Fair Value of Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of September 30, 2023 and December 31, 2022 are as follows:

	Fair Value Measurements
(dollars in thousands)	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
September 30, 2023
Assets
Cash and short-term investments	$	141,340	$	141,340	$	141,340	$	—	$	—
Investment securities available for sale	399,547		399,547		—		386,102		13,445
Investment securities held to maturity	451,056		385,065		—		385,065		—
Other investments, at cost	17,323		17,323		—		17,323		—
Loans held for sale	27,246		27,246		—		27,246		—
Loans, net	1,847,603		1,638,269		—		—		1,638,269
Derivative instruments	914		914		—		914		—
Liabilities
Deposits	2,591,332		2,582,790		—		2,582,790		—
Federal Home Loan Bank advances	185,000		189,065		—		189,065		—
Other borrowings	63,422		48,475		—		48,475		—

	Fair Value Measurements
(dollars in thousands)	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
December 31, 2022
Assets
Cash and short-term investments	$	80,678	$	80,678	$	80,678	$	—	$	—
Investment securities available for sale	432,553		432,553		—		416,957		15,596
Investment securities held to maturity	465,858		411,264		—		411,264		—
Other investments, at cost	13,793		13,793		—		13,003		790
Loans held for sale	17,743		17,743		—		17,743		—
Loans, net	1,720,978		1,469,707		—		—		1,469,707
Liabilities
Deposits	2,490,997		2,489,481		—		2,489,481		—
Federal Home Loan Bank advances	125,000		125,163		—		125,163		—
Other borrowings	78,352		69,930		—		69,930		—

Fair Value Measurements, Recurring and Nonrecurring

The following tables present the recorded amount of the Company’s assets measured at fair value on a recurring and nonrecurring basis as of September 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall. The tables below include only collateral dependent impaired loans with a specific reserve and only other real estate properties with a valuation allowance at September 30, 2023 and December 31, 2022. Those impaired loans and other real estate properties are shown net of the related specific reserves and valuation allowances.

			Fair Value Measurements at Reporting Date Using
(dollars in thousands)	Total Fair Value		(Level 1)		(Level 2)		(Level 3)
September 30, 2023
Nonrecurring
Collateral dependent impaired loans	$	628	$	—	$	—	$	628
Other real estate owned	812		—		—		812
Total nonrecurring assets	$	1,440	$	—	$	—	$	1,440

			Fair Value Measurements at Reporting Date Using
(dollars in thousands)	Total Fair Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2022
Nonrecurring
Collateral dependent impaired loans	$	521	$	—	$	—	$	521
Other real estate owned	651		—		—		651
Total nonrecurring assets	$	1,172	$	—	$	—	$	1,172

Fair Value Measurement Inputs and Valuation Techniques

The following table presents quantitative information about the significant unobservable inputs used in the fair value measurements for assets in level 3 of the fair value hierarchy measured on a nonrecurring basis at September 30, 2023 and December 31, 2022. This table is comprised primarily of collateral dependent impaired loans and other real estate owned:

(dollars in thousands)	September 30, 2023		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Collateral dependent impaired loans	$	628	Appraised Value	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	—	%	50	%
Other real estate owned	812		Appraised Value/Comparable Sales	Discounts to reflect current market conditions and estimated costs to sell	—	%	20	%

(dollars in thousands)	December 31, 2022		Valuation Techniques	Unobservable Inputs	Range Weighted Avg
Collateral dependent impaired loans	$	521	Appraised Value	Discounts to reflect current market conditions, ultimate collectability, and estimated costs to sell	25	%	50	%
Other real estate owned	651		Appraised Value/Comparable Sales	Discounts to reflect current market conditions and estimated costs to sell	—	%	20	%

The following table presents quantitative information about recurring level 3 fair value measurements as of September 30, 2023 and December 31, 2022.

	As of September 30, 2023
(dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Available for sale securities	$	13,445	Discounted Cash Flow	Discount Rate or Yield	N/A*
Other investments	—		Discounted Cash Flow	Discount Rate or Yield	N/A*

	As of December 31, 2022
(dollars in thousands)	Fair Value		Valuation Techniques	Unobservable Inputs	Range (Weighted Avg)
Available for sale securities	$	15,596	Discounted Cash Flow	Discount Rate or Yield	N/A*
Other investments	790		Discounted Cash Flow	Discount Rate or Yield	N/A*

* The Company relies on a third-party pricing service to value its securities. The details of the unobservable inputs and other adjustments used by the third-party pricing service were not readily available to the Company.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation and statement of income classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) for the three and nine months ended September 30, 2023.

	Three Months Ended				Nine Months Ended
	September 30, 2023				September 30, 2023
(dollars in thousands)	Available for sale securities		Other Investments		Available for sale securities		Other Investments
Balance, Beginning	$	13,805	$	—	$	15,596	$	790
Redemptions/Payments	(482)		—		(2,137)		(800)
Fair value adjustments	122		—		(394)		10
Transfer to Level 3	—		—		380		—
Balance, Ending	$	13,445	$	—	$	13,445	$	—