Fair value of financial instruments (Tables)

3 Months Ended

Mar. 31, 2020

Estimated Fair Values of Financial Instruments

The following table contains the estimated fair values and the related carrying values of the Company's financial instruments. Items which are not financial instruments are not included.



	Fair Value
March 31, 2020	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	425,094	$	425,094	$	—	$	—	$	425,094
Investment securities	767,575		—		767,575		—		767,575
Loans, net	4,478,897		—		—		4,480,393		4,480,393
Loans held for sale	325,304		—		325,304		—		325,304
Interest receivable	19,644		—		3,625		16,019		19,644
Mortgage servicing rights	62,581		—		—		62,581		62,581
Derivatives	66,281		—		66,281		—		66,281
Financial liabilities:
Deposits:
Without stated maturities	$	4,142,635	$	4,142,635	$	—	$	—	$	4,142,635
With stated maturities	1,234,297		—		1,243,610		—		1,243,610
Securities sold under agreement to repurchase and federal funds sold	31,892		31,892		—		—		31,892
Federal Home Loan Bank advances	250,000		—		259,037		—		259,037
Subordinated debt	30,930		—		28,921		—		28,921
Other borrowings	15,000		—		15,000		—		15,000
Interest payable	8,893		427		8,466		—		8,893
Derivatives	66,696		—		66,696		—		66,696



	Fair Value
December 31, 2019	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	232,681	$	232,681	$	—	$	—	$	232,681
Investment securities	691,676		—		691,676		—		691,676
Loans, net	4,378,503		—		—		4,363,903		4,363,903
Loans held for sale	262,518		—		262,518		—		262,518
Interest receivable	17,083		—		3,282		13,801		17,083
Mortgage servicing rights	75,521		—		—		75,521		75,521
Derivatives	21,981		—		21,981		—		21,981
Financial liabilities:
Deposits:
Without stated maturities	$	3,743,085	$	3,743,085	$	—	$	—	$	3,743,085
With stated maturities	1,191,853		—		1,200,145		—		1,200,145
Securities sold under agreement to repurchase and federal funds sold	23,745		23,745		—		—		23,745
Federal Home Loan Bank advances	250,000		—		250,213		—		250,213
Subordinated debt	30,930		—		29,706		—		29,706
Interest payable	6,465		376		6,089		—		6,465
Derivatives	17,933		—		17,933		—		17,933

Balances and Levels of Assets Measured at Fair Value on Recurring Basis

The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2019 are presented in the following table:



At December 31, 2019	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Recurring valuations:
Financial assets:
Available-for-sale securities:
Mortgage-backed securities	$	—	$	490,676	$	—	$	490,676
Municipals, tax-exempt	—		189,235		—		189,235
Treasury securities	—		7,448		—		7,448
Corporate securities	—		1,022		—		1,022
Equity securities	—		3,295		—		3,295
Total	$	—	$	691,676	$	—	$	691,676
Loans held for sale	$	—	$	262,518	$	—	$	262,518
Mortgage servicing rights	—		—		75,521		75,521
Derivatives	—		21,981		—		21,981
Financial Liabilities:
Derivatives	—		17,933		—		17,933

The balances and levels of the assets measured at fair value on a recurring basis at March 31, 2020 are presented in the following table:



March 31, 2020	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Recurring valuations:
Financial assets:
Available-for-sale securities:
U.S. government agency securities	$	—	$	3,037	$	—	$	3,037
Mortgage-backed securities	—		499,658		—		499,658
Municipals, tax-exempt	—		235,677		—		235,677
Treasury securities	—		24,860		—		24,860
Corporate securities	—		985		—		985
Equity securities	—		3,358		—		3,358
Total	$	—	$	767,575	$	—	$	767,575
Loans held for sale	$	—	$	325,304	$	—	$	325,304
Mortgage servicing rights	—		—		62,581		62,581
Derivatives	—		66,281		—		66,281
Financial Liabilities:
Derivatives	—		66,696		—		66,696

Balances and Levels of Assets Measured at Fair Value on Non-recurring Basis

The balances and levels of the assets measured at fair value on a non-recurring basis at December 31, 2019 are presented in the following table:



At December 31, 2019	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Non-recurring valuations:
Financial assets:
Other real estate owned	$	—	$	—	$	9,774	$	9,774
Impaired Loans⁽¹⁾:
Commercial and industrial	$	—	$	—	$	6,481	$	6,481
Residential real estate:
1-4 family mortgage	—		—		378		378
Residential line of credit	—		—		321		321
Commercial real estate:
Owner occupied	—		—		951		951
Non-owner occupied	—		—		2,560		2,560
Total	$	—	$	—	$	10,691	$	10,691

(1) Includes both impaired non-purchased loans and collateral-dependent PCI loans.

The balances and levels of the assets measured at fair value on a non-recurring basis at March 31, 2020 are presented in the following table:



At March 31, 2020	Quoted prices in active markets for identical assets (liabilities) (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)		Total
Non-recurring valuations:
Financial assets:
Other real estate owned	$	—	$	—	$	1,058	$	1,058
Collateral dependent loans:
Commercial and industrial	$	—	$	—	$	1,566	$	1,566
Residential real estate:
1-4 family mortgage	—		—		—		—
Residential line of credit	—		—		—		311
Commercial real estate:
Owner occupied	—		—		—		—
Non-owner occupied	—		—		5,704		5,704
Consumer and other	—		—		—		—
Total collateral dependent loans	$	—	$	—	$	7,270	$	7,270

Information About Significant Unobservable Inputs (Level 3) Used in Valuation of Assets Measured at Fair Value on Nonrecurring Basis

The following table presents information as of March 31, 2020 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:



Financial instrument	Fair Value		Valuation technique	Significant Unobservable inputs	Range of inputs
Collateral dependent loans	$	7,270	Valuation of collateral	Discount for comparable sales	0%-30%
Other real estate owned	$	1,058	Appraised value of property less costs to sell	Discount for costs to sell	0%-15%

The following table presents information as of December 31, 2019 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a nonrecurring basis:



Financial instrument	Fair Value		Valuation technique	Significant Unobservable inputs	Range of inputs
Impaired loans⁽¹⁾	$	10,691	Valuation of collateral	Discount for comparable sales	0%-30%
Other real estate owned	$	9,774	Appraised value of property less costs to sell	Discount for costs to sell	0%-15%

(1) Includes both impaired non-purchased loans and collateral-dependent PCI loans.

Differences between Fair Value and Principal Balance for Loans Held for Sale Measured at Fair Value

The following table summarizes the differences between the fair value and the principal balance for loans held for sale measured at fair value as of March 31, 2020 and December 31, 2019:



March 31, 2020	Aggregate fair value		Aggregate Unpaid Principal Balance		Difference
Mortgage loans held for sale measured at fair value	$	325,304	$	311,836	$	13,468
Past due loans of 90 days or more	—		—		—
Nonaccrual loans	—		—		—

December 31, 2019
Mortgage loans held for sale measured at fair value	$	262,518	$	254,868	$	7,650
Past due loans of 90 days or more	—		—		—
Nonaccrual loans	—		—		—