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Fair Value Measurements
6 Months Ended
Jun. 30, 2024
Fair Value Measurements [Abstract]  
Fair Value Measurements
 
7.
 
FAIR VALUE
 
MEASUREMENTS
 
Determination of Fair Value
The Company
 
uses
 
fair value
 
measurements
 
to record
 
fair-value
 
adjustments
 
to certain
 
assets
 
and liabilities
 
and to
determine fair value
 
disclosures. In accordance
 
with the fair
 
value measurements
 
accounting guidance, the
 
fair value of
 
a
financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market
 
participants
 
at the
 
measurement
 
date.
 
Fair value
 
is best
 
determined based
 
upon quoted
 
market prices.
However, in
 
many instances, there
 
are no quoted
 
market prices for the
 
Company's various financial
 
instruments. In cases
where quoted
 
market prices
 
are not
 
available, fair
 
values are
 
based on
 
estimates using
 
present value
 
or other
 
valuation
techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates
of future cash flows. Accordingly, the fair value estimates may not be realized in
 
an immediate settlement of the instrument.
The fair
 
value guidance provides
 
a consistent definition
 
of fair
 
value, which focuses
 
on exit
 
price in
 
an orderly transaction
(that is,
 
not a
 
forced
 
liquidation
 
or distressed
 
sale) between
 
market participants
 
at the
 
measurement
 
date
 
under current
market conditions.
 
If there
 
has been
 
a significant
 
decrease
 
in the
 
volume
 
and level
 
of activity
 
for the
 
asset
 
or liability,
 
a
change in
 
valuation technique or
 
the use
 
of multiple
 
valuation techniques may
 
be appropriate.
 
In such
 
instances, determining
the
 
price
 
at
 
which
 
willing
 
market
 
participants
 
would
 
transact
 
at
 
the
 
measurement
 
date
 
under
 
current
 
market
 
conditions
depends on the facts
 
and circumstances and
 
requires the use of
 
significant judgment. The fair
 
value is a reasonable
 
point
within the range that is most representative of fair value under
 
current market conditions.
Fair Value Hierarchy
In accordance with
 
this guidance, the
 
Company groups its
 
financial assets
 
and financial liabilities
 
generally measured
at fair
 
value in
 
three
 
levels, based
 
on the
 
markets
 
in which
 
the assets
 
and liabilities
 
are traded,
 
and the
 
reliability
 
of the
assumptions used to determine fair value.
Level 1
 
- Valuation
 
is based
 
on quoted
 
prices in
 
active markets
 
for identical
 
assets or
 
liabilities that
 
the reporting
entity has
 
the ability
 
to access
 
at the measurement
 
date. Level
 
1 assets
 
and liabilities
 
generally include
 
debt and
equity securities that
 
are traded in
 
an active exchange
 
market. Valuations are obtained from
 
readily available pricing
sources for market transactions involving identical assets
 
or liabilities.
Level 2
 
- Valuation
 
is based on inputs other
 
than quoted prices included
 
within Level 1 that are
 
observable for the
asset
 
or
 
liability,
 
either
 
directly
 
or
 
indirectly.
 
The
 
valuation
 
may
 
be
 
based
 
on
 
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 for substantially the full term of the
 
asset or liability.
Level 3
 
- Valuation
 
is based on
 
unobservable inputs that
 
are supported
 
by little or
 
no market activity
 
and that are
significant
 
to
 
the
 
fair
 
value
 
of
 
the
 
assets
 
or
 
liabilities.
 
Level
 
3
 
assets
 
and
 
liabilities
 
include
 
financial
 
instruments
whose value
 
is determined
 
using pricing
 
models, discounted
 
cash
 
flow
 
methodologies,
 
or similar
 
techniques,
 
as
well as instruments for which determination of fair value
 
requires significant management judgment or estimation.
A
 
financial
 
instrument's
 
categorization
 
within
 
the
 
valuation
 
hierarchy
 
is
 
based
 
upon
 
the
 
lowest
 
level
 
of
 
input
 
that
 
is
significant to the fair value measurement.
Items Measured at Fair Value
 
on a Recurring Basis
AFS investment securities:
 
When instruments are traded in
 
secondary markets and quoted market
 
prices do not exist
for such securities,
 
management generally relies
 
on prices obtained
 
from independent vendors
 
or third-party broker-dealers.
Management reviews pricing methodologies provided by the vendors and third-party broker-dealers in order to determine if
observable market information is being utilized. Securities measured with pricing provided by independent vendors or
 
third-
party broker-dealers
 
are classified within
 
Level 2 of
 
the hierarchy and
 
often involve using
 
quoted market
 
prices for similar
securities, pricing models or discounted cash flow analyses
 
utilizing inputs observable in the market where available.
Derivatives:
 
The
 
fair
 
value
 
of
 
derivatives
 
are
 
measured
 
with
 
pricing
 
provided
 
by
 
third-party
 
participants
 
and
 
are
classified within Level 2 of the hierarchy.
The
 
following
 
table
 
represents
 
the
 
Company's
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
on
 
a
 
recurring
 
basis
 
at
June 30, 2024 and December 31, 2023 for each of the
 
fair value hierarchy levels (in thousands):
Items Not Measured at Fair Value
The following table
 
presents the carrying
 
amounts and estimated
 
fair values of
 
financial instruments
 
not carried at fair
value as of June 30, 2024 and December 31, 2023 (in
 
thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2024
December 31, 2023
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Investment securities available for sale:
U.S. Government Agency
$
-
$
10,856
$
-
$
10,856
$
-
$
8,173
$
-
$
8,173
Collateralized mortgage obligations
-
82,992
-
82,992
-
80,606
-
80,606
Mortgage-backed securities - residential
-
49,778
-
49,778
-
52,187
-
52,187
Mortgage-backed securities - commercial
-
50,926
-
50,926
-
42,764
-
42,764
Municipal securities
-
19,410
-
19,410
-
19,338
-
19,338
Bank subordinated debt securities
-
22,482
-
22,482
-
26,261
-
26,261
Total
-
236,444
-
236,444
-
229,329
-
229,329
Derivative assets
-
6,465
-
6,465
-
4,892
-
4,892
Total assets at fair value
$
-
$
242,909
$
-
$
242,909
$
-
$
234,221
$
-
$
234,221
Derivative liabilities
$
-
$
5,976
$
-
$
5,976
$
-
$
7,988
$
-
$
7,988
Total liabilities at fair value
$
-
$
5,976
$
-
$
5,976
$
-
$
7,988
$
-
$
7,988
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Hierarchy
Carrying
Amount
Level 1
Level 2
Level 3
Fair Value
Amount
June 30, 2024:
Financial Assets:
Cash and due from banks
$
5,179
$
5,179
$
-
$
-
$
5,179
Interest-bearing deposits in banks
$
72,082
$
72,082
$
-
$
-
$
72,082
Investment securities held to maturity, net
$
169,606
$
-
$
149,573
$
-
$
149,573
Loans held for investment, net
$
1,847,019
$
-
$
-
$
1,821,431
$
1,821,431
Accrued interest receivable
$
11,538
$
-
$
1,454
$
10,084
$
11,538
Financial Liabilities:
Demand deposits
$
579,243
$
579,243
$
-
$
-
$
579,243
Money market and savings accounts
$
1,097,468
$
1,097,468
$
-
$
-
$
1,097,468
Interest-bearing checking accounts
$
65,844
$
65,844
$
-
$
-
$
65,844
Time deposits
$
314,147
$
-
$
-
$
312,428
$
312,428
FHLB advances and other borrowings
$
162,000
$
-
$
160,087
$
-
$
160,087
Accrued interest payable
$
3,869
$
-
$
2,256
$
1,613
$
3,869
December 31, 2023:
Financial Assets:
Cash and due from banks
$
8,019
$
8,019
$
-
$
-
$
8,019
Interest-bearing deposits in banks
$
33,043
$
33,043
$
-
$
-
$
33,043
Investment securities held to maturity
$
174,974
$
-
$
155,510
$
-
$
155,510
Loans held for investment, net
$
1,759,743
$
-
$
-
$
1,723,210
$
1,723,210
Accrued interest receivable
$
10,688
$
-
$
1,448
$
9,240
$
10,688
Financial Liabilities:
Demand deposits
$
552,762
$
552,762
$
-
$
-
$
552,762
Money market and savings accounts
$
1,048,272
$
1,048,272
$
-
$
-
$
1,048,272
Interest-bearing checking accounts
$
47,702
$
47,702
$
-
$
-
$
47,702
Time deposits
$
288,403
$
-
$
-
$
287,104
$
287,104
FHLB advances
$
183,000
$
-
$
182,282
$
-
$
182,282
Accrued interest payable
$
1,372
$
-
$
551
$
821
$
1,372