Fair Value (Tables)

3 Months Ended

Mar. 31, 2020

Financial instruments that were measured at fair value on a recurring and nonrecurring basis

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at March 31, 2020.



($ in thousands)
Description of Financial Instruments	Fair Value at March 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Recurring
Securities available for sale:
Government-sponsored enterprise securities	$	5,032	—	5,032	—
Mortgage-backed securities	756,927		—	756,927	—
Corporate bonds	44,511		—	44,511	—
Total available for sale securities	$	806,470	—	806,470	—

Presold mortgages in process of settlement	$	14,861	14,861	—	—

Nonrecurring
Impaired loans	$	14,979	—	—	14,979
Foreclosed real estate	1,681		—	—	1,681

The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at December 31, 2019.



($ in thousands)
Description of Financial Instruments	Fair Value at December 31, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
Recurring
Securities available for sale:
Government-sponsored enterprise securities	$	20,009	—	20,009	—
Mortgage-backed securities	767,285		—	767,285	—
Corporate bonds	34,651		—	34,651	—
Total available for sale securities	$	821,945	—	821,945	—

Presold mortgages in process of settlement	$	19,712	19,712	—	—

Nonrecurring
Impaired loans	$	16,215	—	—	16,215
Foreclosed real estate	1,830		—	—	1,830

Schedule of significant unobservable inputs

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of March 31, 2020, the significant unobservable inputs used in the fair value measurements were as follows:



($ in thousands)
Description	Fair Value at March 31, 2020		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Impaired loans - valued at collateral value	$	9,649	Appraised value	Discounts applied for estimated costs to sell	10%
Impaired loans - valued at PV of expected cash flows	5,330		PV of expected cash flows	Discount rates used in the calculation of PV of expected cash flows	4-11% (6.31%)
Foreclosed real estate	1,681		Appraised value	Discounts for estimated costs to sell	10%

For Level 3 assets and liabilities measured at fair value on a recurring or non-recurring basis as of December 31, 2019, the significant unobservable inputs used in the fair value measurements were as follows:



($ in thousands)
Description	Fair Value at December 31, 2019		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Impaired loans - valued at collateral value	$	10,718	Appraised value	Discounts applied for estimated costs to sell	10%
Impaired loans - valued at PV of expected cash flows	5,497		PV of expected cash flows	Discount rates used in the calculation of PV of expected cash flows	4-11% (6.50%)
Foreclosed real estate	1,830		Appraised value	Discounts for estimated costs to sell	10%

Schedule of the carrying amounts and estimated fair values of financial instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value at March 31, 2020 and December 31, 2019 are as follows:



		March 31, 2020			December 31, 2019
($ in thousands)	Level in Fair Value Hierarchy	Carrying Amount		Estimated Fair Value	Carrying Amount	Estimated Fair Value
Cash and due from banks, noninterest-bearing	Level 1	$	93,666	93,666	64,519	64,519
Due from banks, interest-bearing	Level 1	282,683		282,683	166,783	166,783
Securities held to maturity	Level 2	61,303		62,385	67,932	68,333
SBA loans held for sale	Level 2	18,449		19,332	—	—
Total loans, net of allowance	Level 3	4,528,210		4,428,870	4,432,068	4,407,610
Accrued interest receivable	Level 1	15,767		15,767	16,648	16,648
Bank-owned life insurance	Level 1	105,083		105,083	104,441	104,441
SBA Servicing Asset	Level 3	4,682		4,906	5,383	5,649

Deposits	Level 2	5,044,988		5,045,800	4,931,355	4,930,751
Borrowings	Level 2	402,185		393,542	300,671	295,399
Accrued interest payable	Level 2	2,100		2,100	2,154	2,154

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details