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Fair Value
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Fair Value Disclosure
Securities AFS, loans HFS, and equity securities are recorded at fair value on a recurring basis. Additionally, the Company may be required to record at fair value other assets on a nonrecurring basis, such as collateral dependent loans, foreclosed assets, and other certain assets. The nonrecurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets.
ASC 820, Fair Value Measurements and Disclosures indicates that assets and liabilities are recorded at fair value according to a fair value hierarchy comprised of three levels:
•Level 1 pricing represents quotes on the exact financial instrument that is traded in active markets. Quoted prices on actively traded equities, for example, are in this category.
•Level 2 pricing is derived from observable data including market spreads, current and projected rates, prepayment data, and credit quality. The valuation may be based on 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 pricing is derived without the use of observable data. In such cases, mark-to-model strategies are typically employed. Often, these types of instruments have no active market, possess unique characteristics, and are thinly traded.
The Company used the following methods and significant assumptions to estimate fair value:
Securities AFS and Equity Securities: The fair values for securities AFS are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).
Loans HFS: Residential mortgage loans originated and held for sale are carried at the lower of cost or estimated fair value on an individual basis. The fair values of mortgage loans HFS are based on commitments on hand from investors within the secondary market for loans with similar characteristics. As such, the fair value adjustments for mortgage loans HFS are recurring Level 2.
Loans HFI: The Company does not record loans HFI at fair value on a recurring basis. Loans for which it was probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement are evaluated individually to determine if any credit loss exists. For loans evaluated on an individual basis that are collateral dependent, the fair value is estimated by applying a discount factor to the collateral value then deducting the estimated cost to sell. For loans evaluated on an individual basis that are not collateral dependent, the discounted cash flow method is utilized to determine the fair value. When a loan experiences a credit loss with specific allocated losses determined by the fair value method, the Company considers the collateral dependent loan as nonrecurring Level 3.
Foreclosed Assets: Foreclosed assets, consisting of properties obtained through foreclosure or in satisfaction of loans, are reported at fair value, determined on the basis of current appraisals, comparable sales, and other estimates of value obtained principally from independent sources, adjusted for estimated selling costs (Level 2). However, foreclosed assets are considered Level 3 in the fair value hierarchy because management has qualitatively applied a discount due to the size, supply of inventory, and the incremental discounts applied to the appraisals. Management also considers other factors, including changes in absorption rates, length of time the property has been on the market, and anticipated sales values, which have resulted in adjustments to the collateral value estimates indicated in certain appraisals.
Fair Value of Assets Measured on a Recurring Basis
The table below presents the recorded amount of assets measured at fair value on a recurring basis:
(in thousands)Fair ValueLevel 1Level 2Level 3
March 31, 2025
Loans HFS$2,178 $— $2,178 $— 
Securities AFS:
Mortgage-backed securities$328,283 $— $328,283 $— 
Municipal bonds$168,389 $— $168,389 $— 
U.S. Treasury securities$3,484 $— $3,484 $— 
U.S. agency securities$66,718 $— $66,718 $— 
Equity securities$2,981 $2,981 $— $— 
December 31, 2024
Loans HFS$2,547 $— $2,547 $— 
Securities AFS:
Mortgage-backed securities$307,100 $— $307,100 $— 
Municipal bonds$168,843 $— $168,843 $— 
U.S. Treasury securities$10,932 $— $10,932 $— 
U.S. agency securities$63,273 $— $63,273 $— 
Equity securities$2,937 $2,937 $— $— 
There were no transfers between Level 1, 2, or 3 during the three months ended March 31, 2025 or the year ended December 31, 2024.
Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis
Financial Assets and Financial Liabilities: Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances. Financial assets measured at fair value on a nonrecurring basis include certain individually evaluated collateral dependent loans reported at fair value of the underlying collateral if repayment is expected solely from the collateral. Prior to foreclosure of these loans, fair value of the collateral is estimated using Level 3 inputs based on customized discounting criteria.
The table below presents certain individually evaluated collateral dependent loans that were remeasured and reported at fair value through the ACL based upon the fair value of the underlying collateral as of the dates indicated:
(in thousands)March 31, 2025December 31, 2024
Carrying value of collateral dependent loans before allowance$2,660 $1,672 
Specific allowance(23)(658)
Fair value of collateral dependent loans$2,637 $1,014 
The Company had no financial liabilities measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024.
Nonfinancial Assets and Liabilities: Certain nonfinancial assets and nonfinancial liabilities are measured at fair value on a nonrecurring basis. These include certain foreclosed assets, which are remeasured and reported at fair value through a charge-off to the ACL upon initial recognition as a foreclosed asset. Subsequent to their initial recognition, certain foreclosed assets are remeasured at fair value through an adjustment included in other noninterest income. The fair value of foreclosed assets is estimated using Level 3 inputs based on customized discounting criteria less estimated selling costs.
The following table presents foreclosed assets that were remeasured and reported at fair value as of the dates indicated:
(in thousands)March 31, 2025December 31, 2024
Foreclosed assets remeasured at initial recognition:
Carrying value of foreclosed assets prior to remeasurement$141 $38 
Charge-offs(16)— 
Fair value of foreclosed assets$125 $38 
There were no foreclosed assets that were remeasured subsequent to initial recognition as of March 31, 2025 and December 31, 2024.
The Company had no nonfinancial liabilities measured at fair value on a nonrecurring basis as of March 31, 2025 and December 31, 2024.
The unobservable inputs used for the Level 3 fair value measurements on a nonrecurring basis were as follows:
(dollars in thousands)Fair ValueValuation TechniqueUnobservable InputDiscount RangesWeighted Average Discount
March 31, 2025
Collateral dependent loans$9,957 Discounted appraisalsCollateral discounts and costs to sell
0% - 48%
4.74%
Foreclosed assets$125 Discounted appraisalsCollateral discounts and costs to sell
0% - 14%
13.18%
December 31, 2024
Collateral dependent loans$7,841 Discounted appraisalsCollateral discounts and costs to sell
0% - 100%
8.90%
Foreclosed assets$38 Discounted appraisalsCollateral discounts and costs to sellN/AN/A
Fair Value of Financial Instruments
The carrying amounts and estimated fair values of financial instruments as of March 31, 2025 and December 31, 2024, were as follows:
(in thousands)Carrying
Amount		Fair ValueLevel 1Level 2Level 3
March 31, 2025
Financial assets:
Cash and due from banks$36,438 $36,438 $36,438 $— $— 
Interest-bearing deposits in other banks$215,717 $215,717 $215,717 $— $— 
Securities AFS$566,874 $566,874 $— $566,874 $— 
Securities HTM$129,686 $107,927 $— $107,927 $— 
Equity securities$2,981 $2,981 $2,981 $— $— 
Nonmarketable equity securities$2,349 $2,349 $— $2,349 $— 
Loans HFS$2,178 $2,178 $— $2,178 $— 
Loans HFI, net of allowance$2,092,907 $1,985,734 $— $— $1,985,734 
Accrued interest receivable$10,553 $10,553 $— $— $10,553 
Financial liabilities:
Deposits$2,825,676 $2,822,511 $— $2,822,511 $— 
Accrued interest payable$6,463 $6,463 $— $6,463 $— 
December 31, 2024
Financial assets:
Cash and due from banks$30,558 $30,558 $30,558 $— $— 
Interest-bearing deposits in other banks$238,417 $238,417 $238,417 $— $— 
Securities AFS$550,148 $550,148 $— $550,148 $— 
Securities HTM$131,796 $108,990 $— $108,990 $— 
Equity securities$2,937 $2,937 $2,937 $— $— 
Nonmarketable equity securities$2,328 $2,328 $— $2,328 $— 
Loans HFS$2,547 $2,547 $— $2,547 $— 
Loans HFI, net of allowance$2,053,282 $1,923,754 $— $— $1,923,754 
Accrued interest receivable$10,048 $10,048 $— $— $10,048 
Financial liabilities:
Deposits$2,805,106 $2,801,310 $— $2,801,310 $— 
Accrued interest payable$7,583 $7,583 $— $7,583 $—