at Fair Value on Non-Recurring Basis

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at September 30, 2021 and December 31, 2020:

 

 

 

Fair Value

 

 

Valuation

Techniques

 

Unobservable

Input(s)

 

Range (Weighted

Average)

 

 

 

(in thousands)

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

2,628

 

 

Market approach

 

Market data comparison

 

(28)% to 23% / (6)%

 

Other

 

 

128

 

 

Market approach

 

Market data comparison

 

(10)% to 5% / (3)%

 

Construction

 

 

7,046

 

 

Market approach

 

Market data comparison

 

(20)% to 10% / (10)%

 

Residential/consumer loans

 

 

2,523

 

 

Market approach

 

Market data comparison

 

(20)% to 8% / (15)%

 

Total real estate loans

 

 

12,325

 

 

 

 

 

 

 

 

Total

 

$

12,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate owned

 

$

675

 

 

Market approach

 

Market data comparison

 

(20)% to (5)% / (12)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Repossessed personal property

 

 

180

 

 

Market approach

 

Market data comparison

 

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

6,330

 

 

Market approach

 

Market data comparison

 

(45)% to 35% / 14%

 

Hospitality

 

 

20,612

 

 

Market approach

 

Market data comparison

 

(2)

 

Other

 

 

8,410

 

 

Market approach

 

Market data comparison

 

(55)% to 34% / 15% (1)

 

Construction

 

 

24,854

 

 

Market approach

 

Market data comparison

 

(20)% to 12% / (8)%

 

Residential/consumer loans

 

 

2,867

 

 

Market approach

 

Market data comparison

 

(13)% to 15% / 6% (1)

 

Total real estate loans

 

 

63,073

 

 

 

 

 

 

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial lines of credit

 

 

41

 

 

Market approach

 

Market data comparison

 

(9)% to 15% / 6% (1)

 

Total

 

$

63,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other real estate owned

 

$

2,360

 

 

Market approach

 

Market data comparison

 

(35)% to 15% / (14)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Repossessed personal property

 

 

857

 

 

Market approach

 

Market data comparison

 

(3)

 

 

(1)

Appraisal reports utilize a combination of valuation techniques including a market approach, where prices and other relevant information generated by market transactions involving similar or comparable properties are used to determine the appraised value. Appraisals may include an ‘as is’ and ‘upon completion’ valuation scenarios. Adjustments are routinely made in the appraisal process by third-party appraisers to adjust for differences between the comparable sales and income data. Adjustments also result from the consideration of relevant economic and demographic factors with the potential to affect property values. Also, prospective values are based on the market conditions which exist at the date of inspection combined with informed forecasts based on current trends in supply and demand for the property types under appraisal. Positive adjustments disclosed in this table represent increases to the sales comparison and negative adjustment represent decreases.

(2)

No discount weighted average range available given primary valuation methodology is via discounted cash flow analysis (DCF) for going concern properties.

(3)

The equipment is usually too low in value to use a professional appraisal service. The values are determined internally using a combination of auction values, vendor recommendations and sales comparisons depending on the equipment type. Some highly commoditized equipment, such as commercial trucks have services that provide industry values.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:

 

 

 

September 30, 2021

 

 

 

Carrying

 

 

Fair Value

 

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

824,347

 

 

$

824,347

 

 

$

 

 

$

 

Securities available for sale

 

 

906,996

 

 

 

4,945

 

 

 

902,051

 

 

 

 

Loans held for sale

 

 

17,881

 

 

 

 

 

 

19,937

 

 

 

 

Loans receivable, net of allowance for credit losses

 

 

4,782,252

 

 

 

 

 

 

 

 

 

4,774,003

 

Accrued interest receivable

 

 

11,943

 

 

 

11,943

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

2,548,591

 

 

 

 

 

 

2,548,591

 

 

 

 

Interest-bearing deposits

 

 

3,180,945

 

 

 

 

 

 

 

 

 

3,180,790

 

Borrowings and subordinated debentures

 

 

352,344

 

 

 

 

 

 

137,991

 

 

 

211,880

 

Accrued interest payable

 

 

1,235

 

 

 

1,235

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

Carrying

 

 

Fair Value

 

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

391,849

 

 

$

391,849

 

 

$

 

 

$

 

Securities available for sale

 

 

753,781

 

 

 

10,132

 

 

 

743,649

 

 

 

 

Loans held for sale

 

 

8,568

 

 

 

 

 

 

9,270

 

 

 

 

Loans receivable, net of allowance for credit losses

 

 

4,789,742

 

 

 

 

 

 

 

 

 

4,755,302

 

Accrued interest receivable

 

 

16,363

 

 

 

16,363

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,898,766

 

 

 

 

 

 

1,898,766

 

 

 

 

Interest-bearing deposits

 

 

3,376,242

 

 

 

 

 

 

 

 

 

3,380,179

 

Borrowings and subordinated debentures

 

 

268,972

 

 

 

 

 

 

151,714

 

 

 

118,809

 

Accrued interest payable

 

 

4,564

 

 

 

4,564