FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2022

FAIR VALUE OF FINANCIAL INSTRUMENTS

Summary of assets measured at fair value on a recurring basis

September 30, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	153,572	$	—	$	—	$	153,572
U.S. government agency		—		57,023		—		57,023
Municipal		—		241,911		—		241,911
Mortgage-backed:
Agency residential		—		204,907		—		204,907
Agency commercial		—		137,376		—		137,376
Corporate		—		58,951		—		58,951
Equity securities with readily determinable fair values		2,996		—		—		2,996
Mortgage servicing rights		—		—		10,440		10,440
Derivative financial assets		—		8,045		—		8,045
Derivative financial liabilities		—		7,431		—		7,431

December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Debt securities available-for-sale:
U.S. Treasury	$	108,976	$	—	$	—	$	108,976
U.S. government agency		—		128,105		—		128,105
Municipal		—		297,077		—		297,077
Mortgage-backed:
Agency residential		—		179,466		—		179,466
Agency commercial		—		164,061		—		164,061
Corporate		—		64,483		—		64,483
Equity securities with readily determinable fair values		3,443		—		—		3,443
Mortgage servicing rights		—		—		7,994		7,994
Derivative financial assets		—		8,697		—		8,697
Derivative financial liabilities		—		9,377		—		9,377

Schedule of quantitative information about the unobservable inputs used in recurring Level 3 fair value measurements

The following tables present additional information about the unobservable inputs used in the fair value measurement of the mortgage servicing rights (dollars in thousands):

September 30, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	10,440	Discounted cash flows	Constant pre-payment rates (CPR)	5.5% to 59.7% (8.2%)
				Discount rate	9.0% to 11.5% (9.3%)
December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Mortgage servicing rights	$	7,994	Discounted cash flows	Constant pre-payment rates (CPR)	7.0% to 88.9% (11.7%)
				Discount rate	9.0% to 11.0% (9.0%)

Summary of assets measured at fair value on a nonrecurring basis

September 30, 2022	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	2,297	$	—	$	2,297
Collateral-dependent impaired loans		—		—		17,517		17,517
Bank premises held for sale		—		—		281		281
Foreclosed assets		—		—		2,637		2,637

December 31, 2021	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
		(dollars in thousands)
Loans held for sale	$	—	$	4,942	$	—	$	4,942
Collateral-dependent impaired loans		—		—		22,423		22,423
Bank premises held for sale		—		—		1,452		1,452
Foreclosed assets		—		—		3,278		3,278

Schedule of quantitative information about the unobservable inputs used in non-recurring Level 3 fair value measurements

The following tables present quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements (dollars in thousands):

September 30, 2022	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	17,517	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		281	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		2,637	Appraisal	Appraisal adjustments	7% (7%)
December 31, 2021	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Collateral-dependent impaired loans	$	22,423	Appraisal of collateral	Appraisal adjustments	Not meaningful
Bank premises held for sale		1,452	Appraisal	Appraisal adjustments	7% (7%)
Foreclosed assets		3,278	Appraisal	Appraisal adjustments	7% (7%)

Summary information on the carrying amounts and estimated fair values of the Company's financial instruments

	Fair Value	September 30, 2022				December 31, 2021
	Hierarchy	Carrying		Estimated		Carrying		Estimated
	Level	Amount		Fair Value		Amount		Fair Value
			(dollars in thousands)
Financial assets:
Cash and cash equivalents	Level 1	$	78,215	$	78,215	$	409,268	$	409,268
Debt securities held-to-maturity	Level 2		546,694		481,692		336,185		336,027
Restricted stock	Level 3		4,050		4,050		2,739		2,739
Loans, net	Level 3		2,554,868		2,548,050		2,475,753		2,494,686
Investments in unconsolidated subsidiaries	Level 3		1,165		1,165		1,165		1,165
Accrued interest receivable	Level 2		16,881		16,881		14,901		14,901
Financial liabilities:
Time deposits	Level 3		269,108		260,220		328,208		327,779
Securities sold under agreements to repurchase	Level 2		48,130		48,130		61,256		61,256
Subordinated notes	Level 3		39,376		37,667		39,316		41,602
Junior subordinated debentures	Level 3		37,763		36,210		37,714		33,640
Accrued interest payable	Level 2		607		607		1,043		1,043