v3.25.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
We use fair value measurements when recording and disclosing certain financial assets and liabilities. Debt securities, equity securities, securities held in a deferred compensation plan and derivative financial instruments are recorded at fair value on a recurring basis. Additionally, from time to time, we may be required to record other financial instruments at fair value on a nonrecurring basis, such as loans held for sale, loans individually evaluated, other real estate owned, or OREO, and other repossessed assets, mortgage servicing rights, or MSRs, and certain other assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants at the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities; it is not a forced transaction. In determining fair value, we use various valuation approaches, including market, income and cost approaches. The fair value standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability, which are developed based on market data that we have obtained from independent sources. Unobservable inputs reflect our estimates of assumptions that market participants would use in pricing an asset or liability, which are developed based on the best information available in the circumstances.
The fair value hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows.
Level 1: valuation is based upon unadjusted quoted market prices for identical instruments traded in active markets.
Level 2: valuation is based upon quoted market prices for similar instruments traded in active markets, quoted market prices for identical or similar instruments traded in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by market data.
Level 3: valuation is derived from other valuation methodologies, including discounted cash flow models and similar techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in determining fair value.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
There have been no changes in our valuation methodologies during the three months ended March 31, 2025. Refer to Note 1. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in our 2024 Form 10-K for more information on the valuation methodologies that we use for financial instruments recorded at fair value on a recurring or nonrecurring basis.
Assets and Liabilities Recorded at Fair Value on a 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 the dates presented:
March 31, 2025
(dollars in thousands)Level 1Level 2Level 3Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities$93,605 $— $— $93,605 
Obligations of U.S. government corporations and agencies— 10,127 — 10,127 
Collateralized mortgage obligations of U.S. government corporations and agencies— 648,818 — 648,818 
Residential mortgage-backed securities of U.S. government corporations and agencies— 33,143 — 33,143 
Commercial mortgage-backed securities of U.S. government corporations and agencies— 219,285 — 219,285 
Obligations of states and political subdivisions— 4,972 — 4,972 
Total Available-for-Sale Debt Securities93,605 916,345 — 1,009,950 
Equity securities1,161 — — 1,161 
Total Securities Available for Sale94,766 916,345 — 1,011,111 
Securities held in a deferred compensation plan10,692 — — 10,692 
Derivative financial assets:
Interest rate swap contracts - commercial loans— 48,493 — 48,493 
Total Assets$105,458 $964,838 $— $1,070,296 
LIABILITIES
Derivative financial liabilities:
Interest rate swap contracts - commercial loans$— $48,865 $— $48,865 
Interest rate swap contracts - cash flow hedge— 6,473 — 6,473 
Total Liabilities$— $55,338 $— $55,338 

December 31, 2024
(dollars in thousands)Level 1Level 2Level 3Total
ASSETS
Available-for-sale debt securities:
U.S. Treasury securities$92,768 $— $— $92,768 
Obligations of U.S. government corporations and agencies— 15,071 — 15,071 
Collateralized mortgage obligations of U.S. government corporations and agencies— 596,284 — 596,284 
Residential mortgage-backed securities of U.S. government corporations and agencies— 33,207 — 33,207 
Commercial mortgage-backed securities of U.S. government corporations and agencies— 224,798 — 224,798 
Obligations of states and political subdivisions— 24,287 — 24,287 
Total Available-for-Sale Debt Securities92,768 893,647 — 986,415 
Equity securities1,176 — — 1,176 
Total Securities Available for Sale93,944 893,647 — 987,591 
Securities held in a deferred compensation plan10,876 — — 10,876 
Derivative financial assets:
Interest rate swap contracts - commercial loans— 60,890 — 60,890 
Total Assets$104,820 $954,537 $— $1,059,357 
LIABILITIES
Derivative financial liabilities:
Interest rate swap contracts - commercial loans$— $61,271 $— $61,271 
Interest rate swap contracts - cash flow hedge— 9,589 — 9,589 
Total Liabilities$— $70,860 $— $70,860 
Assets Recorded at Fair Value on a Nonrecurring Basis
We may be required to measure certain assets and liabilities at fair value on a nonrecurring basis. Nonrecurring assets are recorded at the lower of cost or fair value in our consolidated financial statements. There were no liabilities measured at fair value on a nonrecurring basis at both March 31, 2025 and December 31, 2024. There were no Level 3 assets measured at fair value on a nonrecurring basis and one Level 2 individually evaluated loan measured at a fair value on a nonrecurring basis for $1.0 million as of March 31, 2025. At December 31, 2024 there was $6.8 million of individually evaluated loans measured at fair value and classified as Level 3 on a nonrecurring basis.
Significant unobservable inputs used in the fair value measurements of Level 3 assets on a nonrecurring basis were as follows at December 31, 2024:
December 31, 2024Valuation TechniqueSignificant Unobservable InputsRangeWeighted Average
(dollars in thousands)
Loans individually evaluated$6,830Appraisals of collateral
Appraisal adjustments(1)
20%-75%63.06%
(1) Represents adjustments to appraised values related to market conditions and liquidation estimates based on management judgement.
Fair Value of Financial Instruments
The following tables present the carrying values and fair values of our financial instruments at the dates presented:
Carrying
Value(1)
Fair Value Measurements at March 31, 2025
(dollars in thousands)TotalLevel 1Level 2Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits$211,836 $211,836 $211,836 $— $— 
Securities available for sale1,011,111 1,011,111 94,766 916,345 — 
Portfolio loans, net7,737,339 7,507,010 — — 7,507,010 
Collateral receivable595 595 595 — — 
Securities held in a deferred compensation plan10,692 10,692 10,692 — — 
Mortgage servicing rights5,478 8,126 — — 8,126 
Interest rate swap contracts - commercial loans48,493 48,493 — 48,493 — 
LIABILITIES
Deposits$7,892,933 $7,888,880 $6,070,301 $1,818,579 $— 
Collateral payable42,834 42,834 42,834 — — 
Short-term borrowings95,000 95,000 — 95,000 — 
Long-term borrowings50,876 50,815 — 50,815 — 
Junior subordinated debt securities49,433 49,433 — 49,433 — 
Interest rate swap contracts - commercial loans48,865 48,865 — 48,865 — 
Interest rate swap contracts - cash flow hedge6,473 6,473 — 6,473 — 
(1) As reported in the Consolidated Balance Sheets
Carrying
Value(1)
Fair Value Measurements at December 31, 2024
(dollars in thousands)TotalLevel 1Level 2Level 3
ASSETS
Cash and due from banks, including interest-bearing deposits$244,820 $244,820 $244,820 $— $— 
Securities available for sale987,591 987,591 93,944 893,647 — 
Portfolio loans, net7,641,464 7,362,898 — — 7,362,898 
Collateral receivable2,034 2,034 2,034 — — 
Securities held in a deferred compensation plan10,876 10,876 10,876 — — 
Mortgage servicing rights5,646 8,533 — — 8,533 
Interest rate swaps - commercial loans60,890 60,890 — 60,890 — 
LIABILITIES
Deposits$7,783,117 $7,778,740 $5,916,154 $1,862,586 $— 
Collateral payable52,516 52,516 52,516 — — 
Short-term borrowings150,000 150,000 — 150,000 — 
Long-term borrowings50,896 50,652 — 50,652 — 
Junior subordinated debt securities49,418 49,418 — 49,418 — 
Interest rate swaps - commercial loans61,271 61,271 — 61,271 — 
Interest rate swaps - cash flow hedge9,589 9,589 — 9,589 — 
(1) As reported in the Consolidated Balance Sheets