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Fair Values of Assets and Liabilities (Tables)

6 Months Ended

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				—				—

X

- 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.

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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.

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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).

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