XML 40 R26.htm IDEA: XBRL DOCUMENT v3.23.1
Fair Value of Financial Instruments
 12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate such value:
Loans
Fair values are estimated for portfolios with similar financial characteristics. Loans are segregated by type, such as commercial, real estate, and consumer. Each loan category is further segmented into fixed and variable interest rate categories. The fair value of loans, or exit price, is estimated by using the future value of discounted cash flows using comparable market rates for similar types of loan products and adjusted for market factors. The discount rates used are estimated using comparable market rates for similar types of loan products adjusted to be commensurate with the credit risk, overhead costs, and optionality of such instruments.
Federal Funds Sold, Cash, and Due from Banks
The carrying amounts of short-term federal funds sold and securities purchased under agreements to resell, interest-earning deposits with banks, and cash and due from banks approximate fair value. Federal funds sold and securities purchased under agreements to resell classified as short-term generally mature in 90 days or less.
Certificates of Deposit in Other Banks
Certificates of deposit are other investments made by the Company with other financial institutions that are carried at cost, which is equal to fair value.
Cash Surrender Value – Life Insurance
The fair value of Bank-owned life insurance approximates the carrying amount. Upon liquidation of these investments, the Company would receive the cash surrender value, which equals the carrying amount.
Accrued Interest Receivable and Payable
For accrued interest receivable and payable, the carrying amount is a reasonable estimate of fair value because of the short maturity for these financial instruments.
Deposits
The fair value of deposits with no stated maturity, such as non-interest-bearing demand, Negotiable Order of Withdrawal accounts, savings accounts, and money market accounts, is equal to the amount payable on demand. The fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.
Federal Funds Purchased and Securities Sold under Agreements to Repurchase
For federal funds purchased and securities sold under agreements to repurchase, the carrying amount is a reasonable estimate of fair value, as such instruments reprice in a short time period.
Subordinated Notes and Other Borrowings
The fair value of subordinated notes and other borrowings is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for other borrowed money of similar remaining maturities.
Operating Lease Liabilities
The fair value of operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company's incremental borrowing rate at the lease commencement date.
A summary of the carrying amounts and fair values of the Company's financial instruments at December 31, 2022 and 2021 is as follows:
December 31, 2022
Fair Value Measurements
December 31, 2022Quoted Prices
in Active
Markets for
Identical		Other
Observable		Net
Significant
Unobservable
(in thousands)Carrying
amount		Fair
value		Assets
(Level 1)		Inputs
(Level 2)		Inputs
(Level 3)
Assets:
Cash and due from banks$18,661 $18,661 $18,661 $— $— 
Federal funds sold and overnight interest-bearing deposits65,059 65,059 65,059 — — 
Certificates of deposit in other banks2,955 2,955 2,955 — — 
Available for sale securities250,747 250,747 2,152 248,595 — 
Other investment securities6,353 6,353 46 6,307 — 
Loans, net1,505,664 1,389,018 — — 1,389,018 
Loans held for sale591 591 — 591 — 
Cash surrender value - life insurance2,567 2,567 — 2,567 — 
Interest rate lock commitments20 20 — — 20 
Forward sale commitments3 3 — 3 — 
Accrued interest receivable7,953 7,953 7,953 — — 
Total$1,860,573 $1,743,927 $96,826 $258,063 $1,389,038 
Liabilities:
Deposits:
Non-interest bearing demand$453,443 $453,443 $453,443 $— $— 
Savings, interest checking and money market923,602 923,602 923,602 — — 
Time deposits255,034 250,433 — — 250,433 
Federal funds purchased and securities sold under agreements to repurchase5,187 5,187 5,187 — — 
Federal Home Loan Bank advances and other borrowings98,000 98,000 — 98,000 — 
Subordinated notes49,486 39,197 — 39,197 — 
Interest rate lock commitments18 18 — — 18 
Forward sale commitments3 3 — 3 — 
Accrued interest payable902 902 902 — — 
Total$1,785,675 $1,770,785 $1,383,134 $137,200 $250,451 
December 31, 2021
Fair Value Measurements
December 31, 2021Quoted Prices
in Active
Markets for
Identical		Other
Observable		Net
Significant
Unobservable
(in thousands)Carrying
amount		Fair
value		Assets
(Level 1)		Inputs
(Level 2)		Inputs
(Level 3)
Assets:
Cash and due from banks$17,287 $17,287 $17,287 $— $— 
Federal funds sold and overnight interest-bearing deposits142,622 142,622 142,622 — — 
Certificates of deposit in other banks5,193 5,193 5,193 — — 
Available-for-sale securities310,870 310,870 3,917 306,953 — 
Other investment securities5,408 5,408 60 5,348 — 
Loans, net1,285,230 1,308,539 — — 1,308,539 
Loans held for sale2,249 2,249 — 2,249 — 
Cash surrender value - life insurance2,509 2,509 — 2,509 — 
Interest rate lock commitments312 312 — — 312 
Forward sale commitments12 12 — 12 — 
Accrued interest receivable6,621 6,621 6,621 — — 
Total$1,778,313 $1,801,622 $175,700 $317,071 $1,308,851 
Liabilities:
Deposits:
Non-interest bearing demand$453,066 $453,066 $453,066 $— $— 
Savings, interest checking and money market818,358 818,358 818,358 — — 
Time deposits245,396 246,025 — — 246,025 
Federal funds purchased and securities sold under agreements to repurchase23,829 23,829 23,829 — — 
Federal Home Loan Bank advances and other borrowings77,418 78,152 — 78,152 — 
Subordinated notes49,486 42,908 — 42,908 — 
Interest rate lock commitments26 26 — — 26 
Accrued interest payable282 282 282 — — 
Total$1,667,861 $1,662,646 $1,295,535 $121,060 $246,051 
Off-Balance-Sheet Financial Instruments
The fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the likelihood of the counterparties drawing on such financial instruments, and the present creditworthiness of such counterparties. The Company believes such commitments have been made on terms that are competitive in the markets in which it operates.
Limitations
The fair value estimates provided are made at a point in time based on market information and information about the financial instruments. Because no market exists for a portion of the Company's financial instruments, fair value estimates
are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the fair value estimates.