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FAIR VALUE ACCOUNTING
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE ACCOUNTING FAIR VALUE ACCOUNTING
ASC Topic 820-10, “Fair Value Measurements and Disclosures” establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:
Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company 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 the Company’s assumptions about the factors that market participants would use in pricing an asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.
The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).
Assets Measured on a Recurring Basis
The following tables present the financial instruments measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:
Fair
Value		Quoted Prices in
Active Markets
for Identical
Instruments
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
June 30, 2023
Investment securities:
U.S. government agency obligations$18,703 $— $18,703 $— 
Mortgage-backed securities75,976 — 75,976 — 
Corporate debt securities40,253 — 40,253 — 
Corporate asset-backed securities26,203 — 26,203 — 
Total investment securities161,135 — 161,135 — 
Equity Investments:
Equity Investments423 423 — — 
Equity investments measured at NAV(1)1,876 — — — 
Total equity investments2,299 423 — — 
Total$163,434 $423 $161,135 $— 
December 31, 2022
Investment securities:
U.S. government agency obligations$18,313 $— $18,313 $— 
Mortgage-backed securities78,610 — 78,610 — 
Corporate debt securities40,251 — 40,251 — 
Corporate asset backed securities28,817 — 28,817 — 
Total investment securities165,991 — 165,991 — 
Equity Investments:
Equity Investments338 338 — — 
Equity investments measured at NAV(1)1,456 — — — 
Total equity investments1,794 338 — — 
Total$167,785 $338 $165,991 $— 
(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.
Assets Measured on Nonrecurring Basis
The following tables present the financial instruments measured at fair value on a nonrecurring basis as of June 30, 2023 and December 31, 2022:
Carrying ValueQuoted Prices in
Active Markets
for Identical
Instruments
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
June 30, 2023
Foreclosed and repossessed assets, net$1,199 $— $— $1,199 
Collateral dependent loans with allowances299 — — 299 
Mortgage servicing rights4,008 — — 5,705 
Total$5,506 $— $— $7,203 
December 31, 2022
Foreclosed and repossessed assets, net$1,271 $— $— $1,271 
Impaired loans with allocated allowances6,920 — — 6,920 
Mortgage servicing rights4,262 — — 5,665 
Total$12,453 $— $— $13,856 
The fair value of collateral dependent loans with allowances, and impaired loans prior to the adoption of ASU 2016-13 on January 1, 2023, referenced above, was determined by obtaining independent third party appraisals and/or internally developed collateral valuations to support the Company’s estimates and judgments in determining the fair value of the underlying collateral supporting impaired loans.
The fair value of foreclosed and repossessed assets was determined by obtaining market price valuations from independent third parties wherever such quotes were available for other collateral owned. The Company utilized independent third party appraisals to support the Company’s estimates and judgments in determining fair value for other real estate owned.
The fair value of mortgage servicing rights was estimated using discounted cash flows based on current market rates and other factors.
The following table represents additional quantitative information about assets measured at fair value on a
recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine their fair value at
June 30, 2023.
Fair
Value		Valuation Techniques (1)Significant Unobservable Inputs (2)Range
June 30, 2023
Foreclosed and repossessed assets, net$1,199 Appraisal valueEstimated costs to sell
10% - 15%
Collateral dependent loans with allowances$299 Appraisal valueEstimated costs to sell
10% - 15%
Mortgage servicing rights$5,705 Discounted cash flowsDiscounted rates
9.5% - 12.5%
December 31, 2022
Foreclosed and repossessed assets, net$1,271 Appraisal valueEstimated costs to sell
10% - 15%
Impaired loans with allocated allowances$6,920 Appraisal valueEstimated costs to sell
10% - 15%
Mortgage servicing rights$5,665 Discounted cash flowsDiscounted rates
9.5% - 12.5%
(1)     Fair value is generally determined through independent third-party appraisals of the underlying
    collateral, which generally includes various level 3 inputs which are not observable.

(2)     The fair value basis of collateral depended loans, impaired loans prior to the adoption of ASU 2016-12, and real     
estate owned may be adjusted to reflect management estimates of disposal costs including, but not limited to, real
estate brokerage commissions, legal fees,    and delinquent property taxes.
The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company’s financial instruments as of the dates indicated below were as follows:
 June 30, 2023December 31, 2022
 Valuation Method UsedCarrying
Amount		Estimated
Fair
Value		Carrying
Amount		Estimated
Fair
Value
Financial assets:
Cash and cash equivalents(Level I)$42,969 $42,969 $35,363 $35,363 
Other interest-bearing deposits(Level II)— — 249 250 
Securities available for sale “AFS”(Level II)161,135 161,135 165,991 165,991 
Securities held to maturity “HTM”(Level II)93,800 74,681 96,379 76,779 
Equity investments(Level I)423 423 338 338 
Equity investments valued at NAV(1)N/A1,876 1,876 1,456 1,456 
Other investments(Level II)16,347 16,347 15,834 15,834 
Loans receivable, net(Level III)1,401,824 1,343,772 1,393,845 1,342,838 
Loans held for sale - Residential mortgage(Level I)1,523 1,550 — — 
Loans held for sale - SBA (Level II)871 945 — — 
Mortgage servicing rights(Level III)4,008 5,705 4,262 5,665 
Accrued interest receivable(Level I)5,702 5,702 5,285 5,285 
Financial liabilities:
Deposits(Level III)$1,464,682 $1,460,716 $1,424,720 $1,420,871 
FHLB advances(Level II)122,530 121,373 142,530 141,060 
Other borrowings(Level I)67,357 67,357 72,409 72,409 
Accrued interest payable(Level I)1,486 1,486 968 968 
(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.