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FAIR VALUE OF FINANCIAL INSTRUMENTS
 9 Months Ended
Sep. 30, 2025
FAIR VALUE OF FINANCIAL INSTRUMENTS  
FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 10 — FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company uses fair value measurements to record fair value adjustments to certain assets and to determine fair value disclosures. Accounting guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

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

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

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

Assets and Liabilities Measured at Fair Value on a Recurring and Non-Recurring Basis

Assets measured on a recurring basis are limited to the Company’s AFS securities portfolio, equity investments, and derivative contracts. The AFS portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in shareholders’ equity. Equity investments are carried at estimated fair value with changes in fair value reported on the statements of operations. Outstanding derivative contracts designated as cash flow hedges are carried at estimated fair value with changes in fair value reported as accumulated other comprehensive income or loss in shareholders’ equity. Outstanding derivatives not designated as hedges are carried at estimated fair value with changes in fair value reported as non-interest income. The fair values for substantially all of these assets are obtained monthly from an independent nationally recognized pricing service. On a quarterly basis, the Company assesses the reasonableness of the fair values obtained for the AFS portfolio by reference to a second independent nationally recognized pricing service. Based on the nature of these securities, the Company’s independent pricing service provides prices which are categorized as Level 2 since quoted prices in active markets for identical assets are generally not available for the majority of securities in the Company’s portfolio. Various modeling techniques are used to determine pricing for the Company’s mortgage-backed securities, including option pricing and discounted cash flow models. The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. On an annual basis, the Company obtains the models, inputs and assumptions utilized by its pricing service and reviews them for reasonableness. Other than derivative contracts, the Company did not have any liabilities that were measured at fair value at September 30, 2025 and December 31, 2024.

From time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as certain loans where the carrying value is based on the fair value of the underlying collateral estimated using Level 3 inputs consisting of individual third-party appraisals that may be adjusted based on certain criteria.

Assets and liabilities measured at fair value on a recurring and non-recurring basis are summarized below (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement using:

​

​

​

​

​

Quoted Prices

​

​

​

​

​

​

​

​

​

​

​

in Active

​

Significant

​

​

​

​

​

​

​

​

Markets

​

Other

​

Significant

​

​

Carrying

​

For Identical

​

Observable

​

Unobservable

​

    

Amount

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

At September 30, 2025

​

​

​

​

​

​

​

​

​

​

​

​

Recurring Fair Value Measurements:

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Government agency securities

​

$

37,852

​

$

—

​

$

37,852

​

$

—

U.S. State and Municipal securities

​

​

9,640

​

​

—

​

​

9,640

​

​

—

Residential mortgage securities

​

​

458,925

​

​

—

​

​

458,925

​

​

—

Commercial mortgage securities

​

​

43,618

​

​

—

​

​

43,618

​

​

—

Asset-backed securities

​

​

2,406

​

​

—

​

​

2,406

​

​

—

CRA Mutual Fund

​

​

5,548

​

​

5,548

​

​

—

​

​

—

Derivative assets

​

​

941

​

​

—

​

​

941

​

​

—

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Derivative liabilities

​

​

4,712

​

​

—

​

​

4,712

​

​

—

Non-Recurring Fair Value Measurements:

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

Collateral dependent loans

​

​

36,435

​

​

—

​

​

—

​

​

36,435

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement using:

​

​

​

​

​

Quoted Prices

​

​

​

​

​

​

​

​

​

​

​

in Active

​

Significant

​

​

​

​

​

​

​

​

Markets

​

Other

​

Significant

​

​

Carrying

​

For Identical

​

Observable

​

Unobservable

​

    

Amount

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

At December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Recurring Fair Value Measurements:

​

​

​

​

​

​

​

​

​

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Government agency securities

​

$

63,752

​

$

—

​

$

63,752

​

$

—

U.S. State and Municipal securities

​

​

9,500

​

​

—

​

​

9,500

​

​

—

Residential mortgage securities

​

​

363,068

​

​

—

​

​

363,068

​

​

—

Commercial mortgage securities

​

​

43,128

​

​

—

​

​

43,128

​

​

—

Asset-backed securities

​

​

2,637

​

​

—

​

​

2,637

​

​

—

CRA Mutual Fund

​

​

5,109

​

​

5,109

​

​

—

​

​

—

Derivative assets

​

​

919

​

​

—

​

​

919

​

​

—

Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

Derivative liabilities

​

​

1,539

​

​

—

​

​

1,539

​

​

—

​

There were no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2025 and 2024.

Collateral dependent loans with a total amortized cost of $58.7 million at September 30, 2025 were reduced by an allowance for credit losses of $22.3 million for a reported total net carrying amount of $36.4 million. The collateral values for these loans were estimated using individual third party appraisals that utilized the sales comparison valuation technique. The Company used Level 3 inputs to estimate the fair value including discounts to the appraisals for costs to sell and other adjustments ranging from -100% to 15%, and with a weighted-average of -37%. There were no material assets and liabilities held at September 30, 2024 for which non-recurring fair value adjustments were recorded during the three and nine months ended September 30, 2024.

​

Assets and Liabilities Not Measured at Fair Value

The Company has engaged independent pricing service providers to provide the fair values of its financial assets and liabilities not measured at fair value. These providers follow FASB’s exit pricing guidelines, as required by ASC 820 Fair Value Measurement, when calculating the fair market value. Cash and cash equivalents include cash and due from banks and overnight deposits. The estimated fair values of cash and cash equivalents are assumed to equal their carrying values, as these financial instruments are either due on demand or have short-term maturities. For securities and the disability fund, if quoted market prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. The estimated fair value of loans are measured at amortized cost using an exit price notion. Ownership in equity securities of the FRB and FHLB is generally restricted and there is no established liquid market for their resale. The fair values of deposit liabilities with no stated maturity (i.e., money market and savings deposits, and non-interest-bearing demand deposits) are equal to the carrying amounts payable on demand. Time deposits are valued using a replacement cost of funds approach. Trust preferred securities are valued using a replacement cost of funds approach. For all other assets and liabilities it is assumed that the carrying value equals their current fair value.

Carrying amounts and estimated fair values of financial instruments not carried at fair value were as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using:

​

​

​

​

​

​

​

​

Quoted Prices

​

​

​

​

​

​

​

​

​

​

​

​

​

​

in Active

​

Significant

​

​

​

​

​

​

​

​

​

​

​

Markets

​

Other

​

Significant

​

​

​

​

​

Carrying

​

For Identical

​

Observable

​

Unobservable

​

Total Fair

At September 30, 2025

    

Amount

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

    

Value

Financial Assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

13,109

​

$

13,109

​

$

—

​

$

—

​

$

13,109

Overnight deposits

​

​

372,827

​

​

372,827

​

​

—

​

​

—

​

​

372,827

Securities held-to-maturity

​

​

376,447

​

​

—

​

​

329,762

​

​

—

​

​

329,762

Loans, net

​

​

6,687,464

​

​

—

​

​

—

​

​

6,767,193

​

​

6,767,193

Other investments

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FRB Stock

​

​

11,410

​

​

N/A

​

​

N/A

​

​

N/A

​

​

N/A

FHLB Stock

​

​

13,922

​

​

N/A

​

​

N/A

​

​

N/A

​

​

N/A

Disability Fund

​

​

1,500

​

​

—

​

​

1,500

​

​

—

​

​

1,500

Time deposits at banks

​

​

498

​

​

498

​

​

—

​

​

—

​

​

498

Accrued interest receivable

​

​

35,932

​

​

—

​

​

2,163

​

​

33,769

​

​

35,932

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-interest-bearing demand deposits

​

$

1,382,345

​

$

1,382,345

​

$

—

​

$

—

​

$

1,382,345

Money market and savings deposits

​

​

5,539,944

​

​

5,539,944

​

​

—

​

​

—

​

​

5,539,944

Time deposits

​

​

150,470

​

​

—

​

​

150,496

​

​

—

​

​

150,496

Federal funds purchased

​

​

125,000

​

​

—

​

​

125,000

​

​

—

​

​

125,000

Federal Home Loan Bank of New York advances

​

​

150,000

​

​

—

​

​

150,036

​

​

—

​

​

150,036

Trust preferred securities

​

​

20,620

​

​

—

​

​

—

​

​

20,016

​

​

20,016

Accrued interest payable

​

​

2,253

​

​

918

​

​

992

​

​

343

​

​

2,253

Secured and other borrowings

​

​

17,355

​

​

—

​

​

17,355

​

​

—

​

​

17,355

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement Using:

​

​

​

​

​

​

​

​

Quoted Prices

​

​

​

​

​

​

​

​

​

​

​

​

​

​

in Active

​

Significant

​

​

​

​

​

​

​

​

​

​

​

Markets

​

Other

​

Significant

​

​

​

​

​

Carrying

​

For Identical

​

Observable

​

Unobservable

​

Total Fair

At December 31, 2024

    

Amount

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

    

Value

Financial Assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

13,078

​

$

13,078

​

$

—

​

$

—

​

$

13,078

Overnight deposits

​

​

187,190

​

​

187,190

​

​

—

​

​

—

​

​

187,190

Securities held-to-maturity

​

​

428,557

​

​

—

​

​

366,719

​

​

—

​

​

366,719

Loans, net

​

​

5,970,803

​

​

—

​

​

—

​

​

5,878,582

​

​

5,878,582

Other investments

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

FRB Stock

​

​

11,410

​

​

N/A

​

​

N/A

​

​

N/A

​

​

N/A

FHLB Stock

​

​

17,228

​

​

N/A

​

​

N/A

​

​

N/A

​

​

N/A

Disability Fund

​

​

1,500

​

​

—

​

​

1,500

​

​

—

​

​

1,500

Time deposits at banks

​

​

498

​

​

498

​

​

—

​

​

—

​

​

498

Accrued interest receivable

​

​

33,209

​

​

—

​

​

2,105

​

​

31,104

​

​

33,209

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-interest-bearing demand deposits

​

$

1,334,054

​

$

1,334,054

​

$

—

​

$

—

​

$

1,334,054

Money market and savings deposits

​

​

4,523,522

​

​

4,523,522

​

​

—

​

​

—

​

​

4,523,522

Time deposits

​

​

125,397

​

​

—

​

​

125,288

​

​

—

​

​

125,288

Federal funds purchased

​

​

210,000

​

​

—

​

​

210,000

​

​

—

​

​

210,000

Federal Home Loan Bank of New York advances

​

​

240,000

​

​

—

​

​

240,000

​

​

—

​

​

240,000

Trust preferred securities

​

​

20,620

​

​

—

​

​

—

​

​

20,024

​

​

20,024

Accrued interest payable

​

​

1,809

​

​

12

​

​

1,436

​

​

361

​

​

1,809

Secured and other borrowings

​

​

7,441

​

​

—

​

​

7,441

​

​

—

​

​

7,441

​

​