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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Measurements

Schedule of recorded amount of assets and liabilities measured at fair value on a recurring basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 (unaudited) and December 31, 2019.


					Significant			Significant
					Other			Other
					Observable			Unobservable
		Quoted Prices			Inputs			Inputs			Total
(dollars in thousands)		(Level 1)			(Level 2)			(Level 3)			(Fair Value)
June 30, 2020
Assets:
Investment securities available-for-sale:
U. S. agency securities		$	—		$	117,054		$	—		$	117,054
Residential mortgage backed securities			—			531,528			—			531,528
Municipal bonds			—			90,694			—			90,694
Corporate bonds			—			—			32,920			32,920
Other equity investments			—			—			198			198
Loans held for sale			—			68,433			—			68,433
Interest Rate Caps			—			4,454			—			4,454
Total assets measured at fair value on a recurring basis as of June 30, 2020		$	—		$	812,163		$	33,118		$	845,281
Liabilities:
Interest rate swap derivatives		$	—		$	1,330		$	—		$	1,330
Derivative liability			—			150			—			150
Interest Rate Caps			—			4,748			—			4,748
Total liabilities measured at fair value on a recurring basis as of June 30, 2020		$	—		$	6,228		$	—		$	6,228
December 31, 2019
Assets:
Investment securities available-for-sale:
U. S. agency securities		$	—		$	179,794		$	—		$	179,794
Residential mortgage backed securities			—			543,852			—			543,852
Municipal bonds			—			73,931			—			73,931
Corporate bonds			—			—			10,733			10,733
U.S. Treasury			—			34,855			—			34,855
Other equity investments			—			—			198			198
Loans held for sale			—			56,707			—			56,707
Interest Rate Caps			—			317			—			317
Mortgage banking derivatives			—			—			280			280
Total assets measured at fair value on a recurring basis as of December 31, 2019		$	—		$	889,456		$	11,211		$	900,667
Liabilities:
Interest rate swap derivatives		$	—		$	203		$	—		$	203
Derivative liability			—			86			—			86
Interest Rate Caps			—			312			—			312
Mortgage banking derivatives			—			—			66			66
Total liabilities measured at fair value on a recurring basis as of December 31, 2019		$	—		$	601		$	66		$	667

Schedule of aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value

The following tables summarize the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of June 30, 2020 (unaudited) and December 31, 2019.


		June 30, 2020
					Aggregate
					Unpaid
					Principal
(dollars in thousands)		Fair Value			Balance			Difference
Loans held for sale		$	68,433		$	67,397		$	1,036


		December 31, 2019
					Aggregate
					Unpaid
					Principal
(dollars in thousands)		Fair Value			Balance			Difference
Loans held for sale		$	56,707		$	55,834		$	873

Schedule of the reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3)

The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3):


		Investment			Mortgage Banking
(dollars in thousands)		Securities			Derivatives			Total
Assets:
Beginning balance at January 1, 2020		$	10,931		$	280		$	11,211
Realized gain (loss) included in earnings			442			(280)			162
Unrealized gain included in other comprehensive income			1,280			—			1,280
Purchases of available-for-sale securities			41,547			—			41,547
Principal redemption			(21,082)			—			(21,082)
Ending balance at June 30, 2020		$	33,118		$	—		$	33,118

Liabilities:
Beginning balance at January 1, 2020		$	—		$	66		$	66
Realized loss included in earnings			—			(66)			(66)
Principal redemption			—			—			—
Ending balance at June 30, 2020		$	—		$	—		$	—


		Investment			Mortgage Banking
(dollars in thousands)		Securities			Derivatives			Total
Assets:
Beginning balance at January 1, 2019		$	9,794		$	229		$	10,023
Realized (loss) gain included in earnings			(20)			51			31
Unrealized gain included in other comprehensive income			131			—			131
Purchases of available-for-sale securities			4,030			—			4,030
Principal redemption			(3,004)			—			(3,004)
Ending balance at December 31, 2019		$	10,931		$	280		$	11,211

Liabilities:
Beginning balance at January 1, 2019		$	—		$	269		$	269
Realized gain included in earnings			—			(203)			(203)
Principal redemption			—			—			—
Ending balance at December 31, 2019		$	—		$	66		$	66

Schedule of assets measured at fair value on nonrecurring basis


					Significant			Significant
					Other			Other
					Observable			Unobservable
		Quoted Prices			Inputs			Inputs			Total
(dollars in thousands)		(Level 1)			(Level 2)			(Level 3)			(Fair Value)
June 30, 2020
Commercial		$	—		$	—		$	18,047		$	18,047
Income producing - commercial real estate			—			—			27,295			27,295
Owner occupied - commercial real estate			—			—			10,815			10,815
Real estate mortgage - residential			—			—			7,960			7,960
Construction - commercial and residential			—			—			5,385			5,385
Home equity			—			—			600			600
Other consumer			—			—			6			6
Other real estate owned			—			—			8,237			8,237
Total assets measured at fair value on a nonrecurring basis as of June 30, 2020		$	—		$	—		$	78,345		$	78,345


					Significant			Significant
					Other			Other
					Observable			Unobservable
		Quoted Prices			Inputs			Inputs			Total
(dollars in thousands)		(Level 1)			(Level 2)			(Level 3)			(Fair Value)
December 31, 2019
Impaired loans:
Commercial		$	—		$	—		$	10,100		$	10,100
Income producing - commercial real estate			—			—			11,948			11,948
Owner occupied - commercial real estate			—			—			6,934			6,934
Real estate mortgage - residential			—			—			4,981			4,981
Construction - commercial and residential			—			—			11,409			11,409
Home equity			—			—			387			387
Other real estate owned			—			—			1,487			1,487
Total assets measured at fair value on a nonrecurring basis as of December 31, 2019		$	—		$	—		$	47,246		$	47,246

Schedule of estimated fair values of financial instruments

The estimated fair value of the Company’s financial instruments at June 30, 2020 and December 31, 2019 are as follows:


								Fair Value Measurements
											Significant
											Other			Significant
								Quoted			Observable			Unobservable
		Carrying						Prices			Inputs			Inputs
(dollars in thousands)		Value			Fair Value			(Level 1)			(Level 2)			(Level 3)
June 30, 2020
Assets
Cash and due from banks		$	12,199		$	12,199		$	—		$	12,199		$	—
Federal funds sold			25,466			25,466			—			25,466			—
Interest bearing deposits with other banks			598,377			598,377			—			598,377			—
Investment securities			772,394			772,394			—			719,212			53,182
Federal Reserve and Federal Home Loan Bank stock			40,018			40,018			—			40,018			—
Loans held for sale			68,433			68,433			—			68,433			—
Loans			7,912,965			7,828,639			—			—			7,828,639
Bank owned life insurance			75,913			75,913			—			75,913			—
Annuity investment			14,480			14,480			—			14,480			—
Interest Rate Caps			4,454			4,454			—			4,454			—

Liabilities
Noninterest bearing deposits			2,416,058			2,416,058			—			2,416,058			—
Interest bearing deposits			4,366,421			4,366,421			—			4,366,421			—
Certificates of deposit			1,153,493			1,149,418			—			1,149,418			—
Customer repurchase agreements			31,198			31,198			—			31,198			—
Borrowings			567,882			548,808			—			548,808			—
Interest rate swap derivatives			1,330			1,330						1,330			—
Derivative liability			150			150			—			150			—
Interest Rate Caps			4,748			4,748			—			4,748			—

December 31, 2019
Assets
Cash and due from banks		$	7,539		$	7,539		$	—		$	7,539		$	—
Federal funds sold			38,987			38,987			—			38,987			—
Interest bearing deposits with other banks			195,447			195,447			—			195,447			—
Investment securities			843,363			843,363			—			832,432			10,931
Federal Reserve and Federal Home Loan Bank stock			35,194			35,194			—			35,194			—
Loans held for sale			56,707			56,707			—			56,707			—
Loans			7,472,090			7,550,249			—			—			7,550,249
Bank owned life insurance			75,724			75,724			—			75,724			—
Annuity investment			14,697			14,697			—			14,697			—
Interest Rate Caps			280			280			—			280			—

Liabilities
Noninterest bearing deposits			2,064,367			2,064,367			—			2,064,367			—
Interest bearing deposits			3,876,985			3,876,985			—			3,876,985			—
Certificates of deposit			1,283,039			1,291,688			—			1,291,688			—
Customer repurchase agreements			30,980			30,980			—			30,980			—
Borrowings			467,687			328,330			—			328,330			—
Interest rate swap derivatives			203			203						203			—
Derivative liability			86			86			—			86			—
Interest Rate Caps			312			312			—			312			—
Mortgage banking derivatives			66			66			—			—			66