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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2023
Fair value measurements  
Schedule of differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount
The following table shows the differences between the fair value carrying amount of mortgages held for sale measured at fair value and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity.
(Dollars in thousands)Fair value 
carrying
amount
Aggregate
unpaid principal
Excess of fair value carrying amount over (under) unpaid principal 
September 30, 2023    
Mortgages held for sale reported at fair value$3,118 $2,863 $255 (1)
December 31, 2022    
Mortgages held for sale reported at fair value$3,914 $3,766 $148 (1)
(1)The excess of fair value carrying amount over (under) unpaid principal is included in mortgage banking income and includes changes in fair value at and subsequent to funding and gains and losses on the related loan commitment prior to funding.
Schedule of assets and liabilities measured at fair value on a recurring basis
The following table shows the balance of assets and liabilities measured at fair value on a recurring basis.
(Dollars in thousands)Level 1Level 2Level 3Total
September 30, 2023    
Assets:    
Investment securities available-for-sale:    
U.S. Treasury and Federal agencies securities$539,836 $407,126 $— $946,962 
U.S. States and political subdivisions securities— 92,846 4,138 96,984 
Mortgage-backed securities — Federal agencies— 552,463 — 552,463 
Corporate debt securities— 8,251 — 8,251 
Foreign government and other securities— 582 — 582 
Total debt securities available-for-sale539,836 1,061,268 4,138 1,605,242 
Mortgages held for sale— 3,118 — 3,118 
Accrued income and other assets (interest rate swap agreements)— 27,021 — 27,021 
Total$539,836 $1,091,407 $4,138 $1,635,381 
Liabilities:    
Accrued expenses and other liabilities (interest rate swap agreements)$— $27,531 $— $27,531 
Total$— $27,531 $— $27,531 
December 31, 2022    
Assets:    
Investment securities available-for-sale:    
U.S. Treasury and Federal agencies securities$573,679 $424,919 $— $998,598 
U.S. States and political subdivisions securities— 121,298 1,464 122,762 
Mortgage-backed securities — Federal agencies— 637,058 — 637,058 
Corporate debt securities— 16,131 — 16,131 
Foreign government and other securities— 579 — 579 
Total debt securities available-for-sale573,679 1,199,985 1,464 1,775,128 
Mortgages held for sale— 3,914 — 3,914 
Accrued income and other assets (interest rate swap agreements)— 24,838 — 24,838 
Total$573,679 $1,228,737 $1,464 $1,803,880 
Liabilities:    
Accrued expenses and other liabilities (interest rate swap agreements)$— $25,307 $— $25,307 
Total$— $25,307 $— $25,307 
Schedule of changes in investment securities available-for-sale Level 3 assets measured at fair value on a recurring basis
The following table shows changes in Level 3 assets measured at fair value on a recurring basis for the quarter ended September 30, 2023 and 2022.
(Dollars in thousands)U.S. States and
political
subdivisions
securities
Beginning balance July 1, 2023$4,249 
Total gains or losses (realized/unrealized): 
Included in earnings— 
Included in other comprehensive income (loss)(26)
Purchases— 
Issuances— 
Sales— 
Settlements— 
Maturities(85)
Transfers into Level 3— 
Transfers out of Level 3— 
Ending balance September 30, 2023$4,138 
Beginning balance July 1, 2022$4,515 
Total gains or losses (realized/unrealized): 
Included in earnings— 
Included in other comprehensive income (loss)(32)
Purchases— 
Issuances— 
Sales— 
Settlements— 
Maturities(85)
Transfers into Level 3— 
Transfers out of Level 3— 
Ending balance September 30, 2022$4,398 
Schedule of carrying value of assets measured at fair value on a non-recurring basis
The following table shows the carrying value of assets measured at fair value on a non-recurring basis.
(Dollars in thousands)Level 1Level 2Level 3Total
September 30, 2023    
Collateral-dependent impaired loans$— $— $— $— 
Accrued income and other assets (mortgage servicing rights)— — 3,776 3,776 
Accrued income and other assets (repossessions)— — 233 233 
Accrued income and other assets (other real estate)— — 117 117 
Total$— $— $4,126 $4,126 
December 31, 2022    
Collateral-dependent impaired loans$— $— $— $— 
Accrued income and other assets (mortgage servicing rights)— — 4,137 4,137 
Accrued income and other assets (repossessions)— — 327 327 
Accrued income and other assets (other real estate)— — 104 104 
Total$— $— $4,568 $4,568 
Schedule of fair values of financial instruments
The following table shows the fair values of the Company’s financial instruments.
(Dollars in thousands)Carrying or Contract ValueFair ValueLevel 1Level 2Level 3
September 30, 2023     
Assets:     
Cash and due from banks$75,729 $75,729 $75,729 $— $— 
Federal funds sold and interest bearing deposits with other banks35,406 35,406 35,406 — — 
Investment securities, available-for-sale1,605,242 1,605,242 539,836 1,061,268 4,138 
Other investments25,075 25,075 25,075 — — 
Mortgages held for sale3,118 3,118 — 3,118 — 
Loans and leases, net of allowance for loan and lease losses6,209,574 5,980,435 — — 5,980,435 
Mortgage servicing rights3,776 8,029 — — 8,029 
Accrued interest receivable28,120 28,120 — 28,120 — 
Interest rate swaps27,021 27,021 — 27,021 — 
Liabilities:     
Deposits$6,967,492 $6,954,179 $5,278,426 $1,675,753 $— 
Short-term borrowings272,092 272,092 48,505 223,587 — 
Long-term debt and mandatorily redeemable securities46,533 45,386 — 45,386 — 
Subordinated notes58,764 50,889 — 50,889 — 
Accrued interest payable29,030 29,030 — 29,030 — 
Interest rate swaps27,531 27,531 — 27,531 — 
Off-balance-sheet instruments *— 144 — 144 — 
December 31, 2022     
Assets:     
Cash and due from banks$84,703 $84,703 $84,703 $— $— 
Federal funds sold and interest bearing deposits with other banks38,094 38,094 38,094 — — 
Investment securities, available-for-sale1,775,128 1,775,128 573,679 1,199,985 1,464 
Other investments25,293 25,293 25,293 — — 
Mortgages held for sale3,914 3,914 — 3,914 — 
Loans and leases, net of allowance for loan and lease losses5,871,894 5,712,972 — — 5,712,972 
Mortgage servicing rights4,137 8,007 — — 8,007 
Accrued interest receivable24,747 24,747 — 24,747 — 
Interest rate swaps24,838 24,838 — 24,838 — 
Liabilities:     
Deposits$6,928,265 $6,909,392 $5,787,806 $1,121,586 $— 
Short-term borrowings215,529 215,529 139,079 76,450 — 
Long-term debt and mandatorily redeemable securities46,555 45,111 — 45,111 — 
Subordinated notes58,764 51,398 — 51,398 — 
Accrued interest payable5,999 5,999 — 5,999 — 
Interest rate swaps25,307 25,307 — 25,307 — 
Off-balance-sheet instruments *— 108 — 108 — 
* Represents estimated cash outflows required to currently settle the obligations at current market rates.
Recurring  
Fair value measurements  
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis
The following table shows the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a recurring basis.
(Dollars in thousands)Fair ValueValuation MethodologyUnobservable InputsRange of InputsWeighted Average
September 30, 2023    
Debt securities available-for sale    
Direct placement municipal securities
$4,138 Discounted cash flowsCredit spread assumption
4.87% - 6.82%
6.37 %
December 31, 2022    
Debt securities available-for sale
    
Direct placement municipal securities
$1,464 Discounted cash flowsCredit spread assumption
0.22% - 4.09%
3.49 %
Non-recurring  
Fair value measurements  
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring and non-recurring basis
The following table below shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a non-recurring basis.
(Dollars in thousands)Carrying ValueFair ValueValuation MethodologyUnobservable InputsRange of InputsWeighted Average
September 30, 2023     
Collateral-dependent impaired loans$— $— Collateral based measurements including appraisals, trade publications, and auction valuesDiscount for lack of marketability and current conditions
0% - 0%
0.0 %
Mortgage servicing rights3,776 8,029 Discounted cash flowsConstant prepayment rate (CPR)
5.4% - 14.6%
7.8 %
    Discount rate
11.8% - 13.8%
11.9 %
Repossessions233 234 Appraisals, trade publications and auction valuesDiscount for lack of marketability
0% - 4%
%
Other real estate117 117 AppraisalsDiscount for lack of marketability
0% - 0%
%
December 31, 2022     
Collateral-dependent impaired loans$— $— Collateral based measurements including appraisals, trade publications, and auction valuesDiscount for lack of marketability and current conditions
0% - 0%
0.0 %
Mortgage servicing rights4,137 8,007 Discounted cash flowsConstant prepayment rate (CPR)
7.6% - 9.6%
8.2 %
    Discount rate
11.4% - 14.2%
11.5 %
Repossessions327 370 Appraisals, trade publications and auction valuesDiscount for lack of marketability
2% - 9%
%
Other real estate104 104 AppraisalsDiscount for lack of marketability
0% - 0%
%