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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs. Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. (a) Recurring and Nonrecurring Basis The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis: Investment Securities: The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Investment security valuations are obtained from third-party pricing services. Collateral-Dependent Loans: Collateral-dependent loans are identified for the calculation of the ACL on loans. The fair value used to measure credit loss for this type of loan is commonly based on recent real estate appraisals which are generally obtained at least every 18 months or earlier if there are changes to risk characteristics of the underlying loan. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. The Company also incorporates an estimate of cost to sell the collateral when the sale is probable. Such adjustments may be significant and result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and customer’s business (Level 3). Individually evaluated loans are analyzed for credit loss on a quarterly basis and the ACL on loans is adjusted as required based on the results. Appraisals on collateral-dependent loans are performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company's internal appraisal department reviews and approves the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Derivative Financial Instruments: The Company obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2), and incorporates credit valuation adjustments to reflect nonperformance risk in the measurement of fair value (Level 3). Although the Company has determined that the majority of the inputs used to value its interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as borrower risk ratings, to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2025 and December 31, 2024, the Company assessed the significance of the impact of the credit valuation adjustment on the overall valuation of its interest rate swap derivatives and determined the credit valuation adjustment was not significant to the overall valuation of its interest rate swap derivatives. As a result, the Company has classified its interest rate swap derivative valuations in Level 2 of the fair value hierarchy. Recurring Basis The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:
| June 30, 2025
| Total |  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Assets |  |  |  |  |  |  |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 11,510 |  |  | $ | — |  |  | $ | 11,510 |  |  | $ | — |
Municipal securities | 50,215 |  |  | — |  |  | 50,215 |  |  | — |
Residential CMO and MBS(1) | 317,214 |  |  | — |  |  | 317,214 |  |  | — |
Commercial CMO and MBS(1) | 260,720 |  |  | — |  |  | 260,720 |  |  | — |
| June 30, 2025
| Total |  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Corporate obligations | 10,010 |  |  | — |  |  | 10,010 |  |  | — |
Other asset-backed securities | 6,783 |  |  | — |  |  | 6,783 |  |  | — |
Total investment securities available for sale | 656,452 |  |  | — |  |  | 656,452 |  |  | — |
Equity security | 285 |  |  | 285 |  |  | — |  |  | — |
Derivative assets - interest rate swaps | 17,466 |  |  | — |  |  | 17,466 |  |  | — |
Liabilities |  |  |  |  |  |  |
Derivative liabilities - interest rate swaps | $ | 17,466 |  |  | $ | — |  |  | $ | 17,466 |  |  | $ | — |
(1) U.S. government agency and government-sponsored enterprise CMO and MBS.
| December 31, 2024
| Total |  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Assets |  |  |  |  |  |  |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 12,544 |  |  | $ | — |  |  | $ | 12,544 |  |  | $ | — |
Municipal securities | 50,942 |  |  | — |  |  | 50,942 |  |  | — |
Residential CMO and MBS(1) | 369,331 |  |  | — |  |  | 369,331 |  |  | — |
Commercial CMO and MBS(1) | 309,741 |  |  | — |  |  | 309,741 |  |  | — |
Corporate obligations | 11,770 |  |  | — |  |  | 11,770 |  |  | — |
Other asset-backed securities | 10,066 |  |  | — |  |  | 10,066 |  |  | — |
Total investment securities available for sale | 764,394 |  |  | — |  |  | 764,394 |  |  | — |
Equity security | 297 |  |  | 297 |  |  | — |  |  | — |
Derivative assets - interest rate swaps | 23,867 |  |  | — |  |  | 23,867 |  |  | — |
Liabilities |  |  |  |  |  |  |
Derivative liabilities - interest rate swaps | $ | 23,867 |  |  | $ | — |  |  | $ | 23,867 |  |  | $ | — |
(1) U.S. government agency and government-sponsored enterprise CMO and MBS. Nonrecurring Basis The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables present assets measured at fair value on a nonrecurring basis at the dates indicated:
| Fair Value at June 30, 2025
| Total |  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Collateral-dependent loans: |  |  |  |  |  |  |
Commercial business: |  |  |  |  |  |  |
Owner-occupied CRE | $ | 138 |  |  | $ | — |  |  | $ | — |  |  | $ | 138 |
Total assets measured at fair value on a nonrecurring basis | $ | 138 |  |  | $ | — |  |  | $ | — |  |  | $ | 138 |
| Fair Value at December 31, 2024
| Total |  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Collateral-dependent loans: |  |  |  |  |  |  |
Commercial business: |  |  |  |  |  |  |
Owner-occupied CRE | $ | 2,250 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,250 |
Total commercial business | 2,250 |  |  | — |  |  | — |  |  | 2,250 |
Consumer | 160 |  |  | — |  |  | — |  |  | 160 |
Total assets measured at fair value on a nonrecurring basis | $ | 2,410 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,410 |
The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:
| June 30, 2025
| Fair Value |  | Valuation Technique(s) |  | Unobservable Input(s) |  | Range of Inputs |  | Weighted Average (1)
| (Dollars in thousands)
Collateral-dependent loans | $ | 138 |  |  | Market approach |  | Adjustments to reflect current conditions and selling costs |  | 10.0% - 10.0% |  | 10.0%
| December 31, 2024
| Fair Value |  | Valuation Technique(s) |  | Unobservable Input(s) |  | Range of Inputs |  | Weighted Average (1)
| (Dollars in thousands)
Collateral-dependent loans | $ | 2,410 |  |  | Market approach |  | Adjustments to reflect current conditions and selling costs |  | 10.0% - 10.0% |  | 10.0%
(1) Weighted by net discount to net appraisal fair value (b) Fair Value of Financial Instruments Broadly traded markets do not exist for most of the Company’s financial instruments; therefore, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein does not represent, and should not be construed to represent, the underlying value of the Company. The following tables present the carrying value of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated:
| June 30, 2025
| Carrying Value |  | Fair Value |  | Fair Value Measurements Using:
|  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Financial Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 254,096 |  |  | $ | 254,096 |  |  | $ | 254,096 |  |  | $ | — |  |  | $ | — |
Investment securities available for sale | 656,452 |  |  | 656,452 |  |  | — |  |  | 656,452 |  |  | — |
Investment securities held to maturity | 689,822 |  |  | 629,658 |  |  | — |  |  | 629,658 |  |  | — |
Loans receivable, net | 4,722,326 |  |  | 4,684,464 |  |  | — |  |  | — |  |  | 4,684,464 |
Derivative assets - interest rate swaps | 17,466 |  |  | 17,466 |  |  | — |  |  | 17,466 |  |  | — |
Equity security | 285 |  |  | 285 |  |  | 285 |  |  | — |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |
Non-maturity deposits | $ | 4,802,763 |  |  | $ | 4,802,763 |  |  | $ | 4,802,763 |  |  | $ | — |  |  | $ | — |
Certificates of deposit | 981,650 |  |  | 989,539 |  |  | — |  |  | 989,539 |  |  | — |
| June 30, 2025
| Carrying Value |  | Fair Value |  | Fair Value Measurements Using:
|  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Borrowings | 263,200 |  |  | 263,189 |  |  | — |  |  | 263,189 |  |  | — |
Junior subordinated debentures | 22,204 |  |  | 20,540 |  |  | — |  |  | — |  |  | 20,540 |
Derivative liabilities - interest rate swaps | 17,466 |  |  | 17,466 |  |  | — |  |  | 17,466 |  |  | — |
| December 31, 2024
| Carrying Value |  | Fair Value |  | Fair Value Measurements Using:
|  | Level 1 |  | Level 2 |  | Level 3
| (Dollars in thousands)
Financial Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 117,100 |  |  | $ | 117,100 |  |  | $ | 117,100 |  |  | $ | — |  |  | $ | — |
Investment securities available for sale | 764,394 |  |  | 764,394 |  |  | — |  |  | 764,394 |  |  | — |
Investment securities held to maturity | 703,285 |  |  | 623,452 |  |  | — |  |  | 623,452 |  |  | — |
Loans receivable, net | 4,749,655 |  |  | 4,694,516 |  |  | — |  |  | — |  |  | 4,694,516 |
Derivative assets - interest rate swaps | 23,867 |  |  | 23,867 |  |  | — |  |  | 23,867 |  |  | — |
Equity security | 297 |  |  | 297 |  |  | 297 |  |  | — |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |
Non-maturity deposits | $ | 4,707,362 |  |  | $ | 4,707,362 |  |  | $ | 4,707,362 |  |  | $ | — |  |  | $ | — |
Certificates of deposit | 977,251 |  |  | 985,602 |  |  | — |  |  | 985,602 |  |  | — |
Borrowings | 383,000 |  |  | 383,222 |  |  | — |  |  | 383,222 |  |  | — |
Junior subordinated debentures | 22,058 |  |  | 20,357 |  |  | — |  |  | — |  |  | 20,357 |
Derivative liabilities - interest rate swaps | 23,867 |  |  | 23,867 |  |  | — |  |  | 23,867 |  |  | — |

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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 + Details
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