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Disclosures about Fair Value of Assets and Liabilities | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Disclosures about Fair Value of Assets and Liabilities | Disclosures about Fair Value of Assets and Liabilities The Fair Value Measurements topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. There are three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended June 30, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Available for sale securities When quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Treasury and federal agency securities, state and municipal securities, U.S. government agency mortgage-backed securities, corporate notes. Level 2 securities are valued by a third party pricing service commonly used in the banking industry utilizing observable inputs. Observable inputs include dealer quotes, market spreads, cash flow analysis, the U.S. Treasury yield curve, trade execution data, market consensus prepayment spreads and available credit information and the bond’s terms and conditions. The pricing provider utilizes evaluated pricing models that vary based on asset class. These models incorporate available market information including quoted prices of securities with similar characteristics and, because many fixed–income securities do not trade on a daily basis, apply available information through processes such as benchmark curves, benchmarking of like securities, sector grouping, and matrix pricing. In addition, model processes, such as an option adjusted spread model, is used to develop prepayment and interest rate scenarios for securities with prepayment features. Level 3 securities use the discounted cash flow model or other market indicators to calculate the fair values. Equity securities The fair value of the Company's equity investments is estimated by a third party utilizing readily determinable fair values quoted on an active market. Interest rate swap agreements The fair value of the Company’s interest rate swap agreements is estimated by a third party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy. Commitments to originate mortgage loans and mortgage loan contract assets/liabilities The Company’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable. The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following:
| June 30, 2025
| Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Available for sale securities |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 1,752 |  |  | $ | — |  |  | $ | 1,752 |  |  | $ | — |
State and municipal | 201,741 |  |  | — |  |  | 201,741 |  |  | — |
U.S. government agency mortgage-backed securities | 14,095 |  |  | — |  |  | 14,095 |  |  | — |
Corporate notes | 14,411 |  |  | — |  |  | 11,625 |  |  | 2,786 |
Total available for sale securities | 231,999 |  |  | — |  |  | 229,213 |  |  | 2,786 |
Equity securities | 570 |  |  | 570 |  |  | — |  |  | — |
Interest rate swap agreements asset | 16,637 |  |  | — |  |  | 16,637 |  |  | — |
Commitments to originate mortgage loans | 645 |  |  | — |  |  | 645 |  |  | — |
Liabilities: |  |  |  |  |  |  |
Mortgage loans contracts | (119) |  |  | — |  |  | (119) |  |  | — |
Interest rate swap agreements liability | (16,637) |  |  | — |  |  | (16,637) |  |  | — |
| December 31, 2024
| Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets: |  |  |  |  |  |  |
Available for sale securities |  |  |  |  |  |  |
U.S. Treasury and federal agencies | $ | 1,801 |  |  | $ | — |  |  | $ | 1,801 |  |  | $ | — |
State and municipal | 201,834 |  |  | — |  |  | 201,834 |  |  | — |
U.S. government agency mortgage-backed securities | 14,543 |  |  | — |  |  | 14,543 |  |  | — |
Corporate notes | 15,499 |  |  | — |  |  | 15,499 |  |  | — |
Total available for sale securities | 233,677 |  |  | — |  |  | 233,677 |  |  | — |
Equity securities | 595 |  |  | 595 |  |  | — |  |  | — |
Interest rate swap agreements asset | 28,817 |  |  | — |  |  | 28,817 |  |  | — |
Commitments to originate mortgage loans | 202 |  |  | — |  |  | 202 |  |  | — |
Mortgage loan contracts | 27 |  |  | — |  |  | 27 |  |  | — |
Liabilities: |  |  |  |  |  |  |
Interest rate swap agreements liability | (28,817) |  |  | — |  |  | (28,817) |  |  | — |
Certain other assets are measured at fair value on a non-recurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment):
| Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
June 30, 2025 |  |  |  |  |  |  |
Collateral dependent loans | $ | 6,322 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,322 |
December 31, 2024 |  |  |  |  |  |  |
Collateral dependent loans | $ | 3,797 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,797 |
Collateral Dependent Loans: For loans identified as collateral dependent, the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Loans Transferred to Held for Sale: Once a decision has been made to sell loans not previously classified as held for sale, these loans are transferred into the held for sale category and carried at the lower of cost or fair value, less estimated costs to sell. At the time of transfer into held for sale classification, any amount by which cost exceeds fair value is accounted for as a valuation allowance. This activity generally pertains to loans with observable inputs, and therefore, are classified within Level 2 of the fair value hierarchy. However, should these loans include adjustments for changes in loan characteristics based on unobservable inputs, the loans would then be classified within Level 3 of the fair value hierarchy. As of June 30, 2025 and December 31, 2024, there were zero and $64.8 million loans transferred to held for sale on the accompanying Condensed Consolidated Balance Sheets, respectively. The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
| June 30, 2025
| Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range (Weighted Average)
Collateral dependent loans | $ | 6,322 |  |  | Collateral based measurement |  | Discount to reflect current market conditions and ultimate collectability |  | 16.1%-40.9% (35.8%)
| December 31, 2024
| Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range (Weighted Average)
Collateral dependent loans | $ | 3,797 |  |  | Collateral based measurement |  | Discount to reflect current market conditions and ultimate collectability |  | 16.1%-40.1%(36.6%)

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