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Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2020 and December 31, 2019 (in thousands):

		Fair Value Measurements Using
						Quoted Prices in Active Markets for Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs
		Fair Value				(Level 1)				(Level 2)				(Level 3)
June 30, 2020
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government    corporations and agencies		$	73,899			$	—			$	73,899			$	—
Obligations of states and political subdivisions			200,697				—				199,906				791
Mortgage-backed securities			425,674				—				425,674				—
Other securities			7,888				—				7,888				—
Total available-for-sale securities			708,158				—				707,367				791
Equity securities			97				97				—				—
Derivative assets: interest rate swaps			42				—				42				—
Total assets		$	708,297			$	97			$	707,409			$	791
Derivative liabilities: interest rate swaps		$	1,829			$	—			$	1,829			$	—
December 31, 2019
Available-for-sale securities:
U.S. Treasury securities and Obligations of U.S. government    corporations and agencies		$	107,320			$	—			$	107,320			$	—
Obligations of states and political subdivisions			178,433				—				177,460				973
Mortgage-backed securities			396,126				—				396,126				—
Other securities			3,950				—				3,950				—
Total available-for-sale securities			685,829				—				684,856				973
Equity securities			219				219				—				—
Total assets		$	686,048			$	219			$	684,856			$	973
Derivative liabilities: interest rate swaps		$	325			$	—			$	325			$	—

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2020 and 2019 is summarized as follows (in thousands):

		Obligation of State and Political Subdivisions
		Three months ended								Six months ended
		June 30, 2020				June 30, 2019				June 30, 2020				June 30, 2019
Beginning balance		$	790			$	968			$	973			$	967
Transfers into Level 3			—				—				—				—
Transfers out of Level 3			—				—				—				—
Total gains or losses:
Included in net income			1				2				2				3
Included in other comprehensive income (loss)			—				—				—				—
Purchases, issuances, sales and settlements:
Purchases			—				—				—				—
Issuances			—				—				—				—
Sales			—				—				(184	)			—
Settlements			—				—				—				—
Ending balance		$	791			$	970			$	791			$	970
Total gains or losses for the period included in net income attributable to the change in    unrealized gains or losses related to assets and liabilities still held at the reporting    date		$	—			$	—			$	—			$	—

Significant Assumptions Used in Valuation of Level 3 Financial Instruments

the following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020		Fair Value				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Impaired loans (collateral dependent)		$	8,358			Third party valuations		Discount to reflect realizable value		0% - 40%		(20%)
Foreclosed assets held for sale			21			Third party valuations		Discount to reflect realizable value less estimated selling costs		0% - 40%		(35%)
Mortgage servicing rights			899			Third party valuations		Discount to reflect realizable value		9.0% - 11.0%		(9.1%)

December 31, 2019		Fair Value				Valuation Technique		Unobservable Inputs		Range (Weighted Average)
Impaired loans (collateral dependent)		$	12,727			Third party valuations		Discount to reflect realizable value		0% - 40%		(20%)
Foreclosed assets held for sale			935			Third party valuations		Discount to reflect realizable value less estimated selling costs		0% - 40%		(35%)
Mortgage servicing rights			1,444			Third party valuations		Discount to reflect realizable value		9.5% - 12.5%		(9.7%)

Summary of Estimated Fair Values of Company Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at June 30, 2020 and December 31, 2019 in accordance with ASC 825 (in thousands):

		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
June 30, 2020
Financial Assets
Cash and due from banks		$	237,201			$	237,201			$	237,201			$	—			$	—
Federal funds sold			1,286				1,286				1,286				—				—
Certificates of deposit investments			3,890				3,890				—				3,890				—
Available-for-sale securities			708,158				708,158				—				707,367				791
Held-to-maturity securities			15,009				15,216				—				15,216				—
Equity securities			97				97				97				—				—
Loans held for sale			5,981				5,981				—				5,981				—
Loans net of allowance for loan losses			3,160,900				3,095,700				—				—				3,095,700
Interest receivable			16,842				16,482				—				16,482				—
Federal Reserve Bank stock			9,401				9,401				—				9,401				—
Federal Home Loan Bank stock			5,450				5,450				—				5,450				—
Financial Liabilities
Deposits		$	3,385,827			$	3,396,983			$	—			$	2,856,239			$	540,744
Securities sold under agreements to repurchase			350,288				350,306				—				350,306				—
Interest payable			1,922				1,922				—				1,922				—
Federal Home Loan Bank borrowings			103,939				107,286				—				107,286				—
Other borrowings			—				—				—				—				—
Junior subordinated debentures			18,942				14,285				—				14,285				—
December 31, 2019
Financial Assets
Cash and due from banks		$	84,154			$	84,154			$	84,154			$	—			$	—
Federal funds sold			926				926				926				—				—
Certificates of deposit investments			4,625				4,625				—				4,625				—
Available-for-sale securities			685,636				685,636				—				684,856				780
Held-to-maturity securities			69,542				69,572				—				69,572				—
Equity securities			412				412				219				—				193
Loans held for sale			1,820				1,820				—				1,820				—
Loans net of allowance for loan losses			2,666,616				2,622,053				—				—				2,622,053
Interest receivable			15,577				15,577				—				15,577				—
Federal Reserve Bank stock			9,401				9,401				—				9,401				—
Federal Home Loan Bank stock			4,105				4,105				—				4,105				—
Financial Liabilities
Deposits		$	2,917,366			$	2,924,144			$	—			$	2,332,866			$	591,278
Securities sold under agreements to repurchase			208,109				208,016				—				208,016				—
Interest payable			2,261				2,261				—				2,261				—
Federal Home Loan Bank borrowings			113,895				114,510				—				114,510				—
Other borrowings			5,000				5,000				5,000				—				—
Junior subordinated debentures			18,858				15,596				—				15,596				—

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- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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