The carrying values of short-term financial instruments are deemed to approximate fair values. Such instruments are considered readily convertible to cash and include cash and due from financial institutions, interest-bearing deposits in other financial

The fair value of investment securities is based on market price quotations received from third-party pricing services. The third-party pricing services utilize pricing models supported with timely market data information. Where quoted market prices are not available, fair values are based on quoted market prices of comparable securities.

Fair values of loans are estimated based on discounted cash flows of portfolios of loans with similar financial characteristics including the type of loan, interest terms and repayment history. Fair values are calculated by discounting scheduled cash flows through estimated maturities using estimated market discount rates. Estimated market discount rates are reflective of credit and interest rate risks inherent in the Company's various loan types and are derived from available market information, as well as specific borrower information. The weighted average discount rate used in the valuation of loans was 6.28% and 6.86% as of September 30, 2024 and December 31, 2023, respectively. In accordance with ASU 2016-01, the fair values of loans are measured based on the notion of exit price.

The fair value of loans classified as held for sale are generally based upon quoted prices for similar assets in active markets, acceptance of firm offer letters with agreed upon purchase prices, discounted cash flow models that take into account market observable assumptions, or independent appraisals of the underlying collateral securing the loans. We report loans previously held for investment that were transferred to loans held for sale, if any, at fair value, net of estimated selling costs on our consolidated balance sheets.

The fair values of deposits with no stated maturity, such as noninterest-bearing demand deposits and interest-bearing demand and savings accounts, for the purposes of this disclosure, are shown to equal the carrying amount which is the amount payable on demand. The fair value of time deposits is estimated by discounting future cash flows using rates currently offered for FHLB advances of similar remaining maturities. The weighted average discount rate used in the valuation of time deposits was 4.75% and 5.48% as of September 30, 2024 and December 31, 2023, respectively.

The fair values of our long-term debt is estimated by discounting scheduled cash flows over the contractual borrowing period at the estimated market rate for similar borrowing arrangements. The weighted average discount rate used in the valuation of long-term debt was 6.15% and 6.83% as of September 30, 2024 and December 31, 2023, respectively.

The fair values of derivative financial instruments are based upon current market values, if available. If there are no relevant comparable values, fair values are based on pricing models using current assumptions for interest rate swaps and options.

The fair values of off-balance sheet financial instruments are estimated based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties, current settlement values or quoted market prices of comparable instruments.

Fair value estimates are made at a specific point in time based on relevant market and financial instrument information. These estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument. Because no market exists for a significant portion of our financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates cannot be determined with precision as they are subjective in

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of future business and the value of assets and liabilities that are not considered financial instruments. For example, significant assets and liabilities that are not considered financial assets or liabilities include deferred tax assets, premises and equipment and intangible assets.


					Fair Value Measurement Using
(dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2024
Financial assets:
Cash and due from financial institutions	$	100,064	$	100,064	$	100,064	$	—	$	—
Interest-bearing deposits in other financial institutions	226,505		226,505		226,505		—		—
Investment securities	1,329,570		1,270,443		36,453		1,226,934		7,056
Loans held for sale	1,609		1,609		—		1,609		—
Loans	5,342,609		5,023,606		—		—		5,023,606



Accrued interest receivable	23,942		23,942		489		4,054		19,399

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,838,009		1,838,009		1,838,009		—		—
Interest-bearing demand and savings and money market	3,591,705		3,591,705		3,591,705		—		—
Time	1,153,299		1,146,531		—		—		1,146,531

Long-term debt	156,284		150,081		—		—		150,081
Accrued interest payable	12,980		12,980		123		—		12,857


							Fair Value Measurement Using
(dollars in thousands)	Notional Amount		Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2024
Off-balance sheet financial instruments:
Commitments to extend credit	$	1,267,835	$	—	$	1,244	$	—	$	1,244	$	—
Standby letters of credit and financial guarantees written	2,807		—		42		—		42		—

Derivatives:
Interest rate lock commitments	1,585		(2)		(2)		—		(2)		—

Risk participation agreements	35,395		—		—		—		—		—
Back-to-back swap agreements:
Assets	50,426		2,875		2,875		—		—		2,875
Liabilities	(50,426)		(2,875)		(2,875)		—		—		(2,875)
Interest rate swap agreements	115,545		5,202		5,202		—		—		5,202


					Fair Value Measurement Using
(dollars in thousands)	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Financial assets:
Cash and due from financial institutions	$	116,181	$	116,181	$	116,181	$	—	$	—
Interest-bearing deposits in other financial institutions	406,256		406,256		406,256		—		—
Investment securities	1,279,548		1,212,388		—		1,205,238		7,150
Loans held for sale	1,778		1,778		—		1,778		—
Loans	5,438,982		5,089,292		—		—		5,089,292



Accrued interest receivable	21,511		21,511		342		4,043		17,126

Financial liabilities:
Deposits:
Noninterest-bearing demand	1,913,379		1,913,379		1,913,379		—		—
Interest-bearing demand and savings and money market	3,538,922		3,538,922		3,538,922		—		—
Time	1,395,291		1,385,473		—		—		1,385,473

Long-term debt	156,102		153,073		—		—		153,073
Accrued interest payable	18,948		18,948		85		—		18,863


							Fair Value Measurement Using
(dollars in thousands)	Notional Amount		Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Off-balance sheet financial instruments:
Commitments to extend credit	$	1,275,331	$	—	$	1,210	$	—	$	1,210	$	—
Standby letters of credit and financial guarantees written	3,301		—		50		—		50		—

Derivatives:
Interest rate lock commitments	1,807		(34)		(34)		—		(34)		—

Risk participation agreements	36,022		—		—		—		—		—
Back-to-back swap agreements:
Assets	51,059		3,547		3,547		—		—		3,547
Liabilities	(51,059)		(3,547)		(3,547)		—		—		(3,547)
Interest rate swap agreements	115,545		6,440		6,440		—		—		6,440

We group our financial assets and liabilities at fair value into three levels based on the markets in which the financial assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

•Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities traded in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

•Level 2 — Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

•Level 3 — Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in

We base our fair values on the price that we would expect to receive if an asset were sold, or the price that we would expect to pay to transfer a liability in an orderly transaction between market participants at the measurement date. We also maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements.

We use fair value measurements to record adjustments to certain financial assets and liabilities and to determine fair value disclosures. Available-for-sale securities and derivatives are recorded at fair value on a recurring basis. Periodically, we may be required to record other financial assets at fair value on a nonrecurring basis such as loans held for sale, individually evaluated loans, mortgage servicing rights, and other real estate owned. These nonrecurring fair value adjustments typically involve application of the lower of cost or fair value accounting or write-downs of individual assets.


			Fair Value at Reporting Date Using
(dollars in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2024
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	123,181	$	—	$	116,843	$	6,338
Corporate securities	32,554		—		32,554		—
U.S. Treasury and other government-sponsored entities and agencies	59,230		36,453		22,777		—

Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	386,296		—		386,296		—
Residential - Non-government agencies	17,834		—		17,116		718
Commercial - U.S. government-sponsored entities and agencies	89,029		—		89,029		—
Commercial - Non-government agencies	15,329		—		15,329		—

Total available-for-sale investment securities	723,453		36,453		679,944		7,056



Derivatives:
Interest rate lock commitments	(2)		—		(2)		—



Interest rate swap agreements	5,202		—		—		5,202
Total derivatives	5,200		—		(2)		5,202
Total	$	728,653	$	36,453	$	679,942	$	12,258


			Fair Value at Reporting Date Using
(dollars in thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2023
Available-for-sale securities:
Debt securities:
States and political subdivisions	$	126,635	$	—	$	120,199	$	6,436
Corporate securities	31,414		—		31,414		—
U.S. Treasury and other government-sponsored entities and agencies	26,197		—		26,197		—

Mortgage-backed securities:
Residential - U.S. government-sponsored entities and agencies	378,386		—		378,386		—
Residential - Non-government agencies	18,708		—		17,994		714
Commercial - U.S. government-sponsored entities and agencies	50,914		—		50,914		—
Commercial - Non-government agencies	14,956		—		14,956		—

Total available-for-sale investment securities	647,210		—		640,060		7,150



Derivatives:
Interest rate lock commitments	(34)		—		(34)		—



Interest rate swap agreements	6,440		—		—		6,440
Total derivatives	6,406		—		(34)		6,440
Total	$	653,616	$	—	$	640,026	$	13,590


	Available-For-Sale Debt Securities:
(dollars in thousands)	States and Political Subdivisions		Residential - Non-Government Agencies		Interest Rate Swap Agreements		Total
Balance at December 31, 2023	$	6,436	$	714	$	6,440	$	13,590
Principal payments received	(163)		(18)		—		(181)
Unrealized net gain (loss) included in other comprehensive income	65		22		(1,238)		(1,151)

Balance at September 30, 2024	$	6,338	$	718	$	5,202	$	12,258

Balance at December 31, 2022	$	6,584	$	684	$	5,986	$	13,254
Principal payments received	(172)		(17)		—		(189)
Unrealized net gain (loss) included in other comprehensive income	(49)		4		4,149		4,104

Balance at September 30, 2023	$	6,363	$	671	$	10,135	$	17,169

Based on a discounted cash flow model that calculates the present value of estimated future principal and interest payments, the estimated aggregate fair value of Level 3 financial assets and liabilities measured at fair value on a recurring basis was $12.3 million and $13.6 million as of September 30, 2024 and December 31, 2023, respectively.

The weighted-average discount rate was used as the significant unobservable input in the fair value measurement of the available-for-sale debt securities. The weighted average discount rate utilized was 5.72% and 6.12% as of September 30, 2024 and December 31, 2023, respectively, which was derived by incorporating a credit spread over the FHLB Fixed-Rate Advance curve. Significant increases (decreases) in the weighted-average discount rate could result in a significantly lower (higher) fair value measurement.

The significant unobservable input used in the fair value measurement of the Company's interest rate swap is the weighted-average discount rate. The weighted average discount rate utilized was 3.42% and 3.34% as of September 30, 2024 and December 31, 2023, respectively.