Fair Value of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

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

The Table below presents the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2023, and December 31, 2022.

	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2023
Assets:
Investment Securities Available-for-Sale
Debt Securities Issued by the U.S. Treasury and Government    Agencies	$	144,440	$	83,931	$	—	$	228,371
Debt Securities Issued by States and Political Subdivisions		—		97,742		—		97,742
Debt Securities Issued by U.S. Government-Sponsored    Enterprises		—		48,656		—		48,656
Debt Securities Issued by Corporations		—		799,033		—		799,033
Mortgage-Backed Securities:
Residential - Government Agencies		—		713,582		—		713,582
Residential - U.S. Government-Sponsored Enterprises		—		782,599		—		782,599
Commercial - Government Agencies		—		145,100		—		145,100
Total Mortgage-Backed Securities		—		1,641,281		—		1,641,281
Total Investment Securities Available-for-Sale		144,440		2,670,643		—		2,815,083
Loans Held for Sale		—		2,149		—		2,149
Mortgage Servicing Rights		—		—		707		707
Other Assets		51,651		—		—		51,651
Derivatives 1		—		210		84,840		85,050
Total Assets Measured at Fair Value on a Recurring Basis as of    March 31, 2023	$	196,091	$	2,673,002	$	85,547	$	2,954,640
Liabilities:
Derivatives 1	$	—	$	28	$	137,678	$	137,706
Total Liabilities Measured at Fair Value on a Recurring Basis as of    March 31, 2023	$	—	$	28	$	137,678	$	137,706
December 31, 2022
Assets:
Investment Securities Available-for-Sale
Debt Securities Issued by the U.S. Treasury    and Government Agencies	$	141,944	$	91,962	$	—	$	233,906
Debt Securities Issued by States and Political Subdivisions		—		95,265		—		95,265
Debt Securities Issued by    U.S. Government-Sponsored Enterprises		—		48,628		—		48,628
Debt Securities Issued by Corporations		—		794,658		—		794,658
Mortgage-Backed Securities:
Residential - Government Agencies		—		732,828		—		732,828
Residential - U.S. Government-Sponsored Enterprises		—		793,871		—		793,871
Commercial - Government Agencies or Sponsored Agencies		—		145,667		—		145,667
Total Mortgage-Backed Securities		—		1,672,366		—		1,672,366
Total Investment Securities Available-for-Sale		141,944		2,702,879		—		2,844,823
Loans Held for Sale		—		1,035		—		1,035
Mortgage Servicing Rights		—		—		717		717
Other Assets		47,755		—		—		47,755
Derivatives 1		—		1,822		45,895		47,717
Total Assets Measured at Fair Value on a    Recurring Basis as of December 31, 2022	$	189,699	$	2,705,736	$	46,612	$	2,942,047
Liabilities:
Derivatives 1	$	—	$	70	$	167,967	$	168,037
Total Liabilities Measured at Fair Value on a    Recurring Basis as of December 31, 2022	$	—	$	70	$	167,967	$	168,037

1 The fair value of each class of derivatives is shown in Note 11 Derivative Financial Instruments.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis

For the three months ended March 31, 2023, and March 31, 2022, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(dollars in thousands)	Mortgage Servicing Rights 1			Net Derivative Assets and Liabilities 2
Three Months Ended March 31, 2023
Balance as of January 1, 2023	$	717		$	(122,071	)
Realized and Unrealized Net Gains (Losses):
Included in Net Income		(10	)		336
Transfers to Loans Held for Sale		—			(236	)
Variation Margin Payments		—			69,133
Balance as of March 31, 2023	$	707		$	(52,838	)
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of March 31, 2023	$	—		$	188
Three Months Ended March 31, 2022
Balance as of January 1, 2022	$	800		$	23,904
Realized and Unrealized Net Gains (Losses):
Included in Net Income3		(19	)		(1,085	)
Transfers to Loans Held for Sale		—			113
Variation Margin Payments		—			(73,361	)
Balance as of March 31, 2022	$	781		$	(50,429	)
Total Unrealized Net Gains (Losses) Included in Net Income Related to Assets Still Held as of March 31, 2022	$	—		$	(1,085	)

1 Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of mortgage banking income in the Company’s consolidated statements of income.

2 Realized and unrealized gains and losses related to interest rate lock commitments are reported as a component of mortgage banking income in the Company’s consolidated statements of income. Realized and unrealized gains and losses related to interest rate swap agreements are reported as a component of other noninterest income in the Company’s consolidated statements of income.

3 The unrealized net losses included in net income related to assets still held as of March 31, 2022, has been updated to exclude the impact of activities unrelated to the computation of unrealized net losses.

Summary of the Significant Unobservable Inputs

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of March 31, 2023, and December 31, 2022, the significant unobservable inputs used in the fair value measurements were as follows:

(dollars in thousands)	Valuation  Technique	Description	Range						Weighted Average1			Fair Value
March 31, 2023
Mortgage Servicing Rights	Discounted Cash Flow	Constant Prepayment Rate		3.28	%	-	11.10	%		4.35	%	$	27,163
		Discount Rate		8.73	%	-	10.42	%		9.84	%	$	—
Net Derivative Assets and Liabilities:
Interest Rate Lock Commitments	Pricing Model	Closing Ratio		84.60	%	-	99.00	%		91.50	%	$	174
Interest Rate Swap Agreements	Discounted Cash Flow	Credit Factor		0.00	%	-	0.49	%		0.01	%	$	(53,012	)
December 31, 2022
Mortgage Servicing Rights	Discounted Cash Flow	Constant Prepayment Rate		2.81	%	-	10.63	%		4.02	%	$	28,040
		Discount Rate		8.70	%	-	10.40	%		9.93	%
Net Derivative Assets and Liabilities:
Interest Rate Lock Commitments	Pricing Model	Closing Ratio		84.10	%	-	99.00	%		92.86	%	$	58
Interest Rate Swap Agreements	Discounted Cash Flow	Credit Factor		0.00	%	-	0.49	%		0.01	%	$	(122,129	)

1 Unobservable inputs for mortgage servicing rights and interest rate lock commitments were weighted by loan amount. Unobservable inputs for interest rate swap agreements were weighted by fair value.

Schedule of Assets Measured at Fair Value on Nonrecurring Basis

The Company may be required periodically to measure certain assets and liabilities at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower-of-cost-or-fair value accounting or impairment write-downs of individual assets. The following table represents the assets measured at fair value on a nonrecurring basis as of March 31, 2023, and December 31, 2022.

(dollars in thousands)	Fair Value Hierarchy	Net Carrying Amount		Valuation Allowance
March 31, 2023
Mortgage Servicing Rights - amortization method	Level 3	$	21,395	$	—
December 31, 2022
Mortgage Servicing Rights - amortization method	Level 3	$	21,902	$	—

Schedule of Difference between Aggregate Fair Value and Aggregate Unpaid Principal Balance

The following table reflects the difference between the aggregate fair value and the aggregate unpaid principal balance of the Company’s residential mortgage loans held for sale as of March 31, 2023, and December 31, 2022.

(dollars in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
March 31, 2023
Loans Held for Sale	$	2,149	$	2,135	$	14
December 31, 2022
Loans Held for Sale	$	1,035	$	1,016	$	19

Schedule of Carrying Amount, Fair Value, and Fair Value Hierarchy of Financial Instruments

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments not recorded at fair value on a recurring basis as of March 31, 2023, and December 31, 2022. This table excludes financial instruments for which the carrying amount approximates fair value. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For non-marketable equity securities such as Federal Home Loan Bank of Des Moines and Federal Reserve Bank stock, the carrying amount is a reasonable estimate of fair value as these securities can only be redeemed or sold at their par value and only to the respective issuing government supported institution or to another member institution. For financial liabilities such as noninterest-bearing demand, interest-bearing demand, and savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.

					Fair Value Measurements
	Carrying				Quoted Prices  in Active  Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
(dollars in thousands)	Amount		Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2023
Financial Instruments - Assets
Investment Securities Held-to-Maturity	$	5,312,815	$	4,601,876	$	116,242	$	4,485,634	$	—
Loans		13,556,149		12,734,400		—		—		12,734,400
Financial Instruments - Liabilities
Time Deposits		1,922,753		1,900,997		—		1,900,997		—
Securities Sold Under Agreements to Repurchase		725,490		725,014		—		725,014		—
Other Debt 1		500,000		510,625				510,625
December 31, 2022
Financial Instruments – Assets
Investment Securities Held-to-Maturity	$	5,414,139	$	4,615,393	$	113,417	$	4,501,976	$	—
Loans		13,371,226		12,386,615		—		—		12,386,615
Financial Instruments – Liabilities
Time Deposits		1,705,737		1,679,777		—		1,679,777		—
Securities Sold Under Agreements to Repurchase		725,490		718,614		—		718,614		—
Other Debt 1		400,000		402,877		—		402,877		—

1 Excludes finance lease obligations.