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FAIR VALUE DISCLOSURES AND REPORTING, THE FAIR VALUE OPTION AND FAIR VALUE MEASUREMENTS (Tables)
9 Months Ended
Sep. 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 September 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

$

603,736

$

603,736

$

603,736

$

$

Securities available-for- sale:

 

 

 

 

 

U.S. Treasury

9,450

9,450

9,450

Obligations of U.S. government agencies and sponsored entities

 

100,603

 

100,603

 

 

100,603

 

Municipal securities

 

416,567

 

416,567

 

 

401,310

 

15,257

Mortgage- backed securities

 

402,458

 

402,458

 

 

402,458

 

Corporate obligations

 

28,380

 

28,380

 

 

28,139

 

241

Loans, net

 

3,144,158

 

3,115,390

 

 

 

3,115,390

Accrued interest receivable

 

25,822

 

25,822

 

 

5,291

 

20,531

Liabilities:

 

 

 

 

 

Noninterest-bearing deposits

$

482,236

$

482,236

$

$

482,236

$

Interest-bearing deposits

 

3,746,978

 

3,757,864

 

 

3,757,864

 

Subordinated debentures

 

144,709

 

140,905

 

 

 

140,905

FHLB and other borrowings

 

115,827

 

115,827

 

 

115,827

 

Accrued interest payable

 

2,320

 

2,320

 

 

2,320

 

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:

September 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

$

9,450

$

9,450

$

$

Obligations of U.S. Government agencies and sponsored entities

100,603

100,603

Municipal securities

 

416,567

 

 

401,310

 

15,257

Mortgage-backed securities

 

402,458

 

 

402,458

 

Corporate obligations

 

28,380

 

 

28,139

 

241

Total available-for-sale

$

957,458

$

9,450

$

932,510

$

15,498

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

Paydowns

(273)

Unrealized gain/(loss) included in comprehensive income

 

106

 

(466)

Balance at September 30,2020 and December 31,2019

$

241

$

408

Municipal Securities

($ in thousands)

    

2020

    

2019

Balance, January 1

$

10,345

$

7,574

Unrealized gain included in comprehensive income

 

4,912

 

2,771

Balance at September 30,2020 and December 31,2019

$

15,257

$

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 September 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

September 30,2020

$

241

 

Discounted cash flow

 

Probability of default

 

1.11% - 2.50%

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

September 30,2020

$

15,257

 

Discounted cash flow

 

Discount Rate

 

0.60% - 2.50%

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 September 30, 2020 and December 31, 2019.

September 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

$

9,720

$

$

$

9,720

Other real estate owned

 

5,202

 

 

 

5,202

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