Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Measurements [Abstract]

Assets Measured at Fair Value on a Recurring Basis

The following tables present the assets and liabilities reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of June 30, 2023 and December 31, 2022 by level within the fair value hierarchy (in thousands). Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

June 30, 2023	Level I		Level II			Level III		Total
Fair value measurements on a recurring basis:
Assets
Equity securities	$	1,849	$	-		$	-	$	1,849
Available for sale securities:
U.S. Agency securities		-		66,867			-		66,867
U.S. Treasury securities		149,791		-			-		149,791
Obligations of state and political subdivisions		-		100,443			-		100,443
Corporate obligations		-		12,207			-		12,207
Mortgage-backed securities in government sponsored entities		-		105,007			-		105,007
Loans held for sale		-		14,940			-		14,940
Derivative instruments		-		15,866			529		16,395
Liabilities
Derivative instruments		-		(9,303	)		-		(9,303	)

December 31, 2022	Level I		Level II			Level III		Total
Fair value measurements on a recurring basis:
Assets
Equity securities	$	2,208	$	-		$	-	$	2,208
Available for sale securities:
U.S. Agency securities		-		70,677			-		70,677
U.S. Treasuries securities		148,570		-			-		148,570
Obligations of state and political subdivisions		-		110,300			-		110,300
Corporate obligations		-		9,383			-		9,383
Mortgage-backed securities in government sponsored entities		-		100,576			-		100,576
Derivative instruments		-		16,599			-		16,599
Liabilities
Derivative instruments		-		(9,726	)		-		(9,726	)

Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following tables represent the change in the assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2023 (in thousands):

	IRLC- Asset
Balance acquired as part of the HVBC acquisition	$	657
Total unrealized losses:
Included in other comprehensive loss		-
Total losses included in earnings and held at reporting date		(128	)
Purchases, sales and settlements		-
Transfers in and/or out of Level 3		-
Ending Balance: June 30, 2023	$	529
Change in unrealized (losses) for the period included in earnings (or changes in net assets) for assets held as of June 30, 2023	$	(128	)
Change in unrealized loss for the period included other comprehensive loss for assets held as of June 16, 2023		-

Assets Measured at Fair Value on Non-recurring Basis

Assets measured at fair value on a nonrecurring basis as of June 30, 2023 and December 31, 2022 are included in the table below (in thousands):

June 30, 2023	Level I		Level II		Level III		Total
Individually analyzed loans held for investment	$	-	$	-	$	4,026	$	4,026
Other real estate owned		-		-		49		49
December 31, 2022	Level I		Level II		Level III		Total
Individually analyzed loans held for investment	$	-	$	-	$	496	$	496
Other real estate owned		-		-		297		297

Significant Unobservable Inputs Used in Fair Value Measurement Process

Significant unobservable inputs for assets measured at fair value on a recurring basis at June 30, 2023 (in thousands):

	Quantitative Information about Level 3 Fair Value Measurements at June 30, 2023
	Fair Value		Valuation Technique	Significant Unobservable Input	Range			Weighted Average
Measured at Fair Value on a Recurring Basis:
Net derivative asset and liability:
IRLC	$	529	Discounted cash flows	Pull-through rates		78.26%-95.76	%		84.53	%

Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of the Company’s financial instruments that are not required to be measured or reported at fair value on a recurring basis are as follows (in thousands):

June 30, 2023	Carrying Amount		Fair Value		Level I		Level II		Level III
Financial assets:
Interest bearing time deposits with other banks	$	4,814	$	4,814	$	-	$	-	$	4,814
Net loans		2,141,190		2,080,817		-		-		2,080,817
Financial liabilities:
Deposits		2,266,100		2,254,845		1,935,269		-		319,576
Borrowed funds		318,200		308,507		-		-		308,507
December 31, 2022
Financial assets:
Interest bearing time deposits with other banks	$	6,055	$	6,055	$	-	$	-	$	6,055
Loans held for sale		725		725		-		-		725
Net loans		1,706,447		1,662,514		-		-		1,662,514
Financial liabilities:
Deposits		1,844,208		1,832,037		1,566,517		-		265,520
Borrowed funds		257,278		246,288		-		-		246,288