Fair Value Measurements

3 Months Ended

Mar. 31, 2022

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:


	March 31, 2022
(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	$	—	$	235,584	$	—	$	235,584
Obligations of states and political subdivisions	—		449,358		—		449,358
Agency mortgage-backed securities	—		580,196		—		580,196
U.S. Treasury bills	—		115,581		—		115,581
Corporate debt securities	—		11,725		—		11,725
Total securities available for sale	—		1,392,444		—		1,392,444

Other investments	—		2,843		—		2,843

Derivatives	—		7,771		—		7,771
Total assets	$	—	$	1,403,058	$	—	$	1,403,058

Liabilities
Derivatives	$	—	$	7,990	$	—	$	7,990
Total liabilities	$	—	$	7,990	$	—	$	7,990


	December 31, 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	$	—	$	173,511	$	—	$	173,511
Obligations of states and political subdivisions	—		575,084		—		575,084
Residential mortgage-backed securities	—		513,859		—		513,859
Corporate debt securities	—		12,382		—		12,382
U.S. Treasury bills	—		91,170		—		91,170
Total securities available-for-sale	—		1,366,006		—		1,366,006

Other investments	—		3,012		—		3,012

Derivative financial instruments	—		12,869		—		12,869
Total assets	$	—	$	1,381,887	$	—	$	1,381,887

Liabilities
Derivatives	$	—	$	15,794	$	—	$	15,794
Total liabilities	$	—	$	15,794	$	—	$	15,794

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. The amounts reported in the following tables include balances measured at fair value during the reporting period and still held as of the reporting date.




	March 31, 2022
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Nonaccrual loans	$	3,591	$	—	$	—	$	3,591
Other real estate	674		—		—		674
Loan servicing asset	3,005		—		3,005		—
Total	$	7,270	$	—	$	3,005	$	4,265


	December 31, 2021
(in thousands)	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Nonaccrual loans	$	6,406	$	—	$	—	$	6,406
Other real estate	632		—		—		632
Loan servicing asset	3,146				3,146		—
Total	$	10,184	$	—	$	3,146	$	7,038

The following table presents the gains (losses) recorded in relation to assets measured on a nonrecurring basis and still held as of the reporting date.




	Three months ended
(in thousands)	March 31, 2022
Nonaccrual loans	$	(1,781)
Other real estate	(121)
Loan servicing asset	156
Total	$	(1,746)

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


	March 31, 2022					December 31, 2021
(in thousands)	Carrying Amount		Estimated fair value		Level	Carrying Amount		Estimated fair value		Level
Balance sheet assets




Securities held-to-maturity, net	$	541,039	$	493,342	Level 2	$	429,681	$	434,672	Level 2
Other investments	57,601		57,601		Level 2	56,884		56,884		Level 2
Loans held for sale	4,270		4,270		Level 2	6,389		6,389		Level 2

Loans, net	8,916,861		8,908,849		Level 3	8,872,601		8,869,891		Level 3
State tax credits, held for sale	34,954		34,212		Level 3	27,994		30,686		Level 3

Servicing asset	6,066		6,066		Level 2	6,714		6,714		Level 2

Balance sheet liabilities
Certificates of deposit	$	597,475	$	587,009	Level 3	$	608,293	$	606,177	Level 3
Subordinated debentures and notes	155,031		155,408		Level 2	154,899		155,972		Level 2
FHLB advances	50,000		48,627		Level 2	50,000		51,527		Level 2
Other borrowings and notes payable	228,846		228,846		Level 2	353,863		353,863		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, 2021, 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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