5.	Fair Value of Financial Instruments

U.S. GAAP requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, for which it is practical to estimate that value. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, will likely reduce the comparability of fair value disclosures between financial institutions. In some cases, book value is a reasonable estimate of fair value due to the relatively short period of time between origination of the instrument and its expected realization. The valuation of loans held for investment was impacted by the adoption of ASU 2016-01. In accordance with ASU 2016-01, the fair value of loans held for investment, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are considered a Level 3 classification.

The following tables summarize the book value and estimated fair value of financial instruments for the periods indicated:

			Fair Value of Financial Instruments Using
September 30, 2018 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	110,781	$	110,781	$	-	$	-	$	110,781

Investment Securities Available-for-Sale		458,311		164,409		291,402		2,500		458,311

Investment Securities Held-to-Maturity		51,459		-		35,716		15,663		51,379

FHLB Stock		10,877		N/A		N/A		N/A		N/A
Loans & Leases, Net of Deferred Fees & Allowance		2,363,535		-		-		2,317,185		2,317,185
Accrued Interest Receivable		14,612		-		14,612		-		14,612

Liabilities:
Deposits		2,776,923		2,314,600		457,526		-		2,772,126
Subordinated Debentures		10,310		-		7,579		-		7,579
Accrued Interest Payable		1,227		-		1,227		-		1,227

			Fair Value of Financial Instruments Using
December 31, 2017 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	187,149	$	187,149	$	-	$	-	$	187,149

Investment Securities Available-for-Sale		481,596		144,364		334,732		2,500		481,596

Investment Securities Held-to-Maturity		54,460		-		38,492		16,744		55,236

FHLB Stock		10,342		N/A		N/A		N/A		N/A
Loans & Leases, Net of Deferred Fees & Allowance		2,164,953		-		-		2,137,987		2,137,987
Accrued Interest Receivable		10,999		-		10,999		-		10,999

Liabilities:
Deposits		2,723,228		2,247,831		472,671		-		2,720,502
Subordinated Debentures		10,310		-		7,428		-		7,428
Accrued Interest Payable		1,137		-		1,137		-		1,137

			Fair Value of Financial Instruments Using
September 30, 2017 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	193,270	$	193,270	$	-	$	-	$	193,270

Total Investment Securities Available-for-Sale		456,323		144,610		311,213		500		456,323

Total Investment Securities Held-to-Maturity		55,542		-		39,254		17,037		56,291

FHLB Stock		10,342		N/A		N/A		N/A		N/A
Total Loans & Leases, Net of Deferred Fees & Allowance		2,166,035		-		-		2,148,524		2,148,524
Accrued Interest Receivable		11,498		-		11,498		-		11,498

Liabilities:
Total Deposits		2,709,427		2,159,654		547,796		-		2,707,450
Subordinated Debentures		10,310		-		6,589		-		6,589
Accrued Interest Payable		939		-		939		-		939