FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

Summary of assets measured at fair value on a recurring basis

March 31, 2023	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	157,020	$	—	$	—	$	157,020
U.S. government agency		—		53,698		—		53,698
Municipal		—		248,884		—		248,884
Mortgage-backed:
Agency residential		—		201,976		—		201,976
Agency commercial		—		135,009		—		135,009
Corporate		—		58,035		—		58,035
Equity securities with readily determinable fair values		3,145		—		—		3,145
Mortgage servicing rights		—		—		19,992		19,992
Derivative financial assets		—		7,584		—		7,584
Derivative financial liabilities		—		7,089		—		7,089

December 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	154,515	$	—	$	—	$	154,515
U.S. government agency		—		55,157		—		55,157
Municipal		—		243,829		—		243,829
Mortgage-backed:
Agency residential		—		195,441		—		195,441
Agency commercial		—		132,888		—		132,888
Corporate		—		61,694		—		61,694
Equity securities with readily determinable fair values		3,029		—		—		3,029
Mortgage servicing rights		—		—		10,147		10,147
Derivative financial assets		—		7,610		—		7,610
Derivative financial liabilities		—		6,981		—		6,981

Schedule of quantitative information about the unobservable inputs used in recurring Level 3 fair value measurements

The following tables present additional information about the unobservable inputs used in the fair value measurement of the mortgage servicing rights (dollars in thousands):

March 31, 2023	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	19,992	Discounted cash flows	Constant pre-payment rates (CPR)	6.5% to 59.7% (8.2%)
				Discount rate	9.0% to 11.5% (9.5%)
December 31, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	10,147	Discounted cash flows	Constant pre-payment rates (CPR)	5.3% to 59.7% (8.2%)
				Discount rate	9.0% to 11.7% (9.3%)

Summary of assets measured at fair value on a nonrecurring basis

March 31, 2023	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	5,130	$	—	$	5,130
Collateral-dependent loans		—		—		44,138		44,138
Bank premises held for sale		—		—		235		235
Foreclosed assets		—		—		3,356		3,356

December 31, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	615	$	—	$	615
Collateral-dependent loans		—		—		17,460		17,460
Bank premises held for sale		—		—		235		235
Foreclosed assets		—		—		3,030		3,030

Schedule of quantitative information about the unobservable inputs used in non-recurring Level 3 fair value measurements

The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands):

March 31, 2023	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent loans	$	44,138	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		235	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,356	Appraisal	Appraisal adjustments	7% (7%)
December 31, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent loans	$	17,460	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		235	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,030	Appraisal	Appraisal adjustments	7% (7%)

Summary information on the carrying amounts and estimated fair values of the Company's financial instruments

	Fair Value	March 31, 2023				December 31, 2022
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value
			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	177,112	$	177,112	$	114,159	$	114,159
Debt securities held-to-maturity	Level 2		536,429		481,925		541,600		478,801
Restricted stock	Level 3		4,991		4,991		7,965		7,965
Loans, net	Level 3		3,156,764		3,105,661		2,594,920		2,566,930
Investments in unconsolidated subsidiaries	Level 3		1,614		1,614		1,165		1,165
Accrued interest receivable	Level 2		20,301		20,301		19,506		19,506
Financial liabilities:
Time deposits	Level 3		420,372		409,454		262,968		253,619
Securities sold under agreements to repurchase	Level 2		34,919		34,919		43,081		43,081
Subordinated notes	Level 3		39,415		36,863		39,395		37,205
Junior subordinated debentures	Level 3		52,746		50,720		37,780		37,030
Accrued interest payable	Level 2		1,402		1,402		1,363		1,363