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

6 Months Ended

Jun. 30, 2025

Schedule of Carrying Amount, Estimated Fair Values, and Placement in Fair Value Hierarchy

The carrying amount, estimated fair values, and placement in the fair value hierarchy of the Company’s financial instruments as of June 30, 2025 and December 31, 2024 are as follows:


	Fair Value Measurements
(dollars in thousands)	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
June 30, 2025
Assets
Cash and short-term investments	$	112,145	$	112,145	$	112,145	$	—	$	—
Investment securities available-for-sale	373,572		373,572		—		366,761		6,811
Investment securities held-to-maturity	409,634		369,103		—		369,103		—
Other investments	17,927		17,927		—		17,927		—
Loans held for sale	22,163		22,163		—		22,163		—
Loans, net	1,974,427		1,876,358		—		—		1,876,358
Derivative assets	10		10		—		10		—

Liabilities
Deposits	2,556,230		2,552,984		—		2,552,984		—


Federal Home Loan Bank advances	185,000		184,233		—		184,233		—
Other borrowings	63,086		53,745		—		53,745		—
Derivative liabilities	560		560		—		560		—


	Fair Value Measurements
(dollars in thousands)	Carrying Value		Estimated Fair Value		Level 1		Level 2		Level 3
December 31, 2024
Assets
Cash and short-term investments	$	231,034	$	231,034	$	231,034	$	—	$	—
Investment securities available-for-sale	366,049		366,049		—		357,128		8,921
Investment securities held-to-maturity	430,077		383,020		—		383,020		—
Other investments	17,694		17,694		—		17,694		—
Loans held for sale	39,786		39,786		—		39,786		—
Loans, net	1,824,000		1,703,487		—		—		1,703,487
Derivative assets	784		784		—		784		—

Liabilities
Deposits	2,567,943		2,564,143		—		2,564,143		—
Federal Home Loan Bank advances	185,000		186,468		—		186,468		—
Other borrowings	63,039		52,057		—		52,057		—
Derivative liabilities	47		47		—		47		—

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

The following tables present the recorded amount of the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of June 30, 2025 and December 31, 2024, aggregated by the level in the fair value hierarchy within which those measurements fall. The tables below include collateral dependent impaired loans and other real estate properties at June 30, 2025 and December 31, 2024. Those collateral dependent 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)
June 30, 2025
Recurring
Investment securities available-for-sale
U.S. treasury securities	$	9,965	$	—	$	9,965	$	—
U.S. agency securities	2,619		—		2,619		—
Asset backed securities	15,172		—		15,172		—
State, county & municipal securities	96,168		—		96,168		—
Corporate debt securities	45,937		—		39,126		6,811
Mortgage-backed securities	203,711		—		203,711		—
Total investment securities available-for-sale	373,572		—		366,761		6,811
Equity securities with readily determinable fair values	5,992		—		5,992		—
Loans held for sale	22,163		—		22,163		—
Derivative assets	10		—		10		—
Total recurring assets	$	401,737	$	—	$	394,926	$	6,811

Derivative liabilities	$	560	$	—	$	560	$	—
Total recurring liabilities	$	560	$	—	$	560	$	—

Nonrecurring
Collateral dependent loans	$	2,138	$	—	$	—	$	2,138
Other real estate owned	710		—		—		710
Total nonrecurring assets	$	2,848	$	—	$	—	$	2,848


			Fair Value Measurements at Reporting Date Using
(dollars in thousands)	Total Fair Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2024
Recurring
Investment securities available-for-sale
U.S. treasury securities	$	3,173	$	—	$	3,173	$	—
U.S. agency securities	2,755		—		2,755		—
Asset backed securities	17,824		—		17,824		—
State, county & municipal securities	95,637		—		95,637		—
Corporate debt securities	47,782		—		41,234		6,548
Mortgage-backed securities	198,878		—		196,505		2,373
Total investment securities available-for-sale	366,049		—		357,128		8,921
Equity securities with readily determinable fair values	5,797		—		5,797		—
Loans held for sale	39,786		—		39,786		—
Derivative assets	784		—		784		—
Total recurring assets	$	412,416	$	—	$	403,495	$	8,921

Derivative liabilities	$	47	$	—	$	47	$	—
Total recurring liabilities	$	47	$	—	$	47	$	—

Nonrecurring
Collateral dependent loans	$	3,075	$	—	$	—	$	3,075
Other real estate owned	202		—		—		202
Total nonrecurring assets	$	3,277	$	—	$	—	$	3,277

Schedule of Quantitative Information About Fair Value Measurements for Assets in Level 3

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 June 30, 2025 and December 31, 2024. This table is comprised of collateral dependent impaired loans and other real estate owned:

(dollars in thousands)

June 30, 2025

Valuation
Techniques

Unobservable
Inputs

Discount rate

Collateral dependent loans

2,138

Appraised Value

Discounts to reflect estimated costs to sell

Other real estate owned

710

Appraised Value/Comparable Sales

Discounts to reflect current market conditions and estimated costs to sell

(dollars in thousands)

December 31, 2024

Valuation
Techniques

Unobservable
Inputs

Discount rate

Collateral dependent loans

3,075

Appraised Value

Discounts to reflect estimated costs to sell

Other real estate owned

202

Appraised Value/Comparable Sales

Discounts to reflect current market conditions and estimated costs to sell

The following table presents quantitative information about recurring level 3 fair value measurements as of June 30, 2025 and December 31, 2024.

As of June 30, 2025

(dollars in thousands)

Fair Value

Valuation
Techniques

Unobservable
Inputs

Range
(Weighted Avg)

Available-for-sale securities

6,811

Discounted Cash Flow

Discount Rate or Yield

N/A

As of December 31, 2024

(dollars in thousands)

Fair Value

Valuation
Techniques

Unobservable
Inputs

Range
(Weighted Avg)

Available-for-sale securities

8,921

Discounted Cash Flow

Discount Rate or Yield

N/A

Schedule of Reconciliation and Statement of Income for Assets Measured at Fair Value on Recurring Basis

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 six months ended June 30, 2025.


	Three Months Ended		Six Months Ended
	June 30, 2025		June 30, 2025
(dollars in thousands)	Available-for-sale securities			Available-for-sale securities
Balance, Beginning	$	9,108		$	8,921

Redemptions/Payments	(2,365)			(2,380)
Fair value adjustments	68			270
Transfers between levels	—			—
Balance, Ending	$	6,811		$	6,811

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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