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Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

34

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 September 30, 2021 and December 31, 2020 (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)
September 30, 2021
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	191,684			$	—			$	191,684			$	—
Obligations of states and political subdivisions			338,744				—				338,128				616
Mortgage-backed securities			782,615				—				782,615				—
Other securities			33,923				—				33,923				—
Total available-for-sale securities			1,346,966				—				1,346,350				616
Equity securities			348				348				—				—
Derivative assets: interest rate swaps			35				—				35				—
Total assets		$	1,347,349			$	348			$	1,346,385			$	616
Derivative liabilities: interest rate swaps		$	899			$	—			$	899			$	—
December 31, 2020
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	127,069			$	—			$	127,069			$	—
Obligations of states and political subdivisions			249,844				—				249,050				794
Mortgage-backed securities			491,348				—				491,348				—
Other securities			10,979				—				10,979				—
Total available-for-sale securities			879,240				—				878,446				794
Equity securities			218				218				193				—
Derivative assets: interest rate swaps			1,399				—				1,399				—
Total assets		$	880,857			$	218			$	880,038			$	794
Derivative liabilities: interest rate swaps		$	2,892			$	—			$	2,892			$	—

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 nine months ended September 30, 2021 and 2020 is summarized as follows (in thousands):

		Obligation of State and Political Subdivisions
		Three months ended								Nine months ended
		September 30, 2021				September 30, 2020				September 30, 2021				September 30, 2020
Beginning balance		$	615			$	792			$	794			$	973
Transfers into Level 3			—				—				—				—
Transfers out of Level 3			—				—				—				—
Total gains or losses:
Included in net income			1				1				3				4
Included in other comprehensive income (loss)			—				—				—				—
Purchases, issuances, sales and settlements:
Purchases			—				—				—				—
Issuances			—				—				—				—
Sales			—				—				—				—
Settlements			—				—				(181	)			(184	)
Ending balance		$	616			$	793			$	616			$	793
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		$	—			$	—			$	—			$	—

Assets Measured at Fair Value on a Nonrecurring Basis

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 September 30, 2021 and December 31, 2020 (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)
September 30, 2021
Collateral dependent loans		$	13,682			$	—			$	—			$	13,682
Foreclosed assets held for sale			1,720				—				—				1,720
Mortgage servicing rights			455				—				—				455
December 31, 2020
Collateral dependent loans		$	14,876			$	—			$	—			$	14,876
Foreclosed assets held for sale			290				—				—				290
Mortgage servicing rights			516				—				—				517

Significant Unobservable Inputs Used in Valuation of Level 3 Fair Value Measurements

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at September 30, 2021.

September 30, 2021		Fair Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average
Collateral dependent loans		$	13,682			Third party valuations		Discount to reflect realizable value		0% - 40%		20%
Foreclosed assets held for sale			1,720			Third party valuations		Discount to reflect realizable value less estimated selling costs		0% - 40%		35%
Mortgage servicing rights			455			Third party valuations		PSA standard prepayment model rate		230 - 438			281

December 31, 2020		Fair Value				Valuation Technique		Unobservable Inputs		Range		Weighted Average
Collateral dependent loans		$	14,876			Third party valuations		Discount to reflect realizable value		0% - 40%		20%
Foreclosed assets held for sale			290			Third party valuations		Discount to reflect realizable value less estimated selling costs		0% - 40%		35%
Mortgage servicing rights			517			Third party valuations		PSA standard prepayment model rate		242 - 441			384

Summary of Estimated Fair Values of Company Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments at September 30, 2021 and December 31, 2020 in accordance with ASC 825 (in thousands):

		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
September 30, 2021
Financial assets
Cash and due from banks		$	343,859			$	343,859			$	343,859			$	—			$	—
Federal funds sold			1,347				1,347				1,347				—				—
Certificates of deposit investments			2,695				2,695				—				2,695				—
Available-for-sale securities			1,346,966				1,346,966				—				1,346,351				615
Held-to-maturity securities			7,026				7,057				2,022				5,035				—
Equity securities			348				348				348				—				—
Loans held for sale			1,897				1,897				—				1,897				—
Loans net of allowance for credit losses			3,891,889				3,830,149				—				—				3,830,149
Interest receivable			22,057				22,057				—				22,057				—
Federal Reserve Bank stock			13,845				13,845				—				13,845				—
Federal Home Loan Bank stock			6,528				6,528				—				6,528				—
Financial liabilities
Deposits		$	4,988,562			$	4,991,225			$	—			$	4,347,567			$	643,658
Securities sold under agreements to repurchase			149,891				149,896				—				149,896				—
Interest payable			2,569				2,569				—				2,569				—
Federal Home Loan Bank borrowings			112,641				113,205				—				113,205				—
Subordinated debt, net			94,363				94,363								94,363
Junior subordinated debentures, net			19,153				14,528				—				14,528				—
December 31, 2020
Financial assets
Cash and due from banks		$	415,973			$	415,973			$	415,973			$	—			$	—
Federal funds sold			1,308				1,308				1,308				—				—
Certificates of deposit investments			2,695				2,695				—				2,695				—
Available-for-sale securities			879,240				879,240				—				878,446				794
Held-to-maturity securities			5,016				5,119				—				5,119				—
Equity securities			218				218				218				—				—
Loans held for sale			1,924				1,924				—				1,924				—
Loans net of allowance for credit losses			3,094,585				3,056,344				—				—				3,056,344
Interest receivable			19,287				19,287				—				19,287				—
Federal Reserve Bank stock			9,401				9,401				—				9,401				—
Federal Home Loan Bank stock			5,450				5,450				—				5,450				—
Financial liabilities
Deposits		$	3,692,784			$	3,697,105			$	—			$	3,215,715			$	481,390
Securities sold under agreements to repurchase			206,937				206,945				—				206,945				—
Interest payable			2,345				2,345				—				2,345				—
Federal Home Loan Bank borrowings			93,969				96,669				—				96,669				—
Subordinated debt, net			94,253				94,253				—				94,253				—
Junior subordinated debentures, net			19,027				14,604				—				14,604				—

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