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Note 10 - FAIR VALUE

9 Months Ended

Sep. 30, 2025

FAIR VALUE

FAIR VALUE

​

NOTE 10 – FAIR VALUE

​

Accounting guidance on fair value measurement uses a hierarchy intended to maximize the use of observable inputs and minimize the use of unobservable inputs. This hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows:

● Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in markets;

● Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

● Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Assets and liabilities measured at fair value on a recurring basis comprise the following at September 30, 2025 and December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements at Reporting Date Using

​

​

​

​

​

Quoted Prices

​

Significant

​

​

​

​

​

​

​

​

in Active

​

Other

​

Significant

​

​

​

​

​

Markets for

​

Observable

​

Unobservable

​

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

​

Fair Value

(Level 1)

(Level 2)

(Level 3)

​

​

(dollars in thousands)

September 30, 2025:

​

​

​

​

Securities AFS:

​

​

​

​

U.S. treasuries and govt. sponsored agency securities

​

$

14,208

​

$

—

​

$

14,208

​

$

—

Residential mortgage-backed and related securities

​

57,108

​

—

​

57,108

​

—

Municipal securities

​

161,490

​

—

​

161,490

​

—

Asset-backed securities

​

​

4,918

​

​

—

​

​

4,918

​

​

—

Corporate securities

​

33,625

​

—

​

33,625

​

—

Securities trading

​

​

83,225

​

​

—

​

​

—

​

​

83,225

Derivatives

​

207,775

​

—

​

207,775

​

—

Total assets measured at fair value

​

$

562,349

​

$

—

​

$

479,124

​

$

83,225

​

​

​

​

​

Derivatives

​

$

230,742

​

$

—

​

$

230,742

​

$

—

Total liabilities measured at fair value

​

$

230,742

​

$

—

​

$

230,742

​

$

—

​

​

​

​

​

​

​

​

​

​

December 31, 2024:

​

​

​

​

Securities AFS:

​

​

​

​

U.S. treasuries and govt. sponsored agency securities

​

$

20,591

​

$

—

​

$

20,591

​

$

—

Residential mortgage-backed and related securities

​

50,042

​

—

​

50,042

​

—

Municipal securities

​

164,575

​

—

​

164,575

​

—

Asset-backed securities

​

​

9,224

​

​

—

​

​

9,224

​

​

—

Corporate securities

​

36,677

​

—

​

36,677

​

—

Securities trading

​

​

83,529

​

​

—

​

​

—

​

​

83,529

Derivatives

​

186,781

​

—

​

186,781

​

—

Total assets measured at fair value

​

$

551,419

​

$

—

​

$

467,890

​

$

83,529

​

​

​

​

​

Derivatives

​

$

214,823

​

$

—

​

$

214,823

​

$

—

Total liabilities measured at fair value

​

$

214,823

​

$

—

​

$

214,823

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The securities AFS portfolio consists of securities whereby the Company obtains fair values from an independent pricing service. The fair values are determined by pricing models that consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices from market makers and live trading systems (Level 2 inputs).

Trading securities consist of retained beneficial interests from securitizations and are classified as a Level 3 in the fair value hierarchy.  Fair values are estimated using the discounted cash flow method, including discount rates which are deemed to be significant unobservable inputs. As of September 30, 2025, the discount rates ranged from 3.22% to 6.23%.

Changes in fair value of trading securities for the three and nine months ended September 30, 2025 and 2024, respectively, are presented as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

​

Nine months ended

​

​

​

September 30, 2025

​

September 30, 2024

​

​

September 30, 2025

​

September 30, 2024

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance at the beginning of the period

$

82,900

​

$

22,362

​

​

$

83,529

​

$

22,369

​

​

Trading securities purchased

​

—

​

​

36,670

​

​

​

—

​

​

36,670

​

​

Paydowns

​

(42)

​

​

—

​

​

​

(123)

​

​

—

​

​

Premium amortization

(240)

​

​

(147)

​

​

​

(711)

​

​

(407)

​

​

Fair value gain (loss)

​

607

​

(200)

​

​

530

​

53

​

​

Balance at the end of the period

$

83,225

​

$

58,685

​

​

$

83,225

​

$

58,685

​

​

​

Interest rate caps, swaps, collars and swaptions are used for the purpose of hedging interest rate risk on various financial assets and liabilities, further described in Note 5 to the Consolidated Financial Statements. The fair values are determined by pricing models that consider observable market data for derivative instruments with similar structures (Level 2 inputs).

Certain financial assets are measured at fair value on a non-recurring basis; that is, the assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Assets measured at fair value on a non-recurring basis comprised the following at September 30, 2025 and December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements at Reporting Date Using

​

​

​

​

​

Quoted Prices

​

Significant

​

​

​

​

​

​

​

​

in Active

​

Other

​

Significant

​

​

​

​

​

Markets for

​

Observable

​

Unobservable

​

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

​

Fair Value

Level 1

Level 2

Level 3

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025:

​

​

​

​

Loans/leases evaluated individually

​

$

48,207

​

$

—

​

$

—

​

$

48,207

OREO

​

​

—

​

​

—

​

​

—

​

​

—

​

​

$

48,207

​

$

—

​

$

—

​

$

48,207

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024:

​

​

​

​

Loans/leases evaluated individually

​

$

54,434

​

$

—

​

$

—

​

$

54,434

OREO

​

714

​

—

​

—

​

714

​

​

$

55,148

​

$

—

​

$

—

​

$

55,148

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans/leases evaluated individually are valued at the lower of cost or fair value and are classified as Level 3 in the fair value hierarchy. Fair value is measured based on the value of the collateral securing these loans/leases. Collateral may be comprised of real estate and/or business assets, including equipment, inventory and/or accounts receivable, and is determined based on appraisals by qualified licensed appraisers hired by the Company. Appraised and reported values are discounted based on management's historical knowledge, changes in market conditions from the time of valuation, and/or management's expertise and knowledge of the client and client's business.

OREO in the table above consists of property acquired through foreclosures and settlement of loans.  Property acquired is carried at the estimated fair value of the property, less disposal costs, and is classified as a Level 3 in the fair value hierarchy.  The estimated fair value of the property acquired is generally determined based on appraisals by qualified licensed appraisers hired by the Company.  Appraised and reported values are discounted based on management’s historical knowledge, changes in market conditions from the time of valuation, and/or management’s expertise and knowledge of the property.

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Quantitative Information about Level Fair Value Measurements

​

​

Fair Value

​

Fair Value

​

​

​

​

​

​

​

​

​

​

​

​

September 30,

​

December 31,

​

​

​

​

​

​

​

​

​

​

​

2025

2024

Valuation Technique

Unobservable Input

Range

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans/leases evaluated individually

​

$

48,207

​

$

54,434

​

Appraisal of collateral

​

Appraisal adjustments

​

-10.00

%

to

​

-30.00

%

OREO

​

​

—

​

​

714

​

Appraisal of collateral

​

Appraisal adjustments

​

0.00

%

to

-35.00

%

​

For the loans/leases evaluated individually and OREO, the Company records carrying value at fair value less disposal or selling costs. The amounts reported in the tables above are fair values before the adjustment for disposal or selling costs.

There have been no changes in valuation techniques used for any assets or liabilities measured at fair value during the three and nine months ended September 30, 2025 and 2024.

The following table presents the carrying values and estimated fair values of financial assets and liabilities carried on the Company's consolidated balance sheets, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value

​

As of September 30, 2025

​

As of December 31, 2024

​

​

Hierarchy

​

Carrying

​

Estimated

​

Carrying

​

Estimated

​

Level

Value

Fair Value

Value

Fair Value

​

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

Level 1

​

$

77,581

​

$

77,581

​

$

91,732

​

$

91,732

Federal funds sold

Level 2

​

22,200

​

22,200

​

27,150

​

27,150

Interest-bearing deposits at financial institutions

Level 2

​

137,833

​

137,833

​

143,442

​

143,442

Investment securities:

​

​

​

​

​

​

​

​

HTM

Level 2

​

954,115

​

855,044

​

835,797

​

800,583

AFS

Level 2

​

271,349

​

271,349

​

281,109

​

281,109

Trading

​

Level 3

​

​

83,225

​

​

83,225

​

​

83,529

​

​

83,529

Loans/leases receivable, net

Level 3

​

50,402

​

48,207

​

50,402

​

54,434

Loans/leases receivable, net

Level 2

​

7,039,749

​

6,791,653

​

6,644,161

​

6,325,156

Derivatives

Level 2

​

207,775

​

207,775

​

186,781

​

186,781

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits:

​

​

​

​

​

​

​

​

Nonmaturity deposits

Level 2

​

6,138,705

​

6,138,705

​

5,835,362

​

5,835,362

Time deposits

Level 2

​

1,241,363

​

1,241,426

​

1,225,825

​

1,222,482

Short-term borrowings

Level 2

​

2,850

​

2,850

​

1,800

​

1,800

FHLB advances

Level 2

​

290,383

​

291,276

​

285,383

​

285,196

Other borrowings

Level 2

​

130,609

​

121,275

​

—

​

—

Subordinated notes

​

Level 2

​

​

234,027

​

​

237,668

​

​

233,489

​

​

238,873

Junior subordinated debentures

Level 2

​

48,958

​

42,531

​

48,860

​

41,638

Derivatives

Level 2

​

230,742

​

230,742

​

214,823

​

214,823

​

X

- References

No definition available.

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- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (bbb)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

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