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Fair Value Accounting (Tables)

12 Months Ended

Dec. 31, 2020

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, 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


	December 31, 2019
(dollars in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale:
US government agencies	$	-		499		-		499
SBA securities		-		531		-		531
State and political subdivisions		-		4,184		-		4,184
Asset-backed securities		-		13,167		-		13,167
Mortgage-backed securities		-		49,313		-		49,313
Mortgage loans held for sale		-		27,046		-		27,046
Mortgage loan interest rate lock commitments		-		344		-		344
Total assets measured at fair value on a recurring basis	$	-		95,084		-		95,084

Liabilities
MBS forward sales commitments	$	-		39		-		39
Total liabilities measured at fair value on a recurring basis	$	-		39		-		39

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 85% of loans as of December 31, 2020. 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, 2020
(dollars in thousands)	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


	December 31, 2019
	Level 1		Level 2		Level 3		Total
Assets
Impaired loans	$	-		5,634		4,941		10,575
Total assets measured at fair value on a nonrecurring basis	$	-		5,634		4,941		10,575

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, 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, 2020 and 2019 are as follows:


	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		-


	December 31, 2019
(dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Other investments, at cost	$	6,948		6,948		-		-		6,948
Loans⁽¹⁾		1,914,870		1,900,216		-		-		1,900,216
Financial Liabilities:
Deposits		1,876,124		1,772,121		-		1,772,121		-
FHLB and other borrowings		110,000		109,737		-		109,737		-
Subordinated debentures		35,890		33,250		-		33,250		-


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