0000950170-21-002966 | 10-Q | XBRL Viewer | Capstar Financial Holdings INC

Loans and Allowance for Loan Losses

NOTE 3 – SECURITIES

The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2021 and December 31, 2020 are summarized as follows (in thousands):


	September 30, 2021									December 31, 2020
	Amortized Cost		Gross unrealized gains		Gross unrealized (losses)			Estimated fair value		Amortized Cost		Gross unrealized gains		Gross unrealized (losses)			Estimated fair value
Securities available-for-sale:
U. S. government agency securities	$	11,588	$	101	$	(79	)	$	11,610	$	16,158	$	258	$	(25	)	$	16,391
State and municipal securities		82,471		1,996		(780	)		83,687		89,081		2,928		(81	)		91,928
Mortgage-backed securities		324,862		2,814		(7,176	)		320,500		332,014		4,892		(543	)		336,363
Asset-backed securities		3,325		19		—			3,344		3,325		—		(132	)		3,193
Other debt securities		63,271		1,592		(226	)		64,637		37,608		819		(87	)		38,340
Total	$	485,517	$	6,522	$	(8,261	)	$	483,778	$	478,186	$	8,897	$	(868	)	$	486,215
Securities held-to-maturity:
State and municipal securities	$	1,788	$	59	$	—		$	1,847	$	2,407	$	97	$	—		$	2,504
Total	$	1,788	$	59	$	—		$	1,847	$	2,407	$	97	$	—		$	2,504

Security fair values are established by an independent pricing service as of the dates indicated. The difference between amortized cost and fair value reflects current interest rates and represents the potential gain (loss) had the portfolio been liquidated on those dates. Security gains (losses) are realized only in the event of dispositions prior to maturity or other-than-temporary impairment. Securities with unrealized losses as of September 30, 2021 and December 31, 2020, and the length of time they were in continuous loss positions as of such dates are as follows (in thousands):


	Less than 12 months					12 months or more					Total
September 30, 2021	Estimated fair value		Gross unrealized losses			Estimated fair value		Gross unrealized losses			Estimated fair value		Gross unrealized losses
U. S. government agency securities	$	2,931	$	(40	)	$	1,964	$	(39	)	$	4,895	$	(79	)
State and municipal securities		34,046		(546	)		5,479		(234	)		39,525		(780	)
Mortgage-backed securities		197,864		(5,773	)		41,195		(1,403	)		239,059		(7,176	)
Asset-backed securities		—		—			—		—			—		—
Other debt securities		23,238		(226	)		—		—			23,238		(226	)
Total temporarily impaired securities	$	258,079	$	(6,585	)	$	48,638	$	(1,676	)	$	306,717	$	(8,261	)

December 31, 2020
U. S. government agency securities	$	1,989	$	(25	)	$	—	$	—		$	1,989	$	(25	)
State and municipal securities		10,463		(81	)		—		—			10,463		(81	)
Mortgage-backed securities		100,291		(479	)		1,449		(64	)		101,740		(543	)
Asset-backed securities		—		—			3,193		(132	)		3,193		(132	)
Other debt securities		6,103		(87	)		—		—			6,103		(87	)
Total temporarily impaired securities	$	118,846	$	(672	)	$	4,642	$	(196	)	$	123,488	$	(868	)

As noted in the table above, as of September 30, 2021, the Company had gross unrealized losses of $8.3 million in its investment securities portfolio. The unrealized losses associated with these investment securities are driven by changes in interest rates and are recorded as a component of equity. These investment securities will continue to be monitored as a part of our ongoing impairment analysis. Management evaluates the financial performance of the issuers on a quarterly basis to determine if it is probable that the issuers can make all contractual principal and interest payments. If an expected shortfall in future cash flows is identified, a credit loss will be deemed to have occurred and will be recognized as a charge to earnings and a new cost basis for the security will be established.

Since the Company currently does not intend to sell any investment securities that have an unrealized loss at September 30, 2021, and it is not likely that we will be required to sell these investment securities before recovery of their amortized cost bases, which may be at maturity, we do not consider these securities to be other-than-temporarily impaired at September 30, 2021.

Securities with a market value of $201.5 million at September 30, 2021 were pledged to collateralize public deposits, derivative positions and Federal Home Loan Bank advances.

Results from sales, maturities, prepayments and calls of securities available for sale were as follows (in thousands):


	Nine Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2020
Proceeds	$	74,305		$	141,347
Gross gains		44			83
Gross losses		(24	)		(9	)

The amortized cost and fair value of securities at September 30, 2021, by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	Available-for-sale				Held-to-maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
Due in less than one year	$	17,820	$	17,905	$	—	$	—
Due one to five years		73,699		75,446		1,788		1,847
Due five to ten years		55,125		56,249		—		—
Due beyond ten years		10,686		10,334		—		—
Mortgage-backed securities		324,862		320,500		—		—
Asset-backed securities		3,325		3,344		—		—
Total	$	485,517	$	483,778	$	1,788	$	1,847

Loans and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

NOTE 4 – LOANS AND ALLOWANCE FOR LOAN LOSSES

A summary of the loans held for investment portfolio as of September 30, 2021 and December 31, 2020 follows (in thousands):


	September 30, 2021			December 31, 2020
Commercial real estate	$	772,996		$	643,832
Consumer real estate		328,262			343,791
Construction and land development		210,516			174,859
Commercial and industrial		478,279			623,446
Consumer		45,669			44,279
Other		58,527			53,483
Total		1,894,249			1,883,690
Allowance for loan losses		(22,533	)		(23,245	)
Total loans, net	$	1,871,716		$	1,860,445

Payroll Protection Program Loans

In 2020, the CARES Act created a new guaranteed, unsecured loan program under the SBA called the Payroll Protection Program (“PPP”), which the Company participates in, to fund operational costs of eligible businesses, organizations and self-employed persons during the pandemic period. The SBA has guaranteed 100% of the amounts loaned under the PPP by lenders to eligible small businesses. One of the notable features of the PPP is that borrowers are eligible for loan forgiveness if certain conditions are met related to retaining staff and if loan amounts are used to cover eligible expenses, such as payroll, mortgage interest, rents and utilities payments. These loans have a two to five year term and will earn interest at a rate of 1%. As of September 30, 2021, the outstanding balance of loans originated under the PPP totaled $64.2 million compared with $185.5 million as of December 31, 2020 and was included in commercial and industrial loans.

Additionally, PPP borrowers are not required to pay any fees to the government or the lender and the loans may be repaid by the borrower at any time. The SBA, however, will pay lenders a processing fee based on the size of the PPP loan, ranging from 1% to 5% of the loan. Unamortized fees associated with PPP loans included in total loans were $2.2 million as of September 30, 2021. These fees are deferred and amortized over the life of the loan. PPP fees recognized as income totaled $1.7 million and $5.6 million, respectively, for the three and nine months ended September 30, 2021, compared to $1.0 million and $1.9 million for the same periods in 2020.

Allowance for Loan Losses

The adequacy of the allowance for loan losses (“ALL”) is assessed at the end of each quarter. The ALL includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogenous pools and collectively evaluated for impairment. The ALL factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The Company’s evaluation of other external factors included consideration of continuing developments regarding the novel coronavirus (“COVID-19”) global pandemic (including the effects of COVID-19 variants) and the resulting impact on the Company’s loan portfolio as of September 30, 2021, which is largely uncertain due to rapidly evolving conditions.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes all commercial loans, and consumer relationships with an outstanding balance greater than $500,000, individually and assigns each loan a risk rating. This analysis is performed on a continual basis by the relationship managers and credit department personnel. On at least an annual basis, an independent party performs a formal credit risk review of a sample of the loan portfolio. Among other things, this review assesses the appropriateness of the loan’s risk rating. The Company uses the following definitions for risk ratings:

Special Mention – A special mention asset possesses deficiencies or potential weaknesses deserving of management’s attention. If uncorrected, such weaknesses or deficiencies may expose the Company to an increased risk of loss in the future.

Substandard – A substandard asset is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard.

Doubtful – A doubtful asset has all weaknesses inherent in one classified substandard, with the added characteristic that weaknesses make collection or liquidation in full, on the basis of existing facts, conditions, and values, highly questionable and improbable. The probability of loss is extremely high, but certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset exist, therefore, its classification as an estimated loss is deferred until a more exact status may be determined. Pending factors include proposed merger, acquisition or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

Loans not falling into the criteria above are considered to be pass-rated loans. The Company utilizes six loan grades within the pass risk rating.

The following tables provides the risk category of loans by applicable class of loans as of September 30, 2021 and December 31, 2020 (in thousands):


September 30, 2021	Pass		Special Mention		Substandard		Doubtful		Total Impaired Loans		Total
Commercial real estate	$	748,967	$	13,755	$	4,960	$	—	$	1,154	$	768,836
Consumer real estate		312,991		482		855		—		884		315,212
Construction and land development		207,617		2,844		11		—		—		210,472
Commercial and industrial		451,180		10,194		14,382		26		63		475,845
Consumer		44,344		—		53		28		2		44,427
Other		58,107		—		79		—		—		58,186
Purchased credit impaired		17,060		—		3,931		280		—		21,271
Total	$	1,840,266	$	27,275	$	24,271	$	334	$	2,103	$	1,894,249

December 31, 2020
Commercial real estate	$	601,133	$	33,046	$	2,933	$	—	$	1,179	$	638,291
Consumer real estate		323,072		1,375		1,122		—		1,707		327,276
Construction and land development		169,315		5,153		19		—		102		174,589
Commercial and industrial		568,767		25,855		25,666		—		168		620,456
Consumer		41,640		4		18		2		7		41,671
Other		52,949		—		66		—		—		53,015
Purchased credit impaired		23,899		—		4,412		81		—		28,392
Total	$	1,780,775	$	65,433	$	34,236	$	83	$	3,163	$	1,883,690

The following table details the changes in the ALL for the three and nine month periods ended September 30, 2021 and 2020 (in thousands):


	Commercial real estate			Consumer real estate		Construction and land development		Commercial and industrial			Consumer			Other			Total
Three Months Ended September 30, 2021
Balance, beginning of period	$	7,915		$	1,730	$	3,871	$	8,401		$	356		$	481		$	22,754
Charged-off loans		—			—		—		(125	)		(62	)		(80	)		(267	)
Recoveries		—			17		—		1			17			11			46
Provision for loan losses		(521	)		596		239		(664	)		124			226			—
Balance, end of period	$	7,394		$	2,343	$	4,110	$	7,613		$	435		$	638		$	22,533

Three Months Ended September 30, 2020
Balance, beginning of period	$	5,139		$	1,398	$	2,387	$	11,514		$	234		$	363		$	21,035
Charged-off loans		—			—		—		—			(30	)		(22	)		(52	)
Recoveries		13			1		—		3			16			32			65
Provision for loan losses		677			418		795		183			(20	)		66			2,119
Balance, end of period	$	5,829		$	1,817	$	3,182	$	11,700		$	200		$	439		$	23,167


	Commercial real estate			Consumer real estate			Construction and land development		Commercial and industrial			Consumer			Other			Total
Nine Months Ended September 30, 2021
Balance, beginning of period	$	7,349		$	1,831		$	3,476	$	9,708		$	305		$	576		$	23,245
Charged-off loans		(10	)		(1	)		—		(132	)		(106	)		(158	)		(407	)
Recoveries		—			22			—		2			63			23			110
Provision for loan losses		55			491			634		(1,965	)		173			197			(415	)
Balance, end of period	$	7,394		$	2,343		$	4,110	$	7,613		$	435		$	638		$	22,533

Nine Months Ended September 30, 2020
Balance, beginning of period	$	3,599		$	1,231		$	2,058	$	5,074		$	222		$	420		$	12,604
Charged-off loans		(3	)		(43	)		—		(710	)		(83	)		(175	)		(1,014	)
Recoveries		10			4			—		162			58			48			282
Provision for loan losses		2,223			625			1,124		7,174			3			146			11,295
Balance, end of period	$	5,829		$	1,817		$	3,182	$	11,700		$	200		$	439		$	23,167

A breakdown of the ALL and the loan portfolio by loan category at September 30, 2021 and December 31, 2020 follows (in thousands):


	Commercial real estate		Consumer real estate		Construction and land development		Commercial and industrial		Consumer		Other		Total
September 30, 2021
Allowance for Loan Losses:
Collectively evaluated for impairment	$	7,394	$	2,343	$	4,110	$	7,613	$	435	$	638	$	22,533
Individually evaluated for impairment		—		—		—		—		—		—		—
Purchased credit impaired		—		—		—		—		—		—		—
Balances, end of period	$	7,394	$	2,343	$	4,110	$	7,613	$	435	$	638	$	22,533
Loans:
Collectively evaluated for impairment	$	767,682	$	314,328	$	210,472	$	475,782	$	44,425	$	58,186	$	1,870,875
Individually evaluated for impairment		1,154		884		—		63		2		—		2,103
Purchased credit impaired		4,160		13,050		44		2,434		1,242		341		21,271
Balances, end of period	$	772,996	$	328,262	$	210,516	$	478,279	$	45,669	$	58,527	$	1,894,249

December 31, 2020
Allowance for Loan Losses:
Collectively evaluated for impairment	$	7,349		1,831		3,410		9,708		305		576	$	23,179
Individually evaluated for impairment		—		—		66		—		—		—		66
Purchased credit impaired		—		—		—		—		—		—		—
Balances, end of period	$	7,349	$	1,831	$	3,476	$	9,708	$	305	$	576	$	23,245
Loans:
Collectively evaluated for impairment	$	637,112	$	325,569	$	174,487	$	620,288	$	41,664	$	53,015	$	1,852,135
Individually evaluated for impairment		1,179		1,707		102		168		7		—		3,163
Purchased credit impaired		5,541		16,515		270		2,990		2,608		468		28,392
Balances, end of period	$	643,832	$	343,791	$	174,859	$	623,446	$	44,279	$	53,483	$	1,883,690

The following table presents the allocation of the ALL for each respective loan category with the corresponding percentage of the ALL in each category to total loans, net of deferred fees as of September 30, 2021 and December 31, 2020 (in thousands). PPP loans included in commercial and industrial loans in the below table do not have a corresponding ALL as they are fully guaranteed by the SBA:


	September 30, 2021					December 31, 2020
	Amount		Percent of total loans			Amount		Percent of total loans
Commercial real estate	$	7,394		0.39	%	$	7,349		0.39	%
Consumer real estate		2,343		0.12			1,831		0.10
Construction and land development		4,110		0.22			3,476		0.18
Commercial and industrial		7,613		0.41			9,708		0.51
Consumer		435		0.02			305		0.02
Other		638		0.03			576		0.03
Total allowance for loan losses	$	22,533		1.19	%	$	23,245		1.23	%

The following table presents the Company’s impaired loans that were evaluated for specific loss allowance, excluding purchased credit impaired (“PCI”) loans, as of September 30, 2021 and December 31, 2020 (in thousands):


	September 30, 2021						December 31, 2020
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
With no related allowance recorded:
Commercial real estate	$	1,154	$	1,135	$	—	$	1,179	$	1,176	$	—
Consumer real estate		884		909		—		1,707		1,608		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		63		63		—		168		457		—
Consumer		2		2		—		7		7		—
Other		—		—		—		—		—		—
Subtotal		2,103		2,109		—		3,061		3,248		—
With an allowance recorded:
Commercial real estate		—		—		—		—		—		—
Consumer real estate		—		—		—		—		—		—
Construction and land development		—		—		—		102		102		66
Commercial and industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Other		—		—		—		—		—		—
Subtotal		—		—		—		102		102		66
Total	$	2,103	$	2,109	$	—	$	3,163	$	3,350	$	66

The following table presents information related to the average recorded investment and interest income recognized on impaired loans, excluding PCI loans, for the three and nine month periods ended September 30, 2021 and 2020 (in thousands):


	Three Months Ended				Three Months Ended				Nine Months Ended				Nine Months Ended
	September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial real estate	$	1,159	$	16	$	1,191	$	17	$	1,174	$	48	$	1,458	$	57
Consumer real estate		889		—		961		9		1,181		—		982		27
Construction and land development		—		—		—		—		—		—		—		—
Commercial and industrial		63		—		90		—		64		1		176		2
Consumer		2		—		4		—		49		—		4		—
Other		—		—		—		—		—		—		—		—
Subtotal		2,113		16		2,246		26		2,468		49		2,620		86
With an allowance recorded:
Commercial real estate		—		—		—		—		—		—		—		—
Consumer real estate		—		—		—		—		—		—		—		—
Construction and land development		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		107		—		—		—		108		—
Consumer		—		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—		—
Subtotal		—		—		107		—		—		—		108		—
Total	$	2,113	$	16	$	2,353	$	26	$	2,468	$	49	$	2,728	$	86

There was no interest income recognized on a cash basis for impaired loans during the three or nine month periods ended September 30, 2021 or 2020.

The following table presents the aging of the recorded investment in past due loans as of September 30, 2021 and December 31, 2020 by class of loans (in thousands):


	30 - 59		60 - 89		Greater Than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total
September 30, 2021
Commercial real estate	$	65	$	—	$	1,257		1,322	$	767,514	$	768,836
Consumer real estate		425		496		187		1,108		314,104		315,212
Construction and land development		30		—		12		42		210,430		210,472
Commercial and industrial		437		503		45		985		474,860		475,845
Consumer		160		99		38		297		44,130		44,427
Other		78		316		—		394		57,792		58,186
Purchased credit impaired		932		79		794		1,805		19,466		21,271
Total	$	2,127	$	1,493	$	2,333	$	5,953	$	1,888,296	$	1,894,249

December 31, 2020
Commercial real estate	$	409	$	—	$	1,176	$	1,585	$	636,706	$	638,291
Consumer real estate		6,084		1,596		687		8,367		318,909		327,276
Construction and land development		2,670		745		—		3,415		171,174		174,589
Commercial and industrial		1,734		38		1,595		3,367		617,089		620,456
Consumer		270		40		7		317		41,354		41,671
Other		252		38		—		290		52,725		53,015
Purchased credit impaired		1,372		1,554		901		3,827		24,565		28,392
Total	$	12,791	$	4,011	$	4,366	$	21,168	$	1,862,522	$	1,883,690

The following table presents the recorded investment in non-accrual loans, past due loans over 89 days and accruing and troubled debt restructurings (“TDR”) by class of loans as of September 30, 2021 and December 31, 2020 (in thousands):


	Non-Accrual		Past Due Over 89 Days and Accruing		Troubled Debt Restructurings
September 30, 2021
Commercial real estate	$	115	$	1,257	$	1,135
Consumer real estate		1,174		77		661
Construction and land development		—		12		—
Commercial and industrial		89		45		63
Consumer		47		—		—
Other		—		—		—
Purchased credit impaired		2,006		169		—
Total	$	3,431	$	1,560	$	1,859

December 31, 2020
Commercial real estate	$	130	$	1,176	$	1,176
Consumer real estate		1,821		342		685
Construction and land development		107		—		—
Commercial and industrial		470		1,205		67
Consumer		9		5		—
Other		—		—		—
Purchased credit impaired		2,279		567		—
Total	$	4,816	$	3,295	$	1,928

As of September 30, 2021 and December 31, 2020, all loans classified as nonperforming were deemed to be impaired.

As of September 30, 2021 and December 31, 2020, the Company had a recorded investment in TDR of $1.9 million. The Company had no specific allowance for those loans at September 30, 2021 or December 31, 2020 and there were no commitments to lend additional amounts. Loans accounted for as TDR include modifications from original terms such as those due to bankruptcy proceedings, certain modifications of amortization periods or extended suspension of principal payments due to customer financial difficulties. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s loan policy. Loans accounted for as TDR are individually evaluated for impairment. In accordance with interagency guidance, short term deferrals granted due to the COVID-19 pandemic are not considered TDR unless the borrower was experiencing financial difficulty prior to the pandemic.

There were no new TDR identified during the three or nine months ended September 30, 2021 or 2020. There were no TDR for which there was a payment default within twelve months following the modification during the three or nine months ended September 30, 2021 or 2020.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

Acquired Loans

On July 1, 2020, the Company acquired FCB and BOW (see Note 2 for more information). As a result of the acquisitions, the Company recorded loans with a fair value of $294.7 million. Of those loans, $33.6 million were considered to be purchased credit impaired (“PCI”) loans, which are loans for which it is probable at the acquisition date that all contractually required payments will not be collected. The remaining loans are considered to be purchased non-impaired loans and their related fair value discount or premium is recognized as an adjustment to yield over the remaining life of each loan.

The following table relates to acquired FCB and BOW PCI loans and summarizes the contractually required payments, which includes principal and interest, expected cash flows to be collected, and the fair value of acquired PCI loans at the acquisition date (in thousands):


		FCB and BOW acquisitions on July 1, 2020
Contractually required payments		$42,443
Nonaccretable difference		4,501
Cash flows expected to be collected at acquisition		37,942
Accretable yield		4,349
Fair value of PCI loans at acquisition date		$33,593

The following table relates to purchased non-impaired loans acquired and provides the contractually required payments, fair value, and estimate of contractual cash flows not expected to be collected at the acquisition date (in thousands):


		FCB and BOW acquisitions on July 1, 2020
Contractually required payments		$296,527
Fair value of acquired loans at acquisition date		260,701
Contractual cash flows not expected to be collected		3,718

Purchased Credit Impaired Loans

The following table presents changes in the carrying value of PCI loans (in thousands) for the periods indicated:


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Balance at beginning of period	$	22,765		$	28,392
Change due to payments received and accretion		(1,494	)		(7,121	)
Balance at end of period	$	21,271		$	21,271

The following table presents changes in the accretable yield for PCI loans (in thousands) for the periods indicated:


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Balance at beginning of period	$	3,169		$	4,068
Accretion		(603	)		(1,502	)
Balance at end of period	$	2,566		$	2,566

PCI loans had no impact on the ALL for the three or nine months ended September 30, 2021.

Premises and Equipment

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Premises and Equipment

NOTE 5 – PREMISES AND EQUIPMENT

The Company leases certain premises and equipment under operating leases. At September 30, 2021, the Company had lease liabilities totaling $12.2 million and right-of-use assets totaling $11.4 million related to these leases. Lease liabilities and right-of-use assets are reflected in other liabilities and other assets, respectively. At September 30, 2021, the weighted average remaining lease term for operating leases was 9.3 years and the weighted average discount rate used in the measurement of operating lease liabilities was 3.42%.

Lease costs were as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Operating lease cost	$	514	$	1,588
Short-term lease cost		—		—
Variable lease cost		—		—
Total lease cost	$	514	$	1,588

There were no sale and leaseback transactions, leveraged leases, or lease transactions with related parties during the three or nine months ended September 30, 2021 or 2020.

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows (in thousands):


	September 30, 2021
Lease payments due:
2021	$	432
2022		1,751
2023		1,717
2024		1,425
2025		1,428
2026 and thereafter		7,655
Total undiscounted cash flows		14,408
Discount on cash flows		(2,181	)
Total lease liability	$	12,227

Short Term Borrowings And Long-Term Debt

9 Months Ended

Sep. 30, 2021

Federal Home Loan Banks [Abstract]

Short Term Borrowings And Long-Term Debt

NOTE 6 – SHORT TERM BORROWINGS AND LONG-TERM DEBT

Short-Term Borrowings

The Company had no outstanding advances as of September 30, 2021 compared to $10 million as of December 31, 2020.

Advances from the FHLB are collateralized by investment securities with a market value of $2.2 million, FHLB stock and certain commercial and residential real estate mortgage loans totaling $634.1 million under a blanket mortgage collateral agreement. At September 30, 2021, the amount of available credit from the FHLB totaled $448.9 million.

Subordinated Notes

The Company issued $30.0 million of fixed-to-floating rate subordinated notes during the third quarter of 2020, which were recorded net of issuance costs of $0.6 million, that mature June 30, 2030. Beginning on or after June 30, 2025, the Company may redeem the notes, in whole or in part, at their principal amount plus any accrued and unpaid interest. The notes have a fixed interest rate of 5.25% per annum for the first five years. Thereafter, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR) plus 513 basis points. The carrying value of subordinated notes was $29.5 million at September 30, 2021 and $29.4 million at December 31, 2020.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss)

NOTE 7 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following were changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods ended September 30, 2021 and 2020 (in thousands):


				Unrealized Gains
	Gains and			and Losses
	Losses on			on Available
	Cash Flow			for Sale
	Hedges			Securities			Total
Nine Months Ended September 30, 2021
Beginning balance	$	—		$	7,728		$	7,728
Other comprehensive loss before reclassification, net of tax		—			(7,214	)		(7,214	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		—			(15	)		(15	)
Net current period other comprehensive loss		—			(7,229	)		(7,229	)
Ending Balance	$	—		$	499		$	499

Nine Months Ended September 30, 2020
Beginning balance	$	(2,679	)	$	4,062		$	1,383
Other comprehensive income before reclassification, net of tax		—			2,797			2,797
Amounts reclassified from accumulated other comprehensive income, net of tax		2,679			(55	)		2,624
Net current period other comprehensive income		2,679			2,742			5,421
Ending Balance	$	—		$	6,804		$	6,804

The following amounts were reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands):


													Affected Line Item
Details about Accumulated Other	Three Months Ended September 30,						Nine Months Ended September 30,						in the Statement Where
Comprehensive Income (Loss) Components	2021			2020			2021			2020			Net Income is Presented
Realized losses on cash flow hedges	$	—		$	(2,060	)	$	—		$	(2,466	)	Interest expense - money market accounts
		—			(107	)		—			(213	)	Interest expense - Federal Home Loan Bank advances
		—			—			—			—		Income tax benefit (expense)
	$	—		$	(2,167	)	$	—		$	(2,679	)	Net of tax
Realized gains on available- for-sale securities	$	7		$	34		$	20		$	74		Net gain on sale of securities
		(2	)		(9	)		(5	)		(19	)	Income tax expense
	$	5		$	25		$	15		$	55		Net of tax

Income Taxes

9 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 – INCOME TAXES

The Company’s effective tax rate for the three and nine month periods ended September 30, 2021 was 19.4% and 20.0%, respectively, compared to 22.0% and 18.0% for the three and nine months ended September 30, 2020, respectively.

The three month period decrease is attributable to a revision in the Company's expected annual effective tax rate for 2021 based on continued benefits in the Company's tax strategy. The increase in the effective tax rate from the nine month period ended September 30, 2020 is largely the result of the impact of certain provisions under the CARES Act, which were effective for 2020. The CARES Act permitted NOL’s arising in taxable years beginning after December 31, 2017 and before January 1, 2021 to be carried back five taxable years. This enabled the Company to carry back losses in 2020, which were incurred during the taxable year 2018 to prior years with a higher statutory tax rate, creating a permanent tax rate benefit. As a result, the Company recorded an income tax benefit of $0.8 million related to the permanent tax rate benefit during the first nine months of 2020.

The effective tax rate for the three and nine month periods ended September 30, 2021 compared favorably to the statutory federal rate of 21% and Tennessee excise tax rate of 6.5% primarily due to investments in qualified municipal securities, company owned life insurance, tax benefits of CapStar Bank’s real estate investment trust subsidiary, community investment tax credits, and tax benefits associated with share-based compensation, net of the effect of certain non-deductible expenses.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies

NOTE 9 – COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company has outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the balance sheet.

The following table sets forth outstanding financial instruments whose contract amounts represent credit risk as of September 30, 2021 and December 31, 2020 (in thousands):


	Contract or notional amount
	September 30, 2021		December 31, 2020
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	806,444	$	804,520
Standby letters of credit		10,397		10,403
Total	$	816,841	$	814,923

The Company is party to litigation and claims arising in the normal course of business. Management believes that the liabilities, if any, arising from such litigation and claims as of September 30, 2021, will not have a material impact on the financial statements of the Company.

Derivatives

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 10 – DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest Rate Swaps Designated as Cash Flow Hedges

There were no interest rate swaps designated as cash flow hedges as of September 30, 2021 and December 31, 2020. The Company previously terminated an interest rate swap during 2019, which resulted in a termination fee of $1.5 million which continued to be amortized as the corresponding hedged items, consisting of LIBOR-based brokered deposits and FHLB borrowings, were expected to remain outstanding until the initial maturities of the terminated swaps. However, during the year ended December 31, 2020, it was determined that in light of the Company’s surplus liquidity position this funding was expected to be terminated at the next renewal date and thus the previously terminated interest rate swaps which had been designated as cash flow hedges were no longer deemed effective, therefore, remaining unrealized losses of $1.9 million included in accumulated other comprehensive income were recognized in net income. There are no other interest rate swap related unrealized gains or losses in accumulated other comprehensive income as of September 30, 2021.

Other Interest Rate Swaps

The Company enters into swaps to facilitate customer transactions and meet their financing needs. Upon entering into these transactions the Company enters into offsetting positions with large U.S. financial institutions in order to minimize market risk to the Company. A summary of the Company’s customer related interest rate swaps was as follows (in thousands):


	September 30, 2021					December 31, 2020
	Notional		Estimated			Notional		Estimated
	amount		fair value			amount		fair value
Interest rate swap agreements:
Pay fixed/receive variable swaps	$	58,040	$	(2,118	)	$	59,946	$	(2,740	)
Pay variable/receive fixed swaps		58,040		2,118			59,946		2,740
Total	$	116,080	$	—		$	119,892	$	—

Mortgage Banking Derivatives

The Company enters into various derivative agreements with customers in the form of interest-rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The derivatives are valued using a model that utilizes market interest rates and other unobservable inputs. Changes in the fair value of these commitments due to fluctuations in interest rates that are to be originated to our loans held for sale portfolio are economically hedged through the use of forward sale commitments of mortgage-backed securities. The gains and losses arising from this derivative activity are reflected in current period earnings under mortgage banking income. Interest rate lock commitments are valued using a model with significant unobservable market parameters. Forward sale commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable.

The net (losses) gains relating to mortgage banking derivative instruments included in mortgage banking income were as follows (in thousands):


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Mortgage loan interest rate lock commitments	$	(221	)	$	(1,528	)
Mortgage-backed securities forward sales commitments		307			919
Total	$	86		$	(609	)

The amount and fair value of mortgage banking derivatives included in the consolidated balance sheets were as follows (in thousands):


	September 30, 2021				December 31, 2020
	Notional		Estimated		Notional		Estimated
	amount		fair value		amount		fair value
Included in other assets:
Mortgage loan interest rate lock commitments	$	86,938	$	1,079	$	88,303	$	2,607
Mortgage-backed securities forward sales commitments		72,500		293		—		—
Included in other liabilities:
Mortgage-backed securities forward sales commitments	$	—	$	—	$	87,000	$	(626	)

Stock Options and Restricted Shares

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock Options and Restricted Shares

NOTE 11 – STOCK OPTIONS AND RESTRICTED SHARES

On April 23, 2021, the shareholders of CapStar Financial Holdings, Inc. approved the 2021 Stock Incentive Plan (the "Plan"). The Plan provides for the grant of stock-based incentives, including stock options, restricted stock units, performance awards and restricted stock, to employees, directors and service providers that are subject to forfeiture until vesting conditions have been satisfied by the award recipient under the terms of the award. The Plan is intended to help align the interests of employees and our shareholders and reward our employees for improved Company performance. A total of 1,168,543 shares of stock were reserved for issuance under the Plan. Stock incentives include both restricted share and stock option grants. Total shares issuable under the plan were 1,168,543 as of September 30, 2021.

The Company has recognized stock-based compensation expense, within salaries and employee benefits for employees, and within other non-interest expense for directors, in the consolidated statements of income as follows (in thousands):


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Stock-based compensation expense before income taxes	$	373		$	330		$	1,169		$	1,231
Less: deferred tax benefit		(98	)		(86	)		(306	)		(322	)
Reduction of net income	$	275		$	244		$	863		$	909

Restricted Shares, Restricted Stock Units, and Performance Stock Units

We grant time-vested restricted stock units and performance stock units to certain key employees and directors under our stock award plan. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at the issue date. Those granted after January 1, 2021, vest ratably over a two or three-year vesting period depending on the specific award.

Performance stock units vest based upon the attainment of certain performance metrics over a three-year cumulative performance period. Certain of these awards are eligible to receive dividend equivalent shares. The grant date fair value of these awards was estimated using a Monte Carlo simulation. For awards based upon the achievement of the performance goals, the awards are earned ratably from 0% to 188%. If the performance goals are met at the end of the performance period, the award is adjusted to reflect the Company’s three-year total shareholder return (TSR) performance relative to a capital market peer group. This TSR modifier cannot cause the award to exceed the maximum of 188%.

The recipients have the right to vote and receive dividends but cannot sell, transfer, assign, pledge, hypothecate, or otherwise encumber the restricted stock until the shares have vested. A summary of the changes in the Company’s nonvested restricted shares for the nine months ended September 30, 2021 follows:


				Weighted
				Average
	Restricted			Grant Date
Nonvested Shares	Shares			Fair Value
Nonvested at beginning of period		148,414		$	14.39
Granted		140,549			14.81
Vested		(64,062	)		14.99
Forfeited		(23,222	)		14.52
Nonvested at end of period		201,679		$	14.10

As of September 30, 2021, there was $1.9 million of unrecognized compensation cost related to nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted-average period of 2.0 years. The total fair value of shares vested during the nine months ended September 30, 2021 was $1.1 million.

Stock Options

Option awards are generally granted with an exercise price equal to the fair value of the Company’s common stock at the date of grant. Option awards generally have a three year vesting period and a ten year contractual term.

The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model. There were no options granted in 2021 or 2020.

A summary of the activity in stock options for the nine months ended September 30, 2021 follows:


						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual
	Shares			Price		Term (years)
Outstanding at beginning of period		226,589		$	11.73
Granted		—			—
Exercised		(96,344	)		11.41
Forfeited or expired		—			—
Outstanding at end of period		130,245		$	11.96		5.2
Fully vested and expected to vest		130,245		$	11.96		5.2
Exercisable at end of period		113,578		$	11.54		4.8

Information related to stock options during each year follows:


	2021		2020
Intrinsic value of options exercised	$	821,174	$	188,662
Cash received from option exercises		1,077,489		105,847
Tax benefit realized from option exercises		148,312		16,524
Weighted average fair value of options granted		—		—

As of September 30, 2021, there was $0.1 million of unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 0.6 years.

Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2021

Banking and Thrift, Interest [Abstract]

Regulatory Capital Requirements

NOTE 12 – REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are subject to regulatory capital requirements administered by the Federal Reserve and the Bank is also subject to the regulatory capital requirements of the Tennessee Department of Financial Institutions. Failure to meet capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that could, in that event, have a material adverse effect on the institutions’ financial statements. The relevant regulations require the Company and the Bank to meet specific capital adequacy guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting principles. The capital classifications of the Company and the Bank are also subject to qualitative judgments by their regulators about components, risk weightings, and other factors. Those qualitative judgments could also affect the capital status of the Company and the Bank and the amount of dividends the Company and the Bank may distribute. The final rules implementing the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of September 30, 2021, the Company and the Bank met all regulatory capital adequacy requirements to which they are subject.

The Company’s and the Bank’s capital amounts and ratios as of September 30, 2021 and December 31, 2020 are presented in the following table (dollars in thousands).


	Actual					Minimum capital requirement (1)					Minimum to be well-capitalized (2)
	Amount		Ratio			Amount		Ratio			Amount		Ratio
At September 30, 2021:
Total capital to risk-weighted assets:
CapStar Financial Holdings, Inc.	$	373,051		16.23	%	$	183,922		8.0	%	N/A		N/A
CapStar Bank		359,460		15.65			183,781		8.0		$	229,726		10	%
Tier I capital to risk-weighted assets:
CapStar Financial Holdings, Inc.		320,700		13.95			137,941		6.0		N/A		N/A
CapStar Bank		336,608		14.65			137,835		6.0			183,781		8.00
Common equity Tier 1 capital to risk weighted assets:
CapStar Financial Holdings, Inc.		320,700		13.95			103,456		4.5		N/A		N/A
CapStar Bank		320,108		13.93			103,377		4.5			149,322		6.50
Tier I capital to average assets:
CapStar Financial Holdings, Inc.		320,700		10.28			124,771		4.0		N/A		N/A
CapStar Bank		336,608		10.82			124,449		4.0			155,561		5.00

At December 31, 2020:
Total capital to risk-weighted assets:
CapStar Financial Holdings, Inc.	$	338,426		16.03	%	$	168,910		8.0	%	N/A		N/A
CapStar Bank		324,152		15.36			168,808		8.0		$	211,010		10.0
Tier I capital to risk-weighted assets:
CapStar Financial Holdings, Inc.		285,439		13.52			126,682		6.0		N/A		N/A
CapStar Bank		300,588		14.25			126,606		6.0			168,808		8.0
Common equity Tier 1 capital to risk weighted assets:
CapStar Financial Holdings, Inc.		285,439		13.52			95,012		4.5		N/A		N/A
CapStar Bank		284,088		13.46			94,954		4.5			137,156		6.5
Tier I capital to average assets:
CapStar Financial Holdings, Inc.		285,439		9.60			118,877		4.0		N/A		N/A
CapStar Bank		300,588		10.12			118,780		4.0			148,476		5.0

(1) For the calendar year 2021, the Company must maintain a capital conservation buffer of Tier 1 common equity capital in excess of minimum risk-based capital ratios by at least 2.5% to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees.

(2) For the Company to be well-capitalized, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure.

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

Earnings Per Share

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

NOTE 13 – EARNINGS PER SHARE

The following is a summary of the basic and diluted earnings per share calculation for the three and nine month periods ended September 30, 2021 and 2020 (in thousands except share and per share data):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Basic net income per share calculation:
Numerator – Net income	$	13,102	$	7,487	$	36,207	$	15,015
Denominator – Average common shares outstanding		22,164,278		21,948,579		22,114,948		19,558,281
Basic net income per share	$	0.59	$	0.34	$	1.64	$	0.77
Diluted net income per share calculation:
Numerator – Net income	$	13,102	$	7,487	$	36,207	$	15,015
Denominator – Average common shares outstanding		22,164,278		21,948,579		22,114,948		19,558,281
Dilutive shares contingently issuable		54,124		11,911		50,182		25,167
Average diluted common shares outstanding		22,218,402		21,960,490		22,165,130		19,583,448
Diluted net income per share	$	0.59	$	0.34	$	1.63	$	0.77

Fair Value

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value

NOTE 14 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Bank used the following methods and significant assumptions to estimate fair value:

Investment Securities: The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities that are not actively traded and values debt securities by relying on quoted prices for the specific securities and the securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). See below for additional discussion of Level 3 valuation methodologies and significant inputs. The fair values of all securities are determined from third party pricing services without adjustment.

Derivatives-Interest Rate Swaps: The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Bank’s derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services. The fair values of all interest rate swaps are determined from third party pricing services without adjustment.

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, resulting in a Level 3 fair value classification. Impaired loans are evaluated on at least a quarterly basis for additional impairment and adjusted in accordance with the loan policy.

Other Real Estate Owned: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated no less frequently than annually. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach with data from comparable properties. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Appraisals may be adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and/or management’s expertise and knowledge of the collateral. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. The Company had no other real estate owned carried at fair value at September 30, 2021 or December 31, 2020.

Loans Held For Sale: Loans held for sale are carried at either fair value, if elected, or the lower of cost or fair value on a pool-level basis. Origination fees and costs for loans held for sale recorded at lower of cost or market are capitalized in the basis of the loan and are included in the calculation of realized gains and losses upon sale. Origination fees and costs are recognized in earnings at the time of origination for loans held for sale that are recorded at fair value. Fair value is determined using quoted prices for similar assets, adjusted for specific attributes of that loan or other observable market data, such as outstanding commitments from third party investors (Level 2).

Derivatives-Mortgage Loan Interest Rate Lock Commitments: Interest rate lock commitments that relate to the origination of mortgage loans that will be held for sale are recorded at fair value, determined as the amount that would be required to settle each derivative instrument at the balance sheet date. The fair value of the interest rate lock commitment is derived from the fair value of related mortgage loans, which is based on observable market data and includes the expected net future cash flows related to servicing of the loans. In estimating the fair value of an interest rate lock commitment, the Company assigns a probability to the interest rate lock commitment based on an expectation that it will be exercised and the loan will be funded (a “pull through” rate). The expected pull through rates are applied to the fair value of the unclosed mortgage pipeline, resulting in a Level 3 fair value classification. The pull through rate is a statistical analysis of our actual rate lock fallout history to determine the sensitivity of the residential mortgage loan pipeline compared to interest rate changes and other deterministic values. New market prices are applied based on updated loan characteristics and new fallout ratios (i.e., the inverse of the pull through rate) are applied accordingly. Significant increases (decreases) in the pull through rate in isolation result in a significantly higher (lower) fair value measurement. Changes to the fair value of interest rate lock commitments are recognized based on interest rate changes, changes in the probability that the commitment will be exercised, and the passage of time.

Derivatives-Mortgage-Backed Securities Forward Sales Commitments: The Company utilizes mortgage-backed securities forward sales commitments to hedge mortgage loan interest rate lock commitments. Mortgage-backed securities forward sales commitments are recorded at fair value based on quoted prices for similar assets in an active market with inputs that are observable, resulting in a Level 2 fair value classification.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair value measurements at September 30, 2021
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U. S. government agency securities	$	11,610		$	—	$	11,610		$	—
State and municipal securities		83,687			—		83,687			—
Mortgage-backed securities		320,500			—		320,500			—
Asset-backed securities		3,344			—		3,344			—
Other debt securities		64,637			—		64,637			—
Loans held for sale		79,842			—		79,842			—
Derivative assets:
Non-hedging derivatives:
Interest rate swaps - customer related		2,118			—		2,118			—
Mortgage loan interest rate lock commitments		1,079			—		—			1,079
Mortgage-backed securities forward sales commitments		293			—		293			—
Liabilities:
Derivative liabilities:
Non-hedging derivatives:
Derivative Liabilities - customer related		(2,118	)		—		(2,118	)		—


	Fair value measurements at December 31, 2020
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U. S. government agency securities	$	16,391		$	—	$	16,391		$	—
State and municipal securities		91,928			—		91,928			—
Mortgage-backed securities		336,363			—		336,363			—
Asset-backed securities		3,193			—		3,193			—
Other debt securities		38,340			—		38,340			—
Loans held for sale		97,303			—		97,303			—
Derivative assets:
Non-hedging derivatives:
Interest rate swaps - customer related		2,740			—		2,740			—
Mortgage loan interest rate lock commitments		2,607			—		—			2,607
Liabilities:
Derivative liabilities:
Non-hedging derivatives:
Interest rate swaps - customer related		(2,740	)		—		(2,740	)		—
Mortgage-backed securities forward sales commitments		(626	)		—		(626	)		—

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2021 and 2020 (in thousands):


	Mortgage Loan Interest Rate
	Lock Commitments
	2021			2020

Balance of recurring Level 3 assets at January 1st	$	2,607		$	648
Total gains or losses for the period:
Included in mortgage banking income		(1,528	)		3,488
Balance of recurring Level 3 assets at September 30th	$	1,079		$	4,136

The following table presents quantitative information about recurring Level 3 fair value measurements (dollars in thousands):


					Range
	Fair		Valuation		(Weighted-
September 30, 2021	Value		Technique(s)	Unobservable Input(s)	Average)
Assets:
Non-hedging derivatives:
Mortgage loan interest rate lock commitments	$	1,079	Consensus pricing	Origination pull-through rate	59% - 96% (82%)


					Range
	Fair		Valuation		(Weighted-
December 31, 2020	Value		Technique(s)	Unobservable Input(s)	Average)
Assets:
Non-hedging derivatives:
Mortgage loan interest rate lock commitments	$	2,607	Consensus pricing	Origination pull-through rate	54% - 91% (74%)

There were no assets measured at fair value on a nonrecurring basis as of September 30, 2021. Assets measured at fair value on a nonrecurring basis as of December 31, 2020 are summarized below (in thousands).

Fair value measurements at December 31, 2020

Quoted prices

in active

Significant

markets for

other

Significant

identical

observable

unobservable

Carrying

assets

inputs

Value

(level 1)

(level 2)

(level 3)

Assets:

Impaired loans:

Commercial and industrial

—

The following table presents quantitative information about December 31, 2020 Level 3 fair value measurements for assets measured at fair value on a non-recurring basis (dollars in thousands):


					Range
	Fair		Valuation		(Weighted-
December 31, 2020	Value		Technique(s)	Unobservable Input(s)	Average)
Impaired loans:
Commercial and industrial	$	36	Sales Comparison approach	Appraisal discounts	10%

Fair Value of Financial Instruments

The carrying value and estimated fair values of the Bank’s financial instruments at September 30, 2021 and December 31, 2020 were as follows (in thousands):


	September 30, 2021				December 31, 2020
	Carrying				Carrying				Fair value
	amount		Fair value		amount		Fair value		level of input
Financial assets:
Cash and due from banks, interest-bearing deposits in financial institutions	$	339,367	$	339,367	$	277,439	$	277,439	Level 1
Federal funds sold		19,900		19,900		—		—	Level 1
Securities available-for-sale		483,778		483,778		486,215		486,215	Level 2
Securities held-to-maturity		1,788		1,847		2,407		2,504	Level 2
Loans held for sale		176,488		179,325		186,998		180,698	Level 2
Restricted equity securities		14,443	N/A			15,562	N/A		N/A
Loans held for investment		1,894,249		1,901,826		1,883,690		1,900,647	Level 3
Accrued interest receivable		7,606		7,606		8,771		8,771	Level 2
Other assets		83,072		83,072		46,381		46,381	Level 2 / Level 3
Financial liabilities:
Deposits		2,674,392		2,535,324		2,568,001		2,472,860	Level 3
Subordinated notes and Federal Home Loan bank advances		29,499		31,022		39,423		41,400	Level 2
Other liabilities		2,902		2,902		3,334		3,334	Level 3

The methods and assumptions, not previously presented, used to estimate fair values are described as follows:

(a) Cash and Due from Banks, Interest-Bearing Deposits in Financial Institutions

For these short‑term instruments, the carrying amount is a reasonable estimate of fair value.

(b) Restricted Equity Securities

It is not practical to determine the fair value of restricted securities due to restrictions placed on their transferability.

The fair value of loans was measured using an exit price notion. Fair values for impaired loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral.

(d) Accrued Interest Receivable

The carrying amounts of accrued interest approximate fair value.

(e) Other Assets

Included in other assets are bank owned life insurance and certain interest rate swap agreements. The fair values of interest rate swap agreements are based on independent pricing services that utilize pricing models with observable market inputs. For bank owned life insurance, the carrying amount is based on the cash surrender value and is a reasonable estimate of fair value.

(f) Deposits

The fair value of demand deposits, savings accounts and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit is estimated by discounted cash flow models, using current market interest rates offered on certificates with similar remaining maturities.

(g) Federal Home Loan Bank Advances and Subordinated Debt

The fair value of fixed rate Federal Home Loan Bank Advances and subordinated notes is estimated using discounted cash flow models, using current market interest rates offered on certificates, advances and other borrowings with similar remaining maturities.

(h) Other Liabilities

Included in other liabilities are accrued interest payable and certain interest rate swap agreements. The fair values of interest rate swap agreements are based on independent pricing services that utilize pricing models with observable market inputs. The carrying amounts of accrued interest approximate fair value.

(i) Off-Balance Sheet Instruments

Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing. The fair value of commitments is not material.

(j) Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Bank’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on estimating on and off‑balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. For example, fixed assets are not considered financial instruments and their value has not been incorporated into the fair value estimates. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Schedule of Consideration Paid and Amounts of Assets Acquired and Liabilities Assumed

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements as of and for the period ended September 30, 2021 include CapStar Financial Holdings, Inc. and its wholly owned subsidiary, CapStar Bank (the “Bank”, together referred to as the “Company”). Significant intercompany transactions and accounts are eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with instructions to Form 10-Q and do not include all information and notes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. All adjustments consisting of normally recurring accruals that, in the opinion of management, are necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. These unaudited consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes appearing in the 2020 Form 10-K.
Business Combinations	Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The accounts of an acquired entity are included as of the date of acquisition, and any excess of purchase price over the fair value of the net assets acquired is capitalized as goodwill. Under this method, all identifiable assets acquired, including purchased loans, and liabilities assumed are recorded at fair value. The Company typically issues common stock and/or pays cash for an acquisition, depending on the terms of the acquisition agreement. The value of shares of common stock issued is determined based upon the market price of the stock as of the closing of the acquisition.
Reclassifications	Reclassifications Certain amounts, previously reported, have been reclassified to state all periods on a comparable basis and had no effect on shareholders' equity or net income.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, determination of impairment of intangible assets, including goodwill, the valuation of our investment portfolio, deferred tax assets and estimated liabilities. There have been no significant changes to the Company’s critical accounting policies as disclosed in the 2020 Form 10-K.
Subsequent Events	Subsequent Events Accounting Standards Codification (“ASC”) 855, Subsequent Events, establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. The Company evaluated all significant events or transactions that occurred after September 30, 2021 through the date of filing this Quarterly Report on Form 10-Q and determined that there were no events that required disclosure.

Acquisition (Tables)

9 Months Ended

Sep. 30, 2021

Business Combinations [Abstract]

The following table summarizes the consideration paid for the acquisitions and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date (in thousands):


	As recorded by FCB Corporation			Initial fair value adjustments				Measurement period adjustments		As recorded by CapStar Financial Holdings
Assets:
Cash and cash equivalents	$	90,760		$	—			$	—	$	90,760
Securities		98,536			159		(a)		—		98,695
Loans, gross		296,992			(2,318	)	(b)		—		294,674
Allowance for loan losses		(4,544	)		4,544		(c)		—		—
Premises and equipment, net		9,907			1,540		(d)		—		11,447
Core deposit intangible		—			3,570		(e)		—		3,570
Other		16,514			(917	)	(f)		—		15,597
Total	$	508,165		$	6,578			$	—	$	514,743
Liabilities:
Deposits	$	440,025		$	2,652		(g)	$	—	$	442,677
Other		4,735			—				—		4,735
Total	$	444,760		$	2,652			$	—	$	447,412

Net identifiable assets acquired										$	67,331

Total cost of acquisition:
Value of stock issued										$	43,611
Cash consideration paid											27,278
Total cost of acquisition										$	70,889

Goodwill recorded related to acquisition										$	3,558

(a) The amount represents the fair value adjustment of acquired securities that were subsequently sold.

(b) The amount represents the adjustment of the net book value of acquired loans to their estimated fair value based on interest rates and expected cash flows at the date of acquisition.

(d) The amount represents the adjustment of the net book value of acquired premises and equipment to their estimated fair value.

(f) The amount represents the net adjustment of the deferred tax asset recognized on the fair value adjustments on acquired assets and assumed liabilities.

Securities (Tables)

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Summary of Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Securities

The amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2021 and December 31, 2020 are summarized as follows (in thousands):


	September 30, 2021									December 31, 2020
	Amortized Cost		Gross unrealized gains		Gross unrealized (losses)			Estimated fair value		Amortized Cost		Gross unrealized gains		Gross unrealized (losses)			Estimated fair value
Securities available-for-sale:
U. S. government agency securities	$	11,588	$	101	$	(79	)	$	11,610	$	16,158	$	258	$	(25	)	$	16,391
State and municipal securities		82,471		1,996		(780	)		83,687		89,081		2,928		(81	)		91,928
Mortgage-backed securities		324,862		2,814		(7,176	)		320,500		332,014		4,892		(543	)		336,363
Asset-backed securities		3,325		19		—			3,344		3,325		—		(132	)		3,193
Other debt securities		63,271		1,592		(226	)		64,637		37,608		819		(87	)		38,340
Total	$	485,517	$	6,522	$	(8,261	)	$	483,778	$	478,186	$	8,897	$	(868	)	$	486,215
Securities held-to-maturity:
State and municipal securities	$	1,788	$	59	$	—		$	1,847	$	2,407	$	97	$	—		$	2,504
Total	$	1,788	$	59	$	—		$	1,847	$	2,407	$	97	$	—		$	2,504

Summary of Securities with Unrealized Losses and Length of Time Continuous Loss Positions

Securities with unrealized losses as of September 30, 2021 and December 31, 2020, and the length of time they were in continuous loss positions as of such dates are as follows (in thousands):


	Less than 12 months					12 months or more					Total
September 30, 2021	Estimated fair value		Gross unrealized losses			Estimated fair value		Gross unrealized losses			Estimated fair value		Gross unrealized losses
U. S. government agency securities	$	2,931	$	(40	)	$	1,964	$	(39	)	$	4,895	$	(79	)
State and municipal securities		34,046		(546	)		5,479		(234	)		39,525		(780	)
Mortgage-backed securities		197,864		(5,773	)		41,195		(1,403	)		239,059		(7,176	)
Asset-backed securities		—		—			—		—			—		—
Other debt securities		23,238		(226	)		—		—			23,238		(226	)
Total temporarily impaired securities	$	258,079	$	(6,585	)	$	48,638	$	(1,676	)	$	306,717	$	(8,261	)

December 31, 2020
U. S. government agency securities	$	1,989	$	(25	)	$	—	$	—		$	1,989	$	(25	)
State and municipal securities		10,463		(81	)		—		—			10,463		(81	)
Mortgage-backed securities		100,291		(479	)		1,449		(64	)		101,740		(543	)
Asset-backed securities		—		—			3,193		(132	)		3,193		(132	)
Other debt securities		6,103		(87	)		—		—			6,103		(87	)
Total temporarily impaired securities	$	118,846	$	(672	)	$	4,642	$	(196	)	$	123,488	$	(868	)

Summary of Sales, Maturities, Prepayments and Calls of Securities

Results from sales, maturities, prepayments and calls of securities available for sale were as follows (in thousands):


	Nine Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2020
Proceeds	$	74,305		$	141,347
Gross gains		44			83
Gross losses		(24	)		(9	)

Summary of Amortized Cost and Fair Value of Debt Securities by Contractual Maturity


	Available-for-sale				Held-to-maturity
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
Due in less than one year	$	17,820	$	17,905	$	—	$	—
Due one to five years		73,699		75,446		1,788		1,847
Due five to ten years		55,125		56,249		—		—
Due beyond ten years		10,686		10,334		—		—
Mortgage-backed securities		324,862		320,500		—		—
Asset-backed securities		3,325		3,344		—		—
Total	$	485,517	$	483,778	$	1,788	$	1,847

Loans and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Summary of Loans Held for Investment Portfolio

A summary of the loans held for investment portfolio as of September 30, 2021 and December 31, 2020 follows (in thousands):


	September 30, 2021			December 31, 2020
Commercial real estate	$	772,996		$	643,832
Consumer real estate		328,262			343,791
Construction and land development		210,516			174,859
Commercial and industrial		478,279			623,446
Consumer		45,669			44,279
Other		58,527			53,483
Total		1,894,249			1,883,690
Allowance for loan losses		(22,533	)		(23,245	)
Total loans, net	$	1,871,716		$	1,860,445

Summary of Risk Category of Loans by Applicable Class of Loans

The following tables provides the risk category of loans by applicable class of loans as of September 30, 2021 and December 31, 2020 (in thousands):


September 30, 2021	Pass		Special Mention		Substandard		Doubtful		Total Impaired Loans		Total
Commercial real estate	$	748,967	$	13,755	$	4,960	$	—	$	1,154	$	768,836
Consumer real estate		312,991		482		855		—		884		315,212
Construction and land development		207,617		2,844		11		—		—		210,472
Commercial and industrial		451,180		10,194		14,382		26		63		475,845
Consumer		44,344		—		53		28		2		44,427
Other		58,107		—		79		—		—		58,186
Purchased credit impaired		17,060		—		3,931		280		—		21,271
Total	$	1,840,266	$	27,275	$	24,271	$	334	$	2,103	$	1,894,249

December 31, 2020
Commercial real estate	$	601,133	$	33,046	$	2,933	$	—	$	1,179	$	638,291
Consumer real estate		323,072		1,375		1,122		—		1,707		327,276
Construction and land development		169,315		5,153		19		—		102		174,589
Commercial and industrial		568,767		25,855		25,666		—		168		620,456
Consumer		41,640		4		18		2		7		41,671
Other		52,949		—		66		—		—		53,015
Purchased credit impaired		23,899		—		4,412		81		—		28,392
Total	$	1,780,775	$	65,433	$	34,236	$	83	$	3,163	$	1,883,690

Summary of Changes and Breakdown of Allowance for Loan Losses and Loan Portfolio by Loan Category

The following table details the changes in the ALL for the three and nine month periods ended September 30, 2021 and 2020 (in thousands):


	Commercial real estate			Consumer real estate		Construction and land development		Commercial and industrial			Consumer			Other			Total
Three Months Ended September 30, 2021
Balance, beginning of period	$	7,915		$	1,730	$	3,871	$	8,401		$	356		$	481		$	22,754
Charged-off loans		—			—		—		(125	)		(62	)		(80	)		(267	)
Recoveries		—			17		—		1			17			11			46
Provision for loan losses		(521	)		596		239		(664	)		124			226			—
Balance, end of period	$	7,394		$	2,343	$	4,110	$	7,613		$	435		$	638		$	22,533

Three Months Ended September 30, 2020
Balance, beginning of period	$	5,139		$	1,398	$	2,387	$	11,514		$	234		$	363		$	21,035
Charged-off loans		—			—		—		—			(30	)		(22	)		(52	)
Recoveries		13			1		—		3			16			32			65
Provision for loan losses		677			418		795		183			(20	)		66			2,119
Balance, end of period	$	5,829		$	1,817	$	3,182	$	11,700		$	200		$	439		$	23,167


	Commercial real estate			Consumer real estate			Construction and land development		Commercial and industrial			Consumer			Other			Total
Nine Months Ended September 30, 2021
Balance, beginning of period	$	7,349		$	1,831		$	3,476	$	9,708		$	305		$	576		$	23,245
Charged-off loans		(10	)		(1	)		—		(132	)		(106	)		(158	)		(407	)
Recoveries		—			22			—		2			63			23			110
Provision for loan losses		55			491			634		(1,965	)		173			197			(415	)
Balance, end of period	$	7,394		$	2,343		$	4,110	$	7,613		$	435		$	638		$	22,533

Nine Months Ended September 30, 2020
Balance, beginning of period	$	3,599		$	1,231		$	2,058	$	5,074		$	222		$	420		$	12,604
Charged-off loans		(3	)		(43	)		—		(710	)		(83	)		(175	)		(1,014	)
Recoveries		10			4			—		162			58			48			282
Provision for loan losses		2,223			625			1,124		7,174			3			146			11,295
Balance, end of period	$	5,829		$	1,817		$	3,182	$	11,700		$	200		$	439		$	23,167

A breakdown of the ALL and the loan portfolio by loan category at September 30, 2021 and December 31, 2020 follows (in thousands):


	Commercial real estate		Consumer real estate		Construction and land development		Commercial and industrial		Consumer		Other		Total
September 30, 2021
Allowance for Loan Losses:
Collectively evaluated for impairment	$	7,394	$	2,343	$	4,110	$	7,613	$	435	$	638	$	22,533
Individually evaluated for impairment		—		—		—		—		—		—		—
Purchased credit impaired		—		—		—		—		—		—		—
Balances, end of period	$	7,394	$	2,343	$	4,110	$	7,613	$	435	$	638	$	22,533
Loans:
Collectively evaluated for impairment	$	767,682	$	314,328	$	210,472	$	475,782	$	44,425	$	58,186	$	1,870,875
Individually evaluated for impairment		1,154		884		—		63		2		—		2,103
Purchased credit impaired		4,160		13,050		44		2,434		1,242		341		21,271
Balances, end of period	$	772,996	$	328,262	$	210,516	$	478,279	$	45,669	$	58,527	$	1,894,249

December 31, 2020
Allowance for Loan Losses:
Collectively evaluated for impairment	$	7,349		1,831		3,410		9,708		305		576	$	23,179
Individually evaluated for impairment		—		—		66		—		—		—		66
Purchased credit impaired		—		—		—		—		—		—		—
Balances, end of period	$	7,349	$	1,831	$	3,476	$	9,708	$	305	$	576	$	23,245
Loans:
Collectively evaluated for impairment	$	637,112	$	325,569	$	174,487	$	620,288	$	41,664	$	53,015	$	1,852,135
Individually evaluated for impairment		1,179		1,707		102		168		7		—		3,163
Purchased credit impaired		5,541		16,515		270		2,990		2,608		468		28,392
Balances, end of period	$	643,832	$	343,791	$	174,859	$	623,446	$	44,279	$	53,483	$	1,883,690

Allocation of ALL with Corresponding Percentage of ALL in Each Category to Total Loans, Net of Deferred Fee Except PPP Loans


	September 30, 2021					December 31, 2020
	Amount		Percent of total loans			Amount		Percent of total loans
Commercial real estate	$	7,394		0.39	%	$	7,349		0.39	%
Consumer real estate		2,343		0.12			1,831		0.10
Construction and land development		4,110		0.22			3,476		0.18
Commercial and industrial		7,613		0.41			9,708		0.51
Consumer		435		0.02			305		0.02
Other		638		0.03			576		0.03
Total allowance for loan losses	$	22,533		1.19	%	$	23,245		1.23	%

Summary of Impaired Loans


	September 30, 2021						December 31, 2020
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
With no related allowance recorded:
Commercial real estate	$	1,154	$	1,135	$	—	$	1,179	$	1,176	$	—
Consumer real estate		884		909		—		1,707		1,608		—
Construction and land development		—		—		—		—		—		—
Commercial and industrial		63		63		—		168		457		—
Consumer		2		2		—		7		7		—
Other		—		—		—		—		—		—
Subtotal		2,103		2,109		—		3,061		3,248		—
With an allowance recorded:
Commercial real estate		—		—		—		—		—		—
Consumer real estate		—		—		—		—		—		—
Construction and land development		—		—		—		102		102		66
Commercial and industrial		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Other		—		—		—		—		—		—
Subtotal		—		—		—		102		102		66
Total	$	2,103	$	2,109	$	—	$	3,163	$	3,350	$	66


	Three Months Ended				Three Months Ended				Nine Months Ended				Nine Months Ended
	September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
With no related allowance recorded:
Commercial real estate	$	1,159	$	16	$	1,191	$	17	$	1,174	$	48	$	1,458	$	57
Consumer real estate		889		—		961		9		1,181		—		982		27
Construction and land development		—		—		—		—		—		—		—		—
Commercial and industrial		63		—		90		—		64		1		176		2
Consumer		2		—		4		—		49		—		4		—
Other		—		—		—		—		—		—		—		—
Subtotal		2,113		16		2,246		26		2,468		49		2,620		86
With an allowance recorded:
Commercial real estate		—		—		—		—		—		—		—		—
Consumer real estate		—		—		—		—		—		—		—		—
Construction and land development		—		—		—		—		—		—		—		—
Commercial and industrial		—		—		107		—		—		—		108		—
Consumer		—		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—		—
Subtotal		—		—		107		—		—		—		108		—
Total	$	2,113	$	16	$	2,353	$	26	$	2,468	$	49	$	2,728	$	86

Schedule of Aging of Recorded Investment in Past-due Loans, by Class of Loans

The following table presents the aging of the recorded investment in past due loans as of September 30, 2021 and December 31, 2020 by class of loans (in thousands):


	30 - 59		60 - 89		Greater Than
	Days		Days		89 Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total
September 30, 2021
Commercial real estate	$	65	$	—	$	1,257		1,322	$	767,514	$	768,836
Consumer real estate		425		496		187		1,108		314,104		315,212
Construction and land development		30		—		12		42		210,430		210,472
Commercial and industrial		437		503		45		985		474,860		475,845
Consumer		160		99		38		297		44,130		44,427
Other		78		316		—		394		57,792		58,186
Purchased credit impaired		932		79		794		1,805		19,466		21,271
Total	$	2,127	$	1,493	$	2,333	$	5,953	$	1,888,296	$	1,894,249

December 31, 2020
Commercial real estate	$	409	$	—	$	1,176	$	1,585	$	636,706	$	638,291
Consumer real estate		6,084		1,596		687		8,367		318,909		327,276
Construction and land development		2,670		745		—		3,415		171,174		174,589
Commercial and industrial		1,734		38		1,595		3,367		617,089		620,456
Consumer		270		40		7		317		41,354		41,671
Other		252		38		—		290		52,725		53,015
Purchased credit impaired		1,372		1,554		901		3,827		24,565		28,392
Total	$	12,791	$	4,011	$	4,366	$	21,168	$	1,862,522	$	1,883,690

Schedule of Non-Accrual Loans, Past Due Loans over 89 Days and Accruing and Troubled Debt Restructurings (TDR) by Class of Loans


	Non-Accrual		Past Due Over 89 Days and Accruing		Troubled Debt Restructurings
September 30, 2021
Commercial real estate	$	115	$	1,257	$	1,135
Consumer real estate		1,174		77		661
Construction and land development		—		12		—
Commercial and industrial		89		45		63
Consumer		47		—		—
Other		—		—		—
Purchased credit impaired		2,006		169		—
Total	$	3,431	$	1,560	$	1,859

December 31, 2020
Commercial real estate	$	130	$	1,176	$	1,176
Consumer real estate		1,821		342		685
Construction and land development		107		—		—
Commercial and industrial		470		1,205		67
Consumer		9		5		—
Other		—		—		—
Purchased credit impaired		2,279		567		—
Total	$	4,816	$	3,295	$	1,928

Summary of Contractually Required Payments for FCB and BOW Mergers Expected at Acquisition Date


		FCB and BOW acquisitions on July 1, 2020
Contractually required payments		$42,443
Nonaccretable difference		4,501
Cash flows expected to be collected at acquisition		37,942
Accretable yield		4,349
Fair value of PCI loans at acquisition date		$33,593

Summary of Contractually Required Payments for FCB and BOW Mergers Not Expected at Acquisition Date


		FCB and BOW acquisitions on July 1, 2020
Contractually required payments		$296,527
Fair value of acquired loans at acquisition date		260,701
Contractual cash flows not expected to be collected		3,718

Schedule of Activity in Purchased Credit Impaired Loans

The following table presents changes in the carrying value of PCI loans (in thousands) for the periods indicated:


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Balance at beginning of period	$	22,765		$	28,392
Change due to payments received and accretion		(1,494	)		(7,121	)
Balance at end of period	$	21,271		$	21,271

The following table presents changes in the accretable yield for PCI loans (in thousands) for the periods indicated:


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Balance at beginning of period	$	3,169		$	4,068
Accretion		(603	)		(1,502	)
Balance at end of period	$	2,566		$	2,566

Premises and Equipment (Tables)

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Summary of Lease Costs

Lease costs were as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Operating lease cost	$	514	$	1,588
Short-term lease cost		—		—
Variable lease cost		—		—
Total lease cost	$	514	$	1,588

Maturity Analysis of Operating Lease Liabilities and Reconciliation of Undiscounted Cash Flows

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is as follows (in thousands):


	September 30, 2021
Lease payments due:
2021	$	432
2022		1,751
2023		1,717
2024		1,425
2025		1,428
2026 and thereafter		7,655
Total undiscounted cash flows		14,408
Discount on cash flows		(2,181	)
Total lease liability	$	12,227

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Summary of Changes in Accumulated Other Comprehensive Income (Loss) by Component, Net of Tax

The following were changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods ended September 30, 2021 and 2020 (in thousands):


				Unrealized Gains
	Gains and			and Losses
	Losses on			on Available
	Cash Flow			for Sale
	Hedges			Securities			Total
Nine Months Ended September 30, 2021
Beginning balance	$	—		$	7,728		$	7,728
Other comprehensive loss before reclassification, net of tax		—			(7,214	)		(7,214	)
Amounts reclassified from accumulated other comprehensive loss, net of tax		—			(15	)		(15	)
Net current period other comprehensive loss		—			(7,229	)		(7,229	)
Ending Balance	$	—		$	499		$	499

Nine Months Ended September 30, 2020
Beginning balance	$	(2,679	)	$	4,062		$	1,383
Other comprehensive income before reclassification, net of tax		—			2,797			2,797
Amounts reclassified from accumulated other comprehensive income, net of tax		2,679			(55	)		2,624
Net current period other comprehensive income		2,679			2,742			5,421
Ending Balance	$	—		$	6,804		$	6,804

Summary of Amounts Reclassified out off Accumulated Other Comprehensive Income (Loss)

The following amounts were reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2021 and 2020 (in thousands):


													Affected Line Item
Details about Accumulated Other	Three Months Ended September 30,						Nine Months Ended September 30,						in the Statement Where
Comprehensive Income (Loss) Components	2021			2020			2021			2020			Net Income is Presented
Realized losses on cash flow hedges	$	—		$	(2,060	)	$	—		$	(2,466	)	Interest expense - money market accounts
		—			(107	)		—			(213	)	Interest expense - Federal Home Loan Bank advances
		—			—			—			—		Income tax benefit (expense)
	$	—		$	(2,167	)	$	—		$	(2,679	)	Net of tax
Realized gains on available- for-sale securities	$	7		$	34		$	20		$	74		Net gain on sale of securities
		(2	)		(9	)		(5	)		(19	)	Income tax expense
	$	5		$	25		$	15		$	55		Net of tax

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Financial Instruments Representing Credit Risk

The following table sets forth outstanding financial instruments whose contract amounts represent credit risk as of September 30, 2021 and December 31, 2020 (in thousands):


	Contract or notional amount
	September 30, 2021		December 31, 2020
Financial instruments whose contract amounts represent credit risk:
Unused commitments to extend credit	$	806,444	$	804,520
Standby letters of credit		10,397		10,403
Total	$	816,841	$	814,923

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives (Tables)

9 Months Ended

Sep. 30, 2021

Summary of Customer Related Interest Rate Swaps

A summary of the Company’s customer related interest rate swaps was as follows (in thousands):


	September 30, 2021					December 31, 2020
	Notional		Estimated			Notional		Estimated
	amount		fair value			amount		fair value
Interest rate swap agreements:
Pay fixed/receive variable swaps	$	58,040	$	(2,118	)	$	59,946	$	(2,740	)
Pay variable/receive fixed swaps		58,040		2,118			59,946		2,740
Total	$	116,080	$	—		$	119,892	$	—

Summary of Net (Losses) Gains Relating to Mortgage Banking Derivative Instruments Included in Mortgage Banking Income

The net (losses) gains relating to mortgage banking derivative instruments included in mortgage banking income were as follows (in thousands):


	Three Months Ended			Nine Months Ended
	September 30, 2021			September 30, 2021
Mortgage loan interest rate lock commitments	$	(221	)	$	(1,528	)
Mortgage-backed securities forward sales commitments		307			919
Total	$	86		$	(609	)

Summary of Amount and Fair Value of Mortgage Banking Derivative Instruments Included in Consolidated Balance Sheets

The amount and fair value of mortgage banking derivatives included in the consolidated balance sheets were as follows (in thousands):


	September 30, 2021				December 31, 2020
	Notional		Estimated		Notional		Estimated
	amount		fair value		amount		fair value
Included in other assets:
Mortgage loan interest rate lock commitments	$	86,938	$	1,079	$	88,303	$	2,607
Mortgage-backed securities forward sales commitments		72,500		293		—		—
Included in other liabilities:
Mortgage-backed securities forward sales commitments	$	—	$	—	$	87,000	$	(626	)

Stock Options and Restricted Shares (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Summary of Company Recognized Stock-Based Compensation Expense


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Stock-based compensation expense before income taxes	$	373		$	330		$	1,169		$	1,231
Less: deferred tax benefit		(98	)		(86	)		(306	)		(322	)
Reduction of net income	$	275		$	244		$	863		$	909

Summary of Changes in Company's Nonvested Restricted Shares

A summary of the changes in the Company’s nonvested restricted shares for the nine months ended September 30, 2021 follows:


				Weighted
				Average
	Restricted			Grant Date
Nonvested Shares	Shares			Fair Value
Nonvested at beginning of period		148,414		$	14.39
Granted		140,549			14.81
Vested		(64,062	)		14.99
Forfeited		(23,222	)		14.52
Nonvested at end of period		201,679		$	14.10

Summary of Activity in Stock Options

A summary of the activity in stock options for the nine months ended September 30, 2021 follows:


						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual
	Shares			Price		Term (years)
Outstanding at beginning of period		226,589		$	11.73
Granted		—			—
Exercised		(96,344	)		11.41
Forfeited or expired		—			—
Outstanding at end of period		130,245		$	11.96		5.2
Fully vested and expected to vest		130,245		$	11.96		5.2
Exercisable at end of period		113,578		$	11.54		4.8

Information Related to Stock Options

Information related to stock options during each year follows:


	2021		2020
Intrinsic value of options exercised	$	821,174	$	188,662
Cash received from option exercises		1,077,489		105,847
Tax benefit realized from option exercises		148,312		16,524
Weighted average fair value of options granted		—		—

Regulatory Capital Requirements (Tables)

9 Months Ended

Sep. 30, 2021

Banking and Thrift, Interest [Abstract]

Schedule of Capital Amounts and Ratios

The Company’s and the Bank’s capital amounts and ratios as of September 30, 2021 and December 31, 2020 are presented in the following table (dollars in thousands).


	Actual					Minimum capital requirement (1)					Minimum to be well-capitalized (2)
	Amount		Ratio			Amount		Ratio			Amount		Ratio
At September 30, 2021:
Total capital to risk-weighted assets:
CapStar Financial Holdings, Inc.	$	373,051		16.23	%	$	183,922		8.0	%	N/A		N/A
CapStar Bank		359,460		15.65			183,781		8.0		$	229,726		10	%
Tier I capital to risk-weighted assets:
CapStar Financial Holdings, Inc.		320,700		13.95			137,941		6.0		N/A		N/A
CapStar Bank		336,608		14.65			137,835		6.0			183,781		8.00
Common equity Tier 1 capital to risk weighted assets:
CapStar Financial Holdings, Inc.		320,700		13.95			103,456		4.5		N/A		N/A
CapStar Bank		320,108		13.93			103,377		4.5			149,322		6.50
Tier I capital to average assets:
CapStar Financial Holdings, Inc.		320,700		10.28			124,771		4.0		N/A		N/A
CapStar Bank		336,608		10.82			124,449		4.0			155,561		5.00

At December 31, 2020:
Total capital to risk-weighted assets:
CapStar Financial Holdings, Inc.	$	338,426		16.03	%	$	168,910		8.0	%	N/A		N/A
CapStar Bank		324,152		15.36			168,808		8.0		$	211,010		10.0
Tier I capital to risk-weighted assets:
CapStar Financial Holdings, Inc.		285,439		13.52			126,682		6.0		N/A		N/A
CapStar Bank		300,588		14.25			126,606		6.0			168,808		8.0
Common equity Tier 1 capital to risk weighted assets:
CapStar Financial Holdings, Inc.		285,439		13.52			95,012		4.5		N/A		N/A
CapStar Bank		284,088		13.46			94,954		4.5			137,156		6.5
Tier I capital to average assets:
CapStar Financial Holdings, Inc.		285,439		9.60			118,877		4.0		N/A		N/A
CapStar Bank		300,588		10.12			118,780		4.0			148,476		5.0

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Share [Abstract]

Summary of Basic and Diluted Earnings Per Share


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Basic net income per share calculation:
Numerator – Net income	$	13,102	$	7,487	$	36,207	$	15,015
Denominator – Average common shares outstanding		22,164,278		21,948,579		22,114,948		19,558,281
Basic net income per share	$	0.59	$	0.34	$	1.64	$	0.77
Diluted net income per share calculation:
Numerator – Net income	$	13,102	$	7,487	$	36,207	$	15,015
Denominator – Average common shares outstanding		22,164,278		21,948,579		22,114,948		19,558,281
Dilutive shares contingently issuable		54,124		11,911		50,182		25,167
Average diluted common shares outstanding		22,218,402		21,960,490		22,165,130		19,583,448
Diluted net income per share	$	0.59	$	0.34	$	1.63	$	0.77

Fair Value (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	Fair value measurements at September 30, 2021
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U. S. government agency securities	$	11,610		$	—	$	11,610		$	—
State and municipal securities		83,687			—		83,687			—
Mortgage-backed securities		320,500			—		320,500			—
Asset-backed securities		3,344			—		3,344			—
Other debt securities		64,637			—		64,637			—
Loans held for sale		79,842			—		79,842			—
Derivative assets:
Non-hedging derivatives:
Interest rate swaps - customer related		2,118			—		2,118			—
Mortgage loan interest rate lock commitments		1,079			—		—			1,079
Mortgage-backed securities forward sales commitments		293			—		293			—
Liabilities:
Derivative liabilities:
Non-hedging derivatives:
Derivative Liabilities - customer related		(2,118	)		—		(2,118	)		—


	Fair value measurements at December 31, 2020
				Quoted prices
				in active		Significant
				markets for		other			Significant
				identical		observable			unobservable
	Carrying			assets		inputs			inputs
	Value			(Level 1)		(Level 2)			(Level 3)
Assets:
Securities available-for-sale:
U. S. government agency securities	$	16,391		$	—	$	16,391		$	—
State and municipal securities		91,928			—		91,928			—
Mortgage-backed securities		336,363			—		336,363			—
Asset-backed securities		3,193			—		3,193			—
Other debt securities		38,340			—		38,340			—
Loans held for sale		97,303			—		97,303			—
Derivative assets:
Non-hedging derivatives:
Interest rate swaps - customer related		2,740			—		2,740			—
Mortgage loan interest rate lock commitments		2,607			—		—			2,607
Liabilities:
Derivative liabilities:
Non-hedging derivatives:
Interest rate swaps - customer related		(2,740	)		—		(2,740	)		—
Mortgage-backed securities forward sales commitments		(626	)		—		(626	)		—

Reconciliation of Assets Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Level 3)


	Mortgage Loan Interest Rate
	Lock Commitments
	2021			2020

Balance of recurring Level 3 assets at January 1st	$	2,607		$	648
Total gains or losses for the period:
Included in mortgage banking income		(1,528	)		3,488
Balance of recurring Level 3 assets at September 30th	$	1,079		$	4,136

Summary of Quantitative Information About Level 3 Fair Value Measurements for Assets Measured at Fair Value on Recurring and Non-recurring Basis

The following table presents quantitative information about recurring Level 3 fair value measurements (dollars in thousands):


					Range
	Fair		Valuation		(Weighted-
September 30, 2021	Value		Technique(s)	Unobservable Input(s)	Average)
Assets:
Non-hedging derivatives:
Mortgage loan interest rate lock commitments	$	1,079	Consensus pricing	Origination pull-through rate	59% - 96% (82%)


					Range
	Fair		Valuation		(Weighted-
December 31, 2020	Value		Technique(s)	Unobservable Input(s)	Average)
Assets:
Non-hedging derivatives:
Mortgage loan interest rate lock commitments	$	2,607	Consensus pricing	Origination pull-through rate	54% - 91% (74%)

The following table presents quantitative information about December 31, 2020 Level 3 fair value measurements for assets measured at fair value on a non-recurring basis (dollars in thousands):


					Range
	Fair		Valuation		(Weighted-
December 31, 2020	Value		Technique(s)	Unobservable Input(s)	Average)
Impaired loans:
Commercial and industrial	$	36	Sales Comparison approach	Appraisal discounts	10%

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

Fair value measurements at December 31, 2020

Quoted prices

in active

Significant

markets for

other

Significant

identical

observable

unobservable

Carrying

assets

inputs

Value

(level 1)

(level 2)

(level 3)

Assets:

Impaired loans:

Commercial and industrial

—

Summary of Carrying Value and Fair Values of the Bank's Financial Instruments

Fair Value of Financial Instruments

The carrying value and estimated fair values of the Bank’s financial instruments at September 30, 2021 and December 31, 2020 were as follows (in thousands):


	September 30, 2021				December 31, 2020
	Carrying				Carrying				Fair value
	amount		Fair value		amount		Fair value		level of input
Financial assets:
Cash and due from banks, interest-bearing deposits in financial institutions	$	339,367	$	339,367	$	277,439	$	277,439	Level 1
Federal funds sold		19,900		19,900		—		—	Level 1
Securities available-for-sale		483,778		483,778		486,215		486,215	Level 2
Securities held-to-maturity		1,788		1,847		2,407		2,504	Level 2
Loans held for sale		176,488		179,325		186,998		180,698	Level 2
Restricted equity securities		14,443	N/A			15,562	N/A		N/A
Loans held for investment		1,894,249		1,901,826		1,883,690		1,900,647	Level 3
Accrued interest receivable		7,606		7,606		8,771		8,771	Level 2
Other assets		83,072		83,072		46,381		46,381	Level 2 / Level 3
Financial liabilities:
Deposits		2,674,392		2,535,324		2,568,001		2,472,860	Level 3
Subordinated notes and Federal Home Loan bank advances		29,499		31,022		39,423		41,400	Level 2
Other liabilities		2,902		2,902		3,334		3,334	Level 3

Acquisition - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 01, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Business Acquisition [Line Items]
Acquisition related expenses		$ 0	$ 2,548	$ 323	$ 3,286
Goodwill		$ 41,068		$ 41,068		$ 41,068
FCB Merger
Business Acquisition [Line Items]
Common stock, par value	$ 1.00
Common stock shares	2,966,918
Stock Issued During Period, Value, Issued for Services	$ 22,200
Bow Merger
Business Acquisition [Line Items]
Common stock shares	664,800
Stock Issued During Period, Value, Issued for Services	$ 5,100
Total acquisition consideration	70,900
FCB Corporation and BOW
Business Acquisition [Line Items]
Acquisition related expenses			$ 2,500		$ 3,300
Goodwill	$ 3,558
FCB Common Stock \| FCB Merger
Business Acquisition [Line Items]
Common stock, par value	$ 10.00
BOW Common Stock \| Bow Merger
Business Acquisition [Line Items]
Common stock, par value	$ 10.00

Acquisition - Schedule of Consideration Paid and Amounts of Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands

9 Months Ended

Jul. 01, 2020

Sep. 30, 2020

Sep. 30, 2021

Dec. 31, 2020

Payments to Acquire Businesses, Gross

$ 27,278

Goodwill recorded related to acquisition

$ 41,068

FCB Corporation and BOW

Assets

Cash and cash equivalents

$ 90,760

Premises and equipment, net

98,695

Loans, gross

294,674

11,447

Core deposit intangible

3,570

15,597

514,743

Liabilities

Deposits

442,677

4,735

Net identifiable assets acquired

447,412

67,331

Total cost of acquisition

Value of stock issued

70,889

70,889

Goodwill recorded related to acquisition

3,558

FCB Corporation and BOW | As recorded by FCB Corporation and BOW

Assets

Cash and cash equivalents

90,760

Allowance for loan losses

98,536

Loans, gross

296,992

(4,544)

Premises and equipment, net

9,907

16,514

508,165

Liabilities

Deposits

440,025

4,735

FCB Corporation and BOW | Initial Fair Value Adjustment

444,760

Assets

Allowance for loan losses

^[1]

159

Loans, gross

^[2]

(2,318)

^[3]

4,544

Premises and equipment, net

^[4]

1,540

Core deposit intangible

^[5]

3,570

^[6]

917

6,578

Liabilities

Deposits

^[7]

2,652

FCB Corporation and BOW | Common Stock

2,652

Total cost of acquisition

Value of stock issued

43,611

43,611

FCB Corporation and BOW | Rolled Stock Options

Cash consideration paid

$ 27,278

[1]	The amount represents the fair value adjustment of acquired securities that were subsequently sold.
[2]	The amount represents the adjustment of the net book value of acquired loans to their estimated fair value based on interest rates and expected cash flows at the date of acquisition.
[3]	The amount represents the removal of FCB’s and BOW’s existing allowance for loan losses.
[4]	The amount represents the adjustment of the net book value of acquired premises and equipment to their estimated fair value.
[5]	The amount represents the adjustment of recording the fair value of the core deposit intangible representing the intangible value of the deposit base acquired and the fair value of the customer relationship.
[6]	The amount represents the net adjustment of the deferred tax asset recognized on the fair value adjustments on acquired assets and assumed liabilities.
[7]	The amount represents the adjustment necessary because the weighted average interest rate of acquired time deposits exceeded the cost of similar funding at the time of acquisition. The fair value adjustment will be amortized to reduce future interest expense over the life of the portfolio.

Securities - Summary of Amortized Cost and Fair Value of Available-for-sale and Held-to-maturity Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Securities available for sale [Abstract]
Amortized Cost	$ 485,517	$ 478,186
Gross unrealized gains	6,522	8,897
Gross unrealized (losses)	(8,261)	(868)
Estimated fair value	483,778	486,215
Securities held to maturity [Abstract]
Amortized Cost	1,788	2,407
Gross unrealized gains	59	97
Estimated fair value	1,847	2,504
U. S. government agency securities
Securities available for sale [Abstract]
Amortized Cost	11,588	16,158
Gross unrealized gains	101	258
Gross unrealized (losses)	(79)	(25)
Estimated fair value	11,610	16,391
State and municipal securities
Securities available for sale [Abstract]
Amortized Cost	82,471	89,081
Gross unrealized gains	1,996	2,928
Gross unrealized (losses)	(780)	(81)
Estimated fair value	83,687	91,928
Securities held to maturity [Abstract]
Amortized Cost	1,788	2,407
Gross unrealized gains	59	97
Estimated fair value	1,847	2,504
Mortgage-backed securities
Securities available for sale [Abstract]
Amortized Cost	324,862	332,014
Gross unrealized gains	2,814	4,892
Gross unrealized (losses)	(7,176)	(543)
Estimated fair value	320,500	336,363
Asset-backed securities
Securities available for sale [Abstract]
Amortized Cost	3,325	3,325
Gross unrealized gains	19
Gross unrealized (losses)		(132)
Estimated fair value	3,344	3,193
Other debt securities
Securities available for sale [Abstract]
Amortized Cost	63,271	37,608
Gross unrealized gains	1,592	819
Gross unrealized (losses)	(226)	(87)
Estimated fair value	$ 64,637	$ 38,340

Securities - Summary of Securities with Unrealized Losses and Length of Time Continuous Loss Positions (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Estimated fair value	$ 258,079	$ 118,846
Less than 12 months, Gross unrealized losses	(6,585)	(672)
12 months or more, Estimated fair value	48,638	4,642
12 months or more, Gross unrealized losses	(1,676)	(196)
Total, Estimated fair value	306,717	123,488
Total, Gross unrealized losses	(8,261)	(868)
U. S. government agency securities
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Estimated fair value	2,931	1,989
Less than 12 months, Gross unrealized losses	(40)	(25)
12 months or more, Estimated fair value	1,964
12 months or more, Gross unrealized losses	(39)
Total, Estimated fair value	4,895	1,989
Total, Gross unrealized losses	(79)	(25)
State and municipal securities
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Estimated fair value	34,046	10,463
Less than 12 months, Gross unrealized losses	(546)	(81)
12 months or more, Estimated fair value	5,479
12 months or more, Gross unrealized losses	(234)
Total, Estimated fair value	39,525	10,463
Total, Gross unrealized losses	(780)	(81)
Mortgage-backed securities
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Estimated fair value	197,864	100,291
Less than 12 months, Gross unrealized losses	(5,773)	(479)
12 months or more, Estimated fair value	41,195	1,449
12 months or more, Gross unrealized losses	(1,403)	(64)
Total, Estimated fair value	239,059	101,740
Total, Gross unrealized losses	(7,176)	(543)
Asset-backed securities
Schedule Of Available For Sale Securities [Line Items]
12 months or more, Estimated fair value		3,193
12 months or more, Gross unrealized losses		(132)
Total, Estimated fair value		3,193
Total, Gross unrealized losses		(132)
Other debt securities
Schedule Of Available For Sale Securities [Line Items]
Less than 12 months, Estimated fair value	23,238	6,103
Less than 12 months, Gross unrealized losses	(226)	(87)
Total, Estimated fair value	23,238	6,103
Total, Gross unrealized losses	$ (226)	$ (87)

Securities - Additional Information (Details) $ in Millions	Sep. 30, 2021 USD ($)
Schedule Of Available For Sale Securities [Line Items]
Gross unrealized losses in investment securities portfolio	$ 8.3
Public Deposits, Derivative Positions and Federal Home Loan Bank Advances
Schedule Of Available For Sale Securities [Line Items]
Market value of securities	$ 201.5

Securities - Summary of Sales, Maturities, Prepayments and Calls of Securities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 74,305	$ 141,347
Gross gains	44	83
Gross losses	$ (24)	$ (9)

Securities - Summary of Amortized Cost and Fair Value of Debt and Equity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Available-for-sale, Amortized cost [Abstract]
Due in less than one year	$ 17,820
Due one to five years	73,699
Due five to ten years	55,125
Due beyond ten years	10,686
Amortized Cost	485,517	$ 478,186
Available-for-sale, Estimated fair value [Abstract]
Due in less than one year	17,905
Due one to five years	75,446
Due five to ten years	56,249
Due beyond ten years	10,334
Estimated fair value	483,778	486,215
Held-to-maturity, Amortized cost [Abstract]
Due in less than one year	0
Due one to five years	1,788
Amortized Cost	1,788	2,407
Securities held to maturity [Abstract]
Due in less than one year	0
Due one to five years	1,847
Estimated fair value	1,847	2,504
Mortgage-backed securities
Available-for-sale, Amortized cost [Abstract]
Amortized cost	324,862
Amortized Cost	324,862	332,014
Available-for-sale, Estimated fair value [Abstract]
Estimated fair value	320,500
Estimated fair value	320,500	336,363
Asset-backed securities
Available-for-sale, Amortized cost [Abstract]
Amortized Cost	3,325	3,325
Available-for-sale, Estimated fair value [Abstract]
Estimated fair value	$ 3,344	$ 3,193

Loans and Allowance for Loan Losses - Summary of Loans Held for Investment Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Loans And Leases Receivable Disclosure [Line Items]
Total loans	$ 1,894,249		$ 1,883,690
Allowance for loan losses	(22,533)	$ (22,754)	(23,245)	$ (23,167)	$ (21,035)	$ (12,604)
Loans, net	1,871,716		1,860,445
Commercial real estate
Loans And Leases Receivable Disclosure [Line Items]
Total loans	772,996		643,832
Allowance for loan losses	(7,394)	(7,915)	(7,349)	(5,829)	(5,139)	(3,599)
Consumer real estate
Loans And Leases Receivable Disclosure [Line Items]
Total loans	328,262		343,791
Allowance for loan losses	(2,343)	(1,730)	(1,831)	(1,817)	(1,398)	(1,231)
Construction and land development
Loans And Leases Receivable Disclosure [Line Items]
Total loans	210,516		174,859
Allowance for loan losses	(4,110)	(3,871)	(3,476)	(3,182)	(2,387)	(2,058)
Commercial and industrial
Loans And Leases Receivable Disclosure [Line Items]
Total loans	478,279		623,446
Allowance for loan losses	(7,613)	(8,401)	(9,708)	(11,700)	(11,514)	(5,074)
Consumer
Loans And Leases Receivable Disclosure [Line Items]
Total loans	45,669		44,279
Allowance for loan losses	(435)	(356)	(305)	(200)	(234)	(222)
Other
Loans And Leases Receivable Disclosure [Line Items]
Total loans	58,527		53,483
Allowance for loan losses	$ (638)	$ (481)	$ (576)	$ (439)	$ (363)	$ (420)

Loans and Allowance for Loan Losses - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($) Contract	Sep. 30, 2020 USD ($) Contract	Sep. 30, 2021 USD ($) Contract	Sep. 30, 2020 USD ($) Contract	Dec. 31, 2020 USD ($)	Jul. 01, 2020 USD ($)
Loans And Leases Receivable Disclosure [Line Items]
Outstanding balance of loans originated under PPP	$ 1,871,716,000		$ 1,871,716,000		$ 1,860,445,000
Minimum loan amount for loans analyzed by credit risk			500,000
Interest income recognized on a cash basis for impaired loans	0
Investment in TDR	1,900,000		1,900,000		1,900,000
Specific allowance related to loans	0		0		66,000
Additional commitments related to TDR	$ 0		$ 0		0
New TDR identified during the period \| Contract	0	0	0	0
TDR, payment default within twelve months \| Contract	0	0	0	0
Loan period considered as payment default			30 days
Recorded loans with a fair value						$ 294,700,000
Purchased Credit Impaired
Loans And Leases Receivable Disclosure [Line Items]
Recorded loans with a fair value						$ 33,600,000
Troubled Debt Restructurings
Loans And Leases Receivable Disclosure [Line Items]
Specific allowance related to loans	$ 0		$ 0		0
Commercial and industrial
Loans And Leases Receivable Disclosure [Line Items]
Specific allowance related to loans	$ 0		$ 0
Payroll Protection Program
Loans And Leases Receivable Disclosure [Line Items]
Debt instrument, interest rate	1.00%		1.00%
Unamortized fees	$ 2,200,000		$ 2,200,000
Fees recognized as income	$ 1,700,000	$ 1,000,000.0	$ 5,600,000	$ 1,900,000
Payroll Protection Program \| Minimum
Loans And Leases Receivable Disclosure [Line Items]
Debt instrument, term			2 years
Percentage of loan processing fee	1.00%		1.00%
Payroll Protection Program \| Maximum
Loans And Leases Receivable Disclosure [Line Items]
Debt instrument, term			5 years
Percentage of loan processing fee	5.00%		5.00%
Payroll Protection Program \| Commercial and industrial
Loans And Leases Receivable Disclosure [Line Items]
Outstanding balance of loans originated under PPP	$ 64,200,000		$ 64,200,000		$ 185,500,000

Loans and Allowance for Loan Losses - Summary of Changes in Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	$ 22,754	$ 21,035	$ 23,245	$ 12,604
Charged-off loans	(267)	(52)	(407)	(1,014)
Recoveries	46	65	110	282
Provision for loan losses	(0)	2,119	(415)	11,295
Ending Balance	22,533	23,167	22,533	23,167
Commercial real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	7,915	5,139	7,349	3,599
Charged-off loans	0		(10)	(3)
Recoveries		13
Provision for loan losses	(521)	677	55	2,223
Ending Balance	7,394	5,829	7,394	5,829
Consumer real estate
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	1,730	1,398	1,831	1,231
Charged-off loans		0	(1)	(43)
Recoveries	17	1	22	4
Provision for loan losses	596	418	491	625
Ending Balance	2,343	1,817	2,343	1,817
Construction and land development
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	3,871	2,387	3,476	2,058
Charged-off loans			0
Provision for loan losses	239	(795)	634	1,124
Ending Balance	4,110	3,182	4,110	3,182
Commercial and industrial
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	8,401	11,514	9,708	5,074
Charged-off loans	(125)	0	(132)	(710)
Recoveries	1	3	2	162
Provision for loan losses	(664)	183	(1,965)	7,174
Ending Balance	7,613	11,700	7,613	11,700
Consumer
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	356	234	305	222
Charged-off loans	(62)	(30)	(106)	(83)
Recoveries	17	16	63	58
Provision for loan losses	124	20	173	3
Ending Balance	435	200	435	200
Other
Financing Receivable Allowance For Credit Losses [Line Items]
Beginning Balance	481	363	576	420
Charged-off loans	(80)	(22)	(158)	(175)
Recoveries	11	32	23	48
Provision for loan losses	226	66	197	146
Ending Balance	$ 638	$ 439	$ 638	$ 439

Loans and Allowance for Loan Losses - Summary of Breakdown of Allowance for Loan Losses and Loan Portfolio by Loan Category (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Allowance for Loan Losses:
Collectively evaluated for impairment	$ 22,533		$ 23,179
Individually evaluated for impairment	0		66
Allowance for Loan Losses, Ending Balance	22,533	$ 22,754	23,245	$ 23,167	$ 21,035	$ 12,604
Loans:
Collectively evaluated for impairment	1,870,875		1,852,135
Individually evaluated for impairment	2,103		3,163
Purchased credit impaired	21,271		28,392
Total	1,894,249		1,883,690
Commercial real estate
Allowance for Loan Losses:
Collectively evaluated for impairment	7,394		7,349
Allowance for Loan Losses, Ending Balance	7,394	7,915	7,349	5,829	5,139	3,599
Loans:
Collectively evaluated for impairment	767,682		637,112
Individually evaluated for impairment	1,154		1,179
Purchased credit impaired	4,160		5,541
Total	772,996		643,832
Consumer real estate
Allowance for Loan Losses:
Collectively evaluated for impairment	2,343		1,831
Allowance for Loan Losses, Ending Balance	2,343	1,730	1,831	1,817	1,398	1,231
Loans:
Collectively evaluated for impairment	314,328		325,569
Individually evaluated for impairment	884		1,707
Purchased credit impaired	13,050		16,515
Total	328,262		343,791
Construction and land development
Allowance for Loan Losses:
Collectively evaluated for impairment	4,110		3,410
Individually evaluated for impairment			66
Allowance for Loan Losses, Ending Balance	4,110	3,871	3,476	3,182	2,387	2,058
Loans:
Collectively evaluated for impairment	210,472		174,487
Individually evaluated for impairment			102
Purchased credit impaired	44		270
Total	210,516		174,859
Commercial and industrial
Allowance for Loan Losses:
Collectively evaluated for impairment	7,613		9,708
Individually evaluated for impairment	0
Allowance for Loan Losses, Ending Balance	7,613	8,401	9,708	11,700	11,514	5,074
Loans:
Collectively evaluated for impairment	475,782		620,288
Individually evaluated for impairment	63		168
Purchased credit impaired	2,434		2,990
Total	478,279		623,446
Consumer
Allowance for Loan Losses:
Collectively evaluated for impairment	435		305
Allowance for Loan Losses, Ending Balance	435	356	305	200	234	222
Loans:
Collectively evaluated for impairment	44,425		41,664
Individually evaluated for impairment	2		7
Purchased credit impaired	1,242		2,608
Total	45,669		44,279
Other
Allowance for Loan Losses:
Collectively evaluated for impairment	638		576
Allowance for Loan Losses, Ending Balance	638	$ 481	576	$ 439	$ 363	$ 420
Loans:
Collectively evaluated for impairment	58,186		53,015
Purchased credit impaired	341		468
Total	$ 58,527		$ 53,483

Loans and Allowance for Loan Losses - Allocation of ALL with Corresponding Percentage of ALL in Each Category to Total Loans, Net of Deferred Fee Except PPP Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 22,533	$ 22,754	$ 23,245	$ 23,167	$ 21,035	$ 12,604
Allowance for loan and lease losses, Percentage of total loans	1.19%		1.23%
Commercial real estate
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 7,394	7,915	$ 7,349	5,829	5,139	3,599
Allowance for loan and lease losses, Percentage of total loans	0.39%		0.39%
Consumer real estate
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 2,343	1,730	$ 1,831	1,817	1,398	1,231
Allowance for loan and lease losses, Percentage of total loans	0.12%		0.10%
Construction and land development
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 4,110	3,871	$ 3,476	3,182	2,387	2,058
Allowance for loan and lease losses, Percentage of total loans	0.22%		0.18%
Commercial and industrial
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 7,613	8,401	$ 9,708	11,700	11,514	5,074
Allowance for loan and lease losses, Percentage of total loans	0.41%		0.51%
Consumer
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 435	356	$ 305	200	234	222
Allowance for loan and lease losses, Percentage of total loans	0.02%		0.02%
Other
Loans And Leases Receivable Disclosure [Line Items]
Allowance for loan and leases losses, Amount	$ 638	$ 481	$ 576	$ 439	$ 363	$ 420
Allowance for loan and lease losses, Percentage of total loans	0.03%		0.03%

Loans and Allowance for Loan Losses - Summary of Impaired Loans Evaluated for Specific Loss Allowance, Excluding Purchased Credit Impaired (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Recorded investment	$ 2,103	$ 3,061
Impaired loans with no related allowance recorded, Unpaid principal balance	2,109	3,248
Impaired loans with an allowance recorded, Recorded investment	0	102
Impaired loans with an allowance recorded, Unpaid principal balance	0	102
Impaired loans with an allowance recorded, Related allowance	0	66
Recorded investment	2,103	3,163
Unpaid principal balance	2,109	3,350
Commercial real estate
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Recorded investment	1,154	1,179
Impaired loans with no related allowance recorded, Unpaid principal balance	1,135	1,176
Consumer real estate
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Recorded investment	884	1,707
Impaired loans with no related allowance recorded, Unpaid principal balance	909	1,608
Construction and land development
Financing Receivable Impaired [Line Items]
Impaired loans with an allowance recorded, Recorded investment		102
Impaired loans with an allowance recorded, Unpaid principal balance		102
Impaired loans with an allowance recorded, Related allowance		66
Commercial and industrial
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Recorded investment	63	168
Impaired loans with no related allowance recorded, Unpaid principal balance	63	457
Impaired loans with an allowance recorded, Recorded investment	0
Impaired loans with an allowance recorded, Unpaid principal balance	0
Impaired loans with an allowance recorded, Related allowance	0
Consumer
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Recorded investment	2	7
Impaired loans with no related allowance recorded, Unpaid principal balance	$ 2	$ 7

Loans and Allowance for Loan Losses - Summary of Average Recorded Investment and Interest Income Recognized on Impaired Loans, Excluding PCI Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment	$ 2,113	$ 2,246	$ 2,468	$ 2,620
Impaired loans with no related allowance recorded, Interest income recognized	16	26	49	86
Impaired loans with an allowance recorded, Average recorded investment	0	107	0	108
Average recorded investment	2,113	2,353	2,468	2,728
Interest income recognized	16	26	49	86
Commercial real estate
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment	1,159	1,191	1,174	1,458
Impaired loans with no related allowance recorded, Interest income recognized	16	17	48	57
Consumer real estate
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment	889	961	1,181	982
Impaired loans with no related allowance recorded, Interest income recognized		9	0	27
Construction and land development
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment		0		0
Impaired loans with an allowance recorded, Average recorded investment		0		0
Commercial and industrial
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment	63	90	64	176
Impaired loans with no related allowance recorded, Interest income recognized		0	1	2
Impaired loans with an allowance recorded, Average recorded investment	0	107	0	108
Consumer
Financing Receivable Impaired [Line Items]
Impaired loans with no related allowance recorded, Average recorded investment	$ 2	$ 4	$ 49	4
Impaired loans with no related allowance recorded, Interest income recognized				$ 0

Loans and Allowance for Loan Losses - Schedule of Aging of Recorded Investment in Past-due Loans, by Class of Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	$ 5,953	$ 21,168
Loans Not Past Due	1,888,296	1,862,522
Total purchased credit impaired	21,271	28,392
Total	1,894,249	1,883,690
Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,322	1,585
Loans Not Past Due	767,514	636,706
Total loans excluding purchased credit impaired	768,836	638,291
Total purchased credit impaired	4,160	5,541
Total	772,996	643,832
Consumer real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,108	8,367
Loans Not Past Due	314,104	318,909
Total loans excluding purchased credit impaired	315,212	327,276
Total purchased credit impaired	13,050	16,515
Total	328,262	343,791
Construction and land development
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	42	3,415
Loans Not Past Due	210,430	171,174
Total loans excluding purchased credit impaired	210,472	174,589
Total purchased credit impaired	44	270
Total	210,516	174,859
Commercial and industrial
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	985	3,367
Loans Not Past Due	474,860	617,089
Total loans excluding purchased credit impaired	475,845	620,456
Total purchased credit impaired	2,434	2,990
Total	478,279	623,446
Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	297	317
Loans Not Past Due	44,130	41,354
Total loans excluding purchased credit impaired	44,427	41,671
Total purchased credit impaired	1,242	2,608
Total	45,669	44,279
Other
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	394	290
Loans Not Past Due	57,792	52,725
Total loans excluding purchased credit impaired	58,186	53,015
Total purchased credit impaired	341	468
Total	58,527	53,483
Purchased credit impaired
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,805	3,827
Loans Not Past Due	19,466	24,565
Total purchased credit impaired	21,271	28,392
30 - 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	2,127	12,791
30 - 59 Days Past Due \| Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	65	409
30 - 59 Days Past Due \| Consumer real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	425	6,084
30 - 59 Days Past Due \| Construction and land development
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	30	2,670
30 - 59 Days Past Due \| Commercial and industrial
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	437	1,734
30 - 59 Days Past Due \| Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	160	270
30 - 59 Days Past Due \| Other
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	78	252
30 - 59 Days Past Due \| Purchased credit impaired
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	932	1,372
60 - 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,493	4,011
60 - 89 Days Past Due \| Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due
60 - 89 Days Past Due \| Consumer real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	496	1,596
60 - 89 Days Past Due \| Construction and land development
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		745
60 - 89 Days Past Due \| Commercial and industrial
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	503	38
60 - 89 Days Past Due \| Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	99	40
60 - 89 Days Past Due \| Other
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	316	38
60 - 89 Days Past Due \| Purchased credit impaired
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	79	1,554
Greater than 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	2,333	4,366
Greater than 89 Days Past Due \| Commercial real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,257	1,176
Greater than 89 Days Past Due \| Consumer real estate
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	187	687
Greater than 89 Days Past Due \| Construction and land development
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	12
Greater than 89 Days Past Due \| Commercial and industrial
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	45	1,595
Greater than 89 Days Past Due \| Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	38	7
Greater than 89 Days Past Due \| Other
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due
Greater than 89 Days Past Due \| Purchased credit impaired
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	$ 794	$ 901

Loans and Allowance for Loan Losses - Schedule of Non-Accrual Loans, Past Due Loans over 89 Days and Accruing and Troubled Debt Restructurings (TDR) by Class of Loans (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	$ 3,431	$ 4,816
Past Due Over 89 Days and Accruing	1,560	3,295
Troubled Debt Restructurings	1,859	1,928
Commercial real estate
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	115	130
Past Due Over 89 Days and Accruing	1,257	1,176
Troubled Debt Restructurings	1,135	1,176
Consumer real estate
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	1,174	1,821
Past Due Over 89 Days and Accruing	77	342
Troubled Debt Restructurings	661	685
Construction and Land Development
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual		107
Past Due Over 89 Days and Accruing	12
Troubled Debt Restructurings	0
Commercial and industrial
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	89	470
Past Due Over 89 Days and Accruing		1,205
Troubled Debt Restructurings	63	67
Consumer
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	47	9
Past Due Over 89 Days and Accruing	0	5
Troubled Debt Restructurings	0
Other
Accounts Notes And Loans Receivable [Line Items]
Troubled Debt Restructurings	0
Purchased credit impaired
Accounts Notes And Loans Receivable [Line Items]
Non-Accrual	2,006	2,279
Past Due Over 89 Days and Accruing	169	$ 567
Troubled Debt Restructurings	$ 0

Loans and Allowance for Loan Losses - Summary of Contractually Required Payments (Details) $ in Thousands	Jul. 01, 2020 USD ($)
Purchased Non Impaired [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required payments	$ 296,527
Cash flows expected to be collected at acquisition	3,718
Fair value of PCI loans at acquisition date	260,701
Fair value of acquired loans at acquisition date	260,701
Contractual cash flows not expected to be collected	3,718
F C B And B O W Mergers [Member] \| Purchased Credit Impaired [Member]
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items]
Contractually required payments	42,443
Nonaccretable difference	4,501
Cash flows expected to be collected at acquisition	37,942
Accretable yield	4,349
Fair value of PCI loans at acquisition date	33,593
Fair value of acquired loans at acquisition date	33,593
Contractual cash flows not expected to be collected	$ 37,942

Loans and Allowance for Loan Losses - Schedule of Activity in Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Certain Loans Acquired In Transfer Accounted For As Debt Securities Accretable Yield Movement Schedule [Line Items]
Balance, beginning , carrying value	$ 22,765	$ 28,392
Change due to payments received and accretion	(1,494)	(7,121)
Balance, ending, carrying value	21,271	21,271
Accretable Yield For PCI Loans
Certain Loans Acquired In Transfer Accounted For As Debt Securities Accretable Yield Movement Schedule [Line Items]
Balance, beginning , carrying value	3,169	4,068
Accretion	(603)	(1,502)
Balance, ending, carrying value	$ 2,566	$ 2,566

Premises and Equipment - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Operating lease, liability	$ 12,227,000		$ 12,227,000
Operating lease, right-of-use asset	$ 11,400,000		$ 11,400,000
Operating lease, weighted average remaining lease term	9 years 3 months 18 days		9 years 3 months 18 days
Operating lease, weighted average discount rate, percent	3.42%		3.42%
Sale and leaseback transaction	$ 0	$ 0	$ 0	$ 0

Premises and Equipment - Summary of Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Property, Plant and Equipment [Abstract]
Operating lease cost	$ 514	$ 1,588
Short-term lease cost	0	0
Variable lease cost	0	0
Total lease cost	$ 514	$ 1,588

Premises and Equipment - Maturity Analysis of Operating Lease Liabilities and Reconciliation of Undiscounted Cash Flows (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Lease payments due:
2021	$ 432
2022	1,751
2023	1,717
2024	1,425
2025	1,428
2026 and thereafter	7,655
Total undiscounted cash flows	14,408
Discount on cash flows	(2,181)
Operating lease, liability	$ 12,227

Short Term Borrowings And Long-Term Debt - Additional Information (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) BasisPoint	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Outstanding advances	$ 0		$ 10,000
Issuance of subordinated notes		$ 29,387
Subordinated Notes
Debt Instrument [Line Items]
Issuance of subordinated notes	30,000
Debt issuance costs	$ 600
Maturity date	Jun. 30, 2030
Redemption date	Jun. 30, 2025
Fixed interest rate	5.25%
Debt instrument, frequency of periodic interest payment	quarterly
Debt instrument, description of variable rate basis	The notes have a fixed interest rate of 5.25% per annum for the first five years. Thereafter, the interest rate will reset quarterly to an interest rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR) plus 513 basis points.
Carrying value of subordinated notes	$ 29,500		$ 29,400
Subordinated Notes \| SOFR
Debt Instrument [Line Items]
Debt instrument, interest rate plus basis point \| BasisPoint	513
Investment securities, FHLB stock and commercial and residential real estate mortgage loans
Debt Instrument [Line Items]
Federal Home Loan Bank Advances Collateralized Investment Securities Value	$ 2,200
Mortgage loans collateralized amount	634,100
Amount of available credit	$ 448,900

Accumulated Other Comprehensive Income (Loss) - Summary of Changes In Accumulated Other Comprehensive Income (Loss) By Component, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ 359,752	$ 343,787	$ 343,486	$ 281,950	$ 275,790	$ 273,046	$ 343,486	$ 273,046
Other comprehensive income (loss) before reclassification, net of tax							(7,214)	2,797
Amounts reclassified from accumulated other comprehensive income (loss), net of tax							(15)	2,624
Other comprehensive income (loss)	(1,582)	3,778	(9,425)	1,653	360	3,408	(7,229)	5,421
Ending balance	370,328	359,752	343,787	333,895	281,950	275,790	370,328	333,895
Gains and Losses on Cash Flow Hedges
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance						(2,679)		(2,679)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax								2,679
Other comprehensive income (loss)								2,679
Ending balance				0				0
Unrealized Gains and Losses on Available for Sale Securities
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			7,728			4,062	7,728	4,062
Other comprehensive income (loss) before reclassification, net of tax							(7,214)	2,797
Amounts reclassified from accumulated other comprehensive income (loss), net of tax							(15)	(55)
Other comprehensive income (loss)							(7,229)	2,742
Ending balance	499			6,804			499	6,804
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	2,081	(1,697)	7,728	5,151	4,791	1,383	7,728	1,383
Other comprehensive income (loss)	(1,582)	3,778	(9,425)	1,653	360	3,408	(7,229)	5,421
Ending balance	$ 499	$ 2,081	$ (1,697)	$ 6,804	$ 5,151	$ 4,791	$ 499	$ 6,804

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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Accumulated Other Comprehensive Income (Loss) - Summary of Amounts Reclassified out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net gain on sale of securities							$ 20	$ 74
Interest expense - Federal Home Loan Bank advances	$ 0			$ (116)			(12)	(348)
Income tax benefit (expense)	(3,147)			(2,115)			(9,075)	(3,299)
Net income	13,102	$ 12,076	$ 11,030	7,487	$ 6,181	$ 1,346	36,207	15,015
Reclassification out of Accumulated Other Comprehensive Income \| Realized Losses on Cash Flow Hedges
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Interest expense money market accounts				(2,060)				(2,466)
Interest expense - Federal Home Loan Bank advances				(107)				(213)
Net income				(2,167)				(2,679)
Reclassification out of Accumulated Other Comprehensive Income \| Realized Gains on Available for Sale Securities
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income On Derivatives [Line Items]
Net gain on sale of securities	7			34			20	74
Income tax benefit (expense)	(2)			(9)			(5)	(19)
Net income	$ 5			$ 25			$ 15	$ 55

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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CapStar Financial Holdings, Inc.

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Income Taxes [Line Items]
Effective tax rate	19.40%	22.00%	20.00%	18.00%
Federal statutory income tax rate	21.00%		21.00%
CARES act of 2020, net operating loss carryback period			5 years
CARES act of 2020 net operating loss income tax benefit			$ (0.8)
Tennessee \| State and Local Jurisdiction
Income Taxes [Line Items]
Excise tax rate	6.50%		6.50%

Commitments and Contingencies - Schedule of Financial Instruments Representing Credit Risk (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Unused commitments to extend credit	$ 806,444	$ 804,520
Standby letters of credit	10,397	10,403
Total	$ 816,841	$ 814,923

Derivatives - Additional Information (Details) - Designated as Hedging Instrument [Member] - Interest Rate Swap [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Derivative Instruments [Line Items]
Notional amount	$ 0	$ 0
Derivative termination fees	1,500
Remaining unrealized gains or losses in accumulated other comprehensive income recognized in net income	1,900
Unrealized gains or losses in accumulated other comprehensive income	$ 0

Derivatives - Summary of Customer Related Interest Rate Swaps (Details) - Interest Rate Swap [Member] - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Derivative Instruments [Line Items]
Notional	$ 116,080,000	$ 119,892,000
Estimated	0	0
Pay Fixed And Receive Variable Swaps [Member]
Derivative Instruments [Line Items]
Notional	58,040,000	59,946,000
Estimated	(2,118,000)	(2,740,000)
Pay Variable And Receive Fixed Swaps [Member]
Derivative Instruments [Line Items]
Notional	58,040,000	59,946,000
Estimated	$ 2,118,000	$ 2,740,000

Derivatives - Summary of Net (Losses) Gains Relating to Mortgage Banking Derivative Instruments Included in Mortgage Banking Income (Details) - Mortgage Banking Derivative Instrument [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2021
Derivative Instruments [Line Items]
Net (losses) gains relating to mortgage banking derivative instruments	$ 86	$ (609)
Mortgage Loan Interest Rate Lock Commitments [Member]
Derivative Instruments [Line Items]
Net (losses) gains relating to mortgage banking derivative instruments	(221)	(1,528)
Mortgage Backed Securities Forward Sales Commitments [Member]
Derivative Instruments [Line Items]
Net (losses) gains relating to mortgage banking derivative instruments	$ 307	$ 919

Derivatives - Summary of Amount and Fair Value of Mortgage Banking Derivative Instruments Included in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Other Assets \| Mortgage Loan Interest Rate Lock Commitments
Derivative Instruments [Line Items]
Notional amount, assets	$ 86,938	$ 88,303
Estimated fair value, asset	1,079	2,607
Other Assets \| Mortgage-Backed Securities Forward Sales Commitments
Derivative Instruments [Line Items]
Notional amount, assets	72,500
Estimated fair value, asset	293
Other Liabilities \| Mortgage-Backed Securities Forward Sales Commitments
Derivative Instruments [Line Items]
Notional amount, liabilities	0	87,000
Estimated fair value, liabilities	$ 0	$ 626

Stock Options and Restricted Shares - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted	0	0
Time-Vested Restricted Stock Units and Performance Stock Units \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	2 years
Time-Vested Restricted Stock Units and Performance Stock Units \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years
Performance Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years
Performance Stock Units \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards earning percentage	0.00%
Performance Stock Units \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Awards earning percentage	188.00%
Restricted Shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation cost	$ 1.9
Cost expected to be recognized over a weighted-average period	2 years
Total fair value of shares vested	$ 1.1
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years
Contractual term	10 years
Unrecognized compensation cost	$ 0.1
Cost expected to be recognized over a weighted-average period	7 months 6 days
2021 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares of stock reserved for issuance of stock incentives	1,168,543
Shares issuable under both restricted share and stock option grants	1,168,543

Stock Options and Restricted Shares - Summary of Company Recognized Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock-based compensation expense before income taxes	$ 373	$ 330	$ 1,169	$ 1,231
Less: deferred tax benefit	(98)	(86)	(306)	(322)
Reduction of net income	$ 275	$ 244	$ 863	$ 909

Stock Options and Restricted Shares - Summary of Changes in Company's Nonvested Restricted Shares (Details)	9 Months Ended
	Sep. 30, 2021 $ / shares shares
Restricted Shares, Abstract
Restricted Shares, Nonvested Beginning Balance \| shares	148,414
Restricted Shares, Granted \| shares	140,549
Restricted Shares, Vested \| shares	(64,062)
Restricted Shares, Forfeited \| shares	(23,222)
Restricted Shares, Nonvested Ending Balance \| shares	201,679
Weighted Average Grant Date Fair Value, Abstract
Weighted Average Grant Date Fair Value, Nonvested Beginning Balance \| $ / shares	$ 14.39
Weighted Average Grant Date Fair Value, Granted \| $ / shares	14.81
Weighted Average Grant Date Fair Value, Vested \| $ / shares	14.99
Weighted Average Grant Date Fair Value, Forfeited \| $ / shares	14.52
Weighted Average Grant Date Fair Value, Nonvested Ending Balance \| $ / shares	$ 14.10

Stock Options and Restricted Shares - Summary of Activity in Stock Options (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2021 $ / shares shares	Dec. 31, 2020 $ / shares shares
Shares, Abstract
Shares Outstanding, Beginning Balance \| shares	226,589
Shares Outstanding, Granted \| shares	0	0
Shares Outstanding, Exercised \| shares	(96,344)
Shares Outstanding, Forfeited or Expired \| shares	0
Shares Outstanding, Ending Balance \| shares	130,245	226,589
Shares, Fully Vested and Expected to Vest \| shares	130,245
Shares, Exercisable at End of Period \| shares	113,578
Weighted Average Exercise Price, Abstract
Weighted Average Exercise Price Outstanding, Beginning Balance \| $ / shares	$ 11.73
Weighted Average Exercise Price Outstanding, Granted \| $ / shares	0
Weighted Average Exercise Price Outstanding, Exercised \| $ / shares	11.41
Weighted Average Exercise Price Outstanding, Forfeited or expired \| $ / shares	0
Weighted Average Exercise Price Outstanding, Ending Balance \| $ / shares	11.96	$ 11.73
Weighted Average Exercise Price, Fully vested and expected to vest \| $ / shares	11.96
Weighted Average Exercise Price, Exercisable at End of Period \| $ / shares	$ 11.54
Weighted Average Remaining Contractual Term (year), Abstract
Weighted Average Remaining Contractual Term Outstanding	5 years 2 months 12 days
Weighted Average Remaining Contractual Term, Fully Vested and Expected to Vest	5 years 2 months 12 days
Weighted Average Remaining Contractual Term, Exercisable at End of Period	4 years 9 months 18 days

Stock Options and Restricted Shares - Information Related to Stock Options (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Intrinsic value of options exercised	$ 821,174	$ 188,662
Cash received from option exercises	1,077,489	105,847
Tax benefit realized from option exercises	$ 148,312	$ 16,524
Weighted average fair value of options granted	$ 0	$ 0

Regulatory Capital Requirements - Schedule of Capital Amounts and Ratios (Details)
$ in Thousands

Sep. 30, 2021

USD ($)

Dec. 31, 2020

USD ($)

Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]

Total capital to risk-weighted assets, actual amount

$ 373,051

$ 338,426

Tier I capital to risk-weighted assets, actual amount

320,700

285,439

Tier I capital to average assets, actual amount

$ 320,700

$ 285,439

Total capital to risk-weighted assets, actual ratio

16.23

16.03

Tier I capital to risk-weighted assets, actual ratio

13.95

13.52

Tier I capital to average assets, actual ratio

10.28

9.60

Total capital to risk-weighted assets, minimum capital requirement amount

^[1]

$ 183,922

$ 168,910

Tier I capital to risk-weighted assets, minimum capital requirement amount

^[1]

137,941

126,682

Tier I capital to average assets, minimum capital requirement amount

^[1]

$ 124,771

$ 118,877

Total capital to risk-weighted assets, minimum capital requirement ratio

^[1]

8.0

Tier I capital to risk-weighted assets, minimum capital requirement ratio

^[1]

6.0

Tier I capital to average assets, minimum capital requirement ratio

^[1]

4.0

CapStar Financial Holdings, Inc. | Common Stock

Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]

Tier I capital to risk-weighted assets, actual amount

$ 320,700

$ 285,439

Tier I capital to risk-weighted assets, actual ratio

13.95

13.52

Tier I capital to risk-weighted assets, minimum capital requirement amount

^[1]

$ 103,456

$ 95,012

Tier I capital to risk-weighted assets, minimum capital requirement ratio

^[1]

4.5

CapStar Bank

Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]

Total capital to risk-weighted assets, actual amount

$ 359,460

$ 324,152

Tier I capital to risk-weighted assets, actual amount

336,608

300,588

Tier I capital to average assets, actual amount

$ 336,608

$ 300,588

Total capital to risk-weighted assets, actual ratio

15.65

15.36

Tier I capital to risk-weighted assets, actual ratio

14.65

14.25

Tier I capital to average assets, actual ratio

10.82

10.12

Total capital to risk-weighted assets, minimum capital requirement amount

^[1]

$ 183,781

$ 168,808

Tier I capital to risk-weighted assets, minimum capital requirement amount

^[1]

137,835

126,606

Tier I capital to average assets, minimum capital requirement amount

^[1]

$ 124,449

$ 118,780

Total capital to risk-weighted assets, minimum capital requirement ratio

^[1]

8.0

Tier I capital to risk-weighted assets, minimum capital requirement ratio

^[1]

6.0

Tier I capital to average assets, minimum capital requirement ratio

^[1]

4.0

Total capital to risk-weighted assets, minimum to be well capitalized amount

^[2]

$ 229,726

$ 211,010

Tier I capital to risk-weighted assets, minimum to be well capitalized amount

^[2]

183,781

168,808

Tier I capital to average assets, minimum to be well capitalized amount

^[2]

$ 155,561

$ 148,476

Total capital to risk-weighted assets, minimum to be well capitalized ratio

^[2]

10.0

Tier I capital to risk-weighted assets, minimum to be well capitalized ratio

^[2]

8.00

8.0

Tier I capital to average assets, minimum to be well capitalized ratio

^[2]

5.00

5.0

CapStar Bank | Common Stock

Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]

Tier I capital to risk-weighted assets, actual amount

$ 320,108

$ 284,088

Tier I capital to risk-weighted assets, actual ratio

13.93

13.46

Tier I capital to risk-weighted assets, minimum capital requirement amount

^[1]

$ 103,377

$ 94,954

Tier I capital to risk-weighted assets, minimum capital requirement ratio

^[1]

4.5

Tier I capital to risk-weighted assets, minimum to be well capitalized amount

^[2]

$ 149,322

$ 137,156

Tier I capital to risk-weighted assets, minimum to be well capitalized ratio

^[2]

6.50

6.5

[1]	For the calendar year 2021, the Company must maintain a capital conservation buffer of Tier 1 common equity capital in excess of minimum risk-based capital ratios by at least 2.5% to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees.
[2]	For the Company to be well-capitalized, the Bank must be well-capitalized and the Company must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve to meet and maintain a specific capital level for any capital measure.

Regulatory Capital Requirements - Schedule of Capital Amounts and Ratios (Parenthetical) (Details)	Sep. 30, 2021
Banking and Thrift, Interest [Abstract]
Minimum risk based capital ratios	2.5

Earnings Per Share - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Basic net income per share calculation:
Numerator – Net income	$ 13,102	$ 7,487	$ 36,207	$ 15,015
Denominator – Average common shares outstanding	22,164,278	21,948,579	22,114,948	19,558,281
Basic net income per share	$ 0.59	$ 0.34	$ 1.64	$ 0.77
Diluted net income per share calculation:
Numerator – Net income	$ 13,102	$ 7,487	$ 36,207	$ 15,015
Denominator – Average common shares outstanding	22,164,278	21,948,579	22,114,948	19,558,281
Dilutive shares contingently issuable	54,124	11,911	50,182	25,167
Average diluted common shares outstanding	22,218,402	21,960,490	22,165,130	19,583,448
Diluted net income per share	$ 0.59	$ 0.34	$ 1.63	$ 0.77

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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