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FAIR VALUE DISCLOSURES AND REPORTING, THE FAIR VALUE OPTION AND FAIR VALUE MEASUREMENTS (Tables)
6 Months Ended
Jun. 30, 2020
FAIR VALUE DISCLOSURES AND REPORTING, THE FAIR VALUE OPTION AND FAIR VALUE MEASUREMENTS  
Schedule of estimated fair values

Estimated fair values for the Company’s financial instruments are as follows, as of the dates noted:

As of June 30, 2020

Fair Value Measurements

    

    

    

    

Significant

    

Other

Significant

Observable

Unobservable

Carrying

Estimated

Quoted Prices

Inputs

Inputs

($ in thousands)

    

Amount

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial Instruments:

Assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

539,125

$

539,125

$

539,125

$

$

Securities available-for- sale:

 

 

 

 

 

  

U.S. Treasury

9,443

9,443

9,443

Obligations of U.S. government agencies and sponsored entities

 

100,213

 

100,213

 

 

100,213

 

Municipal securities

 

389,849

 

389,849

 

 

378,965

 

10,884

Mortgage- backed securities

 

398,818

 

398,818

 

 

398,818

 

Corporate obligations

 

28,882

 

28,882

 

 

28,642

 

240

Loans, net

 

3,162,103

 

3,135,815

 

 

 

3,135,815

Accrued interest receivable

 

24,782

 

24,782

 

 

5,629

 

19,153

Liabilities:

 

  

 

  

 

  

 

  

 

  

Noninterest-bearing deposits

$

486,039

$

486,039

$

$

486,039

$

Interest-bearing deposits

 

3,730,851

 

3,733,230

 

 

3,733,230

 

Subordinated debentures

 

80,756

 

73,784

 

 

 

73,784

FHLB and other borrowings

 

116,005

 

116,005

 

 

116,005

 

Accrued interest payable

 

2,195

 

2,195

 

 

2,195

 

As of December 31, 2019

Fair Value Measurements

    

    

    

    

Significant

    

Other

Significant

Quoted

Observable

Unobservable

Carrying

Estimated

Prices

Inputs

Inputs

($ in thousands)

    

Amount

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial Instruments:

 

  

 

  

 

  

 

  

 

  

Assets:

 

  

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

168,864

$

168,864

$

168,864

$

$

Securities available-for-sale:

 

 

 

 

 

U.S. Treasury

4,894

4,894

4,894

Obligations of U.S. government agencies and sponsored entities

77,950

77,950

77,950

Municipal securities

258,982

258,982

248,637

10,345

Mortgage-backed securities

395,315

395,315

395,315

Corporate obligations

27,946

27,946

27,538

408

Loans, net

 

2,597,260

 

2,560,668

 

 

 

2,560,668

Accrued interest receivable

 

14,802

 

14,802

 

 

4,246

 

10,556

Liabilities:

 

  

 

  

 

  

 

  

 

  

Non-interest-bearing deposits

$

723,208

$

723,208

$

$

723,208

$

Interest-bearing deposits

 

2,353,325

 

2,339,537

 

 

2,339,537

 

Subordinated debentures

 

80,678

 

80,330

 

 

 

80,330

FHLB and other borrowings

 

214,319

 

214,319

 

 

214,319

 

Accrued interest payable

 

2,508

 

2,508

 

 

2,508

 

Schedule of assets measured at fair value on a recurring basis

Assets measured at fair value on a recurring basis are summarized below:

June 30, 2020

Fair Value Measurements Using

Quoted Prices

in

Active

Markets

Significant

For

Other

Significant

Identical

Observable

Unobservable

Assets

Inputs

Inputs

($ in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Available-for-sale

U.S. Treasury

$

9,443

$

9,443

$

$

Obligations of U.S. Government agencies and sponsored entities

100,213

100,213

Municipal securities

 

389,849

 

 

378,965

 

10,884

Mortgage-backed securities

 

398,818

 

 

398,818

 

Corporate obligations

 

28,882

 

 

28,642

 

240

Total available-for-sale

$

927,205

$

9,443

$

906,638

$

11,124

December 31, 2019

Fair Value Measurements Using

Quoted Prices

in

Active

Markets

Significant

For

Other

Significant

Identical

Observable

Unobservable

Assets

Inputs

Inputs

($ in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Available-for-sale

U.S. Treasury

$

4,894

$

4,894

$

$

Obligations of U.S. Government agencies and sponsored entities

77,950

77,950

Municipal securities

 

258,982

 

 

248,637

 

10,345

Mortgage-backed securities

 

395,315

 

 

395,315

 

Corporate obligations

 

27,946

 

 

27,538

 

408

Total available-for-sale

$

765,087

$

4,894

$

749,440

$

10,753

Schedule of reconciliation of activity for assets measured at fair value

The following is a reconciliation of activity for assets measured at fair value based on significant unobservable inputs (Level 3) information.

Bank-Issued

Trust

Preferred

Securities

($ in thousands)

    

2020

    

2019

Balance, January 1

$

408

$

874

Unrealized loss included in comprehensive income

 

(168)

 

(466)

Balance at June 30, 2020 and December 31, 2019

$

240

$

408

Municipal Securities

($ in thousands)

    

2020

    

2019

Balance, January 1

$

10,345

$

7,574

Unrealized gain included in comprehensive income

 

539

 

2,771

Balance at June 30, 2020 and December 31, 2019

$

10,884

$

10,345

Schedule of quantitative information about recurring Level 3 fair value measurements

The following methods and assumptions were used to estimate the fair values of the Company’s assets measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019. The following tables present quantitative information about recurring Level 3 fair value measurements ($ in thousands):

    

    

    

Significant

    

Fair

Valuation

Unobservable

Range of

Trust Preferred Securities

    

Value

    

Technique

    

Inputs

    

Inputs

June 30, 2020

$

240

 

Discounted cash flow

 

Probability of default

 

0.63% - 2.53%

December 31, 2019

$

408

 

Discounted cash flow

 

Probability of default

 

2.73% - 4.15%

    

    

    

Significant

    

Fair

Valuation

Unobservable

Range of

Municipal Securities

    

Value

    

Technique

    

Inputs

    

Inputs

June 30, 2020

$

10,884

 

Discounted cash flow

 

Discount Rate

 

0.60% - 2.95%

December 31, 2019

$

10,345

 

Discounted cash flow

 

Discount Rate

 

1.50% - 4.40%

Schedule of fair value measurement of assets measured at fair value on a non-recurring basis and the level within the fair value hierarchy

The following table presents the fair value measurement of assets measured at fair value on a non-recurring basis and the level within the fair value hierarchy in which the fair value measurements were classified at June 30, 2020 and December 31, 2019.

June 30, 2020

Fair Value Measurements Using

Quoted

Prices in

Active

Markets

Significant

For

Other

Significant

Identical

Observable

Unobservable

Assets

Inputs

Inputs

($ in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Impaired loans

$

8,900

$

$

$

8,900

Other real estate owned

 

5,471

 

 

 

5,471

December 31, 2019

Fair Value Measurements Using

Quoted

Prices in

Active

Markets

Significant

For

Other

Significant

Identical

Observable

Unobservable

Assets

Inputs

Inputs

($ in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Impaired loans

$

11,337

$

$

$

11,337

Other real estate owned

 

7,299

 

 

 

7,299