Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at June 30, 2020 and December 31, 2019. There were no transfers between Level 1 and Level 2 for items measured at fair value on a recurring basis during the periods presented.


	June 30, 2020
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	—	$	10,355	$	—	$	10,355
Obligations of U.S. government corporations and agencies	—		163,703		—		163,703
Collateralized mortgage obligations of U.S. government corporations and agencies	—		181,162		—		181,162
Residential mortgage-backed securities of U.S. government corporations and agencies	—		19,768		—		19,768
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		284,550		—		284,550
Corporate obligations	—		5,038		—		5,038
Obligations of states and political subdivisions	—		137,127		—		137,127
Total Available-for-sale Debt Securities	—		801,703		—		801,703
Marketable equity securities	2,602		61		—		2,663
Total Securities	2,602		801,764		—		804,366
Securities held in a deferred compensation plan	5,489		—		—		5,489
Derivative financial assets:
Interest rate swaps	—		94,371		—		94,371
Interest rate lock commitments	—		2,583		—		2,583

Total Assets	$	8,091	$	898,718	$	—	$	906,809
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	94,286	$	—	$	94,286
Forward sale contracts	—		594		—		594
Total Liabilities	$	—	$	94,880	$	—	$	94,880


	December 31, 2019
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	—	$	10,040	$	—	$	10,040
Obligations of U.S. government corporations and agencies	—		157,697		—		157,697
Collateralized mortgage obligations of U.S. government corporations and agencies	—		189,348		—		189,348
Residential mortgage-backed securities of U.S. government corporations and agencies	—		22,418		—		22,418
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		275,870		—		275,870
Corporate Bonds	—		7,627		—		7,627
Obligations of states and political subdivisions	—		116,133		—		116,133
Total Available-for-Sale Debt Securities	—		779,133		—		779,133
Marketable equity securities	5,078		72		—		5,150
Total Securities	5,078		779,205		—		784,283
Securities held in a deferred compensation plan	5,987		—		—		5,987
Derivative financial assets:
Interest rate swaps	—		25,647		—		25,647
Interest rate lock commitments	—		321		—		321
Forward sale contracts	—		1		—		1
Total Assets	$	11,065	$	805,174	$	—	$	816,239
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	25,615	$	—	$	25,615

Total Liabilities	$	—	$25,615		$—		$25,615

Schedule of Assets Measured at Fair Value on Nonrecurring Basis by Significant Unobservable Inputs

For Level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:


	June 30, 2020		Valuation Technique		Significant Unobservable Inputs	Range					Weighted Average ^{(1) (2) (3)}
(dollars in thousands)
Loans held for investment	$	61,068	Collateral method		Costs to sell	0%	-	17%	6.81%
				Discounted cash flow method		Discount rate		3.25%				3.25%
Other real estate owned	2,413		Collateral method		Costs to sell	0%	-	7.00%	4.52%
Mortgage servicing rights	$	4,278	Discounted cash flow method		Discount rate	9.33%	-	12.55%	9.44%
						Constant prepayment rates		7.59%	-	13.58%	12.95%
Total Assets	$	67,759

Schedule of Carrying Values and Fair Values of Financial Instruments

The carrying values and fair values of our financial instruments at June 30, 2020 and December 31, 2019 are presented in the following tables:


	Carrying Value⁽¹⁾		Fair Value Measurements at June 30, 2020
(dollars in thousands)					Total			Level 1			Level 2			Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	351,365	$	351,365		$	351,365		$	—		$	—
Securities	804,366		804,366			2,602			801,764			—
Loans held for sale	14,259		14,072			—			—			14,072
Portfolio loans, net	7,433,949		7,422,797			—			—			7,422,797
Bank owned life insurance	81,443		81,443			—			81,443			—
FHLB and other restricted stock	15,151		15,151			—			—			15,151
Collateral receivable	91,736		91,736			91,736			—			—
Securities held in a deferred compensation plan	5,489		5,489			5,489			—			—
Mortgage servicing rights	4,279		4,279			—			—			4,279
Interest rate swaps	94,371		94,371			—			94,371			—
Interest rate lock commitments	2,583		2,583			—			2,583			—

LIABILITIES
Deposits	$	7,867,916	$	7,874,298		$	6,344,076		$	1,530,222		$	—
Securities sold under repurchase agreements	92,159		92,159			92,159			—			—
Short-term borrowings	84,541		84,541			84,541			—			—
Long-term borrowings	49,489		50,538			4,585			45,953			—
Junior subordinated debt securities	64,053		64,053			64,053			—			—
Interest rate swaps	94,286		94,286			—			94,286			—
Forward sales contracts	594		594			—			594			—
⁽¹⁾ As reported in the Consolidated Balance Sheets


	Carrying Value⁽¹⁾		Fair Value Measurements at December 31, 2019
(dollars in thousands)					Total			Level 1			Level 2			Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	197,823	$	197,823		$	197,823		$	—		$	—
Securities	784,283		784,283			5,078			779,205			—
Loans held for sale	5,256		5,256			—			—			5,256
Portfolio loans, net	7,074,928		6,940,875			—			—			6,940,875
Bank owned life insurance	80,473		80,473			—			80,473			—
FHLB and other restricted stock	22,977		22,977			—			—			22,977
Securities held in a Deferred Compensation Plan	5,987		5,987			5,987			—			—
Mortgage servicing rights	4,662		4,650			—			—			4,650
Interest rate swaps	25,647		25,647			—			25,647			—
Interest rate lock commitments	321		321			—			321			—
Forward sale contracts	1		1			—			1			—
LIABILITIES
Deposits	$	7,036,576	$	7,034,595		$	5,441,143		$	1,593,452		$	—
Securities sold under repurchase agreements	19,888		19,888			19,888			—			—
Short-term borrowings	281,319		281,319			281,319			—			—
Long-term borrowings	50,868		51,339			4,678			46,661			—
Junior subordinated debt securities	64,277		64,277			64,277			—			—
Interest rate swaps	25,615		25,615			—			25,615			—

⁽¹⁾ As reported in the Consolidated Balance Sheets