Fair Value Measurement and fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The fair values of derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2).

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of the periods presented by level within the fair value hierarchy. During

Fair Value of Assets Measured on Non-recurring Basis

The following table sets forth the Company’s assets subject to fair value adjustments (impairment) on a non-recurring basis. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:



(in thousands)	(Level 1)		(Level 2)		(Level 3)		Total Fair Value
March 31, 2020
Assets:
Impaired loans	$	—	$	—	$	4,680	$	4,680
Loans held for sale	—		3,098		—		3,098
Other real estate owned and other repossessed assets	—		—		393		393

December 31, 2019
Assets:
Impaired loans	$	—	$	—	$	5,789	$	5,789
Loans held for sale	—		1,743		—		1,743
Other real estate owned and other repossessed assets	—		—		563		563

Carrying Values and Fair Values of Company's Financial Instruments

The following table presents the carrying values, fair values and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2020 and December 31, 2019:



(in thousands)	Carrying Value		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

March 31, 2020
Financial Assets:
Investment securities held to maturity	$	115,752	$	119,023	$	—	$	116,448	$	2,575
Federal Home Loan Bank and other membership bank stocks	28,575		28,575		—		28,575		—
Loans, net	5,279,739		5,229,776		—		—		5,229,776
Financial Liabilities:
Certificates of deposit	1,084,046		1,084,580		—		1,084,580		—
Other borrowings	140,715		144,658		—		144,658		—
Subordinated debentures	118,229		112,272		—		—		112,272
December 31, 2019
Financial Assets:
Investment securities held to maturity	$	123,975	$	124,904	$	—	$	121,503	$	3,401
Federal Home Loan Bank and other membership bank stocks	22,505		22,505		—		22,505		—
Loans, net	5,097,820		5,194,065		—		—		5,194,065
Financial Liabilities:
Certificates of deposit	870,804		871,418		—		871,418		—
Other borrowings	165,816		166,505		—		166,505		—
Subordinated debentures	118,220		117,992		—		—		117,992