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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets and Liabilities Recorded on a Recurring Basis

The following tables summarize financial assets and financial liabilities recorded at fair value on a recurring basis at December 31, 2023, and December 31, 2022, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value. There were no changes in the valuation techniques during 2023 or 2022.

			December 31, 2023
(Dollars in thousands)			Level 1						Level 2						Level 3						Total
State and municipal securities			$	—					$	232,679					$	49,447					$	282,126
Corporate bonds			—						82,635						1,000						83,635
U.S. treasury securities			55,480						—						—						55,480
U.S. government agency securities			—						24,160						—						24,160
Commercial mortgage-backed securities			—						93,396						—						93,396
Residential mortgage-backed securities			—						506,502						—						506,502
Commercial collateralized mortgage obligations			—						35,183						—						35,183
Residential collateralized mortgage obligations			—						130,144						—						130,144
Asset-backed securities			—						43,005						—						43,005
Securities available for sale			55,480						1,147,704						50,447						1,253,631
Securities carried at fair value through income			—						—						6,808						6,808
Loans held for sale			—						16,852						—						16,852
Mortgage servicing rights			—						—						15,637						15,637
Other assets - derivatives			—						20,487						—						20,487
Total recurring fair value measurements - assets			$	55,480					$	1,185,043					$	72,892					$	1,313,415
Other liabilities - derivatives			$	—					$	(18,300)					$	—					$	(18,300)
Total recurring fair value measurements - liabilities			$	—					$	(18,300)					$	—					$	(18,300)

			December 31, 2022
(Dollars in thousands)			Level 1						Level 2						Level 3						Total
State and municipal securities			$	—					$	334,708					$	54,769					$	389,477
Corporate bonds			—						81,258						1,000						82,258
U.S. treasury securities			110,645						—						—						110,645
U.S. government agency securities			—						137,775						—						137,775
Commercial mortgage-backed securities			—						91,943						—						91,943
Residential mortgage-backed securities			—						572,303						—						572,303
Commercial collateralized mortgage obligations			—						38,813						—						38,813
Residential collateralized mortgage obligations			—						146,370						—						146,370
Asset-backed securities			—						71,900						—						71,900
Securities available for sale			110,645						1,475,070						55,769						1,641,484
Securities carried at fair value through income			—						—						6,368						6,368
Loans held for sale			—						25,389						—						25,389
Mortgage servicing rights			—						—						20,824						20,824
Other assets - derivatives			—						26,733						—						26,733
Total recurring fair value measurements - assets			$	110,645					$	1,527,192					$	82,961					$	1,720,798
Other liabilities - derivatives			$	—					$	(25,275)					$	—					$	(25,275)
Total recurring fair value measurements - liabilities			$	—					$	(25,275)					$	—					$	(25,275)

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

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2023 and 2022, are summarized as follows:

(Dollars in thousands)									MSRs						Securities Available for Sale						Securities at Fair Value Through Income
Balance at January 1, 2023									$	20,824					$	55,769					$	6,368
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)									(4,089)						—						—
Other noninterest income									—						—						725
Loss recognized in AOCI									—						(193)						—
Purchases, issuances, sales and settlements:
Originations									708						—						—
Sales									(1,806)						—						—
Settlements									—						(5,129)						(285)
Balance at December 31, 2023									$	15,637					$	50,447					$	6,808

___________________________

(1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.

(Dollars in thousands)									MSRs						Securities Available for Sale						Securities at Fair Value Through Income
Balance at January 1, 2022									$	16,220					$	41,461					$	7,497
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)									1,219						—						—
Other noninterest income									—						—						(854)
Loss recognized in AOCI									—						(4,421)						—
Purchases, issuances, sales and settlements:
Originations									2,286						—						—
Purchases									—						22,384						—
Acquired in BTH merger									1,099						—						—
Settlements									—						(3,655)						(275)
Balance at December 31, 2022									$	20,824					$	55,769					$	6,368

___________________________

(1)Total mortgage banking revenue includes changes in fair value due to market changes and run-off.

Schedule of Significant Assumptions Used to Value Mortgage Servicing Rights

The significant assumptions used to value MSRs were as follows:

			December 31, 2023												December 31, 2022
			Range						Weighted Average(1)						Range						Weighted Average(1)
Prepayment speeds			7.49% - 8.50%						8.10		%				7.65% - 9.20%						8.11		%
Discount rates			10.25 - 12.75						10.31						9.50 - 22.07						12.55

__________________________

(1)The weighted average was calculated with reference to the principal balance of the underlying mortgages.

Schedule of Difference Between Fair Value and the Unpaid Principal Balance for Financial Instruments for which the Fair Value Option has been Elected and Classified in Income Statement

The following tables summarize the difference between the fair value and the unpaid principal balance for financial instruments for which the fair value option has been elected:

			December 31, 2023
(Dollars in thousands)			Aggregate Fair Value						Principal Balance/Amortized Cost						Difference
Loans held for sale(1)			$	16,852					$	16,475					$	377
Securities carried at fair value through income			6,808						6,815						(7)
Total			$	23,660					$	23,290					$	370

____________________________

(1)There were no loans held for sale that were designated as nonaccrual or 90 days or more past due at December 31, 2023.

			December 31, 2022
(Dollars in thousands)			Aggregate Fair Value						Principal Balance/Amortized Cost						Difference
Loans held for sale(1)			$	25,389					$	24,946					$	443
Securities carried at fair value through income			6,368						7,100						(732)
Total			$	31,757					$	32,046					$	(289)

____________________________

(1)$3.9 million of loans held for sale were designated as nonaccrual or 90 days or more past due at December 31, 2022. Of this balance, $3.3 million was guaranteed by U.S. Government agencies.

Changes in the fair value of assets for which the Company elected the fair value option are classified in the consolidated statements of income line items reflected in the following table:

(Dollars in thousands)															Years Ended December 31,
Changes in fair value included in noninterest income:																											2023						2022						2021
Mortgage banking revenue (loans held for sale)																											$	(66)					$	(517)					$	(5,111)
Other income:
Loans at fair value held for investment																											—						—						(251)
Securities carried at fair value through income																											726						(854)						(814)
Total fair value option impact on noninterest income (1)																											$	660					$	(1,371)					$	(6,176)

____________________________

(1)The fair value option impact on noninterest income is offset by the derivative gain/loss recognized in noninterest income. Please see Note 9 — Mortgage Banking for more detail.

Schedule of Carrying Value and Estimated Fair Value of Financial Instruments Not Measured at Fair Value

The carrying value and estimated fair values of financial instruments not recorded at fair value are as follows:

(Dollars in thousands)			December 31, 2023												December 31, 2022
Financial assets: Level 1 inputs:			Carrying Value						Estimated Fair Value						Carrying Value						Estimated Fair Value
Cash and cash equivalents			$	280,441					$	280,441					$	358,972					$	358,972
Level 2 inputs:
Non-marketable equity securities held in other financial institutions			55,190						55,190						67,378						67,378
GNMA repurchase asset			—						—						24,569						24,569
Accrued interest and loan fees receivable			41,688						41,688						38,136						38,136
Level 3 inputs:
Securities held to maturity			11,615						10,848						11,275						11,970
LHFI, net			7,564,076						7,177,720						7,002,861						6,835,770
Financial liabilities:
Level 2 inputs:
Deposits			8,251,125						8,240,520						7,775,702						7,753,966
FHLB advances and other borrowings			83,598						83,187						639,230						639,103
Subordinated indebtedness			194,279						186,251						201,765						181,624
Accrued interest payable			12,272						12,272						3,917						3,917

X

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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