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FAIR VALUE MEASURES
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASURES
NOTE 7 – FAIR VALUE MEASURES

The fair value of an asset or liability is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various assets and liabilities. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the asset or liability. The accounting standard for disclosures about the fair value measures excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The Company's loans held for sale under the fair value option are comprised of the following:

(dollars in thousands)September 30, 2025December 31, 2024
Mortgage loans held for sale$599,399 $528,599 
SBA loans held for sale4,737 — 
Total loans held for sale$604,136 $528,599 

The Company has elected to record mortgage loans held for sale at fair value in order to eliminate the complexities and inherent difficulties of achieving hedge accounting and to better align reported results with the underlying economic changes in value of the loans and related hedge instruments. This election impacts the timing and recognition of origination fees and costs, as well as servicing value, which are now recognized in earnings at the time of origination. Interest income on mortgage loans held for sale is recorded on an accrual basis in the consolidated statements of income and comprehensive income under the heading interest income – interest and fees on loans. The servicing value is included in the fair value of the interest rate lock commitments (“IRLCs”) with borrowers. The mark to market adjustments related to mortgage loans held for sale and the associated economic hedges are captured in mortgage banking activities.

Net gains of $2.2 million and $10.1 million resulting from changes in fair value of these mortgage loans were recorded in income during the three and nine months ended September 30, 2025, respectively. Net gains of $1.9 million and $4.4 million resulting from changes in fair value of these mortgage loans were recorded in income during the three and nine months ended September 30, 2024, respectively. A net gain of $4.1 million and a net loss of $4.3 million resulting from changes in the fair value of the related derivative financial instruments used to hedge exposure to the market-related risks associated with these mortgage loans were recorded in income during the three and nine months ended September 30, 2025, respectively. A net loss of $2.2 million and a net gain of $5.2 million resulting from changes in the fair value of the related derivative financial instruments were recorded in income during the three and nine months ended September 30, 2024, respectively. The Company’s valuation of mortgage loans held for sale incorporates an assumption for credit risk; however, given the short-term period that the Company holds these loans, valuation adjustments attributable to instrument-specific credit risk is nominal.

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale measured at fair value as of September 30, 2025 and December 31, 2024:

(dollars in thousands) 
September 30, 2025December 31, 2024
Aggregate fair value of mortgage loans held for sale$599,399 $528,599 
Aggregate unpaid principal balance of mortgage loans held for sale585,799 525,071 
Past-due loans of 90 days or more667 — 
Nonaccrual loans667 — 
Unpaid principal balance of nonaccrual loans647 — 

The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale measured at fair value as of September 30, 2025 and December 31, 2024:

(dollars in thousands) 
September 30, 2025December 31, 2024
Aggregate fair value of SBA loans held for sale$4,737 $— 
Aggregate unpaid principal balance4,408 — 
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale, loans held for sale under the fair value option and derivative financial instruments are recorded at fair value on a recurring basis. From time to time, the Company may be required to record at fair value other assets on a nonrecurring basis, such as collateral-dependent loans, loan servicing rights and OREO. Additionally, the Company is required to disclose, but not record, the fair value of other financial instruments.

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of September 30, 2025 and December 31, 2024:

Recurring Basis
Fair Value Measurements
 September 30, 2025
(dollars in thousands) 
Fair ValueLevel 1Level 2Level 3
Financial assets:    
Debt securities available-for-sale:
U.S. Treasuries$684,890 $684,890 $— $— 
State, county and municipal securities21,461 — 21,461 — 
Corporate debt securities10,411 — 9,361 1,050 
SBA pool securities12,912 — 12,912 — 
Mortgage-backed securities1,401,997 — 1,401,997 — 
Loans held for sale604,136 — 604,136 — 
Derivative financial instruments7,133 — 7,133 — 
Mortgage banking derivative instruments5,012 — 5,012 — 
Total recurring assets at fair value$2,747,952 $684,890 $2,062,012 $1,050 
Financial liabilities:    
Derivative financial instruments$7,426 $— $7,426 $— 
Risk participation agreement20 — 20 — 
Mortgage banking derivative instruments1,980 — 1,980 — 
Total recurring liabilities at fair value$9,426 $— $9,426 $— 

Recurring Basis
Fair Value Measurements
 December 31, 2024
(dollars in thousands)Fair ValueLevel 1Level 2Level 3
Financial assets:    
Debt securities available-for-sale:
U.S. Treasuries$796,464 $796,464 $— $— 
U.S. government sponsored agencies994 — 994 — 
State, county and municipal securities24,740 — 24,740 — 
Corporate debt securities10,283 — 9,263 1,020 
SBA pool securities70,482 — 70,482 — 
Mortgage-backed securities768,297 — 768,297 — 
Loans held for sale528,599 — 528,599 — 
Derivative financial instruments8,717 — 8,717 — 
Mortgage banking derivative instruments7,299 — 7,299 — 
Total recurring assets at fair value$2,215,875 $796,464 $1,418,391 $1,020 
Financial liabilities:    
Derivative financial instruments$8,718 $— $8,718 $— 
Risk participation agreement13 — 13 — 
Total recurring liabilities at fair value$8,731 $— $8,731 $— 
The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of September 30, 2025 and December 31, 2024:

 Nonrecurring Basis
Fair Value Measurements
(dollars in thousands)Fair ValueLevel 1Level 2Level 3
September 30, 2025    
Collateral-dependent loans$31,069 $— $— $31,069 
Other real estate owned1,325 — — 1,325 
Total nonrecurring assets at fair value$32,394 $— $— $32,394 
December 31, 2024    
Collateral-dependent loans$45,697 $— $— $45,697 
Other real estate owned1,010 — — 1,010 
Total nonrecurring assets at fair value$46,707 $— $— $46,707 

The inputs used to determine estimated fair value of collateral-dependent loans include market conditions, loan term, underlying collateral characteristics and discount rates. The inputs used to determine fair value of OREO include market conditions, estimated marketing period or holding period, underlying collateral characteristics and discount rates.

For the nine months ended September 30, 2025 and the year ended December 31, 2024, there were no changes in the methods and significant assumptions used to estimate fair value.

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets:

(dollars in thousands)Fair ValueValuation
Technique		Unobservable InputsRange of
Discounts		Weighted
Average
Discount
September 30, 2025     
Recurring:     
Debt securities available-for-sale$1,050 Discounted cash flowsProbability of Default10.4%10.4%
Loss Given Default47%47%
Nonrecurring:     
Collateral-dependent loans$31,069 Third-party appraisals and discounted cash flowsCollateral discounts and
discount rates
15% - 50%
32%
Other real estate owned$1,325 Third-party appraisals and sales contractsCollateral discounts and estimated
costs to sell
15% - 22%
16%
December 31, 2024     
Recurring:     
Debt securities available-for-sale$1,020 Discounted cash flowsProbability of Default10.3%10.3%
Loss Given Default45%45%
Nonrecurring:   
Collateral-dependent loans$45,697 Third-party appraisals and discounted cash flowsCollateral discounts and
discount rates
15% - 60%
30%
Other real estate owned$1,010 Third-party appraisals and sales contractsCollateral discounts and estimated
costs to sell
15% - 44%
27%
The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows:
Fair Value Measurements
  September 30, 2025
(dollars in thousands)Carrying
Amount		Level 1Level 2Level 3Total
Financial assets:     
Cash and due from banks$216,927 $216,927 $— $— $216,927 
Interest-bearing deposits in banks826,237 826,237 — — 826,237 
Debt securities held-to-maturity202,581 — 187,612 — 187,612 
Loans, net20,882,011 — — 20,585,880 20,585,880 
Financial liabilities:     
Deposits22,228,078 — 22,225,008 — 22,225,008 
Other borrowings337,094 — 335,978 — 335,978 
Subordinated deferrable interest debentures133,804 — 142,010 — 142,010 

Fair Value Measurements
  December 31, 2024
(dollars in thousands)Carrying
Amount		Level 1Level 2Level 3Total
Financial assets:     
Cash and due from banks$244,980 $244,980 $— $— $244,980 
Interest-bearing deposits in banks975,397 975,397 — — 975,397 
Debt securities held-to-maturity164,677 — 144,028 — 144,028 
Loans, net20,356,125 — — 19,882,553 19,882,553 
Financial liabilities:     
Deposits21,722,448 — 21,721,421 — 21,721,421 
Other borrowings291,788 — 291,213 — 291,213 
Subordinated deferrable interest debentures132,309 — 142,202 — 142,202