Fair Value

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value

21.     FAIR VALUE

Fair value is defined by U.S. GAAP as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. U.S. GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

● Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

● Level 2: Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

● Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the factors that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair values for each category of financial asset noted below:

Securities: The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges, live trading desk pricing from brokerages, or by matrix pricing, which is a mathematical technique used widely in the industry to value debt securities by relying on their relationship to other benchmark quoted securities. In certain circumstances live trading desk pricing from brokerages and third party internal models are used to value debt securities that we classify as Level 3.

Collateral-dependent loans: A specific loss allowance is created for collateral dependent loans, representing the difference between the face value of the loan and the current appraised value of its associated collateral, less estimated disposition costs.

Foreclosed assets: Repossessed real estate (OREO) and other assets are carried at the lower of cost or fair value. Fair value is the appraised value less expected selling costs for OREO and some other assets such as mobile homes, and for all other assets fair value is represented by the estimated sales proceeds as determined using reasonably available sources. Foreclosed assets for which appraisals can be feasibly obtained are periodically measured for impairment using updated appraisals. Fair values for other foreclosed assets are adjusted as necessary, subsequent to a periodic re-evaluation of expected cash flows and the timing of resolution. If impairment is determined to exist, the book value of a foreclosed asset is immediately written down to its estimated impaired value through the income statement, thus the carrying amount is equal to the fair value and there is no valuation allowance.

Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands):

	Fair Value Measurements at December 31, 2023, using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Realized Gain/(Loss)
Securities:
U.S. government agencies	$	—	$	102,749	$	—	$	102,749	$	—
Mortgage-backed securities		—		99,544		—		99,544		—
State and political subdivisions		—		194,206		—		194,206		—
Corporate bonds		—		—		52,040		52,040		—
Collateralized loan obligations		—		570,662		—		570,662		—
Total available-for-sale securities	$	—	$	967,161	$	52,040	$	1,019,201	$	—

	Fair Value Measurements at December 31, 2022, using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Realized Gain/(Loss)
Securities:
U.S. government agencies	$	—	$	50,599	$	—	$	50,599	$	—
Mortgage-backed securities		—		122,532		—		122,532		—
State and political subdivisions		—		205,980		—		205,980		—
Corporate bonds		—		—		57,435		57,435		—
Collateralized loan obligations		—		498,377		—		498,377		—
Total available-for-sale securities	$	—	$	877,488	$	57,435	$	934,923	$	—

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2023 and 2022 (dollars in thousands):

	Collateralized Loan Obligations				Corporate Bonds
	2023		2022		2023		2022
Balance of recurring Level 3 assets at January 1,	$	—	$	195,707	$	57,435	$	27,530
Total gains or losses for the period:
Included in other comprehensive income		—		—		(5,395)		—
Purchases		—		—		—		29,905
Transfers out of Level 3		—		(195,707)		—		—
Balance of recurring Level 3 assets at December 31,	$	—	$	—	$	52,040	$	57,435

The following table present quantitative information about recurring level 3 fair value measurements at December 31, 2023 (dollars in thousands):

					Range
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Min	Max	Weighted Average
Corporate Bonds	$	52,040	New issue pricing	Risk appetite	N/A	N/A	N/A
			Secondary market pricing	Market volatility
			Credit quality of issuer
			Credit spread

The following table presents quantitative information about recurring level 3 fair value measurements at December 31, 2022 (dollars in thousands):

					Range
	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Min	Max	Weighted Average
Corporate Bonds	$	57,435	New issue pricing	Risk appetite	N/A	N/A	N/A
			Secondary market pricing	Market volatility
			Credit quality of issuer
			Credit spread

Assets and liabilities measured at fair market value on a non-recurring basis are summarized below (dollars in thousands):

	Year Ended December 31, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Collateral dependent loans	$	—	$	5,889	$	—	$	5,889

	Year Ended December 31, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Collateral dependent impaired loans	$	—	$	18,141	$	—	$	18,141

There were no assets measured at fair value on a non-recurring basis with level 3 fair value measurements at December 31, 2022.