The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2023, and December 31, 2022, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.

Fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets and liabilities that the Company has the ability to access. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the hierarchy. In such cases, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 (in thousands):


	Fair Value Measurement at June 30, 2023
Description	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
U.S. Treasury	$	584	$	584	$	—	$	—
U.S. Agencies		11,129		—		11,129		—
State and political subdivisions		16,939		—		16,939		—
Corporates		156		156		—		—
Trading – other		79		79		—		—
Trading securities		28,887		819		28,068		—
U.S. Treasury		787,824		787,824		—		—
U.S. Agencies		172,301		—		172,301		—
Mortgage-backed		3,712,820		—		3,712,820		—
State and political subdivisions		1,303,695		—		1,303,695		—
Corporates		342,656		342,656		—		—
Collateralized loan obligations		349,319		—		349,319		—
Available-for-sale securities		6,668,615		1,130,480		5,538,135		—
Equity securities with readily determinable fair values		10,925		10,925		—		—
Company-owned life insurance		63,837		—		63,837		—
Bank-owned life insurance		516,816		—		516,816		—
Derivatives		112,241		—		112,241		—
Total	$	7,401,321	$	1,142,224	$	6,259,097	$	—
Liabilities
Derivatives	$	118,562	$	—	$	118,562	$	—
Securities sold not yet purchased		7,229		—		7,229		—
Total	$	125,791	$	—	$	125,791	$	—


	Fair Value Measurement at December 31, 2022
Description	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
U.S. Treasury	$	580	$	580	$	—	$	—
U.S. Agencies		7,558		—		7,558		—
State and political subdivisions		8,038		—		8,038		—
Corporates		1,024		1,024		—		—
Trading – other		780		780		—		—
Trading securities		17,980		2,384		15,596		—
U.S. Treasury		777,070		777,070		—		—
U.S. Agencies		171,296		—		171,296		—
Mortgage-backed		3,982,122		—		3,982,122		—
State and political subdivisions		1,362,407		—		1,362,407		—
Corporates		367,500		367,500		—		—
Collateralized loan obligations		345,952		—		345,952		—
Available for sale securities		7,006,347		1,144,570		5,861,777		—
Equity securities with readily determinable fair values		10,782		10,782		—		—
Company-owned life insurance		56,769		—		56,769		—
Bank-owned life insurance		510,293		—		510,293		—
Derivatives		48,121		—		48,121		—
Total	$	7,650,292	$	1,157,736	$	6,492,556	$	—
Liabilities
Derivatives	$	126,334	$	—	$	126,334	$	—
Securities sold not yet purchased		3,503		—		3,503		—
Total	$	129,837	$	—	$	129,837	$	—

The following methods and assumptions were used to estimate the fair value of each class of financial instruments measured on a recurring basis:

Trading Securities Fair values for trading securities (including financial futures), are based on quoted market prices where available. If quoted market prices are not available, fair values are based on quoted market prices for similar securities.

Available-for-Sale Securities Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs. On an annual basis, the Company compares a sample of these prices to other independent sources for the same securities. Additionally, throughout the year, if securities are sold, comparisons are made between the pricing services prices and the market prices at which the securities were sold. Variances are analyzed, and, if appropriate, additional research is conducted with the third-party pricing services. Based on this research, the pricing services may affirm or revise their quoted price. No significant adjustments have been made to the prices provided by the pricing services. The pricing services also provide documentation on an ongoing basis that includes reference data, inputs and methodology by asset class, which is reviewed to ensure that security placement within the fair value hierarchy is appropriate.

Equity securities with readily determinable fair values Fair values are based on quoted market prices.

Company-owned Life Insurance Fair value is equal to the cash surrender value of the life insurance policies.

Bank-owned Life Insurance Fair value is equal to the cash surrender value of the life insurance policies.

Derivatives Fair values are determined using valuation techniques including discounted cash flow analysis on the expected cash flows from each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

Securities sold not yet purchased Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs.

Assets measured at fair value on a non-recurring basis as of June 30, 2023 and December 31, 2022 (in thousands):


	Fair Value Measurement at June 30, 2023 Using
Description	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Losses Recognized During the Six Months Ended June 30
Collateral dependent assets	$	4,510	$	—	$	—	$	4,510	$	(3,403	)
Other real estate owned		—		—		—		—		—
Total	$	4,510	$	—	$	—	$	4,510	$	(3,403	)


	Fair Value Measurement at December 31, 2022 Using
Description	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Losses Recognized During the Twelve Months Ended December 31
Collateral dependent assets	$	4,373	$	—	$	—	$	4,373	$	(2,998	)
Other real estate owned		68		—		—		68		—
Total	$	4,441	$	—	$	—	$	4,441	$	(2,998	)

Valuation methods for instruments measured at fair value on a non-recurring basis

The following methods and assumptions were used to estimate the fair value of each class of financial instruments measured on a non-recurring basis:

Collateral Dependent Assets Collateral dependent assets are assets evaluated as part of the ACL on an individual basis. Those assets for which there is an associated allowance are considered financial assets measured at fair value on a non-recurring basis. Adjustments are recorded on certain assets to reflect write-downs that are based on the external appraised value of the underlying collateral. The external appraisals are generally based on recent sales of comparable properties which are then adjusted for the unique characteristics of the property being valued. In the case of non-real estate collateral, reliance is placed on a variety of sources, including external estimates of value and judgments based on the experience and expertise of internal specialists within the Company’s property management group and the Company’s credit department. The valuations of the collateral dependent assets are

reviewed on a quarterly basis. Because many of these inputs are not observable, the measurements are classified as Level 3.

Other real estate owned Other real estate owned consists of loan collateral which has been repossessed through foreclosure. This collateral is comprised of commercial and residential real estate and other non-real estate property, including auto, recreational and marine vehicles. Other real estate owned is recorded as held for sale initially at the fair value of the collateral less estimated selling costs. The initial valuation of the foreclosed property is obtained through an appraisal process similar to the process described in the impaired loans paragraph above. Subsequent to foreclosure, valuations are reviewed quarterly and updated periodically, and the assets may be marked down further, reflecting a new cost basis. Fair value measurements may be based upon appraisals, third-party price opinions, or internally developed pricing methods and those measurements are classified as Level 3.

Fair value disclosures require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis.

The estimated fair value of the Company’s financial instruments at June 30, 2023 and December 31, 2022 are as follows (in thousands):


	Fair Value Measurement at June 30, 2023 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
FINANCIAL ASSETS
Cash and short-term investments	$	4,121,276	$	3,811,438	$	309,838	$	—	$	4,121,276
Securities available for sale		6,668,615		1,130,480		5,538,135		—		6,668,615
Securities held to maturity (exclusive of allowance for credit losses)		5,810,591		—		5,234,236		—		5,234,236
Trading securities		28,887		819		28,068		—		28,887
Other securities		428,149		10,925		417,224		—		428,149
Loans (exclusive of allowance for credit losses)		22,487,361		—		22,295,499		—		22,295,499
Derivatives		112,241		—		112,241		—		112,241
FINANCIAL LIABILITIES
Demand and savings deposits		30,326,969		30,326,969		—		—		30,326,969
Time deposits		3,193,492		—		3,200,832		—		3,200,832
Other borrowings		3,850,583		73,981		3,776,602		—		3,850,583
Long-term debt		382,280		—		415,254		—		415,254
Derivatives		118,562		—		118,562		—		118,562
OFF-BALANCE SHEET ARRANGEMENTS
Commitments to extend credit for loans										5,429
Commercial letters of credit										54
Standby letters of credit										2,185


	Fair Value Measurement at December 31, 2022 Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
FINANCIAL ASSETS
Cash and short-term investments	$	2,638,384	$	1,686,787	$	951,597	$	—	$	2,638,384
Securities available for sale		7,006,347		1,144,570		5,861,777		—		7,006,347
Securities held to maturity (exclusive of allowance for credit losses)		5,861,599		—		5,280,659		—		5,280,659
Trading securities		17,980		2,384		15,596		—		17,980
Other securities		349,758		10,782		338,976		—		349,758
Loans (exclusive of allowance for credit losses)		21,033,167		—		20,816,899		—		20,816,899
Derivatives		48,121		—		48,121		—		48,121
FINANCIAL LIABILITIES
Demand and savings deposits		31,721,995		31,721,995		—		—		31,721,995
Time deposits		917,138		—		917,138		—		917,138
Other borrowings		2,222,167		62,480		2,159,687		—		2,222,167
Long-term debt		381,311		—		418,737		—		418,737
Derivatives		126,334		—		126,334		—		126,334
OFF-BALANCE SHEET ARRANGEMENTS
Commitments to extend credit for loans										9,260
Commercial letters of credit										185
Standby letters of credit										3,982

Cash and short-term investments The carrying amounts of cash and due from banks, federal funds sold and resell agreements are reasonable estimates of their fair values.

Securities held to maturity For U.S. Agency and mortgage-backed securities, as well as general obligation bonds in the State and political subdivision portfolio, fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Prices are provided by third-party pricing services and are based on observable market inputs. On an annual basis, the Company compares a sample of these prices to other independent sources for the same securities. Variances are analyzed, and, if appropriate, additional research is conducted with the third-party pricing services. Based on this research, the pricing services may affirm or revise their quoted price. No significant adjustments have been made to the prices provided by the pricing services. The pricing services also provide documentation on an ongoing basis that includes reference data, inputs and methodology by asset class, which is reviewed to ensure that security placement within the fair value hierarchy is appropriate. For private placement bonds in the State and political subdivision portfolio, fair values are estimated by discounting the future cash flows using current market rates.

Other securities Amount consists of FRB and FHLB stock held by the Company, equity securities with readily determinable fair values, and equity securities without readily determinable fair values, including equity-method investments and other miscellaneous investments. The carrying amount of the FRB and FHLB stock equals its fair value because the shares can only be redeemed by the FRB and FHLB at their carrying amount. Equity securities with readily determinable fair values are measured at fair value using quoted market prices. Equity securities without readily determinable fair values are carried at cost, which approximates fair value.

Loans Fair values are estimated for portfolios with similar financial characteristics. Loans are segregated by type, such as commercial, real estate, consumer, and credit card. Each loan category is further segmented into fixed and variable interest rate categories. The fair value of loans are estimated by discounting the future cash flows. The discount rates used are estimated using comparable market rates for similar types of instruments adjusted to be commensurate with the credit risk, overhead costs, and optionality of such instruments.

Demand and savings deposits The fair value of demand deposits and savings accounts is the amount payable on demand at June 30, 2023 and December 31, 2022.

Time deposits The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates that are currently offered for deposits of similar remaining maturities.

Other borrowings The carrying amounts of federal funds purchased, repurchase agreements and other short-term debt are reasonable estimates of their fair value because of the short-term nature of their maturities. Federal funds purchased are classified as Level 1 based on availability of quoted market prices and repurchase agreements and other short-term debt are classified as Level 2.

Long-term debt Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.

Other off-balance sheet instruments The fair value of loan commitments and letters of credit are determined based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreement and the present creditworthiness of the counterparties. Neither the fees earned during the year on these instruments nor their fair value at period-end are significant to the Company’s consolidated financial position.