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Fair Value (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value on Recurring Basis

The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates stated.

		September 30, 2022
(Dollars in thousands)		Total				Level 1				Level 2				Level 3
Securities available for sale
State and municipals		$	51,032			$	—			$	51,032			$	—
U.S. Treasury and agencies			60,085				—				60,085				—
Mortgage backed securities			207,820				—				200,203				7,617
Corporate bonds			40,579				1,500				31,034				8,045
Total securities available for sale		$	359,516			$	1,500			$	342,354			$	15,662
Other assets
MSR assets		$	29,861			$	—			$	—			$	29,861
Rabbi trust assets			765				765				—				—
Mortgage derivative asset			1,045				—				1,045				—
Interest rate swap asset			102				—				102				—
Other liabilities
Mortgage derivative liability		$	—			$	—			$	—			$	—
Interest rate swap liability			102				—				102				—

		December 31, 2021
(Dollars in thousands)		Total				Level 1				Level 2				Level 3
Securities available for sale
State and municipals		$	51,113			$	—			$	51,113			$	—
U.S. Treasury and agencies			64,066				—				64,066				—
Mortgage backed securities			219,110				—				211,194				7,916
Corporate bonds			39,243				3,000				25,179				11,064
Total securities available for sale		$	373,532			$	3,000			$	351,552			$	18,980
Other assets
Rabbi trust assets		$	994			$	994			$	—			$	—
Mortgage derivative asset			1,876				—				1,876				—
Interest rate swap asset			199				—				199				—
Other liabilities
Mortgage derivative liability		$	75			$	—			$	75			$	—
Interest rate swap liability			199				—				199				—

Summary of Changes in Financial Assets Valued Using Level 3 Inputs

The following table presents the change in financial assets valued using Level 3 inputs for the period stated.

(Dollars in thousands)		MSR Assets				Corporate Bonds				Mortgage backed securities
Balance as of December 31, 2021		$	16,469			$	11,064			$	7,916
Change in accounting method			4,484				—				—
Transfers from Level 2 to Level 3			—				—				—
Transfers from Level 3 to Level 2			—				(5,684	)			—
Additions			5,412				3,000				—
Sales or paydowns			—				—				(280	)
Fair value adjustments			3,496				(335	)			(19	)
Balance as of September 30, 2022		$	29,861			$	8,045			$	7,617

Summary of Assets Measured at Fair Value

The following tables summarize assets that were measured at fair value on a nonrecurring basis as of the dates stated.

		September 30, 2022
(Dollars in thousands)		Total				Level 1				Level 2				Level 3
Impaired loans, net		$	3,142			$	—			$	—			$	3,142
Loans held for sale			25,800				—				25,800				—
OREO			195				—				—				195

		December 31, 2021
(Dollars in thousands)		Total				Level 1				Level 2				Level 3
Impaired loans, net		$	8,344			$	—			$	—			$	8,344
Loans held for sale			121,943				—				121,943				—
OREO			157				—				—				157

Summary of Quantitative Information about Level 3 Fair Value Measurements

The following tables present quantitative information about Level 3 fair value measurements as of the dates stated.

(Dollars in thousands)		Balance as of September 30, 2022				Unobservable Input		Range
Impaired loans, net
Discounted appraised value technique		$	661			Selling Costs		0% - 7%
Discounted cash flows technique			2,481			Discount Rate		4% - 11%
OREO
Discounted appraised value technique			195			Selling Costs			7	%

(Dollars in thousands)		Balance as of December 31, 2021				Unobservable Input		Range
Impaired loans, net
Discounted appraised value technique		$	8,108			Selling Costs			7	%
Discounted cash flows technique			236			Discount Rate		4% - 7%
OREO
Discounted appraised value technique			157			Selling Costs			7	%

Summary of Estimated Fair Values and Related Carrying Amounts and Valuation Level of Financial Instruments

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated.

		September 30, 2022
										Fair Value Measurements
(Dollars in thousands)		Carrying Value				Fair Value				Level 1				Level 2				Level 3
Financial Assets
Cash and due from banks		$	98,305			$	98,305			$	98,305			$	—			$	—
Federal funds sold			10,581				10,581				10,581				—				—
Securities available for sale			359,516				359,516				1,500				342,354				15,662
Restricted equity investments			13,639				13,639				—				13,639				—
Other equity investments			23,570				23,570				—				23,570				—
PPP loans receivable, net			13,148				13,148				—				—				13,148
Loans held for investment, net			2,137,808				2,093,433				—				—				2,093,433
Accrued interest receivable			9,577				9,577				—				9,577				—
Bank owned life insurance			47,095				47,095				—				47,095				—
MSR assets			29,861				29,861				—				—				29,861
Financial Liabilities
Noninterest-bearing deposits		$	787,514			$	787,514			$	787,514			$	—			$	—
Interest-bearing demand and money market deposits			1,097,585				1,097,585				—				1,097,585				—
Savings deposits			152,225				152,225				—				152,225				—
Time deposits			372,162				370,898				—				—				370,898
FHLB borrowings			150,100				150,100				—				150,100				—
FRB borrowings			55				55				—				55				—
Subordinated notes, net			39,937				37,608				—				—				37,608

		December 31, 2021
										Fair Value Measurements
(Dollars in thousands)		Carrying Value				Fair Value				Level 1				Level 2				Level 3
Financial Assets
Cash and due from banks		$	130,548			$	130,548			$	130,548			$	—			$	—
Federal funds sold			43,903				43,903				43,903				—				—
Securities available for sale			373,532				373,532				3,000				351,552				18,980
Restricted equity investments			8,334				8,334				—				8,334				—
Other equity investments			14,184				14,184				—				14,184				—
PPP loans receivable, net			30,406				30,406				—				—				30,406
Loans held for investment, net			1,765,051				1,766,820				—				—				1,766,820
Accrued interest receivable			9,573				9,573				—				9,573				—
Bank owned life insurance			46,545				46,545				—				46,545				—
Financial Liabilities
Noninterest-bearing deposits		$	685,801			$	685,801			$	685,801			$	—			$	—
Interest-bearing demand and money market deposits			962,092				962,092				—				962,092				—
Savings deposits			150,376				150,376				—				150,376				—
Time deposits			499,502				503,968				—				—				503,968
FHLB borrowings			10,111				9,943				—				9,943				—
FRB borrowings			17,901				17,901				—				17,901				—
Subordinated notes, net			39,986				41,388				—				—				41,388

X

- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique used to measure similar asset in prior period by class of asset or liability on non-recurring basis.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (bbb)
-URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258

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Tabular disclosure of assets measured at fair value measured on a recurring or nonrecurring basis. Includes, but is not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
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Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References

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-Name Accounting Standards Codification
-Topic 820
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-Section 50
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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References

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-Section 50
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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References

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