Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of assets and liabilities measured at fair value on recurring basis

The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017.

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
March 31, 2018
Assets:
Investment securities available for sale:
U. S. agency securities	$	—	$	192,091	$	—	$	192,091
Residential mortgage backed securities		—		329,240		—		329,240
Municipal bonds		—		48,605		—		48,605
Corporate bonds		—		6,663		1,500		8,163
Other equity investments		—		—		218		218
Loans held for sale		—		25,873		—		25,873
Mortgage banking derivatives		—		—		51		51
Interest rate swap derivatives		—		4,788		—		4,788
Total assets measured at fair value on a recurring basis as of March 31, 2018	$	—	$	607,260	$	1,769	$	609,029
Liabilities:
Mortgage banking derivatives	$	—	$	—	$	84	$	84
Interest rate swap derivatives		—		13		—		13
Total liabilities measured at fair value on a recurring basis as of March 31, 2018	$	—	$	13	$	84	$	97
December 31, 2017
Assets:
Investment securities available for sale:
U. S. agency securities	$	—	$	195,984	$	—	$	195,984
Residential mortgage backed securities		—		317,836		—		317,836
Municipal bonds		—		62,057		—		62,057
Corporate bonds		—		11,673		1,500		13,173
Other equity investments		—		—		218		218
Loans held for sale		—		25,096		—		25,096
Mortgage banking derivatives		—		—		43		43
Interest rate swap derivatives		—		2,256		—		2,256
Total assets measured at fair value on a recurring basis as of December 31, 2017	$	—	$	614,902	$	1,761	$	616,663
Liabilities:
Mortgage banking derivatives	$	—	$	—	$	10	$	10
Interest rate swap derivatives		—		—		—		—
Total liabilities measured at fair value on a recurring basis as of December 31, 2017	$	—	$	—	$	10	$	10

Schedule of the aggregate fair value and the aggregate unpaid principal balance for residential real estate loans

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale measured at fair value as of March 31, 2018 and December 31, 2017.

	March 31, 2018
(dollars in thousands)	Fair Value		Aggregate Unpaid Principal Balance		Difference
Residential mortgage loans held for sale	$	25,873	$	25,469	$	404
FHA mortgage loans held for sale	$	—	$	—	$	—

	December 31, 2017
(dollars in thousands)	Fair Value		Aggregate Unpaid Principal Balance		Difference
Residential mortgage loans held for sale	$	25,096	$	24,674	$	422
FHA mortgage loans held for sale	$	—	$	—	$	—

Schedule of reconciliation of activity of siginificant unobservable inputs (Level 3)

The following is a reconciliation of activity for assets and liabilities measured at fair value based on Significant Other Unobservable Inputs (Level 3):

(dollars in thousands)	Investment Securities		Mortgage Banking Derivatives		Total
Assets:
Beginning balance at January 1, 2018	$	1,718	$	43	$	1,761
Realized loss included in earnings - net mortgage banking derivatives		—		8		8
Purchases of available-for-sale securities		—		—		—
Principal redemption		—		—		—
Ending balance at March 31, 2018	$	1,718	$	51	$	1,769
Liabilities:
Beginning balance at January 1, 2018	$	—	$	10	$	10
Realized loss included in earnings - net mortgage banking derivatives		—		74		74
Principal redemption		—		—		—
Ending balance at March 31, 2018	$	—	$	84	$	84

(dollars in thousands)	Investment Securities		Mortgage Banking Derivatives			Total
Assets:
Beginning balance at January 1, 2017	$	1,718	$	114		$	1,832
Realized loss included in earnings - net mortgage banking derivatives		—		(71	)		(71	)
Purchases of available-for-sale securities		—		—			—
Principal redemption		—		—			—
Ending balance at December 31, 2017	$	1,718	$	43		$	1,761
Liabilities:
Beginning balance at January 1, 2017	$	—	$	55		$	55
Realized loss included in earnings - net mortgage banking derivatives		—		(45	)		(45	)
Principal redemption		—		—			—
Ending balance at December 31, 2017	$	—	$	10		$	10

Schedule of assets measured at fair value on nonrecurring basis

Assets measured at fair value on a nonrecurring basis are included in the table below:

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
March 31, 2018
Impaired loans:
Commercial	$	—	$	—	$	1,811	$	1,811
Income producing - commercial real estate		—		—		6,620		6,620
Owner occupied - commercial real estate		—		—		5,932		5,932
Real estate mortgage - residential		—		—		1,745		1,745
Construction - commercial and residential		—		—		1,551		1,551
Home equity		—		—		494		494
Other consumer		—		—		11		11
Other real estate owned		—		—		1,394		1,394
Total assets measured at fair value on a nonrecurring basis as of March 31, 2018	$	—	$	—	$	19,558	$	19,558

(dollars in thousands)	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total (Fair Value)
December 31, 2017
Impaired loans:
Commercial	$	—	$	—	$	2,266	$	2,266
Income producing - commercial real estate		—		—		7,664		7,664
Owner occupied - commercial real estate		—		—		5,214		5,214
Real estate mortgage - residential		—		—		775		775
Construction - commercial and residential		—		—		1,552		1,552
Home equity		—		—		494		494
Other consumer		—		—		11		11
Other real estate owned		—		—		1,394		1,394
Total assets measured at fair value on a nonrecurring basis as of December 31, 2017	$	—	$	—	$	19,370	$	19,370

Schedule of estimated fair values of financial instruments

The estimated fair values of the Company’s financial instruments at March 31, 2018 and December 31, 2017 are as follows:

					Fair Value Measurements
					Quoted Prices		Significant Other Observable Inputs		Significant  Unobservable Inputs
(dollars in thousands)	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2018
Assets
Cash and due from banks	$	7,954	$	7,954	$	—	$	7,954	$	—
Federal funds sold		29,552		29,552		—		29,552		—
Interest bearing deposits with other banks		167,347		167,347		—		167,347		—
Investment securities		578,317		578,317		—		576,599		1,718
Federal Reserve and Federal Home Loan Bank stock		34,768		34,768		—		34,768		—
Loans held for sale		25,873		25,873		—		25,873		—
Loans (1)		6,536,719		6,564,036		—		—		6,564,036
Bank owned life insurance		61,291		61,291		—		61,291		—
Annuity investment		11,463		11,463		—		11,463		—
Mortgage banking derivatives		51		51		—		—		51
Interst rate swap derivatives		4,788		4,788		—		4,788		—
Liabilities
Noninterest bearing deposits		1,909,210		1,909,210		—		1,909,210		—
Interest bearing deposits		3,134,707		3,134,707		—		3,134,707		—
Certificates of deposit		1,077,884		1,074,200		—		1,074,200		—
Customer repurchase agreements		48,365		48,365		—		48,365		—
Borrowings		492,003		497,066		—		497,066		—
Mortgage banking derivatives		84		84		—		—		84
December 31, 2017
Assets
Cash and due from banks	$	7,445	$	7,445	$	—	$	7,445	$	—
Federal funds sold		15,767		15,767		—		15,767		—
Interest bearing deposits with other banks		167,261		167,261		—		167,261		—
Investment securities		589,268		589,268		—		587,550		1,718
Federal Reserve and Federal Home Loan Bank stock		36,324		36,324		—		36,324		—
Loans held for sale		25,096		25,096		—		25,096		—
Loans (2)		6,346,770		6,381,213		—		—		6,381,213
Bank owned life insurance		60,947		60,947		—		60,947		—
Annuity investment		11,632		11,632		—		11,632		—
Mortgage banking derivatives		43		43		—		—		43
Interst rate swap derivatives		2,256		2,256		—		2,256		—
Liabilities
Noninterest bearing deposits		1,982,912		1,982,912		—		1,982,912		—
Interest bearing deposits		3,041,563		3,041,563		—		3,041,563		—
Certificates of deposit		829,509		829,886		—		829,886		—
Customer repurchase agreements		76,561		76,561		—		76,561		—
Borrowings		541,905		533,162		—		533,162		—
Mortgage banking derivatives		10		10		—		—		10

(1) Carrying amount is net of unearned income and the allowance for credit losses. In accordance with the prospective adoption of ASU No. 2016-01, the fair value of loans was measured using an exit price notion.

(2) Carrying amount is net of unearned income and the allowance for credit losses. The fair value of loans was measured using an entry price notion.