Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.20.2
Fair Value Measurements (Tables)
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value on Recurring Basis

As of June 30, 2020 and December 31, 2019, 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)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

45,262

 

 

$

 

 

$

 

 

$

45,262

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

413,263

 

 

 

 

 

 

413,263

 

Collateralized mortgage obligations

 

 

 

 

 

120,294

 

 

 

 

 

 

120,294

 

Debt securities

 

 

 

 

 

77,152

 

 

 

 

 

 

77,152

 

Total U.S. government agency and sponsored agency obligations

 

 

 

 

 

610,709

 

 

 

 

 

 

610,709

 

Total securities available for sale

 

$

45,262

 

 

$

610,709

 

 

$

 

 

$

655,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities

 

$

35,205

 

 

$

 

 

$

 

 

$

35,205

 

U.S. government agency and sponsored agency obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

410,800

 

 

 

 

 

 

410,800

 

Collateralized mortgage obligations

 

 

 

 

 

164,592

 

 

 

 

 

 

164,592

 

Debt securities

 

 

 

 

 

23,879

 

 

 

 

 

 

23,879

 

Total U.S. government agency and sponsored agency obligations

 

 

 

 

 

599,271

 

 

 

 

 

 

599,271

 

Total securities available for sale

 

$

35,205

 

 

$

599,271

 

 

$

 

 

$

634,477

 

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

As of June 30, 2020 and December 31, 2019, 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)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent impaired loans (1)

 

$

44,120

 

 

$

 

 

$

 

 

$

44,120

 

Other real estate owned

 

 

148

 

 

 

 

 

 

 

 

 

148

 

Bank-owned premises

 

 

1,900

 

 

 

 

 

 

 

 

 

1,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent impaired loans (2)

 

$

31,049

 

 

$

 

 

$

 

 

$

31,049

 

Other real estate owned

 

 

63

 

 

 

 

 

 

 

 

 

63

 

Bank-owned premises

 

 

1,900

 

 

 

 

 

 

 

 

 

1,900

 

 

(1)

Consisted of real estate loans of $42.6 million, commercial and industrial loans of $288,000, and consumer loans of $1.2 million. $43.9 million was secured by real estate and one commercial and industrial loan for $247,000 was fully secured by cash.

(2)

Consisted of real estate loans of $27.2 million and commercial and industrial loans of $3.9 million. $27.2 million was secured by real estate and $3.9 million was secured by personal property.

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

The following table represents quantitative information about Level 3 fair value comments for assets measured at fair value on a non-recurring basis at June 30, 2020 and December 31, 2019:

 

 

 

Fair Value

 

 

Valuation

Techniques

 

Unobservable

Input(s)

 

Range (Weighted

Average)

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent impaired loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,355

 

 

Market approach

 

Market data comparison

 

(30)% to (3)% /(17%)

 

Other

 

 

15,441

 

 

Market approach

 

Market data comparison

 

(18)% to 42% / 18% (2)

 

Construction

 

 

23,067

 

 

Market approach

 

Market data comparison

 

(18)% to 43% / 21% (2)

 

Residential property

 

 

2,761

 

 

Market approach

 

Market data comparison

 

(13)% to 15% / 6% (2)

 

Total real estate loans

 

 

42,624

 

 

 

 

 

 

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial term

 

 

288

 

 

Market approach

 

Market data comparison

 

(9)% to 11% / 1% (2) (3)

 

Consumer loans

 

 

1,208

 

 

Market approach

 

Market data comparison

 

(13)% to 15% / 6% (2)

 

Total

 

$

44,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank-owned premises

 

 

1,900

 

 

Market approach

 

Market data comparison

 

(30)% to 55% /(2)% (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

Collateral dependent impaired loans:

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

Other

 

$

13,926

 

 

Market approach

 

Market data comparison

 

(1)

 

Construction

 

 

13,228

 

 

Market approach

 

Market data comparison

 

(3)% to 43% /21% (2)

 

Total real estate loans

 

 

27,154

 

 

 

 

 

 

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial lines of credit

 

 

3,895

 

 

Market approach

 

Market data comparison

 

(8)% to 42% /18% (2)

 

Total

 

$

31,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank-owned premises

 

 

1,900

 

 

Market approach

 

Market data comparison

 

(30)% to 55% /(2)% (2)

 

 

(1)

The values were estimated by current market data comparison, supplemented by cost information. The properties compared when possible, with others for sale and that have sold in the general time period. Adjustments are made for differences in equipment, mileage, cosmetics, conversions, originality, condition as well as sale terms and current economic conditions at time of sale.

(2)

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.

(3)

Includes one loan secured by cash collateral.

Estimated Fair Values of Financial Instruments

The estimated fair values of financial instruments were as follows:

 

 

 

June 30, 2020

 

 

 

Carrying

 

 

Fair Value

 

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

546,048

 

 

$

546,048

 

 

$

 

 

$

 

Securities available for sale

 

 

655,971

 

 

 

45,262

 

 

 

610,709

 

 

 

 

Loans held for sale

 

 

17,942

 

 

 

 

 

 

17,942

 

 

 

 

Loans receivable, net of allowance for credit losses

 

 

4,739,312

 

 

 

 

 

 

 

 

 

4,690,692

 

Accrued interest receivable

 

 

21,372

 

 

 

21,372

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,865,213

 

 

 

 

 

 

1,865,213

 

 

 

 

Interest-bearing deposits

 

 

3,344,568

 

 

 

 

 

 

 

 

 

3,353,585

 

Borrowings and subordinated debentures

 

 

370,478

 

 

 

 

 

 

254,116

 

 

 

120,139

 

Accrued interest payable

 

 

8,655

 

 

 

8,655

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

Carrying

 

 

Fair Value

 

 

 

Amount

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

121,678

 

 

$

121,678

 

 

$

 

 

$

 

Securities available for sale

 

 

634,477

 

 

 

35,205

 

 

 

599,272

 

 

 

 

Loans held for sale

 

 

6,020

 

 

 

 

 

 

6,382

 

 

 

 

Loans receivable, net of allowance for credit losses

 

 

4,548,739

 

 

 

 

 

 

 

 

 

4,520,322

 

Accrued interest receivable

 

 

11,742

 

 

 

11,742

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

 

1,391,624

 

 

 

 

 

 

1,391,624

 

 

 

 

Interest-bearing deposits

 

 

3,307,338

 

 

 

 

 

 

 

 

 

3,317,867

 

Borrowings and subordinated debentures

 

 

208,377

 

 

 

 

 

 

89,831

 

 

 

118,807

 

Accrued interest payable

 

 

11,215

 

 

 

11,215