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Fair Value Measurements

9 Months Ended

Sep. 30, 2025

Fair Value Measurements

Fair Value Measurements

Note 12 – Fair Value Measurements

​

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy established by the Company also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are:

​

Level 1:  Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

​

Level 2:  Significant observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

​

Level 3:  Significant unobservable inputs that reflect a company’s own view about the assumptions that market participants would use in pricing an asset or liability.

​

There were no transfers between levels during the nine-month period ended September 30, 2025, and September 30, 2024.

​

Company has certain assets and liabilities measured at fair value. The majority of those assets and liabilities are measured using Level 2 measurement methods. The following is a description of the techniques used to measure all assets and liabilities using Level 2 techniques at fair value as of September 30, 2025, and December 31, 2024:

​

● Government-sponsored agency debt securities are primarily priced using available market information through processes such as benchmark spreads, market valuations of like securities, like securities groupings and matrix pricing.

● Other government-sponsored agency securities, mortgage-backed securities (“MBS”), collateralized mortgage obligations (“CMO”),and some of the actively traded real estate mortgage investment conduits and collateralized mortgage obligations are priced using available market information including benchmark yields, prepayment speeds, spreads, volatility of similar securities and trade date.

● State and political subdivisions are largely grouped by characteristics (e.g., geographical data and source of revenue in trade dissemination systems). Because some securities are not traded daily and due to other grouping limitations, active market quotes are often obtained using benchmarking for like securities. For securities where quoted prices or market prices are not available, fair value is calculated using discounted cash flows or other market indicators (level 3).

● Asset-backed collateralized loan obligations(“CLO”), and asset-backed securities (“ABS”) were priced using data from a pricing matrix supported by our bond accounting service provider and are therefore considered Level 2 valuations. For securities where quoted prices or market prices are not available, fair value is calculated using discounted cash flows or other market indicators (level 3).

● Residential mortgage loans available for sale in the secondary market are carried at fair market value. The fair value of loans held-for-sale is determined using quoted secondary market prices for similar loans.

● Mortgage banking derivatives, e.g., residential mortgage loans with locked interest rates to be sold in the secondary market and forward commitments for the future delivery of mortgage loans to third party investors, as well as forward commitments for future delivery of MBS, are considered derivatives. Fair values are estimated based on observable changes in mortgage interest rates including prices for MBS from the date of the commitment and do not typically involve significant judgments by management.

​

● The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income to derive the resultant value. The Company is able to compare the valuation model inputs, such as the discount rate, prepayment speeds, weighted average delinquency and foreclosure/bankruptcy rates to widely available published industry data for reasonableness.

● Interest rate swap positions, both assets and liabilities, are based on valuation pricing models using an income approach reflecting readily observable market parameters such as interest rate yield curves.

​

Assets and Liabilities Measured at Fair Value on a Recurring Basis:

​

The tables below present the balance of assets and liabilities at September 30, 2025, and December 31, 2024, respectively, measured by the Company at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

Level 1

Level 2

Level 3

Total

Assets:

​

​

​

​

​

​

​

​

​

​

​

​

Securities available-for-sale

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

$

190,670

​

$

-

​

$

-

​

$

190,670

U.S. government agencies

​

​

-

​

​

38,264

​

​

-

​

​

38,264

U.S. government agencies mortgage-backed

​

​

-

​

​

93,051

​

​

-

​

​

93,051

States and political subdivisions

​

​

-

​

​

199,234

​

​

11,441

​

​

210,675

Collateralized mortgage obligations

​

​

-

​

​

378,236

​

​

​

​

​

378,236

Asset-backed securities

​

​

-

​

​

43,202

​

​

4,600

​

​

47,802

Collateralized loan obligations

​

​

-

​

​

198,098

​

​

-

​

​

198,098

Equity Securities

​

​

-

​

​

684

​

​

-

​

​

684

Loans held-for-sale

​

​

-

​

​

1,463

​

​

-

​

​

1,463

Mortgage servicing rights

​

​

-

​

​

-

​

​

9,549

​

​

9,549

Interest rate derivatives 1

​

​

-

​

​

4,281

​

​

-

​

​

4,281

Mortgage banking derivatives

​

​

-

​

​

69

​

​

-

​

​

69

Total

​

$

190,670

​

$

956,582

​

$

25,590

​

$

1,172,842

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap agreements, including risk participation agreements

​

$

-

​

$

1,388

​

$

-

​

$

1,388

Total

​

$

-

​

$

1,388

​

$

-

​

$

1,388

​

​

​

​

​

​

​

​

​

​

​

​

​

​

¹ Interest rate derivatives includes interest rate swaps, a rate cap and risk participation agreements.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

Level 1

Level 2

Level 3

Total

Assets:

​

​

​

​

​

​

​

​

​

​

​

​

Securities available-for-sale

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

$

194,143

​

$

-

​

$

-

​

$

194,143

U.S. government agencies

​

​

-

​

​

37,814

​

​

-

​

​

37,814

U.S. government agencies mortgage-backed

​

​

-

​

​

100,277

​

​

-

​

​

100,277

States and political subdivisions

​

​

-

​

​

203,560

​

​

11,896

​

​

215,456

Collateralized mortgage obligations

​

​

-

​

​

368,616

​

​

-

​

​

368,616

Asset-backed securities

​

​

-

​

​

59,049

​

​

3,254

​

​

62,303

Collateralized loan obligations

​

​

-

​

​

183,092

​

​

-

​

​

183,092

Loans held-for-sale

​

​

-

​

​

1,556

​

​

-

​

​

1,556

Mortgage servicing rights

​

​

-

​

​

-

​

​

10,374

​

​

10,374

Interest rate derivatives 1

​

​

-

​

​

5,526

​

​

-

​

​

5,526

Mortgage banking derivatives

​

​

-

​

​

55

​

​

-

​

​

55

Total

​

$

194,143

​

$

959,545

​

$

25,524

​

$

1,179,212

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate swap agreements, including risk participation agreements

​

$

-

​

$

3,192

​

$

-

​

$

3,192

Total

​

$

-

​

$

3,192

​

$

-

​

$

3,192

​

¹ Interest rate derivatives includes interest rate swaps, a rate cap and risk participation agreements.

​

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are as follows:

​

​	​	​	​	​	​	​	​	​	​
​	​	​	Nine Months Ended September 30, 2025
​	​	Securities available-for-sale					​	​	​
​	​	​		​	States and		​	Mortgage
​	​	Asset-backed		​	Political		​	Servicing
​		Securities		​	Subdivisions			Rights
Beginning balance January 1, 2025	​	$	3,254	​	$	11,896	​	$	10,374
Transfers out of Level 3	​	​	-	​	​	-	​	​	-
Total gains or losses	​	​	​	​	​	​	​	​	​
Included in earnings	​	​	-	​	​	-	​	​	(1,143)
Included in other comprehensive income	​	​	(16)	​	​	(335)	​	​	-
Purchases, issuances, sales, and settlements	​	​	​	​	​	​	​	​	​
Purchases	​	​	1,702	​	​	-	​	​	-
Issuances	​	​	-	​	​	-	​	​	665
Settlements	​	​	(340)	​	​	(120)	​	​	(347)
Ending balance September 30, 2025	​	$	4,600	​	$	11,441	​	$	9,549
​	​	​	​	​	​	​	​	​	​

​

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	Nine Months Ended September 30, 2024							​
​	​	​	Securities available-for-sale				​	​	​	​
​	​	​		​	States and		​	Mortgage		​
​	​	Asset-backed		​	Political		​	Servicing		​
​		Securities		​	Subdivisions			Rights
Beginning balance January 1, 2024	​	$	2,270	​	$	13,059	​	$	10,344	​
Transfers out of Level 3	​	​	-	​	​	-	​	​	-	​
Total gains or losses	​	​	​	​	​	​	​	​	​	​
Included in earnings	​	​	-	​	​	(98)	​	​	(706)	​
Included in other comprehensive income	​	​	(68)	​	​	18	​	​	-	​
Purchases, issuances, sales, and settlements	​	​	​	​	​	​	​	​	​	​
Purchases	​	​	1,209	​	​	-	​	​	-	​
Issuances	​	​	-	​	​	-	​	​	490	​
Settlements	​	​	(111)	​	​	(111)	​	​	(402)	​
Ending balance September 30, 2024	​	$	3,300	​	$	12,868	​	$	9,726	​

​

The following table and commentary present quantitative and qualitative information about Level 3 fair value measurements as of September 30, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted

Measured at fair value

​

​

​

​

​

​

Significant Unobservable

​

​

​

Average

on a recurring basis:

Fair Value

Valuation Methodology

Inputs

Range of Input

of Inputs

​

​

​

​

​

​

​

​

​

​

​

​

​

States and political subdivisions

​

$

11,441

​

Discounted Cash Flow

​

Discount Rate

​

3.4 -5.0%

​

4.1

%

​

​

​

​

​

​

​

Liquidity Premium

​

0.5 - 0.5%

​

0.5

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-backed securities

​

$

4,600

​

Discounted Cash Flow

​

Discount Rate

​

5.1 - 5.1%

​

5.1

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage servicing rights

​

$

9,549

​

Discounted Cash Flow

​

Discount Rate

​

9.0 - 11.0%

​

10.5

%

​

​

​

​

​

​

​

Prepayment Speed

​

1.8 - 37.4%

​

9.3

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The following table and commentary present quantitative and qualitative information about Level 3 fair value measurements as December 31, 2024:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted

Measured at fair value

​

​

​

​

​

​

Significant Unobservable

​

​

​

Average

on a recurring basis:

Fair Value

Valuation Methodology

Inputs

Range of Input

of Inputs

​

​

​

​

​

​

​

​

​

​

​

​

​

States and political subdivisions

​

$

11,896

​

Discounted Cash Flow

​

Discount Rate

​

5.3 – 5.4%

​

5.4

%

​

​

​

​

​

​

​

Liquidity Premium

​

0.5 – 0.5%

​

0.5

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Asset-backed securities

​

$

3,254

​

Discounted Cash Flow

​

Discount Rate

​

4.9 – 4.9%

​

4.9

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage servicing rights

​

$

10,374

​

Discounted Cash Flow

​

Discount Rate

​

9.0 – 11.0%

​

9.0

%

​

​

​

​

​

​

​

Prepayment Speed

​

0.0 – 31.5%

​

6.9

%

​

​

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis:

​

The Company may be required, from time to time, to measure certain other assets at fair value on a nonrecurring basis in accordance with GAAP. These assets consist of individually evaluated loans and OREO. The following is a description of the techniques used to measure these assets using Level 3 techniques at fair value as of September 30, 2025, and December 31, 2024:

​

● The fair value of individually evaluated loans with specific allocations of the allowance for credit losses is essentially based on recent real estate appraisals or the fair value of the collateralized asset. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are made in the appraisal process by the appraisers to reflect differences between the available comparable sales and income data. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

● Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at fair value, less costs to sell. Fair values are based on third party appraisals of the property, resulting in a Level 3 classification, or an executed pending sales contract. In cases where the carrying amount exceeds the fair value, less costs to sell, a valuation loss is recognized.

​

​

For assets measured at fair value on a nonrecurring basis at September 30, 2025, and December 31, 2024, respectively, the following tables provide the level of valuation assumptions used to determine each valuation and the carrying value of the related assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

Level 1

Level 2

Level 3

Total

Individually evaluated loans1

​

$

-

​

$

-

​

$

23,978

​

$

23,978

Other real estate owned, net2

​

​

-

​

​

-

​

​

6,416

​

​

6,416

Total

​

$

-

​

$

-

​

$

30,394

​

$

30,394

​

¹ Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of collateral for collateral-dependent loans, which had a carrying amount of $29.8 million and a valuation allowance of $5.9 million, resulting in a decrease of specific allocations within the allowance for credit losses on loans of $1.3 million for the nine months ended September 30, 2025.

² OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $6.4 million at September 30, 2025, which is made up of the outstanding balance of $7.0 million, net of a valuation allowance of $632,000.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

Level 1

Level 2

Level 3

Total

Individually evaluated loans1

​

$

-

​

$

-

​

$

19,058

​

$

19,058

Other real estate owned, net2

​

​

-

​

​

-

​

​

21,617

​

​

21,617

Total

​

$

-

​

$

-

​

$

40,675

​

$

40,675

​

¹ Represents carrying value and related write-downs of loans for which adjustments are substantially based on the appraised value of

collateral for collateral-dependent loans and to a lesser extent the discounted cash flow, which had a carrying amount of $26.2 million and a valuation allowance of $7.2 million, resulting in a decrease of specific allocations within the allowance for credit losses on loans of $3.9 million for the year December 31, 2024.

² OREO is measured at the lower of carrying or fair value less costs to sell, and had a net carrying amount of $21.6 million at December 31, 2024, which is made up of the outstanding balance of $23.5 million, net of a valuation allowance of $1.9 million.

​

The Company has estimated the fair values of these assets based primarily on Level 3 inputs. OREO and individually evaluated loans are generally valued using the fair value of collateral provided by third party appraisals. These valuations include assumptions related to cash flow projections, discount rates, and recent comparable sales. The numerical ranges of unobservable inputs for these valuation assumptions are not meaningful.

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/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 2: 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 3: 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 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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 11: 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 12: 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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