Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

Financial Instruments Measured at Fair Value on a Recurring and Nonrecurring Basis

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at September 30, 2023:


($ in thousands) Description of Financial Instruments	Fair Value at September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Recurring
Securities available for sale:
U.S. Treasury	$	170,859	—	170,859	—
Government-sponsored enterprise securities	56,904		—	56,904	—
Mortgage-backed securities	1,854,448		—	1,854,448	—
Corporate bonds	18,195		—	18,195	—
Total available for sale securities	$	2,100,406	—	2,100,406	—

Presold mortgages in process of settlement	$	5,427	5,427	—	—

Nonrecurring
Individually evaluated loans	$	1,436	—	—	1,436

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at December 31, 2022:


($ in thousands) Description of Financial Instruments	Fair Value at December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Recurring
Securities available for sale:
US Treasury securities	$	168,758	—	168,758	—
Government-sponsored enterprise securities	57,456		—	57,456	—
Mortgage-backed securities	2,045,000		—	2,045,000	—
Corporate bonds	43,279		—	43,279	—
Total available for sale securities	$	2,314,493	—	2,314,493	—

Presold mortgages in process of settlement	$	1,282	1,282	—	—

Nonrecurring
Individually evaluated loans	$	9,590	—	—	9,590
Foreclosed real estate	38		—	—	38

Schedule of Significant Unobservable Inputs

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of September 30, 2023, the significant unobservable inputs used in the fair value measurements were as follows:

($ in thousands)

Fair Value at September 30, 2023

Valuation
Technique

Significant Unobservable
Inputs

Range (Weighted Average)

Individually evaluated loans - collateral-dependent

1,436

Appraised value

Discounts applied for estimated costs to sell

10%

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

($ in thousands)

Fair Value at December 31, 2022

Valuation
Technique

Significant Unobservable
Inputs

Range (Weighted Average)

Individually evaluated loans - collateral-dependent

5,680

Appraised value

Discounts applied for estimated costs to sell

10%

Individually evaluated loans - cash-flow dependent

3,910

PV of expected cash flows

Discount rates used in the calculation of PV of expected cash flows

5.5%-11.1% (6.76%)

Foreclosed real estate

Appraised value

Discounts applied for estimated costs to sell

10%

Schedule of the Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value at September 30, 2023 and December 31, 2022 were as follows:


		September 30, 2023			December 31, 2022
($ in thousands)	Level in Fair Value Hierarchy	Carrying Amount		Estimated Fair Value	Carrying Amount	Estimated Fair Value
Cash and due from banks, noninterest-bearing	Level 1	$	95,257	95,257	101,133	101,133
Due from banks, interest-bearing	Level 1	178,332		178,332	169,185	169,185
Securities held to maturity	Level 2	535,460		410,321	541,700	432,528
SBA loans held for sale	Level 2	2,633		2,633	—	—
Total loans, net of allowance	Level 3	7,918,839		7,377,021	6,574,178	6,240,870
Accrued interest receivable	Level 1	34,414		34,414	29,710	29,710
Bank-owned life insurance	Level 1	182,764		182,764	164,592	164,592
SBA Servicing Asset	Level 3	3,515		4,127	4,004	4,721

Deposits	Level 2	10,235,403		10,225,228	9,227,529	9,218,945
Borrowings	Level 2	401,843		388,391	287,507	277,146
Accrued interest payable	Level 1	5,511		5,511	2,738	2,738