2021 Annual Report

December 31, 2020 Fair Value Hierarchy

Carrying

Estimated

(dollars in thousands)

Amount Level 1

Level 2

Level 3 Fair Value

Financial Assets: Cash and Due From Banks. . . . . . . . . . . . . . . . . . . . . . $ 160,675 $ 160,675 $ Bank-Owned Certificates of Deposit. . . . . . . . . . . . . . Securities Available for Sale . . . . . . . . . . . . . . . . . . . . 390,629 FHLB Stock, at Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,027 Loans, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,282,436 Accrued Interest Receivable . . . . . . . . . . . . . . . . . . . . 9,172 Interest Rate Caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,834 Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,757 Financial Liabilities: Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,501,636 $ Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 FHLB Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,500 Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . . 73,739 Accrued Interest Payable . . . . . . . . . . . . . . . . . . . . . . . 1,615 Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,167 2,860 — — — — — — — — — —

— $ — $ 160,675

2,908 —

2,908

— 390,629 — 390,629

5,027 —

5,027

— 2,309,421 — 2,309,421

9,172 — 2,834 — 2,757 —

9,172 2,834 2,757

— $ 2,509,148 $ — $ 2,509,148

11,001 — 58,830 — 74,769 — 1,615 — 6,167 —

11,001 58,830 74,769 1,615

6,167 The following methods and assumptions were used by the Company to estimate fair value of consolidated financial statements not previously discussed. Cash and due from banks – The carrying amount of cash and cash equivalents approximates their fair value. Bank-owned certificates of deposit – Fair values of bank-owned certificates of deposit are estimated using the discounted cash flow analysis based on current rates for similar types of deposits. FHLB stock – The carrying amount of FHLB stock approximates its fair value. Loans, Net – Fair values for loans are estimated based on discounted cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value since it is short term in nature and does not present anticipated credit concerns. Deposits – The fair values disclosed for demand deposits without stated maturities (interest and noninterest transaction, savings, and money market accounts) are equal to the amount payable on demand at the reporting date (their carrying amounts). Fair values for the fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits. Notes payable and subordinated debentures – The fair values of the Company’s notes payable and subordinated debentures are estimated using a discounted cash flow analysis, based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements. FHLB advances – The fair values of the Company’s FHLB advances are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowing agreements. Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value since it is short term in nature.

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