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Fair value estimates
 9 Months Ended
Sep. 30, 2025
Fair value estimates  
Fair value estimates

9. Fair value estimates:

​

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosure under GAAP. Fair value estimates are calculated without attempting to estimate the value of anticipated future business and the value of certain assets and liabilities that are not considered financial. Accordingly, such assets and liabilities are excluded from disclosure requirements.

​

 

In accordance with FASB ASC 820, “Fair Value Measurements and Disclosures,” fair value is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets. In many cases, these values cannot be realized in immediate settlement of the instrument.

​

Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction that is not a forced liquidation or distressed sale between participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

​

In accordance with GAAP, the Company groups its assets and liabilities generally measured at fair value into three levels based on market information or other fair value estimates in which the assets and liabilities are traded or valued and the reliability of the assumptions used to determine fair value. These levels include:

​

●Level 1: Unadjusted quoted prices of 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; quoted prices 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 assumptions about the assumptions that market participants would use in pricing an asset or liability.

An asset’s or liability’s placement in the fair value hierarchy is based on the lowest level of input that is significant to the fair value estimate.

​

At September 30, 2025, the Company owned 31 corporate debt securities with an aggregate amortized cost and fair value of $23.5 million and $23.9 million, respectively. At September 30, 2025, the market was not active for two corporate debt securities based on transaction criteria for similar instruments. The aggregate amortized cost and fair value for these two securities was $1.8 million and $2.0 million, respectively, at September 30, 2025. The Company obtained valuations for these securities from a third-party service provider that prepared the valuations using a market approach that involves identifying a population of transactions for similar instruments and incorporating an evaluation to capture credit risk associated with these bonds. Management takes measures to validate the service providers’ analysis and is actively involved in the valuation process, including reviewing the population and evaluation of credit risk. Management believes this approach to be a conservative approach as it takes into consideration securities that have longer maturities or longer call dates, issuers with smaller asset sizes, and securities with smaller issue amounts. These factors are typically considered to be factors that would add credit spread to a bond, thus resulting in a higher required yield. Management believes the valuation results from this market approach to be consistent with pricing and data for similar deals at September 30, 2025. The Company considers the inputs used in the market approach to be unobservable Level 3 inputs because, while inputs are based on actual transactions, the relative number of transactions in the population is small and subjective assumptions are used in determining and applying factors to incorporate credit spreads into the price determination. Management will continue to monitor the market for these securities to assess the market activity and the availability of observable inputs and will continue to apply these controls and procedures to the valuations received from the Company’s third-party service provider. During the quarter and nine months ended September 30, 2025, there were no transfers into Level 3.

​

The following methods and assumptions were used by the Company to calculate fair values and related carrying amounts of financial instruments:

​

Investment securities: The fair values of U.S. Treasury securities and marketable equity securities are based on quoted market prices from active exchange markets. The fair values of debt securities are based on pricing from a matrix pricing model.

 

​

Interest rate swaps and floors: The Company’s interest rate swaps and options are reported at fair value utilizing Level 2 inputs. Values of these instruments are obtained through an independent pricing source utilizing information which may include market observed quotations for interest rate, forward rates, rate volatility, and volatility surface. Derivative contracts create exposure to interest rate movements as well as risks from the potential of non-performance of the counterparty.

​

Individually evaluated loans: Fair values for individually evaluated loans are estimated using underlying collateral values, where applicable.

​

Other real estate owned:  Other real estate owned ("OREO") represents properties that the Company has acquired through foreclosure by either accepting a deed in lieu of foreclosure, or by taking possession of assets that collateralized a loan, and former bank premises that are no longer used for operations or for future expansion. The Company reports OREO at the lower of cost or fair value less cost to sell, adjusted periodically based on a current appraisal. Write-downs and any gain or loss upon the sale of OREO is recorded in other noninterest income. OREO is reported in other assets on the consolidated balance sheets. OREO had a carrying amount of $2.7 million and $738 thousand at September 30, 2025 and December 31, 2024, respectively. During the year ended December 31, 2024, one former community banking office with a carrying value of $711 thousand was transferred to OREO. In 2025, an additional former banking office with a carrying value of $433 thousand was transferred to OREO. The Company also acquired one commercial property through foreclosure. The commercial property had a recorded investment of $1.5 million that was included in OREO at September 30, 2025. Other real estate owned is classified within Level 3 in the fair value hierarchy based on appraisals, letters of intent or agreements of sale received from third parties.

​

​

Assets and liabilities measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At September 30, 2025

 

​

​

Fair Value Measurement Using

 

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

U.S. Treasury securities

    

$

128,507

    

$

128,507

    

$

​

    

$

​

​

State and municipals:

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

 

61,198

​

​

​

​

 

61,198

​

​

​

​

Tax-exempt

​

 

83,786

​

​

​

​

 

83,786

​

​

​

​

Residential mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government agencies

​

 

10,104

​

​

​

​

 

10,104

​

​

​

​

U.S. government-sponsored enterprises

​

 

159,696

​

​

​

​

 

159,696

​

​

​

​

Commercial mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government-sponsored enterprises

​

 

1,888

​

​

​

​

 

1,888

​

​

​

​

Private collateralized mortgage obligations

​

 

45,425

​

​

​

​

 

45,425

​

​

​

​

Asset backed securities

​

​

19,283

​

​

​

​

 

19,283

​

​

​

​

Corporate debt securities

​

​

23,907

​

​

​

​

​

21,935

​

​

1,972

​

Negotiable certificates of deposit

​

​

727

​

​

​

​

​

727

​

​

​

​

Common equity securities

​

​

2,473

​

​

2,473

​

​

​

​

​

​

​

Total investment securities

​

$

536,994

​

$

130,980

​

$

404,042

​

$

1,972

​

Interest rate swap-other assets

​

$

15,708

​

​

​

​

$

15,708

​

​

​

​

Interest rate swap-other liabilities

​

$

(15,470)

​

​

​

​

$

(15,470)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2024

 

​

​

Fair Value Measurement Using 

 

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

U.S. Treasury securities

    

$

167,551

    

$

167,551

    

$

​

    

$

​

​

State and municipals:

​

​

​

​

​

​

​

​

​

​

​

​

​

Taxable

​

 

68,899

​

​

​

​

 

68,899

​

​

​

​

Tax-exempt

​

 

66,117

​

​

​

​

 

66,117

​

​

​

​

Residential mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government agencies

​

 

1,376

​

​

​

​

 

1,376

​

​

​

​

U.S. government-sponsored enterprises

​

 

126,376

​

​

​

​

 

126,376

​

​

​

​

Commercial mortgage-backed securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government-sponsored enterprises

​

​

1,856

​

​

​

​

​

1,856

​

​

​

​

Private collateralized mortgage obligations

​

​

38,572

​

​

​

​

​

38,572

​

​

​

​

Asset backed securities

​

​

23,252

​

​

​

​

​

23,252

​

​

​

​

Corporate debt securities

​

​

31,621

​

​

​

​

​

26,999

​

​

4,622

​

Negotiable certificates of deposit

​

​

709

​

​

​

​

​

709

​

​

​

​

Common equity securities

​

 

2,430

​

​

2,430

​

​

​

​

​

​

​

Total investment securities

​

$

528,759

​

$

169,981

​

$

354,156

​

$

4,622

​

Interest rate swap-other assets

​

$

20,537

​

​

​

​

$

20,537

​

​

​

​

Interest rate swap-other liabilities

​

$

(20,151)

​

​

​

​

$

(20,151)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

The $2.6 million change in the fair value of Level 3 corporate debt securities from $4.6 million at December 31, 2024 to $2.0 million at September 30, 2025 included a redemption of one security with a fair value of $2.7 million at December 31, 2024 and an aggregate increase in the fair value of the remaining two securities of $0.1 million.

​

Assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2025 and December 31, 2024 are summarized as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

 

​

​

Fair Value Measurement Using

​

​

​

​

​

​

Quoted Prices in

​

Significant

​

Significant

 

​

​

​

​

Active Markets for

​

Other Observable

​

Unobservable

 

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Amount 

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Loans individually evaluated for credit loss

    

$

14,236

    

$

​

    

$

​

    

$

14,236

​

Other real estate owned

​

$

2,685

​

$

​

​

$

​

​

$

2,685

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

 

​

​

Fair Value Measurement Using 

 

​

​

​

​

​

Quoted Prices in

​

Significant Other

​

Significant

 

​

​

​

​

Active Markets for

​

Observable

​

Unobservable

 

​

​

​

​

Identical Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Amount 

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Loans individually evaluated for credit loss

    

$

22,164

    

$

​

    

$

​

    

$

22,164

​

Other real estate owned

​

$

738

​

$

​

​

$

​

​

$

738

​

​

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis at September 30, 2025 and December 31, 2024 and for which the Company has utilized Level 3 inputs to determine fair value:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

September 30, 2025

 

​

​

Quantitative Information about Level 3 Fair Value Measurements 

 

​

​

Fair Value

​

​

​

​

​

Range

 

(Dollars in thousands, except percents)

    

Estimate 

    

Valuation Techniques 

    

Unobservable Input 

    

(Weighted Average) 

 

Loans individually evaluated for credit loss

    

$

14,236

    

Appraisal of collateral

    

Appraisal adjustments

    

5.0% to 94.0%  (57.5)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

3.0% to 6.0% (5.5)%

​

Other real estate owned

​

$

2,685

 

Appraisal of collateral

 

Appraisal adjustments

 

0.0% to 10.0% (2.9)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

0.0% to 6.0% (0.0)%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

 

​

​

Quantitative Information about Level 3 Fair Value Measurements 

 

​

​

Fair Value

​

​

​

​

​

Range

 

(Dollars in thousands, except percents)

    

Estimate 

    

Valuation Techniques 

    

Unobservable Input 

    

(Weighted Average) 

 

Loans individually evaluated for credit loss

    

$

22,164

    

Appraisal of collateral

    

Appraisal adjustments

    

3.0% to 111.9%  (59.6)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

0.0% to 6.0% (5.6)%

​

Other real estate owned

​

$

738

 

Appraisal of collateral

 

Appraisal adjustments

 

0.0% to 10.0% (9.7)%

​

​

​

​

​

​

​

 

Liquidation expenses

 

3.0% to 6.0% (5.0)%

​

​

Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various Level 3 inputs which are not identifiable.

​

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

​

The carrying and fair values of the Company’s financial instruments at September 30, 2025 and December 31, 2024 and their placement within the fair value hierarchy are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

September 30, 2025

 

​

​

​

​

​

​

​

​

Fair Value Hierarchy 

​

​

​

​

​

​

​

​

​

Quoted

   

​

​

   

​

​

 

​

​

​

​

​

​

​

​

Prices in

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

Active

​

Significant

​

​

​

 

​

​

​

​

​

​

​

​

Markets for

​

Other

​

Significant

 

​

​

​

​

​

​

​

​

Identical

​

Observable

​

Unobservable

 

​

​

Carrying

​

Fair

​

Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Value 

    

Value 

    

(Level 1) 

    

(Level 2) 

    

(Level 3) 

 

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

179,923

​

$

179,923

​

$

179,923

​

$

​

​

$

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available for sale

​

 

534,521

​

 

534,521

​

​

128,507

​

​

404,042

​

​

1,972

​

Held to maturity

​

 

73,286

​

 

63,545

​

​

​

​

 

63,545

​

​

​

​

Common equity securities

​

​

2,473

​

​

2,473

​

​

2,473

​

​

​

​

​

​

​

Loans held for sale

​

 

816

​

 

816

​

​

​

​

 

816

​

​

​

​

Net loans

​

 

3,976,524

​

 

3,909,350

​

​

​

​

​

​

​

​

3,909,350

​

Accrued interest receivable

​

 

16,995

​

 

16,995

​

​

​

​

 

16,995

​

​

​

​

Mortgage servicing rights

​

 

1,219

​

 

2,163

​

​

​

​

 

2,163

​

​

​

​

Restricted equity securities (FHLB and other)

​

​

13,517

​

 

13,517

​

​

​

​

 

13,517

​

​

​

​

Other assets - interest rate swaps

​

 

15,708

​

 

15,708

​

​

​

​

 

15,708

​

​

​

​

Total

​

$

4,814,982

​

$

4,739,011

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

$

4,289,731

​

$

4,287,471

​

$

​

​

$

4,287,471

​

$

​

​

Short-term borrowings

​

​

76,310

​

​

76,173

​

​

​

​

​

76,173

​

​

​

​

Long-term debt

​

 

137,029

​

 

137,803

​

​

​

​

 

137,803

​

​

​

​

Subordinated debt

​

 

83,111

​

 

85,761

​

​

​

​

 

85,761

​

​

​

​

Junior subordinated debt

​

​

8,114

​

​

7,342

​

​

​

​

​

7,342

​

​

​

​

Accrued interest payable

​

​

7,976

​

 

7,976

​

​

​

​

​

7,976

​

​

​

​

Other liabilities - interest rate swaps

​

 

15,470

​

 

15,470

​

​

​

​

​

15,470

​

​

​

​

Total

​

$

4,617,741

​

$

4,617,996

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

​

​

    

December 31, 2024

 

​

    

​

​

    

​

​

    

Fair Value Hierarchy 

 

​

​

​

​

​

​

​

​

Quoted

    

​

​

    

​

​

 

​

​

​

​

​

​

​

​

Prices in

​

​

​

​

​

​

 

​

​

​

​

​

​

​

​

Active

​

Significant

​

​

​

 

​

​

​

​

​

​

​

​

Markets for

​

Other

​

Significant

 

​

​

​

​

​

​

​

​

Identical

​

Observable

​

Unobservable

 

​

​

Carrying

​

Fair

​

Assets

​

Inputs

​

Inputs

 

(Dollars in thousands)

    

Value 

    

Value 

    

(Level 1) 

    

(Level 2) 

    

(Level 3) 

 

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

135,851

​

$

135,851

​

$

135,851

​

$

​

​

$

​

​

Investment securities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Available for sale

​

 

526,329

​

 

526,329

​

​

167,551

​

​

354,156

​

​

4,622

​

Held to maturity

​

 

78,184

​

 

65,152

​

​

​

​

 

65,152

​

​

​

​

Common equity securities

​

​

2,430

​

​

2,430

​

​

2,430

​

​

​

​

​

​

​

Loans held for sale

​

 

​

​

 

​

​

​

​

​

 

​

​

​

​

​

Net loans

​

 

3,951,729

​

 

3,830,062

​

​

​

​

​

​

​

​

3,830,062

​

Accrued interest receivable

​

 

15,632

​

 

15,632

​

​

​

​

 

15,632

​

​

​

​

Mortgage servicing rights

​

 

1,304

​

 

2,314

​

​

​

​

 

2,314

​

​

​

​

Restricted equity securities (FHLB and other)

​

 

10,220

​

 

10,220

​

​

​

​

 

10,220

​

​

​

​

Other assets - interest rate swaps

​

​

20,537

​

​

20,537

​

​

​

​

​

20,537

​

​

​

​

Total

​

$

4,742,216

​

$

4,608,527

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

$

4,407,552

​

$

4,404,117

​

$

​

​

$

4,404,117

​

$

​

​

Short-term borrowings

​

 

15,900

​

 

15,900

​

​

​

​

 

15,900

​

​

​

​

Long-term debt

​

 

98,637

​

 

98,875

​

​

​

​

 

98,875

​

​

​

​

Subordinated debt

​

​

33,000

​

​

32,506

​

​

​

​

​

32,506

​

​

​

​

Junior subordinated debt

​

​

8,039

​

​

8,167

​

​

​

​

​

8,167

​

​

​

​

Accrued interest payable

​

 

5,503

​

 

5,503

​

​

​

​

​

5,503

​

​

​

​

Other liabilities - interest rate swaps

​

​

20,151

​

​

20,151

​

​

​

​

​

20,151

​

​

​

​

Total

​

$

4,588,782

​

$

4,585,219

​

​

​

​

​

​

​

​

​

​

​