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Fair Values of Assets and Liabilities (Tables) | 6 Months Ended
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Jun. 30, 2023
Fair Value Disclosures [Abstract] |
Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  | (Dollars in thousands) |
June 30, 2023 |  |  |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored enterprises obligations |  | $ | 1,840 |  |  | $ | — |  |  | $ | 1,840 |  |  | $ | — |
U.S Government agency small business administration pools guaranteed by the SBA |  |  | 7,788 |  |  |  | — |  |  |  | 7,788 |  |  |  | — |
Collateralized mortgage obligations issued by the FHLMC, FNMA and GNMA |  |  | 5,864 |  |  |  | — |  |  |  | 5,864 |  |  |  | — |
Residential mortgage-backed-securities |  |  | 21,672 |  |  |  | — |  |  |  | 21,672 |  |  |  | — |
Municipal bonds |  |  | 65,141 |  |  |  | — |  |  |  | 65,141 |  |  |  | — |
Corporate debt |  |  | 485 |  |  |  | — |  |  |  | 485 |  |  |  | — |
Corporate subordinated debt |  |  | 7,106 |  |  |  | — |  |  |  | 7,106 |  |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage servicing rights |  |  | 350 |  |  |  | — |  |  |  | — |  |  |  | 350 |
Derivatives |  |  | 326 |  |  |  | — |  |  |  | 326 |  |  |  | — |
Other liabilities: |  |  |
Derivatives |  |  | 48 |  |  |  | — |  |  |  | 48 |  |  |  | — |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  | (Dollars in thousands) |
December 31, 2022 |  |  |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Government-sponsored enterprises obligations |  | $ | 1,826 |  |  | $ | — |  |  | $ | 1,826 |  |  | $ | — |
U.S Government agency small business administration pools guaranteed by the SBA |  |  | 8,359 |  |  |  | — |  |  |  | 8,359 |  |  |  | — |
Collateralized mortgage obligations issued by the FHLMC, FNMA and GNMA |  |  | 6,222 |  |  |  | — |  |  |  | 6,222 |  |  |  | — |
Residential mortgage-backed-securities |  |  | 21,823 |  |  |  | — |  |  |  | 21,823 |  |  |  | — |
Municipal bonds |  |  | 62,416 |  |  |  | — |  |  |  | 62,416 |  |  |  | — |
Corporate debt |  |  | 497 |  |  |  | — |  |  |  | 497 |  |  |  | — |
Corporate subordinated debt |  |  | 4,957 |  |  |  | — |  |  |  | 4,957 |  |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |
Mortgage servicing rights |  | $ | 357 |  |  |  | — |  |  |  | — |  |  |  | 357 |
Derivatives |  |  | 961 |  |  |  | — |  |  |  | 961 |  |  |  | — |
Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | For the six months ended June 30, 2023 and 2022, the changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:
(Dollars in thousands) |  | Mortgage Servicing Rights (1) |
Balance as of January 1, 2023 |  | $ | 357 |
Included in net (loss) income |  |  | (7 | )
Balance as of June 30, 2023 |  | $ | 350 |
Total unrealized net gains (losses) included in net income related to assets still held as of June 30, 2023 |  | $ | — |
Balance as of January 1, 2022 |  | $ | 322 |
Included in net (loss) income |  |  | 42 |
Balance as of June 30, 2022 |  | $ | 364 |
Total unrealized net gains (losses) included in net income related to assets still held as of June 30, 2022 |  | $ | — |
(1) Realized and unrealized gains and losses related to mortgage servicing rights are reported as a component of loan servicing fee income in the Company’s consolidated statements of (loss) income.
Summary of Significant Unobservable Inputs used in Level 3 Assets Measured at Fair Value on Recurring Basis | For Level 3 assets measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, the significant unobservable inputs used in the fair value measurements were as follows:
|  | June 30, 2023 |
(Dollars in thousands) |  | Valuation Technique |  | Description |  | Range |  | Weighted Average (1) |  | Fair Value |
Mortgage Servicing Rights |  | Discounted Cash Flow |  | Prepayment Rate |  | 5.70% - 20.69% |  | 7.78% |  | $ | 350 |
|  |  |  | Discount Rate |  | 9.50% - 9.50% |  | 9.00% |  |  |
|  |  |  | Delinquency Rate |  | 1.82% - 2.47% |  | 2.36% |  |  |
|  |  |  | Default Rate |  | 0.14% - 0.20% |  | 0.15% |  |  |
|  | December 31, 2022 |
(Dollars in thousands) |  | Valuation Technique |  | Description |  | Range |  | Weighted Average (1) |  | Fair Value |
Mortgage Servicing Rights |  | Discounted Cash Flow |  | Prepayment Rate |  | 6.48% - 23.49% |  | 7.78% |  | $ | 357 |
|  |  |  | Discount Rate |  | 9.50% - 9.50% |  | 9.50% |  |  |
|  |  |  | Delinquency Rate |  | 2.13% - 2.79% |  | 2.24% |  |  |
|  |  |  | Default Rate |  | 0.14% - 0.20% |  | 0.15% |  |  |
(1) Unobservable inputs for mortgage servicing rights were weighted by loan amount.
Fair Value Measurements, Recurring and Nonrecurring | The estimated fair values, and related carrying or notional amounts, of the Company’s financial instruments at June 30, 2023 and December 31, 2022 are as follows:
(Dollars in thousands) |  | Carrying Amount |  |  | Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 6,643 |  |  | $ | 6,643 |  |  | $ | 6,643 |  |  | $ | — |  |  | $ | — |
Interest-bearing time deposits with other banks |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Federal Home Loan Bank stock |  |  | 3,615 |  |  |  | 3,615 |  |  |  | — |  |  |  | 3,615 |  |  |  | — |
Bank-owned life insurance |  |  | 4,602 |  |  |  | 4,602 |  |  |  | — |  |  |  | 4,602 |  |  |  | — |
Loans, net |  |  | 413,740 |  |  |  | 369,281 |  |  |  | — |  |  |  | — |  |  |  | 369,281 |
Accrued interest receivable |  |  | 2,001 |  |  |  | 2,001 |  |  |  | 2,001 |  |  |  | — |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 388,941 |  |  | $ | 386,848 |  |  | $ | 315,895 |  |  | $ | 70,953 |  |  | $ | — |
Advances from Federal Home Loan Bank |  |  | 85,597 |  |  |  | 85,111 |  |  |  | — |  |  |  | 85,111 |  |  |  | — |
Mortgagors’ tax escrow |  |  | 864 |  |  |  | 864 |  |  |  | — |  |  |  | 864 |  |  |  | — |
Accrued interest payable |  |  | 227 |  |  |  | 227 |  |  |  | 227 |  |  |  | — |  |  |  | — |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 8,250 |  |  | $ | 8,250 |  |  | $ | 8,250 |  |  | $ | — |  |  | $ | — |
Interest-bearing time deposits with other banks |  |  | 747 |  |  |  | 747 |  |  |  | — |  |  |  | 747 |  |  |  | — |
Federal Home Loan Bank stock |  |  | 3,502 |  |  |  | 3,502 |  |  |  | — |  |  |  | 3,502 |  |  |  | — |
Bank-owned life insurance |  |  | 4,561 |  |  |  | 4,561 |  |  |  | — |  |  |  | 4,561 |  |  |  | — |
Loans, net |  |  | 398,924 |  |  |  | 361,402 |  |  |  | — |  |  |  | — |  |  |  | 361,402 |
Accrued interest receivable |  |  | 1,988 |  |  |  | 1,988 |  |  |  | 1,988 |  |  |  | — |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 382,363 |  |  | $ | 379,714 |  |  | $ | 320,624 |  |  | $ | 59,090 |  |  | $ | — |
Advances from Federal Home Loan Bank |  |  | 99,397 |  |  |  | 97,675 |  |  |  | — |  |  |  | 97,675 |  |  |  | — |
Mortgagors’ tax escrow |  |  | 938 |  |  |  | 938 |  |  |  | — |  |  |  | 938 |  |  |  | — |
Accrued interest payable |  |  | 95 |  |  |  | 95 |  |  |  | 95 |  |  |  | — |  |  |  | — |

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- Definition Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are 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. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2C -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2C Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-3 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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- Definition 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 Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c) -SubTopic 10 -Topic 820 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-3 + Details
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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//820/tableOfContent + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, 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 Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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