Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Assets Measured At Fair Value On A Recurring And Non-Recurring Basis

The following tables present for each of the fair-value hierarchy levels the Company’s assets that are measured at fair value on a recurring and non-recurring basis as of the dates indicated (in thousands).

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
June 30, 2019
Measured on a recurring basis:
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	—	$	111,186		$	—	$	111,186
Mortgage-backed securities		—		295,323			—		295,323
Other assets:
Hedging derivative instruments		—		35			—		35
Fair value adjusted through comprehensive income	$	—	$	406,544		$	—	$	406,544
Other assets:
Derivative instruments - interest rate products	$	—	$	5,199		$	—	$	5,199
Derivative instruments - credit contracts		—		29			—		29
Derivative instruments - mortgage banking		—		205			—		205
Other liabilities:
Derivative instruments - interest rate products		—		(5,692	)		—		(5,692	)
Derivative instruments - credit contracts		—		(47	)		—		(47	)
Derivative instruments - mortgage banking		—		(16	)		—		(16	)
Fair value adjusted through net income	$	—	$	(322	)	$	—	$	(322	)
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	2,045		$	—	$	2,045
Collateral dependent impaired loans		—		—			4,935		4,935
Other assets:
Loan servicing rights		—		—			1,060		1,060
Other real estate owned		—		—			37		37
Total	$	—	$	2,045		$	6,032	$	8,077

There were no transfers between Levels 1 and 2 during the six months ended June 30, 2019. There were no liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2019.

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
December 31, 2018
Measured on a recurring basis:
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	—	$	152,028		$	—	$	152,028
Mortgage-backed securities		—		293,649			—		293,649
Other assets:
Hedging derivative instruments		—		631			—		631
Fair value adjusted through comprehensive income	$	—	$	446,308		$	—	$	446,308
Other assets:
Derivative instruments - interest rate products	$	—	$	1,803		$	—	$	1,803
Derivative instruments - mortgage banking		—		83			—		83
Other liabilities:
Derivative instruments - interest rate products		—		(2,006	)		—		(2,006	)
Derivative instruments - credit contracts		—		(24	)		—		(24	)
Derivative instruments - mortgage banking		—		(27	)		—		(27	)
Fair value adjusted through net income	$	—	$	(171	)	$	—	$	(171	)
Measured on a nonrecurring basis:
Loans:
Loans held for sale	$	—	$	2,868		$	—	$	2,868
Collateral dependent impaired loans		—		—			2,872		2,872
Other assets:
Loan servicing rights		—		—			1,022		1,022
Other real estate owned		—		—			230		230
Total	$	—	$	2,868		$	4,124	$	6,992

There were no transfers between Levels 1 and 2 during the six months ended June 30, 2018. There were no liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2018.

Additional Quantitative Information About Assets Measured At Fair Value On A Recurring And Non-Recurring Basis

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands).

Asset	Fair Value		Valuation Technique	Unobservable Input	Unobservable Input Value or Range
Collateral dependent impaired loans	$	4,935	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	28% ⁽³⁾
Loan servicing rights		1,060	Discounted cash flow	Discount rate	10.2% ⁽³⁾
				Constant prepayment rate	15.4% ⁽³⁾
Other real estate owned		37	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	20% ⁽³⁾

⁽¹⁾	Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

⁽²⁾	Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

⁽³⁾	Weighted averages.

Changes in Level 3 Fair Value Measurements

There were no assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of or during the six months ended June 30, 2019 and 2018.

Carrying Amount, Estimated Fair Value, And Placement In Fair Value Hierarchy Of Financial Instruments

The following presents (in thousands) the carrying amount, estimated fair value, and placement in the fair value measurement hierarchy of the Company’s financial instruments as of the dates indicated.

	Level in	June 30, 2019				December 31, 2018
	Fair Value			Estimated				Estimated
	Measurement	Carrying		Fair		Carrying		Fair
	Hierarchy	Amount		Value		Amount		Value
Financial assets:
Cash and cash equivalents	Level 1	$	108,988	$	108,988	$	102,755	$	102,755
Securities available for sale	Level 2		406,509		406,509		445,677		445,677
Securities held to maturity	Level 2		398,610		401,405		446,581		439,581
Loans held for sale	Level 2		2,045		2,045		2,868		2,868
Loans	Level 2		3,112,315		3,131,641		3,049,812		3,006,161
Loans ⁽¹⁾	Level 3		4,935		4,935		2,872		2,872
Accrued interest receivable	Level 1		12,432		12,432		11,990		11,990
FHLB and FRB stock	Level 2		21,717		21,717		26,375		26,375
Derivative instruments – cash flow hedge	Level 2		35		35		631		631
Derivative instruments – interest rate products	Level 2		5,199		5,199		1,803		1,803
Derivative instruments – credit contracts	Level 2		29		29		—		—
Derivative instruments – mortgage banking	Level 2		205		205		83		83
Financial liabilities:
Non-maturity deposits	Level 1		2,363,505		2,363,505		2,346,839		2,346,839
Time deposits	Level 2		1,108,484		1,105,235		1,020,068		1,014,532
Short-term borrowings	Level 1		308,500		308,500		469,500		469,500
Long-term borrowings	Level 2		39,237		38,602		39,202		38,415
Accrued interest payable	Level 1		10,368		10,368		9,280		9,280
Derivative instruments – interest rate products	Level 2		5,692		5,692		2,006		2,006
Derivative instruments – credit contracts	Level 2		47		47		24		24
Derivative instruments – mortgage banking	Level 2		16		16		27		27

⁽¹⁾	Comprised of collateral dependent impaired loans.