Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis

The Table below presents the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023.

	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
September 30, 2024
Assets:
Investment Securities Available-for-Sale
Debt Securities Issued by the U.S. Treasury and Government    Agencies	$	150,910	$	78,119	$	—	$	229,029
Debt Securities Issued by States and Political Subdivisions		—		65,845		—		65,845
Debt Securities Issued by U.S. Government-Sponsored    Enterprises		—		1,464		—		1,464
Debt Securities Issued by Corporations		—		673,391		—		673,391
Mortgage-Backed Securities:
Residential - Government Agencies		—		648,589		—		648,589
Residential - U.S. Government-Sponsored Enterprises		—		687,820		—		687,820
Commercial - Government Agencies		—		244,186		—		244,186
Total Mortgage-Backed Securities		—		1,580,595		—		1,580,595
Total Investment Securities Available-for-Sale		150,910		2,399,414		—		2,550,324
Loans Held for Sale		—		5,048		—		5,048
Mortgage Servicing Rights		—		—		660		660
Other Assets		19,982		—		—		19,982
Derivatives 1		—		74,256		158		74,414
Total Assets Measured at Fair Value on a    Recurring Basis as of September 30, 2024	$	170,892	$	2,478,718	$	818	$	2,650,428
Liabilities:
Derivatives 1	$	—	$	115,086	$	6	$	115,092
Total Liabilities Measured at Fair Value on a   Recurring Basis as of September 30, 2024	$	—	$	115,086	$	6	$	115,092
December 31, 2023
Assets:
Investment Securities Available-for-Sale
Debt Securities Issued by the U.S. Treasury    and Government Agencies	$	146,214	$	66,359	$	—	$	212,573
Debt Securities Issued by States and Political Subdivisions		—		63,806		—		63,806
Debt Securities Issued by    U.S. Government-Sponsored Enterprises		—		1,476		—		1,476
Debt Securities Issued by Corporations		—		657,701		—		657,701
Mortgage-Backed Securities:
Residential - Government Agencies		—		629,327		—		629,327
Residential - U.S. Government-Sponsored Enterprises		—		709,127		—		709,127
Commercial - Government Agencies or Sponsored Agencies		—		134,923		—		134,923
Total Mortgage-Backed Securities		—		1,473,377		—		1,473,377
Total Investment Securities Available-for-Sale		146,214		2,262,719		—		2,408,933
Loans Held for Sale		—		3,124		—		3,124
Mortgage Servicing Rights		—		—		678		678
Other Assets		13,448		—		—		13,448
Derivatives 1		—		94,921		148		95,069
Total Assets Measured at Fair Value on a    Recurring Basis as of December 31, 2023	$	159,662	$	2,360,764	$	826	$	2,521,252
Liabilities:
Derivatives 1	$	—	$	143,857	$	—	$	143,857
Total Liabilities Measured at Fair Value on a    Recurring Basis as of December 31, 2023	$	—	$	143,857	$	—	$	143,857

1 The fair value of each class of derivatives is shown in Note 11. Derivative Financial Instruments.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

For the three and nine months ended September 30, 2024 and 2023, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(dollars in thousands)	Mortgage Servicing Rights 1			Net Derivative Assets and Liabilities 2
Three Months Ended September 30, 2024
Balance as of July 1, 2024	$	668		$	132
Net Gains/(Losses) Included in Net Income		(8	)		506
Transfers to Loans Held for Sale		—			(486	)
Balance as of September 30, 2024	$	660		$	152
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of September 30, 2024	$	—		$	506
Three Months Ended September 30, 2023
Balance as of July 1, 2023	$	695		$	202
Realized and Unrealized Net Gains (Losses):
Included in Net Income		(10	)		7,878
Transfers to Loans Held for Sale		—			(187	)
Variation Margin Payments		—			376
Balance as of September 30, 2023	$	685		$	8,269
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of September 30, 2023	$	—		$	7,878
Nine Months Ended September 30, 2024
Balance as of January 1, 2024	$	678		$	148
Realized and Unrealized Net Gains (Losses):
Included in Net Income		(18	)		751
Transfers to Loans Held for Sale		—			(747	)
Balance as of September 30, 2024	$	660		$	152
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of September 30, 2024	$	—		$	751
Nine Months Ended September 30, 2023
Balance as of January 1, 2023	$	717		$	(122,071	)
Realized and Unrealized Net Gains (Losses):
Included in Net Income		(32	)		8,772
Transfers to Loans Held for Sale		—			(498	)
Variation Margin Payments		—			122,066
Balance as of September 30, 2023	$	685		$	8,269
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of September 30, 2023	$	—		$	8,772

1 Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of mortgage banking income in the Company’s unaudited consolidated statements of income.

2 Realized and unrealized gains and losses related to IRLCs are reported as a component of mortgage banking income in the Company’s unaudited consolidated statements of income. Realized and unrealized gains and losses related to interest rate swap agreements not designated as hedging

instruments are reported as a component of other noninterest income and interest rate swap agreements designated as hedging instruments are reported in interest

income in the Company’s unaudited consolidated statements of income.

Summary of the Significant Unobservable Inputs

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of September 30, 2024 and December 31, 2023, the significant unobservable inputs used in the fair value measurements were as follows:

(dollars in thousands)	Valuation  Technique	Description	Range					Weighted Average 1			Fair Value
September 30, 2024
Mortgage Servicing Rights	Discounted Cash Flow	Constant Prepayment Rate		3.10	%	-	17.61%		4.20	%	$	25,925
		Discount Rate		8.64	%	-	10.44%		9.28	%
Net Derivative Assets and Liabilities:
Interest Rate Lock Commitments	Pricing Model	Closing Ratio		75.40	%	-	99.00%		91.47	%	$	152
December 31, 2023
Mortgage Servicing Rights	Discounted Cash Flow	Constant Prepayment Rate		2.98	%	-	21.18%		4.06	%	$	26,851
		Discount Rate		7.65	%	-	10.79%		9.48	%
Net Derivative Assets and Liabilities:
Interest Rate Lock Commitments	Pricing Model	Closing Ratio		83.50	%	-	99.00%		85.53	%	$	148

1 Unobservable inputs for mortgage servicing rights and interest rate lock commitments were weighted by loan amount.

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

The Company may be required periodically to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets. The following table represents the assets measured at fair value on a nonrecurring basis as of September 30, 2024 and December 31, 2023.

(dollars in thousands)	Fair Value Hierarchy	Net Carrying Amount		Valuation Allowance
September 30, 2024
Mortgage Servicing Rights - amortization method	Level 3	$	18,911	$	—
December 31, 2023
Mortgage Servicing Rights - amortization method	Level 3	$	20,201	$	—

Schedule of Difference between Aggregate Fair Value and Aggregate Unpaid Principal Balance

The following table reflects the difference between the aggregate fair value and the aggregate unpaid principal balance of the Company’s residential mortgage loans held for sale as of September 30, 2024 and December 31, 2023.

(dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
September 30, 2024
Loans Held for Sale	$	5,048	$	4,980	$	68
December 31, 2023
Loans Held for Sale	$	3,124	$	3,051	$	73

Schedule of Carrying Amount, Fair Value, and Fair Value Hierarchy of Financial Instruments

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments not recorded at fair value on a recurring basis as of September 30, 2024 and December 31, 2023. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For non-marketable equity securities such as Federal Home Loan Bank of Des Moines and Federal Reserve Bank stock, the carrying amount is a reasonable estimate of fair value as these securities can only be redeemed or sold at their par value and only to the respective issuing government supported institution or to another member institution. For financial liabilities such as noninterest-bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

					Fair Value Measurements
	Carrying				Quoted Prices  in Active  Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2024
Financial Instruments - Assets
Investment Securities Held-to-Maturity	$	4,710,245	$	4,072,596	$	119,850	$	3,952,746	$	—
Loans		13,647,538		13,049,917		—		—		13,049,917
Financial Instruments - Liabilities
Time Deposits		3,168,526		3,164,895		—		3,164,895		—
Securities Sold Under Agreements to Repurchase		100,490		103,969		—		103,969		—
Other Debt 1		550,000		559,580		—		559,580		—
December 31, 2023
Financial Instruments – Assets
Investment Securities Held-to-Maturity	$	4,997,335	$	4,253,637	$	116,531	$	4,137,106	$	—
Loans		13,698,701		12,872,260		—		—		12,872,260
Financial Instruments – Liabilities
Time Deposits		3,057,302		3,043,258		—		3,043,258		—
Securities Sold Under Agreements to Repurchase		150,490		155,461		—		155,461		—
Other Debt 1		550,000		541,466		—		541,466		—

1 Excludes finance lease obligations.