Disclosures of Fair Values of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Assets Measured at Fair Value on Recurring Basis

The following table presents the Company’s assets that are measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of December 31, 2019 and 2018 (in thousands):



			Fair Value Measurements Using:
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2019
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	107,320	$	—	$	107,320	$	—
Obligations of states and political subdivisions	178,433		—		177,460		973
Mortgage-backed securities	396,126		—		396,126		—
Other securities	4,169		219		3,950		—
Total available-for-sale securities	$	686,048	$	219	$	684,856	$	973
December 31, 2018
Available-for-sale securities:
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	198,649	$	—	$	198,649	$	—
Obligations of states and political subdivisions	192,579		—		191,612		967
Mortgage-backed securities	298,672		—		298,672		—
Other securities	2,374		364		2,010		—
Total available-for-sale securities	$	692,274	$	364	$	690,943	$	967

Fair Value of Assets Measured on a Recurring Basis Using Significant Unobservable Inputs

The change in fair value of assets measured on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2019 and 2018 is summarized as follows (in thousands):



	Obligations of State and Political Subdivisions				Trust Preferred Securities
	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Beginning balance	$	967	$	—	$	—	$	2,548
Transfers into Level 3	—		967		—		—
Transfers out of Level 3	—		—		—		—
Total gains or losses
Included in net income	6		—		—		—
Included in other comprehensive income (loss)	—		—		—		18
Purchases, issuances, sales and settlements
Purchases	—		—		—		—
Issuances	—		—		—		—
Sales	—		—		—		(2,522		)
Settlements	—		—		—		(44		)
Ending balance	$	973	$	967	$	—	$	—
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date	$	—	$	—	$	—	$	—

Assets Measured at Fair Value on a Nonrecurring Basis

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2019 and 2018 (in thousands):



	Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2019
Impaired loans (collateral dependent)	$	12,727	$	—	$	—	$	12,727
Foreclosed assets held for sale	935		—		—		935
Mortgage servicing rights	1,444,000		—		—		1,444
December 31, 2018
Impaired loans (collateral dependent)	$	16,437	$	—	$	—	$	16,437
Foreclosed assets held for sale	836		—		—		836

Significant Assumptions Used in Valuation of Level 3 Financial Instruments

The following table presents quantitative information about unobservable inputs used in Level 3 fair value measurements other than goodwill at December 31, 2019.



	Fair Value (in thousands)	Valuation Technique	Unobservable Inputs	Range (Weighted Average)
Impaired loans (collateral dependent)	12,727	Third party valuations	Discount to reflect realizable value	0	%	-	40%		(	20	%	)
Foreclosed assets held for sale	935	Third party valuations	Discount to reflect realizable value less estimated selling costs	0	%	-	40%		(	35	%	)
Mortgage servicing rights	1,444	Third party valuations	Discounts to reflect realizable value	9.50	%	-	12.50	%	(	9.7	%	)

Carrying Amounts and Estimated Fair Values of Financial Instruments Not Carried at Fair Value

he following tables present estimated fair values of the Company’s financial instruments at December 31, 2019 and 2018 in accordance with FAS 107-1 and APB 28-1, codified with ASC 820 (in thousands):



	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
December 31, 2019
Financial Assets
Cash and due from banks	$	84,154	$	84,154	$	84,154	$	—	$	—
Federal funds sold	926		926		926		—		—
Certificates of deposit investments	4,625		4,625		—		4,625		—
Available-for-sale securities	686,048		686,048		219		684,856		973
Held-to-maturity securities	69,542		69,572		—		69,572		—
Loans held for sale	1,820		1,820		—		1,820		—
Loans net of allowance for loan losses	2,666,616		2,622,053		—		—		2,622,053
Interest receivable	15,577		15,577		—		15,577		—
Federal Reserve Bank stock	9,401		9,401		—		9,401		—
Federal Home Loan Bank stock	4,105		4,105		—		4,105		—
Financial Liabilities
Deposits	2,917,336		2,924,144		—		2,332,866		591,278
Securities sold under agreements to repurchase	208,109		208,016		—		208,016		—
Interest payable	2,261		2,261		—		2,261		—
Federal Home Loan Bank borrowings	113,895		114,510		—		114,510		—
Other borrowings	5,000		5,000		5,000		—		—
Junior subordinated debentures	18,858		15,596		—		15,596		—



December 31, 2018
Financial Assets
Cash and due from banks	$	140,735	$	140,735	$	140,735	$	—	$	—
Federal funds sold	665		665		665		—		—
Certificates of deposit investments	7,569		7,569		—		7,569		—
Available-for-sale securities	692,274		692,274		364		690,943		967
Held-to-maturity securities	69,436		67,909		—		67,909		—
Loans held for sale	1,508		1,508		—		1,508		—
Loans net of allowance for loan losses	2,616,822		2,541,037		—		—		2,541,037
Interest receivable	16,881		16,881		—		16,881		—
Federal Reserve Bank stock	7,390		7,390		—		7,390		—
Federal Home Loan Bank stock	3,095		3,095		—		3,095		—
Financial Liabilities
Deposits	2,988,686		2,991,177		—		2,396,917		594,260
Securities sold under agreements to repurchase	192,330		192,179		—		192,179		—
Interest payable	1,758		1,758		—		1,758		—
Federal Home Loan Bank borrowings	119,745		119,704		—		119,704		—
Other borrowings	7,724		7,724		—		7,724		—
Junior subordinated debentures	29,000		24,418		—		24,418		—