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Fair value of financial instruments (Tables)

6 Months Ended

Jun. 30, 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
June 30, 2020	Carrying amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and cash equivalents	$	717,592	$	717,592	$	—	$	—	$	717,592
Investment securities	751,767		—		751,767		—		751,767

Loans, net	4,713,894		—		—		4,755,504		4,755,504
Loans held for sale	435,479		—		435,479		—		435,479
Interest receivable	26,587		45		3,533		23,009		26,587
Mortgage servicing rights	60,508		—		—		60,508		60,508
Derivatives	80,544		—		80,544		—		80,544
Financial liabilities:
Deposits:
Without stated maturities	$	4,761,306	$	4,761,306	$	—	$	—	$	4,761,306
With stated maturities	1,191,495		—		1,204,271		—		1,204,271
Securities sold under agreement to repurchase and federal funds sold	32,732		32,732		—		—		32,732
Federal Home Loan Bank advances	250,000		—		258,901		—		258,901
Subordinated debt	30,930		—		23,396		—		23,396
Other borrowings	15,000		—		15,000		—		15,000
Interest payable	7,079		207		6,872		—		7,079
Derivatives	50,069		—		50,069		—		50,069


	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 June 30, 2020 are presented in the following table:


June 30, 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	$	—	$	3,024	$	—	$	3,024
Mortgage-backed securities	—		454,606		—		454,606
Municipals, tax-exempt	—		266,052		—		266,052
Treasury securities	—		22,771		—		22,771
Corporate securities	—		985		—		985
Equity securities	—		4,329		—		4,329
Total	$	—	$	751,767	$	—	$	751,767
Loans held for sale	$	—	$	435,479	$	—	$	435,479
Mortgage servicing rights	—		—		60,508		60,508
Derivatives	—		80,544		—		80,544
Financial Liabilities:
Derivatives	—		50,069		—		50,069

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

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 June 30, 2020 are presented in the following table:


At June 30, 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	$	—	$	—	$	3,407	$	3,407
Collateral dependent loans:
Commercial and industrial	$	—	$	—	$	3,062	$	3,062

Residential real estate:
1-4 family mortgage	—		—		100		100
Residential line of credit	—		—		471		311
Commercial real estate:
Owner occupied	—		—		1,461		1,461
Non-owner occupied	—		—		8,500		8,500
Consumer and other	—		—		336		336
Total collateral dependent loans	$	—	$	—	$	15,162	$	15,162

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.

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 June 30, 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

15,162

Valuation of collateral

Discount for comparable sales

0%-30%

Other real estate owned

3,407

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: