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Fair Value Accounting (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of assets and liabilities measured at fair value on recurring basis

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis.


	December 31, 2021
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale:
Corporate bonds	$	-		2,188		-		2,188
US treasuries		-		992		-		992
US government agencies		-		14,169		-		14,169
SBA securities		-		438		-		438
State and political subdivisions		-		25,176		-		25,176
Asset-backed securities		-		10,164		-		10,164
Mortgage-backed securities		-		67,154		-		67,154
Mortgage loans held for sale		-		13,556		-		13,556
Mortgage loan interest rate lock commitments		-		425		-		425
Total assets measured at fair value on a recurring basis	$	-		134,262		-		134,262

Liabilities
MBS forward sales commitments	$	-		41		-		41
Total liabilities measured at fair value on a recurring basis	$	-		41		-		41

	December 31, 2020
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale:
US government agencies	$	-		6,493		-		6,493
SBA securities		-		485		-		485
State and political subdivisions		-		19,388		-		19,388
Asset-backed securities		-		11,529		-		11,529
Mortgage-backed securities		-		56,834		-		56,834
Mortgage loans held for sale		-		60,257		-		60,257
Mortgage loan interest rate lock commitments		-		2,385		-		2,385
Total assets measured at fair value on a recurring basis	$	-		157,371		-		157,371

Liabilities
MBS forward sales commitments	$	-		501		-		501
Total liabilities measured at fair value on a recurring basis	$	-		501		-		501

Schedule of assets and liabilities measured at fair value on nonrecurring basis

Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

The Company is predominantly an asset based lender with real estate serving as collateral on approximately 86% of loans as of December 31, 2021. Loans which are deemed to be impaired are valued net of the allowance for loan losses, and other real estate owned is valued at the lower of cost or net realizable value of the underlying real estate collateral. Such market values are generally obtained using independent appraisals, which the Company considers to be level 2 inputs. The tables below present the recorded amount of assets and liabilities measured at fair value on a nonrecurring basis.


	December 31, 2021
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Impaired loans	$	-		5,262		2,065		7,327
Total assets measured at fair value on a nonrecurring basis	$	-		5,262		2,065		7,327

	December 31, 2020
	Level 1		Level 2		Level 3		Total
Assets
Impaired loans	$	-		8,144		3,109		11,253
Other real estate owned		-		1,169		-		1,169
Total assets measured at fair value on a nonrecurring basis	$	-		9,313		3,109		12,422

Schedule of unobservable inputs used in the fair value measurements

For Level 3 assets and liabilities measured at fair value on a recurring or nonrecurring basis as of December 31, 2021 and 2020, the significant unobservable inputs used in the fair value measurements were as follows:

	Valuation Technique	Significant Unobservable Inputs	Range of Inputs
Impaired loans	Appraised Value/Discounted Cash Flows	Discounts to appraisals or cash flows for estimated holding and/or selling costs or age of appraisal	0-25	%
Other real estate owned	Appraised Value/Comparable Sales	Discounts to appraisals for estimated holding or selling costs	0-25	%

Schedule of estimated fair values of the Company's financial instruments

The estimated fair values of the Company’s financial instruments at December 31, 2021 and 2020 are as follows:


	December 31, 2021
(dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Other investments, at cost	$	4,021		4,021		-		-		4,021
Loans⁽¹⁾		2,451,306		2,422,621		-		-		2,422,621
Financial Liabilities:
Deposits		2,563,826		2,327,055		-		2,327,055		-
Subordinated debentures		36,106		33,936		-		33,936		-

	December 31, 2020
(dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Other investments, at cost	$	3,635		3,635		-		-		3,635
Loans⁽¹⁾		2,085,756		2,060,698		-		-		2,060,698
Financial Liabilities:
Deposits		2,142,758		2,008,317		-		2,008,317		-
FHLB and other borrowings		25,000		24,972		-		24,972		-
Subordinated debentures		35,998		30,371		-		30,371		-


⁽¹⁾ Carrying amount is net of the allowance for loan losses and previously presented impaired loans.