XML 45 R31.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Fair Value Measurements and Disclosures | 12 Months Ended
--- | ---
Dec. 31, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures The Company values its financial assets and liabilities measured at fair value in three levels as required by ASC 820, Fair Value Measurements and Disclosures. Under this guidance, fair value is based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: •Level 1 – Quoted prices in active markets for identical assets or liabilities. •Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. •Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities quarterly. Recurring Basis Investment Securities Available for Sale Fair values of investment securities available for sale are primarily measured using information from a third-party pricing service. This pricing service provides pricing information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications. If quoted prices are available in an active market, investment securities are classified as Level 1 measurements. If quoted prices are not available in an active market, fair values are estimated primarily by the use of pricing models. Level 2 investment securities are primarily comprised of mortgage-backed securities issued by government agencies and U.S. government-sponsored enterprises. In certain cases, where there is limited or less transparent information provided by the Company’s third-party pricing service, fair value is estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes. Investment securities are classified within Level 3 when little or no market activity supports the fair value. Management primarily identifies investment securities which may have traded in illiquid or inactive markets by identifying instances of a significant decrease in the volume and frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Investment securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant unobservable inputs. For example, management may use quoted prices for similar investment securities in the absence of a liquid and active market for the investment securities being valued. As of December 31, 2023, management did not make adjustments to prices provided by the third-party pricing service as a result of illiquid or inactive markets. Derivative Assets and Liabilities The fair value of these derivative financial instruments is obtained from a third-party pricing service that uses widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. The following tables present the balances of assets and liabilities measured on a recurring basis as of December 31, 2023 and 2022 aggregated by the level in the fair value hierarchy in which these measurements fall.
(dollars in thousands) |  | December 31, 2023 |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |
U.S. agency mortgage-backed |  | $ | 283,853 |  |  | $ | — |  |  | $ | 283,853 |  |  | $ | — |
Collateralized mortgage obligations |  | 79,262 |  |  | — |  |  | 79,262 |  |  | — |
Municipal bonds |  | 46,674 |  |  | — |  |  | 46,674 |  |  | — |
U.S. government agency |  | 18,049 |  |  | — |  |  | 18,049 |  |  | — |
Corporate bonds |  | 6,088 |  |  | — |  |  | 6,088 |  |  | — |
Total available for sale securities |  | $ | 433,926 |  |  | $ | — |  |  | $ | 433,926 |  |  | $ | — |
Derivative assets(1) |  | $ | 3,914 |  |  | $ | — |  |  | $ | 3,914 |  |  | $ | — |
Total |  | $ | 437,840 |  |  | $ | — |  |  | $ | 437,840 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |
Derivative liabilities(1) |  | $ | 3 |  |  | $ | — |  |  | $ | 3 |  |  | $ | — |
(dollars in thousands) |  | December 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |
Available for sale securities: |  |  |  |  |  |  |  |
U.S. agency mortgage-backed |  | $ | 316,832 |  |  | $ | — |  |  | $ | 316,832 |  |  | $ | — |
Collateralized mortgage obligations |  | 86,345 |  |  | — |  |  | 86,345 |  |  | — |
Municipal bonds |  | 57,625 |  |  | — |  |  | 57,625 |  |  | — |
U.S. government agency |  | 19,333 |  |  | — |  |  | 19,333 |  |  | — |
Corporate bonds |  | 6,383 |  |  | — |  |  | 6,383 |  |  | — |
Total available for sale securities |  | $ | 486,518 |  |  | $ | — |  |  | $ | 486,518 |  |  | $ | — |
Derivative assets(1) |  | $ | 5,144 |  |  | $ | — |  |  | $ | 5,144 |  |  | $ | — |
Total |  | $ | 491,662 |  |  | $ | — |  |  | $ | 491,662 |  |  | $ | — |
Liabilities |  |  |  |  |  |  |  |
Derivative liabilities(1) |  | $ | 9 |  |  | $ | — |  |  | $ | 9 |  |  | $ | — |
(1)For more information, refer to Note 14. Nonrecurring Basis The Company records loans individually evaluated for impairment at fair value on a nonrecurring basis. A loan is considered impaired if it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Fair value is measured at the fair value of the collateral for collateral-dependent loans. For non-collateral-dependent loans, fair value is measured by present valuing expected future cash flows. Impaired loans are classified as Level 3 assets when measured using appraisals from third parties of the collateral less any prior liens and when there is no observable market price. Foreclosed assets and ORE are also recorded at fair value on a nonrecurring basis. Foreclosed assets are initially recorded at fair value less estimated costs to sell. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. The fair value of foreclosed assets and ORE is based on property appraisals and an analysis of similar properties available. As such, the Company classifies foreclosed and ORE assets as Level 3 assets. The Company has segregated all financial assets and liabilities that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the tables below.
|  |  |  | Fair Value Measurements Using
(dollars in thousands) |  | December 31, 2023 |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | 3,797 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,797 |
Foreclosed assets and ORE |  | 1,575 |  |  | — |  |  | — |  |  | 1,575 |
Total |  | $ | 5,372 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,372 |
|  |  |  | Fair Value Measurements Using
(dollars in thousands) |  | December 31, 2022 |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  | $ | 4,312 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,312 |
Foreclosed assets and ORE |  | 461 |  |  | — |  |  | — |  |  | 461 |
Total |  | $ | 4,773 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,773 |
The following tables show significant unobservable inputs used in the fair value measurement of Level 3 assets.
(dollars in thousands) |  | Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range of Discounts |  | Weighted Average Discount
As of December 31, 2023
Loans individually evaluated for impairment |  | $ | 3,797 |  |  | Third party appraisals and discounted cash flows |  | Collateral values, market discounts and estimated costs to sell |  | 0% - 89% |  | 10 | %
Foreclosed assets and ORE |  | $ | 1,575 |  |  | Third party appraisals, sales contracts, broker price opinions |  | Collateral values, market discounts and estimated costs to sell |  | 31% - 71% |  | 62 | %
(dollars in thousands) |  | Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range of Discounts |  | Weighted Average Discount
As of December 31, 2022
Loans individually evaluated for impairment |  | $ | 4,312 |  |  | Third party appraisals and discounted cash flows |  | Collateral values, market discounts and estimated costs to sell |  | 0% - 89% |  | 14 | %
Foreclosed assets and ORE |  | $ | 461 |  |  | Third party appraisals, sales contracts, broker price opinions |  | Collateral values, market discounts and estimated costs to sell |  | 6% - 31% |  | 16 | %
ASC 820, Fair Value Measurements and Disclosures, requires the disclosure of each class of financial instruments for which it is practicable to estimate. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. 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. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statement element. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates included herein are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the fair value of assets and liabilities that are not required to be recorded or disclosed at fair value like premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: •The carrying value of cash and cash equivalents and interest-bearing deposits in banks approximate their fair value. •The fair value for investment securities is determined from quoted market prices when available. If a quoted market price is not available, fair value is estimated using third party pricing services or quoted market prices of securities with similar characteristics. •The carrying value of mortgage loans held for sale approximates their fair value. •The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturity. •The cash surrender value of BOLI approximates its fair value. •The fair value of customer deposits, excluding certificates of deposit, is the amount payable on demand. The fair value of fixed-maturity certificates of deposit is estimated by discounting the future cash flows using the rates currently offered for deposits of similar remaining maturities. •The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. •The fair value of other borrowings and FHLB advances is estimated by discounting the future cash flows using the rates currently offered for borrowings of similar maturities. •The fair value of derivative assets and liabilities are obtained from a third-party pricing service that uses the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The fair value of off-balance sheet financial instruments as of December 31, 2023 and 2022 was immaterial.
|  |  |  | Fair Value Measurements at December 31, 2023
(dollars in thousands) |  | Carrying Amount |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 75,831 |  |  | $ | 75,831 |  |  | $ | 75,831 |  |  | $ | — |  |  | $ | — |
Interest-bearing deposits in banks |  | 99 |  |  | 99 |  |  | 99 |  |  | — |  |  | — |
Investment securities available for sale |  | 433,926 |  |  | 433,926 |  |  | — |  |  | 433,926 |  |  | — |
Investment securities held to maturity |  | 1,065 |  |  | 1,066 |  |  | — |  |  | 1,066 |  |  | — |
Mortgage loans held for sale |  | 361 |  |  | 361 |  |  | — |  |  | 361 |  |  | — |
Loans, net |  | 2,550,101 |  |  | 2,381,863 |  |  | — |  |  | 2,378,066 |  |  | 3,797 |
Cash surrender value of BOLI |  | 47,321 |  |  | 47,321 |  |  | 47,321 |  |  | — |  | — |
Derivative assets(1) |  | 3,914 |  |  | 3,914 |  |  | — |  |  | 3,914 |  |  | — |
Financial Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 2,670,624 |  |  | $ | 2,665,590 |  |  | $ | 2,025,890 |  |  | $ | 639,700 |  |  | $ | — |
Other borrowings |  | 5,539 |  |  | 5,498 |  |  | — |  |  | 5,498 |  |  | — |
Subordinated debt, net of issuance cost |  | 54,241 |  |  | 50,865 |  |  | — |  |  | 50,865 |  |  | — |
Short-term FHLB advances |  | 150,000 |  |  | 150,000 |  |  | 150,000 |  |  | — |  |  | — |
Long-term FHLB advances |  | 42,713 |  |  | 41,792 |  |  | — |  |  | 41,792 |  |  | — |
Derivative liabilities(1) |  | 3 |  |  | 3 |  |  | — |  |  | 3 |  |  | — |
|  |  |  | Fair value Measurements at December 31, 2022
(dollars in thousands) |  | Carrying Amount |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Financial Assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 87,401 |  |  | $ | 87,401 |  |  | $ | 87,401 |  |  | $ | — |  |  | $ | — |
Interest-bearing deposits in banks |  | 349 |  |  | 349 |  |  | 349 |  |  | — |  |  | — |
Investment securities available for sale |  | 486,518 |  |  | 486,518 |  |  | — |  |  | 486,518 |  |  | — |
Investment securities held to maturity |  | 1,075 |  |  | 1,072 |  |  | — |  |  | 1,072 |  |  | — |
Mortgage loans held for sale |  | 98 |  |  | 98 |  |  | — |  |  | 98 |  |  | — |
Loans, net |  | 2,401,451 |  |  | 2,326,104 |  |  | — |  |  | 2,321,792 |  |  | 4,312 |
Cash surrender value of BOLI |  | 46,276 |  |  | 46,276 |  |  | 46,276 |  |  | — |  |  | — |
Derivative assets(1) |  | 5,144 |  |  | 5,144 |  |  | — |  |  | 5,144 |  |  | — |
Financial Liabilities |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 2,633,181 |  |  | $ | 2,620,577 |  |  | $ | 2,297,736 |  |  | $ | 322,841 |  |  | $ | — |
Other borrowings |  | 5,539 |  |  | 5,388 |  |  | — |  |  | 5,388 |  |  | — |
Subordinated debt, net of issuance cost |  | 54,013 |  |  | 51,287 |  |  | — |  |  | 51,287 |  |  | — |
Short-term FHLB advances |  | 155,000 |  |  | 155,000 |  |  | 155,000 |  |  | — |  |  | — |
Long-term FHLB advances |  | 21,213 |  |  | 20,019 |  |  | — |  |  | 20,019 |  |  | — |
Derivative liabilities(1) |  | 9 |  |  | 9 |  |  | — |  |  | 9 |  |  | — |
(1)Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration