Fair Value (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value on Recurring Basis

The following tables present the balances of financial assets measured at fair value on a recurring basis as of the dates stated.

	June 30, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	53,552	$	—	$	53,552	$	—
U.S. Treasury and agencies		62,823		—		62,823		—
Mortgage backed securities		222,702		—		214,960		7,742
Corporate bonds		42,459		—		32,408		10,051
Total securities available for sale	$	381,536	$	—	$	363,743	$	17,793
Other assets
MSR assets	$	29,265	$	—	$	—	$	29,265
Rabbi trust assets		829		829		—		—
Mortgage derivative asset		937		—		937		—
Other liabilities
Mortgage derivative liability	$	30	$	—	$	30	$	—

	December 31, 2021
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	51,113	$	—	$	51,113	$	—
U.S. Treasury and agencies		64,066		—		64,066		—
Mortgage backed securities		219,110		—		211,194		7,916
Corporate bonds		39,243		3,000		25,179		11,064
Total securities available for sale	$	373,532	$	3,000	$	351,552	$	18,980
Other assets
Rabbi trust assets	$	994	$	994	$	—	$	—
Mortgage derivative asset		1,876		—		1,876		—
Interest rate swap asset		199		—		199		—
Other liabilities
Mortgage derivative liability	$	75	$	—	$	75	$	—
Interest rate swap liability	$	199	$	—	$	199	$	—

Summary of Changes in Financial Assets Valued Using Level 3 Inputs

The following table presents the change in financial assets valued using Level 3 inputs for the period stated.

(Dollars in thousands)	MSR Assets		Corporate Bonds			Mortgage backed securities
Balance as of December 31, 2021	$	16,469	$	11,064		$	7,916
Change in accounting method		4,484		—			—
Transfers from Level 2 to Level 3		—		—			—
Transfers from Level 3 to Level 2		—		(3,622	)		—
Additions		4,764		3,000			—
Sales or paydowns		—		—			(165	)
Fair value adjustments		3,548		(391	)		(9	)
Balance as of June 30, 2022	$	29,265	$	10,051		$	7,742

Summary of Assets Measured at Fair Value

The following tables summarize assets that were measured at fair value on a nonrecurring basis as of the dates stated.

	June 30, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	6,291	$	—	$	—	$	6,291
Loans held for sale		32,759		—		32,759		—
OREO		74		—		—		74

	December 31, 2021
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans, net	$	8,344	$	—	$	—	$	8,344
Loans held for sale		121,943		—		121,943		—
OREO		157		—		—		157

Summary of Quantitative Information about Level 3 Fair Value Measurements

The following tables present quantitative information about Level 3 fair value measurements as of the dates stated.

(Dollars in thousands)	Balance as of June 30, 2022		Unobservable Input	Range
Impaired loans, net
Discounted appraised value technique	$	3,833	Discount Rate	25.0%-50.0%
Discounted cash flows technique		2,458	Discount Rate	4.3%-11.0%
OREO
Discounted appraised value technique		74	Selling Costs		7	%

(Dollars in thousands)	Balance as of December 31, 2021		Unobservable Input	Range
Impaired loans, net
Discounted appraised value technique	$	8,108	Selling Costs		7	%
Discounted cash flows technique		236	Discount Rate	4% - 7%
OREO
Discounted appraised value technique		157	Selling Costs		7	%

Summary of Estimated Fair Values and Related Carrying Amounts and Valuation Level of Financial Instruments

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated.

	June 30, 2022
					Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	75,192	$	75,192	$	75,192	$	—	$	—
Federal funds sold		35,493		35,493		35,493		—		—
Securities available for sale		381,536		381,536		—		363,743		17,793
Restricted equity investments		13,072		13,072		—		13,072		—
Other equity investments		23,773		23,773		—		23,773		—
PPP loans receivable, net		15,654		15,654		—		—		15,654
Loans held for investment, net		2,031,141		2,004,753		—		—		2,004,753
Accrued interest receivable		8,908		8,908		—		8,908		—
Bank owned life insurance		47,100		47,100		—		47,100		—
MSR assets		29,265		29,265		—		—		29,265
Financial Liabilities
Noninterest-bearing deposits	$	785,743	$	785,743	$	785,743	$	—	$	—
Interest-bearing demand and money market deposits		1,007,420		1,007,420		—		1,007,420		—
Savings deposits		150,030		150,030		—		150,030		—
Time deposits		392,514		395,677		—		—		395,677
FHLB borrowings		135,000		135,000		—		135,000		—
FRB borrowings		60		60		—		60		—
Subordinated notes, net		39,953		39,070		—		—		39,070

	December 31, 2021
					Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	130,548	$	130,548	$	130,548	$	—	$	—
Federal funds sold		43,903		43,903		43,903		—		—
Securities available for sale		373,532		373,532		3,000		351,552		18,980
Restricted equity investments		8,334		8,334		—		8,334		—
Other equity investments		14,184		14,184		—		14,184		—
PPP loans receivable, net		30,406		30,406		—		—		30,406
Loans held for investment, net		1,765,051		1,766,820		—		—		1,766,820
Accrued interest receivable		9,573		9,573		—		9,573		—
Bank owned life insurance		46,545		46,545		—		46,545		—
Financial Liabilities
Noninterest-bearing deposits	$	706,088	$	706,088	$	706,088	$	—	$	—
Interest-bearing demand and money market deposits		941,805		941,805		—		941,805		—
Savings deposits		150,376		150,376		—		150,376		—
Time deposits		499,502		503,968		—		—		503,968
FHLB borrowings		10,111		9,943		—		9,943		—
FRB borrowings		17,901		17,901		—		17,901		—
Subordinated notes, net		39,986		41,388		—		—		41,388