XML 24 R14.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Fair value estimates
 6 Months Ended
Jun. 30, 2024
Fair value estimates  
Fair value of estimates

7. Fair value estimates:

​

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosure under GAAP. Fair value estimates are calculated without attempting to estimate the value of anticipated future business and the value of certain assets and liabilities that are not considered financial. Accordingly, such assets and liabilities are excluded from disclosure requirements.

​

 

In accordance with FASB ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. In cases where quoted market prices are not available, 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 estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets. In many cases, these values cannot be realized in immediate settlement of the instrument.

​

Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction that is not a forced liquidation or distressed sale between participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

​

In accordance with GAAP, the Company groups its assets and liabilities generally measured at fair value into three levels based on market information or other fair value estimates in which the assets and liabilities are traded or valued and the reliability of the assumptions used to determine fair value. These levels include:

​

●Level 1: Unadjusted quoted prices of identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
●Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
●Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

An asset’s or liability’s placement in the fair value hierarchy is based on the lowest level of input that is significant to the fair value estimate.

​

During the periods ended June 30, 2024 and December 31, 2023 there were no transfers in or out of Level 3.

​

The following methods and assumptions were used by the Company to calculate fair values and related carrying amounts of financial instruments:

​

Investment securities: The fair values of U.S. Treasury securities and marketable equity securities are based on quoted market prices from active exchange markets. The fair values of debt securities are based on pricing from a matrix pricing model.

 

​

Interest rate swaps and options:  The Company’s interest rate swaps and options are reported at fair value utilizing Level 2 inputs. Values of these instruments are obtained through an independent pricing source utilizing information which may include market observed quotations for interest rate, forward rates, rate volatility, and volatility surface. Derivative contracts create exposure to interest rate movements as well as risks from the potential of non-performance of the counterparty.

​

​

Assets and liabilities measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023 are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using

 

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

(Dollars in thousands)

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

June 30, 2024

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

U.S. Treasury securities

    

$

180,007

    

$

180,007

    

$

​

    

$

​

​

U.S. government-sponsored enterprises

​

​

2,032

​

​

​

​

​

2,032

​

​

​

​

State and municipals:

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

 

56,837

​

​

​

​

 

56,837

​

​

​

​

Tax-exempt

​

 

65,004

​

​

​

​

 

65,004

​

​

​

​

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government agencies

​

 

604

​

​

​

​

 

604

​

​

​

​

U.S. government-sponsored enterprises

​

 

77,028

​

​

​

​

 

77,028

​

​

​

​

Corporate debt securities

​

​

3,728

​

​

​

​

​

3,728

​

​

​

​

Common equity securities

​

​

78

​

​

78

​

​

​

​

​

​

​

Total investment securities

​

$

385,318

​

$

180,085

​

$

205,233

​

$

​

​

Interest rate swap-other assets

​

$

20,958

​

​

​

​

$

20,958

​

​

​

​

Interest rate swap-other liabilities

​

$

(20,538)

​

​

​

​

$

(20,538)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using 

 

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

(Dollars in thousands)

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

December 31, 2023

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

U.S. Treasury securities

    

$

184,057

    

$

184,057

    

$

​

    

$

​

​

U.S. government-sponsored enterprises

​

​

2,152

​

​

​

​

​

2,152

​

​

​

​

State and municipals:

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

 

57,100

​

​

​

​

 

57,100

​

​

​

​

Tax-exempt

​

 

67,124

​

​

​

​

 

67,124

​

​

​

​

Mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government agencies

​

 

724

​

​

​

​

 

724

​

​

​

​

U.S. government-sponsored enterprises

​

 

84,040

​

​

​

​

 

84,040

​

​

​

​

Corporate debt securities

​

​

3,730

​

​

​

​

​

3,730

​

​

​

​

Common equity securities

​

 

98

​

​

98

​

​

​

​

​

​

​

Total investment securities

​

$

399,025

​

$

184,155

​

$

214,870

​

$

​

​

Interest rate swap-other assets

​

$

19,278

​

​

​

​

$

19,278

​

​

​

​

Interest rate swap-other liabilities

​

$

(18,808)

​

​

​

​

$

(18,808)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Assets and liabilities measured at fair value on a nonrecurring basis at June 30, 2024 and December 31, 2023 are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using

 

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

(Dollars in thousands)

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

June 30, 2024

    

Amount 

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Loans individually evaluated for credit loss

    

$

6,851

    

$

​

    

$

​

    

$

6,851

​

Other real estate owned

​

$

1,152

​

​

​

​

​

​

​

$

1,152

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using 

 

​

​

​

​

​

Quoted Prices in

​

Significant Other

​

Significant

 

​

​

​

​

Active Markets for

​

Observable

​

Unobservable

 

(Dollars in thousands)

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

December 31, 2023

    

Amount 

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Loans individually evaluated for credit loss

    

$

4,740

    

$

​

    

$

​

    

$

4,740

​

​

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Quantitative Information about Level 3 Fair Value Measurements 

 

(Dollars in thousands, except percents)

​

Fair Value

​

​

​

​

​

Range

 

June 30, 2024

    

Estimate 

    

Valuation Techniques 

    

Unobservable Input 

    

(Weighted Average) 

 

Loans individually evaluated for credit loss

    

$

6,851

    

Appraisal of collateral

    

Appraisal adjustments

    

22.8% to 94.0%  (67.5)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

3.0% to 6.0% (5.6)%

​

Other real estate owned

​

$

1,152

 

Appraisal of collateral

 

Appraisal adjustments

 

1.0% to 1.0% (1.0)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

3.0% to 6.0% (4.5)%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Quantitative Information about Level 3 Fair Value Measurements 

 

(Dollars in thousands, except percents)

​

Fair Value

​

​

​

​

​

Range

 

December 31, 2023

    

Estimate 

    

Valuation Techniques 

    

Unobservable Input 

    

(Weighted Average) 

 

Loans individually evaluated for credit loss

    

$

4,740

    

Appraisal of collateral

    

Appraisal adjustments

    

22.8% to 82.4%  (63.6)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

3.0% to 6.0% (5.2)%

​

​

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

​

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

​

The carrying and fair values of the Company’s financial instruments at June 30, 2024 and December 31, 2023 and their placement within the fair value hierarchy are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

Fair Value Hierarchy 

 

​

​

​

​

​

​

​

​

Quoted

   

​

​

   

​

​

 

​

​

​

​

​

​

​

​

Prices in

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

Active

​

Significant

​

​

​

 

​

​

​

​

​

​

​

​

Markets for

​

Other

​

Significant

 

​

​

​

​

​

​

​

​

Identical

​

Observable

​

Unobservable

 

(Dollars in thousands)

​

Carrying

​

Fair

​

Assets

​

Inputs

​

Inputs

 

June 30, 2024

    

Value 

    

Value 

    

(Level 1) 

    

(Level 2) 

    

(Level 3) 

 

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

49,956

​

$

49,956

​

$

49,956

​

$

​

​

$

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available for sale

​

 

385,240

​

 

385,240

​

​

180,007

​

​

205,233

​

​

​

​

Common equity securities

​

​

78

​

​

78

​

​

78

​

​

​

​

​

​

​

Held to maturity

​

 

81,598

​

 

68,224

​

​

​

​

 

68,224

​

​

​

​

Loans held for sale

​

 

​

​

 

​

​

​

​

​

 

​

​

​

​

​

Net loans

​

 

2,846,430

​

 

2,646,017

​

​

​

​

​

​

​

​

2,646,017

​

Accrued interest receivable

​

 

13,326

​

 

13,326

​

​

​

​

 

13,326

​

​

​

​

Mortgage servicing rights

​

 

852

​

 

1,709

​

​

​

​

 

1,709

​

​

​

​

Restricted equity securities (FHLB and other)

​

​

7,736

​

 

7,736

​

​

​

​

 

7,736

​

​

​

​

Other assets - interest rate swaps

​

 

20,958

​

 

20,958

​

​

​

​

 

20,958

​

​

​

​

Total

​

$

3,406,174

​

$

3,193,244

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

$

3,064,959

​

$

3,059,952

​

$

​

​

$

3,059,952

​

$

​

​

Short-term borrowings

​

​

104,250

​

​

104,254

​

​

​

​

​

104,254

​

​

​

​

Long-term debt

​

 

25,000

​

 

24,761

​

​

​

​

 

24,761

​

​

​

​

Subordinated debt

​

 

33,000

​

 

43,284

​

​

​

​

 

43,284

​

​

​

​

Accrued interest payable

​

​

5,507

​

 

5,507

​

​

​

​

​

5,507

​

​

​

​

Other liabilities - interest rate swaps

​

 

20,538

​

 

20,538

​

​

​

​

​

20,538

​

​

​

​

Total

​

$

3,253,254

​

$

3,258,296

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

Fair Value Hierarchy 

 

​

​

​

​

​

​

​

​

Quoted

    

​

​

    

​

​

 

​

​

​

​

​

​

​

​

Prices in

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

Active

​

Significant

​

​

​

 

​

​

​

​

​

​

​

​

Markets for

​

Other

​

Significant

 

​

​

​

​

​

​

​

​

Identical

​

Observable

​

Unobservable

 

(Dollars in thousands)

​

Carrying

​

Fair

​

Assets

​

Inputs

​

Inputs

 

December 31, 2023

    

Value 

    

Value 

    

(Level 1) 

    

(Level 2) 

    

(Level 3) 

 

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

187,365

​

$

187,365

​

$

187,365

​

$

​

​

$

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available for sale

​

 

398,927

​

 

398,927

​

​

184,057

​

​

214,870

​

​

​

​

Common equity securities

​

​

98

​

​

98

​

​

98

​

​

​

​

​

​

​

Held to maturity

​

 

84,851

​

 

71,698

​

​

​

​

 

71,698

​

​

​

​

Loans held for sale

​

 

250

​

 

250

​

​

​

​

 

​

​

​

​

​

Net loans

​

 

2,828,002

​

 

2,593,151

​

​

​

​

​

​

​

​

2,593,151

​

Accrued interest receivable

​

 

12,734

​

 

12,734

​

​

​

​

 

12,734

​

​

​

​

Mortgage servicing rights

​

 

870

​

 

1,745

​

​

​

​

 

1,745

​

​

​

​

Restricted equity securities (FHLB and other)

​

 

5,180

​

 

5,180

​

​

​

​

 

5,180

​

​

​

​

Other assets - interest rate swaps

​

​

19,278

​

​

19,278

​

​

​

​

​

19,278

​

​

​

​

Total

​

$

3,537,555

​

$

3,290,426

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

$

3,279,037

​

$

3,274,774

​

$

​

​

$

3,274,774

​

$

​

​

Short-term borrowings

​

 

17,590

​

 

17,590

​

​

​

​

 

17,590

​

​

​

​

Long-term debt

​

 

25,000

​

 

24,924

​

​

​

​

 

24,924

​

​

​

​

Subordinated debt

​

​

33,000

​

​

45,504

​

​

​

​

​

45,504

​

​

​

​

Accrued interest payable

​

 

5,765

​

 

5,765

​

​

​

​

​

5,765

​

​

​

​

Other liabilities - interest rate swaps

​

​

18,808

​

​

18,808

​

​

​

​

​

18,808

​

​

​

​

Total

​

$

3,379,200

​

$

3,387,365

​

​

​

​

​

​

​

​

​

​

​