Alerus Financial (ALRS) 10-Q 5 Nov 20 2020 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 31, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Entity Registrant Name	ALERUS FINANCIAL CORPORATION
Title of 12(b) Security	Common Stock, par value $1.00 per share
Trading Symbol	ALRS
Security Exchange Name	NASDAQ
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		17,121,863
Entity Central Index Key	0000903419
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 95,751	$ 144,006
Available-for-sale	495,414	310,350
Equity		2,808
Loans held for sale	111,311	46,846
Loans	2,058,419	1,721,279
Allowance for loan losses	(31,337)	(23,924)
Net loans	2,027,082	1,697,355
Land, premises and equipment, net	20,493	20,629
Operating lease right-of-use assets	8,168	8,343
Accrued interest receivable	9,199	7,551
Bank-owned life insurance	32,161	31,566
Goodwill	27,329	27,329
Other intangible assets	15,421	18,391
Servicing rights	2,579	3,845
Deferred income taxes, net	8,628	7,891
Other assets	45,273	29,968
Total assets	2,898,809	2,356,878
Deposits
Noninterest-bearing	693,450	577,704
Interest-bearing	1,768,920	1,393,612
Total deposits	2,462,370	1,971,316
Long-term debt	58,745	58,769
Operating lease liabilities	8,671	8,864
Accrued expenses and other liabilities	47,020	32,201
Total liabilities	2,576,806	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: 17,121,863 and 17,049,551 issued and outstanding	17,122	17,050
Additional paid-in capital	89,757	88,650
Retained earnings	204,581	178,092
Accumulated other comprehensive income (loss)	10,543	1,936
Total stockholders’ equity	322,003	285,728
Total liabilities and stockholders’ equity	$ 2,898,809	$ 2,356,878

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 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	17,121,863	17,049,551
Common stock, shares outstanding	17,121,863	17,049,551

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Interest Income
Loans, including fees	$ 21,962	$ 21,886	$ 63,876	$ 65,171
Investment securities - Taxable	1,973	1,374	5,497	4,021
Investment securities -Exempt from federal income taxes	238	163	712	618
Other	116	202	816	603
Total interest income	24,289	23,625	70,901	70,413
Interest Expense
Deposits	1,683	3,506	7,633	9,802
Short-term borrowings		539		1,805
Long-term debt	841	899	2,575	2,714
Total interest expense	2,524	4,944	10,208	14,321
Net interest income	21,765	18,681	60,693	56,092
Provision for loan losses	3,500	1,498	9,500	5,515
Net interest income after provision for loan losses	18,265	17,183	51,193	50,577
Noninterest Income
Retirement and benefit services	15,104	15,307	45,034	46,142
Wealth management	4,486	3,896	12,644	11,385
Mortgage banking	22,269	8,135	44,860	19,739
Service charges on deposit accounts	355	447	1,075	1,321
Net gains (losses) on investment securities	1,428	48	2,722	357
Other	1,614	1,747	4,340	5,694
Total noninterest income	45,256	29,580	110,675	84,638
Noninterest Expense
Compensation	22,740	20,041	62,684	54,997
Employee taxes and benefits	5,033	4,600	15,088	15,188
Occupancy and equipment expense	2,768	2,700	8,392	8,086
Business services, software and technology expense	4,420	4,224	13,384	12,044
Intangible amortization expense	990	990	2,971	3,091
Professional fees and assessments	1,031	1,051	3,231	3,146
Marketing and business development	929	890	2,088	2,024
Supplies and postage	247	631	1,625	2,027
Travel	26	435	338	1,335
Mortgage and lending expenses	1,231	751	3,466	1,966
Other	799	1,014	3,407	2,198
Total noninterest expense	40,214	37,327	116,674	106,102
Income before income taxes	23,307	9,436	45,194	29,113
Income tax expense	5,648	2,332	10,698	7,225
Net income	$ 17,659	$ 7,104	$ 34,496	$ 21,888
Basic earnings per common share	$ 1.01	$ 0.49	$ 1.98	$ 1.53
Diluted earnings per common share	0.99	0.48	1.94	1.49
Dividends declared per common share	$ 0.15	$ 0.14	$ 0.45	$ 0.42
Average common shares outstanding	17,121	14,274	17,101	13,957
Diluted average common shares outstanding	17,453	14,626	17,435	14,317

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Consolidated Statements of Comprehensive Income
Net Income	$ 17,659	$ 7,104	$ 34,496	$ 21,888
Other Comprehensive Income (Loss), Net of Tax
Unrealized gains (losses) on available-for-sale securities	2,459	2,187	14,212	9,307
Reclassification adjustment for losses (gains) realized in income	(1,428)	(49)	(2,722)	(379)
Total other comprehensive income (loss), before tax	1,031	2,138	11,490	8,928
Income tax expense (benefit) related to items of other comprehensive income	259	538	2,883	2,242
Other comprehensive income (loss), net of tax	772	1,600	8,607	6,686
Total comprehensive income	$ 18,431	$ 8,704	$ 43,103	$ 28,574

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			21,888			21,888
Other comprehensive income (loss)				6,686		6,686
Common stock repurchased	(82)	(291)	(1,574)			(1,947)
Common stock dividends			(6,312)			(6,312)
ESOP repurchase obligation termination					34,494	34,494
Initial public offering of 3,289,000 shares of common stock net of issuance costs	3,289	59,515				62,804
Stock-based compensation expense	13	1,317				1,330
Vesting of restricted stock	54	(54)
Ending balance at Sep. 30, 2019	17,049	88,230	173,039	3,085		281,403
Beginning balance at Jun. 30, 2019	13,816	28,676	169,788	1,485	(34,494)	179,271
Net Income			7,104			7,104
Other comprehensive income (loss)				1,600		1,600
Common stock repurchased	(77)	(275)	(1,489)			(1,841)
Common stock dividends			(2,364)			(2,364)
ESOP repurchase obligation termination					$ 34,494	34,494
Initial public offering of 3,289,000 shares of common stock net of issuance costs	3,289	59,515				62,804
Stock-based compensation expense		335				335
Vesting of restricted stock	21	(21)
Ending balance at Sep. 30, 2019	17,049	88,230	173,039	3,085		281,403
Beginning balance at Dec. 31, 2019	17,050	88,650	178,092	1,936		285,728
Net Income			34,496			34,496
Other comprehensive income (loss)				8,607		8,607
Common stock repurchased	(15)	(140)	(217)			(372)
Common stock dividends			(7,790)			(7,790)
Stock-based compensation expense	14	1,320				1,334
Vesting of restricted stock	73	(73)
Ending balance at Sep. 30, 2020	17,122	89,757	204,581	10,543		322,003
Beginning balance at Jun. 30, 2020	17,120	89,313	189,528	9,771		305,732
Net Income			17,659			17,659
Other comprehensive income (loss)				772		772
Common stock repurchased		(29)	(7)			(36)
Common stock dividends			(2,599)			(2,599)
Stock-based compensation expense		475				475
Vesting of restricted stock	2	(2)
Ending balance at Sep. 30, 2020	$ 17,122	$ 89,757	$ 204,581	$ 10,543		$ 322,003

Consolidated Statements of Ch_2

Consolidated Statements of Changes in Stockholders Equity (Parenthetical) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Consolidated Statements of Changes in Stockholders’ Equity
IPO common stock net of issuance costs	3,289,000	3,289,000

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating Activities
Net income	$ 34,496	$ 21,888
Adjustments to reconcile net income to net cash provided (used) by operating activities
Deferred income taxes	(3,620)	149
Provision for loan losses	9,500	5,515
Depreciation and amortization	6,657	6,500
Amortization and accretion of premiums/discounts on investment securities	1,140	832
Amortization of operating lease right-of-use assets	(18)	3
Stock-based compensation	1,334	1,330
Increase in value of bank-owned life insurance	(595)	(601)
Realized loss (gain) on sale of branch		(1,544)
Realized loss (gain) on sale of fixed assets		(541)
Realized loss (gain) on derivative instruments	(3,282)	(3,086)
Realized loss (gain) on loans sold	(37,220)	(12,885)
Realized loss (gain) on sale of foreclosed assets	(26)	(120)
Realized loss (gain) on sale of investment securities	(2,722)	(379)
Realized loss (gain) on servicing rights	574	(213)
Net change in:
Securities held for trading		1,539
Loans held for sale	(27,325)	(38,294)
Accrued interest receivable	(1,648)	151
Other assets	(2,842)	6,122
Accrued expenses and other liabilities	5,754	15,566
Net cash provided (used) by operating activities	(19,843)	1,932
Investing Activities
Proceeds from sales or calls of investment securities available-for-sale	74,630	32,565
Proceeds from maturities of investment securities available-for-sale	39,208	27,818
Purchases of investment securities available-for-sale	(285,830)	(80,450)
Net (increase) decrease in equity securities	2,808	490
Net (increase) decrease in loans	(339,758)	14,213
Proceeds from sale of branch		10,379
Proceeds from sale of fixed assets		875
Purchases of premises and equipment	(2,761)	(2,450)
Proceeds from sales of foreclosed assets	555	1,006
Net cash provided (used) by investing activities	(511,148)	4,446
Financing Activities
Net increase (decrease) in deposits	491,054	53,241
Net increase (decrease) in short-term borrowings		(93,460)
Repayments of long-term debt	(156)	(181)
Cash dividends paid on common stock	(7,790)	(6,312)
Repurchase of common stock	(372)	(1,947)
Proceeds from the issuance of common stock in initial public offering net of issuance costs		62,804
Net cash provided (used) by financing activities	482,736	14,145
Net change in cash and cash equivalents	(48,255)	20,523
Cash and cash equivalents at beginning of period	144,006	40,651
Cash and cash equivalents at end of period	95,751	61,174
Cash paid for:
Interest	9,838	13,162
Income taxes	11,041	5,550
Non-cash information
Loan collateral transferred to foreclosed assets	531	766
Unrealized gain (loss) on investment securities available-for-sale	8,607	6,686
Initial recognition of operating lease right-of-use assets		10,475
Initial recognition of operating lease liabilities		10,996
Right-of-use assets obtained in exchange for new operating leases	$ 1,531
ESOP repurchase obligation termination		$ 34,494

Significant Accounting Policies

Significant Accounting Policies	9 Months Ended
	Sep. 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 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 has not had 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	9 Months Ended
	Sep. 30, 2020
Recent Accounting Pronouncements
Recent 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 September 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 an 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 on its 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	9 Months Ended
	Sep. 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 September 30, 2020 and December 31, 2019: September 30, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 16,075 $ 34 $ (17) $ 16,092 Obligations of state and political agencies 142,308 4,908 — 147,216 Mortgage backed securities Residential agency 203,812 7,933 (45) 211,700 Commercial 86,502 1,092 (52) 87,542 Asset backed securities 123 8 — 131 Corporate bonds 32,518 244 (29) 32,733 Total available-for-sale investment securities $ 481,338 $ 14,219 $ (143) $ 495,414 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 September 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: September 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 $ (9) $ 4,694 $ (8) $ 1,309 $ (17) $ 6,003 Obligations of state and political agencies — 590 — — — 590 Mortgage backed securities Residential agency (45) 15,481 — — (45) 15,481 Commercial (48) 25,292 (4) 2,603 (52) 27,895 Asset backed securities — — — 2 — 2 Corporate bonds (29) 5,971 — — (29) 5,971 Total available-for-sale investment securities $ (131) $ 52,028 $ (12) $ 3,914 $ (143) $ 55,942 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 nine months ended September 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 September 30, 2020, by contractual maturity: Amortized Fair (dollars in thousands) Cost Value Due within one year or less $ 16,132 $ 16,211 Due after one year through five years 26,821 27,459 Due after five years through ten years 145,310 150,121 Due after 10 years 293,075 301,623 Total available-for-sale investment securities $ 481,338 $ 495,414 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 $115.4 million and $136.2 million were pledged as of September 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 nine months ended September 30, 2020 and 2019, are displayed in the table below: Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Proceeds $ 35,125 $ 10,934 $ 74,630 $ 32,565 Realized gains 1,428 59 2,722 357 Realized losses — (11) — (22) As of September 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: September 30, December 31, (dollars in thousands) 2020 2019 Federal Reserve $ 2,675 $ 2,675 FHLB 3,169 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 September 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 September 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	9 Months Ended
	Sep. 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 September 30, 2020 and December 31, 2019: September 30, December 31, (dollars in thousands) 2020 2019 Commercial Commercial and industrial (1) $ 789,036 $ 479,144 Real estate construction 33,169 26,378 Commercial real estate 535,216 494,703 Total commercial 1,357,421 1,000,225 Consumer Residential real estate first mortgage 469,050 457,155 Residential real estate junior lien 152,487 177,373 Other revolving and installment 79,461 86,526 Total consumer 700,998 721,054 Total loans $ 2,058,419 $ 1,721,279 (1) Included Paycheck Protection Program, or PPP, loans of $348.9 million at September 30, 2020. Total loans included net deferred loan fees and costs of $7.8 million and $1.0 million at September 30, 2020 and December 31, 2019, respectively. Deferred loan fees on PPP loans were $7.4 million at September 30, 2020. Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurements 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 as issued on April 7, 2020, are included as accruing current. The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of September 30, 2020 and December 31, 2019: September 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 $ 784,282 $ 1,914 $ — $ 2,840 $ 789,036 Real estate construction 32,384 785 — — 33,169 Commercial real estate 530,984 2,903 — 1,329 535,216 Total commercial 1,347,650 5,602 — 4,169 1,357,421 Consumer Residential real estate first mortgage 466,551 2,042 — 457 469,050 Residential real estate junior lien 152,111 207 — 169 152,487 Other revolving and installment 79,221 240 — — 79,461 Total consumer 697,883 2,489 — 626 700,998 Total loans $ 2,045,533 $ 8,091 $ — $ 4,795 $ 2,058,419 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 September 30, 2020 and December 31, 2019: September 30, 2020 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 759,808 $ 8,706 $ 20,522 $ — $ 789,036 Real estate construction 32,140 783 246 — 33,169 Commercial real estate 501,913 7,265 26,038 — 535,216 Total commercial 1,293,861 16,754 46,806 — 1,357,421 Consumer Residential real estate first mortgage 467,168 1,413 469 — 469,050 Residential real estate junior lien 149,290 2,005 1,192 — 152,487 Other revolving and installment 79,461 — — — 79,461 Total consumer 695,919 3,418 1,661 — 700,998 Total loans $ 1,989,780 $ 20,172 $ 48,467 $ — $ 2,058,419 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 nine months ended September 30, 2020 and 2019: Three months ended September 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,797 $ (846) $ (10) $ 432 $ 10,373 Real estate construction 443 40 — — 483 Commercial real estate 9,948 1,828 — 95 11,871 Total commercial 21,188 1,022 (10) 527 22,727 Consumer Residential real estate first mortgage 2,673 1,694 — — 4,367 Residential real estate junior lien 1,102 28 — 81 1,211 Other revolving and installment 546 108 (41) 24 637 Total consumer 4,321 1,830 (41) 105 6,215 Unallocated 1,747 648 — — 2,395 Total $ 27,256 $ 3,500 $ (51) $ 632 $ 31,337 Nine months ended September 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,270 $ (498) $ (2,745) $ 1,346 $ 10,373 Real estate construction 303 180 — — 483 Commercial real estate 6,688 5,953 (865) 95 11,871 Total commercial 19,261 5,635 (3,610) 1,441 22,727 Consumer Residential real estate first mortgage 1,448 2,914 — 5 4,367 Residential real estate junior lien 671 377 (12) 175 1,211 Other revolving and installment 352 371 (194) 108 637 Total consumer 2,471 3,662 (206) 288 6,215 Unallocated 2,192 203 — — 2,395 Total $ 23,924 $ 9,500 $ (3,816) $ 1,729 $ 31,337 Three months ended September 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 11,694 $ (962) $ (324) $ 538 $ 10,946 Real estate construction 323 25 — — 348 Commercial real estate 5,765 (4) — — 5,761 Total commercial 17,782 (941) (324) 538 17,055 Consumer Residential real estate first mortgage 1,155 (139) — — 1,016 Residential real estate junior lien 710 157 (20) 49 896 Other revolving and installment 380 1 (31) 28 378 Total consumer 2,245 19 (51) 77 2,290 Unallocated 1,219 2,420 — — 3,639 Total $ 21,246 $ 1,498 $ (375) $ 615 $ 22,984 Nine months ended September 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,127 $ 3,263 $ (5,275) $ 831 $ 10,946 Real estate construction 250 97 (1) 2 348 Commercial real estate 6,279 (668) — 150 5,761 Total commercial 18,656 2,692 (5,276) 983 17,055 Consumer Residential real estate first mortgage 1,156 (140) — — 1,016 Residential real estate junior lien 805 113 (154) 132 896 Other revolving and installment 380 388 (513) 123 378 Total consumer 2,341 361 (667) 255 2,290 Unallocated 1,177 2,462 — — 3,639 Total $ 22,174 $ 5,515 $ (5,943) $ 1,238 $ 22,984 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 September 30, 2020 and December 31, 2019: September 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 $ 3,497 $ 785,539 $ 789,036 $ 379 $ 9,994 $ — $ 10,373 Real estate construction — 33,169 33,169 — 483 — 483 Commercial real estate 1,525 533,691 535,216 9 11,862 — 11,871 Total commercial 5,022 1,352,399 1,357,421 388 22,339 — 22,727 Consumer Residential real estate first mortgage 457 468,593 469,050 — 4,367 — 4,367 Residential real estate junior lien 229 152,258 152,487 19 1,192 — 1,211 Other revolving and installment — 79,461 79,461 — 637 — 637 Total consumer 686 700,312 700,998 19 6,196 — 6,215 Total loans $ 5,708 $ 2,052,711 $ 2,058,419 $ 407 $ 28,535 $ 2,395 $ 31,337 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. September 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 $ 2,523 $ 2,609 $ 379 $ 639 $ 727 $ 189 Commercial real estate 196 196 9 5,718 5,823 2,946 Residential real estate junior lien 19 20 19 — — — Other revolving and installment — — — 5 6 3 Total impaired loans with a valuation allowance 2,738 2,825 407 6,362 6,556 3,138 Impaired loans without a valuation allowance Commercial and industrial 974 1,159 — 337 1,110 — Commercial real estate 1,329 1,448 — 207 236 — Residential real estate first mortgage 457 469 — 782 797 — Residential real estate junior lien 210 256 — 266 372 — Other revolving and installment — — — — — — Total impaired loans without a valuation allowance 2,970 3,332 — 1,592 2,515 — Total impaired loans Commercial and industrial 3,497 3,768 379 976 1,837 189 Commercial real estate 1,525 1,644 9 5,925 6,059 2,946 Residential real estate first mortgage 457 469 — 782 797 — Residential real estate junior lien 229 276 19 266 372 — Other revolving and installment — — — 5 6 3 Total impaired loans $ 5,708 $ 6,157 $ 407 $ 7,954 $ 9,071 $ 3,138 The table below presents the average recorded investment in impaired loans and interest income for the three and nine months ended September 30, 2020 and 2019: Three months ended September 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 $ 2,541 $ 14 $ 1,964 $ 4 Commercial real estate 197 8 1,623 2 Residential real estate first mortgage — — — — Residential real estate junior lien 19 — 619 1 Other revolving and installment — — 5 — Total impaired loans with a valuation allowance 2,757 22 4,211 7 Impaired loans without a valuation allowance Commercial and industrial 1,013 24 1,206 7 Commercial real estate 1,330 — — — Residential real estate first mortgage 459 — 183 — Residential real estate junior lien 211 3 297 — Other revolving and installment — — 2 — Total impaired loans without a valuation allowance 3,013 27 1,688 7 Total impaired loans Commercial and industrial 3,554 38 3,170 11 Commercial real estate 1,527 8 1,623 2 Residential real estate first mortgage 459 — 183 — Residential real estate junior lien 230 3 916 1 Other revolving and installment — — 7 — Total impaired loans $ 5,770 $ 49 $ 5,899 $ 14 Nine Months Ended September 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 $ 3,815 $ 14 $ 2,473 $ 12 Commercial real estate 200 8 1,668 6 Residential real estate junior lien 20 — 621 3 Other revolving and installment — — 5 — Total impaired loans with a valuation allowance 4,035 22 4,767 21 Impaired loans without a valuation allowance Commercial and industrial 1,154 26 2,979 23 Real estate construction — — — — Commercial real estate 1,699 — — — Residential real estate first mortgage 467 — 92 — Residential real estate junior lien 217 3 302 — Other revolving and installment — — 4 — Total impaired loans without a valuation allowance 3,537 29 3,377 23 Total impaired loans Commercial and industrial 4,969 40 5,452 35 Real estate construction — — — — Commercial real estate 1,899 8 1,668 6 Residential real estate first mortgage 467 — 92 — Residential real estate junior lien 237 3 923 3 Other revolving and installment — — 9 — Total impaired loans $ 7,572 $ 51 $ 8,144 $ 44 Loans with a carrying value of $1.2 billion as of September 30, 2020 and December 31, 2019, respectively, 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 third quarter of 2020, there were no loans modified as a TDR. As of September 30, 2020, the Company had entered into modifications on 552 loans representing $ 151.4 million in principal balances, since the beginning of the pandemic. Of those loans, 27 loans with a total outstanding principal balance of $16.9 million, have been granted second deferral, 56 loans with a total outstanding principal balance of $12.0 million remain on the first deferral and the remaining loans have been returned to a normal payment status. 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	9 Months Ended
	Sep. 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 September 30, 2020 and December 31, 2019: September 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: September 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 $ (16,689) $ 15,168 $ 31,857 $ (14,287) $ 17,570 Core deposit intangible assets 3,793 (3,540) 253 4,993 (4,172) 821 Total intangible assets $ 35,650 $ (20,229) $ 15,421 $ 36,850 $ (18,459) $ 18,391 Amortization of intangible assets was $1.0 million for each of the three months ended September 30, 2020, and 2019, respectively. Amortization of intangible assets was $3.0 and $3.1 million for the nine months ended September 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 September 30, 2020.

Loan Servicing

Loan Servicing	9 Months Ended
	Sep. 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 $ 476.3 million and $541.9 million as of September 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 nine months ended September 30, 2020 and 2019: Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 2,891 $ 4,300 $ 3,845 $ 4,623 Additions 42 179 154 279 Amortization (296) (287) (692) (690) (Impairment)/Recovery (58) (46) (728) (66) Balance, end of period $ 2,579 $ 4,146 $ 2,579 $ 4,146 The following is a summary of key data and assumptions used in the valuation of servicing rights as of September 30, 2020 and December 31, 2019. Increases or decreases in any one of these assumptions would result in lower or higher fair value measurements. September 30, December 31, (dollars in thousands) 2020 2019 Fair value of servicing rights $ 2,579 $ 3,845 Weighted-average remaining term, years 20.0 20.1 Prepayment speeds 23.8 % 11.8 % Discount rate 9.0 % 9.4 %

Leases

Leases	9 Months Ended
	Sep. 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 2027. 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. September 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 $ 8,168 $ 8,343 Finance lease right-of-use assets Land, premises and equipment, net 231 318 Total lease right-of-use assets $ 8,399 $ 8,661 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 8,671 $ 8,864 Finance lease liabilities Long-term debt 484 640 Total lease liabilities $ 9,155 $ 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. September 30, December 31, 2020 2019 Weighted-average remaining lease term, years Operating leases 5.5 6.2 Finance leases 0.8 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 nine months ending September 30, 2020 and 2019. Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Lease costs Operating lease cost $ 634 $ 602 $ 1,825 $ 1,772 Variable lease cost 223 222 888 633 Short-term lease cost 102 122 304 416 Finance lease cost Interest on lease liabilities 10 14 33 45 Amortization of right-of-use assets 29 29 87 87 Sublease income (57) (65) (175) (202) Net lease cost $ 941 $ 924 $ 2,962 $ 2,751 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 628 $ 600 $ 1,807 $ 1,774 Right-of-use assets obtained in exchange for new operating lease liabilities — — 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 September 30, 2020 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2021 $ 251 $ 2,179 September 30, 2022 251 2,095 September 30, 2023 21 1,832 September 30, 2024 — 1,065 September 30, 2025 — 707 Thereafter — 1,753 Total future minimum lease payments $ 523 $ 9,631 Amounts representing interest (39) (960) Total operating lease liabilities $ 484 $ 8,671

Deposits

Deposits	9 Months Ended
	Sep. 30, 2020
Deposits.
Deposits	NOTE 8 Deposits The components of deposits in the consolidated balance sheets as of September 30, 2020 and December 31, 2019 were as follows: September 30, December 31, (dollars in thousands) 2020 2019 Noninterest-bearing $ 693,450 $ 577,704 Interest-bearing Interest-bearing demand 590,366 458,689 Savings accounts 78,659 55,777 Money market savings 892,473 683,064 Time deposits 207,422 196,082 Total interest-bearing 1,768,920 1,393,612 Total deposits $ 2,462,370 $ 1,971,316

Short-Term Borrowings

Short-Term Borrowings	9 Months Ended
	Sep. 30, 2020
Short-Term Borrowings
Short-Term Borrowings	NOTE 9 Short‑Term Borrowings There were no short‑term borrowings outstanding as of September 30, 2020 and December 31, 2019. The following table presents information related to short-term borrowings for the three and nine months ending September 30, 2020 and 2019: Three months ended September 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ — Average daily balance — 61,386 Maximum month-end balance — 124,250 Weighted-average rate During period — % 2.40 % End of period — % 2.30 % FHLB Short-term advances Balance as of end of period $ — $ — Average daily balance — 25,815 Maximum month-end balance — — Weighted-average rate During period — % 2.58 % End of period — % — % Nine months ended September 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ — Average daily balance 107 82,504 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.54 % End of period — % 2.30 % FHLB Short-term advances Balance as of end of period $ — $ — Average daily balance — 12,985 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.44 % End of period — % — %

Long-Term Debt

Long-Term Debt	9 Months Ended
	Sep. 30, 2020
Long-Term Debt.
Long-Term Debt	NOTE 10 Long‑Term Debt Long‑term debt as of September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,672 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,436 Three-month LIBOR + 3.10% 3.33 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,153 Three-month LIBOR + 1.80% 2.05 % 9/15/2036 9/15/2011 Finance lease liability 2,700 484 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,745 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 2,700 640 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,769

Financial Instruments with Off-

Financial Instruments with Off-Balance Sheet Risk	9 Months Ended
	Sep. 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. A summary of the contractual amounts of the Company’s exposure to off-balance sheet risk is as follows: September 30, December 31, (dollars in thousands) 2020 2019 Commitments to extend credit $ 596,642 $ 586,365 Standby letters of credit 7,073 8,516 Total $ 603,715 $ 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 September 30, 2020 and December 31, 2019. With the Bank of North Dakota, the Company had $19.0 million of letters of credit outstanding as of September 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 $239.3 million and $242.0 million as of September 30, 2020 and December 31, 2019, respectively.

Share-Based Compensation

Share-Based Compensation	9 Months Ended
	Sep. 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 September 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 $ 475 thousand and $ 335 thousand for the three months ended September 30, 2020 and 2019, respectively. Compensation expense relating to awards under these plans was $1.3 million and $1.2 million for the nine months ended September 30, 2020 and 2019, respectively. The following table presents the activity in the stock plans for the nine months ended September 30, 2020 and 2019: Nine months ended September 30, 2020 Nine months ended September 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 (87,939) 16.24 (53,882) 18.69 Forfeited or cancelled (7,590) 19.75 (6,138) 17.34 Outstanding at end of period 329,528 $ 19.46 347,611 $ 18.64 As of September 30, 2020, there was $3.2 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 3.47 years.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
Income Taxes
Income Taxes	NOTE 13 Income Taxes The components of income tax expense (benefit) for the three and nine months ended September 30, 2020 and 2019 are as follows: Three months ended September 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,894 21.0 % $ 1,982 21.0 % Tax effect of: Tax exempt income (134) (0.6) % (107) (1.1) % Other 888 3.8 % 457 4.8 % Applicable income taxes $ 5,648 24.2 % $ 2,332 24.7 % Nine months ended September 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 9,491 21.0 % $ 6,114 21.0 % Tax effect of: Tax exempt income (382) (0.8) % (329) (1.1) % Other 1,589 3.5 % 1,440 4.9 % Applicable income taxes $ 10,698 23.7 % $ 7,225 24.8 % 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	9 Months Ended
	Sep. 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 September 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,994 $ — $ — $ 613 $ (842) $ 21,765 Provision for loan losses 3,500 — — — — 3,500 Noninterest income 3,398 15,104 4,486 22,269 (1) 45,256 Noninterest expense 10,876 8,347 2,110 9,769 9,112 40,214 Net income before taxes $ 11,016 $ 6,757 $ 2,376 $ 13,113 $ (9,955) $ 23,307 Nine months ended September 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 61,857 $ — $ — $ 1,411 $ (2,575) $ 60,693 Provision for loan losses 9,500 — — — — 9,500 Noninterest income 8,129 45,034 12,644 44,860 8 110,675 Noninterest expense 34,887 25,472 6,254 23,228 26,833 116,674 Net income before taxes $ 25,599 $ 19,562 $ 6,390 $ 23,043 $ (29,400) $ 45,194 Three months ended September 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 19,193 $ — $ — $ 384 $ (896) $ 18,681 Provision for loan losses 1,498 — — — — 1,498 Noninterest income 1,695 15,307 3,896 8,135 547 29,580 Noninterest expense 10,800 8,551 1,835 7,256 8,885 37,327 Net income before taxes $ 8,590 $ 6,756 $ 2,061 $ 1,263 $ (9,234) $ 9,436 Nine months ended September 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 57,987 $ — $ — $ 818 $ (2,713) $ 56,092 Provision for loan losses 5,515 — — — — 5,515 Noninterest income 5,273 46,142 11,385 19,739 2,099 84,638 Noninterest expense 30,880 26,142 5,936 17,184 25,960 106,102 Net income before taxes $ 26,865 $ 20,000 $ 5,449 $ 3,373 $ (26,574) $ 29,113 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	9 Months Ended
	Sep. 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 nine months ending September 30, 2020 and 2019 are presented below: Three months ended Nine months ended September 30, September 30, (dollars and shares in thousands, except per share data) 2020 2019 2020 2019 Net income $ 17,659 $ 7,104 $ 34,496 $ 21,888 Dividends and undistributed earnings allocated to participating securities 315 154 600 514 Net income available to common shareholders $ 17,344 $ 6,950 $ 33,896 $ 21,374 Weighted-average common shares outstanding for basic earnings per share 17,121 14,274 17,101 13,957 Dilutive effect of stock-based awards 332 352 334 360 Weighted-average common shares outstanding for diluted earnings per share 17,453 14,626 17,435 14,317 Earnings per common share: Basic earnings per common share $ 1.01 $ 0.49 $ 1.98 $ 1.53 Diluted earnings per common share $ 0.99 $ 0.48 $ 1.94 $ 1.49

Derivative Instruments

Derivative Instruments	9 Months Ended
	Sep. 30, 2020
Derivative Instruments
Derivative Instruments	NOTE 16 Derivative Instruments The Company did not have any derivatives designated as hedging instruments, as of September 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 September 30, 2020 and December 31, 2019: September 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 Accrued interest and Other assets $ 13,133 $ 401,313 $ 1,228 $ 45,715 Forward loan sales commitments Accrued interest and Other assets 1,545 54,310 393 12,784 Total asset derivatives $ 14,678 $ 455,623 $ 1,621 $ 58,499 Liability Derivatives TBA mortgage backed securities Accrued expenses and other liabilities $ 1,960 $ 380,063 $ 109 $ 68,500 Total liability derivatives $ 1,960 $ 380,063 $ 109 $ 68,500 The gain (loss) recognized on derivative instruments for the three and nine months ended September 30, 2020 and 2019 was as follows: Three months ended Nine months ended Consolidated Statements of September 30, September 30, September 30, September 30, (dollars in thousands) of Income Location 2020 2019 2020 2019 Interest rate lock commitments Mortgage banking/Other noninterest income $ 5,647 $ (257) $ 11,226 $ 2,024 Forward loan sales commitments Mortgage banking 369 (199) 1,152 454 TBA mortgage backed securities Mortgage banking (3,747) 680 (9,099) (104) Total gain/(loss) from derivative instruments $ 2,269 $ 224 $ 3,279 $ 2,374 The Company has third party agreements that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. The amount of collateral posted with third parties at September 30, 2020 and December 31, 2019, respectively was $5.1 million and $853 thousand. The amount of collateral posted with third parties was deemed to be sufficient as of those dates to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures.

Regulatory Matters

Regulatory Matters	9 Months Ended
	Sep. 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 September 30, 2020 and December 31, 2019, each of the Company and the Bank had met all of the capital adequacy requirements to which it was subject. The following table presents the Company’s and the Bank’s actual capital amounts and ratios as of September 30, 2020 and December 31, 2019: September 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 $ 270,679 13.08 % $ 93,151 4.50 % $ N/A N/A Bank 257,835 12.47 % 93,076 4.50 % 134,443 6.50 % Tier 1 capital to risk weighted assets . Consolidated 278,959 13.48 % 124,202 6.00 % N/A N/A Bank 257,835 12.47 % 124,102 6.00 % 165,469 8.00 % Total capital to risk weighted assets Consolidated 354,573 17.13 % 165,603 8.00 % N/A N/A Bank 283,758 13.72 % 165,469 8.00 % 206,836 10.00 % Tier 1 capital to average assets Consolidated 278,959 9.76 % 114,293 4.00 % N/A N/A Bank 257,835 9.03 % 114,207 4.00 % 142,759 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 September 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 September 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	9 Months Ended
	Sep. 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 September 30, 2020 and December 31, 2019: September 30, 2020 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and securities U.S. treasury and government agencies $ — $ 16,092 $ — $ 16,092 Obligations of state and political agencies — 147,216 — 147,216 Mortgage backed securities Residential agency — 211,700 — 211,700 Commercial — 87,542 — 87,542 Asset backed securities — 131 — 131 Corporate bonds — 32,733 — 32,733 Total available-for-sale securities $ — $ 495,414 $ — $ 495,414 Other assets Derivatives $ — $ 14,678 $ — $ 14,678 Other liabilities Derivatives $ — $ 1,960 $ — $ 1,960 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 September 30, 2020 and December 31, 2019 consisted of the following: September 30, 2020 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 111,311 $ — $ 111,311 $ — Impaired loans — 5,301 5,301 407 Foreclosed assets — 10 10 — Servicing rights — 2,579 2,579 — 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 September 30, 2020, and December 31, 2019, were as follows: September 30, 2020 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 5,301 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 10 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,579 315-485 396 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 September 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: September 30, 2020 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 95,751 $ 95,751 $ — $ — $ 95,751 Loans 2,027,082 — — 2,075,044 2,075,044 Accrued interest receivable 9,199 9,199 — — 9,199 Bank-owned life insurance 32,161 — 32,161 — 32,161 Financial Liabilities Noninterest-bearing deposits $ 693,450 $ — $ 693,450 $ — $ 693,450 Interest-bearing deposits 1,561,498 — 1,561,498 — 1,561,498 Time deposits 207,422 — — 208,990 208,990 Long-term debt 58,745 — 56,219 — 56,219 Accrued interest payable 1,408 1,408 — — 1,408 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	9 Months Ended
	Sep. 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 were able to apply for loans from existing SBA lenders and other approved regulated lenders that enrolled in the program, subject to numerous limitations and eligibility criteria. The Bank participated 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 September 30, 2020, we had assisted 1,632 new and existing clients secure approximately $363 .6 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 provided us with additional liquidity, if necessary, to facilitate lending to small businesses under the PPP. As of September 30, 2020, we have not had a need to utilize the PPPL Facility.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 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 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 has not had 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 an 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 on its 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)	9 Months Ended
	Sep. 30, 2020
Investment Securities
Schedule of amortized cost of investment securities to estimated fair values	September 30, 2020 Amortized Unrealized Unrealized Fair (dollars in thousands) Cost Gains Losses Value U.S. Treasury and agencies $ 16,075 $ 34 $ (17) $ 16,092 Obligations of state and political agencies 142,308 4,908 — 147,216 Mortgage backed securities Residential agency 203,812 7,933 (45) 211,700 Commercial 86,502 1,092 (52) 87,542 Asset backed securities 123 8 — 131 Corporate bonds 32,518 244 (29) 32,733 Total available-for-sale investment securities $ 481,338 $ 14,219 $ (143) $ 495,414 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	September 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 $ (9) $ 4,694 $ (8) $ 1,309 $ (17) $ 6,003 Obligations of state and political agencies — 590 — — — 590 Mortgage backed securities Residential agency (45) 15,481 — — (45) 15,481 Commercial (48) 25,292 (4) 2,603 (52) 27,895 Asset backed securities — — — 2 — 2 Corporate bonds (29) 5,971 — — (29) 5,971 Total available-for-sale investment securities $ (131) $ 52,028 $ (12) $ 3,914 $ (143) $ 55,942 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 $ 16,132 $ 16,211 Due after one year through five years 26,821 27,459 Due after five years through ten years 145,310 150,121 Due after 10 years 293,075 301,623 Total available-for-sale investment securities $ 481,338 $ 495,414
Schedule of proceeds from the sale of available for sale securities	Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Proceeds $ 35,125 $ 10,934 $ 74,630 $ 32,565 Realized gains 1,428 59 2,722 357 Realized losses — (11) — (22)
Schedule of federal home loan bank	September 30, December 31, (dollars in thousands) 2020 2019 Federal Reserve $ 2,675 $ 2,675 FHLB 3,169 3,080

Loans and Allowance for Loan _2

Loans and Allowance for Loan Losses (Tables)	9 Months Ended
	Sep. 30, 2020
Loans and Allowance for Loan Losses
Schedule of total loans outstanding by portfolio segment	September 30, December 31, (dollars in thousands) 2020 2019 Commercial Commercial and industrial (1) $ 789,036 $ 479,144 Real estate construction 33,169 26,378 Commercial real estate 535,216 494,703 Total commercial 1,357,421 1,000,225 Consumer Residential real estate first mortgage 469,050 457,155 Residential real estate junior lien 152,487 177,373 Other revolving and installment 79,461 86,526 Total consumer 700,998 721,054 Total loans $ 2,058,419 $ 1,721,279 (1) Included Paycheck Protection Program, or PPP, loans of $348.9 million at September 30, 2020.
Schedule of past due aging analysis of the loan portfolio	September 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 $ 784,282 $ 1,914 $ — $ 2,840 $ 789,036 Real estate construction 32,384 785 — — 33,169 Commercial real estate 530,984 2,903 — 1,329 535,216 Total commercial 1,347,650 5,602 — 4,169 1,357,421 Consumer Residential real estate first mortgage 466,551 2,042 — 457 469,050 Residential real estate junior lien 152,111 207 — 169 152,487 Other revolving and installment 79,221 240 — — 79,461 Total consumer 697,883 2,489 — 626 700,998 Total loans $ 2,045,533 $ 8,091 $ — $ 4,795 $ 2,058,419 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	September 30, 2020 Criticized Special (dollars in thousands) Pass Mention Substandard Doubtful Total Commercial Commercial and industrial $ 759,808 $ 8,706 $ 20,522 $ — $ 789,036 Real estate construction 32,140 783 246 — 33,169 Commercial real estate 501,913 7,265 26,038 — 535,216 Total commercial 1,293,861 16,754 46,806 — 1,357,421 Consumer Residential real estate first mortgage 467,168 1,413 469 — 469,050 Residential real estate junior lien 149,290 2,005 1,192 — 152,487 Other revolving and installment 79,461 — — — 79,461 Total consumer 695,919 3,418 1,661 — 700,998 Total loans $ 1,989,780 $ 20,172 $ 48,467 $ — $ 2,058,419 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 September 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 10,797 $ (846) $ (10) $ 432 $ 10,373 Real estate construction 443 40 — — 483 Commercial real estate 9,948 1,828 — 95 11,871 Total commercial 21,188 1,022 (10) 527 22,727 Consumer Residential real estate first mortgage 2,673 1,694 — — 4,367 Residential real estate junior lien 1,102 28 — 81 1,211 Other revolving and installment 546 108 (41) 24 637 Total consumer 4,321 1,830 (41) 105 6,215 Unallocated 1,747 648 — — 2,395 Total $ 27,256 $ 3,500 $ (51) $ 632 $ 31,337 Nine months ended September 30, 2020 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,270 $ (498) $ (2,745) $ 1,346 $ 10,373 Real estate construction 303 180 — — 483 Commercial real estate 6,688 5,953 (865) 95 11,871 Total commercial 19,261 5,635 (3,610) 1,441 22,727 Consumer Residential real estate first mortgage 1,448 2,914 — 5 4,367 Residential real estate junior lien 671 377 (12) 175 1,211 Other revolving and installment 352 371 (194) 108 637 Total consumer 2,471 3,662 (206) 288 6,215 Unallocated 2,192 203 — — 2,395 Total $ 23,924 $ 9,500 $ (3,816) $ 1,729 $ 31,337 Three months ended September 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 11,694 $ (962) $ (324) $ 538 $ 10,946 Real estate construction 323 25 — — 348 Commercial real estate 5,765 (4) — — 5,761 Total commercial 17,782 (941) (324) 538 17,055 Consumer Residential real estate first mortgage 1,155 (139) — — 1,016 Residential real estate junior lien 710 157 (20) 49 896 Other revolving and installment 380 1 (31) 28 378 Total consumer 2,245 19 (51) 77 2,290 Unallocated 1,219 2,420 — — 3,639 Total $ 21,246 $ 1,498 $ (375) $ 615 $ 22,984 Nine months ended September 30, 2019 Beginning Provision for Loan Loan Ending (dollars in thousands) Balance Loan Losses Charge-offs Recoveries Balance Commercial Commercial and industrial $ 12,127 $ 3,263 $ (5,275) $ 831 $ 10,946 Real estate construction 250 97 (1) 2 348 Commercial real estate 6,279 (668) — 150 5,761 Total commercial 18,656 2,692 (5,276) 983 17,055 Consumer Residential real estate first mortgage 1,156 (140) — — 1,016 Residential real estate junior lien 805 113 (154) 132 896 Other revolving and installment 380 388 (513) 123 378 Total consumer 2,341 361 (667) 255 2,290 Unallocated 1,177 2,462 — — 3,639 Total $ 22,174 $ 5,515 $ (5,943) $ 1,238 $ 22,984
Schedule of loans distributed by portfolio segment and impairment methodology	September 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 $ 3,497 $ 785,539 $ 789,036 $ 379 $ 9,994 $ — $ 10,373 Real estate construction — 33,169 33,169 — 483 — 483 Commercial real estate 1,525 533,691 535,216 9 11,862 — 11,871 Total commercial 5,022 1,352,399 1,357,421 388 22,339 — 22,727 Consumer Residential real estate first mortgage 457 468,593 469,050 — 4,367 — 4,367 Residential real estate junior lien 229 152,258 152,487 19 1,192 — 1,211 Other revolving and installment — 79,461 79,461 — 637 — 637 Total consumer 686 700,312 700,998 19 6,196 — 6,215 Total loans $ 5,708 $ 2,052,711 $ 2,058,419 $ 407 $ 28,535 $ 2,395 $ 31,337 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	September 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 $ 2,523 $ 2,609 $ 379 $ 639 $ 727 $ 189 Commercial real estate 196 196 9 5,718 5,823 2,946 Residential real estate junior lien 19 20 19 — — — Other revolving and installment — — — 5 6 3 Total impaired loans with a valuation allowance 2,738 2,825 407 6,362 6,556 3,138 Impaired loans without a valuation allowance Commercial and industrial 974 1,159 — 337 1,110 — Commercial real estate 1,329 1,448 — 207 236 — Residential real estate first mortgage 457 469 — 782 797 — Residential real estate junior lien 210 256 — 266 372 — Other revolving and installment — — — — — — Total impaired loans without a valuation allowance 2,970 3,332 — 1,592 2,515 — Total impaired loans Commercial and industrial 3,497 3,768 379 976 1,837 189 Commercial real estate 1,525 1,644 9 5,925 6,059 2,946 Residential real estate first mortgage 457 469 — 782 797 — Residential real estate junior lien 229 276 19 266 372 — Other revolving and installment — — — 5 6 3 Total impaired loans $ 5,708 $ 6,157 $ 407 $ 7,954 $ 9,071 $ 3,138 The table below presents the average recorded investment in impaired loans and interest income for the three and nine months ended September 30, 2020 and 2019: Three months ended September 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 $ 2,541 $ 14 $ 1,964 $ 4 Commercial real estate 197 8 1,623 2 Residential real estate first mortgage — — — — Residential real estate junior lien 19 — 619 1 Other revolving and installment — — 5 — Total impaired loans with a valuation allowance 2,757 22 4,211 7 Impaired loans without a valuation allowance Commercial and industrial 1,013 24 1,206 7 Commercial real estate 1,330 — — — Residential real estate first mortgage 459 — 183 — Residential real estate junior lien 211 3 297 — Other revolving and installment — — 2 — Total impaired loans without a valuation allowance 3,013 27 1,688 7 Total impaired loans Commercial and industrial 3,554 38 3,170 11 Commercial real estate 1,527 8 1,623 2 Residential real estate first mortgage 459 — 183 — Residential real estate junior lien 230 3 916 1 Other revolving and installment — — 7 — Total impaired loans $ 5,770 $ 49 $ 5,899 $ 14 Nine Months Ended September 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 $ 3,815 $ 14 $ 2,473 $ 12 Commercial real estate 200 8 1,668 6 Residential real estate junior lien 20 — 621 3 Other revolving and installment — — 5 — Total impaired loans with a valuation allowance 4,035 22 4,767 21 Impaired loans without a valuation allowance Commercial and industrial 1,154 26 2,979 23 Real estate construction — — — — Commercial real estate 1,699 — — — Residential real estate first mortgage 467 — 92 — Residential real estate junior lien 217 3 302 — Other revolving and installment — — 4 — Total impaired loans without a valuation allowance 3,537 29 3,377 23 Total impaired loans Commercial and industrial 4,969 40 5,452 35 Real estate construction — — — — Commercial real estate 1,899 8 1,668 6 Residential real estate first mortgage 467 — 92 — Residential real estate junior lien 237 3 923 3 Other revolving and installment — — 9 — Total impaired loans $ 7,572 $ 51 $ 8,144 $ 44

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2020
Goodwill and Other Intangible Assets
Schedule of goodwill by segment	September 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	September 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 $ (16,689) $ 15,168 $ 31,857 $ (14,287) $ 17,570 Core deposit intangible assets 3,793 (3,540) 253 4,993 (4,172) 821 Total intangible assets $ 35,650 $ (20,229) $ 15,421 $ 36,850 $ (18,459) $ 18,391

Loan Servicing (Tables)

Loan Servicing (Tables)	9 Months Ended
	Sep. 30, 2020
Loan Servicing
Summary of activity related to loan servicing	Three months ended Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Balance, beginning of period $ 2,891 $ 4,300 $ 3,845 $ 4,623 Additions 42 179 154 279 Amortization (296) (287) (692) (690) (Impairment)/Recovery (58) (46) (728) (66) Balance, end of period $ 2,579 $ 4,146 $ 2,579 $ 4,146
Summary of key economic assumptions	September 30, December 31, (dollars in thousands) 2020 2019 Fair value of servicing rights $ 2,579 $ 3,845 Weighted-average remaining term, years 20.0 20.1 Prepayment speeds 23.8 % 11.8 % Discount rate 9.0 % 9.4 %

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2020
Leases
Schedule of right-of-use assets and lease liabilities	September 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 $ 8,168 $ 8,343 Finance lease right-of-use assets Land, premises and equipment, net 231 318 Total lease right-of-use assets $ 8,399 $ 8,661 Lease Liabilities Operating lease liabilities Operating lease liabilities $ 8,671 $ 8,864 Finance lease liabilities Long-term debt 484 640 Total lease liabilities $ 9,155 $ 9,504
Schedule of weighted average remaining lease term and average discount rate	September 30, December 31, 2020 2019 Weighted-average remaining lease term, years Operating leases 5.5 6.2 Finance leases 0.8 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 Nine months ended September 30, September 30, (dollars in thousands) 2020 2019 2020 2019 Lease costs Operating lease cost $ 634 $ 602 $ 1,825 $ 1,772 Variable lease cost 223 222 888 633 Short-term lease cost 102 122 304 416 Finance lease cost Interest on lease liabilities 10 14 33 45 Amortization of right-of-use assets 29 29 87 87 Sublease income (57) (65) (175) (202) Net lease cost $ 941 $ 924 $ 2,962 $ 2,751 Other information Cash paid for amounts included in the measurement of lease liabilities operating cash flows from operating leases $ 628 $ 600 $ 1,807 $ 1,774 Right-of-use assets obtained in exchange for new operating lease liabilities — — 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 September 30, 2020 were as follows: Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2021 $ 251 $ 2,179 September 30, 2022 251 2,095 September 30, 2023 21 1,832 September 30, 2024 — 1,065 September 30, 2025 — 707 Thereafter — 1,753 Total future minimum lease payments $ 523 $ 9,631 Amounts representing interest (39) (960) Total operating lease liabilities $ 484 $ 8,671
Schedule of future minimum payments for operating leases	Finance Operating (dollars in thousands) Leases Leases Twelve months ended September 30, 2021 $ 251 $ 2,179 September 30, 2022 251 2,095 September 30, 2023 21 1,832 September 30, 2024 — 1,065 September 30, 2025 — 707 Thereafter — 1,753 Total future minimum lease payments $ 523 $ 9,631 Amounts representing interest (39) (960) Total operating lease liabilities $ 484 $ 8,671

Deposits (Tables)

Deposits (Tables)	9 Months Ended
	Sep. 30, 2020
Deposits.
Schedule of components of deposits	September 30, December 31, (dollars in thousands) 2020 2019 Noninterest-bearing $ 693,450 $ 577,704 Interest-bearing Interest-bearing demand 590,366 458,689 Savings accounts 78,659 55,777 Money market savings 892,473 683,064 Time deposits 207,422 196,082 Total interest-bearing 1,768,920 1,393,612 Total deposits $ 2,462,370 $ 1,971,316

Short-Term Borrowings (Tables)

Short-Term Borrowings (Tables)	9 Months Ended
	Sep. 30, 2020
Short-Term Borrowings
Schedule of short-term borrowings	Three months ended September 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ — Average daily balance — 61,386 Maximum month-end balance — 124,250 Weighted-average rate During period — % 2.40 % End of period — % 2.30 % FHLB Short-term advances Balance as of end of period $ — $ — Average daily balance — 25,815 Maximum month-end balance — — Weighted-average rate During period — % 2.58 % End of period — % — % Nine months ended September 30, (dollars in thousands) 2020 2019 Fed funds purchased Balance as of end of period $ — $ — Average daily balance 107 82,504 Maximum month-end balance — 139,605 Weighted-average rate During period — % 2.54 % End of period — % 2.30 % FHLB Short-term advances Balance as of end of period $ — $ — Average daily balance — 12,985 Maximum month-end balance — 135,000 Weighted-average rate During period — % 2.44 % End of period — % — %

Long-Term Debt (Tables)

Long-Term Debt (Tables)	9 Months Ended
	Sep. 30, 2020
Long-Term Debt.
Schedule of long-term debt	September 30, 2020 Period End Face Carrying Interest Maturity (dollars in thousands) Value Value Interest Rate Rate Date Call Date Subordinated notes payable $ 50,000 $ 49,672 Fixed 5.75 % 12/30/2025 12/30/2020 Junior subordinated debenture (Trust I) 4,124 3,436 Three-month LIBOR + 3.10% 3.33 % 6/26/2033 6/26/2008 Junior subordinated debenture (Trust II) 6,186 5,153 Three-month LIBOR + 1.80% 2.05 % 9/15/2036 9/15/2011 Finance lease liability 2,700 484 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,745 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 2,700 640 Fixed 7.81 % 10/31/2022 N/A Total long-term debt $ 63,010 $ 58,769

Financial Instruments with Of_2

Financial Instruments with Off-Balance Sheet Risk (Tables)	9 Months Ended
	Sep. 30, 2020
Financial Instruments with Off-Balance Sheet Risk
Schedule of financial instruments whose contract amount represents credit risk	September 30, December 31, (dollars in thousands) 2020 2019 Commitments to extend credit $ 596,642 $ 586,365 Standby letters of credit 7,073 8,516 Total $ 603,715 $ 594,881

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2020
Share-Based Compensation Plan
Schedule of stock plan activity	Nine months ended September 30, 2020 Nine months ended September 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 (87,939) 16.24 (53,882) 18.69 Forfeited or cancelled (7,590) 19.75 (6,138) 17.34 Outstanding at end of period 329,528 $ 19.46 347,611 $ 18.64

Income Taxes (Tables)

Income Taxes (Tables)	9 Months Ended
	Sep. 30, 2020
Income Taxes
Schedule of effective income tax rate reconciliation	Three months ended September 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 4,894 21.0 % $ 1,982 21.0 % Tax effect of: Tax exempt income (134) (0.6) % (107) (1.1) % Other 888 3.8 % 457 4.8 % Applicable income taxes $ 5,648 24.2 % $ 2,332 24.7 % Nine months ended September 30, 2020 2019 Percent of Percent of (dollars in thousands) Amount Pretax Income Amount Pretax Income Taxes at statutory federal income tax rate $ 9,491 21.0 % $ 6,114 21.0 % Tax effect of: Tax exempt income (382) (0.8) % (329) (1.1) % Other 1,589 3.5 % 1,440 4.9 % Applicable income taxes $ 10,698 23.7 % $ 7,225 24.8 %

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2020
Segment Reporting
Schedule of key metrics related to segments	Three months ended September 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 21,994 $ — $ — $ 613 $ (842) $ 21,765 Provision for loan losses 3,500 — — — — 3,500 Noninterest income 3,398 15,104 4,486 22,269 (1) 45,256 Noninterest expense 10,876 8,347 2,110 9,769 9,112 40,214 Net income before taxes $ 11,016 $ 6,757 $ 2,376 $ 13,113 $ (9,955) $ 23,307 Nine months ended September 30, 2020 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 61,857 $ — $ — $ 1,411 $ (2,575) $ 60,693 Provision for loan losses 9,500 — — — — 9,500 Noninterest income 8,129 45,034 12,644 44,860 8 110,675 Noninterest expense 34,887 25,472 6,254 23,228 26,833 116,674 Net income before taxes $ 25,599 $ 19,562 $ 6,390 $ 23,043 $ (29,400) $ 45,194 Three months ended September 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 19,193 $ — $ — $ 384 $ (896) $ 18,681 Provision for loan losses 1,498 — — — — 1,498 Noninterest income 1,695 15,307 3,896 8,135 547 29,580 Noninterest expense 10,800 8,551 1,835 7,256 8,885 37,327 Net income before taxes $ 8,590 $ 6,756 $ 2,061 $ 1,263 $ (9,234) $ 9,436 Nine months ended September 30, 2019 Retirement and Wealth Corporate (dollars in thousands) Banking Benefit Services Management Mortgage Administration Consolidated Net interest income $ 57,987 $ — $ — $ 818 $ (2,713) $ 56,092 Provision for loan losses 5,515 — — — — 5,515 Noninterest income 5,273 46,142 11,385 19,739 2,099 84,638 Noninterest expense 30,880 26,142 5,936 17,184 25,960 106,102 Net income before taxes $ 26,865 $ 20,000 $ 5,449 $ 3,373 $ (26,574) $ 29,113

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2020
Earnings Per Share
Schedule of basic and diluted earnings per share	Three months ended Nine months ended September 30, September 30, (dollars and shares in thousands, except per share data) 2020 2019 2020 2019 Net income $ 17,659 $ 7,104 $ 34,496 $ 21,888 Dividends and undistributed earnings allocated to participating securities 315 154 600 514 Net income available to common shareholders $ 17,344 $ 6,950 $ 33,896 $ 21,374 Weighted-average common shares outstanding for basic earnings per share 17,121 14,274 17,101 13,957 Dilutive effect of stock-based awards 332 352 334 360 Weighted-average common shares outstanding for diluted earnings per share 17,453 14,626 17,435 14,317 Earnings per common share: Basic earnings per common share $ 1.01 $ 0.49 $ 1.98 $ 1.53 Diluted earnings per common share $ 0.99 $ 0.48 $ 1.94 $ 1.49

Derivative Instruments (Tables)

Derivative Instruments (Tables)	9 Months Ended
	Sep. 30, 2020
Derivative Instruments
Schedule of amounts recorded in the Company’s consolidated balance sheets for derivatives not designated as hedging instruments	September 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 Accrued interest and Other assets $ 13,133 $ 401,313 $ 1,228 $ 45,715 Forward loan sales commitments Accrued interest and Other assets 1,545 54,310 393 12,784 Total asset derivatives $ 14,678 $ 455,623 $ 1,621 $ 58,499 Liability Derivatives TBA mortgage backed securities Accrued expenses and other liabilities $ 1,960 $ 380,063 $ 109 $ 68,500 Total liability derivatives $ 1,960 $ 380,063 $ 109 $ 68,500
Schedule of gain (loss) recognized on derivatives instruments	Three months ended Nine months ended Consolidated Statements of September 30, September 30, September 30, September 30, (dollars in thousands) of Income Location 2020 2019 2020 2019 Interest rate lock commitments Mortgage banking/Other noninterest income $ 5,647 $ (257) $ 11,226 $ 2,024 Forward loan sales commitments Mortgage banking 369 (199) 1,152 454 TBA mortgage backed securities Mortgage banking (3,747) 680 (9,099) (104) Total gain/(loss) from derivative instruments $ 2,269 $ 224 $ 3,279 $ 2,374

Regulatory Matters (Tables)

Regulatory Matters (Tables)	9 Months Ended
	Sep. 30, 2020
Regulatory Matters
Schedule of Bank’s actual capital amounts and ratios	September 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 $ 270,679 13.08 % $ 93,151 4.50 % $ N/A N/A Bank 257,835 12.47 % 93,076 4.50 % 134,443 6.50 % Tier 1 capital to risk weighted assets . Consolidated 278,959 13.48 % 124,202 6.00 % N/A N/A Bank 257,835 12.47 % 124,102 6.00 % 165,469 8.00 % Total capital to risk weighted assets Consolidated 354,573 17.13 % 165,603 8.00 % N/A N/A Bank 283,758 13.72 % 165,469 8.00 % 206,836 10.00 % Tier 1 capital to average assets Consolidated 278,959 9.76 % 114,293 4.00 % N/A N/A Bank 257,835 9.03 % 114,207 4.00 % 142,759 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)	9 Months Ended
	Sep. 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	September 30, 2020 (dollars in thousands) Level 1 Level 2 Level 3 Total Available-for-sale and securities U.S. treasury and government agencies $ — $ 16,092 $ — $ 16,092 Obligations of state and political agencies — 147,216 — 147,216 Mortgage backed securities Residential agency — 211,700 — 211,700 Commercial — 87,542 — 87,542 Asset backed securities — 131 — 131 Corporate bonds — 32,733 — 32,733 Total available-for-sale securities $ — $ 495,414 $ — $ 495,414 Other assets Derivatives $ — $ 14,678 $ — $ 14,678 Other liabilities Derivatives $ — $ 1,960 $ — $ 1,960 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	September 30, 2020 (dollars in thousands) Level 2 Level 3 Total Impairment Loans held for sale $ 111,311 $ — $ 111,311 $ — Impaired loans — 5,301 5,301 407 Foreclosed assets — 10 10 — Servicing rights — 2,579 2,579 — 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	September 30, 2020 (dollars in thousands) Weighted Asset Type Valuation Technique Unobservable Input Fair Value Range Average Impaired loans Appraisal value Property specific adjustment $ 5,301 N/A N/A Foreclosed assets Appraisal value Property specific adjustment 10 N/A N/A Servicing rights Discounted cash flows Prepayment speed assumptions 2,579 315-485 396 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	September 30, 2020 Carrying Estimated Fair Value (dollars in thousands) Amount Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents $ 95,751 $ 95,751 $ — $ — $ 95,751 Loans 2,027,082 — — 2,075,044 2,075,044 Accrued interest receivable 9,199 9,199 — — 9,199 Bank-owned life insurance 32,161 — 32,161 — 32,161 Financial Liabilities Noninterest-bearing deposits $ 693,450 $ — $ 693,450 $ — $ 693,450 Interest-bearing deposits 1,561,498 — 1,561,498 — 1,561,498 Time deposits 207,422 — — 208,990 208,990 Long-term debt 58,745 — 56,219 — 56,219 Accrued interest payable 1,408 1,408 — — 1,408 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 Thousands	Sep. 25, 2019USD ($)shares	Sep. 17, 2019shares	Sep. 30, 2019shares	Sep. 30, 2020segment	Sep. 30, 2019USD ($)shares
Significant Accounting Policies
Number of operating segments | segment				4
Shares sold | shares			3,289,000		3,289,000
Aggregate offering price	$ 69,100
Underwriting Discounts	4,700
Offering cost	1,600
Net proceeds	$ 62,800				$ 62,804
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	Sep. 30, 2020	Dec. 31, 2019
Investment securities available-for-sale
Amortized Cost	$ 481,338	$ 307,764
Unrealized Gains	14,219	3,061
Unrealized Losses	(143)	(475)
Fair Value	495,414	310,350
U. S. Treasury and agencies
Investment securities available-for-sale
Amortized Cost	16,075	21,246
Unrealized Gains	34	9
Unrealized Losses	(17)	(15)
Fair Value	16,092	21,240
Obligations of state and political agencies
Investment securities available-for-sale
Amortized Cost	142,308	68,162
Unrealized Gains	4,908	647
Unrealized Losses		(161)
Fair Value	147,216	68,648
Mortgage backed securities - Residential Agency
Investment securities available-for-sale
Amortized Cost	203,812	180,411
Unrealized Gains	7,933	2,258
Unrealized Losses	(45)	(131)
Fair Value	211,700	182,538
Mortgage backed securities - Commercial
Investment securities available-for-sale
Amortized Cost	86,502	30,752
Unrealized Gains	1,092	101
Unrealized Losses	(52)	(168)
Fair Value	87,542	30,685
Asset backed securities
Investment securities available-for-sale
Amortized Cost	123	139
Unrealized Gains	8	5
Fair Value	131	144
Corporate bonds
Investment securities available-for-sale
Amortized Cost	32,518	7,054
Unrealized Gains	244	41
Unrealized Losses	(29)
Fair Value	$ 32,733	$ 7,095

Investment Securities - Gross u

Investment Securities - Gross unrealized losses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Investment securities available-for-sale
Unrealized losses less than 12 months	$ (131)	$ (313)
Fair value less than 12 months	52,028	46,067
Unrealized losses over 12 months	(12)	(162)
Fair value over 12 months	3,914	36,019
Total Unrealized losses	(143)	(475)
Total Fair value	55,942	82,086
U. S. Treasury and agencies
Investment securities available-for-sale
Unrealized losses less than 12 months	(9)	(5)
Fair value less than 12 months	4,694	1,740
Unrealized losses over 12 months	(8)	(10)
Fair value over 12 months	1,309	9,990
Total Unrealized losses	(17)	(15)
Total Fair value	6,003	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	590	11,959
Unrealized losses over 12 months		(21)
Fair value over 12 months		5,798
Total Unrealized losses		(161)
Total Fair value	590	17,757
Mortgage backed securities - Residential Agency
Investment securities available-for-sale
Unrealized losses less than 12 months	(45)	(52)
Fair value less than 12 months	15,481	17,131
Unrealized losses over 12 months		(79)
Fair value over 12 months		14,036
Total Unrealized losses	(45)	(131)
Total Fair value	15,481	31,167
Mortgage backed securities - Commercial
Investment securities available-for-sale
Unrealized losses less than 12 months	(48)	(116)
Fair value less than 12 months	25,292	15,235
Unrealized losses over 12 months	(4)	(52)
Fair value over 12 months	2,603	6,195
Total Unrealized losses	(52)	(168)
Total Fair value	27,895	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	(29)
Fair value less than 12 months	5,971
Total Unrealized losses	(29)
Total Fair value	$ 5,971

Investment Securities - Amortiz

Investment Securities - Amortized cost and estimated fair value (Details) $ in Thousands	Sep. 30, 2020USD ($)
Amortized Cost
Due within one year or less	$ 16,132
Due after one year through five years	26,821
Due after five years through ten years	145,310
Due after 10 years	293,075
Total investment securities available-for-sale	481,338
Fair Value
Due within one year or less	16,211
Due after one year through five years	27,459
Due after five years through ten years	150,121
Due after 10 years	301,623
Total investment securities available-for-sale	$ 495,414

Investment Securities - Pledged

Investment Securities - Pledged (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Investment Securities
Investment securities with carrying value	$ 115.4	$ 136.2

Investment Securities - Proceed

Investment Securities - Proceeds from sale of available for sale securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Investment Securities
Proceeds	$ 35,125	$ 10,934	$ 74,630	$ 32,565
Realized gains	$ 1,428	59	$ 2,722	357
Realized losses		$ (11)		$ (22)

Investment Securities - Carryin

Investment Securities - Carrying value (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Investment Securities
Federal Reserve	$ 2,675	$ 2,675
FHLB	$ 3,169	$ 3,080

Investment Securities - Visa Cl

Investment Securities - Visa Class B Restricted Shares (Details) - Visa $ in Thousands	9 Months Ended
	Sep. 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	Sep. 30, 2020	Dec. 31, 2019
Loans and Allowance for Loan Losses
Total loans	$ 2,058,419	$ 1,721,279
Deferred loan fees and costs	7,800	1,000
PPP Loans
Loans and Allowance for Loan Losses
Total loans	348,900
Deferred loan fees and costs	7,400
Commercial
Loans and Allowance for Loan Losses
Total loans	1,357,421	1,000,225
Consumer
Loans and Allowance for Loan Losses
Total loans	700,998	721,054
Commercial and industrial | Commercial
Loans and Allowance for Loan Losses
Total loans	789,036	479,144
Real estate construction | Commercial
Loans and Allowance for Loan Losses
Total loans	33,169	26,378
Residential | Consumer | Real estate first mortgage
Loans and Allowance for Loan Losses
Total loans	469,050	457,155
Residential | Consumer | Real estate junior lien
Loans and Allowance for Loan Losses
Total loans	152,487	177,373
Commercial real estate | Commercial
Loans and Allowance for Loan Losses
Total loans	535,216	494,703
Other revolving and installment | Consumer
Loans and Allowance for Loan Losses
Total loans	$ 79,461	$ 86,526

Loans and Allowance for Loan _4

Loans and Allowance for Loan Losses - Past due aging analysis (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Past due aging analysis of loans
Accruing Current	$ 2,045,533	$ 1,711,189
Nonaccrual	4,795	7,379
Loans and Leases Receivable, Gross, Total	2,058,419	1,721,279
30 - 89 Days Past Due
Past due aging analysis of loans
Past due	8,091	2,263
90 Days or More Past Due
Past due aging analysis of loans
Past due		448
Commercial
Past due aging analysis of loans
Accruing Current	1,347,650	992,858
Nonaccrual	4,169	6,302
Loans and Leases Receivable, Gross, Total	1,357,421	1,000,225
Commercial | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	5,602	1,065
Commercial | Commercial and industrial
Past due aging analysis of loans
Accruing Current	784,282	473,900
Nonaccrual	2,840	4,862
Loans and Leases Receivable, Gross, Total	789,036	479,144
Commercial | Commercial and industrial | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	1,914	382
Commercial | Real estate construction
Past due aging analysis of loans
Accruing Current	32,384	26,251
Loans and Leases Receivable, Gross, Total	33,169	26,378
Commercial | Real estate construction | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	785	127
Commercial | Commercial real estate
Past due aging analysis of loans
Accruing Current	530,984	492,707
Nonaccrual	1,329	1,440
Loans and Leases Receivable, Gross, Total	535,216	494,703
Commercial | Commercial real estate | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	2,903	556
Consumer
Past due aging analysis of loans
Accruing Current	697,883	718,331
Nonaccrual	626	1,077
Loans and Leases Receivable, Gross, Total	700,998	721,054
Consumer | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	2,489	1,198
Consumer | 90 Days or More Past Due
Past due aging analysis of loans
Past due		448
Consumer | Residential | Real estate first mortgage
Past due aging analysis of loans
Accruing Current	466,551	455,244
Nonaccrual	457	797
Loans and Leases Receivable, Gross, Total	469,050	457,155
Consumer | Residential | Real estate first mortgage | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	2,042	666
Consumer | Residential | Real estate first mortgage | 90 Days or More Past Due
Past due aging analysis of loans
Past due		448
Consumer | Residential | Real estate junior lien
Past due aging analysis of loans
Accruing Current	152,111	176,915
Nonaccrual	169	274
Loans and Leases Receivable, Gross, Total	152,487	177,373
Consumer | Residential | Real estate junior lien | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	207	184
Consumer | Other revolving and installment
Past due aging analysis of loans
Accruing Current	79,221	86,172
Nonaccrual		6
Loans and Leases Receivable, Gross, Total	79,461	86,526
Consumer | Other revolving and installment | 30 - 89 Days Past Due
Past due aging analysis of loans
Past due	$ 240	$ 348

Loans and Allowance for Loan _5

Loans and Allowance for Loan Losses - Loans by risk category (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Loans outstanding by loan portfolio segment and risk category
Loans	$ 2,058,419	$ 1,721,279
Pass
Loans outstanding by loan portfolio segment and risk category
Loans	1,989,780	1,654,719
Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	20,172	12,226
Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	48,467	54,334
Commercial
Loans outstanding by loan portfolio segment and risk category
Loans	1,357,421	1,000,225
Commercial | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	1,293,861	935,719
Commercial | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	16,754	12,226
Commercial | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	46,806	52,280
Commercial | Commercial and industrial
Loans outstanding by loan portfolio segment and risk category
Loans	789,036	479,144
Commercial | Commercial and industrial | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	759,808	448,306
Commercial | Commercial and industrial | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	8,706	9,585
Commercial | Commercial and industrial | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	20,522	21,253
Commercial | Real estate construction
Loans outstanding by loan portfolio segment and risk category
Loans	33,169	26,378
Commercial | Real estate construction | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	32,140	25,119
Commercial | Real estate construction | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	783	282
Commercial | Real estate construction | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	246	977
Commercial | Commercial real estate
Loans outstanding by loan portfolio segment and risk category
Loans	535,216	494,703
Commercial | Commercial real estate | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	501,913	462,294
Commercial | Commercial real estate | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	7,265	2,359
Commercial | Commercial real estate | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	26,038	30,050
Consumer
Loans outstanding by loan portfolio segment and risk category
Loans	700,998	721,054
Consumer | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	695,919	719,000
Consumer | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	3,418
Consumer | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	1,661	2,054
Consumer | Residential | Real estate first mortgage
Loans outstanding by loan portfolio segment and risk category
Loans	469,050	457,155
Consumer | Residential | Real estate first mortgage | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	467,168	456,358
Consumer | Residential | Real estate first mortgage | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	1,413
Consumer | Residential | Real estate first mortgage | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	469	797
Consumer | Residential | Real estate junior lien
Loans outstanding by loan portfolio segment and risk category
Loans	152,487	177,373
Consumer | Residential | Real estate junior lien | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	149,290	176,122
Consumer | Residential | Real estate junior lien | Special Mention
Loans outstanding by loan portfolio segment and risk category
Loans	2,005
Consumer | Residential | Real estate junior lien | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans	1,192	1,251
Consumer | Other revolving and installment
Loans outstanding by loan portfolio segment and risk category
Loans	79,461	86,526
Consumer | Other revolving and installment | Pass
Loans outstanding by loan portfolio segment and risk category
Loans	$ 79,461	86,520
Consumer | Other revolving and installment | Substandard
Loans outstanding by loan portfolio segment and risk category
Loans		$ 6

Loans and Allowance for Loan _6

Loans and Allowance for Loan Losses - Changes in allowance (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Changes in the allowance
Beginning Balance	$ 27,256	$ 21,246	$ 23,924	$ 22,174
Provision for loan losses	3,500	1,498	9,500	5,515
Loan charge-offs	(51)	(375)	(3,816)	(5,943)
Loan recoveries	632	615	1,729	1,238
Ending Balance	31,337	22,984	31,337	22,984
Unallocated
Changes in the allowance
Beginning Balance	1,747	1,219	2,192	1,177
Provision for loan losses	648	2,420	203	2,462
Ending Balance	2,395	3,639	2,395	3,639
Commercial
Changes in the allowance
Beginning Balance	21,188	17,782	19,261	18,656
Provision for loan losses	1,022	(941)	5,635	2,692
Loan charge-offs	(10)	(324)	(3,610)	(5,276)
Loan recoveries	527	538	1,441	983
Ending Balance	22,727	17,055	22,727	17,055
Commercial | Commercial and industrial
Changes in the allowance
Beginning Balance	10,797	11,694	12,270	12,127
Provision for loan losses	(846)	(962)	(498)	3,263
Loan charge-offs	(10)	(324)	(2,745)	(5,275)
Loan recoveries	432	538	1,346	831
Ending Balance	10,373	10,946	10,373	10,946
Commercial | Real estate construction
Changes in the allowance
Beginning Balance	443	323	303	250
Provision for loan losses	40	25	180	97
Loan charge-offs				(1)
Loan recoveries				2
Ending Balance	483	348	483	348
Commercial | Commercial real estate
Changes in the allowance
Beginning Balance	9,948	5,765	6,688	6,279
Provision for loan losses	1,828	(4)	5,953	(668)
Loan charge-offs			(865)
Loan recoveries	95		95	150
Ending Balance	11,871	5,761	11,871	5,761
Consumer
Changes in the allowance
Beginning Balance	4,321	2,245	2,471	2,341
Provision for loan losses	1,830	19	3,662	361
Loan charge-offs	(41)	(51)	(206)	(667)
Loan recoveries	105	77	288	255
Ending Balance	6,215	2,290	6,215	2,290
Consumer | Residential | Real estate first mortgage
Changes in the allowance
Beginning Balance	2,673	1,155	1,448	1,156
Provision for loan losses	1,694	(139)	2,914	(140)
Loan recoveries			5
Ending Balance	4,367	1,016	4,367	1,016
Consumer | Residential | Real estate junior lien
Changes in the allowance
Beginning Balance	1,102	710	671	805
Provision for loan losses	28	157	377	113
Loan charge-offs		(20)	(12)	(154)
Loan recoveries	81	49	175	132
Ending Balance	1,211	896	1,211	896
Consumer | Other revolving and installment
Changes in the allowance
Beginning Balance	546	380	352	380
Provision for loan losses	108	1	371	388
Loan charge-offs	(41)	(31)	(194)	(513)
Loan recoveries	24	28	108	123
Ending Balance	$ 637	$ 378	$ 637	$ 378

Loans and Allowance for Loan _7

Loans and Allowance for Loan Losses - Components of loans and associated allowance (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	$ 5,708		$ 7,954
Recorded Investment, Collectively Evaluated	2,052,711		1,713,325
Loans and Leases Receivable, Gross, Total	2,058,419		1,721,279
Allowance Allocation, Individually Evaluated	407		3,138
Allowance Allocation, Collectively Evaluated	28,535		18,594
Allowance Allocation, Unallocated	2,395		2,192
Loans and Leases Receivable, Allowance, Total	31,337	$ 27,256	23,924	$ 22,984	$ 21,246	$ 22,174
Commercial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	5,022		6,901
Recorded Investment, Collectively Evaluated	1,352,399		993,324
Loans and Leases Receivable, Gross, Total	1,357,421		1,000,225
Allowance Allocation, Individually Evaluated	388		3,135
Allowance Allocation, Collectively Evaluated	22,339		16,126
Loans and Leases Receivable, Allowance, Total	22,727	21,188	19,261	17,055	17,782	18,656
Commercial | Commercial and industrial
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	3,497		976
Recorded Investment, Collectively Evaluated	785,539		478,168
Loans and Leases Receivable, Gross, Total	789,036		479,144
Allowance Allocation, Individually Evaluated	379		189
Allowance Allocation, Collectively Evaluated	9,994		12,081
Loans and Leases Receivable, Allowance, Total	10,373	10,797	12,270	10,946	11,694	12,127
Commercial | Real estate construction
Loans and Allowance for Loan Losses
Recorded Investment, Collectively Evaluated	33,169		26,378
Loans and Leases Receivable, Gross, Total	33,169		26,378
Allowance Allocation, Collectively Evaluated	483		303
Loans and Leases Receivable, Allowance, Total	483	443	303	348	323	250
Commercial | Commercial real estate
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	1,525		5,925
Recorded Investment, Collectively Evaluated	533,691		488,778
Loans and Leases Receivable, Gross, Total	535,216		494,703
Allowance Allocation, Individually Evaluated	9		2,946
Allowance Allocation, Collectively Evaluated	11,862		3,742
Loans and Leases Receivable, Allowance, Total	11,871	9,948	6,688	5,761	5,765	6,279
Consumer
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	686		1,053
Recorded Investment, Collectively Evaluated	700,312		720,001
Loans and Leases Receivable, Gross, Total	700,998		721,054
Allowance Allocation, Individually Evaluated	19		3
Allowance Allocation, Collectively Evaluated	6,196		2,468
Loans and Leases Receivable, Allowance, Total	6,215	4,321	2,471	2,290	2,245	2,341
Consumer | Residential | Real estate first mortgage
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	457		782
Recorded Investment, Collectively Evaluated	468,593		456,373
Loans and Leases Receivable, Gross, Total	469,050		457,155
Allowance Allocation, Collectively Evaluated	4,367		1,448
Loans and Leases Receivable, Allowance, Total	4,367	2,673	1,448	1,016	1,155	1,156
Consumer | Residential | Real estate junior lien
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated	229		266
Recorded Investment, Collectively Evaluated	152,258		177,107
Loans and Leases Receivable, Gross, Total	152,487		177,373
Allowance Allocation, Individually Evaluated	19
Allowance Allocation, Collectively Evaluated	1,192		671
Loans and Leases Receivable, Allowance, Total	1,211	1,102	671	896	710	805
Consumer | Other revolving and installment
Loans and Allowance for Loan Losses
Recorded Investment, Individually Evaluated			5
Recorded Investment, Collectively Evaluated	79,461		86,521
Loans and Leases Receivable, Gross, Total	79,461		86,526
Allowance Allocation, Individually Evaluated			3
Allowance Allocation, Collectively Evaluated	637		349
Loans and Leases Receivable, Allowance, Total	$ 637	$ 546	$ 352	$ 378	$ 380	$ 380

Loans and Allowance for Loan _8

Loans and Allowance for Loan Losses - Impaired loans (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Impaired
Loans with related allowance for loan losses, Recorded investment	$ 2,738	$ 6,362
Loans with related allowance for loan losses, unpaid principal	2,825	6,556
Loans with related allowance for loan losses, Related Allowance	407	3,138
Loans with no related allowance for loan losses, Recorded investment	2,970	1,592
Loans with no related allowance for loan losses, unpaid principal	3,332	2,515
Recorded investment	5,708	7,954
Unpaid principal balance	6,157	9,071
Commercial | Commercial and industrial
Impaired
Loans with related allowance for loan losses, Recorded investment	2,523	639
Loans with related allowance for loan losses, unpaid principal	2,609	727
Loans with related allowance for loan losses, Related Allowance	379	189
Loans with no related allowance for loan losses, Recorded investment	974	337
Loans with no related allowance for loan losses, unpaid principal	1,159	1,110
Recorded investment	3,497	976
Unpaid principal balance	3,768	1,837
Commercial | Commercial real estate
Impaired
Loans with related allowance for loan losses, Recorded investment	196	5,718
Loans with related allowance for loan losses, unpaid principal	196	5,823
Loans with related allowance for loan losses, Related Allowance	9	2,946
Loans with no related allowance for loan losses, Recorded investment	1,329	207
Loans with no related allowance for loan losses, unpaid principal	1,448	236
Recorded investment	1,525	5,925
Unpaid principal balance	1,644	6,059
Consumer | Residential | Real estate first mortgage
Impaired
Loans with no related allowance for loan losses, Recorded investment	457	782
Loans with no related allowance for loan losses, unpaid principal	469	797
Recorded investment	457	782
Unpaid principal balance	469	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	19
Loans with no related allowance for loan losses, Recorded investment	210	266
Loans with no related allowance for loan losses, unpaid principal	256	372
Recorded investment	229	266
Unpaid principal balance	$ 276	372
Consumer | Other revolving and installment
Impaired
Loans with related allowance for loan losses, Recorded investment		5
Loans with related allowance for loan losses, unpaid principal		6
Loans with related allowance for loan losses, Related Allowance		3
Recorded investment		5
Unpaid principal balance		$ 6

Loans and Allowance for Loan _9

Loans and Allowance for Loan Losses - Interest Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Impaired
Loans with related allowance for loan losses, Average recorded investment	$ 2,757	$ 4,211	$ 4,035	$ 4,767
Loans with no related allowance for loan losses, Average recorded investment	3,013	1,688	3,537	3,377
Loans, Average recorded investment	5,770	5,899	7,572	8,144
Loans with related allowance for loan losses, Interest income	22	7	22	21
Loans with no related allowance for loan losses, Interest income	27	7	29	23
Loans, Interest income	49	14	51	44
Commercial | Commercial and industrial
Impaired
Loans with related allowance for loan losses, Average recorded investment	2,541	1,964	3,815	2,473
Loans with no related allowance for loan losses, Average recorded investment	1,013	1,206	1,154	2,979
Loans, Average recorded investment	3,554	3,170	4,969	5,452
Loans with related allowance for loan losses, Interest income	14	4	14	12
Loans with no related allowance for loan losses, Interest income	24	7	26	23
Loans, Interest income	38	11	40	35
Commercial | Commercial real estate
Impaired
Loans with related allowance for loan losses, Average recorded investment	197	1,623	200	1,668
Loans with no related allowance for loan losses, Average recorded investment	1,330		1,699
Loans, Average recorded investment	1,527	1,623	1,899	1,668
Loans with related allowance for loan losses, Interest income	8	2	8	6
Loans, Interest income	8	2	8	6
Consumer | Residential | Real estate first mortgage
Impaired
Loans with related allowance for loan losses, Average recorded investment			20	621
Loans with no related allowance for loan losses, Average recorded investment	459	183	467	92
Loans, Average recorded investment	459	183	467	92
Loans with related allowance for loan losses, Interest income				3
Consumer | Residential | Real estate junior lien
Impaired
Loans with related allowance for loan losses, Average recorded investment	19	619
Loans with no related allowance for loan losses, Average recorded investment	211	297	217	302
Loans, Average recorded investment	230	916	237	923
Loans with related allowance for loan losses, Interest income		1
Loans with no related allowance for loan losses, Interest income	3		3
Loans, Interest income	$ 3	1	$ 3	3
Consumer | Other revolving and installment
Impaired
Loans with related allowance for loan losses, Average recorded investment		5		5
Loans with no related allowance for loan losses, Average recorded investment		2		4
Loans, Average recorded investment		$ 7		$ 9

Loans and Allowance for Loan_10

Loans and Allowance for Loan Losses - Pledged (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Loans and Allowance for Loan Losses
Total loans	$ 2,058,419	$ 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	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2020USD ($)loan	Mar. 31, 2019loan	Sep. 30, 2020USD ($)loan	Dec. 31, 2019USD ($)
Troubled debt restructuring
Number of loans modified as a troubled debt restructuring | loan	0
Number of loan modifications not considered TDRs, in connection with CARES Act | loan	552		552
Loan modifications not considered TDRS, in connection with CARES Act | $	$ 151.4		$ 151.4
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 a troubled debt restructuring | loan		1
Carrying value of restructured loan | $				$ 0.2
Specific reserve for loan losses allocated | $				$ 0
Second Deferral
Troubled debt restructuring
Number of loan modifications not considered TDRs, in connection with CARES Act | loan	27		27
Loan modifications not considered TDRS, in connection with CARES Act | $	$ 16.9		$ 16.9
First Deferral
Troubled debt restructuring
Number of loan modifications not considered TDRs, in connection with CARES Act | loan	56		56
Loan modifications not considered TDRS, in connection with CARES Act | $	$ 12		$ 12

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	Sep. 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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill
Gross Carrying Amount	$ 35,650		$ 35,650		$ 36,850
Accumulated Amortization	(20,229)		(20,229)		(18,459)
Total	15,421		15,421		18,391
Intangible amortization expense	990	$ 990	2,971	$ 3,091
Goodwill, Impairment Loss			0
Identifiable customer intangibles
Goodwill
Gross Carrying Amount	31,857		31,857		31,857
Accumulated Amortization	(16,689)		(16,689)		(14,287)
Total	15,168		15,168		17,570
Core deposit intangible assets
Goodwill
Gross Carrying Amount	3,793		3,793		4,993
Accumulated Amortization	(3,540)		(3,540)		(4,172)
Total	$ 253		$ 253		$ 821

Loan Servicing (Details)

Loan Servicing (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Loan Servicing
Loans serviced for others	$ 476,300		$ 476,300		$ 541,900
Servicing Asset at Fair Value, Amount
Balance, beginning of period	2,891	$ 4,300	3,845	$ 4,623
Additions	42	179	154	279
Amortization	(296)	(287)	(692)	(690)
(Impairment)/Recovery	(58)	(46)	(728)	(66)
Balance, end of period	$ 2,579	$ 4,146	$ 2,579	$ 4,146

Loan Servicing - Key economic a

Loan Servicing - Key economic assumptions (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Loan Servicing
Fair value of servicing rights	$ 2,579	$ 3,845
Weighted average remaining term, years	20 years	20 years 1 month 6 days
Prepayment speeds	23.80%	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	Sep. 30, 2020USD ($)lease	Dec. 31, 2019USD ($)
Leases
Number of finance leases | lease	1
Lease Right-of-Use Assets
Operating lease right-of-use assets	$ 8,168	$ 8,343
Finance lease right-of-use assets	$ 231	$ 318
Finance Lease, Right-of-Use Asset, balance sheet location	us-gaap:PropertyPlantAndEquipmentNet	us-gaap:PropertyPlantAndEquipmentNet
Lease right-of-use assets	$ 8,399	$ 8,661
Operating lease liabilities	8,671	8,864
Finance lease liabilities	$ 484	$ 640
Finance lease liabilities, balance sheet location	us-gaap:LongTermDebt	us-gaap:LongTermDebt
Lease liabilities	$ 9,155	$ 9,504

Leases - Weighted-average remai

Leases - Weighted-average remaining lease term and average discount rate (Details) - item	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Leases
Minimum number of options to renew lease agreements	1
Weighted-average remaining lease term, Operating leases	5 years 6 months	6 years 2 months 12 days
Weighted-average remaining lease term, Finance leases	9 months 18 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		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Lease costs
Operating lease cost	$ 634	$ 602	$ 1,825	$ 1,772
Variable lease cost	223	222	888	633
Short-term lease cost	102	122	304	416
Finance lease cost
Interest on lease liabilities	10	14	33	45
Amortization of right-of-use assets	29	29	87	87
Sublease Income	(57)	(65)	(175)	(202)
Net lease cost	941	924	2,962	2,751
Operating cash flows from operating leases	$ 628	$ 600	1,807	$ 1,774
Right-of-use assets obtained in exchange for new operating lease liabilities			$ 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	Sep. 30, 2020	Dec. 31, 2019
Finance leases
2021	$ 251
2022	251
2023	21
Total future minimum lease payments	523
Amounts representing interest	(39)
Total finance lease liabilities	484	$ 640
Operating leases
2021	2,179
2022	2,095
2023	1,832
2024	1,065
2025	707
Thereafter	1,753
Total future minimum lease payments	9,631
Amounts representing interest	(960)
Total operating lease liabilities	$ 8,671	$ 8,864

Deposits (Details)

Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Deposits.
Noninterest-bearing	$ 693,450	$ 577,704
Interest-bearing demand	590,366	458,689
Savings accounts	78,659	55,777
Money market savings	892,473	683,064
Time deposits	207,422	196,082
Total interest-bearing	1,768,920	1,393,612
Total deposits	$ 2,462,370	$ 1,971,316

Short-Term Borrowings (Details)

Short-Term Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Short-term borrowings
Balance as of end of period		$ 0		$ 0
Federal Funds Purchased
Short-term borrowings
Average daily balance	$ 61,386	$ 107	$ 82,504
Maximum month-end balance	$ 124,250		$ 139,605
During period	2.40%		2.54%
End of period	2.30%		2.30%
Federal Home Loan Bank Advances
Short-term borrowings
Average daily balance	$ 25,815		$ 12,985
Maximum month-end balance			$ 135,000
During period	2.58%		2.44%

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Long-Term Debt
Face Value	$ 63,010	$ 63,010
Carrying Amount	58,745	58,769
Subordinated notes payable
Long-Term Debt
Face Value	50,000	50,000
Carrying Amount	$ 49,672	$ 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	$ 3,436	$ 3,402
Period End Interest Rate	3.33%	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	$ 5,153	$ 5,102
Period End Interest Rate	2.05%	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	$ 2,700	$ 2,700
Carrying Amount	$ 484	$ 640
Fixed interest rate	7.81%	7.81%

Financial Instruments with Of_3

Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 603,715	$ 594,881
Commitments to extend credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	596,642	586,365
Standby letters of credit
Financial Instruments with Off Balance Sheet Risk
Amount of credit risk	$ 7,073	$ 8,516

Financial Instruments with Off

Financial Instruments with Off Balance Sheet Risk - Narrative (Details) - USD ($) $ in Thousands	Sep. 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	19,000	20,000
Collateralized loans	$ 239,300	$ 242,000

Share-Based Compensation - Plan

Share-Based Compensation - Plan Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-Based Compensation
Compensation expense	$ 475	$ 335	$ 1,300	$ 1,200
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	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Restricted Stock Awards and Units
Outstanding at beginning of period	347,211	337,014
Granted	77,846	70,617
Vested	(87,939)	(53,882)
Forfeited or cancelled	(7,590)	(6,138)
Outstanding at end of period	329,528	347,611
Weighted Average Grant Date Fair Value
Outstanding at beginning of period	$ 18.64	$ 18.36
Granted	19.53	19.87
Vested	16.24	18.69
Forfeited or cancelled	19.75	17.34
Outstanding at end of period	$ 19.46	$ 18.64
Additional disclosures
Unrecognized compensation cost	$ 3,200
Weighted average period	3 years 5 months 19 days

Income Taxes - Reconciliation b

Income Taxes - Reconciliation between applicable income taxes and statutory federal tax rate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Tax amount
Taxes at statutory federal income tax rate	$ 4,894	$ 1,982	$ 9,491	$ 6,114
Tax effect of tax exempt income	(134)	(107)	(382)	(329)
Tax effect of other	888	457	1,589	1,440
Total income tax expense	$ 5,648	$ 2,332	$ 10,698	$ 7,225
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)	(0.60%)	(1.10%)	(0.80%)	(1.10%)
Tax effect of other (as percentage)	3.80%	4.80%	3.50%	4.90%
Applicable income taxes (as percentage)	24.20%	24.70%	23.70%	24.80%

Segment Reporting (Details)

Segment Reporting (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)segmentitem	Sep. 30, 2019USD ($)
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	$ 21,765	$ 18,681	$ 60,693	$ 56,092
Provision for loan losses	3,500	1,498	9,500	5,515
Noninterest income	45,256	29,580	110,675	84,638
Noninterest expense	40,214	37,327	116,674	106,102
Net income before taxes	23,307	9,436	45,194	29,113
Corporate Administration
Key metrics related to segments
Net interest income	(842)	(896)	(2,575)	(2,713)
Noninterest income	(1)	547	8	2,099
Noninterest expense	9,112	8,885	26,833	25,960
Net income before taxes	(9,955)	(9,234)	(29,400)	(26,574)
Banking | Operating Segments
Key metrics related to segments
Net interest income	21,994	19,193	61,857	57,987
Provision for loan losses	3,500	1,498	9,500	5,515
Noninterest income	3,398	1,695	8,129	5,273
Noninterest expense	10,876	10,800	34,887	30,880
Net income before taxes	11,016	8,590	25,599	26,865
Retirement and Benefit Services | Operating Segments
Key metrics related to segments
Noninterest income	15,104	15,307	45,034	46,142
Noninterest expense	8,347	8,551	25,472	26,142
Net income before taxes	6,757	6,756	19,562	20,000
Wealth Management | Operating Segments
Key metrics related to segments
Noninterest income	4,486	3,896	12,644	11,385
Noninterest expense	2,110	1,835	6,254	5,936
Net income before taxes	2,376	2,061	6,390	5,449
Mortgage | Operating Segments
Key metrics related to segments
Net interest income	613	384	1,411	818
Noninterest income	22,269	8,135	44,860	19,739
Noninterest expense	9,769	7,256	23,228	17,184
Net income before taxes	$ 13,113	$ 1,263	$ 23,043	$ 3,373

Earnings Per Share - Two-class

Earnings Per Share - Two-class method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share
Net Income	$ 17,659	$ 7,104	$ 34,496	$ 21,888
Dividends and undistributed earnings allocated to participating securities	315	154	600	514
Net income available to common shareholders	$ 17,344	$ 6,950	$ 33,896	$ 21,374
Weighted-average common shares outstanding for basic earnings per share	17,121	14,274	17,101	13,957
Dilutive effect of stock-based awards	332	352	334	360
Weighted-average common shares outstanding for diluted earnings per share	17,453	14,626	17,435	14,317
Earnings per common share:
Basic earnings per common share	$ 1.01	$ 0.49	$ 1.98	$ 1.53
Diluted earnings per common share	$ 0.99	$ 0.48	$ 1.94	$ 1.49

Derivative Instruments (Details

Derivative Instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Derivative Instruments
Fair Value, Derivative Assets	$ 14,678	$ 1,621
Fair Value, Derivative Liabilities	1,960	109
Notional Amount, Derivative Assets	455,623	58,499
Notional Amount, Derivative Liabilities	380,063	68,500
Interest rate lock commitments | Accrued interest and other assets
Derivative Instruments
Fair Value, Derivative Assets	13,133	1,228
Notional Amount, Derivative Assets	401,313	45,715
Forward loan sales commitments | Accrued interest and other assets
Derivative Instruments
Fair Value, Derivative Assets	1,545	393
Notional Amount, Derivative Assets	54,310	12,784
TBA mortgage backed securities | Accrued expenses and other liabilities
Derivative Instruments
Fair Value, Derivative Liabilities	1,960	109
Notional Amount, Derivative Liabilities	$ 380,063	$ 68,500

Derivative Instruments - Gain (

Derivative Instruments - Gain (loss) recognized on derivatives instruments (Details) - Not designated as hedging - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	$ 2,269	$ 224	$ 3,279	$ 2,374
Interest rate lock commitments | Mortgage banking/other noninterest income
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	5,647	(257)	11,226	2,024
Forward loan sales commitments | Mortgage banking
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	369	(199)	1,152	454
TBA mortgage backed securities | Mortgage banking
Gain (loss) recognized on derivative instruments
Gain (loss) recognized on derivatives instruments	$ (3,747)	$ 680	$ (9,099)	$ (104)

Derivative Instruments - Collat

Derivative Instruments - Collateral (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Derivative Instruments
Collateral held by third parties	$ 5,100	$ 853

Regulatory Matters (Details)

Regulatory Matters (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Common equity tier 1 capital to risk weighted assets
Actual	$ 270,679	$ 239,672
Requirements for Capital Adequacy Purposes	$ 93,151	$ 86,452
Actual	13.08%	12.48%
Requirements	4.50%	4.50%
Tier 1 capital to risk weighted assets
Actual	$ 278,959	$ 247,866
Requirements for Capital Adequacy Purposes	$ 124,202	$ 115,270
Actual	13.48%	12.90%
Requirements	6.00%	6.00%
Total capital to risk weighted assets
Actual	$ 354,573	$ 321,415
Requirements for Capital Adequacy Purposes	$ 165,603	$ 153,693
Actual	17.13%	16.73%
Requirements	8.00%	8.00%
Tier 1 capital to average assets
Actual	$ 278,959	$ 247,866
Requirements for Capital Adequacy Purposes	$ 114,293	$ 91,504
Actual	9.76%	11.05%
Requirements	4.00%	4.00%
Bank
Common equity tier 1 capital to risk weighted assets
Actual	$ 257,835	$ 228,512
Requirements for Capital Adequacy Purposes	93,076	86,362
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 134,443	$ 124,745
Actual	12.47%	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	$ 257,835	$ 228,512
Requirements for Capital Adequacy Purposes	124,102	115,149
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 165,469	$ 153,532
Actual	12.47%	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	$ 283,758	$ 252,436
Requirements for Capital Adequacy Purposes	165,469	153,532
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 206,836	$ 191,915
Actual	13.72%	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	$ 257,835	$ 228,512
Requirements for Capital Adequacy Purposes	114,207	89,615
Minimum to be Well Capitalized Under Prompt Corrective Action	$ 142,759	$ 112,018
Actual	9.03%	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	Sep. 30, 2020	Dec. 31, 2019
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	$ 495,414	$ 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	211,700	182,538
Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	87,542	30,685
Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	131	144
Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	32,733	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	495,414	313,158
Derivates assets	14,678	1,621
Derivative liabilities	1,960	109
Recurring | U.S. treasury and government agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	16,092	21,240
Recurring | Obligations of state and political agencies
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	147,216	68,648
Recurring | Mortgage backed securities - Residential Agency
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	211,700	182,538
Recurring | Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	87,542	30,685
Recurring | Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	131	144
Recurring | Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	32,733	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	495,414	310,350
Derivates assets	14,678	1,621
Derivative liabilities	1,960	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	16,092	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	147,216	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	211,700	182,538
Recurring | Level 2 | Mortgage backed securities - Commercial
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	87,542	30,685
Recurring | Level 2 | Asset backed securities
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	131	144
Recurring | Level 2 | Corporate bonds
Fair value, assets and liabilities measured on recurring and non recurring basis
Available-for-sale	$ 32,733	$ 7,095

Fair Value of Assets and Liab_4

Fair Value of Assets and Liabilities - Nonrecurring Basis (Details) - Non recurring - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	$ 5,301	$ 4,816
Foreclosed assets	10	8
Servicing rights	2,579	3,845
Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	111,311	46,846
Impaired loans
Fair value, assets and liabilities measured on recurring and non recurring basis
Net impairment	407	3,138
Level 2 | Loans held for sale
Fair value, assets and liabilities measured on recurring and non recurring basis
Loans held for sale	111,311	46,846
Level 3
Fair value, assets and liabilities measured on recurring and non recurring basis
Impaired loans	5,301	4,816
Foreclosed assets	10	8
Servicing rights	$ 2,579	$ 3,845

Fair Value of Assets and Liab_5

Fair Value of Assets and Liabilities - Valuation Technique (Details) - Level 3	Sep. 30, 2020USD ($)item	Dec. 31, 2019USD ($)item
Impaired loans | Appraisal value | Property specific adjustment
Valuation techniques and significant unobservable inputs
Impaired loans	$ 5,301,000	$ 4,816,000
Foreclosed assets | Appraisal value | Property specific adjustment
Valuation techniques and significant unobservable inputs
Foreclosed assets	$ 10,000	$ 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	$ 2,579,000	$ 3,845,000
Servicing rights | Prepayment speed assumptions | Minimum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input | item	315	123
Servicing rights | Prepayment speed assumptions | Maximum
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	485	267
Servicing rights | Prepayment speed assumptions | Weighted average
Valuation techniques and significant unobservable inputs
Servicing Asset, Measurement Input	396	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	Sep. 30, 2020	Dec. 31, 2019
Carrying amount
Financial Assets
Cash and cash equivalents	$ 95,751	$ 144,006
Loans	2,027,082	1,697,355
Accrued interest receivable	9,199	7,551
Bank-owned life insurance	32,161	31,566
Financial Liabilities
Noninterest-bearing deposits	693,450	577,704
Interest-bearing deposits	1,561,498	1,197,530
Time deposits	207,422	196,082
Long-term debt	58,745	58,769
Accrued interest payable	1,408	1,038
Estimated fair value
Financial Assets
Cash and cash equivalents	95,751	144,006
Loans	2,075,044	1,693,824
Accrued interest receivable	9,199	7,551
Bank-owned life insurance	32,161	31,566
Financial Liabilities
Noninterest-bearing deposits	693,450	577,704
Interest-bearing deposits	1,561,498	1,197,530
Time deposits	208,990	196,182
Long-term debt	56,219	58,239
Accrued interest payable	1,408	1,038
Level 1 | Estimated fair value
Financial Assets
Cash and cash equivalents	95,751	144,006
Accrued interest receivable	9,199	7,551
Financial Liabilities
Accrued interest payable	1,408	1,038
Level 2 | Estimated fair value
Financial Assets
Bank-owned life insurance	32,161	31,566
Financial Liabilities
Noninterest-bearing deposits	693,450	577,704
Interest-bearing deposits	1,561,498	1,197,530
Long-term debt	56,219	58,239
Level 3 | Estimated fair value
Financial Assets
Loans	2,075,044	1,693,824
Financial Liabilities
Time deposits	$ 208,990	$ 196,182

COVID-19 Pandemic Response (Det

COVID-19 Pandemic Response (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)client
PPP Loans
COVID-19 Pandemic Response
Number of clients assisted under the PPP | client	1,632
Loans financed	$ 363,600
Net processing fees	$ 11,000
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