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Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2024

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023, classified using the fair value hierarchy:


	At September 30, 2024
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Available-for-sale securities:


State and political subdivisions	$	—	$	1,287	$	—	$	1,287
Residential mortgage-backed securities	—		280,799		—		280,799
Collateralized mortgage obligations	—		1,788		—		1,788
Corporate bonds	—		70,226		—		70,226
Total available-for-sale securities	—		354,100		—		354,100
Equity securities:

Money market mutual funds	2,406		—		—		2,406
Total equity securities	2,406		—		—		2,406

Loans held for sale	—		17,131		—		17,131

Interest rate locks with customers*	—		578		—		578

Total assets	$	2,406	$	371,809	$	—	$	374,215
Liabilities:
Contingent consideration liability	$	—	$	—	$	627	$	627

Credit derivatives*	—		—		123		123

Forward loan sale commitments*	—		75		—		75
Total liabilities	$	—	$	75	$	750	$	825

* Such financial instruments are recorded at fair value as further described in Note 11, "Derivative Instruments and Hedging Activities."


	At December 31, 2023
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets/ Liabilities at Fair Value
Assets:
Available-for-sale securities:


State and political subdivisions	$	—	$	2,301	$	—	$	2,301
Residential mortgage-backed securities	—		264,552		—		264,552
Collateralized mortgage obligations	—		2,001		—		2,001
Corporate bonds	—		82,699		—		82,699
Total available-for-sale securities	—		351,553		—		351,553
Equity securities:
Equity securities - financial services industry	764		—		—		764
Money market mutual funds	2,529		—		—		2,529
Total equity securities	3,293		—		—		3,293

Loans held for sale	—		11,637		—		11,637
Interest rate locks with customers*	—		717		—		717

Total assets	$	3,293	$	363,907	$	—	$	367,200
Liabilities:
Contingent consideration liability	$	—	$	—	$	1,224	$	1,224
Interest rate swaps*	—		5,779		—		5,779
Credit derivatives*	—		—		186		186
Forward loan sale commitments*	—		427		—		427
Total liabilities	$	—	$	6,206	$	1,410	$	7,616

* Such financial instruments are recorded at fair value as further described in Note 11, "Derivative Instruments and Hedging Activities."

Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Level 3 Rollforward

The following table includes a roll forward of credit derivatives for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30, 2024
(Dollars in thousands)	Balance at December 31, 2023		Additions		Increase in value		Balance at September 30, 2024


Credit derivatives	$	(186)	$	(297)	$	360	$	(123)
Net total	$	(186)	$	(297)	$	360	$	(123)


	Nine Months Ended September 30, 2023
(Dollars in thousands)	Balance at December 31, 2022		Additions		Increase in value		Balance at September 30, 2023


Credit derivatives	$	(360)	$	(973)	$	1,166	$	(167)
Net total	$	(360)	$	(973)	$	1,166	$	(167)

Contingent Consideration Liability Change In Amount

The following table presents the change in the balance of the contingent consideration liability related to acquisitions for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the nine months ended September 30, 2024 and 2023:


	Nine Months Ended September 30, 2024
(Dollars in thousands)	Balance at December 31, 2023		Payment of Contingent Consideration		Adjustment of Contingent Consideration		Balance at September 30, 2024
Paul I. Sheaffer Insurance Agency	$	1,224	$	635	$	38	$	627
Total contingent consideration liability	$	1,224	$	635	$	38	$	627


	Nine Months Ended September 30, 2023
(Dollars in thousands)	Balance at December 31, 2022		Payment of Contingent Consideration		Adjustment of Contingent Consideration		Balance at September 30, 2023
Paul I. Sheaffer Insurance Agency	$	1,765	$	635	$	73	$	1,203
Total contingent consideration liability	$	1,765	$	635	$	73	$	1,203

Assets Measured at Fair Value on Non-Recurring Basis

The following table represents assets measured at fair value on a non-recurring basis at September 30, 2024 and December 31, 2023:


	At September 30, 2024
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Individually analyzed loans held for investment	$	—	$	—	$	13,782	$	13,782

Other real estate owned	—		—		20,915		20,915
Repossessed assets	—		—		79		79
Total	$	—	$	—	$	34,776	$	34,776


	At December 31, 2023
(Dollars in thousands)	Level 1		Level 2		Level 3		Assets at Fair Value
Individually analyzed loans held for investment	$	—	$	—	$	18,960	$	18,960

Other real estate owned	—		—		19,032		19,032
Total	$	—	$	—	$	37,992	$	37,992

Assets, Liabilities and Off-Balance Sheet Items Not Measured at Fair Value

The following table presents assets and liabilities not measured at fair value on a recurring or non-recurring basis in the Corporation’s condensed consolidated balance sheets but for which the fair value is required to be disclosed at September 30, 2024 and December 31, 2023. The disclosed fair values are classified using the fair value hierarchy.


	At September 30, 2024
(Dollars in thousands)	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets:
Cash and short-term interest-earning assets	$	504,700	$	—	$	—	$	504,700	$	504,700

Held-to-maturity securities	—		123,103		—		123,103		137,681
Federal Home Loan Bank, Federal Reserve Bank and other stock	NA		NA		NA		NA		40,235
Net loans and leases held for investment	—		—		6,444,735		6,444,735		6,630,911
Servicing rights	—		—		9,693		9,693		5,692
Total assets	$	504,700	$	123,103	$	6,454,428	$	7,082,231	$	7,319,219
Liabilities:
Deposits:
Demand and savings deposits, non-maturity	$	5,336,406	$	—	$	—	$	5,336,406	$	5,336,406
Time deposits	—		1,525,692		—		1,525,692		1,517,742
Total deposits	5,336,406		1,525,692		—		6,862,098		6,854,148
Short-term borrowings	8,256		—		—		8,256		8,256
Long-term debt	—		227,096		—		227,096		225,000
Subordinated notes	—		146,750		—		146,750		149,136
Total liabilities	$	5,344,662	$	1,899,538	$	—	$	7,244,200	$	7,236,540


	At December 31, 2023
(Dollars in thousands)	Level 1		Level 2		Level 3		Fair Value		Carrying Amount
Assets:
Cash and short-term interest-earning assets	$	249,799	$	—	$	—	$	249,799	$	249,799
Held-to-maturity securities	—		128,277		—		128,277		145,777
Federal Home Loan Bank, Federal Reserve Bank and other stock	NA		NA		NA		NA		40,499
Net loans and leases held for investment	—		—		6,290,455		6,290,455		6,462,867
Servicing rights	—		—		17,724		17,724		8,982
Total assets	$	249,799	$	128,277	$	6,308,179	$	6,686,255	$	6,907,924
Liabilities:
Deposits:
Demand and savings deposits, non-maturity	$	5,221,989	$	—	$	—	$	5,221,989	$	5,221,989
Time deposits	—		1,153,775		—		1,153,775		1,153,792
Total deposits	5,221,989		1,153,775		—		6,375,764		6,375,781
Short-term borrowings	6,306		—		—		6,306		6,306
Long-term debt	—		310,817		—		310,817		310,000
Subordinated notes	—		140,500		—		140,500		148,761
Total liabilities	$	5,228,295	$	1,605,092	$	—	$	6,833,387	$	6,840,848

- 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.

+ References + Details