Fair Value of Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of March 31, 2020 and December 31, 2019 are as follows:

(dollars in thousands)	Fair Value Measurements
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
March 31, 2020
Assets
Cash and short-term investments	$	95,827	$	95,827	$	95,827	$	—	$	—
Investment securities available for sale	333,085		333,085		—		331,068		2,017
Other investments, at cost	3,891		3,891		3,162		729		—
Loans held for sale	11,022		11,022		—		11,022		—
Loans, net	980,642		1,003,928		—		—		1,003,928
Liabilities
Deposits	1,293,076		1,293,076		—		1,293,076		—
Subordinated debentures	24,229		24,229		—		24,229		—
Other borrowings	51,063		48,465		—		48,465

(dollars in thousands)	Fair Value Measurements
	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
December 31, 2019
Assets
Cash and short-term investments	$	104,092	$	104,092	$	104,192	$	—	$	—
Investment securities available for sale	347,332		347,332		—		345,310		2,022
Other investments, at cost	4,288		4,288		3,559		729		—
Loans held for sale	10,076		10,076		—		10,076		—
Loans, net	961,696		938,475		—		—		938,475
Liabilities
Deposits	1,293,742		1,294,506		—		1,294,506		—
Subordinated debentures	24,229		24,229		—		24,229		—
Other borrowings	61,563		60,585		—		60,585		—

Fair Value Measurements, Recurring and Nonrecurring

The following table presents the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of March 31, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall. The table below includes only impaired loans with a specific reserve and only other real estate properties with a valuation allowance at March 31, 2020 and

December 31, 2019. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

(dollars in thousands)			Fair Value Measurements at Reporting Date Using
March 31, 2020	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
State, county & municipal securities	$	6,410	$	—	$	6,410	$	—
Corporate Debt securities	2,017		—		—		2,017
Mortgage-backed securities	324,658		—		324,658		—
Total available for sale securities	$	333,085	$	—	$	331,068	$	2,017
Nonrecurring
Collateral Dependent Impaired Loans	4,509		—		—		4,509
Other Real Estate	847		—		—		847
Total nonrecurring assets	$	5,356	$	—	$	—	$	5,356

(dollars in thousands)			Fair Value Measurements at Reporting Date Using
December 31, 2019	Total Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Securities Available for Sale
State, county & municipal securities	$	5,115	$	—	$	5,115	$	—
Corporate Debt securities	2,806		—		784		2,022
Mortgage-backed securities	339,411		—		339,411		—
Total available for sale securities	$	347,332	$	—	$	345,310	$	2,022
Nonrecurring
Collateral Dependent Impaired Loans	5,985		—		—		5,985
Other Real Estate	1,320		—		—		1,320
Total nonrecurring assets	$	7,305	$	—	$	—	$	7,305

Fair Value Measurement Inputs and Valuation Techniques

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at March 31, 2020 and December 31, 2019. This table is comprised primarily of collateral dependent impaired loans and other real estate:

(dollars in thousands)
	March 31, 2020		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Collateral Dependent Impaired Loans	$	4,509	Appraised Value	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	10	%	50	%
Other Real Estate	847		Appraised Value/Comparable Sales	Discounts to reflect current market conditions and estimated costs to sell	—	%	20	%

(dollars in thousands)	December 31, 2019		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Collateral Dependent Impaired Loans	$	5,985	Appraised Value	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	—	%	20	%
Other Real Estate	1,320		Appraised Value/Comparable Sales	Discounts to reflect current market conditions and estimated costs to sell	—	%	20	%

The following table presents quantitative information about recurring level 3 fair value measurements as of March 31, 2020.

(dollars in thousands)
March 31, 2020	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Corporate debt securities	$	2,017	Discounted Cash Flow	Discount Rate or Yield	N/A*
December 31, 2019
Corporate debt securities	$	2,022	Discounted Cash Flow	Discount Rate or Yield	N/A*

* The Company relies on a third-party pricing service to value its securities. The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the three months ended March 31, 2020 and 2019.

(dollars in thousands)	Available for Sale Securities
	March 31, 2020		March 31, 2019
Balance, Beginning	$	2,022	$	4,277
Transfers out of Level 3	—		—
Sales	—		—
Paydowns	(5)		(390)
Realized Loss on Sale of Security	—		—
Unrealized gains included in Other Comprehensive Income	—		10
Balance, Ending	$	2,017	$	3,897