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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

Summary of assets measured at fair value on a recurring basis


June 30, 2023		Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value

			(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury		$	155,140		$	—		$	—		$	155,140
U.S. government agency			—			52,424			—			52,424
Municipal			—			244,055			—			244,055
Mortgage-backed:
Agency residential			—			189,550			—			189,550
Agency commercial			—			130,886			—			130,886
Corporate			—			50,733			—			50,733
Equity securities with readily determinable fair values			3,152			—			—			3,152
Mortgage servicing rights			—			—			20,133			20,133
Derivative financial assets			—			8,640			—			8,640
Derivative financial liabilities			—			8,053			—			8,053


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):


June 30, 2023		Fair Value			Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Mortgage servicing rights		$	20,133		Discounted cash flows		Constant pre-payment rates (CPR)		6.8% to 39.4% (8.0%)
							Discount rate		9.0% to 23.4% (9.6%)

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


June 30, 2023		Level 1 Inputs			Level 2 Inputs			Level 3 Inputs			Total Fair Value

			(dollars in thousands)
Loans held for sale		$	—		$	8,829		$	—		$	8,829
Collateral-dependent loans			—			—			32,767			32,767
Bank premises held for sale			—			—			35			35
Foreclosed assets			—			—			3,080			3,080


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):


June 30, 2023		Fair Value			Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Collateral-dependent loans		$	32,767		Appraisal of collateral		Appraisal adjustments		Not meaningful
Bank premises held for sale			35		Appraisal		Appraisal adjustments		7% (7%)
Foreclosed assets			3,080		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		June 30, 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		$	109,808		$	109,808		$	114,159		$	114,159
Debt securities held-to-maturity		Level 2			533,231			469,921			541,600			478,801
Restricted stock		Level 3			11,345			11,345			7,965			7,965
Loans, net		Level 3			3,206,841			3,143,481			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			19,900			19,900			19,506			19,506

Financial liabilities:
Time deposits		Level 3			469,355			457,327			262,968			253,619
Securities sold under agreements to repurchase		Level 2			38,729			38,729			43,081			43,081
Subordinated notes		Level 3			39,435			32,481			39,395			37,205
Junior subordinated debentures		Level 3			52,760			41,993			37,780			37,030
Accrued interest payable		Level 2			2,386			2,386			1,363			1,363