Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 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
	June 30, 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	$	75,255	$	—	$	—	$	152,422	$	—	$	—
U.S. government sponsored agencies	—		98,324		—		—		88,115		—
States and political subdivisions	—		248,271		—		—		225,882		—
Residential mortgage-backed securities	—		635,487		—		—		604,653		—
Commercial mortgage-backed securities	—		52,830		—		—		50,049		—
Bank-issued trust preferred securities	—		21,430		1,842		—		10,278		—

Total available-for-sale securities	$	75,255	$	1,056,342	$	1,842	$	152,422	$	978,977	$	—
Equity investment securities (a)	175		200		—		147		199		—
Derivative assets (b)	—		30,903		—		—		34,123		—
Liabilities:
Derivative liabilities (c)	$	—	$	25,591	$	—	$	—	$	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 June 30, 2023 and December 31, 2022.


	Non-Recurring Fair Value Measurements at Reporting Date
	June 30, 2023				December 31, 2022
(Dollars in thousands)	Level 2		Level 3		Level 2		Level 3

Assets:
Collateral dependent loans	$	—	$	6,561	$	—	$	10,354
Loans held for sale (a)	$	1,587	$	—	$	1,254	$	—
Other real estate owned	$	—	$	7,118	$	—	$	55

(a) Loans held for sale are presented gross of a valuation allowance of $138 and $105 at June 30, 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	June 30, 2023				December 31, 2022
		Carrying Amount		Fair Value		Carrying Amount		Fair Value

Assets:
Cash and cash equivalents	1	$	148,482	$	148,482	$	154,022	$	154,022




Held-to-maturity investment securities:
Obligations of:
U.S. government sponsored agencies	2	176,027		166,234		132,366		123,020
States and political subdivisions (a)	2	144,909		113,042		145,263		108,776
Residential mortgage-backed securities	2	243,807		223,955		176,215		157,998
Commercial mortgage-backed securities	2	104,675		87,870		101,861		85,354
Commercial mortgage-backed securities	3	4,748		3,408		4,748		3,361
Total held-to-maturity securities		674,166		594,509		560,453		478,509


Other investment securities:
Other investment securities at cost:
Federal Home Loan Bank ("FHLB") stock	N/A	31,564		31,564		26,605		26,605
Federal Reserve Bank ("FRB") stock	N/A	26,511		26,511		21,231		21,231
Banker's Bank of Kentucky ("BBKY") stock	N/A	355		355		355		355
Total other investment securities at cost		58,430		58,430		48,191		48,191
Other investment securities at fair value:
Nonqualified deferred compensation (b)	1	2,660		2,660		2,048		2,048
Other investment securities (c)	2	2,114		2,114		1,024		1,024
Total other investment securities		63,204		63,204		51,263		51,263

Loans and leases, net of deferred fees and costs (d)	3	5,974,596		5,715,455		4,707,150		4,516,695
Bank owned life insurance	2	138,181		138,181		105,292		105,292
Liabilities:
Deposits	2	$	6,959,869	$	5,972,977	$	5,716,941	$	4,682,491
Short-term borrowings	2	569,935		582,893		500,138		504,584
Long-term borrowings	2	123,579		126,390		101,093		101,992

(a) Held-to-maturity investment securities are presented gross of an allowance for credit losses of $241 at both June 30, 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 June 30, 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 $61.2 million and $53.2 million at June 30, 2023 and at December 31, 2022, respectively.