Alerus Financial (ALRS) 10-Q 6 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity Registrant Name	ALERUS FINANCIAL CORPORATION
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		17,120,656
Entity Central Index Key	0000903419
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 210,437	$ 144,006
Available-for-sale securities	393,727	310,350
Equity securities		2,808
Loans held for sale	101,751	46,846
Loans	2,034,197	1,721,279
Allowance for loan losses	(27,256)	(23,924)
Net loans	2,006,941	1,697,355
Land, premises and equipment, net	20,709	20,629
Operating lease right-of-use assets	8,746	8,343
Accrued interest receivable	7,975	7,551
Bank-owned life insurance	31,959	31,566
Goodwill	27,329	27,329
Other intangible assets	16,411	18,391
Servicing rights	2,891	3,845
Deferred income taxes, net	8,810	7,891
Other assets	37,771	29,968
Total assets	2,875,457	2,356,878
Deposits
Noninterest-bearing	700,892	577,704
Interest-bearing	1,752,261	1,393,612
Total deposits	2,453,153	1,971,316
Long-term debt	58,754	58,769
Operating lease liabilities	9,254	8,864
Accrued expenses and other liabilities	48,564	32,201
Total liabilities	2,569,725	2,071,150
Stockholders’ equity
Preferred stock, $1 par value, 2,000,000 shares authorized: 0 issued and outstanding
Common stock, $1 par value, 30,000,000 shares authorized: 17,120,466 and 17,049,551 issued and outstanding	17,120	17,050
Additional paid-in capital	89,313	88,650
Retained earnings	189,528	178,092
Accumulated other comprehensive income (loss)	9,771	1,936
Total stockholders’ equity	305,732	285,728
Total liabilities and stockholders’ equity	$ 2,875,457	$ 2,356,878

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Consolidated Balance Sheets
Preferred stock, par value	$ 1	$ 1
Preferred Stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	17,120,466	17,049,551
Common stock, shares outstanding	17,120,466	17,049,551

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Interest Income
Loans, including fees	$ 21,372	$ 21,712	$ 41,914	$ 43,285
Investment securities - Taxable	1,765	1,338	3,524	2,647
Investment securities -Exempt from federal income taxes	239	211	474	455
Other	130	217	700	401
Total interest income	23,506	23,478	46,612	46,788
Interest Expense
Deposits	2,558	3,548	5,950	6,296
Short-term borrowings		735		1,266
Long-term debt	857	904	1,734	1,815
Total interest expense	3,415	5,187	7,684	9,377
Net interest income	20,091	18,291	38,928	37,411
Provision for loan losses	3,500	1,797	6,000	4,017
Net interest income after provision for loan losses	16,591	16,494	32,928	33,394
Noninterest Income
Retirement and benefit services	13,710	15,776	29,930	30,835
Wealth management	4,112	3,878	8,158	7,489
Mortgage banking	17,546	7,035	22,591	11,604
Service charges on deposit accounts	297	430	720	874
Net gains (losses) on investment securities	1,294	182	1,294	309
Other	1,271	2,683	2,726	3,947
Total noninterest income	38,230	29,984	65,419	55,058
Noninterest Expense
Compensation	21,213	18,143	39,944	34,956
Employee taxes and benefits	4,747	5,160	10,055	10,588
Occupancy and equipment expense	2,869	2,641	5,624	5,386
Business services, software and technology expense	4,520	4,022	8,964	7,820
Intangible amortization expense	991	1,050	1,981	2,101
Professional fees and assessments	1,160	1,029	2,200	2,095
Marketing and business development	549	707	1,159	1,134
Supplies and postage	675	663	1,378	1,396
Travel	51	398	312	900
Mortgage and lending expenses	1,192	769	2,235	1,215
Other	1,767	679	2,608	1,184
Total noninterest expense	39,734	35,261	76,460	68,775
Income before income taxes	15,087	11,217	21,887	19,677
Income tax expense	3,613	2,869	5,050	4,893
Net income	$ 11,474	$ 8,348	$ 16,837	$ 14,784
Basic earnings per common share	$ 0.66	$ 0.60	$ 0.97	$ 1.07
Diluted earnings per common share	0.65	0.59	0.95	1.05
Dividends declared per common share	$ 0.15	$ 0.14	$ 0.30	$ 0.28
Average common shares outstanding	17,111	13,810	17,091	13,796
Diluted average common shares outstanding	17,445	14,100	17,425	14,089

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Consolidated Statements of Comprehensive Income
Net Income	$ 11,474	$ 8,348	$ 16,837	$ 14,784
Other Comprehensive Income (Loss), Net of Tax
Unrealized gains (losses) on available-for-sale securities	4,794	3,929	11,753	6,501
Reclassification adjustment for losses (gains) realized in income	(1,294)	(176)	(1,294)	(289)
Total other comprehensive income (loss), before tax	3,500	3,753	10,459	6,790
Income tax expense (benefit) related to items of other comprehensive income	878	942	2,624	1,704
Other comprehensive income (loss), net of tax	2,622	2,811	7,835	5,086
Total comprehensive income	$ 14,096	$ 11,159	$ 24,672	$ 19,870

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders Equity - USD ($) $ in Thousands	Common Stock	Additional Paid in Capital.	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	ESOP – Owned Shares	Total
Beginning balance at Dec. 31, 2018	$ 13,775	$ 27,743	$ 159,037	$ (3,601)	$ (34,494)	$ 162,460
Net Income			14,784			14,784
Other comprehensive income (loss)				5,086		5,086
Common stock repurchased	(5)	(16)	(85)			(106)
Common stock dividends			(3,948)			(3,948)
Stock-based compensation expense	13	982				995
Vesting of restricted stock	33	(33)
Ending balance at Jun. 30, 2019	13,816	28,676	169,788	1,485	(34,494)	179,271
Beginning balance at Mar. 31, 2019	13,801	28,045	163,429	(1,326)	(34,494)	169,455
Net Income			8,348			8,348
Other comprehensive income (loss)				2,811		2,811
Common stock repurchased	(1)	(2)	(14)			(17)
Common stock dividends			(1,975)			(1,975)
Stock-based compensation expense	13	636				649
Vesting of restricted stock	3	(3)
Ending balance at Jun. 30, 2019	13,816	28,676	169,788	1,485	$ (34,494)	179,271
Beginning balance at Dec. 31, 2019	17,050	88,650	178,092	1,936		285,728
Net Income			16,837			16,837
Other comprehensive income (loss)				7,835		7,835
Common stock repurchased	(15)	(111)	(210)			(336)
Common stock dividends			(5,191)			(5,191)
Stock-based compensation expense	14	845				859
Vesting of restricted stock	71	(71)
Ending balance at Jun. 30, 2020	17,120	89,313	189,528	9,771		305,732
Beginning balance at Mar. 31, 2020	17,106	88,703	180,650	7,149		293,608
Net Income			11,474			11,474
Other comprehensive income (loss)				2,622		2,622
Common stock dividends			(2,596)			(2,596)
Stock-based compensation expense	14	610				624
Ending balance at Jun. 30, 2020	$ 17,120	$ 89,313	$ 189,528	$ 9,771		$ 305,732

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities
Net income	$ 16,837	$ 14,784
Adjustments to reconcile net income to net cash provided (used) by operating activities
Deferred income taxes	(3,543)	780
Provision for loan losses	6,000	4,017
Depreciation and amortization	4,313	4,208
Amortization and accretion of premiums/discounts on investment securities	684	559
Amortization of operating lease right-of-use assets	(12)	6
Stock-based compensation	859	995
Increase in value of bank-owned life insurance	(393)	(396)
Realized loss (gain) on sale of branch		(1,544)
Realized loss (gain) on derivative instruments	(1,010)	(2,150)
Realized loss (gain) on loans sold	(19,099)	(6,103)
Realized loss (gain) on sale of foreclosed assets	(19)	(161)
Realized loss (gain) on sale of investment securities	(1,294)	(289)
Realized loss (gain) on servicing rights	558	(101)
Net change in:
Securities held for trading		1,539
Loans held for sale	(34,934)	(24,027)
Accrued interest receivable	(424)	(255)
Other assets	(2,295)	(3,334)
Accrued expenses and other liabilities	11,079	(934)
Net cash provided (used) by operating activities	(22,693)	(12,406)
Investing Activities
Proceeds from sales or calls of investment securities available-for-sale	39,505	21,631
Proceeds from maturities of investment securities available-for-sale	22,266	18,801
Purchases of investment securities available-for-sale	(134,079)	(37,458)
Net (increase) decrease in equity securities	2,808	633
Net (increase) decrease in loans	(315,888)	(13,117)
Proceeds from sale of branch		10,379
Purchases of premises and equipment	(1,998)	(1,934)
Proceeds from sales of foreclosed assets	303	420
Net cash provided (used) by investing activities	(387,083)	(645)
Financing Activities
Net increase (decrease) in deposits	481,837	(26,507)
Net increase (decrease) in short-term borrowings		47,985
Repayments of long-term debt	(103)	(104)
Cash dividends paid on common stock	(5,191)	(3,948)
Repurchase of common stock	(336)	(106)
Net cash provided (used) by financing activities	476,207	17,320
Net change in cash and cash equivalents	66,431	4,269
Cash and cash equivalents at beginning of period	144,006	40,651
Cash and cash equivalents at end of period	210,437	44,920
Cash paid for:
Interest	7,923	7,719
Income taxes	618	4,644
Non-cash information
Loan collateral transferred to foreclosed assets	302	491
Unrealized gain (loss) on investment securities available-for-sale	7,835	5,086
Initial recognition of operating lease right-of-use assets		10,422
Initial recognition of operating lease liabilities		$ 10,943
Right-of-use assets obtained in exchange for new operating leases	$ 1,531

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Significant Accounting Policies
Significant Accounting Policies	NOTE 1 Significant Accounting Policies Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides innovative and comprehensive financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage. Initial Public Offering On September 17, 2019, the Company sold 2,860,000 shares of common stock in its initial public offering. On September 25, 2019, the Company sold an additional 429,000 shares of common stock pursuant to the exercise in full, by the underwriters, of their option to purchase additional shares. The aggregate offering price for the shares sold by the Company was $69.1 million, and after deducting $4.7 million of underwriting discounts and $1.6 million of offering expenses paid to third parties, the Company received total net proceeds of $62.8 million. Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2020. Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity, or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for loan losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments. Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity. Other Information On March 11, 2020, the World Health Organization declared the spread of Coronavirus Disease 2019, or COVID-19, a worldwide pandemic. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to the Company, COVID-19 has impacted various parts of its 2020 operations and financial results, including, but not limited to, additional loan loss reserves, costs for emergency preparedness, or potential shortages of personnel. Management believes the Company is taking appropriate actions to mitigate, to the extent possible, the negative impact. However, the full impact of COVID-19 is currently unknown and cannot be reasonably estimated as the events are continuing to unfold as the year progresses. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, or the agencies, issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” or ASC 310-40, a restructuring of debt constitutes a troubled debt restructuring, or TDR, if the creditor for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the Financial Accounting Standards Boards, or FASB, that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. This interagency guidance is expected to have a material impact on the Company’s financial statements for disclosure of the impact to date. Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Jun. 30, 2020
Recent Accounting Pronouncements
Review Accounting Pronouncements	NOTE 2 Recent Accounting Pronouncements The following FASB Accounting Standards Updates, or ASUs, are divided into pronouncements which have been adopted by the Company since January 1, 2020, and those which are not yet effective and have been evaluated or are currently being evaluated by management as of June 30, 2020. Adopted Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This ASU removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its estimated fair value, not to exceed the carrying amount of goodwill. For public business entities that are US Securities and Exchange Commission filers, ASU 2017-04, is effective for interim and annual reporting periods beginning after December 15, 2019. The Company adopted ASU 2017-04 effective January 1, 2020, and the new guidance did not have an impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018‑13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This ASU eliminates, adds, and modifies certain disclosure requirements for estimated fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the estimated fair value hierarchy, but will be required to disclose the range and weighted-average used to develop significant unobservable inputs for Level 3 estimated fair value measurements. ASU 2018‑13 is effective for all entities interim and annual reporting periods beginning after December 15, 2019. The Company adopted ASU 2018-13 effective January 1, 2020, and the revised disclosure requirements did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 was effective for the Company on January 1, 2020, and did not have a material impact on the Company’s consolidated financial statements. Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires a new impairment model known as the current expected credit loss, or CECL, which significantly changes the way impairment of financial instruments is recognized by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of financial instruments. The main provisions of ASU 2016-13 include (1) replacing the “incurred cost” approach under GAAP with an “expected loss” model for instruments measured at amortized cost, (2) requiring entities to record an allowance for credit losses related to available-for-sale debt securities rather than a direct write-down of the carrying amount of the investments, as is required by the other-than-temporary impairment model under current GAAP, and (3) a simplified accounting model for purchase credit-impaired debt securities and loans. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses (Topic 326). This update amends the effective date of ASU No. 2016-13 for certain entities, including private companies and smaller reporting companies, until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption is permitted. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. The Company does not plan to early adopt this standard but continues to work through implementation. The Company continues collecting and retaining loan and credit data and evaluating various loss estimation models. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics, and quality of our loan portfolio, as well as the general economic conditions and forecasts as of the adoption date. In April 2019, the FASB issued ASU 2019‑04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2019-04. In May 2019, the FASB issued ASU 2019‑05, Targeted Transition Relief to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible instruments. In November 2019, the FASB Issued ASU 2019-10, which amends the effective date of this ASU for certain entities, including private companies and smaller reporting companies until after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. This update is not expected to have a significant impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for the areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2020, for public business entities. For private companies and smaller reporting companies, this guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2021. As an emerging growth company, the Company can take advantage of this later effective date. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective, or prospective basis. The Company is currently reviewing the provisions of this new pronouncement, but does not expect adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoptions is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-03. Codification Improvements to Financial Instruments. This ASU represents changes to clarify or improve the Accounting Standards Codification, or ASC, related to seven topics. The amendments make the ASC easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Issues 1, 2, 3, 4, and 5 are conforming amendments and for public business entities effective upon the issuance of the standard. Issues 6 and 7 are amendments that affect the guidance in ASU 2016-13. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2016-13. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments.

Investment Securities

Investment Securities	6 Months Ended
	Jun. 30, 2020
Investment Securities
Investment Securities	NOTE 3 Investment Securities The following tables present amortized cost, gross unrealized gain and losses, and fair value of the available-for-sale investment securities as of June 30, 2020 and December 31, 2019: June 30, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 16,202 $ 66 $ (16) $ 16,252 Obligations of state and political agencies 110,676 3,477 — 114,153 Mortgage backed securities Residential agency 206,146 8,595 (34) 214,707 Commercial 27,007 940 (21) 27,926 Asset backed securities 127 8 — 135 Corporate bonds 20,524 79 (49) 20,554 Total available-for-sale investment securities $ 380,682 $ 13,165 $ (120) $ 393,727 December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 21,246 $ 9 $ (15) $ 21,240 Obligations of state and political agencies 68,162 647 (161) 68,648 Mortgage backed securities Residential agency 180,411 2,258 (131) 182,538 Commercial 30,752 101 (168) 30,685 Asset backed securities 139 5 — 144 Corporate bonds 7,054 41 — 7,095 Total available-for-sale investment securities $ 307,764 $ 3,061 $ (475) $ 310,350 The following tables present unrealized losses and fair values for available-for-sale investment securities as of June 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: June 30, 2020 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value U.S. Treasury and agencies $ (8) $ 4,803 $ (8) $ 1,324 $ (16) $ 6,127 Obligations of state and political agencies — — — — — — Mortgage backed securities Residential agency (34) 11,903 — — (34) 11,903 Commercial — — (21) 6,640 (21) 6,640 Asset backed securities — — — 2 — 2 Corporate bonds (49) 9,451 — — (49) 9,451 Total available-for-sale investment securities $ (91) $ 26,157 $ (29) $ 7,966 $ (120) $ 34,123 December 31, 2019 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value U.S. Treasury and agencies $ (5) $ 1,740 $ (10) $ 9,990 $ (15) $ 11,730 Obligations of state and political agencies (140) 11,959 (21) 5,798 (161) 17,757 Mortgage backed securities Residential agency (52) 17,131 (79) 14,036 (131) 31,167 Commercial (116) 15,235 (52) 6,195 (168) 21,430 Asset backed securities — 2 — — — 2 Corporate bonds — — — — — — Total available-for-sale investment securities $ (313) $ 46,067 $ (162) $ 36,019 $ (475) $ 82,086 For all of the above investment securities, the unrealized losses were generally due to changes in interest rates and unrealized losses were considered to be temporary as the fair value is expected to recover as the securities approach their maturity dates. The Company evaluates securities for other-than-temporary impairment, or OTTI, on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, consideration is given to the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities, considers external credit ratings and recent downgrades; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value. For the three and six months ended June 30, 2020 and 2019, the Company did not recognize OTTI losses on its investment securities. The following table presents amortized cost and estimated fair value of the available-for-sale investment securities as of June 30, 2020, by contractual maturity: Amortized Fair (dollars in thousands) Cost Value Due within one year or less $ 18,105 $ 18,235 Due after one year through five years 26,685 27,323 Due after five years through ten years 114,717 118,244 Due after 10 years 221,175 229,925 Total available-for-sale investment securities $ 380,682 $ 393,727 Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Investment securities with a total carrying value of $121.3 million and $136.2 million were pledged as of June 30, 2020 and December 31, 2019, respectively, to secure public deposits and for other purposes required or permitted by law. Proceeds from the sale or call of available‑for‑sale investment securities, for the three and six months ended June 30, 2020 and 2019, are displayed in the table below: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Proceeds $ 35,505 $ 16,868 $ 39,505 $ 21,631 Realized gains 1,294 179 1,294 298 Realized losses — (5) — (11) As of June 30, 2020 and December 31, 2019, the carrying value of the Company’s Federal Reserve stock and Federal Home Loan Bank of Des Moines, or FHLB, stock was as follows: June 30, December 31, (dollars in thousands) 2020 2019 Federal Reserve $ 2,675 $ 2,675 FHLB 3,236 3,080 These securities can only be redeemed or sold at their par value and only to the respective issuing institution or to another member institution. The Company records these non-marketable equity securities as a component of other assets and periodically evaluates these securities for impairment. Management considers these non-marketable equity securities to be long-term investments. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. Visa Class B Restricted Shares In 2008, the Company received Visa Class B restricted shares as part of Visa’s initial public offering. These shares are transferable only under limited circumstances until they can be converted into the publicly traded Class A common shares. This conversion will not occur until the settlement of certain litigation which will be indemnified by Visa members, including the Company. Visa funded an escrow account from its initial public offering to settle these litigation claims. Should this escrow account be insufficient to cover these litigation claims, Visa is entitled to fund additional amounts to the escrow account by reducing each member bank’s Class B conversion ratio to unrestricted Class A shares. As of June 30, 2020, the conversion ratio was 1.6228. Based on the existing transfer restriction and the uncertainty of the outcome of the Visa litigation mentioned above, the 6,924 Class B shares (11,236 Class A equivalents) that the Company owned as of June 30, 2020 and December 31, 2019, are carried at a zero cost basis.

Loans and Allowance for Loan Lo

Loans and Allowance for Loan Losses	6 Months Ended
	Jun. 30, 2020
Loans and Allowance for Loan Losses
Loans and Allowance for Loan Losses	NOTE 4 Loans and Allowance for Loan Losses The following table presents total loans outstanding, by portfolio segment, as of June 30, 2020 and December 31, 2019: June 30, December 31, (dollars in thousands) 2020 2019 Commercial Commercial and industrial (1) $ 794,204 $ 479,144 Real estate construction 31,344 26,378 Commercial real estate 519,104 494,703 Total commercial 1,344,652 1,000,225 Consumer Residential real estate first mortgage 456,737 457,155 Residential real estate junior lien 154,351 177,373 Other revolving and installment 78,457 86,526 Total consumer 689,545 721,054 Total loans $ 2,034,197 $ 1,721,279 (1) Includes Paycheck Protection Program, or PPP, loans of $347.3 million at June 30, 2020. Total loans included net deferred loan fees and costs of $10.3 million and $1.0 million at June 30, 2020 and December 31, 2019, respectively. Deferred loan fees on PPP loans were $9.6 million as of June 30, 2020. Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. Loan modifications made in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions are included as accruing current. The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of June 30, 2020 and December 31, 2019: June 30, 2020 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 790,675 $ 662 $ — $ 2,867 $ 794,204 Real estate construction 31,344 — — — 31,344 Commercial real estate 517,657 — — 1,447 519,104 Total commercial 1,339,676 662 — 4,314 1,344,652 Consumer Residential real estate first mortgage 453,810 2,163 — 764 456,737 Residential real estate junior lien 153,907 233 — 211 154,351 Other revolving and installment 78,306 112 — 39 78,457 Total consumer 686,023 2,508 — 1,014 689,545 Total loans $ 2,025,699 $ 3,170 $ — $ 5,328 $ 2,034,197 December 31, 2019 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 473,900 $ 382 $ — $ 4,862 $ 479,144 Real estate construction 26,251 127 — — 26,378 Commercial real estate 492,707 556 — 1,440 494,703 Total commercial 992,858 1,065 — 6,302 1,000,225 Consumer Residential real estate first mortgage 455,244 666 448 797 457,155 Residential real estate junior lien 176,915 184 — 274 177,373 Other revolving and installment 86,172 348 — 6 86,526 Total consumer 718,331 1,198 448 1,077 721,054 Total loans $ 1,711,189 $ 2,263 $ 448 $ 7,379 $ 1,721,279 The Company’s consumer loan portfolio is primarily comprised of secured loans that are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows: Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well‑defined weakness or weaknesses that jeopardize the repayment of the debt. Well‑defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss: Loans classified as loss are considered uncollectible and charged off immediately. The tables below present total loans outstanding, by loan portfolio segment, and risk category as of June 30, 2020 and December 31, 2019: June 30, 2020 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 768,851 $ 5,886 $ 19,467 $ — $ 794,204 Real estate construction 31,087 — 257 — 31,344 Commercial real estate 491,105 4,348 23,651 — 519,104 Total commercial 1,291,043 10,234 43,375 — 1,344,652 Consumer Residential real estate first mortgage 455,973 — 764 — 456,737 Residential real estate junior lien 151,249 1,841 1,261 — 154,351 Other revolving and installment 78,418 — 39 — 78,457 Total consumer 685,640 1,841 2,064 — 689,545 Total loans $ 1,976,683 $ 12,075 $ 45,439 $ — $ 2,034,197 December 31, 2019 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 448,306 $ 9,585 $ 21,253 $ — $ 479,144 Real estate construction 25,119 282 977 — 26,378 Commercial real estate 462,294 2,359 30,050 — 494,703 Total commercial 935,719 12,226 52,280 — 1,000,225 Consumer Residential real estate first mortgage 456,358 — 797 — 457,155 Residential real estate junior lien 176,122 — 1,251 — 177,373 Other revolving and installment 86,520 — 6 — 86,526 Total consumer 719,000 — 2,054 — 721,054 Total loans $ 1,654,719 $ 12,226 $ 54,334 $ — $ 1,721,279 The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pools and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three and six months ended June 30, 2020 and 2019: Three months ended June 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,901 $ 278 $ (2,703) $ 321 $ 10,797 Real estate construction 334 109 — — 443 Commercial real estate 8,276 2,537 (865) — 9,948 Total commercial 21,511 2,924 (3,568) 321 21,188 Consumer Residential real estate first mortgage 2,209 459 — 5 2,673 Residential real estate junior lien 1,025 32 (12) 57 1,102 Other revolving and installment 441 171 (86) 20 546 Total consumer 3,675 662 (98) 82 4,321 Unallocated 1,833 (86) — — 1,747 Total $ 27,019 $ 3,500 $ (3,666) $ 403 $ 27,256 Six months ended June 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,270 $ 348 $ (2,735) $ 914 $ 10,797 Real estate construction 303 140 — — 443 Commercial real estate 6,688 4,125 (865) — 9,948 Total commercial 19,261 4,613 (3,600) 914 21,188 Consumer Residential real estate first mortgage 1,448 1,220 — 5 2,673 Residential real estate junior lien 671 349 (12) 94 1,102 Other revolving and installment 352 263 (153) 84 546 Total consumer 2,471 1,832 (165) 183 4,321 Unallocated 2,192 (445) — — 1,747 Total $ 23,924 $ 6,000 $ (3,765) $ 1,097 $ 27,256 Three months ended June 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 13,815 $ 818 $ (3,166) $ 227 $ 11,694 Real estate construction 251 70 — 2 323 Commercial real estate 5,843 (228) — 150 5,765 Total commercial 19,909 660 (3,166) 379 17,782 Consumer Residential real estate first mortgage 1,610 (455) — — 1,155 Residential real estate junior lien 761 (51) (30) 30 710 Other revolving and installment 349 433 (424) 22 380 Total consumer 2,720 (73) (454) 52 2,245 Unallocated 9 1,210 — — 1,219 Total $ 22,638 $ 1,797 $ (3,620) $ 431 $ 21,246 Six months ended June 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,127 $ 4,225 $ (4,951) $ 293 $ 11,694 Real estate construction 250 72 (1) 2 323 Commercial real estate 6,279 (664) — 150 5,765 Total commercial 18,656 3,633 (4,952) 445 17,782 Consumer Residential real estate first mortgage 1,156 (1) — — 1,155 Residential real estate junior lien 805 (44) (134) 83 710 Other revolving and installment 380 387 (482) 95 380 Total consumer 2,341 342 (616) 178 2,245 Unallocated 1,177 42 — — 1,219 Total $ 22,174 $ 4,017 $ (5,568) $ 623 $ 21,246 The following tables present the recorded investment in loans and related allowance for loan losses, by loan portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of June 30, 2020 and December 31, 2019: June 30, 2020 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Unallocated Total Commercial Commercial and industrial $ 3,644 $ 790,560 $ 794,204 $ 503 $ 10,294 $ — $ 10,797 Real estate construction — 31,344 31,344 — 443 — 443 Commercial real estate 1,529 517,575 519,104 10 9,938 — 9,948 Total commercial 5,173 1,339,479 1,344,652 513 20,675 — 21,188 Consumer Residential real estate first mortgage 747 455,990 456,737 — 2,673 — 2,673 Residential real estate junior lien 260 154,091 154,351 20 1,082 — 1,102 Other revolving and installment 39 78,418 78,457 16 530 — 546 Total consumer 1,046 688,499 689,545 36 4,285 — 4,321 Total loans $ 6,219 $ 2,027,978 $ 2,034,197 $ 549 $ 24,960 $ 1,747 $ 27,256 December 31, 2019 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Unallocated Total Commercial Commercial and industrial $ 976 $ 478,168 $ 479,144 $ 189 $ 12,081 $ — $ 12,270 Real estate construction — 26,378 26,378 — 303 — 303 Commercial real estate 5,925 488,778 494,703 2,946 3,742 — 6,688 Total commercial 6,901 993,324 1,000,225 3,135 16,126 — 19,261 Consumer Residential real estate first mortgage 782 456,373 457,155 — 1,448 — 1,448 Residential real estate junior lien 266 177,107 177,373 — 671 — 671 Other revolving and installment 5 86,521 86,526 3 349 — 352 Total consumer 1,053 720,001 721,054 3 2,468 — 2,471 Total loans $ 7,954 $ 1,713,325 $ 1,721,279 $ 3,138 $ 18,594 $ 2,192 $ 23,924 The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses. June 30, 2020 December 31, 2019 Recorded Unpaid Related Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 3,020 $ 3,096 $ 503 $ 639 $ 727 $ 189 Commercial real estate 199 227 10 5,718 5,823 2,946 Residential real estate junior lien 19 20 20 — — — Other revolving and installment 35 35 16 5 6 3 Total impaired loans with a valuation allowance 3,273 3,378 549 6,362 6,556 3,138 Impaired loans without a valuation allowance Commercial and industrial 624 805 — 337 1,110 — Commercial real estate 1,330 1,447 — 207 236 — Residential real estate first mortgage 747 764 — 782 797 — Residential real estate junior lien 241 341 — 266 372 — Other revolving and installment 4 4 — — — — Total impaired loans without a valuation allowance 2,946 3,361 — 1,592 2,515 — Total impaired loans Commercial and industrial 3,644 3,901 503 976 1,837 189 Commercial real estate 1,529 1,674 10 5,925 6,059 2,946 Residential real estate first mortgage 747 764 — 782 797 — Residential real estate junior lien 260 361 20 266 372 — Other revolving and installment 39 39 16 5 6 3 Total impaired loans $ 6,219 $ 6,739 $ 549 $ 7,954 $ 9,071 $ 3,138 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2020 and 2019: Three months ended June 30, 2020 2019 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 4,881 $ 15 $ 2,229 $ 16 Commercial real estate 200 8 1,678 8 Residential real estate first mortgage — — — — Residential real estate junior lien 20 — 60 3 Other revolving and installment 35 — 9 — Total impaired loans with a valuation allowance 5,136 23 3,976 27 Impaired loans without a valuation allowance Commercial and industrial 694 26 1,271 31 Commercial real estate 1,693 — — — Residential real estate first mortgage 755 — — — Residential real estate junior lien 255 3 751 1 Other revolving and installment 4 — 5 — Total impaired loans without a valuation allowance 3,401 29 2,027 32 Total impaired loans Commercial and industrial 5,575 41 3,500 47 Commercial real estate 1,893 8 1,678 8 Residential real estate first mortgage 755 — — — Residential real estate junior lien 275 3 811 4 Other revolving and installment 39 — 14 — Total impaired loans $ 8,537 $ 52 $ 6,003 $ 59 Six Months Ended June 30, 2020 2019 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 4,714 $ 15 $ 1,332 $ 17 Commercial real estate 203 8 1,505 — Residential real estate junior lien 20 — — — Other revolving and installment 35 — 9 — Total impaired loans with a valuation allowance 4,972 23 2,846 17 Impaired loans without a valuation allowance Commercial and industrial 747 26 4,835 33 Real estate construction — — 217 9 Commercial real estate 1,821 — — — Residential real estate first mortgage 761 — — — Residential real estate junior lien 279 3 821 4 Other revolving and installment 5 — 13 — Total impaired loans without a valuation allowance 3,613 29 5,886 46 Total impaired loans Commercial and industrial 5,461 41 6,167 50 Real estate construction — — 217 9 Commercial real estate 2,024 8 1,505 — Residential real estate first mortgage 761 — — — Residential real estate junior lien 299 3 821 4 Other revolving and installment 40 — 22 — Total impaired loans $ 8,585 $ 52 $ 8,732 $ 63 Loans with a carrying value of $1.2 billion as of June 30, 2020 and $1.2 billion as of December 31, 2019, were pledged to secure public deposits, and for other purposes required or permitted by law. Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a TDR if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include reduction of interest rates, extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt. During the second quarter of 2020 there were no loans modified as a TDR. As of June 30, 2020, the Company executed 5 15 principal and interest deferrals on outstanding loan balances of $ 148.5 million in connection with the COVID-19 relief provided by the CARES Act. These deferrals were generally no more than 90 days in duration and were not considered TDRs in accordance with the Interagency Statement on Loan Modifications and Reporting for Financial Institutions as issued on April 7, 2020. During the first quarter of 2019, there was one loan modified as a TDR as a result of extending the amortization period. As of December 31, 2019, the carrying value of the restructured loan was $0.2 million. The loan is currently performing according to the modified terms and there was no specific reserve for loan losses allocated to the loan modified as troubled debt restructuring. The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in troubled debt restructurings or whose loans are on nonaccrual.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2020
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	NOTE 5 Goodwill and Other Intangible Assets The following table summarizes the carrying amount of goodwill, by segment, as of June 30, 2020 and December 31, 2019: June 30, December 31, (dollars in thousands) 2020 2019 Banking $ 20,131 $ 20,131 Retirement and benefit services 7,198 7,198 Total goodwill $ 27,329 $ 27,329 The gross carrying amount and accumulated amortization for each type of identifiable intangible asset are as follows: June 30, 2020 December 31, 2019 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 31,857 $ (15,888) $ 15,969 $ 31,857 $ (14,287) $ 17,570 Core deposit intangible assets 3,793 (3,351) 442 4,993 (4,172) 821 Total intangible assets $ 35,650 $ (19,239) $ 16,411 $ 36,850 $ (18,459) $ 18,391 Amortization of intangible assets was $1.0 million and $1.1 million for the three months ended June 30, 2020, and 2019, respectively. Amortization of intangible assets was $2.0 and $2.1 million for the six months ended June 30, 2020, and 2019, respectively. Goodwill is evaluated for impairment on an annual basis, at a minimum, and more frequently when the economic environment warrants. The Company determined that there was no goodwill impairment as of June 30, 2020.

Loan Servicing

Loan Servicing	6 Months Ended
	Jun. 30, 2020
Loan Servicing
Loan Servicing	NOTE 6 Loan Servicing Loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled $ 498.7 million and $541.9 million as of June 30, 2020 and December 31, 2019, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on an accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of fair value adjustments to capitalized mortgage servicing rights. The following table summarizes the Company’s activity related to servicing rights for the three and six months ended June 30, 2020 and 2019: Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 3,277 $ 4,530 $ 3,845 $ 4,623 Additions 88 34 112 101 Amortization (209) (239) (396) (404) (Impairment)/Recovery (265) (25) (670) (20) Balance, end of period $ 2,891 $ 4,300 $ 2,891 $ 4,300 The following is a summary of key data and assumptions used in the valuation of servicing rights as of June 30, 2020 and December 31, 2019. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements. June 30, December 31, (dollars in thousands) 2020 2019 Fair value of servicing rights $ 2,891 $ 3,845 Weighted-average remaining term, years 19.9 20.1 Prepayment speeds 22.1 % 11.8 % Discount rate 9.0 % 9.4 %

Leases

Leases	6 Months Ended
	Jun. 30, 2020
Leases
Leases	NOTE 7 Leases Substantially all of the leases in which the Company is the lessee are comprised of real estate property for offices and office equipment rentals with terms extending through 2032. Portions of certain properties are subleased for terms extending through 2024. Substantially all of the Company’s leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated financial statements. The Company has one existing finance lease for the Company’s headquarters building with a lease term through 2022. The Company elected not to include short‑term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated financial statements. The following table presents the classification of the Company’s right-of-use, or ROU, assets and lease liabilities on the consolidated financial statements. June 30, December 31, (dollars in thousands) 2020 2019 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 8,746 $ 8,343 Finance lease right-of-use assets Land, premises and equipment, net 260 318 Total lease right-of-use assets $ 9,006 $ 8,661 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 9,254 $ 8,864 Finance lease liabilities Long-term debt 537 640 Total lease liabilities $ 9,791 $ 9,504 The calculated amount of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the rate for the remaining lease term as of January 1, 2019 was used. For the Company’s only finance lease, the Company utilized its incremental borrowing rate at lease inception. June 30, December 31, 2020 2019 Weighted-average remaining lease term, years Operating leases 5.8 6.2 Finance leases 2.1 2.8 Weighted-average discount rate Operating leases 2.8 % 3.1 % Finance leases 7.8 % 7.8 % As the Company elected, for all classes of underlying assets, not to separate lease and non‑lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance and utilities. Variable lease cost also includes payments for usage or maintenance of those capitalized equipment operating leases. The following table presents lease costs and other lease information for the three and six months ending June 30, 2020 and 2019. Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Lease costs Operating lease cost $ 568 $ 598 $ 1,191 $ 1,170 Variable lease cost 468 211 665 410 Short-term lease cost 107 260 202 465 Finance lease cost Interest on lease liabilities 11 16 23 31 Amortization of right-of-use assets 29 29 58 58 Sublease income (52) (68) (118) (139) Net lease cost $ 1,131 $ 1,046 $ 2,021 $ 1,995 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases 561 597 $ 1,179 $ 1,174 Right-of-use assets obtained in exchange for new operating lease liabilities 1,348 — 1,531 — Right-of-use assets obtained in exchange for new finance lease liabilities — — — — Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of June 30, 2020 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2021 $ 251 $ 2,293 June 30, 2022 251 2,085 June 30, 2023 84 1,981 June 30, 2024 — 1,255 June 30, 2025 — 738 Thereafter — 1,913 Total future minimum lease payments $ 586 $ 10,265 Amounts representing interest (49) (1,011) Total operating lease liabilities $ 537 $ 9,254

Deposits

Deposits	6 Months Ended
	Jun. 30, 2020
Deposits.
Deposits	NOTE 8 Deposits The components of deposits in the consolidated balance sheets as of June 30, 2020 and December 31, 2019 were as follows: June 30, December 31, (dollars in thousands) 2020 2019 Noninterest-bearing $ 700,892 $ 577,704 Interest-bearing Interest-bearing demand 579,840 458,689 Savings accounts 75,973 55,777 Money market savings 892,717 683,064 Time deposits 203,731 196,082 Total interest-bearing 1,752,261 1,393,612 Total deposits $ 2,453,153 $ 1,971,316

Short-Term Borrowings

Short-Term Borrowings	6 Months Ended
	Jun. 30, 2020
Short-Term Borrowings
Short-Term Borrowings	NOTE 9 Short‑Term Borrowings There were no short‑term borrowings outstanding as of June 30, 2020 and December 31, 2019. The following table presents information related to short-term borrowings for the three and six months ending June 30, 2020 and 2019: Three months ended June 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ 6,445 Average daily balance 321 103,035 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.59 % End of period — % 2.50 % FHLB Short-term advances Balance as of end of period $ — $ 135,000 Average daily balance — 12,857 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.16 % End of period — % 2.40 % Six months ended June 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ 6,445 Average daily balance 161 93,238 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.59 % End of period — % 2.50 % FHLB Short-term advances Balance as of end of period $ — $ 135,000 Average daily balance — 6,464 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.17 % End of period — % 2.40 %

Long-Term Debt

Long-Term Debt	6 Months Ended
	Jun. 30, 2020
Long-Term Debt.
Long-Term Debt	NOTE 10 Long‑Term Debt Long‑term debt as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,656 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,424 Three-month LIBOR + 3.10% 3.38 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,137 Three-month LIBOR + 1.80% 2.11 % 9/15/2036 9/15/2011 Finance lease liability 2,657 537 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 62,967 $ 58,754 December 31, 2019 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,625 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,402 Three-month LIBOR + 3.10% 5.05 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,102 Three-month LIBOR + 1.80% 3.69 % 9/15/2036 9/15/2011 Finance lease liability 2,657 640 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 62,967 $ 58,769

Financial Instruments with Off-

Financial Instruments with Off-Balance Sheet Risk	6 Months Ended
	Jun. 30, 2020
Financial Instruments with Off-Balance Sheet Risk
Financial Instruments with Off-Balance Sheet Risk	NOTE 11 Financial Instruments with Off‑Balance Sheet Risk In the normal course of business, the Bank has outstanding commitment and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making such commitments as it does for instruments that are included in the statements of financial condition. As of June 30, 2020 and December 31, 2019, the following financial instruments whose contract amount represents credit risk were approximately as follows: June 30, December 31, (dollars in thousands) 2020 2019 Commitments to extend credit $ 600,269 $ 586,365 Standby letters of credit 7,387 8,516 Total $ 607,656 $ 594,881 Commitments to extend credit are agreements to lend to a client as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property and equipment, and income producing commercial properties. The Company was not required to perform on any financial guarantees and did not incur any losses on its commitments during the past two years. The Company utilizes standby letters of credit issued by either the Federal Home Loan Bank or the Bank of North Dakota to secure public unit deposits. The Company had a $150 thousand letter of credit with the Federal Home Loan Bank as of June 30, 2020 and December 31, 2019. With the Bank of North Dakota, the Company had $15.0 million of letters of credit outstanding as of June 30, 2020 and $20.0 million as of December 31, 2019. Bank of North Dakota letters of credit were collateralized by loans pledged to the Bank of North Dakota in the amount of $248.3 million and $242.0 million as of June 30, 2020 and December 31, 2019, respectively.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Jun. 30, 2020
Share-Based Compensation Plan
Share-Based Compensation Plan	NOTE 12 Share-Based Compensation The Company has granted equity awards pursuant to the Alerus Financial Corporation 2009 Stock Plan. The awards were in the form of restricted stock or restricted stock units and are considered to represent an element of employee compensation. Compensation expense for the awards is based on the fair value of Alerus Financial Corporation common stock at the time of grant. The value of awards that are expected to vest are amortized into expense over the vesting periods. The ability to grant awards under this plan has expired. On May 6, 2019, the Company’s stockholders approved the Alerus Financial Corporation 2019 Equity Incentive Plan. This plan allows the compensation committee the ability to grant a wide variety of equity awards, including stock options, stock appreciation rights, restricted stock, restricted stock units and cash incentive awards in such forms and amounts as it deems appropriate to accomplish the goals of the plan. Any shares subject to an award that is cancelled, forfeited, or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the plan. However, shares subject to an award shall not again be made available for issuance or delivery under the plan if such shares are (a) tendered in payment of the exercise price of a stock option, (b) delivered to, or withheld by, the Company to satisfy any tax withholding obligation, or (c) covered by a stock‑settled stock appreciation right or other awards that were not issued upon the settlement of the award. Shares vest, become exercisable and contain such other terms and conditions as determined by the compensation committee and set forth in individual agreements with the participant receiving the award. The plan authorizes the issuance of up to 1,100,000 shares of common stock. As of June 30, 2020, 28,242 stock awards and 49,604 restricted stock units had been issued under the plan. Compensation expense relating to awards under these plans was $624 thousand and $ 399 thousand for the three months ending June 30, 2020 and 2019, respectively. Compensation expense relating to awards under these plans was $ 859 thousand and $649 thousand for the six months ending June 30, 2020 and 2019, respectively. The following tables present the activity in the stock plans for the six months ended June 30, 2020 and 2019: Six months ended June 30, 2020 Six months ended June 30, 2019 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 347,211 $ 18.64 337,014 $ 18.36 Granted 77,846 19.53 70,617 19.87 Vested (86,137) 16.15 (32,837) 19.73 Forfeited or cancelled (5,068) 19.37 (753) 21.76 Outstanding at end of period 333,852 $ 19.48 374,041 $ 18.52 As of June 30, 2020, there was $3.58 million of unrecognized compensation expense related to non-vested awards granted under the plans. The expense is expected to be recognized over a weighted-average period of 3.56 years.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2020
Income Taxes
Income Taxes	NOTE 13 Income Taxes The components of income tax expense (benefit) for the three and six months ended June 30, 2020 and 2019 are as follows: Three months ended June 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 3,168 21.0 % $ 2,356 21.0 Tax effect of: Tax exempt income (127) (0.8) (108) (1.0) Other 572 3.8 621 5.4 Applicable income taxes $ 3,613 23.9 % $ 2,869 25.6 Six months ended June 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,596 21.0 % $ 4,132 21.0 % Tax effect of: Tax exempt income (247) (1.1) % (222) (1.1) % Other 701 3.2 % 983 5.0 % Applicable income taxes $ 5,050 23.1 % $ 4,893 24.9 % It is the opinion of management that the Company has no significant uncertain tax positions that would be subject to change upon examination.

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2020
Segment Reporting
Segment Reporting	NOTE 14 Segment Reporting The Company determines reportable segments based on the services offered, the significance of the services offered, the significance of those services to the Company’s financial statements, and management’s regular review of the operating results of those services. The Company operates through four operating segments: Banking, Retirement and Benefit Services, Wealth Management, and Mortgage. The financial information presented for each segment includes net interest income, provision for loan losses, direct noninterest income, and direct noninterest expense, before indirect allocations. Corporate Administration includes the indirect overhead and is set forth in the table below. The segment net income before taxes represents direct revenue and expense before indirect allocations and income taxes. The following table presents key metrics related to the Company’s segments for the periods presented: Three months ended June 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 20,417 $ — $ — $ 530 $ (856) $ 20,091 Provision for loan losses 3,500 — — — — 3,500 Noninterest income 2,857 13,710 4,112 17,546 5 38,230 Noninterest expense 11,359 9,193 2,629 8,020 8,533 39,734 Net income before taxes $ 8,415 $ 4,517 $ 1,483 $ 10,056 $ (9,384) $ 15,087 Six months ended June 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 39,863 $ — $ — $ 798 $ (1,733) $ 38,928 Provision for loan losses 6,000 — — — — 6,000 Noninterest income 4,731 29,930 8,158 22,591 9 65,419 Noninterest expense 24,011 17,125 4,144 13,459 17,721 76,460 Net income before taxes $ 14,583 $ 12,805 $ 4,014 $ 9,930 $ (19,445) $ 21,887 Three months ended June 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 18,894 $ — $ — $ 305 $ (908) $ 18,291 Provision for loan losses 1,797 — — — — 1,797 Noninterest income 1,747 15,776 3,878 7,035 1,548 29,984 Noninterest expense 10,088 8,601 2,177 5,966 8,429 35,261 Net income before taxes $ 8,756 $ 7,175 $ 1,701 $ 1,374 $ (7,789) $ 11,217 Six months ended June 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 38,794 $ — $ — $ 434 $ (1,817) $ 37,411 Provision for loan losses 4,017 — — — — 4,017 Noninterest income 3,578 30,835 7,489 11,604 1,552 55,058 Noninterest expense 20,080 17,591 4,101 9,928 17,075 68,775 Net income before taxes $ 18,275 $ 13,244 $ 3,388 $ 2,110 $ (17,340) $ 19,677 Banking The Banking division offers a complete line of loan, deposit, cash management, and treasury services through fifteen offices in North Dakota, Minnesota, and Arizona. These products and services are supported through web and mobile based applications. The majority of the Company’s assets and liabilities are in the Banking segment’s balance sheet. Retirement and Benefit Services Retirement and Benefit Services provides the following services nationally: recordkeeping and administration services to qualified retirement plans; ESOP trustee, recordkeeping, and administration; investment fiduciary services to retirement plans; health savings accounts, flex spending accounts, COBRA recordkeeping and administration services, and payroll to employers; and payroll and HIRS services for employers. In addition, the division operates within each of the banking markets as well as in Albert Lea, Minnesota, Lansing, Michigan, Bedford, New Hampshire, and 13 satellite offices. Wealth Management The Wealth Management division provides advisory and planning services, investment management, and trust and fiduciary services to clients across the Company’s footprint. Mortgage The Mortgage division offers first and second mortgage loans through a centralized mortgage unit in Minneapolis, Minnesota as well as through the Banking office locations.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share
Earnings Per Share	NOTE 15 Earnings Per Share Beginning in the third quarter of 2019, the Company elected to prospectively use the two-class method in calculating earnings per share due to the restricted stock awards and restricted stock units qualifying as participating securities. Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared (or accumulated) and participating rights in undistributed earnings. Average shares of common stock for diluted net income per common share include shares to be issued upon the vesting of restricted stock awards and restricted stock units granted under the Company's share-based compensation plans. The calculation of basic and diluted earnings per share using the two-class method for the three and six months ending June 30, 2020 is presented below: Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2020 2020 Net income $ 11,474 $ 16,837 Dividends and undistributed earnings allocated to participating securities 200 282 Net income available to common shareholders $ 11,274 $ 16,555 Weighted-average common shares outstanding for basic earnings per share 17,111 17,091 Dilutive effect of stock-based awards 334 334 Weighted-average common shares outstanding for diluted earnings per share 17,445 17,425 Earnings per common share: Basic earnings per common share $ 0.66 $ 0.97 Diluted earnings per common share $ 0.65 $ 0.95 For the three and six months ended June 30, 2019, the basic and diluted earnings per share were calculated using the treasury stock method, as presented in the table below. The Company determined that the impact to diluted earnings per share would be immaterial if calculated under the two-class method for the three and six months ended June 30, 2019. The calculation of basic and diluted earnings per share using the treasury stock method for the three and six months ending June 30, 2019 is presented below: Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2019 2019 Basic: Net income attributable to common shareholders $ 8,348 $ 14,784 Weighted-average common shares outstanding 13,810 13,796 Basic earnings per common share $ 0.60 $ 1.07 Diluted: Net income attributable to common shareholders $ 8,348 $ 14,784 Weighted-average common shares outstanding 13,810 13,796 Add: Dilutive effect of stock-based awards 290 293 Weighted-average common shares outstanding for diluted EPS 14,100 14,089 Diluted earnings per common share $ 0.59 $ 1.05

Derivative Instruments

Derivative Instruments	6 Months Ended
	Jun. 30, 2020
Derivative Instruments
Derivative Instruments	NOTE 16 Derivative Instruments The Company did not have any derivatives designated as hedging instruments, as of June 30, 2020 and December 31, 2019. The following table presents the amounts recorded in the Company’s consolidated balance sheets, for derivatives not designated as hedging instruments, as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Asset Derivatives Consolidated Balance Sheet Location Interest rate lock commitments Other assets $ 5,936 $ 179,182 $ 1,228 $ 45,715 Forward loan sales commitments Other assets 1,175 34,235 393 12,784 TBA mortgage backed securities Other assets — — — — Total asset derivatives $ 7,111 $ 213,417 $ 1,621 $ 58,499 Liability Derivatives Interest rate lock commitments Accrued expenses and other liabilities $ — $ — $ — $ — Forward loan sales commitments Accrued expenses and other liabilities — — — — TBA mortgage backed securities Accrued expenses and other liabilities 1,321 239,000 109 68,500 Total liability derivatives $ 1,321 $ 239,000 $ 109 $ 68,500 The gain (loss) recognized on derivative instruments for the three and six months ended June 30, 2020 and 2019 was as follows: Three months ended Six months ended Consolidated Statements of June 30, June 30, June 30, June 30, (dollars in thousands) Income Location 2020 2019 2020 2019 Interest rate lock commitments Mortgage banking $ 4,352 $ 492 $ 5,579 $ 2,281 Forward loan sales commitments Mortgage banking 117 407 783 653 TBA mortgage backed securities Mortgage banking (1,929) (330) (5,352) (784) Total gain/(loss) from derivative instruments $ 2,540 $ 569 $ 1,010 $ 2,150

Regulatory Matters

Regulatory Matters	6 Months Ended
	Jun. 30, 2020
Regulatory Matters
Regulatory Matters	NOTE 17 Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes at June 30, 2020 and December 31, 2019, each of the Company and the Bank had met all of the capital adequacy requirements to which it is subject. The following table presents the Company’s and the Bank’s actual capital amounts and ratios as of June 30, 2020 and December 31, 2019: June 30, 2020 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 254,047 12.58 % $ 90,888 4.50 % $ N/A N/A Bank 241,940 11.99 % 90,814 4.50 % 131,176 6.50 % Tier 1 capital to risk weighted assets . Consolidated 262,298 12.99 % 121,184 6.00 % N/A N/A Bank 241,940 11.99 % 121,086 6.00 % 161,448 8.00 % Total capital to risk weighted assets Consolidated 337,225 16.70 % 161,578 8.00 % N/A N/A Bank 267,191 13.24 % 161,448 8.00 % 201,810 10.00 % Tier 1 capital to average assets Consolidated 262,298 9.75 % 107,620 4.00 % N/A N/A Bank 241,940 9.00 % 107,531 4.00 % 134,414 5.00 % December 31, 2019 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 239,672 12.48 % $ 86,452 4.50 % $ N/A N/A Bank 228,512 11.91 % 86,362 4.50 % 124,745 6.50 % Tier 1 capital to risk weighted assets . Consolidated 247,866 12.90 % 115,270 6.00 % N/A N/A Bank 228,512 11.91 % 115,149 6.00 % 153,532 8.00 % Total capital to risk weighted assets Consolidated 321,415 16.73 % 153,693 8.00 % N/A N/A Bank 252,436 13.15 % 153,532 8.00 % 191,915 10.00 % Tier 1 capital to average assets Consolidated 247,866 11.05 % 91,504 4.00 % N/A N/A Bank 228,512 10.20 % 89,615 4.00 % 112,018 5.00 % The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval. The Company and the Bank are subject to the rules of the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act rules. The rules included the implementation of a 2.5 percent capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount will be subject to the limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. At June 30, 2020, the ratios for the Company and the Bank were sufficient to meet the conservation buffer. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development, or HUD, regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of June 30, 2020, and December 31, 2019, the Company was in compliance with HUD guidelines.

Fair Value of Assets and Liabil

Fair Value of Assets and Liabilities	6 Months Ended
	Jun. 30, 2020
Fair Value of Assets and Liabilities
Fair Value of Assets and Liabilities	NOTE 18 Fair Value of Assets and Liabilities The Company categorizes its assets and liabilities measured at estimated fair value into a three level hierarchy based on the priority of the inputs to the valuation technique used to determine estimated fair value. The estimated fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the estimated fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the estimated fair value measurement. Assets and liabilities valued at estimated fair value are categorized based on the following inputs to the valuation techniques as follows: Level 1— Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that an entity has the ability to access. Level 2— Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Estimated fair values for these instruments are estimated using pricing models, quoted prices of investment securities with similar characteristics, or discounted cash flows. Level 3— Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may re‑measure the carrying value of assets and liabilities measured on a nonrecurring basis to estimated fair value. Adjustments to estimated fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their estimated fair value. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at estimated fair value for the initial and subsequent measurement on an instrument‑by‑instrument basis. The Company adopted the policy to value certain financial instruments at estimated fair value. The Company has not elected to measure any existing financial instruments at estimated fair value; however, it may elect to measure newly acquired financial instruments at estimated fair value in the future. Recurring Basis The Company uses estimated fair value measurements to record estimated fair value adjustments to certain assets and liabilities and to determine estimated fair value disclosures. The following tables present the balances of the assets and liabilities measured at estimated fair value on a recurring basis as of June 30, 2020 and December 31, 2019: June 30, 2020 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and securities U.S. treasury and government agencies $ — $ 16,252 $ — $ 16,252 Obligations of state and political agencies — 114,153 — 114,153 Mortgage backed securities Residential agency — 214,707 — 214,707 Commercial — 27,926 — 27,926 Asset backed securities — 135 — 135 Corporate bonds — 20,554 — 20,554 Total available-for-sale securities $ — $ 393,727 $ — $ 393,727 Other assets Derivatives $ — $ 7,111 $ — $ 7,111 Other liabilities Derivatives $ — $ 1,321 $ — $ 1,321 December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and equity securities U.S. treasury and government agencies $ — $ 21,240 $ — $ 21,240 Obligations of state and political agencies — 68,648 — 68,648 Mortgage backed securities Residential agency — 182,538 — 182,538 Commercial — 30,685 — 30,685 Asset backed securities — 144 — 144 Corporate bonds — 7,095 — 7,095 Equity securities 2,808 — — 2,808 Total available-for-sale and equity securities $ 2,808 $ 310,350 $ — $ 313,158 Other assets Derivatives $ — $ 1,621 $ — $ 1,621 Other liabilities Derivatives $ — $ 109 $ — $ 109 The following is a description of the valuation methodologies used for instruments measured at estimated fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. Investment Securities When available, the Company uses quoted market prices to determine the estimated fair value of investment securities; such items are classified in Level 1 of the estimated fair value hierarchy. For the Company’s investment securities for which quoted prices are not available for identical investment securities in an active market, the Company determines estimated fair value utilizing vendors who apply matrix pricing for similar bonds for which no prices are observable or may compile prices from various sources. These models are primarily industry‑standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market, and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Estimated fair values from these models are verified, where possible, against quoted prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, cannot be obtained, or cannot be corroborated, a security is generally classified as Level 3. Derivatives All of the Company’s derivatives are traded in over‑the‑counter markets where quoted market prices are not readily available. For these derivatives, estimated fair value is measured using internally developed models that use primarily market observable inputs, such as yield curves and option volatilities, and accordingly, classify as Level 2. Examples of Level 2 derivatives are basic interest rate swaps and forward contracts. Nonrecurring Basis Certain assets are measured at estimated fair value on a nonrecurring basis. These assets are not measured at estimated fair value on an ongoing basis; however, they are subject to estimated fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment. Net impairment related to nonrecurring estimated fair value measurements of certain assets as of June 30, 2020 and December 31, 2019 consisted of the following: June 30, 2020 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 101,751 $ — $ 101,751 $ — Impaired loans — 5,670 5,670 549 Foreclosed assets — 26 26 — Servicing rights — 2,891 2,891 — December 31, 2019 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 46,846 $ — $ 46,846 $ — Impaired loans — 4,816 4,816 3,138 Foreclosed assets — 8 8 — Servicing rights — 3,845 3,845 — Loans Held for Sale Loans originated and held for sale are carried at the lower of cost or estimated fair value. The Company obtains quotes or bids on these loans directly from purchasing financial institutions. Typically these quotes include a premium on the sale and thus these quotes indicate estimated fair value of the held for sale loans is greater than cost. Impairment losses for loans held for sale that are carried at the lower of cost or estimated fair value, represent additional net write‑downs during the period to record these loans at the lower of cost or estimated fair value, subsequent to their initial classification as loans held for sale. The valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values as of June 30, 2020, and December 31, 2019, were as follows: June 30, 2020 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 5,670 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 26 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,891 268-425 237 Discount rate 9.0 % 9.0 % December 31, 2019 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 4,816 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 8 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 3,845 123-267 194 Discount rate 9.4 % 9.4 % Disclosure of estimated fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases in which quoted market prices are not available, estimated fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived estimated fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments, with an estimated fair value that is not practicable to estimate and all non‑financial instruments, are excluded from the disclosure requirements. Accordingly, the aggregate estimated fair value amounts presented do not necessarily represent the underlying value of the Company. The following disclosures represent financial instruments in which the ending balances, as of June 30, 2020 and December 31, 2019, were not carried at estimated fair value in their entirety on the consolidated balance sheets. Cash and Cash Equivalents and Accrued Interest The carrying amounts reported in the consolidated balance sheets approximate those assets and liabilities estimated fair values. Loans For variable‑rate loans that reprice frequently and with no significant change in credit risk, estimated fair values are based on carrying values. The estimated fair values of other loans are estimated using discounted cash flow analysis, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Bank‑Owned Life Insurance Bank‑owned life insurance is carried at the amount due upon surrender of the policy, which is also the estimated fair value. This amount was provided by the insurance companies based on the terms of the underlying insurance contract. Deposits The estimated fair values of demand deposits are, by definition, equal to the amount payable on demand at the consolidated balance sheet date. The estimated fair values of fixed‑rate certificates of deposit are estimated using a discounted cash flow calculation that applies current incremental interest rates being offered on certificates of deposit to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit. Short‑Term Borrowings and Long‑Term Debt For variable‑rate borrowings that reprice frequently, estimated fair values are based on carrying values. The estimated fair value of fixed‑rate borrowings are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Off‑Balance Sheet Credit‑Related Commitments Off‑balance sheet credit related commitments are generally of short‑term nature. The contract amount of such commitments approximates their estimated fair value since the commitments are comprised primarily of unfunded loan commitments which are generally priced at market at the time of funding. The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments are as follows: June 30, 2020 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 210,437 $ 210,437 $ — $ — $ 210,437 Loans 2,006,941 — — 2,035,211 2,035,211 Accrued interest receivable 7,975 7,975 — — 7,975 Bank-owned life insurance 31,959 — 31,959 — 31,959 Financial Liabilities Noninterest-bearing deposits $ 700,892 $ — $ 700,892 $ — $ 700,892 Interest-bearing deposits 1,548,530 — 1,548,530 — 1,548,530 Time deposits 203,731 — — 205,086 205,086 Long-term debt 58,754 — 56,670 — 56,670 Accrued interest payable 799 799 — — 799 December 31, 2019 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 144,006 $ 144,006 $ — $ — $ 144,006 Loans 1,697,355 — — 1,693,824 1,693,824 Accrued interest receivable 7,551 7,551 — — 7,551 Bank-owned life insurance 31,566 — 31,566 — 31,566 Financial Liabilities Noninterest-bearing deposits $ 577,704 $ — $ 577,704 $ — $ 577,704 Interest-bearing deposits 1,197,530 — 1,197,530 — 1,197,530 Time deposits 196,082 — — 196,182 196,182 Long-term debt 58,769 — 58,239 — 58,239 Accrued interest payable 1,038 1,038 — — 1,038

COVID-19 Pandemic Response

COVID-19 Pandemic Response	6 Months Ended
	Jun. 30, 2020
COVID-19 Pandemic Response
COVID-19 Pandemic Response	NOTE 19 COVID-19 Pandemic Response On March 27, 2020, President Trump signed into Law the Coronavirus Aid Relief and Economic Security Act, or CARES Act, which established a $2.0 trillion economic stimulus package, including cash payments to individuals, supplemental unemployment insurance benefits and a $349 billion loan program administered through the U.S. Small Business Administration, or SBA, referred to as the PPP. Under the PPP, small businesses, sole proprietorships, independent contractors, and self-employed individuals may apply for loans from existing SBA lenders and other approved regulated lenders that enroll in the program, subject to numerous limitations and eligibility criteria. The Bank is participating as a lender in the PPP. In addition, the CARES Act provides financial institutions the option to temporarily suspend certain requirements under GAAP related to TDRs for a limited period of time to account for the effects of COVID-19. See “Note 4 Loans and Allowance for Loan Losses” for additional discussion regarding TDRs. On April 2, 2020, the SBA issued an interim final rule, announcing the implementation of sections 1102 and 1106 of the CARES Act. Section 1102 of the CARES Act temporarily added a new program, the PPP, to the SBA’s 7(a) Loan Program. Section 1106 of the CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the PPP. The PPP and loan forgiveness are intended to provide economic relief to small businesses nationwide adversely impacted by COVID-19. As an SBA-Certified Preferred lender we were delegated the authority as part of the CARES Act to make PPP SBA-guaranteed financing available to eligible borrowers. As of June 30, 2020, we had assisted over 1,580 new and existing clients secure approximately $36 2.7 million of PPP financing. The SBA pays a processing fee based on the balance of the financing outstanding at the time of final disbursement. The processing fees were as follows: five percent for loans of not more than $350 thousand, three percent for loans of more than $350 thousand and less than $2 million, and one percent for loans of at least $2 million. Net processing fees in the amount of $11.0 million are being deferred and recognized as interest income on a level yield method over the life of the respective loans. On April 7, 2020, the Board of Governors of the Federal Reserve System, or FRB, authorized each of the Federal Reserve Banks to establish the Payment Protection Program Lending Facility, or PPPL Facility, pursuant to section 13(3) of the Federal Reserve Act. Under the PPPL Facility, each of the Federal Reserve Banks will extend non-recourse loans to eligible financial institutions to fund loans guaranteed by the SBA under the PPP established by the CARES Act. On April 15, 2020, we executed a PPPL Facility Agreement with the Federal Reserve Bank of Minneapolis. The PPP loans guaranteed by the SBA are eligible to serve as collateral for the PPPL Facility. The PPPL Facility will provide us with additional liquidity to facilitate lending to small businesses under the PPP. As of June 30, 2020, we have not had a need to utilize the PPPL Facility.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Significant Accounting Policies
Organization	Organization Alerus Financial Corporation, or the Company, is a financial holding company organized under the laws of the state of Delaware. The Company and its subsidiaries operate as a diversified financial services company headquartered in Grand Forks, North Dakota. Through its subsidiary, Alerus Financial, National Association, or the Bank, the Company provides innovative and comprehensive financial solutions to businesses and consumers through four distinct business lines—banking, retirement and benefit services, wealth management, and mortgage.
Initial Public Offering	Initial Public Offering On September 17, 2019, the Company sold 2,860,000 shares of common stock in its initial public offering. On September 25, 2019, the Company sold an additional 429,000 shares of common stock pursuant to the exercise in full, by the underwriters, of their option to purchase additional shares. The aggregate offering price for the shares sold by the Company was $69.1 million, and after deducting $4.7 million of underwriting discounts and $1.6 million of offering expenses paid to third parties, the Company received total net proceeds of $62.8 million.
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and conform to practices within the banking industry and include all of the information and disclosures required by generally accepted accounting principles in the United States of America, or GAAP, for interim financial reporting. The accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair presentation of financial results for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results for the full year or any other period. The Company has also evaluated all subsequent events for potential recognition and disclosure through the date of the filing of this Quarterly Report on Form 10-Q. These interim unaudited financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2019, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2020.
Principles of Consolidation	Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s principal operating subsidiary is the Bank. In the normal course of business, the Company may enter into a transaction with a variable interest entity, or VIE. VIE’s are legal entities whose investors lack the ability to make decisions about the entity’s activities, or whose equity investors do not have the right to receive the residual returns of the entity. The applicable accounting guidance requires the Company to perform ongoing quantitative and qualitative analysis to determine whether it must consolidate any VIE. The Company does not have any ownership interest in, or exert any control, over any VIE, and thus no VIE’s are included in the consolidated financial statements.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the valuation of investment securities, determination of the allowance for loan losses, valuation of reporting units for the purpose of testing goodwill and other intangible assets for impairment, valuation of deferred tax assets, and fair values of financial instruments.
Reclassifications	Reclassifications Certain items previously reported have been reclassified to conform to the current period’s reporting format. Such reclassifications did not affect net income or stockholders’ equity.
Other Information	Other Information On March 11, 2020, the World Health Organization declared the spread of Coronavirus Disease 2019, or COVID-19, a worldwide pandemic. The COVID-19 pandemic is having significant effects on global markets, supply chains, businesses, and communities. Specific to the Company, COVID-19 has impacted various parts of its 2020 operations and financial results, including, but not limited to, additional loan loss reserves, costs for emergency preparedness, or potential shortages of personnel. Management believes the Company is taking appropriate actions to mitigate, to the extent possible, the negative impact. However, the full impact of COVID-19 is currently unknown and cannot be reasonably estimated as the events are continuing to unfold as the year progresses. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation, or the agencies, issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” or ASC 310-40, a restructuring of debt constitutes a troubled debt restructuring, or TDR, if the creditor for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the Financial Accounting Standards Boards, or FASB, that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. This interagency guidance is expected to have a material impact on the Company’s financial statements for disclosure of the impact to date.
Emerging Growth Company	Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on September 12, 2019; (2) the last day of the fiscal year in which the Company has $1.07 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the “Exchange Act”; or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period.
New Accounting Pronouncements	Adopted Pronouncements In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This ASU removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its estimated fair value, not to exceed the carrying amount of goodwill. For public business entities that are US Securities and Exchange Commission filers, ASU 2017-04, is effective for interim and annual reporting periods beginning after December 15, 2019. The Company adopted ASU 2017-04 effective January 1, 2020, and the new guidance did not have an impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018‑13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. This ASU eliminates, adds, and modifies certain disclosure requirements for estimated fair value measurements. Among the changes, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the estimated fair value hierarchy, but will be required to disclose the range and weighted-average used to develop significant unobservable inputs for Level 3 estimated fair value measurements. ASU 2018‑13 is effective for all entities interim and annual reporting periods beginning after December 15, 2019. The Company adopted ASU 2018-13 effective January 1, 2020, and the revised disclosure requirements did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40) – Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by these amendments. ASU 2018-15 was effective for the Company on January 1, 2020, and did not have a material impact on the Company’s consolidated financial statements. Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires a new impairment model known as the current expected credit loss, or CECL, which significantly changes the way impairment of financial instruments is recognized by requiring immediate recognition of estimated credit losses expected to occur over the remaining life of financial instruments. The main provisions of ASU 2016-13 include (1) replacing the “incurred cost” approach under GAAP with an “expected loss” model for instruments measured at amortized cost, (2) requiring entities to record an allowance for credit losses related to available-for-sale debt securities rather than a direct write-down of the carrying amount of the investments, as is required by the other-than-temporary impairment model under current GAAP, and (3) a simplified accounting model for purchase credit-impaired debt securities and loans. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses (Topic 326). This update amends the effective date of ASU No. 2016-13 for certain entities, including private companies and smaller reporting companies, until fiscal years beginning after December 15, 2022, including interim periods within those fiscal periods. Early adoption is permitted. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. The Company does not plan to early adopt this standard but continues to work through implementation. The Company continues collecting and retaining loan and credit data and evaluating various loss estimation models. While we currently cannot reasonably estimate the impact of adopting this standard, we expect the impact will be influenced by the composition, characteristics, and quality of our loan portfolio, as well as the general economic conditions and forecasts as of the adoption date. In April 2019, the FASB issued ASU 2019‑04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2019-04. In May 2019, the FASB issued ASU 2019‑05, Targeted Transition Relief to provide entities with an option to irrevocably elect the fair value option applied on an instrument-by-instrument basis for eligible instruments. In November 2019, the FASB Issued ASU 2019-10, which amends the effective date of this ASU for certain entities, including private companies and smaller reporting companies until after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company can take advantage of this delay and plans to adopt the standard with the amended effective date. This update is not expected to have a significant impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740), which simplifies accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for the areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2020, for public business entities. For private companies and smaller reporting companies, this guidance is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2021. As an emerging growth company, the Company can take advantage of this later effective date. Early adoption of the amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. Depending on the amendment, adoption may be applied on the retrospective, modified retrospective, or prospective basis. The Company is currently reviewing the provisions of this new pronouncement, but does not expect adoption of this guidance to have a material impact on the Company’s consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The ASU is based on a consensus of the Emerging Issues Task Force and is expected to increase comparability in accounting for these transactions. ASU 2016-01 made targeted improvements to accounting for financial instruments, including providing an entity the ability to measure certain equity securities without a readily determinable fair value at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Among other topics, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting. For public business entities, the amendments in the ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoptions is permitted. The Company does not expect the adoption of ASU 2020-01 to have a material impact on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-03. Codification Improvements to Financial Instruments. This ASU represents changes to clarify or improve the Accounting Standards Codification, or ASC, related to seven topics. The amendments make the ASC easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Issues 1, 2, 3, 4, and 5 are conforming amendments and for public business entities effective upon the issuance of the standard. Issues 6 and 7 are amendments that affect the guidance in ASU 2016-13. The Company will consider these clarifications and improvements in determining the appropriate adoption of ASU 2016-13. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. These amendments provide temporary optional guidance to ease the potential burden in accounting for reference rate reform. The ASU provides optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is assessing ASU 2020-04 and its impact on the Company’s transition away from LIBOR for its loan and other financial instruments.

Investment Securities (Tables)

Investment Securities (Tables)	6 Months Ended
	Jun. 30, 2020
Investment Securities
Schedule of amortized cost of investment securities to estimated fair values	June 30, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 16,202 $ 66 $ (16) $ 16,252 Obligations of state and political agencies 110,676 3,477 — 114,153 Mortgage backed securities Residential agency 206,146 8,595 (34) 214,707 Commercial 27,007 940 (21) 27,926 Asset backed securities 127 8 — 135 Corporate bonds 20,524 79 (49) 20,554 Total available-for-sale investment securities $ 380,682 $ 13,165 $ (120) $ 393,727 December 31, 2019 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 21,246 $ 9 $ (15) $ 21,240 Obligations of state and political agencies 68,162 647 (161) 68,648 Mortgage backed securities Residential agency 180,411 2,258 (131) 182,538 Commercial 30,752 101 (168) 30,685 Asset backed securities 139 5 — 144 Corporate bonds 7,054 41 — 7,095 Total available-for-sale investment securities $ 307,764 $ 3,061 $ (475) $ 310,350
Schedule of investment securities with gross unrealized losses	June 30, 2020 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value U.S. Treasury and agencies $ (8) $ 4,803 $ (8) $ 1,324 $ (16) $ 6,127 Obligations of state and political agencies — — — — — — Mortgage backed securities Residential agency (34) 11,903 — — (34) 11,903 Commercial — — (21) 6,640 (21) 6,640 Asset backed securities — — — 2 — 2 Corporate bonds (49) 9,451 — — (49) 9,451 Total available-for-sale investment securities $ (91) $ 26,157 $ (29) $ 7,966 $ (120) $ 34,123 December 31, 2019 Less than 12 Months Over 12 Months Total Unrealized Fair Unrealized Fair Unrealized Fair (dollars in thousands) Losses Value Losses Value Losses Value U.S. Treasury and agencies $ (5) $ 1,740 $ (10) $ 9,990 $ (15) $ 11,730 Obligations of state and political agencies (140) 11,959 (21) 5,798 (161) 17,757 Mortgage backed securities Residential agency (52) 17,131 (79) 14,036 (131) 31,167 Commercial (116) 15,235 (52) 6,195 (168) 21,430 Asset backed securities — 2 — — — 2 Corporate bonds — — — — — — Total available-for-sale investment securities $ (313) $ 46,067 $ (162) $ 36,019 $ (475) $ 82,086
Schedule of contractual maturity of amortized cost and estimated fair value	Amortized Fair (dollars in thousands) Cost Value Due within one year or less $ 18,105 $ 18,235 Due after one year through five years 26,685 27,323 Due after five years through ten years 114,717 118,244 Due after 10 years 221,175 229,925 Total available-for-sale investment securities $ 380,682 $ 393,727
Schedule of proceeds from the sale of available for sale securities	Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Proceeds $ 35,505 $ 16,868 $ 39,505 $ 21,631 Realized gains 1,294 179 1,294 298 Realized losses — (5) — (11)
Schedule of federal home loan bank	June 30, December 31, (dollars in thousands) 2020 2019 Federal Reserve $ 2,675 $ 2,675 FHLB 3,236 3,080

Loans and Allowance for Loan _2

Loans and Allowance for Loan Losses (Tables)	6 Months Ended
	Jun. 30, 2020
Loans and Allowance for Loan Losses
Schedule of total loans outstanding by portfolio segment	June 30, December 31, (dollars in thousands) 2020 2019 Commercial Commercial and industrial (1) $ 794,204 $ 479,144 Real estate construction 31,344 26,378 Commercial real estate 519,104 494,703 Total commercial 1,344,652 1,000,225 Consumer Residential real estate first mortgage 456,737 457,155 Residential real estate junior lien 154,351 177,373 Other revolving and installment 78,457 86,526 Total consumer 689,545 721,054 Total loans $ 2,034,197 $ 1,721,279 (1) Includes Paycheck Protection Program, or PPP, loans of $347.3 million at June 30, 2020.
Schedule of past due aging analysis of the loan portfolio	June 30, 2020 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 790,675 $ 662 $ — $ 2,867 $ 794,204 Real estate construction 31,344 — — — 31,344 Commercial real estate 517,657 — — 1,447 519,104 Total commercial 1,339,676 662 — 4,314 1,344,652 Consumer Residential real estate first mortgage 453,810 2,163 — 764 456,737 Residential real estate junior lien 153,907 233 — 211 154,351 Other revolving and installment 78,306 112 — 39 78,457 Total consumer 686,023 2,508 — 1,014 689,545 Total loans $ 2,025,699 $ 3,170 $ — $ 5,328 $ 2,034,197 December 31, 2019 90 Days Accruing 30 - 89 Days or More Total (dollars in thousands) Current Past Due Past Due Nonaccrual Loans Commercial Commercial and industrial $ 473,900 $ 382 $ — $ 4,862 $ 479,144 Real estate construction 26,251 127 — — 26,378 Commercial real estate 492,707 556 — 1,440 494,703 Total commercial 992,858 1,065 — 6,302 1,000,225 Consumer Residential real estate first mortgage 455,244 666 448 797 457,155 Residential real estate junior lien 176,915 184 — 274 177,373 Other revolving and installment 86,172 348 — 6 86,526 Total consumer 718,331 1,198 448 1,077 721,054 Total loans $ 1,711,189 $ 2,263 $ 448 $ 7,379 $ 1,721,279
Schedule of loans outstanding, by portfolio segment and risk category	June 30, 2020 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 768,851 $ 5,886 $ 19,467 $ — $ 794,204 Real estate construction 31,087 — 257 — 31,344 Commercial real estate 491,105 4,348 23,651 — 519,104 Total commercial 1,291,043 10,234 43,375 — 1,344,652 Consumer Residential real estate first mortgage 455,973 — 764 — 456,737 Residential real estate junior lien 151,249 1,841 1,261 — 154,351 Other revolving and installment 78,418 — 39 — 78,457 Total consumer 685,640 1,841 2,064 — 689,545 Total loans $ 1,976,683 $ 12,075 $ 45,439 $ — $ 2,034,197 December 31, 2019 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 448,306 $ 9,585 $ 21,253 $ — $ 479,144 Real estate construction 25,119 282 977 — 26,378 Commercial real estate 462,294 2,359 30,050 — 494,703 Total commercial 935,719 12,226 52,280 — 1,000,225 Consumer Residential real estate first mortgage 456,358 — 797 — 457,155 Residential real estate junior lien 176,122 — 1,251 — 177,373 Other revolving and installment 86,520 — 6 — 86,526 Total consumer 719,000 — 2,054 — 721,054 Total loans $ 1,654,719 $ 12,226 $ 54,334 $ — $ 1,721,279
Summary of changes in allowances	Three months ended June 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,901 $ 278 $ (2,703) $ 321 $ 10,797 Real estate construction 334 109 — — 443 Commercial real estate 8,276 2,537 (865) — 9,948 Total commercial 21,511 2,924 (3,568) 321 21,188 Consumer Residential real estate first mortgage 2,209 459 — 5 2,673 Residential real estate junior lien 1,025 32 (12) 57 1,102 Other revolving and installment 441 171 (86) 20 546 Total consumer 3,675 662 (98) 82 4,321 Unallocated 1,833 (86) — — 1,747 Total $ 27,019 $ 3,500 $ (3,666) $ 403 $ 27,256 Six months ended June 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,270 $ 348 $ (2,735) $ 914 $ 10,797 Real estate construction 303 140 — — 443 Commercial real estate 6,688 4,125 (865) — 9,948 Total commercial 19,261 4,613 (3,600) 914 21,188 Consumer Residential real estate first mortgage 1,448 1,220 — 5 2,673 Residential real estate junior lien 671 349 (12) 94 1,102 Other revolving and installment 352 263 (153) 84 546 Total consumer 2,471 1,832 (165) 183 4,321 Unallocated 2,192 (445) — — 1,747 Total $ 23,924 $ 6,000 $ (3,765) $ 1,097 $ 27,256 Three months ended June 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 13,815 $ 818 $ (3,166) $ 227 $ 11,694 Real estate construction 251 70 — 2 323 Commercial real estate 5,843 (228) — 150 5,765 Total commercial 19,909 660 (3,166) 379 17,782 Consumer Residential real estate first mortgage 1,610 (455) — — 1,155 Residential real estate junior lien 761 (51) (30) 30 710 Other revolving and installment 349 433 (424) 22 380 Total consumer 2,720 (73) (454) 52 2,245 Unallocated 9 1,210 — — 1,219 Total $ 22,638 $ 1,797 $ (3,620) $ 431 $ 21,246 Six months ended June 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,127 $ 4,225 $ (4,951) $ 293 $ 11,694 Real estate construction 250 72 (1) 2 323 Commercial real estate 6,279 (664) — 150 5,765 Total commercial 18,656 3,633 (4,952) 445 17,782 Consumer Residential real estate first mortgage 1,156 (1) — — 1,155 Residential real estate junior lien 805 (44) (134) 83 710 Other revolving and installment 380 387 (482) 95 380 Total consumer 2,341 342 (616) 178 2,245 Unallocated 1,177 42 — — 1,219 Total $ 22,174 $ 4,017 $ (5,568) $ 623 $ 21,246
Schedule of loans distributed by portfolio segment and impairment methodology	June 30, 2020 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Unallocated Total Commercial Commercial and industrial $ 3,644 $ 790,560 $ 794,204 $ 503 $ 10,294 $ — $ 10,797 Real estate construction — 31,344 31,344 — 443 — 443 Commercial real estate 1,529 517,575 519,104 10 9,938 — 9,948 Total commercial 5,173 1,339,479 1,344,652 513 20,675 — 21,188 Consumer Residential real estate first mortgage 747 455,990 456,737 — 2,673 — 2,673 Residential real estate junior lien 260 154,091 154,351 20 1,082 — 1,102 Other revolving and installment 39 78,418 78,457 16 530 — 546 Total consumer 1,046 688,499 689,545 36 4,285 — 4,321 Total loans $ 6,219 $ 2,027,978 $ 2,034,197 $ 549 $ 24,960 $ 1,747 $ 27,256 December 31, 2019 Recorded Investment Allowance for Loan Losses Individually Collectively Individually Collectively (dollars in thousands) Evaluated Evaluated Total Evaluated Evaluated Unallocated Total Commercial Commercial and industrial $ 976 $ 478,168 $ 479,144 $ 189 $ 12,081 $ — $ 12,270 Real estate construction — 26,378 26,378 — 303 — 303 Commercial real estate 5,925 488,778 494,703 2,946 3,742 — 6,688 Total commercial 6,901 993,324 1,000,225 3,135 16,126 — 19,261 Consumer Residential real estate first mortgage 782 456,373 457,155 — 1,448 — 1,448 Residential real estate junior lien 266 177,107 177,373 — 671 — 671 Other revolving and installment 5 86,521 86,526 3 349 — 352 Total consumer 1,053 720,001 721,054 3 2,468 — 2,471 Total loans $ 7,954 $ 1,713,325 $ 1,721,279 $ 3,138 $ 18,594 $ 2,192 $ 23,924
Schedule of impaired loans	June 30, 2020 December 31, 2019 Recorded Unpaid Related Recorded Unpaid Related (dollars in thousands) Investment Principal Allowance Investment Principal Allowance Impaired loans with a valuation allowance Commercial and industrial $ 3,020 $ 3,096 $ 503 $ 639 $ 727 $ 189 Commercial real estate 199 227 10 5,718 5,823 2,946 Residential real estate junior lien 19 20 20 — — — Other revolving and installment 35 35 16 5 6 3 Total impaired loans with a valuation allowance 3,273 3,378 549 6,362 6,556 3,138 Impaired loans without a valuation allowance Commercial and industrial 624 805 — 337 1,110 — Commercial real estate 1,330 1,447 — 207 236 — Residential real estate first mortgage 747 764 — 782 797 — Residential real estate junior lien 241 341 — 266 372 — Other revolving and installment 4 4 — — — — Total impaired loans without a valuation allowance 2,946 3,361 — 1,592 2,515 — Total impaired loans Commercial and industrial 3,644 3,901 503 976 1,837 189 Commercial real estate 1,529 1,674 10 5,925 6,059 2,946 Residential real estate first mortgage 747 764 — 782 797 — Residential real estate junior lien 260 361 20 266 372 — Other revolving and installment 39 39 16 5 6 3 Total impaired loans $ 6,219 $ 6,739 $ 549 $ 7,954 $ 9,071 $ 3,138 The table below presents the average recorded investment in impaired loans and interest income for the three and six months ended June 30, 2020 and 2019: Three months ended June 30, 2020 2019 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 4,881 $ 15 $ 2,229 $ 16 Commercial real estate 200 8 1,678 8 Residential real estate first mortgage — — — — Residential real estate junior lien 20 — 60 3 Other revolving and installment 35 — 9 — Total impaired loans with a valuation allowance 5,136 23 3,976 27 Impaired loans without a valuation allowance Commercial and industrial 694 26 1,271 31 Commercial real estate 1,693 — — — Residential real estate first mortgage 755 — — — Residential real estate junior lien 255 3 751 1 Other revolving and installment 4 — 5 — Total impaired loans without a valuation allowance 3,401 29 2,027 32 Total impaired loans Commercial and industrial 5,575 41 3,500 47 Commercial real estate 1,893 8 1,678 8 Residential real estate first mortgage 755 — — — Residential real estate junior lien 275 3 811 4 Other revolving and installment 39 — 14 — Total impaired loans $ 8,537 $ 52 $ 6,003 $ 59 Six Months Ended June 30, 2020 2019 Average Average Recorded Interest Recorded Interest (dollars in thousands) Investment Income Investment Income Impaired loans with a valuation allowance Commercial and industrial $ 4,714 $ 15 $ 1,332 $ 17 Commercial real estate 203 8 1,505 — Residential real estate junior lien 20 — — — Other revolving and installment 35 — 9 — Total impaired loans with a valuation allowance 4,972 23 2,846 17 Impaired loans without a valuation allowance Commercial and industrial 747 26 4,835 33 Real estate construction — — 217 9 Commercial real estate 1,821 — — — Residential real estate first mortgage 761 — — — Residential real estate junior lien 279 3 821 4 Other revolving and installment 5 — 13 — Total impaired loans without a valuation allowance 3,613 29 5,886 46 Total impaired loans Commercial and industrial 5,461 41 6,167 50 Real estate construction — — 217 9 Commercial real estate 2,024 8 1,505 — Residential real estate first mortgage 761 — — — Residential real estate junior lien 299 3 821 4 Other revolving and installment 40 — 22 — Total impaired loans $ 8,585 $ 52 $ 8,732 $ 63

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2020
Goodwill and Other Intangible Assets
Schedule of goodwill by segment	June 30, December 31, (dollars in thousands) 2020 2019 Banking $ 20,131 $ 20,131 Retirement and benefit services 7,198 7,198 Total goodwill $ 27,329 $ 27,329
Schedule of identifiable intangible assets	June 30, 2020 December 31, 2019 (dollars in thousands) Gross Carrying Amount Accumulated Amortization Total Gross Carrying Amount Accumulated Amortization Total Identifiable customer intangibles $ 31,857 $ (15,888) $ 15,969 $ 31,857 $ (14,287) $ 17,570 Core deposit intangible assets 3,793 (3,351) 442 4,993 (4,172) 821 Total intangible assets $ 35,650 $ (19,239) $ 16,411 $ 36,850 $ (18,459) $ 18,391

Loan Servicing (Tables)

Loan Servicing (Tables)	6 Months Ended
	Jun. 30, 2020
Loan Servicing
Summary of activity related to loan servicing	Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 3,277 $ 4,530 $ 3,845 $ 4,623 Additions 88 34 112 101 Amortization (209) (239) (396) (404) (Impairment)/Recovery (265) (25) (670) (20) Balance, end of period $ 2,891 $ 4,300 $ 2,891 $ 4,300
Summary of key economic assumptions	June 30, December 31, (dollars in thousands) 2020 2019 Fair value of servicing rights $ 2,891 $ 3,845 Weighted-average remaining term, years 19.9 20.1 Prepayment speeds 22.1 % 11.8 % Discount rate 9.0 % 9.4 %

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases
Schedule of right-of-use assets and lease liabilities	June 30, December 31, (dollars in thousands) 2020 2019 Lease Right-of-Use Assets Classification Operating lease right-of-use assets Operating lease right-of-use assets $ 8,746 $ 8,343 Finance lease right-of-use assets Land, premises and equipment, net 260 318 Total lease right-of-use assets $ 9,006 $ 8,661 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 9,254 $ 8,864 Finance lease liabilities Long-term debt 537 640 Total lease liabilities $ 9,791 $ 9,504
Schedule of weighted average remaining lease term and average discount rate	June 30, December 31, 2020 2019 Weighted-average remaining lease term, years Operating leases 5.8 6.2 Finance leases 2.1 2.8 Weighted-average discount rate Operating leases 2.8 % 3.1 % Finance leases 7.8 % 7.8 %
Schedule of lease costs and other lease information	Three months ended Six months ended June 30, June 30, (dollars in thousands) 2020 2019 2020 2019 Lease costs Operating lease cost $ 568 $ 598 $ 1,191 $ 1,170 Variable lease cost 468 211 665 410 Short-term lease cost 107 260 202 465 Finance lease cost Interest on lease liabilities 11 16 23 31 Amortization of right-of-use assets 29 29 58 58 Sublease income (52) (68) (118) (139) Net lease cost $ 1,131 $ 1,046 $ 2,021 $ 1,995 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases 561 597 $ 1,179 $ 1,174 Right-of-use assets obtained in exchange for new operating lease liabilities 1,348 — 1,531 — Right-of-use assets obtained in exchange for new finance lease liabilities — — — —
Schedule of future minimum payments for finance leases	Future minimum payments for finance and operating leases with initial or remaining terms of one year or more as of June 30, 2020 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2021 $ 251 $ 2,293 June 30, 2022 251 2,085 June 30, 2023 84 1,981 June 30, 2024 — 1,255 June 30, 2025 — 738 Thereafter — 1,913 Total future minimum lease payments $ 586 $ 10,265 Amounts representing interest (49) (1,011) Total operating lease liabilities $ 537 $ 9,254
Schedule of future minimum payments for operating leases	Finance Operating (dollars in thousands) Leases Leases Twelve months ended June 30, 2021 $ 251 $ 2,293 June 30, 2022 251 2,085 June 30, 2023 84 1,981 June 30, 2024 — 1,255 June 30, 2025 — 738 Thereafter — 1,913 Total future minimum lease payments $ 586 $ 10,265 Amounts representing interest (49) (1,011) Total operating lease liabilities $ 537 $ 9,254

Deposits (Tables)

Deposits (Tables)	6 Months Ended
	Jun. 30, 2020
Deposits.
Schedule of components of deposits	June 30, December 31, (dollars in thousands) 2020 2019 Noninterest-bearing $ 700,892 $ 577,704 Interest-bearing Interest-bearing demand 579,840 458,689 Savings accounts 75,973 55,777 Money market savings 892,717 683,064 Time deposits 203,731 196,082 Total interest-bearing 1,752,261 1,393,612 Total deposits $ 2,453,153 $ 1,971,316

Short-Term Borrowings (Tables)

Short-Term Borrowings (Tables)	6 Months Ended
	Jun. 30, 2020
Short-Term Borrowings
Schedule of short-term borrowings	Three months ended June 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ 6,445 Average daily balance 321 103,035 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.59 % End of period — % 2.50 % FHLB Short-term advances Balance as of end of period $ — $ 135,000 Average daily balance — 12,857 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.16 % End of period — % 2.40 % Six months ended June 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ 6,445 Average daily balance 161 93,238 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.59 % End of period — % 2.50 % FHLB Short-term advances Balance as of end of period $ — $ 135,000 Average daily balance — 6,464 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.17 % End of period — % 2.40 %

Long-Term Debt (Tables)

Long-Term Debt (Tables)	6 Months Ended
	Jun. 30, 2020
Long-Term Debt.
Schedule of long-term debt	June 30, 2020 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,656 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,424 Three-month LIBOR + 3.10% 3.38 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,137 Three-month LIBOR + 1.80% 2.11 % 9/15/2036 9/15/2011 Finance lease liability 2,657 537 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 62,967 $ 58,754 December 31, 2019 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,625 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,402 Three-month LIBOR + 3.10% 5.05 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,102 Three-month LIBOR + 1.80% 3.69 % 9/15/2036 9/15/2011 Finance lease liability 2,657 640 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 62,967 $ 58,769

Financial Instruments with Of_2

Financial Instruments with Off-Balance Sheet Risk (Tables)	6 Months Ended
	Jun. 30, 2020
Financial Instruments with Off-Balance Sheet Risk
Schedule of financial instruments whose contract amount represents credit risk	June 30, December 31, (dollars in thousands) 2020 2019 Commitments to extend credit $ 600,269 $ 586,365 Standby letters of credit 7,387 8,516 Total $ 607,656 $ 594,881

Share-Based Compensation (Table

Share-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Share-Based Compensation Plan
Schedule of stock plan activity	Six months ended June 30, 2020 Six months ended June 30, 2019 Weighted- Weighted- Average Grant Average Grant Awards Date Fair Value Awards Date Fair Value Restricted Stock and Restricted Stock Unit Awards Outstanding at beginning of period 347,211 $ 18.64 337,014 $ 18.36 Granted 77,846 19.53 70,617 19.87 Vested (86,137) 16.15 (32,837) 19.73 Forfeited or cancelled (5,068) 19.37 (753) 21.76 Outstanding at end of period 333,852 $ 19.48 374,041 $ 18.52

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2020
Income Taxes
Schedule of effective income tax rate reconciliation	Three months ended June 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 3,168 21.0 % $ 2,356 21.0 Tax effect of: Tax exempt income (127) (0.8) (108) (1.0) Other 572 3.8 621 5.4 Applicable income taxes $ 3,613 23.9 % $ 2,869 25.6 Six months ended June 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,596 21.0 % $ 4,132 21.0 % Tax effect of: Tax exempt income (247) (1.1) % (222) (1.1) % Other 701 3.2 % 983 5.0 % Applicable income taxes $ 5,050 23.1 % $ 4,893 24.9 %

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2020
Segment Reporting
Schedule of key metrics related to segments	Three months ended June 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 20,417 $ — $ — $ 530 $ (856) $ 20,091 Provision for loan losses 3,500 — — — — 3,500 Noninterest income 2,857 13,710 4,112 17,546 5 38,230 Noninterest expense 11,359 9,193 2,629 8,020 8,533 39,734 Net income before taxes $ 8,415 $ 4,517 $ 1,483 $ 10,056 $ (9,384) $ 15,087 Six months ended June 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 39,863 $ — $ — $ 798 $ (1,733) $ 38,928 Provision for loan losses 6,000 — — — — 6,000 Noninterest income 4,731 29,930 8,158 22,591 9 65,419 Noninterest expense 24,011 17,125 4,144 13,459 17,721 76,460 Net income before taxes $ 14,583 $ 12,805 $ 4,014 $ 9,930 $ (19,445) $ 21,887 Three months ended June 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 18,894 $ — $ — $ 305 $ (908) $ 18,291 Provision for loan losses 1,797 — — — — 1,797 Noninterest income 1,747 15,776 3,878 7,035 1,548 29,984 Noninterest expense 10,088 8,601 2,177 5,966 8,429 35,261 Net income before taxes $ 8,756 $ 7,175 $ 1,701 $ 1,374 $ (7,789) $ 11,217 Six months ended June 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 38,794 $ — $ — $ 434 $ (1,817) $ 37,411 Provision for loan losses 4,017 — — — — 4,017 Noninterest income 3,578 30,835 7,489 11,604 1,552 55,058 Noninterest expense 20,080 17,591 4,101 9,928 17,075 68,775 Net income before taxes $ 18,275 $ 13,244 $ 3,388 $ 2,110 $ (17,340) $ 19,677

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share
Schedule of basic and diluted earnings per share	Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2020 2020 Net income $ 11,474 $ 16,837 Dividends and undistributed earnings allocated to participating securities 200 282 Net income available to common shareholders $ 11,274 $ 16,555 Weighted-average common shares outstanding for basic earnings per share 17,111 17,091 Dilutive effect of stock-based awards 334 334 Weighted-average common shares outstanding for diluted earnings per share 17,445 17,425 Earnings per common share: Basic earnings per common share $ 0.66 $ 0.97 Diluted earnings per common share $ 0.65 $ 0.95 Three months ended Six months ended June 30, June 30, (dollars and shares in thousands, except per share data) 2019 2019 Basic: Net income attributable to common shareholders $ 8,348 $ 14,784 Weighted-average common shares outstanding 13,810 13,796 Basic earnings per common share $ 0.60 $ 1.07 Diluted: Net income attributable to common shareholders $ 8,348 $ 14,784 Weighted-average common shares outstanding 13,810 13,796 Add: Dilutive effect of stock-based awards 290 293 Weighted-average common shares outstanding for diluted EPS 14,100 14,089 Diluted earnings per common share $ 0.59 $ 1.05

Derivative Instruments (Tables)

Derivative Instruments (Tables)	6 Months Ended
	Jun. 30, 2020
Derivative Instruments
Schedule of amounts recorded in the Company’s consolidated balance sheets for derivatives not designated as hedging instruments	June 30, 2020 December 31, 2019 Fair Notional Fair Notional (dollars in thousands) Value Amount Value Amount Asset Derivatives Consolidated Balance Sheet Location Interest rate lock commitments Other assets $ 5,936 $ 179,182 $ 1,228 $ 45,715 Forward loan sales commitments Other assets 1,175 34,235 393 12,784 TBA mortgage backed securities Other assets — — — — Total asset derivatives $ 7,111 $ 213,417 $ 1,621 $ 58,499 Liability Derivatives Interest rate lock commitments Accrued expenses and other liabilities $ — $ — $ — $ — Forward loan sales commitments Accrued expenses and other liabilities — — — — TBA mortgage backed securities Accrued expenses and other liabilities 1,321 239,000 109 68,500 Total liability derivatives $ 1,321 $ 239,000 $ 109 $ 68,500
Schedule of gain (loss) recognized on derivatives instruments	Three months ended Six months ended Consolidated Statements of June 30, June 30, June 30, June 30, (dollars in thousands) Income Location 2020 2019 2020 2019 Interest rate lock commitments Mortgage banking $ 4,352 $ 492 $ 5,579 $ 2,281 Forward loan sales commitments Mortgage banking 117 407 783 653 TBA mortgage backed securities Mortgage banking (1,929) (330) (5,352) (784) Total gain/(loss) from derivative instruments $ 2,540 $ 569 $ 1,010 $ 2,150

Regulatory Matters (Tables)

Regulatory Matters (Tables)	6 Months Ended
	Jun. 30, 2020
Regulatory Matters
Schedule of Bank’s actual capital amounts and ratios	June 30, 2020 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 254,047 12.58 % $ 90,888 4.50 % $ N/A N/A Bank 241,940 11.99 % 90,814 4.50 % 131,176 6.50 % Tier 1 capital to risk weighted assets . Consolidated 262,298 12.99 % 121,184 6.00 % N/A N/A Bank 241,940 11.99 % 121,086 6.00 % 161,448 8.00 % Total capital to risk weighted assets Consolidated 337,225 16.70 % 161,578 8.00 % N/A N/A Bank 267,191 13.24 % 161,448 8.00 % 201,810 10.00 % Tier 1 capital to average assets Consolidated 262,298 9.75 % 107,620 4.00 % N/A N/A Bank 241,940 9.00 % 107,531 4.00 % 134,414 5.00 % December 31, 2019 Minimum to be Requirements Well Capitalized for Capital Under Prompt Actual Adequacy Purposes Corrective Action (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Common equity tier 1 capital to risk weighted assets Consolidated $ 239,672 12.48 % $ 86,452 4.50 % $ N/A N/A Bank 228,512 11.91 % 86,362 4.50 % 124,745 6.50 % Tier 1 capital to risk weighted assets . Consolidated 247,866 12.90 % 115,270 6.00 % N/A N/A Bank 228,512 11.91 % 115,149 6.00 % 153,532 8.00 % Total capital to risk weighted assets Consolidated 321,415 16.73 % 153,693 8.00 % N/A N/A Bank 252,436 13.15 % 153,532 8.00 % 191,915 10.00 % Tier 1 capital to average assets Consolidated 247,866 11.05 % 91,504 4.00 % N/A N/A Bank 228,512 10.20 % 89,615 4.00 % 112,018 5.00 %

Fair Value of Assets and Liab_2

Fair Value of Assets and Liabilities (Tables)	6 Months Ended
	Jun. 30, 2020
Fair Value of Assets and Liabilities
Summary of balances of the assets and liabilities measured at estimated fair value on a recurring basis	June 30, 2020 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and securities U.S. treasury and government agencies $ — $ 16,252 $ — $ 16,252 Obligations of state and political agencies — 114,153 — 114,153 Mortgage backed securities Residential agency — 214,707 — 214,707 Commercial — 27,926 — 27,926 Asset backed securities — 135 — 135 Corporate bonds — 20,554 — 20,554 Total available-for-sale securities $ — $ 393,727 $ — $ 393,727 Other assets Derivatives $ — $ 7,111 $ — $ 7,111 Other liabilities Derivatives $ — $ 1,321 $ — $ 1,321 December 31, 2019 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and equity securities U.S. treasury and government agencies $ — $ 21,240 $ — $ 21,240 Obligations of state and political agencies — 68,648 — 68,648 Mortgage backed securities Residential agency — 182,538 — 182,538 Commercial — 30,685 — 30,685 Asset backed securities — 144 — 144 Corporate bonds — 7,095 — 7,095 Equity securities 2,808 — — 2,808 Total available-for-sale and equity securities $ 2,808 $ 310,350 $ — $ 313,158 Other assets Derivatives $ — $ 1,621 $ — $ 1,621 Other liabilities Derivatives $ — $ 109 $ — $ 109
Schedule of net impairment losses related to nonrecurring estimated fair value measurements of certain assets	June 30, 2020 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 101,751 $ — $ 101,751 $ — Impaired loans — 5,670 5,670 549 Foreclosed assets — 26 26 — Servicing rights — 2,891 2,891 — December 31, 2019 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 46,846 $ — $ 46,846 $ — Impaired loans — 4,816 4,816 3,138 Foreclosed assets — 8 8 — Servicing rights — 3,845 3,845 —
Schedule of valuation techniques and significant unobservable inputs used to measure Level 3 estimated fair values	June 30, 2020 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 5,670 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 26 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,891 268-425 237 Discount rate 9.0 % 9.0 % December 31, 2019 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 4,816 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 8 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 3,845 123-267 194 Discount rate 9.4 % 9.4 %
Summary of estimated fair values and related carrying or notional amounts, of the Company’s financial instruments	June 30, 2020 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 210,437 $ 210,437 $ — $ — $ 210,437 Loans 2,006,941 — — 2,035,211 2,035,211 Accrued interest receivable 7,975 7,975 — — 7,975 Bank-owned life insurance 31,959 — 31,959 — 31,959 Financial Liabilities Noninterest-bearing deposits $ 700,892 $ — $ 700,892 $ — $ 700,892 Interest-bearing deposits 1,548,530 — 1,548,530 — 1,548,530 Time deposits 203,731 — — 205,086 205,086 Long-term debt 58,754 — 56,670 — 56,670 Accrued interest payable 799 799 — — 799 December 31, 2019 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 144,006 $ 144,006 $ — $ — $ 144,006 Loans 1,697,355 — — 1,693,824 1,693,824 Accrued interest receivable 7,551 7,551 — — 7,551 Bank-owned life insurance 31,566 — 31,566 — 31,566 Financial Liabilities Noninterest-bearing deposits $ 577,704 $ — $ 577,704 $ — $ 577,704 Interest-bearing deposits 1,197,530 — 1,197,530 — 1,197,530 Time deposits 196,082 — — 196,182 196,182 Long-term debt 58,769 — 58,239 — 58,239 Accrued interest payable 1,038 1,038 — — 1,038

Significant Accounting Polici_3

Significant Accounting Policies (Details) $ in Millions	Sep. 25, 2019shares	Sep. 25, 2019USD ($)	Sep. 17, 2019shares	Jun. 30, 2020segment
Significant Accounting Policies
Number of operating segments | segment				4
Aggregate offering price		$ 69.1
Underwriting Discounts		4.7
Offering cost		1.6
Net proceeds		$ 62.8
IPO
Significant Accounting Policies
Shares sold | shares			2,860,000
Underwriter
Significant Accounting Policies
Shares sold | shares	429,000

Investment Securities (Details)

Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investment securities available-for-sale
Amortized Cost	$ 380,682	$ 307,764
Unrealized Gains	13,165	3,061
Unrealized Losses	(120)	(475)
Fair Value	393,727	310,350
U. S. Treasury and agencies
Investment securities available-for-sale
Amortized Cost	16,202	21,246
Unrealized Gains	66	9
Unrealized Losses	(16)	(15)
Fair Value	16,252	21,240
Obligations of state and political agencies
Investment securities available-for-sale
Amortized Cost	110,676	68,162
Unrealized Gains	3,477	647
Unrealized Losses		(161)
Fair Value	114,153	68,648
Mortgage backed securities - Residential Agency
Investment securities available-for-sale
Amortized Cost	206,146	180,411
Unrealized Gains	8,595	2,258
Unrealized Losses	(34)	(131)
Fair Value	214,707	182,538
Mortgage backed securities - Commercial
Investment securities available-for-sale
Amortized Cost	27,007	30,752
Unrealized Gains	940	101
Unrealized Losses	(21)	(168)
Fair Value	27,926	30,685
Asset backed securities
Investment securities available-for-sale
Amortized Cost	127	139
Unrealized Gains	8	5
Fair Value	135	144
Corporate bonds
Investment securities available-for-sale
Amortized Cost	20,524	7,054
Unrealized Gains	79	41
Unrealized Losses	(49)
Fair Value	$ 20,554	$ 7,095

Investment Securities - Gross u

Investment Securities - Gross unrealized losses (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investment securities available-for-sale
Unrealized losses less than 12 months	$ (91)	$ (313)
Fair value less than 12 months	26,157	46,067
Unrealized losses over 12 months	(29)	(162)
Fair value over 12 months	7,966	36,019
Total Unrealized losses	(120)	(475)
Total Fair value	34,123	82,086
U. S. Treasury and agencies
Investment securities available-for-sale
Unrealized losses less than 12 months	(8)	(5)
Fair value less than 12 months	4,803	1,740
Unrealized losses over 12 months	(8)	(10)
Fair value over 12 months	1,324	9,990
Total Unrealized losses	(16)	(15)
Total Fair value	6,127	11,730
Obligations of state and political agencies
Investment securities available-for-sale
Unrealized losses less than 12 months		(140)
Fair value less than 12 months		11,959
Unrealized losses over 12 months		(21)
Fair value over 12 months		5,798
Total Unrealized losses		(161)
Total Fair value		17,757
Mortgage backed securities - Residential Agency
Investment securities available-for-sale
Unrealized losses less than 12 months	(34)	(52)
Fair value less than 12 months	11,903	17,131
Unrealized losses over 12 months		(79)
Fair value over 12 months		14,036
Total Unrealized losses	(34)	(131)
Total Fair value	11,903	31,167
Mortgage backed securities - Commercial
Investment securities available-for-sale
Unrealized losses less than 12 months		(116)
Fair value less than 12 months		15,235
Unrealized losses over 12 months	(21)	(52)
Fair value over 12 months	6,640	6,195
Total Unrealized losses	(21)	(168)
Total Fair value	6,640	21,430
Asset backed securities
Investment securities available-for-sale
Fair value less than 12 months		2
Fair value over 12 months	2
Total Fair value	2	$ 2
Corporate bonds
Investment securities available-for-sale
Unrealized losses less than 12 months	(49)
Fair value less than 12 months	9,451
Total Unrealized losses	(49)
Total Fair value	$ 9,451

Investment Securities - Amortiz

Investment Securities - Amortized cost and estimated fair value (Details) $ in Thousands	Jun. 30, 2020USD ($)
Amortized Cost
Due within one year or less	$ 18,105
Due after one year through five years	26,685
Due after five years through ten years	114,717
Due after 10 years	221,175
Total investment securities available-for-sale	380,682
Fair Value
Due within one year or less	18,235
Due after one year through five years	27,323
Due after five years through ten years	118,244
Due after 10 years	229,925
Total investment securities available-for-sale	$ 393,727

Investment Securities - Pledged

Investment Securities - Pledged (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Investment Securities
Investment securities with carrying value	$ 121.3	$ 136.2

Investment Securities - Proceed

Investment Securities - Proceeds from sale of available for sale securities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Investment Securities
Proceeds	$ 35,505	$ 16,868	$ 39,505	$ 21,631
Realized gains	$ 1,294	179	$ 1,294	298
Realized losses		$ (5)		$ (11)

Investment Securities - Carryin

Investment Securities - Carrying value (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investment Securities
Federal Reserve	$ 2,675	$ 2,675
FHLB	$ 3,236	$ 3,080

Investment Securities - Visa Cl

Investment Securities - Visa Class B Restricted Shares (Details) - Visa $ in Thousands	6 Months Ended
	Jun. 30, 2020USD ($)shares	Dec. 31, 2019USD ($)
Common Class A
Securities
Investment shares owned, if converted	11,236
Common Class B
Securities
Conversion ratio	1.6228
Investment shares owned	6,924
Cost basis | $	$ 0	$ 0

Loans and Allowance for Loan _3

Loans and Allowance for Loan Losses - Loans outstanding by portfolio segment (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Loans and Allowance for Loan Losses
Total loans	$ 2,034,197	$ 1,721,279
Deferred loan fees and costs	10,300	1,000
PPP Loans
Loans and Allowance for Loan Losses
Total loans	347,300
Deferred loan fees and costs	9,600
Commercial
Loans and Allowance for Loan Losses
Total loans	1,344,652	1,000,225
Consumer
Loans and Allowance for Loan Losses
Total loans	689,545	721,054
Commercial and industrial | Commercial
Loans and Allowance for Loan Losses
Total loans	794,204	479,144
Real estate construction | Commercial
Loans and Allowance for Loan Losses
Total loans	31,344	26,378
Residential | Consumer | Real estate first mortgage
Loans and Allowance for Loan Losses
Total loans	456,737	457,155
Residential | Consumer | Real estate junior lien
Loans and Allowance for Loan Losses
Total loans	154,351	177,373
Commercial real estate | Commercial
Loans and Allowance for Loan Losses
Total loans	519,104	494,703
Other revolving and installment | Consumer
Loans and Allowance for Loan Losses
Total loans	$ 78,457	$ 86,526

Loans and Allowance for Loan _4

Loans and Allowance for Loan Losses - Past due aging analysis (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	$ 2,034,197	$ 1,721,279
Performing
Past due aging analysis of loans
Accruing Current	2,025,699	1,711,189
Nonaccrual	5,328	7,379
Loans and Leases Receivable, Gross, Total	2,034,197	1,721,279
30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	3,170	2,263
90 Days or More Past Due | Performing
Past due aging analysis of loans
Past due		448
Commercial
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	1,344,652	1,000,225
Commercial | Performing
Past due aging analysis of loans
Accruing Current	1,339,676	992,858
Nonaccrual	4,314	6,302
Loans and Leases Receivable, Gross, Total	1,344,652	1,000,225
Commercial | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	662	1,065
Commercial | Commercial and industrial
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	794,204	479,144
Commercial | Commercial and industrial | Performing
Past due aging analysis of loans
Accruing Current	790,675	473,900
Nonaccrual	2,867	4,862
Loans and Leases Receivable, Gross, Total	794,204	479,144
Commercial | Commercial and industrial | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	662	382
Commercial | Real estate construction
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	31,344	26,378
Commercial | Real estate construction | Performing
Past due aging analysis of loans
Accruing Current	31,344	26,251
Loans and Leases Receivable, Gross, Total	31,344	26,378
Commercial | Real estate construction | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due		127
Commercial | Commercial real estate
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	519,104	494,703
Commercial | Commercial real estate | Performing
Past due aging analysis of loans
Accruing Current	517,657	492,707
Nonaccrual	1,447	1,440
Loans and Leases Receivable, Gross, Total	519,104	494,703
Commercial | Commercial real estate | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due		556
Consumer
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	689,545	721,054
Consumer | Performing
Past due aging analysis of loans
Accruing Current	686,023	718,331
Nonaccrual	1,014	1,077
Loans and Leases Receivable, Gross, Total	689,545	721,054
Consumer | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	2,508	1,198
Consumer | 90 Days or More Past Due | Performing
Past due aging analysis of loans
Past due		448
Consumer | Residential | Real estate first mortgage
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	456,737	457,155
Consumer | Residential | Real estate first mortgage | Performing
Past due aging analysis of loans
Accruing Current	453,810	455,244
Nonaccrual	764	797
Loans and Leases Receivable, Gross, Total	456,737	457,155
Consumer | Residential | Real estate first mortgage | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	2,163	666
Consumer | Residential | Real estate first mortgage | 90 Days or More Past Due | Performing
Past due aging analysis of loans
Past due		448
Consumer | Residential | Real estate junior lien
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	154,351	177,373
Consumer | Residential | Real estate junior lien | Performing
Past due aging analysis of loans
Accruing Current	153,907	176,915
Nonaccrual	211	274
Loans and Leases Receivable, Gross, Total	154,351	177,373
Consumer | Residential | Real estate junior lien | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	233	184
Consumer | Other revolving and installment
Past due aging analysis of loans
Loans and Leases Receivable, Gross, Total	78,457	86,526
Consumer | Other revolving and installment | Performing
Past due aging analysis of loans
Accruing Current	78,306	86,172
Nonaccrual	39	6
Loans and Leases Receivable, Gross, Total	78,457	86,526
Consumer | Other revolving and installment | 30 - 89 Days Past Due | Performing
Past due aging analysis of loans
Past due	$ 112	$ 348

Loans and Allowance for Loan _5

Loans and Allowance for Loan Losses - Loans by risk category (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Loans outstanding by loan portfolio segment and risk category
Loans	$ 2,034,197	$ 1,721,279
Pass
Loans outstanding by loan portfolio segment and risk category
Loans	1,976,683	1,654,719
Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	12,075	12,226
Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	45,439	54,334
Commercial
Loans outstanding by loan portfolio segment and risk category
Loans	1,344,652	1,000,225
Commercial | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	1,291,043	935,719
Commercial | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	10,234	12,226
Commercial | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	43,375	52,280
Commercial | Commercial and industrial
Loans outstanding by loan portfolio segment and risk category
Loans	794,204	479,144
Commercial | Commercial and industrial | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	768,851	448,306
Commercial | Commercial and industrial | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	5,886	9,585
Commercial | Commercial and industrial | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	19,467	21,253
Commercial | Real estate construction
Loans outstanding by loan portfolio segment and risk category
Loans	31,344	26,378
Commercial | Real estate construction | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	31,087	25,119
Commercial | Real estate construction | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans		282
Commercial | Real estate construction | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	257	977
Commercial | Commercial real estate
Loans outstanding by loan portfolio segment and risk category
Loans	519,104	494,703
Commercial | Commercial real estate | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	491,105	462,294
Commercial | Commercial real estate | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	4,348	2,359
Commercial | Commercial real estate | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	23,651	30,050
Consumer
Loans outstanding by loan portfolio segment and risk category
Loans	689,545	721,054
Consumer | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	685,640	719,000
Consumer | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	1,841
Consumer | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	2,064	2,054
Consumer | Residential | Real estate first mortgage
Loans outstanding by loan portfolio segment and risk category
Loans	456,737	457,155
Consumer | Residential | Real estate first mortgage | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	455,973	456,358
Consumer | Residential | Real estate first mortgage | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	764	797
Consumer | Residential | Real estate junior lien
Loans outstanding by loan portfolio segment and risk category
Loans	154,351	177,373
Consumer | Residential | Real estate junior lien | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	151,249	176,122
Consumer | Residential | Real estate junior lien | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	1,841
Consumer | Residential | Real estate junior lien | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	1,261	1,251
Consumer | Other revolving and installment
Loans outstanding by loan portfolio segment and risk category
Loans	78,457	86,526
Consumer | Other revolving and installment | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	78,418	86,520
Consumer | Other revolving and installment | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	$ 39	$ 6

Loans and Allowance for Loan _6

Loans and Allowance for Loan Losses - Changes in allowance (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Changes in the allowance
Beginning Balance	$ 27,019	$ 22,638	$ 23,924	$ 22,174
Provision for loan losses	3,500	1,797	6,000	4,017
Loan charge-offs	(3,666)	(3,620)	(3,765)	(5,568)
Loan recoveries	403	431	1,097	623
Ending Balance	27,256	21,246	27,256	21,246
Unallocated
Changes in the allowance
Beginning Balance	1,833	9	2,192	1,177
Provision for loan losses	(86)	1,210	(445)	42
Ending Balance	1,747	1,219	1,747	1,219
Commercial
Changes in the allowance
Beginning Balance	21,511	19,909	19,261	18,656
Provision for loan losses	2,924	660	4,613	3,633
Loan charge-offs	(3,568)	(3,166)	(3,600)	(4,952)
Loan recoveries	321	379	914	445
Ending Balance	21,188	17,782	21,188	17,782
Commercial | Commercial and industrial
Changes in the allowance
Beginning Balance	12,901	13,815	12,270	12,127
Provision for loan losses	278	818	348	4,225
Loan charge-offs	(2,703)	(3,166)	(2,735)	(4,951)
Loan recoveries	321	227	914	293
Ending Balance	10,797	11,694	10,797	11,694
Commercial | Real estate construction
Changes in the allowance
Beginning Balance	334	251	303	250
Provision for loan losses	109	70	140	72
Loan charge-offs				(1)
Loan recoveries		2		2
Ending Balance	443	323	443	323
Commercial | Commercial real estate
Changes in the allowance
Beginning Balance	8,276	5,843	6,688	6,279
Provision for loan losses	2,537	(228)	4,125	(664)
Loan charge-offs	(865)		(865)
Loan recoveries		150		150
Ending Balance	9,948	5,765	9,948	5,765
Consumer
Changes in the allowance
Beginning Balance	3,675	2,720	2,471	2,341
Provision for loan losses	662	(73)	1,832	342
Loan charge-offs	(98)	(454)	(165)	(616)
Loan recoveries	82	52	183	178
Ending Balance	4,321	2,245	4,321	2,245
Consumer | Residential | Real estate first mortgage
Changes in the allowance
Beginning Balance	2,209	1,610	1,448	1,156
Provision for loan losses	459	(455)	1,220	(1)
Loan recoveries	5		5
Ending Balance	2,673	1,155	2,673	1,155
Consumer | Residential | Real estate junior lien
Changes in the allowance
Beginning Balance	1,025	761	671	805
Provision for loan losses	32	(51)	349	(44)
Loan charge-offs	(12)	(30)	(12)	(134)
Loan recoveries	57	30	94	83
Ending Balance	1,102	710	1,102	710
Consumer | Other revolving and installment
Changes in the allowance
Beginning Balance	441	349	352	380
Provision for loan losses	171	433	263	387
Loan charge-offs	(86)	(424)	(153)	(482)
Loan recoveries	20	22	84	95
Ending Balance	$ 546	$ 380	$ 546	$ 380

Loans and Allowance for Loan _7

Loans and Allowance for Loan Losses - Components of loans and associated allowance (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	$ 6,219		$ 7,954
Recorded Investment, Collectively Evaluated	2,027,978		1,713,325
Loans and Leases Receivable, Gross, Total	2,034,197		1,721,279
Allowance Allocation, Individually Evaluated	549		3,138
Allowance Allocation, Collectively Evaluated	24,960		18,594
Allowance Allocation, Unallocated	1,747		2,192
Loans and Leases Receivable, Allowance, Total	27,256	$ 27,019	23,924	$ 21,246	$ 22,638	$ 22,174
Commercial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	5,173		6,901
Recorded Investment, Collectively Evaluated	1,339,479		993,324
Loans and Leases Receivable, Gross, Total	1,344,652		1,000,225
Allowance Allocation, Individually Evaluated	513		3,135
Allowance Allocation, Collectively Evaluated	20,675		16,126
Loans and Leases Receivable, Allowance, Total	21,188	21,511	19,261	17,782	19,909	18,656
Commercial | Commercial and industrial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	3,644		976
Recorded Investment, Collectively Evaluated	790,560		478,168
Loans and Leases Receivable, Gross, Total	794,204		479,144
Allowance Allocation, Individually Evaluated	503		189
Allowance Allocation, Collectively Evaluated	10,294		12,081
Loans and Leases Receivable, Allowance, Total	10,797	12,901	12,270	11,694	13,815	12,127
Commercial | Real estate construction
Loans and Allowance for Loan Losses
Recorded Investment, Collectively Evaluated	31,344		26,378
Loans and Leases Receivable, Gross, Total	31,344		26,378
Allowance Allocation, Collectively Evaluated	443		303
Loans and Leases Receivable, Allowance, Total	443	334	303	323	251	250
Commercial | Commercial real estate
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	1,529		5,925
Recorded Investment, Collectively Evaluated	517,575		488,778
Loans and Leases Receivable, Gross, Total	519,104		494,703
Allowance Allocation, Individually Evaluated	10		2,946
Allowance Allocation, Collectively Evaluated	9,938		3,742
Loans and Leases Receivable, Allowance, Total	9,948	8,276	6,688	5,765	5,843	6,279
Consumer
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	1,046		1,053
Recorded Investment, Collectively Evaluated	688,499		720,001
Loans and Leases Receivable, Gross, Total	689,545		721,054
Allowance Allocation, Individually Evaluated	36		3
Allowance Allocation, Collectively Evaluated	4,285		2,468
Loans and Leases Receivable, Allowance, Total	4,321	3,675	2,471	2,245	2,720	2,341
Consumer | Residential | Real estate first mortgage
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	747		782
Recorded Investment, Collectively Evaluated	455,990		456,373
Loans and Leases Receivable, Gross, Total	456,737		457,155
Allowance Allocation, Collectively Evaluated	2,673		1,448
Loans and Leases Receivable, Allowance, Total	2,673	2,209	1,448	1,155	1,610	1,156
Consumer | Residential | Real estate junior lien
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	260		266
Recorded Investment, Collectively Evaluated	154,091		177,107
Loans and Leases Receivable, Gross, Total	154,351		177,373
Allowance Allocation, Individually Evaluated	20
Allowance Allocation, Collectively Evaluated	1,082		671
Loans and Leases Receivable, Allowance, Total	1,102	1,025	671	710	761	805
Consumer | Other revolving and installment
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	39		5
Recorded Investment, Collectively Evaluated	78,418		86,521
Loans and Leases Receivable, Gross, Total	78,457		86,526
Allowance Allocation, Individually Evaluated	16		3
Allowance Allocation, Collectively Evaluated	530		349
Loans and Leases Receivable, Allowance, Total	$ 546	$ 441	$ 352	$ 380	$ 349	$ 380

Loans and Allowance for Loan _8

Loans and Allowance for Loan Losses - Impaired loans (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Impaired
Loans with related allowance for loan losses, Recorded investment	$ 3,273	$ 6,362
Loans with related allowance for loan losses, unpaid principal	3,378	6,556
Loans with related allowance for loan losses, Related Allowance	549	3,138
Loans with no related allowance for loan losses, Recorded investment	2,946	1,592
Loans with no related allowance for loan losses, unpaid principal	3,361	2,515
Recorded investment	6,219	7,954
Unpaid principal balance	6,739	9,071
Commercial | Commercial and industrial
Impaired
Loans with related allowance for loan losses, Recorded investment	3,020	639
Loans with related allowance for loan losses, unpaid principal	3,096	727
Loans with related allowance for loan losses, Related Allowance	503	189
Loans with no related allowance for loan losses, Recorded investment	624	337
Loans with no related allowance for loan losses, unpaid principal	805	1,110
Recorded investment	3,644	976
Unpaid principal balance	3,901	1,837
Commercial | Commercial real estate
Impaired
Loans with related allowance for loan losses, Recorded investment	199	5,718
Loans with related allowance for loan losses, unpaid principal	227	5,823
Loans with related allowance for loan losses, Related Allowance	10	2,946
Loans with no related allowance for loan losses, Recorded investment	1,330	207
Loans with no related allowance for loan losses, unpaid principal	1,447	236
Recorded investment	1,529	5,925
Unpaid principal balance	1,674	6,059
Consumer | Residential | Real estate first mortgage
Impaired
Loans with no related allowance for loan losses, Recorded investment	747	782
Loans with no related allowance for loan losses, unpaid principal	764	797
Recorded investment	747	782
Unpaid principal balance	764	797
Consumer | Residential | Real estate junior lien
Impaired
Loans with related allowance for loan losses, Recorded investment	19
Loans with related allowance for loan losses, unpaid principal	20
Loans with related allowance for loan losses, Related Allowance	20
Loans with no related allowance for loan losses, Recorded investment	241	266
Loans with no related allowance for loan losses, unpaid principal	341	372
Recorded investment	260	266
Unpaid principal balance	361	372
Consumer | Other revolving and installment
Impaired
Loans with related allowance for loan losses, Recorded investment	35	5
Loans with related allowance for loan losses, unpaid principal	35	6
Loans with related allowance for loan losses, Related Allowance	16	3
Loans with no related allowance for loan losses, Recorded investment	4
Loans with no related allowance for loan losses, unpaid principal	4
Recorded investment	39	5
Unpaid principal balance	$ 39	$ 6

Loans and Allowance for Loan _9

Loans and Allowance for Loan Losses - Interest Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Impaired
Loans with related allowance for loan losses, Average recorded investment	$ 5,136	$ 3,976	$ 4,972	$ 2,846
Loans with no related allowance for loan losses, Average recorded investment	3,401	2,027	3,613	5,886
Loans, Average recorded investment	8,537	6,003	8,585	8,732
Loans with related allowance for loan losses, Interest income	23	27	23	17
Loans with no related allowance for loan losses, Interest income	29	32	29	46
Loans, Interest income	52	59	52	63
Commercial | Commercial and industrial
Impaired
Loans with related allowance for loan losses, Average recorded investment	4,881	2,229	4,714	1,332
Loans with no related allowance for loan losses, Average recorded investment	694	1,271	747	4,835
Loans, Average recorded investment	5,575	3,500	5,461	6,167
Loans with related allowance for loan losses, Interest income	15	16	15	17
Loans with no related allowance for loan losses, Interest income	26	31	26	33
Loans, Interest income	41	47	41	50
Commercial | Real estate construction
Impaired
Loans with no related allowance for loan losses, Average recorded investment				217
Loans, Average recorded investment				217
Loans with no related allowance for loan losses, Interest income				9
Loans, Interest income				9
Commercial | Commercial real estate
Impaired
Loans with related allowance for loan losses, Average recorded investment	200	1,678	203	1,505
Loans with no related allowance for loan losses, Average recorded investment	1,693		1,821
Loans, Average recorded investment	1,893	1,678	2,024	1,505
Loans with related allowance for loan losses, Interest income	8	8	8
Loans, Interest income	8	8	8
Consumer | Residential | Real estate first mortgage
Impaired
Loans with related allowance for loan losses, Average recorded investment			20
Loans with no related allowance for loan losses, Average recorded investment	755		761
Loans, Average recorded investment	755		761
Consumer | Residential | Real estate junior lien
Impaired
Loans with related allowance for loan losses, Average recorded investment	20	60
Loans with no related allowance for loan losses, Average recorded investment	255	751	279	821
Loans, Average recorded investment	275	811	299	821
Loans with related allowance for loan losses, Interest income		3
Loans with no related allowance for loan losses, Interest income	3	1	3	4
Loans, Interest income	3	4	3	4
Consumer | Other revolving and installment
Impaired
Loans with related allowance for loan losses, Average recorded investment	35	9	35	9
Loans with no related allowance for loan losses, Average recorded investment	4	5	5	13
Loans, Average recorded investment	$ 39	$ 14	$ 40	$ 22

Loans and Allowance for Loan_10

Loans and Allowance for Loan Losses - Pledged (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Loans and Allowance for Loan Losses
Total loans	$ 2,034,197	$ 1,721,279
Pledged
Loans and Allowance for Loan Losses
Total loans	$ 1,200,000	$ 1,200,000

Loans and Allowance for Loan_11

Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details) $ in Millions	1 Months Ended	3 Months Ended		12 Months Ended
	Jun. 30, 2020USD ($)loan	Jun. 30, 2020USD ($)loan	Mar. 31, 2019loan	Dec. 31, 2019USD ($)
Troubled debt restructuring
Number of loans modified as modified as a troubled debt restructuring | loan		0
Number of principal and interest deferrals in connection with the CARES Act | loan	515
Loan principal and interest deferrals in connection with the CARES Act | $	$ 148.5	$ 148.5
Maximum
Troubled debt restructuring
Typical loan deferral period under the CARES Act	90 days
Interest Rate Below Market Reduction
Troubled debt restructuring
Number of loans modified as modified as a troubled debt restructuring | loan			1
Carrying value of restructured loan | $				$ 0.2
Specific reserve for loan losses allocated | $				$ 0

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Goodwill
Goodwill	$ 27,329	$ 27,329
Banking
Goodwill
Goodwill	20,131	20,131
Retirement and Benefit Services
Goodwill
Goodwill	$ 7,198	$ 7,198

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Goodwill
Gross Carrying Amount	$ 35,650		$ 35,650		$ 36,850
Accumulated Amortization	(19,239)		(19,239)		(18,459)
Total	16,411		16,411		18,391
Intangible amortization expense	991	$ 1,050	1,981	$ 2,101
Goodwill, Impairment Loss			0
Identifiable customer intangibles
Goodwill
Gross Carrying Amount	31,857		31,857		31,857
Accumulated Amortization	(15,888)		(15,888)		(14,287)
Total	15,969		15,969		17,570
Core deposit intangible assets
Goodwill
Gross Carrying Amount	3,793		3,793		4,993
Accumulated Amortization	(3,351)		(3,351)		(4,172)
Total	$ 442		$ 442		$ 821

Loan Servicing (Details)

Loan Servicing (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Loan Servicing
Loans serviced for others	$ 498,700		$ 498,700		$ 541,900
Servicing Asset at Fair Value, Amount
Balance, beginning of period	3,277	$ 4,530	3,845	$ 4,623
Additions	88	34	112	101
Amortization	(209)	(239)	(396)	(404)
(Impairment)/Recovery	(265)	(25)	(670)	(20)
Balance, end of period	$ 2,891	$ 4,300	$ 2,891	$ 4,300

Loan Servicing - Key economic a

Loan Servicing - Key economic assumptions (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Loan Servicing
Fair value of servicing rights	$ 2,891	$ 3,845
Weighted average remaining term, years	19 years 10 months 24 days	20 years 1 month 6 days
Prepayment speeds	22.10%	11.80%
Discount rate	9.00%	9.40%

Leases - Lease right-of-use ass

Leases - Lease right-of-use assets and liabilities (Details) $ in Thousands	Jun. 30, 2020USD ($)lease	Dec. 31, 2019USD ($)
Leases
Number of finance leases | lease	1
Lease Right-of-Use Assets
Operating lease right-of-use assets	$ 8,746	$ 8,343
Finance lease right-of-use assets	$ 260	$ 318
Finance Lease, Right-of-Use Asset, balance sheet location	us-gaap:PropertyPlantAndEquipmentNet	us-gaap:PropertyPlantAndEquipmentNet
Lease right-of-use assets	$ 9,006	$ 8,661
Operating lease liabilities	9,254	8,864
Finance lease liabilities	$ 537	$ 640
Finance lease liabilities, balance sheet location	us-gaap:LongTermDebt	us-gaap:LongTermDebt
Lease liabilities	$ 9,791	$ 9,504

Leases - Weighted-average remai

Leases - Weighted-average remaining lease term and average discount rate (Details) - item	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Leases
Minimum number of options to renew lease agreements	1
Weighted-average remaining lease term, Operating leases	5 years 9 months 18 days	6 years 2 months 12 days
Weighted-average remaining lease term, Finance leases	2 years 1 month 6 days	2 years 9 months 18 days
Weighted-average discount rate, Operating leases	2.80%	3.10%
Weighted-average discount rate, Finance leases	7.80%	7.80%

Leases - Lease costs and other

Leases - Lease costs and other lease information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Lease costs
Operating lease cost	$ 568	$ 598	$ 1,191	$ 1,170
Variable lease cost	468	211	665	410
Short-term lease cost	107	260	202	465
Finance lease cost
Interest on lease liabilities	11	16	23	31
Amortization of right-of-use assets	29	29	58	58
Sublease Income	(52)	(68)	(118)	(139)
Net lease cost	1,131	1,046	2,021	1,995
Operating cash flows from operating leases	561	$ 597	1,179	$ 1,174
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 1,348		$ 1,531
Minimum
Finance lease cost
Initial or remaining lease term under operating lease	1 year		1 year
Initial or remaining lease term under finance lease	1 year		1 year

Leases - Future minimum payment

Leases - Future minimum payments for finance and operating leases (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Finance leases
2021	$ 251
2022	251
2023	84
Total future minimum lease payments	586
Amounts representing interest	(49)
Total finance lease liabilities	537	$ 640
Operating leases
2021	2,293
2022	2,085
2023	1,981
2024	1,255
2025	738
Thereafter	1,913
Total future minimum lease payments	10,265
Amounts representing interest	(1,011)
Total operating lease liabilities	$ 9,254	$ 8,864

Deposits (Details)

Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Deposits.
Noninterest-bearing	$ 700,892	$ 577,704
Interest-bearing demand	579,840	458,689
Savings accounts	75,973	55,777
Money market savings	892,717	683,064
Time deposits	203,731	196,082
Total interest-bearing	1,752,261	1,393,612
Total deposits	$ 2,453,153	$ 1,971,316

Short-Term Borrowings (Details)

Short-Term Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Short-term borrowings
Balance as of end of period	$ 0		$ 0		$ 0
Federal Funds Purchased
Short-term borrowings
Balance as of end of period		$ 6,445		$ 6,445
Average daily balance	$ 321	103,035	$ 161	93,238
Maximum month-end balance		$ 139,605		$ 139,605
During period		2.59%		2.59%
End of period		2.50%		2.50%
Federal Home Loan Bank Advances
Short-term borrowings
Balance as of end of period		$ 135,000		$ 135,000
Average daily balance		12,857		6,464
Maximum month-end balance		$ 135,000		$ 135,000
During period		2.16%		2.17%
End of period		2.40%		2.40%

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Long-Term Debt
Face Value	$ 62,967	$ 62,967
Carrying Amount	58,754	58,769
Subordinated notes payable
Long-Term Debt
Face Value	50,000	50,000
Carrying Amount	$ 49,656	$ 49,625
Fixed interest rate	5.75%	5.75%
Junior subordinated debenture (Trust I)
Long-Term Debt
Face Value	$ 4,124	$ 4,124
Carrying Amount	$ 3,424	$ 3,402
Period End Interest Rate	3.38%	5.05%
Junior subordinated debenture (Trust I) | Three - month LIBOR
Long-Term Debt
Interest Rate	3.10%	3.10%
Junior subordinated debenture (Trust II)
Long-Term Debt
Face Value	$ 6,186	$ 6,186
Carrying Amount	$ 5,137	$ 5,102
Period End Interest Rate	2.11%	3.69%
Junior subordinated debenture (Trust II) | Three - month LIBOR
Long-Term Debt
Interest Rate	1.80%	1.80%
Finance lease liability
Long-Term Debt
Face Value	$ 2,657	$ 2,657
Carrying Amount	$ 537	$ 640
Fixed interest rate	7.81%	7.81%

Financial Instruments with Of_3

Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 607,656	$ 594,881
Commitments to extend credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	600,269	586,365
Standby letters of credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 7,387	$ 8,516

Financial Instruments with Off

Financial Instruments with Off Balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Letter of credit with FHLB
Financial Instruments with Off Balance Sheet Risk
Outstanding letters of credit	$ 150	$ 150
Letter of credit with Bank of North Dakota
Financial Instruments with Off Balance Sheet Risk
Outstanding letters of credit	15,000	20,000
Collateralized loans	$ 248,300	$ 242,000

Share-Based Compensation - Plan

Share-Based Compensation - Plan Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-Based Compensation
Compensation expense	$ 624	$ 399	$ 859	$ 649
2019 Equity Incentive Plan
Share-Based Compensation
Awards authorized	1,100,000		1,100,000
2019 Equity Incentive Plan | Restricted stock awards
Share-Based Compensation
Awards issued			28,242
2019 Equity Incentive Plan | Restricted stock units
Share-Based Compensation
Awards issued			49,604

Share-Based Compensation - Acti

Share-Based Compensation - Activity in stock (Details) - Restricted Stock Awards and Units - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Restricted Stock Awards and Units
Outstanding at beginning of period	347,211	337,014
Granted	77,846	70,617
Vested	(86,137)	(32,837)
Forfeited or cancelled	(5,068)	(753)
Outstanding at end of period	333,852	374,041
Weighted Average Grant Date Fair Value
Outstanding at beginning of period	$ 18.64	$ 18.36
Granted	19.53	19.87
Vested	16.15	19.73
Forfeited or cancelled	19.37	21.76
Outstanding at end of period	$ 19.48	$ 18.52
Additional disclosures
Unrecognized compensation cost	$ 3,580
Weighted average period	3 years 6 months 22 days

Income Taxes - Reconciliation b

Income Taxes - Reconciliation between applicable income taxes and statutory federal tax rate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Tax amount
Taxes at statutory federal income tax rate	$ 3,168	$ 2,356	$ 4,596	$ 4,132
Tax effect of tax exempt income	(127)	(108)	(247)	(222)
Tax effect of other	572	621	701	983
Total income tax expense	$ 3,613	$ 2,869	$ 5,050	$ 4,893
Percentage of pretax income
Taxes at statutory federal income tax rate (as percentage)	21.00%	21.00%	21.00%	21.00%
Tax effect of tax exempt income (as percentage)	(0.80%)	(1.00%)	(1.10%)	(1.10%)
Tax effect of other (as percentage)	3.80%	5.40%	3.20%	5.00%
Applicable income taxes (as percentage)	23.90%	25.60%	23.10%	24.90%

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2020USD ($)segmentitem	Jun. 30, 2019USD ($)
Segment Reporting
Number of operating segments | segment			4
Number of Banking offices | item			15
Number of satellite offices | item			13
Key metrics related to segments
Net interest income	$ 20,091	$ 18,291	$ 38,928	$ 37,411
Provision for loan losses	3,500	1,797	6,000	4,017
Noninterest income	38,230	29,984	65,419	55,058
Noninterest expense	39,734	35,261	76,460	68,775
Net income before taxes	15,087	11,217	21,887	19,677
Corporate Administration
Key metrics related to segments
Net interest income	(856)	(908)	(1,733)	(1,817)
Noninterest income	5	1,548	9	1,552
Noninterest expense	8,533	8,429	17,721	17,075
Net income before taxes	(9,384)	(7,789)	(19,445)	(17,340)
Banking | Operating Segments
Key metrics related to segments
Net interest income	20,417	18,894	39,863	38,794
Provision for loan losses	3,500	1,797	6,000	4,017
Noninterest income	2,857	1,747	4,731	3,578
Noninterest expense	11,359	10,088	24,011	20,080
Net income before taxes	8,415	8,756	14,583	18,275
Retirement and Benefit Services | Operating Segments
Key metrics related to segments
Noninterest income	13,710	15,776	29,930	30,835
Noninterest expense	9,193	8,601	17,125	17,591
Net income before taxes	4,517	7,175	12,805	13,244
Wealth Management | Operating Segments
Key metrics related to segments
Noninterest income	4,112	3,878	8,158	7,489
Noninterest expense	2,629	2,177	4,144	4,101
Net income before taxes	1,483	1,701	4,014	3,388
Mortgage | Operating Segments
Key metrics related to segments
Net interest income	530	305	798	434
Noninterest income	17,546	7,035	22,591	11,604
Noninterest expense	8,020	5,966	13,459	9,928
Net income before taxes	$ 10,056	$ 1,374	$ 9,930	$ 2,110

Earnings Per Share - Two-class

Earnings Per Share - Two-class method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share
Net Income	$ 11,474	$ 8,348	$ 16,837	$ 14,784
Dividends and undistributed earnings allocated to participating securities	200		282
Net income available to common shareholders	$ 11,274		$ 16,555
Weighted-average common shares outstanding for basic earnings per share	17,111	13,810	17,091	13,796
Dilutive effect of stock-based awards	334	290	334	293
Weighted-average common shares outstanding for diluted earnings per share	17,445	14,100	17,425	14,089
Earnings per common share:
Basic earnings per common share	$ 0.66	$ 0.60	$ 0.97	$ 1.07
Diluted earnings per common share	$ 0.65	$ 0.59	$ 0.95	$ 1.05

Earnings Per Share - Treasury s

Earnings Per Share - Treasury stock method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share
Net income attributable to common shareholders	$ 11,474	$ 8,348	$ 16,837	$ 14,784
Weighted-average common shares outstanding for basic earnings per share	17,111	13,810	17,091	13,796
Basic earnings per common share	$ 0.66	$ 0.60	$ 0.97	$ 1.07
Dilutive effect of stock-based awards	334	290	334	293
Weighted-average common shares outstanding for diluted earnings per share	17,445	14,100	17,425	14,089
Diluted earnings per common share	$ 0.65	$ 0.59	$ 0.95	$ 1.05

Derivative Instruments (Details

Derivative Instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative Instruments
Fair Value, Derivative Assets	$ 7,111	$ 1,621
Fair Value, Derivative Liabilities	1,321	109
Notional Amount, Derivative Assets	213,417	58,499
Notional Amount, Derivative Liabilities	239,000	68,500
Interest rate lock commitments | Other assets
Derivative Instruments
Fair Value, Derivative Assets	5,936	1,228
Notional Amount, Derivative Assets	179,182	45,715
Forward loan sales commitments | Other assets
Derivative Instruments
Fair Value, Derivative Assets	1,175	393
Notional Amount, Derivative Assets	34,235	12,784
TBA mortgage backed securities | Accrued expenses and other liabilities
Derivative Instruments
Fair Value, Derivative Liabilities	1,321	109
Notional Amount, Derivative Liabilities	$ 239,000	$ 68,500

Derivative Instruments - Gain (

Derivative Instruments - Gain (loss) recognized on derivatives instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	$ 2,540	$ 569	$ 1,010	$ 2,150
Interest rate lock commitments | Mortgage banking
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	4,352	492	5,579	2,281
Forward loan sales commitments | Mortgage banking
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	117	407	783	653
TBA mortgage backed securities | Mortgage banking
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	$ (1,929)	$ (330)	$ (5,352)	$ (784)

Regulatory Matters (Details)

Regulatory Matters (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Common equity tier 1 capital to risk weighted assets
Actual	$ 254,047	$ 239,672
Requirements for Capital Adequacy Purposes	$ 90,888	$ 86,452
Actual	12.58%	12.48%
Requirements	4.50%	4.50%
Tier 1 capital to risk weighted assets
Actual	$ 262,298	$ 247,866
Requirements for Capital Adequacy Purposes	$ 121,184	$ 115,270
Actual	12.99%	12.90%
Requirements	6.00%	6.00%
Total capital to risk weighted assets
Actual	$ 337,225	$ 321,415
Requirements for Capital Adequacy Purposes	$ 161,578	$ 153,693
Actual	16.70%	16.73%
Requirements	8.00%	8.00%
Tier 1 capital to average assets
Actual	$ 262,298	$ 247,866
Requirements for Capital Adequacy Purposes	$ 107,620	$ 91,504
Actual	9.75%	11.05%
Requirements	4.00%	4.00%
Bank
Common equity tier 1 capital to risk weighted assets
Actual	$ 241,940	$ 228,512
Requirements for Capital Adequacy Purposes	90,814	86,362
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 131,176	$ 124,745
Actual	11.99%	11.91%
Requirements	4.50%	4.50%
Minimum to be Well Capitalized Under Prompt Corrective Action	6.50%	6.50%
Tier 1 capital to risk weighted assets
Actual	$ 241,940	$ 228,512
Requirements for Capital Adequacy Purposes	121,086	115,149
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 161,448	$ 153,532
Actual	11.99%	11.91%
Requirements	6.00%	6.00%
Minimum to be Well Capitalized Under Prompt Corrective Action	8.00%	8.00%
Total capital to risk weighted assets
Actual	$ 267,191	$ 252,436
Requirements for Capital Adequacy Purposes	161,448	153,532
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 201,810	$ 191,915
Actual	13.24%	13.15%
Requirements	8.00%	8.00%
Minimum to be Well Capitalized Under Prompt Corrective Action	10.00%	10.00%
Tier 1 capital to average assets
Actual	$ 241,940	$ 228,512
Requirements for Capital Adequacy Purposes	107,531	89,615
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 134,414	$ 112,018
Actual	9.00%	10.20%
Requirements	4.00%	4.00%
Minimum to be Well Capitalized Under Prompt Corrective Action	5.00%	5.00%

Fair Value of Assets and Liab_3

Fair Value of Assets and Liabilities - Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	$ 393,727	$ 310,350
Equity securities		2,808
Mortgage backed securities - Residential Agency
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	214,707	182,538
Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	27,926	30,685
Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	135	144
Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	20,554	7,095
Recurring
Fair value, assets and liabilities measured on recurring and non recurring basis
Equity securities		2,808
Total available-for-sale and equity securities	393,727	313,158
Derivates assets	7,111	1,621
Derivative liabilities	1,321	109
Recurring | U.S. treasury and government agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	16,252	21,240
Recurring | Obligations of state and political agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	114,153	68,648
Recurring | Mortgage backed securities - Residential Agency
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	214,707	182,538
Recurring | Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	27,926	30,685
Recurring | Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	135	144
Recurring | Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	20,554	7,095
Recurring | Level 1
Fair value, assets and liabilities measured on recurring and non recurring basis
Equity securities		2,808
Total available-for-sale and equity securities		2,808
Recurring | Level 2
Fair value, assets and liabilities measured on recurring and non recurring basis
Total available-for-sale and equity securities	393,727	310,350
Derivates assets	7,111	1,621
Derivative liabilities	1,321	109
Recurring | Level 2 | U.S. treasury and government agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	16,252	21,240
Recurring | Level 2 | Obligations of state and political agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	114,153	68,648
Recurring | Level 2 | Mortgage backed securities - Residential Agency
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	214,707	182,538
Recurring | Level 2 | Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	27,926	30,685
Recurring | Level 2 | Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	135	144
Recurring | Level 2 | Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale securities	$ 20,554	$ 7,095

Fair Value of Assets and Liab_4

Fair Value of Assets and Liabilities - Nonrecurring Basis (Details) - Non recurring - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	$ 5,670	$ 4,816
Foreclosed assets	26	8
Servicing rights	2,891	3,845
Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	101,751	46,846
Impaired loans
Fair value, assets and liabilities measured on recurring and non recurring basis
Net impairment	549	3,138
Level 2 | Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	101,751	46,846
Level 3
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	5,670	4,816
Foreclosed assets	26	8
Servicing rights	$ 2,891	$ 3,845

Fair Value of Assets and Liab_5

Fair Value of Assets and Liabilities - Valuation Technique (Details) - Level 3	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Impaired loans | Appraisal value | Property specific adjustment
Valuation techniques and significant unobservable inputs
Impaired loans	$ 5,670,000	$ 4,816,000
Foreclosed assets | Appraisal value | Property specific adjustment
Valuation techniques and significant unobservable inputs
Foreclosed assets	$ 26,000	$ 8,000
Servicing rights
Valuation techniques and significant unobservable inputs
Servicing Asset, Valuation Technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Servicing rights | Prepayment speed assumptions
Valuation techniques and significant unobservable inputs
Servicing rights	$ 2,891,000	$ 3,845,000
Servicing rights | Prepayment speed assumptions | Minimum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	268	123
Servicing rights | Prepayment speed assumptions | Maximum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	425	267
Servicing rights | Prepayment speed assumptions | Weighted average
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	237	194
Servicing rights | Discount rate
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	0.090	0.094
Servicing rights | Discount rate | Weighted average
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	0.090	0.094

Fair Value of Assets and Liab_6

Fair Value of Assets and Liabilities - Off-Balance Sheet Credit-Related Commitments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Carrying amount
Financial Assets
Cash and cash equivalents	$ 210,437	$ 144,006
Loans	2,006,941	1,697,355
Accrued interest receivable	7,975	7,551
Bank-owned life insurance	31,959	31,566
Financial Liabilities
Noninterest-bearing deposits	700,892	577,704
Interest-bearing deposits	1,548,530	1,197,530
Time deposits	203,731	196,082
Long-term debt	58,754	58,769
Accrued interest payable	799	1,038
Estimated fair value
Financial Assets
Cash and cash equivalents	210,437	144,006
Loans	2,035,211	1,693,824
Accrued interest receivable	7,975	7,551
Bank-owned life insurance	31,959	31,566
Financial Liabilities
Noninterest-bearing deposits	700,892	577,704
Interest-bearing deposits	1,548,530	1,197,530
Time deposits	205,086	196,182
Long-term debt	56,670	58,239
Accrued interest payable	799	1,038
Level 1 | Estimated fair value
Financial Assets
Cash and cash equivalents	210,437	144,006
Accrued interest receivable	7,975	7,551
Financial Liabilities
Accrued interest payable	799	1,038
Level 2 | Estimated fair value
Financial Assets
Bank-owned life insurance	31,959	31,566
Financial Liabilities
Noninterest-bearing deposits	700,892	577,704
Interest-bearing deposits	1,548,530	1,197,530
Long-term debt	56,670	58,239
Level 3 | Estimated fair value
Financial Assets
Loans	2,035,211	1,693,824
Financial Liabilities
Time deposits	$ 205,086	$ 196,182

COVID-19 Pandemic Response (Det

COVID-19 Pandemic Response (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020USD ($)client
COVID-19 Pandemic Response
Net processing fees	$ 11,000
PPP Loans
COVID-19 Pandemic Response
Number of clients assisted under the PPP | client	1,580
Loans financed	$ 362,700
PPP Loans - Less than $350 Thousand
COVID-19 Pandemic Response
Processing fees on PPP loans (as a percent)	5.00%
Threshold value loans financed under the PPP	$ 350
PPP Loans - $350 Thousand to $2 Million
COVID-19 Pandemic Response
Processing fees on PPP loans (as a percent)	3.00%
PPP Loans - $350 Thousand to $2 Million | Minimum
COVID-19 Pandemic Response
Threshold value loans financed under the PPP	$ 350
PPP Loans - $350 Thousand to $2 Million | Maximum
COVID-19 Pandemic Response
Threshold value loans financed under the PPP	$ 2,000
PPP Loans - $2 Million
COVID-19 Pandemic Response
Processing fees on PPP loans (as a percent)	1.00%
Threshold value loans financed under the PPP	$ 2,000