XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.2
Fair Value Disclosures (Tables)
 6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Assets and Liabilities Measured at Fair Value of Recurring Basis
The following table presents the assets and liabilities measured at fair value on a recurring basis at June 30, 2020 and December 31, 2019, classified using the fair value hierarchy:
 At June 30, 2020
(Dollars in thousands)Level 1Level 2Level 3Assets/
Liabilities at
Fair Value
Assets:
Available-for-sale securities:
State and political subdivisions$—  $21,578  $—  $21,578  
Residential mortgage-backed securities—  80,472  —  80,472  
Collateralized mortgage obligations—  6,080  —  6,080  
Corporate bonds—  86,071  —  86,071  
Total available-for-sale securities—  194,201  —  194,201  
Equity securities:
Equity securities - financial services industry712  —  —  712  
Money market mutual funds1,236  —  —  1,236  
Total equity securities1,948  —  —  1,948  
Loans*—  —  255  255  
Interest rate locks with customers*—  3,453  —  3,453  
Total assets$1,948  $197,654  $255  $199,857  
Liabilities:
Contingent consideration liability$—  $—  $109  $109  
Interest rate swaps*—  708  —  708  
Credit derivatives*—  —  912  912  
Forward loan sale commitments*—  582  —  582  
Total liabilities$—  $1,290  $1,021  $2,311  

The Corporation recorded no unrealized gains and losses within other comprehensive income for recurring Level 3 fair value measurements held at June 30, 2020. The $912 thousand of credit derivatives liability represents the Credit Valuation Adjustment (CVA), which is obtained from real-time financial market data, of fifty-eight interest rate swaps with a current notional amount of $393.4 million. The June 30, 2020 CVA assumes a zero-deal recovery percentage based on the most recent index credit curve.
 At December 31, 2019
(Dollars in thousands)Level 1Level 2Level 3Assets/
Liabilities at
Fair Value
Assets:
Available-for-sale securities:
U.S. government corporations and agencies$—  $300  $—  $300  
State and political subdivisions—  34,595  —  34,595  
Residential mortgage-backed securities—  118,460  —  118,460  
Collateralized mortgage obligations—  2,361  —  2,361  
Corporate bonds—  91,208  —  91,208  
Total available-for-sale securities—  246,924  —  246,924  
Equity securities:
Equity securities - financial services industry1,004  —  —  1,004  
Money market mutual funds1,619  —  —  1,619  
Total equity securities2,623  —  —  2,623  
Loans*—  —  317  317  
Interest rate locks with customers*—  399  —  399  
Total assets$2,623  $247,323  $317  $250,263  
Liabilities:
Contingent consideration liability$—  $—  $160  $160  
Interest rate swaps*—  249  —  249  
Credit derivatives*—  —  176  176  
Forward loan sale commitments*—  19  —  19  
Total liabilities$—  $268  $336  $604  
* Such financial instruments are recorded at fair value as further described in Note 11, "Derivative Instruments and Hedging Activities.
Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Level 3 Rollforward
The following table includes a rollforward of corporate bonds, loans and credit derivatives for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the six months ended June 30, 2020 and 2019:
 Six Months Ended June 30, 2020
(Dollars in thousands)Balance at
December 31,
2019		AdditionsPayments receivedIncrease in valueBalance at June 30, 2020
Loans$317  $—  $(60) $(2) $255  
Credit derivatives(176) (2,541) —  1,805  (912) 
Net total $141  $(2,541) $(60) $1,803  $(657) 

 Six Months Ended June 30, 2019
(Dollars in thousands)Balance at
December 31,
2018		AdditionsPayments receivedIncrease in valueBalance at June 30, 2019
Corporate bonds$25,729  $—  $—  $1,196  $26,925  
Loans1,779  —  (78) 24  1,725  
Credit derivatives(72) (670) —  582  (160) 
Net total$27,436  $(670) $(78) $1,802  $28,490  
Contingent Consideration Liability Change In Amount
The following table presents the change in the balance of the contingent consideration liability related to acquisitions for which the Corporation utilized Level 3 inputs to determine fair value on a recurring basis for the six months ended June 30, 2020 and 2019:
 Six Months Ended June 30, 2020
(Dollars in thousands)Balance at
December 31,
2019		Contingent
Consideration
from New
Acquisition		Payment of
Contingent
Consideration		Adjustment
of Contingent
Consideration		Balance at June 30, 2020
Girard Partners$160  $—  $61  $10  $109  
Total contingent consideration liability$160  $—  $61  $10  $109  

 Six Months Ended June 30, 2019
(Dollars in thousands)Balance at
December 31,
2018		Contingent
Consideration
from New
Acquisition		Payment of
Contingent
Consideration		Adjustment
of Contingent
Consideration		Balance at June 30, 2019
Girard Partners$259  $—  $65  $17  $211  
Total contingent consideration liability$259  $—  $65  $17  $211  
Assets Measured at Fair Value on Non-Recurring Basis
The Corporation may be required to periodically measure certain assets and liabilities at fair value on a non-recurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or market accounting or changes in the value of loans held for investment analyzed on an individual basis. The following table represents assets measured at fair value on a non-recurring basis at June 30, 2020 and December 31, 2019:
 At June 30, 2020
(Dollars in thousands)Level 1Level 2Level 3Assets at
Fair Value
Individually analyzed loans held for investment$—  $—  $24,640  $24,640  
Other real estate owned—  —  8,642  8,642  
Total$—  $—  $33,282  $33,282  

 At December 31, 2019
(Dollars in thousands)Level 1Level 2Level 3Assets at
Fair Value
Impaired loans held for investment$—  $—  $36,018  $36,018  
Impaired leases held for investment—  —  277  277  
Other real estate owned—  —  516  516  
Total$—  $—  $36,811  $36,811  
Assets, Liabilities and Off-Balance Sheet Items Not Measured at Fair Value
The following table presents assets and liabilities not measured at fair value on a recurring or non-recurring basis in the Corporation’s consolidated balance sheets but for which the fair value is required to be disclosed at June 30, 2020 and December 31, 2019. The disclosed fair values are classified using the fair value hierarchy.
 At June 30, 2020
(Dollars in thousands)Level 1Level 2Level 3Fair
Value		Carrying
Amount
Assets:
Cash and short-term interest-earning assets$348,529  $—  $—  $348,529  $348,529  
Held-to-maturity securities—  208,307  —  208,307  201,703  
Federal Home Loan Bank, Federal Reserve Bank and other stockNANANANA28,192  
Loans held for sale14,416  16,863  —  31,279  31,082  
Net loans and leases held for investment—  —  4,977,902  4,977,902  4,840,697  
Servicing rights—  —  6,191  6,191  6,081  
Total assets$362,945  $225,170  $4,984,093  $5,572,208  $5,456,284  
Liabilities:
Deposits:
Demand and savings deposits, non-maturity$4,348,844  $—  $—  $4,348,844  $4,348,844  
Time deposits—  532,459  —  532,459  520,485  
Total deposits4,348,844  532,459  —  4,881,303  4,869,329  
Short-term borrowings—  210,780  —  210,780  210,780  
Long-term debt—  215,137  —  215,137  210,039  
Subordinated notes—  93,430  —  93,430  94,903  
Total liabilities$4,348,844  $1,051,806  $—  $5,400,650  $5,385,051  
 At December 31, 2019
(Dollars in thousands)Level 1Level 2Level 3Fair
Value		Carrying
Amount
Assets:
Cash and short-term interest-earning assets$125,128  $—  $—  $125,128  $125,128  
Held-to-maturity securities—  194,886  —  194,886  192,052  
Federal Home Loan Bank, Federal Reserve Bank and other stockNANANANA28,254  
Loans held for sale—  5,560  —  5,560  5,504  
Net loans and leases held for investment—  —  4,309,208  4,309,208  4,314,893  
Servicing rights—  —  9,340  9,340  6,626  
Total assets$125,128  $200,446  $4,318,548  $4,644,122  $4,672,457  
Liabilities:
Deposits:
Demand and savings deposits, non-maturity$3,754,065  $—  $—  $3,754,065  $3,754,065  
Time deposits—  609,387  —  609,387  606,010  
Total deposits3,754,065  609,387  —  4,363,452  4,360,075  
Short-term borrowings—  18,680  —  18,680  18,680  
Long-term debt—  151,343  —  151,343  150,098  
Subordinated notes—  96,663  —  96,663  94,818  
Total liabilities$3,754,065  $876,073  $—  $4,630,138  $4,623,671