Fair Value Measurements

6 Months Ended

Jun. 30, 2021

FAIR VALUE MEASUREMENTS

The following table summarizes financial instruments 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:


	June 30, 2021
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	99,254	$	—	$	99,254
Obligations of states and political subdivisions	—		480,845		—		480,845
Agency mortgage-backed securities	—		477,379		—		477,379
U.S. Treasury bills	—		11,346		—		11,346
Corporate debt securities	—		15,399		—		15,399
Total securities available for sale	—		1,084,223		—		1,084,223



Derivatives	—		19,809		—		19,809
Total assets	$	—	$	1,104,032	$	—	$	1,104,032

Liabilities
Derivatives	$	—	$	24,225	$	—	$	24,225
Total liabilities	$	—	$	24,225	$	—	$	24,225


	December 31, 2020
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Assets
Securities available for sale
Obligations of U.S. Government-sponsored enterprises	$	—	$	15,161	$	—	$	15,161
Obligations of states and political subdivisions	—		344,232		—		344,232
Residential mortgage-backed securities	—		526,572		—		526,572
Corporate debt securities	—		14,998		—		14,998
U.S. Treasury bills	—		11,466		—		11,466
Total securities available-for-sale	—		912,429		—		912,429



Derivative financial instruments	—		28,703		—		28,703
Total assets	$	—	$	941,132	$	—	$	941,132

Liabilities
Derivatives	$	—	$	34,967	$	—	$	34,967
Total liabilities	$	—	$	34,967	$	—	$	34,967

From time to time, the Company measures certain assets at fair value on a nonrecurring basis. These include assets measured at the lower of cost or fair value that were recognized at fair value below cost at the end of the period. At June 30, 2021, no assets were measured on a nonrecurring basis.

Following is a summary of the carrying amounts and fair values of certain financial instruments:


	June 30, 2021					December 31, 2020
(in thousands)	Carrying Amount		Estimated fair value		Level	Carrying Amount		Estimated fair value		Level
Balance sheet assets




Securities held-to-maturity, net	$	450,665	$	470,099	Level 2	$	487,610	$	501,523	Level 2
Other investments	50,959		50,959		Level 2	48,764		48,764		Level 2
Loans held for sale	5,763		5,763		Level 2	13,564		13,564		Level 2

Loans, net	7,098,082		7,093,710		Level 3	7,088,264		7,067,562		Level 3
State tax credits, held for sale	34,710		38,629		Level 3	36,853		39,925		Level 3


Balance sheet liabilities
Certificates of deposit	$	514,334	$	515,877	Level 3	$	550,095	$	553,946	Level 3
Subordinated debentures and notes	203,940		193,136		Level 2	203,637		192,889		Level 2
FHLB advances	50,000		51,591		Level 2	50,000		51,871		Level 2
Other borrowings and notes payable	234,509		234,509		Level 2	301,081		301,081		Level 2

For information regarding the methods and assumptions used to estimate the fair value of each class of financial instruments refer to Note 19 – Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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