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FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
15. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Disclosures about Fair Value of Financial Instruments

The following summarizes the methods and assumptions used to estimate the fair values of the Company's financial instruments:

Short-Term Financial Instruments

The carrying values of short-term financial instruments are considered to approximate fair values, as they are readily convertible to cash. These instruments include cash and due from financial institutions, interest-bearing deposits in other financial institutions, accrued interest receivable, most short-term FHLB advances and other short-term borrowings, and accrued interest payable.

Investment Securities

Fair values of investment securities are determined using market price quotations provided by third-party pricing services, which apply pricing models supported by current market data. Where quoted market prices are unavailable, fair values are based on comparable securities.

Loans

Fair values of loans are estimated using discounted cash flows models applied to portfolios of loans with similar financial characteristics including the type of loan, interest terms and repayment history. Cash flows are discounted using estimated market rates that reflect credit and interest rate risks. These rates are derived from market data and borrower-specific information. The weighted average discount rate used in the valuation of loans was 6.41% as of September 30, 2025, and 7.07% as of December 31, 2024. Fair value measurements are based on the exit price notion, in accordance with ASU 2016-01.

Loans Held for Sale

Fair values of loans classified as held for sale are generally based upon quoted prices for similar assets in active markets, acceptance of firm offer letters with agreed upon purchase prices, discounted cash flow models that take into account market observable assumptions, or independent appraisals of the underlying collateral securing the loans.

Loans transferred from held-for-investment to held-for-sale are reported at fair value, net of estimated selling costs on the consolidated balance sheets.
Mortgage Servicing Rights

MSRs are initially recorded at fair value determined by a discounted cash flow model prepared by a third-party service provider using market-based assumptions at origination. Subsequent impairment assessments are performed at each reporting period and use current market assumptions. Key assumptions include mortgage prepayment speeds, discount rates, servicing income, and costs. These inputs are subjective and require management judgment. Changes in assumptions are made to reflect evolving market trends and loan product types.

MSRs are classified as Level 3 assets in the fair value hierarchy due to significant unobservable inputs. The Company’s valuation techniques rely on discounted cash flow models reflecting expected cash flows, prepayment behavior, and cost structures. Fair value measurements and related assumptions are reviewed periodically and validated against market data and third-party valuations.

Deposit Liabilities

For deposits with no stated maturity, such as noninterest-bearing demand deposits and interest-bearing demand and savings accounts, fair value equals the carrying amount, representing the amount payable on demand.

For time deposits, fair value is estimated by discounting future cash flows using rates currently offered for FHLB advances of similar remaining maturities. The weighted average discount rate used in the valuation of time deposits was 4.09% as of September 30, 2025 and 4.50% as of December 31, 2024.

Long-Term Debt

Fair values of long-term debt are estimated by discounting scheduled cash flows over the contractual borrowing period using estimated market rates for similar borrowing arrangements. The weighted average discount rate used in the valuation of long-term debt was 6.76% as of September 30, 2025 and 6.68% as of December 31, 2024.

Derivatives

Fair values of derivative financial instruments are based on current market values, when available. If there are no relevant comparable values, fair values are based on pricing models using current assumptions for forward sale commitments, interest rate lock commitments, risk participation agreements, back-to-back swap agreements, and interest rate swaps.

Off-Balance Sheet Financial Instruments

Fair values of off-balance sheet financial instruments are estimated based on the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties, current settlement values or quoted market prices of comparable instruments.

Limitations of Fair Value Estimates

Fair value estimates are made at a specific point in time and are based on relevant market conditions and available financial instrument information. These estimates do not reflect any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument. Because no market exists for a significant portion of our financial instruments, fair value estimates are based on judgments and assumptions regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates cannot be determined with precision as they are inherently subjective in nature and involve uncertainties and matters of significant judgment. Changes in assumptions could significantly impact the estimates.
Fair value estimates are limited to existing on- and off-balance sheet financial instruments and do not include the estimated value of future business or non-financial assets and liabilities such as deferred tax assets and premises and equipment.

(dollars in thousands)  Fair Value Measurement Using
September 30, 2025Carrying
Amount		Estimated
Fair Value		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Financial assets:     
Cash and due from financial institutions$102,859 $102,859 $102,859 $— $— 
Interest-bearing deposits in other financial institutions207,034 207,034 207,034 — — 
Investment securities1,329,569 1,259,542 61,250 1,191,479 6,813 
Loans held for sale1,557 1,557 — 1,557 — 
Loans5,367,202 5,079,899 — — 5,079,899 
Mortgage servicing rights8,459 11,454 — — 11,454 
Accrued interest receivable25,232 25,232 872 4,704 19,656 
Financial liabilities:     
Deposits:     
Noninterest-bearing demand1,903,614 1,903,614 1,903,614 — — 
Interest-bearing demand and savings and money market3,633,606 3,633,606 3,633,606 — — 
Time1,040,464 1,034,331 — — 1,034,331 
Long-term debt131,527 128,287 — — 128,287 
Accrued interest payable8,604 8,604 111 — 8,493 

(dollars in thousands)Fair Value Measurement Using
September 30, 2025Notional
Amount		Carrying
Amount		Estimated
Fair Value		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Off-balance sheet financial instruments: 
Commitments to extend credit$1,351,802 $— $1,144 $— $1,144 $— 
Standby letters of credit and financial guarantees written2,437 — 37 — 37 — 
Derivatives:
Forward sale commitments1,576 (16)(16)— (16)— 
Risk participation agreements51,424 (3)(3)— (3)— 
Back-to-back swap agreements:
Assets61,095 3,123 3,123 — 3,123 — 
Liabilities(61,095)(3,123)(3,123)— (3,123)— 
Interest rate swap agreements114,580 4,344 4,344 — 4,344 — 
(dollars in thousands)  Fair Value Measurement Using
December 31, 2024Carrying
Amount		Estimated
Fair Value		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Financial assets:
Cash and due from financial institutions$77,774 $77,774 $77,774 $— $— 
Interest-bearing deposits in other financial institutions303,167 303,167 303,167 — — 
Investment securities1,334,588 1,244,339 59,498 1,177,994 6,847 
Loans held for sale5,662 5,662 — 5,662 — 
Loans5,332,852 4,916,765 — — 4,916,765 
Mortgage servicing rights8,473 12,387 — — 12,387 
Accrued interest receivable 23,378 23,378 462 4,607 18,309 
Financial liabilities:     
Deposits:     
Noninterest-bearing demand1,888,937 1,888,937 1,888,937 — — 
Interest-bearing demand and savings and money market3,667,889 3,667,889 3,667,889 — — 
Time1,087,185 1,079,275 — — 1,079,275 
Long-term debt156,345 153,760 — — 153,760 
Accrued interest payable10,051 10,051 113 — 9,938 

(dollars in thousands)  Fair Value Measurement Using
December 31, 2024Notional
Amount		Carrying
Amount		Estimated
Fair Value		Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Off-balance sheet financial instruments:
Commitments to extend credit$1,219,537 $— $1,167 $— $1,167 $— 
Standby letters of credit and financial guarantees written2,702 — 41 — 41 — 
Derivatives:
Interest rate lock commitments469 (4)(4)— (4)— 
Forward sale commitments4,909 46 46 — 46 — 
Risk participation agreements35,183 — — — — — 
Back-to-back swap agreements:
Assets50,202 3,840 3,840 — — 3,840 
Liabilities(50,202)(3,840)(3,840)— — (3,840)
Interest rate swap agreements115,545 8,382 8,382 — 8,382 — 

Fair Value Measurements

The Company classifies its financial assets and liabilities measured at fair value into a three-level hierarchy, based on the markets in which the financial assets and liabilities are traded and the reliability of the assumptions used to determine fair value as follows:

•Level 1 — Fair value is based on quoted prices (unadjusted) for identical assets or liabilities traded in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.

•Level 2 — Fair value is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuation techniques for which all significant assumptions are observable in the market.
•Level 3 — Fair value is determined by using model-based techniques that rely on significant assumptions not observable in the market. These unobservable assumptions reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability. Techniques may include the use of discounted cash flow models and other similar methods that require the use of significant judgment or estimation.

Fair value is measured based on the price that we would expect to receive if an asset were sold, or the price that we would expect to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Company also prioritizes the use of observable inputs and minimizes reliance on unobservable inputs when developing fair value estimates.

Fair Value Hierarchy Transfers

During the nine months ended September 30, 2025, the Company transferred its back-to-back swaps from Level 3 to Level 2 of the fair value hierarchy due to a change in valuation methodology.

During the year ended December 31, 2024, the Company transferred its interest rate swap from Level 3 to Level 2 of the fair value hierarchy due to a change in valuation methodology.

Recurring and Nonrecurring Fair Value Measurements

The Company uses fair value measurements to record adjustments to certain financial assets and liabilities and to determine fair value disclosures. Available-for-sale securities and derivatives are recorded at fair value on a recurring basis.

Periodically, the Company may be required to record other financial assets, such as loans held for sale, individually evaluated loans, mortgage servicing rights, and other real estate owned, at fair value on a nonrecurring basis. These nonrecurring fair value adjustments typically involve application of lower of cost or fair value accounting, or write-downs of individual assets.

The following tables present the fair value of financial assets and liabilities measured on a recurring basis as of the dates presented:
(dollars in thousands)Fair Value at Reporting Date Using
September 30, 2025Fair ValueQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Available-for-sale securities:    
Debt securities:    
States and political subdivisions$116,247 $— $110,111 $6,136 
U.S. Treasury and other government-sponsored entities and agencies100,761 61,250 39,511 — 
Collateralized loan obligations40,903 — 40,903 — 
Mortgage-backed securities:    
Residential - U.S. government-sponsored entities and agencies416,555 — 416,555 — 
Residential - Non-government agencies15,963 — 15,286 677 
Commercial - U.S. government-sponsored entities and agencies68,254 — 68,254 — 
Total available-for-sale investment securities758,683 61,250 690,620 6,813 
Derivatives:
Forward sale commitments(16)— (16)— 
Risk participation agreements(3)— (3)— 
Interest rate swap agreements4,344 — 4,344 — 
Total derivatives4,325 — 4,325 — 
Total$763,008 $61,250 $694,945 $6,813 
(dollars in thousands)Fair Value at Reporting Date Using
December 31, 2024Fair ValueQuoted Prices
in Active
Markets for
Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Available-for-sale securities:    
Debt securities:    
States and political subdivisions$116,833 $— $110,668 $6,165 
U.S. Treasury and other government-sponsored entities and agencies81,200 59,498 21,702 — 
Collateralized loan obligations31,140 — 31,140 — 
Mortgage-backed securities:    
Residential - U.S. government-sponsored entities and agencies414,471 — 414,471 — 
Residential - Non-government agencies16,926 — 16,244 682 
Commercial - U.S. government-sponsored entities and agencies67,161 — 67,161 — 
Commercial - Non-government agencies9,927 — 9,927 — 
Total available-for-sale investment securities737,658 59,498 671,313 6,847 
Derivatives:
Interest rate lock commitments(4)— (4)— 
Forward sale commitments46 — 46 — 
Interest rate swap agreements8,382 — 8,382 — 
Total derivatives8,424 — 8,424 — 
Total$746,082 $59,498 $679,737 $6,847 

The following table presents changes in Level 3 financial assets and liabilities measured at fair value on a recurring basis for the periods presented:
Available-For-Sale Debt Securities:
(dollars in thousands)States and Political SubdivisionsResidential - Non-Government AgenciesInterest Rate Swap AgreementsTotal
Balance at December 31, 2024$6,165 $682 $— $6,847 
Principal payments received(178)(18)— (196)
Unrealized net gain (loss) included in other comprehensive income149 13 — 162 
Balance at September 30, 2025$6,136 $677 $— $6,813 
  
Balance at December 31, 2023$6,436 $714 $6,440 $13,590 
Principal payments received(163)(18)— (181)
Unrealized net gain (loss) included in other comprehensive income65 22 (1,238)(1,151)
Balance at September 30, 2024$6,338 $718 $5,202 $12,258 

The Company estimates the fair value of Level 3 financial assets and liabilities using a discounted cash flow model that calculates the present value of estimated future principal and interest payments. Based on this methodology, the estimated aggregate fair value of Level 3 financial assets and liabilities measured at fair value on a recurring basis was $6.8 million as of September 30, 2025, compared to and $6.8 million as of December 31, 2024.

The weighted-average discount rate is the primary unobservable input used in the fair value measurement of the available-for-sale debt securities. The weighted average discount rate utilized was 5.78% as of September 30, 2025, 6.22% as of December 31, 2024, and 5.72% as of September 30, 2024. These discount rates were derived by incorporating a credit spread
over the FHLB Fixed-Rate Advance curve. A significant increase in the weighted-average discount rate could result in a lower fair value, while a decrease could result in a higher fair value.

There were no financial assets or liabilities measured on a nonrecurring basis as of September 30, 2025 and December 31, 2024.