Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

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

The following tables present our assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy level at March 31, 2020 and December 31, 2019. There were no transfers between Level 1 and Level 2 for items measured at fair value on a recurring basis during the periods presented.



	March 31, 2020
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	—	$	10,372	$	—	$	10,372
Obligations of U.S. government corporations and agencies	—		137,982		—		137,982
Collateralized mortgage obligations of U.S. government corporations and agencies	—		189,472		—		189,472
Residential mortgage-backed securities of U.S. government corporations and agencies	—		21,193		—		21,193
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		284,679		—		284,679
Corporate Bonds	—		7,551		—		7,551
Obligations of states and political subdivisions	—		144,717		—		144,717
Total Available-for-sale Debt Securities	—		795,966		—		795,966
Marketable equity securities	3,504		62		—		3,566
Total Securities	3,504		796,028		—		799,532
Securities held in a deferred compensation plan	4,782		—		—		4,782
Derivative financial assets:
Interest rate swaps	—		88,135		—		88,135
Interest rate lock commitments	—		2,927		—		2,927
Total Assets	$	8,286	$	887,090	$	—	$	895,376
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	87,989	$	—	$	87,989
Forward sale contracts	—		1,292		—		1,292
Total Liabilities	$	—	$	89,281	$	—	$	89,281



	December 31, 2019
(dollars in thousands)	Level 1		Level 2		Level 3		Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities	$	—	$	10,040	$	—	$	10,040
Obligations of U.S. government corporations and agencies	—		157,697		—		157,697
Collateralized mortgage obligations of U.S. government corporations and agencies	—		189,348		—		189,348
Residential mortgage-backed securities of U.S. government corporations and agencies	—		22,418		—		22,418
Commercial mortgage-backed securities of U.S. government corporations and agencies	—		275,870		—		275,870
Corporate Bonds	—		7,627		—		7,627
Obligations of states and political subdivisions	—		116,133		—		116,133
Total Available-for-Sale Debt Securities	—		779,133		—		779,133
Marketable equity securities	5,078		72		—		5,150
Total Securities	5,078		779,205		—		784,283
Securities held in a deferred compensation plan	5,987		—		—		5,987
Derivative financial assets:
Interest rate swaps	—		25,647		—		25,647
Interest rate lock commitments	—		321		—		321
Forward sale contracts	—		1		—		1
Total Assets	$	11,065	$	805,174	$	—	$	816,239
LIABILITIES
Derivative financial liabilities:
Interest rate swaps	$	—	$	25,615	$	—	$	25,615
Total Liabilities	$	—	$	25,615	$	—	$	25,615

Schedule of Assets Measured at Fair Value on Nonrecurring Basis by Significant Unobservable Inputs

For Level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2020 and December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:



	March 31, 2020		Valuation Technique(s)		Significant Unobservable Inputs	Range
(dollars in thousands)
Loans held for investment	$	20,926	Collateral Method	Third party appraisal	Costs to sell	0% - 17%
			Discounted cash flow method	Discount rate	Contractual loan rate	3.25%
Other real estate owned	3,045		Collateral method	Third party appraisal	Costs to sell	7%
Mortgage servicing rights	3,929		Discounted cash flow method	Third party service provider	Discount rate	9.39% - 12.54%
					Constant prepayment rates	7.46% - 12.74%
Total Assets	$	27,900



	December 31, 2019		Valuation Technique(s)		Significant Unobservable Inputs	Range
(dollars in thousands)
Impaired loans	$	38,697	Collateral Method	Third party appraisal	Costs to sell	0% - 20%
			Discounted cash flow method	Discount rate	Contractual loan rate	4.75% - 5.50%
Other real estate owned	3,231		Collateral method	Third party appraisal	Costs to sell	7%
Mortgage servicing rights	1,134		Discounted cash flow method	Third party service provider	Discount rate	9.39% - 12.54%
					Constant prepayment rates	7.46% - 12.74%
Total Assets	$	43,062

Schedule of Carrying Values and Fair Values of Financial Instruments

The carrying values and fair values of our financial instruments at March 31, 2020 and December 31, 2019 are presented in the following tables:



	Carrying Value⁽¹⁾		Fair Value Measurements at March 31, 2020
(dollars in thousands)	Carrying Value⁽¹⁾		Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	187,684	$	187,684	$	187,684	$	—	$	—
Securities	799,532		799,532		3,504		796,028		—
Loans held for sale	7,309		7,309		—		—		7,309
Portfolio loans, net	7,149,895		7,090,570		—		—		7,090,570
Bank owned life insurance	80,978		80,798		—		80,798		—
FHLB and other restricted stock	28,253		28,253		—		—		28,253
Securities held in a deferred compensation plan	4,782		4,782		4,782		—		—
Mortgage servicing rights	3,979		3,982		—		—		3,982
Interest rate swaps	88,135		88,135		—		88,135		—
Interest rate lock commitments	2,927		2,927		—		2,927		—
LIABILITIES
Deposits	$	7,057,879	$	7,065,896	$	5,469,826	$	1,596,070	$	—
Securities sold under repurchase agreements	69,644		69,644		69,644		—		—
Short-term borrowings	410,240		410,240		410,240		—		—
Long-term borrowings	50,180		51,675		4,630		47,045		—
Junior subordinated debt securities	64,038		64,038		64,038		—		—
Interest rate swaps	87,989		87,989		—		87,989		—
Forward sales contracts	1,292		1,292		—		1,292		—
⁽¹⁾ As reported in the Consolidated Balance Sheets



	Carrying Value⁽¹⁾		Fair Value Measurements at December 31, 2019
(dollars in thousands)	Carrying Value⁽¹⁾		Total		Level 1		Level 2		Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits	$	197,823	$	197,823	$	197,823	$	—	$	—
Securities	784,283		784,283		5,078		779,205		—
Loans held for sale	5,256		5,256		—		—		5,256
Portfolio loans, net	7,074,928		6,940,875		—		—		6,940,875
Bank owned life insurance	80,473		80,473		—		80,473		—
FHLB and other restricted stock	22,977		22,977		—		—		22,977
Securities held in a Deferred Compensation Plan	5,987		5,987		5,987		—		—
Mortgage servicing rights	4,662		4,650		—		—		4,650
Interest rate swaps	25,647		25,647		—		25,647		—
Interest rate lock commitments	321		321		—		321		—
Forward sale contracts	1		1		—		1		—
LIABILITIES
Deposits	$	7,036,576	$	7,034,595	$	5,441,143	$	1,593,452	$	—
Securities sold under repurchase agreements	19,888		19,888		19,888		—		—
Short-term borrowings	281,319		281,319		281,319		—		—
Long-term borrowings	50,868		51,339		4,678		46,661		—
Junior subordinated debt securities	64,277		64,277		64,277		—		—
Interest rate swaps	25,615		25,615		—		25,615		—
⁽¹⁾ As reported in the Consolidated Balance Sheets