XML 17 R26.htm IDEA: XBRL DOCUMENT
v3.20.1

Fair Value of Financial Instruments | 12 Months Ended
--- | ---
Dec. 31, 2019
Fair Value of Financial Instruments |
Fair Value of Financial Instruments | (18) Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value: Loans Fair values are estimated for portfolios with similar financial characteristics. Loans are segregated by type, such as commercial, real estate, and consumer. Each loan category is further segmented into fixed and variable interest rate categories. The fair value of loans, or exit price, is estimated by using the future value of discounted cash flows using comparable market rates for similar types of loan products and adjusted for market factors. The discount rates used are estimated using comparable market rates for similar types of loan products adjusted to be commensurate with the credit risk, overhead costs, and optionality of such instruments. Investment Securities A detailed description of the fair value measurement of the debt instruments in the available-for-sale sections of the investment security portfolio is provided in the Fair Value Measurement section above. A schedule of investment securities by category and maturity is provided in the notes on Investment Securities. Other investment securities Other investment securities include equity securities with readily determinable fair values and other investment securities that do not have readily determinable fair values. Investments in Federal Home Loan Bank (FHLB) stock, and Midwest Independent Bank (MIB) bankers bank stock, that do not have readily determinable fair values, are required for membership in those organizations. Equity securities that are not actively traded are classified in level 2. Equity securities with readily determinable fair values are recorded at fair value, with changes in fair value reflected in earnings. Equity securities that do not have readily determinable fair values are carried at cost and are periodically assessed for impairment. The Company uses level 1 inputs to value equity securities that are traded in active markets. Federal Funds Sold, Cash, and Due from Banks The carrying amounts of short-term federal funds sold and securities purchased under agreements to resell, interest earning deposits with banks, and cash and due from banks approximate fair value. Federal funds sold and securities purchased under agreements to resell classified as short-term generally mature in 90 days or less. Certificates of Deposit in other banks Certificates of deposit are other investments made by the Company with other financial institutions that are carried at cost which is equal to fair value. Cash Surrender Value – Life Insurance The fair value of Bank owned life insurance (BOLI) approximates the carrying amount. Upon liquidation of these investments, the Company would receive the cash surrender value which equals the carrying amount. Accrued Interest Receivable and Payable For accrued interest receivable and payable, the carrying amount is a reasonable estimate of fair value because of the short maturity for these financial instruments. Deposits The fair value of deposits with no stated maturity, such as noninterest‑bearing demand, NOW accounts, savings, and money market, is equal to the amount payable on demand. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Federal funds purchased and Securities Sold under Agreements to Repurchase For Federal funds purchased and securities sold under agreements to repurchase, the carrying amount is a reasonable estimate of fair value, as such instruments reprice in a short time period. Subordinated Notes and Other Borrowings The fair value of subordinated notes and other borrowings is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for other borrowed money of similar remaining maturities. Operating Lease Liabilities The fair value of operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company's incremental borrowing rate at the lease commencement date. A summary of the carrying amounts and fair values of the Company's financial instruments at December 31, 2019 and 2018 is as follows:
|  |  |  |  |  |  |  | December 31, 2019
|  |  |  |  |  |  |  | Fair Value Measurements
|  |  |  |  |  |  |  |  | Quoted Prices |  |  |  |  |  |
|  |  |  |  |  |  |  | in Active |  |  |  |  | Net
|  |  |  |  |  |  |  | Markets for |  | Other |  | Significant
|  | December 31, 2019 |  | Identical |  | Observable |  | Unobservable
|  | Carrying |  | Fair |  | Assets |  | Inputs |  | Inputs
(in thousands) |  | amount |  | value |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 22,576 |  | $ | 22,576 |  | $ | 22,576 |  | $ | — |  | $ | —
Federal funds sold and overnight interest-bearing deposits |  |  | 55,545 |  |  | 55,545 |  |  | 55,545 |  |  | — |  |  | —
Certificates of deposit in other banks |  |  | 10,862 |  |  | 10,862 |  |  | 10,862 |  |  | — |  |  | —
Available for sale securities |  |  | 175,093 |  |  | 175,093 |  |  | 995 |  |  | 174,098 |  |  | —
Other investment securities |  |  | 5,808 |  |  | 5,808 |  |  | 13 |  |  | 5,795 |  |  | —
Loans, net |  |  | 1,156,748 |  |  | 1,148,339 |  |  | — |  |  | — |  |  | 1,148,339
Mortgage servicing rights |  |  | 2,482 |  |  | 2,482 |  |  | — |  |  | — |  |  | 2,482
Cash surrender value - life insurance |  |  | 2,398 |  |  | 2,398 |  |  | — |  |  | 2,398 |  |  | —
Accrued interest receivable |  |  | 6,481 |  |  | 6,481 |  |  | 6,481 |  |  | — |  |  | —
Total |  | $ | 1,437,993 |  | $ | 1,429,584 |  | $ | 96,472 |  | $ | 182,291 |  | $ | 1,150,821
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-interest bearing demand |  | $ | 261,166 |  | $ | 261,166 |  | $ | 261,166 |  | $ | — |  | $ | —
Savings, interest checking and money market |  |  | 614,331 |  |  | 614,331 |  |  | 614,331 |  |  | — |  |  | —
Time deposits |  |  | 311,024 |  |  | 311,489 |  |  | — |  |  | — |  |  | 311,489
Federal funds purchased and securities sold under agreements to repurchase |  |  | 27,272 |  |  | 27,272 |  |  | 27,272 |  |  | — |  |  | —
Federal Home Loan Bank advances and other borrowings |  |  | 96,919 |  |  | 97,833 |  |  | — |  |  | 97,833 |  |  | —
Subordinated notes |  |  | 49,486 |  |  | 43,640 |  |  | — |  |  | 43,640 |  |  | —
Operating lease liabilities |  |  | 2,224 |  |  | 2,224 |  |  |  |  |  | 2,224 |  |  |
Accrued interest payable |  |  | 1,136 |  |  | 1,136 |  |  | 1,136 |  |  | — |  |  | —
Total |  | $ | 1,363,558 |  | $ | 1,359,091 |  | $ | 903,905 |  | $ | 143,697 |  | $ | 311,489
|  |  |  |  |  |  |  | December 31, 2018
|  |  |  |  |  |  |  | Fair Value Measurements
|  |  |  |  |  |  |  | Quoted Prices |  |  |  |  |  |
|  |  |  |  |  |  |  | in Active |  |  |  |  | Net
|  |  |  |  |  |  |  | Markets for |  | Other |  | Significant
|  | December 31, 2018 |  | Identical |  | Observable |  | Unobservable
|  | Carrying |  | Fair |  | Assets |  | Inputs |  | Inputs
(in thousands) |  | amount |  | value |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 23,687 |  | $ | 23,687 |  | $ | 23,687 |  | $ | — |  | $ | —
Federal funds sold and overnight interest-bearing deposits |  |  | 18,396 |  |  | 18,396 |  |  | 18,396 |  |  | — |  |  | —
Certificates of deposit in other banks |  |  | 12,247 |  |  | 12,247 |  |  | 12,247 |  |  | — |  |  | —
Available-for-sale securities |  |  | 218,205 |  |  | 218,205 |  |  | 1,952 |  |  | 216,253 |  |  | —
Other investment securities |  |  | 5,675 |  |  | 5,675 |  |  | 12 |  |  | 5,663 |  |  | —
Loans, net |  |  | 1,134,975 |  |  | 1,115,003 |  |  | — |  |  | — |  |  | 1,115,003
Mortgage servicing rights |  |  | 2,931 |  |  | 2,931 |  |  | — |  |  | — |  |  | 2,931
Cash surrender value - life insurance |  |  | 2,542 |  |  | 2,542 |  |  | — |  |  | 2,542 |  |  | —
Accrued interest receivable |  |  | 6,162 |  |  | 6,162 |  |  | 6,162 |  |  | — |  |  | —
|  | $ | 1,424,820 |  | $ | 1,404,848 |  | $ | 62,456 |  | $ | 224,458 |  | $ | 1,117,934
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-interest bearing demand |  | $ | 262,857 |  | $ | 262,857 |  | $ | 262,857 |  | $ | — |  | $ | —
Savings, interest checking and money market |  |  | 614,040 |  |  | 614,040 |  |  | 614,040 |  |  | — |  |  | —
Time deposits |  |  | 321,571 |  |  | 318,949 |  |  | — |  |  | — |  |  | 318,949
Federal funds purchased and securities sold under agreements to repurchase |  |  | 24,647 |  |  | 24,647 |  |  | 24,647 |  |  | — |  |  | —
Federal Home Loan Bank advances and other borrowings |  |  | 95,153 |  |  | 94,326 |  |  | — |  |  | 94,326 |  |  | —
Subordinated notes |  |  | 49,486 |  |  | 45,749 |  |  | — |  |  | 45,749 |  |  | —
Accrued interest payable |  |  | 1,035 |  |  | 1,035 |  |  | 1,035 |  |  | — |  |  | —
|  | $ | 1,368,789 |  | $ | 1,361,603 |  | $ | 902,579 |  | $ | 140,075 |  | $ | 318,949
Off-Balance-Sheet Financial Instruments The fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments, and the present creditworthiness of such counterparties. The Company believes such commitments have been made on terms that are competitive in the markets in which it operates. Limitations The fair value estimates provided are made at a point in time based on market information and information about the financial instruments. Because no market exists for a portion of the Company'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 fair value estimates.

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsOwnedAtFairValueAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration