FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2021

FAIR VALUE

Schedule of Assets Measured at Fair Value on a Recurring Basis

The table below presents the balances of assets measured at fair value on a recurring basis:

	March 31, 2021
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets:
U.S. Treasury securities	$	900	$	0	$	0	$	900
U.S. government sponsored agency securities		0		34,890		0		34,890
Mortgage-backed securities: residential		0		347,332		0		347,332
Mortgage-backed securities: commercial		0		35,918		0		35,918
State and municipal securities		0		421,249		140		421,389
Total Securities		900		839,389		140		840,429
Mortgage banking derivative		0		1,217		0		1,217
Interest rate swap derivative		0		18,194		0		18,194
Total assets	$	900	$	858,800	$	140	$	859,840
Liabilities:
Mortgage banking derivative		0		4		0		4
Interest rate swap derivative		0		18,206		0		18,206
Total liabilities	$	0	$	18,210	$	0	$	18,210

	December 31, 2020
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets:
U.S. government sponsored agency securities	$	0	$	36,487	$	0	$	36,487
Mortgage-backed securities: residential		0		279,503		0		279,503
Mortgage-backed securities: commercial		0		36,881		0		36,881
State and municipal securities		0		381,834		140		381,974
Total Securities		0		734,705		140		734,845
Mortgage banking derivative		0		1,182		0		1,182
Interest rate swap derivative		0		21,764		0		21,764
Total assets	$	0	$	757,651	$	140	$	757,791
Liabilities:
Mortgage banking derivative		0		111		0		111
Interest rate swap derivative		0		21,794		0		21,794
Total liabilities	$	0	$	21,905	$	0	$	21,905

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

The fair value of Level 3 available-for-sale securities was immaterial and thus did not require additional recurring fair value disclosure.

The table below presents the balances of assets measured at fair value on a nonrecurring basis:

	March 31, 2021
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets
Collateral dependent loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	133	$	133
Non-working capital loans		0		0		4,331		4,331
Commercial real estate and multi-family residential loans:
Owner occupied loans		0		0		710		710
Agri-business and agricultural loans:
Loans secured by farmland		0		0		43		43
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		0		0		322		322
Total collateral dependent loans	$	0	$	0	$	5,539	$	5,539
Other real estate owned		0		0		0		0
Total assets	$	0	$	0	$	5,539	$	5,539

	December 31, 2020
	Fair Value Measurements Using						Assets
(dollars in thousands)	Level 1		Level 2		Level 3		at Fair Value
Assets
Collateral dependent loans:
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	0	$	178	$	178
Non-working capital loans		0		0		4,904		4,904
Commercial real estate and multi-family residential loans:
Owner occupied loans		0		0		1,211		1,211
Agri-business and agricultural loans:
Loans secured by farmland		0		0		61		61
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		0		0		411		411
Total collateral dependent loans	$	0	$	0	$	6,765	$	6,765
Other real estate owned		0		0		0		0
Total assets	$	0	$	0	$	6,765	$	6,765

Schedule of Fair Value Measured on Nonrecurring Basis Valuation Techniques

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at March 31, 2021:

(dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Collateral dependent loans:
Commercial and industrial	$	4,464	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	61	%	22%-100%
Collateral dependent loans:
Commercial real estate		710	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	67	%	25%-73%
Collateral dependent loans:
Agribusiness and agricultural		43	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	70	%
Collateral dependent loans:
Consumer 1-4 family mortgage		322	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	9	%

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2020:

(dollars in thousands)	Fair Value		Valuation Methodology	Unobservable Inputs	Average		Range of Inputs
Collateral dependent loans:
Commercial and industrial	$	5,082	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	55	%	16%-100%
Collateral dependent loans:
Commercial real estate		1,211	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	53	%	21%-74%
Collateral dependent loans:
Agribusiness and agricultural		61	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	58	%
Collateral dependent loans:
Consumer 1-4 family mortgage		411	Collateral based measurements	Discount to reflect current market conditions and ultimate collectability	11	%	10%-15%

Collateral dependent loans had a gross carrying amount of $19.6 million, with a valuation allowance of $8.5 million at March 31, 2021. The change in the fair value of collateral dependent loans resulted in increases in the provision for credit losses of $815,000 during the three months ended March 31, 2021. At March 31, 2020, collateral dependent loans had a gross carrying amount of $17.4 million, with a valuation allowance of $7.4 million. The change in the fair value of collateral dependent loans resulted in increases in the provision for credit losses of $142,000 during the three months ended March 31, 2020.

Schedule of Fair Values and the Related Carrying Values of Financial Instruments

The following table contains the estimated fair values and the related carrying values of the Company’s financial instruments. Items which are not financial instruments are not included.

	March 31, 2021
	Carrying		Estimated Fair Value
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	501,945	$	499,989	$	1,956	$	0	$	501,945
Securities available-for-sale		840,429		900		839,389		140		840,429
Real estate mortgages held-for-sale		19,092		0		19,755		0		19,755
Loans, net		4,402,787		0		0		4,355,296		4,355,296
Mortgage banking derivative		1,217		0		1,217		0		1,217
Interest rate swap derivative		18,194		0		18,194		0		18,194
Federal Reserve and Federal Home Loan Bank Stock		13,772		N/A		N/A		N/A		N/A
Accrued interest receivable		19,355		0		4,420		14,935		19,355
Financial Liabilities:
Certificates of deposit		(1,006,879)		0		(1,014,233)		0		(1,014,233)
All other deposits		(4,223,091)		(4,223,091)		0		0		(4,223,091)
Federal Home Loan Bank advances		(75,000)		0		(65,349)		0		(65,349)
Mortgage banking derivative		(4)		0		(4)		0		(4)
Interest rate swap derivative		(18,206)		0		(18,206)		0		(18,206)
Standby letters of credit		(484)		0		0		(484)		(484)
Accrued interest payable		(4,283)		(71)		(4,212)		0		(4,283)

	December 31, 2020
	Carrying		Estimated Fair Value
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	249,927	$	247,228	$	2,699	$	0	$	249,927
Securities available-for-sale		734,845		0		734,705		140		734,845
Real estate mortgages held-for-sale		11,218		0		11,651		0		11,651
Loans, net		4,587,748		0		0		4,532,639		4,532,639
Mortgage banking derivative		1,182		0		1,182		0		1,182
Interest rate swap derivative		21,764		0		21,764		0		21,764
Federal Reserve and Federal Home Loan Bank Stock		13,772		N/A		N/A		N/A		N/A
Accrued interest receivable		18,761		0		3,801		14,960		18,761
Financial Liabilities:
Certificates of deposit		(1,024,819)		0		(1,033,095)		0		(1,033,095)
All other deposits		(4,011,986)		(4,011,986)		0		0		(4,011,986)
Miscellaneous borrowings		(10,500)		0		(10,500)		0		(10,500)
Federal Home Loan Bank advances		(75,000)		0		(68,967)		0		(68,967)
Mortgage banking derivative		(111)		0		(111)		0		(111)
Interest rate swap derivative		(21,794)		0		(21,794)		0		(21,794)
Standby letters of credit		(686)		0		0		(686)		(686)
Accrued interest payable		(5,959)		(66)		(5,893)		0		(5,959)