Fair Value (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of fair value of assets measured on recurring basis

The table below presents the recorded amount of assets measured at fair value on a recurring basis:


(in thousands)	Fair Value		Level 1		Level 2		Level 3
September 30, 2020
Loans HFS	$	23,358	$	—	$	23,358	$	—
Securities AFS:
Mortgage-backed securities	282,513		—		282,513		—
Municipal bonds	174,124		—		174,124		—
U.S. agency securities	11,107		—		11,107		—

Equity securities	4,032		4,032		—		—

December 31, 2019
Loans HFS	$	5,089	$	—	$	5,089	$	—
Securities AFS:
Mortgage-backed securities	235,671		—		235,671		—
Municipal bonds	92,758		—		92,758		—
U.S. agency securities	7,144		—		7,144		—

Equity securities	3,936		3,936		—		—

Schedule of fair value of assets measured on nonrecurring basis

The table below presents certain impaired loans that were remeasured and reported at fair value through the allowance for loan losses based upon the fair value of the underlying collateral during the reported periods:


	For the Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019
Carrying value of impaired loans before allowance for loan losses	$	5,021	$	1,337
Specific allowance for loan losses	(780)		(140)
Fair value of impaired loans	$	4,241	$	1,197

The following table presents foreclosed assets that were remeasured and reported at fair value during the reported periods:


	For the Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019
Foreclosed assets remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement	$	—	$	1,119
Charge-offs	—		—
Fair value of foreclosed assets	$	—	$	1,119

Schedule of inputs used for the Level 3 fair value measurement

The unobservable inputs used for the Level 3 fair value measurements on a nonrecurring basis are as follows:

(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Discount Ranges

Weighted Average Discount

September 30, 2020

Impaired loans

12,256

Discounted appraisals

Collateral discounts and costs to sell

0% - 100%

18.24%

Foreclosed assets

828

Discounted appraisals

Collateral discounts and costs to sell

N/A

December 31, 2019

Impaired loans

9,454

Discounted appraisals

Collateral discounts and costs to sell

0% - 100%

25.80%

Foreclosed assets

1,128

Discounted appraisals

Collateral discounts and costs to sell

0% - 36%

2.60%

Schedule of carrying amounts and estimated fair values of financial instruments

The carrying amounts and estimated fair values of financial instruments as of September 30, 2020 and December 31, 2019, were as follows:


(in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
September 30, 2020
Financial assets:
Cash and due from banks	$	31,422	$	31,422	$	31,422	$	—	$	—
Interest-bearing deposits in other banks	239,466		239,466		239,466		—		—
Securities AFS	467,744		467,744		—		467,744		—
Equity securities	4,032		4,032		4,032		—		—
Nonmarketable equity securities	3,445		3,445		—		3,445		—
Loans HFS	23,358		23,358		—		23,358		—
Loans HFI, net of allowance	1,633,080		1,641,936		—		—		1,641,936
Accrued interest receivable	6,617		6,617		—		—		6,617
Financial liabilities:
Deposits	2,193,940		2,198,985		—		2,198,985		—
Accrued interest payable	1,805		1,805		—		1,805		—

December 31, 2019
Financial assets:
Cash and due from banks	$	25,937	$	25,937	$	25,937	$	—	$	—
Interest-bearing deposits in other banks	107,355		107,355		107,355		—		—
Securities AFS	335,573		335,573		—		335,573		—
Equity securities	3,936		3,936		3,936		—		—
Nonmarketable equity securities	1,350		1,350		—		1,350		—
Loans HFS	5,089		5,089		—		5,089		—
Loans HFI, net of allowance	1,424,987		1,426,163		—		—		1,426,163
Accrued interest receivable	5,251		5,251		—		—		5,251
Financial liabilities:
Deposits	1,721,120		1,721,286		—		1,721,286		—


Accrued interest payable	2,222		2,222		—		2,222		—