Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Summary of Assets Measured on a Recurring Basis

The following table provides the fair value for assets and liabilities required to be measured and reported at fair value on a recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy.


	Recurring Fair Value Measurements at Reporting Date
	March 31, 2023						December 31, 2022
(Dollars in thousands)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3

Assets:
Available-for-sale investment securities:
Obligations of:
U.S. Treasury and government agencies	$	58,438	$	—	$	—	$	152,422	$	—	$	—
U.S. government sponsored agencies	—		98,311		—		—		88,115		—
States and political subdivisions	—		224,996		—		—		225,882		—
Residential mortgage-backed securities	—		605,270		—		—		604,653		—
Commercial mortgage-backed securities	—		52,153		—		—		50,049		—
Bank-issued trust preferred securities	—		10,329		—		—		10,278		—

Total available-for-sale securities	$	58,438	$	991,059	$	—	$	152,422	$	978,977	$	—
Equity investment securities (a)	168		199		—		147		199		—
Derivative assets (b)	—		27,339		—		—		34,123		—
Liabilities:
Derivative liabilities (c)	$	—	$	23,100	$	—	$	—	$	28,529	$	—

(a) Included in "Other investment securities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 3 Investment Securities" of the Notes to the Unaudited Condensed Consolidated Financial Statements.

(b) Included in "Other assets" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 10 Derivative Financial Instruments" of the Notes to the Unaudited Condensed Consolidated Financial Statements.

(c) Included in "Accrued expenses and other liabilities" on the Unaudited Consolidated Balance Sheets. For additional information, see "Note 10 Derivative Financial Instruments" of the Notes to the Unaudited Condensed Consolidated Financial Statements.

Summary of Assets and Liabilities Measured on a Non-Recurring Basis

The following table provides the fair value for each class of assets and liabilities required to be measured and reported at fair value on a non-recurring basis on the Unaudited Consolidated Balance Sheets by level in the fair value hierarchy at March 31, 2023 and December 31, 2022.


	Non-Recurring Fair Value Measurements at Reporting Date
	March 31, 2023				December 31, 2022
(Dollars in thousands)	Level 2		Level 3		Level 2		Level 3

Assets:
Collateral dependent loans	$	—	$	8,860	$	—	$	10,354
Loans held for sale (a)	$	1,251	$	—	$	1,254	$	—
Other real estate owned	$	—	$	—	$	—	$	55

(a) Loans held for sale are presented gross of a valuation allowance of $99 and $105 at March 31, 2023 and at December 31, 2022, respectively.

Summary of Financial Instruments Not Required to be Measured at Fair Value

The following table provides the carrying amount for each class of assets and liabilities and the fair value for certain financial instruments that are not required to be measured or reported at fair value on the Unaudited Consolidated Balance Sheets.


	Fair Value Measurements of Other Financial Instruments
(Dollars in thousands)	Fair Value Hierarchy Level	March 31, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value

Assets:
Cash and cash equivalents	1	$	157,154	$	157,154	$	154,022	$	154,022




Held-to-maturity investment securities:
Obligations of:
U.S. government sponsored agencies	2	194,184		186,446		132,366		123,020
States and political subdivisions (a)	2	145,085		114,192		145,263		108,776
Residential mortgage-backed securities	2	245,294		230,377		176,215		157,998
Commercial mortgage-backed securities	2	105,002		89,919		101,861		85,354
Commercial mortgage-backed securities	3	4,748		3,502		4,748		3,361
Total held-to-maturity securities		694,313		624,436		560,453		478,509


Other investment securities:
Other investment securities at cost:
Federal Home Loan Bank ("FHLB") stock	N/A	27,381		27,381		26,605		26,605
Federal Reserve Bank ("FRB") stock	N/A	21,231		21,231		21,231		21,231
Banker's Bank of Kentucky ("BBKY") stock	N/A	355		355		355		355
Total other investment securities at cost		48,967		48,967		48,191		48,191
Other investment securities at fair value:
Nonqualified deferred compensation (b)	1	2,405		2,405		2,048		2,048
Other investment securities (c)	2	1,024		1,024		1,024		1,024
Total other investment securities		52,396		52,396		51,263		51,263

Loans and leases, net of deferred fees and costs (d)	3	4,759,718		4,522,720		4,707,150		4,516,695
Bank owned life insurance	2	105,999		105,999		105,292		105,292
Liabilities:
Deposits	2	$	5,788,527	$	4,924,296	$	5,716,941	$	4,682,491
Short-term borrowings	2	490,670		496,786		500,138		504,584
Long-term borrowings	2	95,629		96,822		101,093		101,992

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $241 at both March 31, 2023 and December 31, 2022.

(b) Nonqualified deferred compensation includes mutual funds as part of the investment.

(c) "Other investment securities", as reported on the Unaudited Consolidated Balance Sheets, also included equity investment securities at March 31, 2023

and at December 31, 2022, which are reported in the Assets and Liabilities Required to be Measured and Reported at Fair Value on a Recurring Basis

table above and not included in this table.

(d) Loans and leases, net of deferred fees and costs, are presented gross of an allowance for credit losses of $53.3 million and $53.2 million at March 31, 2023 and at December 31, 2022, respectively.