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Fair Value Measurements
 9 Months Ended
Sep. 30, 2025
Fair Value Measurements  
Fair Value Measurements

Note 6 – Fair Value Measurements

ASC 820-10, Fair Value Measurement – Overall (“ASC 820-10”), provides a framework for measuring fair value under U.S. GAAP. This guidance also allows the Company the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on a contract-by-contract basis.

In accordance with ASC 820-10, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 – Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities.

Level 3 – Valuations for assets and liabilities that are derived from other methodologies, including option pricing models, discounted cash flow models and similar techniques, and are 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 and liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value for September 30, 2025 and December 31, 2024.

​

Available-for-sale securities – Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds (such as U.S. Treasuries), mortgage products and exchange traded equities. 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 would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions, and certain corporate, asset-backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.

​

Derivative arrangements – The fair values of derivative arrangements are estimated by the Company using a third-party derivative valuation expert who relies on Level 2 inputs, namely discounted cash flow models to determine a fair value by calculating a settlement termination value with the counterparty.

Assets measured and reported at estimated fair value on a recurring basis are summarized below:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

Level 1

​

Level 2

​

Level 3

​

Fair Value

Assets:

​

(in thousands)

Available-for-sale debt securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury securities

​

$

69,023

​

$

—

​

$

—

​

$

69,023

U.S. Government agencies

​

​

—

​

​

11,200

​

​

—

​

​

11,200

Agency mortgage-backed securities

​

​

—

​

​

43,847

​

​

—

​

​

43,847

Agency collateralized mortgage obligations

​

​

—

​

​

10,950

​

​

—

​

​

10,950

Corporate bonds

​

​

—

​

​

73,329

​

​

9,315

​

​

82,644

Municipal obligations

​

​

—

​

​

6,488

​

​

—

​

​

6,488

SBA securities

​

​

—

​

​

6,871

​

​

—

​

​

6,871

Total available-for-sale debt securities

​

$

69,023

​

$

152,685

​

$

9,315

​

$

231,023

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative assets

​

$

—

​

$

24,425

​

$

—

​

$

24,425

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Derivative liabilities

​

$

—

​

$

22,773

​

$

—

​

$

22,773

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

Level 1

​

Level 2

​

Level 3

​

Fair Value

Assets:

​

(in thousands)

Available-for-sale debt securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury securities

​

$

69,084

​

$

—

​

$

—

​

$

69,084

U.S. Government agencies

​

​

—

​

​

9,007

​

​

—

​

​

9,007

Agency mortgage-backed securities

​

​

—

​

​

39,184

​

​

—

​

​

39,184

Agency collateralized mortgage obligations

​

​

—

​

​

10,833

​

​

—

​

​

10,833

Corporate bonds

​

​

—

​

​

75,147

​

​

8,898

​

​

84,045

Municipal obligations

​

​

—

​

​

9,806

​

​

—

​

​

9,806

SBA securities

​

​

—

​

​

6,246

​

​

—

​

​

6,246

Total available-for-sale debt securities

​

$

69,084

​

$

150,223

​

$

8,898

​

$

228,205

​

​

​

​

​

​

​

​

​

​

​

​

​

Derivative assets

​

$

—

​

$

27,174

​

$

—

​

$

27,174

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Derivative liabilities

​

$

—

​

$

27,177

​

$

—

​

$

27,177

​

The Company had no purchases, sales or transfers of level 3 assets during the three and nine months ended September 30, 2025 and 2024. The change in the value of Level 3 assets during the three and nine months ended September 30, 2025 was a direct result of the change in market value of the underlying securities.

The Company may also be required from time to time to measure certain other assets at fair value on a non-recurring basis in accordance with U.S. GAAP. Any adjustments to fair value usually result in write-downs of individual assets.

Collateral-Dependent Loans – Collateral-dependent loans with specific reserves are carried at fair value, which equals the estimated market value of the collateral less estimated costs to sell. Collateral may be in the form of real estate or business assets including equipment, inventory, and accounts receivable. A loan may have multiple types of collateral; however, the majority of the Company’s loan collateral is real estate. The value of real estate collateral is generally determined utilizing a market valuation approach based on an appraisal conducted by an independent, licensed appraiser outside of the Company using observable market data (Level 2). However, if the collateral value is significantly adjusted due to differences in the comparable properties or is discounted by the Company because of lack of marketability, then the fair value is considered Level 3. The value of business equipment is based upon an outside appraisal if deemed significant or the net book value on the applicable borrower’s financial statements if not considered significant.

Likewise, values for inventory and accounts receivables collateral are based on financial statement balances or aging reports (Level 3). In limited circumstances, the collateral value for a collateral-dependent loan may be based on the enterprise value of a company.

The enterprise value method involves assessing the borrower’s ability to repay the loan by estimating the total value of its business, including both debt and equity. This approach is typically used where the recoverable value is based on the fair value of the company as a going concern, adjusted for the priority of the Company’s claim. Fair value adjustments are recorded in the period incurred as provision for credit losses in the consolidated statements of income.

The Company had no liabilities measured at fair value on a non-recurring basis.

The following table summarizes assets measured at fair value on a non-recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

​

​

(in thousands)

Collateral-dependent loans, net of reserve

​

$

—

​

$

—

​

$

8,669

​

$

8,669

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

    

Level 1

    

Level 2

    

Level 3

    

Fair Value

​

​

(in thousands)

Collateral-dependent loans, net of reserve

​

$

—

​

$

—

​

$

10,951

​

$

10,951

​

For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows:

​

​

​

​

​

​

​

​

​

    

Significant

    

Significant

    

    

​

​

Valuation

​

Observable

​

Unobservable

​

​

Technique

​

Inputs

​

Inputs

Collateral-dependent loans

 

Appraisal Value / Comparison Sales / Enterprise Value

 

Appraisals and/or sales of comparable properties or financial statements of the business

 

Appraisals discounted 5 to 20% for sales commission and other holding costs; Enterprise value discounts of assets, liabilities and equity

​

ASC Topic 825, Financial Instruments (ASC 825), requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above.

​

ASC 825 requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. The exit price notion is a market-based measurement of fair value that is represented by the price to sell an asset or transfer a liability in the principal market (or most advantageous market in the absence of a principal market) on the measurement date. As of September 30, 2025 and December 31, 2024, fair values of loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors.

​

The following tables present the estimated fair values, related carrying amounts, and valuation level of the financial instruments as of the dates stated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

​

​

Amount

​

Value

​

Level 1

​

Level 2

​

Level 3

​

​

(In thousands)

Financial Assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

295,377

​

$

295,377

​

$

295,377

​

$

—

​

$

—

Loans receivable, net

​

​

4,673,077

​

​

4,613,357

​

​

—

​

​

—

​

​

4,613,357

Accrued interest receivable

​

​

21,074

​

​

21,074

​

​

21,074

​

​

—

​

​

—

FHLB stock

​

​

11,541

​

​

11,541

​

​

—

​

​

11,541

​

​

—

FRB stock

​

​

12,831

​

​

12,831

​

​

—

​

​

12,831

​

​

—

Non-public investments

​

​

20,159

​

​

20,159

​

​

—

​

​

—

​

​

20,159

BOLI

​

​

56,342

​

​

56,342

​

​

—

​

​

56,342

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits, other than time deposits

​

$

2,418,955

​

$

2,418,955

​

$

2,418,955

​

$

—

​

$

—

Time deposits

​

​

2,146,709

​

​

2,147,754

​

​

—

​

​

2,147,754

​

​

—

FHLB borrowings

​

​

41,453

​

​

41,337

​

​

—

​

​

41,337

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

​

​

Amount

​

Value

​

Level 1

​

Level 2

​

Level 3

​

​

(In thousands)

Financial Assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

363,855

​

$

363,855

​

$

363,855

​

$

—

​

$

—

Loans receivable, net

​

​

4,294,408

​

​

4,196,079

​

​

—

​

​

—

​

​

4,196,079

Accrued interest receivable

​

​

19,685

​

​

19,685

​

​

19,685

​

​

—

​

​

—

FHLB stock

​

​

6,728

​

​

6,728

​

​

—

​

​

6,728

​

​

—

FRB stock

​

​

12,142

​

​

12,142

​

​

—

​

​

12,142

​

​

—

Non-public investments

​

​

5,494

​

​

5,494

​

​

—

​

​

—

​

​

5,494

BOLI

​

​

102,785

​

​

102,785

​

​

—

​

​

102,785

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial Liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits, other than time deposits

​

$

2,214,372

​

$

2,214,372

​

$

2,214,372

​

$

—

​

$

—

Time deposits

​

​

1,963,280

​

​

1,964,801

​

​

—

​

​

1,964,801

​

​

—

FHLB borrowings

​

​

120,835

​

​

120,778

​

​

—

​

​

120,778

​

​

—

​