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Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2022
Fair Value Measurements [Abstract]  
Fair Value Assets and Liabilities Measured on Nonrecurring Basis Valuation Techniques

(Dollars in thousands)

    

Fair Value

    

Valuation Technique

    

Unobservable Input

    

Range

September 30, 2022

 

  

 

  

  

  

MSRs (1)

$

5,321

 

Market Approach

Weighted average prepayment speed (PSA) (2)

121

IRLCs - net liability

$

(23)

 

Market Approach

Range of pull through rate

78% - 100%

Average pull through rate

92%

(Dollars in thousands)

    

Fair Value

    

Valuation Technique

    

Unobservable Input

    

Range

December 31, 2021

 

  

 

  

  

  

MSRs (1)

$

4,087

 

Market Approach

Weighted average prepayment speed (PSA) (2)

156

IRLCs - asset

$

380

 

Market Approach

Range of pull through rate

77% - 100%

Average pull through rate

93%

(1)The weighted average was calculated with reference to the principal balance of the underlying mortgages.
(2)PSA = Public Securities Association Standard Prepayment Model

Schedule of Servicing Asset at Fair Value

For the Three Months Ended

For the Nine Months Ended

(Dollars in thousands)

    

September 30, 2022

    

September 30, 2022

Beginning balance

 

$

5,228

 

$

4,087

Servicing rights resulting from sales of loans

113

777

Valuation adjustment

(20)

457

Ending balance

$

5,321

$

5,321

Schedule of Derivative Asset at Fair Value

For the Three Months Ended

For the Nine Months Ended

(Dollars in thousands)

    

September 30, 2022

    

September 30, 2022

Beginning balance

 

$

146

 

$

380

Valuation adjustment

(169)

(403)

Ending balance

$

(23)

$

(23)

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

Significant

Other

Significant

Quoted

Observable

Unobservable

Prices

Inputs

Inputs

(Dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

September 30, 2022

 

  

 

  

 

  

 

  

Assets:

Securities available for sale:

 

  

 

  

 

  

 

  

U.S. Government agencies

$

18,314

$

$

18,314

$

Mortgage-backed

 

66,156

 

 

66,156

 

Other Debt Securities

1,877

1,877

 

86,347

 

 

86,347

 

Equity securities

1,222

1,222

TBA securities

1,000

1,000

LHFS

8,342

8,342

MSRs

5,321

5,321

IRLCs

10

10

Total assets at fair value

$

102,242

$

$

96,911

$

5,331

Liabilities:

IRLCs

$

33

$

$

$

33

Total liabilities at fair value

$

33

$

$

$

33

Significant

Other

Significant

Quoted

Observable

Unobservable

Prices

Inputs

Inputs

(Dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

December 31, 2021

 

  

 

  

 

  

 

  

Assets:

Securities available for sale:

 

  

 

  

 

  

 

  

U.S. Government agencies

$

22,305

$

$

22,305

$

Mortgage-backed

 

92,637

 

 

92,637

 

Other Debt Securities

2,040

2,040

 

116,982

 

 

116,982

 

Equity securities

1,372

1,372

TBA securities

55

55

LHFS

37,749

37,749

MSRs

4,087

4,087

IRLCs

380

380

Total assets at fair value

$

160,625

$

$

156,158

$

4,467

Liabilities:

TBA securities

$

41

$

$

41

$

Total liabilities at fair value

$

41

$

$

41

$

Fair Value of Assets Measured on Nonrecurring Basis

Quantitative Information about Level 3 Fair Value Measurements

Weighted

(Dollars in thousands)

    

Fair Value

    

Valuation Technique

    

Unobservable Input

    

Range

    

Average (3)

September 30, 2022

 

  

 

  

  

  

  

Nonrecurring measurements:

 

  

 

  

  

  

  

Impaired loans

$

617

 

Appraisal of collateral

(1)

Liquidation expense

(2)

10%

(10%)

Impaired loans

$

1,432

 

Discounted cash flow analysis

(1)

Discount rate

6% - 7.25%

(6%)

Other real estate owned

$

197

 

Appraisal of collateral

(1)

Appraisal adjustments

(2)

0% - 20%

(2%)

Quantitative Information about Level 3 Fair Value Measurements

Weighted

(Dollars in thousands)

    

Fair Value

    

Valuation Technique

    

Unobservable Input

    

Range

Average (3)

December 31, 2021

 

  

 

  

  

  

Nonrecurring measurements:

 

  

 

  

  

  

Impaired loans

$

617

 

Appraisal of collateral

(1)

Liquidation expense

(2)

10%

(10%)

Impaired loans

$

2,026

 

Discounted cash flow analysis

(1)

Discount rate

4% - 7.25%

(6%)

Other real estate owned

$

532

 

Appraisal of collateral

(1)

Appraisal adjustments

(2)

20% - 40%

(35%)

(1)Fair value is generally determined through independent appraisals of the underlying collateral (impaired loans and OREO) or discounted cash flow analyses (impaired loans), which generally include various level III inputs which are not identifiable.
(2)Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
(3)Unobservable inputs were weighted by the relative fair value of the instruments.
Schedule of Estimated Fair Values of Financial Assets and Liabilities

September 30, 2022

    

December 31, 2021

Estimated

Estimated

Carrying

Fair

Carrying 

Fair

(Dollars in thousands)

    

Amount

    

Value

    

Amount

    

Value

Financial assets

 

  

 

  

 

  

 

  

Level 1 inputs

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

163,306

$

163,306

$

583,613

$

583,613

Level 2 inputs

 

  

 

  

 

  

 

  

Investment securities available for sale

$

86,347

$

86,347

$

116,982

$

116,982

Investment securities held to maturity

570,719

501,145

404,594

401,524

Equity securities

1,222

1,222

1,372

1,372

Restricted securities

 

9,894

 

9,894

 

4,159

 

4,159

LHFS

8,342

8,342

37,749

37,749

TBA securities

1,000

1,000

55

55

Cash surrender value on life insurance

 

58,768

 

58,768

 

47,935

 

47,935

Level 3 inputs

 

  

 

  

 

  

 

  

Loans, net

$

2,385,606

$

2,299,283

$

2,105,231

$

2,106,373

MSRs

5,321

5,321

4,087

4,087

IRLCs

10

10

380

380

Financial liabilities

 

  

 

  

 

  

 

  

Level 2 inputs

 

  

 

  

 

  

 

  

Deposits:

 

  

 

  

 

  

 

  

Noninterest-bearing demand

$

893,808

$

893,808

$

927,497

$

927,497

Checking plus interest

 

649,929

 

649,929

 

524,143

 

524,143

Money market

 

721,987

 

721,987

 

889,099

 

889,099

Savings

 

320,189

 

320,189

 

225,546

 

225,546

Club

 

1,440

 

1,440

 

388

 

388

Certificates of deposit

 

427,959

 

412,214

 

459,563

 

461,135

Securities sold under retail repurchase agreement

 

 

 

4,143

 

4,143

Advances from FHLB - long-term

10,013

 

9,998

 

10,135

 

10,187

Subordinated debt

42,995

 

40,817

 

42,762

 

44,876

TBA Securities

 

 

41

 

41

Level 3 inputs

IRLCs

33

33