Fair Value (Tables)

3 Months Ended

Mar. 31, 2023

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.

	March 31, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	51,662	$	—	$	51,662	$	—
U.S. Treasury and agencies		62,152		—		62,152		—
Mortgage backed securities		199,320		—		191,816		7,504
Corporate bonds		38,856		—		34,557		4,299
Total securities available for sale	$	351,990	$	—	$	340,187	$	11,803
Other assets
MSR assets	$	27,095	$	—	$	—	$	27,095
Rabbi trust assets		577		577		—		—
Mortgage derivative asset		455		—		455		—
Interest rate swap asset		57		—		57		—
Other liabilities
Mortgage derivative liability	$	57	$	—	$	57	$	—
Interest rate swap liability		57		—		57		—

	December 31, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Securities available for sale
State and municipals	$	50,993	$	—	$	50,993	$	—
U.S. Treasury and agencies		67,162		—		67,162		—
Mortgage backed securities		196,336		—		188,719		7,617
Corporate bonds		39,850		—		35,561		4,289
Total securities available for sale	$	354,341	$	—	$	342,435	$	11,906
Other assets
MSR assets	$	28,991	$	—	$	—	$	28,991
Rabbi trust assets		584		584		—		—
Mortgage derivative asset		112		—		112		—
Interest rate swap asset		95		—		95		—
Other liabilities
Mortgage derivative liability	$	24	$	—	$	24	$	—
Interest rate swap liability		95		—		95		—

Summary of changes incorporate bonds and mortgage backed securities using level 3 inputs

The following table presents the change in corporate bonds and mortgage backed securities using Level 3 inputs for the periods stated.

(Dollars in thousands)	Corporate Bonds		Mortgage Backed Securities
Balance as of December 31, 2022	$	4,289	$	7,617
Fair value adjustments		10		(113	)
Balance as of March 31, 2023	$	4,299	$	7,504

Summary of Change in MSR Assets

The following table presents the change in MSR assets as of the dates and for the periods stated.

(Dollars in thousands)	MSR Assets
Balance as of December 31, 2022	$	28,991
Additions		242
Fair value adjustments		(2,138	)
Balance as of March 31, 2023	$	27,095

Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. The following describes the valuation techniques used by the Company to measure certain financial assets recorded at fair value on a nonrecurring basis in the financial statements.

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.

	March 31, 2023
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Other equity investments	$	22,960	$	—	$	22,960	$	—
Collateral-dependent loans		7,165		—		—		7,165
Loans held for sale		76,528		—		76,528		—

	December 31, 2022
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Other equity investments	$	23,776	$	—	$	23,776	$	—
Impaired loans - Pre-ASC 326		34,888		—		—		34,888
Loans held for sale		69,534		—		69,534		—
OREO		195		—		—		195

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 March 31, 2023		Unobservable Input	Range
Collateral-dependent loans
Discounted appraised value technique		7,165	Selling Costs		7	%

(Dollars in thousands)	Balance as of December 31, 2022		Unobservable Input	Range
Impaired loans - Pre-ASC 326
Discounted appraised value technique		34,743	Selling Costs	7% - 10%
Discounted cash flows technique		145	Discount Rate	4% - 11%
OREO
Discounted appraised value technique		195	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.

	March 31, 2023
					Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	226,374	$	226,374	$	226,374	$	—	$	—
Federal funds sold		1,976		1,976		1,976		—		—
Securities available for sale		351,990		351,990		—		340,187		11,803
Restricted equity investments		18,388		18,388		—		18,388		—
Other equity investments		22,960		22,960		—		22,960		—
Other investments		26,538		26,538		—		—		26,538
PPP loans receivable, net		7,988		7,988		—		—		7,988
Loans held for investment, net		2,419,018		2,382,220		—		—		2,382,220
Accrued interest receivable		14,915		14,915		—		14,915		—
Bank owned life insurance		47,536		47,536		—		47,536		—
MSR assets		27,095		27,095		—		—		27,095
Financial Liabilities
Noninterest-bearing demand deposits	$	594,518	$	594,518	$	594,518	$	—	$	—
Interest-bearing demand and money market deposits		1,326,655		1,326,655		—		1,326,655		—
Savings deposits		143,530		143,530		—		143,530
Time deposits		696,344		693,332		—		—		693,332
FHLB borrowings		239,100		239,045		—		239,045		—
Subordinated notes, net		39,904		37,610		—		—		37,610

	December 31, 2022
					Fair Value Measurements
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and due from banks	$	77,274	$	77,274	$	77,274	$	—	$	—
Federal funds sold		1,426		1,426		1,426		—		—
Securities available for sale		354,341		354,341		—		342,435		11,906
Restricted equity investments		21,257		21,257		—		21,257		—
Other equity investments		23,776		23,776		—		23,776		—
Other investments		24,672		24,672		—		—		24,672
PPP loans receivable, net		11,967		11,967		—		—		11,967
Loans held for investment, net		2,376,153		2,321,042		—		—		2,321,042
Accrued interest receivable		12,393		12,393		—		12,393		—
Bank owned life insurance		47,245		47,245		—		47,245		—
MSR assets		28,991		28,991		—		—		28,991
Financial Liabilities
Noninterest-bearing demand deposits	$	640,101	$	640,101	$	640,101	$	—	$	—
Interest-bearing demand and money market deposits		1,318,799		1,318,799		—		1,318,799		—
Savings deposits		151,646		151,646		—		151,646		—
Time deposits		391,961		352,294		—		—		352,294
FHLB borrowings		311,700		311,700		—		311,700		—
FRB borrowings		51		51		—		51		—
Subordinated notes, net		39,920		37,689		—		—		37,689