XML 30 R19.htm IDEA: XBRL DOCUMENT
v3.23.3

FAIR VALUE MEASUREMENTS | 9 Months Ended
--- | ---
Sep. 30, 2023
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | ​ ​ 10. FAIR VALUE MEASUREMENTS The Company follows ASC 820, Fair Value Measurement to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. ASC 820 clarifies that fair value of certain assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants. ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. The three levels of the fair value hierarchy under ASC 820 based on these two types of inputs are as follows: Level 1 Valuation is based on quoted prices in active markets for identical assets and liabilities. Level 2 Valuation is based on observable inputs including quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in less active markets, and model-based valuation techniques for which significant assumptions can be derived primarily from or corroborated by observable data in the markets. Level 3 Valuation is based on model-based techniques that use one or more significant inputs or assumptions that are unobservable in the market. These unobservable inputs reflect the Company’s assumptions about what market participants would use and information that is reasonably available under the circumstances without undue cost and effort. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following describes the valuation techniques used by the Company to measure certain financial assets and liabilities recorded at fair value on a recurring basis in the financial statements. Derivative Instruments As discussed in Note 8 “Derivatives” within this Item 1 of this Quarterly Report, the Company records derivative instruments at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company’s interest-bearing assets and liabilities, as well as to manage the Company’s exposure to credit risk related to borrower’s performance under interest rate derivatives. The Company has contracted with a third-party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. Third-party valuations are validated by the Company using the Bloomberg Valuation Service’s derivative pricing functions. No significant differences were identified during the validation as of September 30, 2023 and December 31, 2022. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities. AFS Securities AFS securities are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, when available (Level 1). If quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable market data (Level 2). If the inputs used to provide the evaluation for certain securities are unobservable and/or there is little, if any, market activity, then the security would fall to the lowest level of the hierarchy (Level 3). The Company’s investment portfolio is primarily valued using fair value measurements that are considered to be Level 2. The Company has contracted with a third-party portfolio accounting service vendor for valuation of its securities portfolio. The vendor’s primary source for security valuation is ICE, which evaluates securities based on market data. ICE utilizes evaluated pricing models that vary by asset class and include available trade, bid, and other market information. Generally, the methodology includes broker quotes, proprietary models, vast descriptive terms and conditions databases, as well as extensive quality control programs. The vendor utilizes proprietary valuation matrices for valuing all municipals securities. The initial curves for determining the price, movement, and yield relationships within the municipal matrices are derived from industry benchmark curves or sourced from a municipal trading desk. The securities are further broken down according to issuer, credit support, state of issuance, and rating to incorporate additional spreads to the industry benchmark curves. The Company primarily uses the Bloomberg Valuation Service, an independent information source that draws on quantitative models and market data contributed from over 4,000 market participants, to validate third party valuations. Any significant differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No significant differences were identified during the validation as of September 30, 2023 and December 31, 2022. The carrying value of restricted FRB and FHLB stock approximates fair value based on the redemption provisions of each entity and is therefore excluded from the table below. Loans Held for Sale Residential loans originated for sale in the open market are carried at fair value. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). Gains and losses on the sale of loans are recorded in current period earnings as a component of “Mortgage banking income” on the Company’s Consolidated Statements of Income. The following table presents the balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2023 and December 31, 2022 (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair Value Measurements at September 30, 2023 using
​ |  | ​ | ​ |  | Significant |  | ​ | ​ |  | ​ | ​
​ | ​ | Quoted Prices in | ​ | Other | ​ | Significant | ​ | ​ | ​
​ | ​ | Active Markets for | ​ | Observable | ​ | Unobservable | ​ | ​ | ​
​ | ​ | Identical Assets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​
​ | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Balance
ASSETS | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
AFS securities: | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
U.S. government and agency securities | ​ | $ | 59,568 | ​ | $ | 2,270 | ​ | $ | — | ​ | $ | 61,838
Obligations of states and political subdivisions | ​ |  | — | ​ |  | 417,460 | ​ |  | — | ​ |  | 417,460
Corporate and other bonds(1) | ​ |  | — | ​ |  | 242,818 | ​ |  | — | ​ |  | 242,818
MBS | ​ |  | — | ​ |  | 1,361,085 | ​ |  | — | ​ |  | 1,361,085
Other securities | ​ |  | — | ​ |  | 1,727 | ​ |  | — | ​ |  | 1,727
LHFS | ​ |  | — | ​ |  | 6,608 | ​ |  | — | ​ |  | 6,608
Financial Derivatives(2) | ​ |  | — | ​ |  | 123,019 | ​ |  | — | ​ |  | 123,019
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financial Derivatives(2) | ​ | $ | — | ​ | $ | 291,769 | ​ | $ | — | ​ | $ | 291,769
(1) Other bonds include asset-backed securities. (2) Includes hedged and non-hedged derivatives. ​ ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair Value Measurements at December 31, 2022 using
​ |  | ​ | ​ |  | Significant |  | ​ | ​ |  | ​ | ​
​ | ​ | Quoted Prices in | ​ | Other | ​ | Significant | ​ | ​ | ​
​ | ​ | Active Markets for | ​ | Observable | ​ | Unobservable | ​ | ​ | ​
​ | ​ | Identical Assets | ​ | Inputs | ​ | Inputs | ​ | ​ | ​
​ | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Balance
ASSETS | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
AFS securities: | ​ | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
U.S. government and agency securities | ​ | $ | 56,606 | ​ | $ | 5,337 | ​ | $ | — | ​ | $ | 61,943
Obligations of states and political subdivisions | ​ | ​ | — | ​ | ​ | 807,435 | ​ | ​ | — | ​ | ​ | 807,435
Corporate and other bonds(1) | ​ |  | — | ​ |  | 226,380 | ​ |  | — | ​ |  | 226,380
MBS | ​ |  | — | ​ |  | 1,644,394 | ​ |  | — | ​ |  | 1,644,394
Other securities | ​ |  | — | ​ |  | 1,664 | ​ |  | — | ​ |  | 1,664
LHFS | ​ | ​ | — | ​ | ​ | 3,936 | ​ | ​ | — | ​ | ​ | 3,936
Financial Derivatives(2) | ​ |  | — | ​ |  | 80,310 | ​ |  | — | ​ |  | 80,310
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Financial Derivatives(2) | ​ | $ | — | ​ | $ | 236,000 | ​ | $ | — | ​ | $ | 236,000
(1) Other bonds include asset-backed securities. (2) Includes hedged and non-hedged derivatives. ​ Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower-of-cost-or-market accounting or write-downs of individual assets after they are evaluated for impairment. The primary assets accounted for at fair value on a nonrecurring basis are related to foreclosed properties, former bank premises, and collateral-dependent loans that are individually assessed. When the asset is secured by real estate, the Company measures the fair value utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed appraiser using observable market data. Management may discount the value from the appraisal in determining the fair value if, based on its understanding of the market conditions, the collateral had been impaired below the appraised value (Level 3). The nonrecurring valuation adjustments for these assets did not have a significant impact on the Company’s consolidated financial statements. Fair Value of Financial Instruments ASC 825, Financial Instruments, requires disclosure about fair value of financial instruments for interim periods and excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Cash and Cash Equivalents For those short-term instruments, the carrying amount is a reasonable estimate of fair value. HTM Securities The Company’s HTM investment portfolio is primarily valued using fair value measurements that are considered to be Level 2, utilizes the same valuation approach as described above with the AFS securities portfolio. Any significant differences between valuation sources are researched by further analyzing the various inputs that are utilized by each pricing source. No significant differences were identified during the validation as of September 30, 2023 and December 31, 2022. The Company’s Level 3 HTM securities are a result of a prior acquisition and are comprised of asset-backed securities and municipal bonds. Valuations of the asset-backed securities are provided by a third-party vendor specializing in the SBA markets and are based on underlying loan pool information, market data, and recent trading activity for similar securities. Valuations of the municipal bonds are provided by a third-party vendor that specializes in hard-to-value securities and are based on a discounted cash flow model and incorporates considerations for the complexity of the instrument, likelihood it will be called, and credit ratings. The Company reviews the valuations obtained for any material differences between valuation sources by analyzing the various inputs and results utilized by each pricing source. No significant differences were identified during the validation as of September 30, 2023 and December 31, 2022. Loans and Leases The fair value of loans and leases were estimated using an exit price, representing the amount that would be expected to be received if the Company sold the loans and leases. The fair value of performing loans and leases were estimated through use of discounted cash flows. Credit loss assumptions were based on market PD/LGD for loan and lease cohorts. The discount rate was based primarily on recent market origination rates. Fair value of loans and leases individually assessed and their respective levels within the fair value hierarchy are described in the previous section related to fair value measurements of assets that are measured on a nonrecurring basis. ​ Bank Owned Life Insurance The carrying value of BOLI approximates fair value. The Company records these policies at their cash surrender value, which is estimated using information provided by insurance carriers. Deposits The fair value of demand deposits, savings accounts, brokered deposits, and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposits were valued using a discounted cash flow calculation that includes a market rate analysis of the current rates offered by market participants for certificates of deposits that mature in the same period. Accrued Interest The carrying amounts of accrued interest approximate fair value. The carrying values and estimated fair values of the Company’s financial instruments at September 30, 2023 and December 31, 2022 are as follows (dollars in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Measurements at September 30, 2023 using
​ |  | ​ | ​ |  | Quoted Prices |  | Significant |  | ​ | ​ |  | ​ | ​
​ | ​ | ​ | ​ | ​ | in Active | ​ | Other | ​ | Significant | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Markets for | ​ | Observable | ​ | Unobservable | ​ | Total Fair
​ | ​ | ​ | ​ | ​ | Identical Assets | ​ | Inputs | ​ | Inputs | ​ | Value
​ | ​ | Carrying | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Value | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Balance
ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 398,945 | ​ | $ | 398,945 | ​ | $ | — | ​ | $ | — | ​ | $ | 398,945
AFS securities | ​ |  | 2,084,928 | ​ |  | 59,568 | ​ |  | 2,025,360 | ​ |  | — | ​ |  | 2,084,928
HTM securities | ​ |  | 843,269 | ​ |  | — | ​ |  | 760,786 | ​ |  | 1,260 | ​ |  | 762,046
Restricted stock | ​ |  | 104,785 | ​ |  | — | ​ |  | 104,785 | ​ |  | — | ​ |  | 104,785
LHFS | ​ |  | 6,608 | ​ |  | — | ​ |  | 6,608 | ​ |  | — | ​ |  | 6,608
LHFI, net of deferred fees and costs | ​ |  | 15,283,620 | ​ |  | — | ​ |  | — | ​ |  | 14,712,224 | ​ |  | 14,712,224
Financial Derivatives(1) | ​ |  | 123,019 | ​ |  | — | ​ |  | 123,019 | ​ |  | — | ​ |  | 123,019
Accrued interest receivable | ​ |  | 85,663 | ​ |  | — | ​ |  | 85,663 | ​ |  | — | ​ |  | 85,663
BOLI | ​ |  | 449,452 | ​ |  | — | ​ |  | 449,452 | ​ |  | — | ​ |  | 449,452
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits | ​ | $ | 16,786,505 | ​ | $ | — | ​ | $ | 16,758,971 | ​ | $ | — | ​ | $ | 16,758,971
Borrowings | ​ |  | 1,020,669 | ​ |  | — | ​ |  | 947,640 | ​ |  | — | ​ |  | 947,640
Accrued interest payable | ​ |  | 17,046 | ​ |  | — | ​ |  | 17,046 | ​ |  | — | ​ |  | 17,046
Financial Derivatives(1) | ​ |  | 291,769 | ​ |  | — | ​ |  | 291,769 | ​ |  | — | ​ |  | 291,769
(1) Includes hedged and non-hedged derivatives. ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Fair Value Measurements at December 31, 2022 using
​ | ​ | ​ | ​ | ​ | Quoted Prices | ​ | Significant | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | in Active | ​ | Other | ​ | Significant | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | Markets for | ​ | Observable | ​ | Unobservable | ​ | Total Fair
​ | ​ | ​ | ​ | ​ | Identical Assets | ​ | Inputs | ​ | Inputs | ​ | Value
​ | ​ | Carrying | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Value | ​ | Level 1 | ​ | Level 2 | ​ | Level 3 | ​ | Balance
ASSETS | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 319,948 | ​ | $ | 319,948 | ​ | $ | — | ​ | $ | — | ​ | $ | 319,948
AFS securities | ​ |  | 2,741,816 | ​ |  | 56,606 | ​ |  | 2,685,210 | ​ |  | — | ​ |  | 2,741,816
HTM securities | ​ |  | 847,732 | ​ |  | — | ​ |  | 798,778 | ​ |  | 3,109 | ​ |  | 801,887
Restricted stock | ​ |  | 120,213 | ​ |  | — | ​ |  | 120,213 | ​ |  | — | ​ |  | 120,213
LHFS | ​ | ​ | 3,936 | ​ | ​ | — | ​ |  | 3,936 | ​ |  | — | ​ | ​ | 3,936
LHFI, net of deferred fees and costs | ​ |  | 14,449,142 | ​ |  | — | ​ |  | — | ​ |  | 13,974,926 | ​ |  | 13,974,926
Financial Derivatives(1) | ​ |  | 80,310 | ​ |  | — | ​ |  | 80,310 | ​ |  | — | ​ |  | 80,310
Accrued interest receivable | ​ |  | 81,953 | ​ |  | — | ​ |  | 81,953 | ​ |  | — | ​ |  | 81,953
BOLI | ​ |  | 440,656 | ​ |  | — | ​ |  | 440,656 | ​ |  | — | ​ |  | 440,656
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
LIABILITIES | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Deposits | ​ | $ | 15,931,677 | ​ | $ | — | ​ | $ | 15,927,361 | ​ | $ | — | ​ | $ | 15,927,361
Borrowings | ​ |  | 1,708,700 | ​ |  | — | ​ |  | 1,645,095 | ​ |  | — | ​ |  | 1,645,095
Accrued interest payable | ​ |  | 5,268 | ​ |  | — | ​ |  | 5,268 | ​ |  | — | ​ |  | 5,268
Financial Derivatives(1) | ​ |  | 236,000 | ​ |  | — | ​ |  | 236,000 | ​ |  | — | ​ |  | 236,000
(1) Includes hedged and non-hedged derivatives. ​ ​ The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. Borrowers with fixed rate obligations, however, are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk by adjusting terms of new loans and deposits and by investing in securities with terms that mitigate the Company’s overall interest rate risk. ​

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//820/tableOfContent + Details
Name: | us-gaap_FairValueMeasurementInputsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration