Fair Value Measurements

3 Months Ended

Mar. 31, 2021

FAIR VALUE MEASUREMENTS

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	March 31, 2021		Level 1		Level 2		Level 3
Debt securities available for sale
U.S. Government sponsored agencies	$	43,452	$	—	$	43,452	$	—
Mortgage backed securities:
Government sponsored agencies	61,074		—		61,074		—
Nongovernment sponsored entities	18,491		—		18,491		—
State and political subdivisions	64,795		—		64,795		—
Corporate debt securities	29,658		—		29,658		—
Asset-backed securities	48,021		—		48,021		—

Tax-exempt state and political subdivisions	45,893		—		45,893		—
Total debt securities available for sale	$	311,384	$	—	$	311,384	$	—

Derivative financial assets
Interest rate caps	$	13,923	$	—	$	13,923	$	—

Derivative financial liabilities
Interest rate swaps	$	1,799	$	—	$	1,799	$	—


	Balance at		Fair Value Measurements Using:
Dollars in thousands	December 31, 2020		Level 1		Level 2		Level 3
Debt securities available for sale
U.S. Government sponsored agencies	$	35,157	$	—	$	35,157	$	—
Mortgage backed securities:
Government sponsored agencies	59,046		—		59,046		—
Nongovernment sponsored entities	16,687		—		16,687		—
State and political subdivisions	50,905		—		50,905		—
Corporate debt securities	26,427		—		26,427		—
Asset-backed securities	46,126		—		46,126		—

Tax-exempt state and political subdivisions	51,779		—		51,779		—
Total debt securities available for sale	$	286,127	$	—	$	286,127	$	—

Derivative financial assets
Interest rate caps	$	6,653	$	—	$	6,653	$	—

Derivative financial liabilities
Interest rate swaps	$	2,747	$	—	$	2,747	$	—

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. These include assets that are measured at the lower of cost or market that were recognized at fair value below cost at the end of the period. Assets measured at fair value on a nonrecurring basis are included in the table below.


	Balance at		Fair Value Measurements Using:
Dollars in thousands	March 31, 2021		Level 1		Level 2		Level 3
Residential mortgage loans held for sale	$	3,083	$	—	$	3,083	$	—

Collateral-dependent loans with an ACLL

Commercial real estate	$	11,333	$	—	$	9,836	$	1,497
Construction and development	2,090		—		1,697		393
Residential real estate	1,135		—		72		1,063

Total collateral-dependent loans with an ACLL	$	14,558	$	—	$	11,605	$	2,953

Property held for sale

Commercial real estate	$	1,557	$	—	$	1,557	$	—
Construction and development	11,013		—		10,503		510
Residential real estate	223		—		223		—
Total property held for sale	$	12,793	$	—	$	12,283	$	510


	Balance at		Fair Value Measurements Using:
Dollars in thousands	December 31, 2020		Level 1		Level 2		Level 3
Residential mortgage loans held for sale	$	1,998	$	—	$	1,998	$	—

Collateral-dependent impaired loans
Commercial	$	8	$	—	$	8	$	—
Commercial real estate	9,914		—		9,914		—
Construction and development	1,576		—		1,576		—
Residential real estate	597		—		597		—

Total collateral-dependent impaired loans	$	12,095	$	—	$	12,095	$	—

Property held for sale

Commercial real estate	$	1,557	$	—	$	1,557	$	—
Construction and development	11,595		—		10,974		621
Residential real estate	476		—		476		—
Total property held for sale	$	13,628	$	—	$	13,007	$	621

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


	March 31, 2021				Fair Value Measurements Using:
Dollars in thousands	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	176,597	$	176,597	$	—	$	176,597	$	—
Debt securities available for sale	311,384		311,384		—		311,384		—
Debt securities held to maturity	99,457		100,354		—		100,354		—
Other investments	10,776		10,776		—		10,776		—
Loans held for sale, net	3,083		3,083		—		3,083		—
Loans, net	2,418,029		2,408,948		—		11,605		2,397,343
Accrued interest receivable	10,654		10,654		—		10,654		—
Cash surrender value of life insurance policies and annuities	59,740		59,740		—		59,740		—
Derivative financial assets	13,923		13,923		—		13,923		—
	$	3,103,643	$	3,095,459	$	—	$	698,116	$	2,397,343
Financial liabilities
Deposits	$	2,725,010	$	2,718,006	$	—	$	2,718,006	$	—
Short-term borrowings	140,145		140,145		—		140,145		—
Long-term borrowings	694		845		—		845		—
Subordinated debentures	29,398		29,398		—		29,398		—
Subordinated debentures owed to unconsolidated subsidiary trusts	19,589		19,589		—		19,589		—
Accrued interest payable	692		692		—		692		—
Derivative financial liabilities	1,799		1,799		—		1,799		—
	$	2,917,327	$	2,910,474	$	—	$	2,910,474	$	—


	December 31, 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	$	99,787	$	99,787	$	—	$	99,787	$	—
Debt securities available for sale	286,127		286,127		—		286,127		—
Debt securities held to maturity	99,914		103,157		—		103,157		—
Other investments	14,185		14,185		—		14,185		—
Loans held for sale, net	1,998		1,998		—		1,998		—
Loans, net	2,379,907		2,384,275		—		12,095		2,372,180
Accrued interest receivable	11,989		11,989		—		11,989		—
Cash surrender value of life insurance policies	59,438		59,438		—		59,438		—
Derivative financial assets	6,653		6,653		—		6,653		—
	$	2,959,998	$	2,967,609	$	—	$	595,429	$	2,372,180
Financial liabilities
Deposits	$	2,595,651	$	2,597,326	$	—	$	2,597,326	$	—
Short-term borrowings	140,146		140,146		—		140,146		—
Long-term borrowings	699		866		—		866		—
Subordinated debentures	29,364		29,364		—		29,364		—
Subordinated debentures owed to unconsolidated subsidiary trusts	19,589		19,589		—		19,589		—
Accrued interest payable	745		745		—		745		—
Derivative financial liabilities	2,747		2,747		—		2,747		—
	$	2,788,941	$	2,790,783	$	—	$	2,790,783	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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