Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

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



	Balance at		Fair Value Measurements Using:
Dollars in thousands	June 30, 2020		Level 1		Level 2		Level 3
Securities available for sale
U.S. Government sponsored agencies	$	38,139	$	—	$	38,139	$	—
Mortgage backed securities:
Government sponsored agencies	66,062		—		66,062		—
Nongovernment sponsored entities	12,635		—		12,635		—
State and political subdivisions	62,159		—		62,159		—
Corporate debt securities	22,656		—		22,656		—
Asset-backed securities	45,304		—		45,304		—
Tax-exempt state and political subdivisions	75,584		—		75,584		—
Total securities available for sale	$	322,539	$	—	$	322,539	$	—

Derivative financial assets
Interest rate cap	$	4,643	$	—	$	4,643	$	—

Derivative financial liabilities
Interest rate swaps	$	3,583	$	—	$	3,583	$	—



	Balance at		Fair Value Measurements Using:
Dollars in thousands	December 31, 2019		Level 1		Level 2		Level 3
Securities available for sale
U.S. Government sponsored agencies	$	20,864	$	—	$	20,864	$	—
Mortgage backed securities:
Government sponsored agencies	70,975		—		70,975		—
Nongovernment sponsored entities	10,229		—		10,229		—
State and political subdivisions	49,973		—		49,973		—
Corporate debt securities	18,200		—		18,200		—
Asset-backed securities	33,014		—		33,014		—
Tax-exempt state and political subdivisions	73,100		—		73,100		—
Total securities available for sale	$	276,355	$	—	$	276,355	$	—

Derivative financial liabilities
Interest rate swaps	$	988	$	—	$	988	$	—

Assets measured at fair value on a nonrecurring basis are included in the table below.



	Balance at		Fair Value Measurements Using:
Dollars in thousands	June 30, 2020		Level 1		Level 2		Level 3
Residential mortgage loans held for sale	$	4,040	$	—	$	4,040	$	—

Collateral-dependent loans with an ACLL
Commercial	$	8	$	—	$	8	$	—
Commercial real estate	1,146		—		1,146		—
Construction and development	422		—		422		—
Residential real estate	162		—		162		—
Total collateral-dependent loans with an ACLL	$	1,738	$	—	$	1,738	$	—

Property held for sale
Commercial real estate	$	1,125	$	—	$	1,125	$	—
Construction and development	14,720		—		13,998		722
Residential real estate	539		—		539		—
Total property held for sale	$	16,384	$	—	$	15,662	$	722

Collateral dependent loans with an ACLL were categorized as impaired loans with specific reserves prior to the adoption of ASC 326.



	Balance at		Fair Value Measurements Using:
Dollars in thousands	December 31, 2019		Level 1		Level 2		Level 3
Residential mortgage loans held for sale	$	1,319	$	—	$	1,319	$	—

Collateral-dependent impaired loans
Commercial	$	4,831	$	—	$	4,831	$	—
Commercial real estate	1,863		—		1,863		—
Construction and development	425		—		425		—
Residential real estate	692		—		566		126
Total collateral-dependent impaired loans	$	7,811	$	—	$	7,685	$	126

Property held for sale
Commercial real estate	$	1,304	$	—	$	1,304	$	—
Construction and development	12,182		—		12,182		—
Residential real estate	705		—		705		—
Total property held for sale	$	14,191	$	—	$	14,191	$	—

The carrying values and estimated fair values of our financial instruments are summarized below:



	June 30, 2020				Fair Value Measurements Using:
Dollars in thousands	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	42,790	$	42,790	$	—	$	42,790	$	—
Securities available for sale	322,539		322,539		—		322,539		—
Securities held to maturity	80,497		81,609		—		81,609		—
Other investments	8,875		8,875		—		8,875		—
Loans held for sale, net	4,040		4,040		—		4,040		—
Loans, net	2,192,541		2,191,443		—		1,738		2,189,705
Accrued interest receivable	11,205		11,205		—		11,205		—
Derivative financial assets	4,643		4,643		—		4,643		—
Cash surrender value of life insurance policies and annuities	55,315		55,315		—		55,315		—
	$	2,722,445	$	2,722,459	$	—	$	532,754	$	2,189,705
Financial liabilities
Deposits	$	2,451,769	$	2,454,997	$	—	$	2,454,997	$	—
Short-term borrowings	90,945		90,945		—		90,945		—
Long-term borrowings	708		890		—		890		—
Subordinated debentures owed to unconsolidated subsidiary trusts	19,589		19,589		—		19,589		—
Accrued interest payable	1,017		1,017		—		1,017		—
Derivative financial liabilities	3,583		3,583		—		3,583		—
	$	2,567,611	$	2,571,021	$	—	$	2,571,021	$	—



	December 31, 2019				Fair Value Measurements Using:
Dollars in thousands	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	61,888	$	61,888	$	—	$	61,888	$	—
Securities available for sale	276,355		276,355		—		276,355		—
Other investments	12,972		12,972		—		12,972		—
Loans held for sale, net	1,319		1,319		—		1,319		—
Loans, net	1,900,425		1,901,020		—		7,685		1,893,335
Accrued interest receivable	8,439		8,439		—		8,439		—
Cash surrender value of life insurance policies	43,603		43,603		—		43,603		—
	$	2,305,001	$	2,305,596	$	—	$	412,261	$	1,893,335
Financial liabilities
Deposits	$	1,913,237	$	1,918,610	$	—	$	1,918,610	$	—
Short-term borrowings	199,345		199,345		—		199,345		—
Long-term borrowings	717		854		—		854		—
Subordinated debentures owed to unconsolidated subsidiary trusts	19,589		19,589		—		19,589		—
Accrued interest payable	1,234		1,234		—		1,234		—
Derivative financial liabilities	988		988		—		988		—
	$	2,135,110	$	2,140,620	$	—	$	2,140,620	$	—