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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

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 March 31, 2024, and December 31, 2023, 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 2024 or 2023.

			March 31, 2024
(Dollars in thousands)			Level 1						Level 2						Level 3						Total
State and municipal securities			$	—					$	230,348					$	47,249					$	277,597
Corporate bonds			—						82,247						1,000						83,247
U.S. treasury securities			38,286						—						—						38,286
U.S. government agency securities			—						24,152						—						24,152
Commercial mortgage-backed securities			—						92,740						—						92,740
Residential mortgage-backed securities			—						486,623						—						486,623
Commercial collateralized mortgage obligations			—						41,426						—						41,426
Residential collateralized mortgage obligations			—						126,333						—						126,333
Asset-backed securities			—						20,518						—						20,518
Securities available for sale			38,286						1,104,387						48,249						1,190,922
Securities carried at fair value through income			—						—						6,755						6,755
Loans held for sale			—						14,975						—						14,975
Other assets - derivatives			—						22,717						—						22,717
Total recurring fair value measurements - assets			$	38,286					$	1,142,079					$	55,004					$	1,235,369
Other liabilities - derivatives			$	—					$	(21,013)					$	—					$	(21,013)
Total recurring fair value measurements - liabilities			$	—					$	(21,013)					$	—					$	(21,013)

			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)

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 Three Months Ended March 31, 2024 and 2023, are summarized as follows:

(Dollars in thousands)									MSRs						Securities Available for Sale						Securities at Fair Value Through Income
Balance at January 1, 2024									$	15,637					$	50,447					$	6,808
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)									450						—						—
Other noninterest income									—						—						(53)
Loss recognized in AOCI									—						(77)						—
Purchases, issuances, sales and settlements:
Originations									—						—						—
Sales									(16,087)						—						—
Settlements									—						(2,121)						—
Balance at March 31, 2024									$	—					$	48,249					$	6,755

___________________________

(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, 2023									$	20,824					$	55,769					$	6,368
Gain (loss) recognized in earnings:
Mortgage banking revenue(1)									(906)						—						—
Other noninterest income									—						—						45
Loss recognized in AOCI									—						108						—
Purchases, issuances, sales and settlements:
Originations									149						—						—
Sales									(1,806)						—						—
Settlements									—						(2,054)						—
Balance at March 31, 2023									$	18,261					$	53,823					$	6,413

___________________________

(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
															Range						Weighted Average(1)
Prepayment speeds															7.49% - 8.50%						8.10		%
Discount rates															10.25% - 12.75%						10.31		%

__________________________

(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:

			March 31, 2024
(Dollars in thousands)			Aggregate Fair Value						Principal Balance/Amortized Cost						Difference
Loans held for sale(1)			$	14,975					$	14,596					$	379
Securities carried at fair value through income			6,755						6,815						(60)
Total			$	21,730					$	21,411					$	319

____________________________

(1)There were no loans held for sale that were designated as nonaccrual or 90 days or more past due at March 31, 2024.

			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 of loans held for sale that were designated as nonaccrual or 90 days or more past due at December 31, 2023.

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)			Three Months Ended March 31,
Changes in fair value included in noninterest income:			2024						2023
Mortgage banking revenue (loans held for sale)(1)			$	2					$	164
Other income:
Securities carried at fair value through income			(53)						46
Total fair value option impact on noninterest income			$	(51)					$	210

____________________________

(1)The fair value option impact on noninterest income is offset by the derivative gain/loss recognized in noninterest income. Please see Note 6 — 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)			March 31, 2024												December 31, 2023
Financial assets: Level 1 inputs:			Carrying Value						Estimated Fair Value						Carrying Value						Estimated Fair Value
Cash and cash equivalents			$	291,512					$	291,512					$	280,441					$	280,441
Level 2 inputs:
Non-marketable equity securities held in other financial institutions			53,870						53,870						55,190						55,190
Accrued interest and loan fees receivable			43,508						43,508						41,688						41,688
Level 3 inputs:
Securities held to maturity			11,651						10,956						11,615						10,848
LHFI, net			7,801,652						7,392,695						7,564,076						7,177,720
Financial liabilities:
Level 2 inputs:
Deposits			8,505,464						8,490,801						8,251,125						8,240,520
FHLB advances and other borrowings			13,158						12,685						83,598						83,187
Subordinated indebtedness			160,684						158,149						194,279						186,251
Accrued interest payable			15,943						15,943						12,272						12,272

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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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