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Fair Value of Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended
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Jun. 30, 2024
Fair Value Disclosures [Abstract] |
Fair Value, by Balance Sheet Grouping | The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2024 and December 31, 2023 are as follows:
| Fair Value Measurements
(dollars in thousands) | Carrying Value |  | Estimated Fair Value |  | Level 1 |  | Level 2 |  | Level 3
June 30, 2024 |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and short-term investments | $ | 82,002 |  |  | $ | 82,002 |  |  | $ | 82,002 |  |  | $ | — |  |  | $ | — |
Investment securities available-for-sale | 376,580 |  |  | 376,580 |  |  | — |  |  | 367,207 |  |  | 9,373 |
Investment securities held-to-maturity | 442,945 |  |  | 393,359 |  |  | — |  |  | 393,359 |  |  | — |
Other investments | 18,491 |  |  | 18,491 |  |  | — |  |  | 18,491 |  |  | — |
Loans held for sale | 40,132 |  |  | 40,132 |  |  | — |  |  | 40,132 |  |  | — |
Loans, net | 1,846,768 |  |  | 1,701,073 |  |  | — |  |  | — |  |  | 1,701,073 |
Derivative instruments | 531 |  |  | 531 |  |  | — |  |  | 531 |  |  | — |
Liabilities |  |  |  |  |  |  |  |  |
Deposits | 2,460,225 |  |  | 2,454,409 |  |  | — |  |  | 2,454,409 |  |  | — |
Federal Home Loan Bank advances | 205,000 |  |  | 207,372 |  |  | — |  |  | 207,372 |  |  | — |
Other borrowings | 62,992 |  |  | 50,554 |  |  | — |  |  | 50,554 |  |  | — |
| Fair Value Measurements
(dollars in thousands) | Carrying Value |  | Estimated Fair Value |  | Level 1 |  | Level 2 |  | Level 3
December 31, 2023 |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |
Cash and short-term investments | $ | 83,322 |  |  | $ | 83,322 |  |  | $ | 83,322 |  |  | $ | — |  |  | $ | — |
Investment securities available-for-sale | 407,382 |  |  | 407,382 |  |  | — |  |  | 396,568 |  |  | 10,814 |
Investment securities held-to-maturity | 449,031 |  |  | 405,576 |  |  | — |  |  | 405,576 |  |  | — |
Other investments | 16,868 |  |  | 16,868 |  |  | — |  |  | 16,868 |  |  | — |
Loans held for sale | 27,958 |  |  | 27,958 |  |  | — |  |  | 27,958 |  |  | — |
Loans, net | 1,865,099 |  |  | 1,699,870 |  |  | — |  |  | — |  |  | 1,699,870 |
Liabilities |  |  |  |  |  |  |  |  |
Deposits | 2,544,790 |  |  | 2,538,477 |  |  | — |  |  | 2,538,477 |  |  | — |
Federal Home Loan Bank advances | 175,000 |  |  | 176,022 |  |  | — |  |  | 176,022 |  |  | — |
Other borrowings | 63,445 |  |  | 51,056 |  |  | — |  |  | 51,056 |  |  | — |
Derivative instruments | 438 |  |  | 438 |  |  | — |  |  | 438 |  |  | — |
Fair Value Measurements, Recurring and Nonrecurring | The following tables present the recorded amount of the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall. The tables below include collateral dependent impaired loans and other real estate properties at June 30, 2024 and December 31, 2023. Those collateral dependent impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.
|  |  | Fair Value Measurements at Reporting Date Using
(dollars in thousands) | Total Fair Value |  | (Level 1) |  | (Level 2) |  | (Level 3)
June 30, 2024 |  |  |  |  |  |  |
Recurring |  |  |  |  |  |  |
Investment securities available-for-sale |  |  |  |  |  |  |
U.S. treasury securities | $ | 7,058 |  |  | $ | — |  |  | $ | 7,058 |  |  | $ | — |
U.S. agency securities | 3,848 |  |  | — |  |  | 3,848 |  |  | — |
Asset backed securities | 21,910 |  |  | — |  |  | 21,910 |  |  | — |
State, county & municipal securities | 97,165 |  |  | — |  |  | 97,165 |  |  | — |
Corporate debt securities | 46,724 |  |  | — |  |  | 40,166 |  |  | 6,558 |
Mortgage-backed securities | 199,875 |  |  | — |  |  | 197,060 |  |  | 2,815 |
Total investment securities available-for-sale | 376,580 |  |  | — |  |  | 367,207 |  |  | 9,373 |
Loans held for sale | 40,132 |  |  | — |  |  | 40,132 |  |  | — |
Derivative instruments | 531 |  |  | — |  |  | 531 |  |  | — |
Total recurring assets | $ | 417,243 |  |  | $ | — |  |  | $ | 407,870 |  |  | $ | 9,373 |
Nonrecurring |  |  |  |  |  |  |
Collateral dependent loans | $ | 1,427 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,427 |
Other real estate owned | 582 |  |  | — |  |  | — |  |  | 582 |
Total nonrecurring assets | $ | 2,009 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,009 |
|  |  | Fair Value Measurements at Reporting Date Using
(dollars in thousands) | Total Fair Value |  | (Level 1) |  | (Level 2) |  | (Level 3)
December 31, 2023 |  |  |  |  |  |  |
Recurring |  |  |  |  |  |  |
Investment securities available-for-sale |  |  |  |  |  |  |
U.S. treasury securities | $ | 498 |  |  | $ | — |  |  | $ | 498 |  |  | $ | — |
U.S. agency securities | 4,139 |  |  | — |  |  | 4,139 |  |  | — |
Asset backed securities | 24,630 |  |  | — |  |  | 24,630 |  |  | — |
State, county & municipal securities | 109,036 |  |  | — |  |  | 109,036 |  |  | — |
Corporate debt securities | 47,390 |  |  | — |  |  | 40,465 |  |  | 6,925 |
Mortgage-backed securities | 221,689 |  |  | — |  |  | 217,800 |  |  | 3,889 |
Total investment securities available-for-sale | 407,382 |  |  | — |  |  | 396,568 |  |  | 10,814 |
Loans held for sale | 27,958 |  |  | — |  |  | 27,958 |  |  | — |
Total recurring assets | $ | 435,340 |  |  | $ | — |  |  | $ | 424,526 |  |  | $ | 10,814 |
Derivative instruments | $ | 438 |  |  | $ | — |  |  | $ | 438 |  |  | $ | — |
Total recurring liabilities | $ | 438 |  |  | $ | — |  |  | $ | 438 |  |  | $ | — |
Nonrecurring |  |  |  |  |  |  |
Collateral dependent loans | $ | 1,410 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,410 |
Other real estate owned | 448 |  |  | — |  |  | — |  |  | 448 |
Total nonrecurring assets | $ | 1,858 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,858 |
Fair Value Measurement Inputs and Valuation Techniques | The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at June 30, 2024 and December 31, 2023. This table is comprised of collateral dependent impaired loans and other real estate owned:
(dollars in thousands) | June 30, 2024 |  | Valuation Techniques |  | Unobservable Inputs |  |  |  | Discount rate
Collateral dependent loans | $ | 1,427 |  |  | Appraised Value |  | Discounts to reflect estimated costs to sell |  |  |  |  |  | 10 | %
Other real estate owned | 582 |  |  | Appraised Value/Comparable Sales |  | Discounts to reflect current market conditions and estimated costs to sell |  |  |  |  |  | 10 | %
(dollars in thousands) | December 31, 2023 |  | Valuation Techniques |  | Unobservable Inputs |  |  |  | Discount rate
Collateral dependent loans | $ | 1,410 |  |  | Appraised Value |  | Discounts to reflect estimated costs to sell |  |  |  |  |  | 10 | %
Other real estate owned | 448 |  |  | Appraised Value/Comparable Sales |  | Discounts to reflect current market conditions and estimated costs to sell |  |  |  |  |  | 10 | %
The following table presents quantitative information about recurring level 3 fair value measurements as of June 30, 2024 and December 31, 2023.
| As of June 30, 2024
(dollars in thousands) | Fair Value |  | Valuation Techniques |  | Unobservable Inputs |  | Range (Weighted Avg)
Available-for-sale securities | $ | 9,373 |  |  | Discounted Cash Flow |  | Discount Rate or Yield |  | N/A*
| As of December 31, 2023
(dollars in thousands) | Fair Value |  | Valuation Techniques |  | Unobservable Inputs |  | Range (Weighted Avg)
Available-for-sale securities | $ | 10,814 |  |  | Discounted Cash Flow |  | Discount Rate or Yield |  | N/A*
* The Company relies on a third-party pricing service to value its securities. The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the three and six months ended June 30, 2024.
| Three Months Ended |  | Six Months Ended
| June 30, 2024 |  | June 30, 2024
(dollars in thousands) | Available-for-sale securities |  |  |  | Available-for-sale securities |  |
Balance, Beginning | $ | 7,145 |  |  |  |  | $ | 10,814 |  |  |
Additions | 2,588 |  |  |  |  | 2,588 |  |  |
Redemptions/Payments | (338) |  |  |  |  | (3,251) |  |  |
Fair value adjustments | (22) |  |  |  |  | 1,647 |  |  |
Transfers between levels | — |  |  |  |  | (2,425) |  |  |
Balance, Ending | $ | 9,373 |  |  |  |  | $ | 9,373 |  |  |

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