7. Fair Value of Financial Instruments

U.S. GAAP requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, for which it is practical to estimate that value. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. The use of assumptions and various valuation techniques, as well as the absence of secondary markets for certain financial instruments, will likely reduce the comparability of fair value disclosures between financial institutions. In some cases, book value is a reasonable estimate of fair value due to the relatively short period of time between origination of the instrument and its expected realization. The valuation of loans held for investment was impacted by the adoption of ASU 2016-01. In accordance with ASU 2016-01, the fair value of loans held for investment, excluding previously presented impaired loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses. The discount rates used to determine fair value use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. Loans are considered a Level 3 classification.

The following tables summarize the book value and estimated fair value of financial instruments for the periods indicated:

			Fair Value of Financial Instruments Using
March 31, 2020 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	282,960	$	282,960	$	-	$	-	$	282,960

Investment Securities Available-for-Sale		532,246		20,606		511,640		-		532,246

Investment Securities Held-to-Maturity		58,701		-		29,296		30,207		59,503

Loans & Leases, Net		2,615,285		-		-		2,605,120		2,605,120
Accrued Interest Receivable		12,541		-		12,541		-		12,541

Liabilities:
Deposits		3,255,273		2,733,525		524,013		-		3,257,538
Subordinated Debentures		10,310		-		7,415		-		7,415
Accrued Interest Payable		2,430		-		2,430		-		2,430

			Fair Value of Financial Instruments Using
December 31, 2019 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	294,758	$	294,758	$	-	$	-	$	294,758

Investment Securities Available-for-Sale		507,386		55,200		452,186		-		507,386

Investment Securities Held-to-Maturity		60,229		-		31,253		29,844		61,097

Loans & Leases, Net		2,618,015		-		-		2,584,805		2,584,805
Accrued Interest Receivable		16,733		-		16,733		-		16,733

Liabilities:
Deposits		3,278,019		2,760,097		517,172		-		3,277,269
Subordinated Debentures		10,310		-		7,325		-		7,325
Accrued Interest Payable		2,795		-		2,795		-		2,795

			Fair Value of Financial Instruments Using
March 31, 2019 (in thousands)	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Estimated Fair Value
Assets:
Cash and Cash Equivalents	$	97,810	$	97,810	$	-	$	-	$	97,810

Investment Securities Available-for-Sale		491,289		164,877		321,769		4,643		491,289

Investment Securities Held-to-Maturity		54,412		-		36,705		18,276		54,981

Loans & Leases, Net		2,509,061		-		-		2,490,197		2,490,197
Accrued Interest Receivable		12,524		-		12,524		-		12,524

Liabilities:
Deposits		3,008,040		2,483,258		521,321		-		3,004,579
Subordinated Debentures		10,310		-		7,600		-		7,600
Accrued Interest Payable		2,193		-		2,193		-		2,193