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Fair Value Measurements and Disclosures
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Disclosures Fair Value Measurements and Disclosures
The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company groups assets and liabilities measured or disclosed at fair value in three levels as required by ASC 820, Fair Value Measurements and Disclosures. Under this guidance, fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels used to measure fair value are as follows:
 
•Level 1 – Quoted prices in active markets for identical assets or liabilities.
•Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
•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. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities quarterly.
Recurring Basis
Investment Securities Available for Sale
Fair values of investment securities available for sale are primarily measured using information from a third-party pricing service. This pricing service provides pricing information by utilizing pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities bids, offers and other reference data from market research publications. If quoted prices are available in an active market, investment securities are classified as Level 1 measurements. If quoted prices are not available in an active market, fair values are estimated primarily by the use of pricing models. Level 2 investment securities are primarily comprised of mortgage-backed securities issued by government agencies and U.S. government-sponsored enterprises. In certain cases, where there is limited or less transparent information provided by the Company’s third-party pricing service, fair value is estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes. Investment securities are classified within Level 3 when little or no market activity supports the fair value.

Management primarily identifies investment securities which may have traded in illiquid or inactive markets, by identifying instances of a significant decrease in the volume and frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Investment securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant unobservable inputs. For example, management may use quoted prices for similar investment securities in the absence of a liquid and active market for the investment securities being valued. As of March 31, 2026, management did not make adjustments to prices provided by the third-party pricing service as a result of illiquid or inactive markets.
Derivative Assets and Liabilities
Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition. The fair value of these derivative financial instruments is obtained from a third-party pricing service that uses widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual
terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following tables present the balances of assets measured for fair value on a recurring basis as of March 31, 2026 and December 31, 2025.

(dollars in thousands)March 31, 2026Level 1Level 2Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed$273,740 $— $273,740 $— 
Collateralized mortgage obligations50,738 — 50,738 — 
Municipal bonds47,765 — 47,765 — 
U.S. government agency9,986 — 9,986 — 
Corporate bonds3,500 — 3,500 — 
Total$385,729 $— $385,729 $— 
Derivative assets$1,101 $— $1,101 $— 
Total$386,830 $— $386,830 $— 
Liabilities
Derivative liabilities$211 $— $211 $— 


(dollars in thousands)December 31, 2025Level 1Level 2Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed$267,650 $— $267,650 $— 
Collateralized mortgage obligations60,327 — 60,327 — 
Municipal bonds48,147 — 48,147 — 
U.S. government agency11,003 — 11,003 — 
Corporate bonds4,321 — 4,321 — 
Total$391,448 $— $391,448 $— 
Derivative assets$1,311 $— $1,311 $— 
Total$392,759 $— $392,759 $— 
Liabilities
Derivative liabilities$294 $— $294 $— 

Nonrecurring Basis
The Company records loans individually evaluated for credit losses at fair value on a nonrecurring basis. Fair value is measured at the fair value of the collateral for collateral-dependent loans. For non-collateral-dependent loans, fair value is measured by present valuing expected future cash flows. Loans individually evaluated are classified as Level 3 assets when measured using appraisals from third parties of the collateral less any prior liens and when there is no observable market price.
Foreclosed assets and ORE are also recorded at fair value on a nonrecurring basis. Foreclosed assets are initially recorded at fair value less estimated costs to sell. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. The fair value of foreclosed assets and ORE is based on property appraisals and an analysis of similar properties available. As such, the Company classifies foreclosed and ORE assets as Level 3 assets.

The Company has segregated all financial assets that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date as reflected in the table below.

  Fair Value Measurements Using
(dollars in thousands)March 31, 2026Level 1Level 2Level 3
Assets
Loans individually evaluated$7,800 $— $— $7,800 
Foreclosed assets and ORE4,093 — — 4,093 
Total$11,893 $— $— $11,893 
  Fair Value Measurements Using
(dollars in thousands)December 31, 2025Level 1Level 2Level 3
Assets
Loans individually evaluated$4,941 $— $— $4,941 
Foreclosed assets and ORE1,929 — — 1,929 
Total$6,870 $— $— $6,870 


The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets.

(dollars in thousands)Fair ValueValuation TechniqueUnobservable InputsRange of DiscountsWeighted Average Discount
March 31, 2026
Loans individually evaluated$7,800 Third party appraisals and discounted cash flowsCollateral values, market discounts and estimated costs to sell
0% - 100%
22%
Foreclosed assets and ORE$4,093 Third party appraisals, sales contracts, broker price opinionsCollateral values, market discounts and estimated costs to sell
6% - 30%
15%
(dollars in thousands)Fair ValueValuation TechniqueUnobservable InputsRange of
Discounts		Weighted Average Discount
December 31, 2025
Loans individually evaluated$4,941 Third party appraisals and discounted cash flowsCollateral values, market discounts and estimated costs to sell
0% - 100%
20%
Foreclosed assets and ORE$1,929 Third party appraisals, sales contracts, broker price opinionsCollateral values, market discounts and estimated costs to sell
0% - 43%
22%
ASC 820, Fair Value Measurements and Disclosures, requires the disclosure of each class of financial instruments for which it is practicable to estimate. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. 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. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes
certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statements. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates included herein are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the fair value of assets and liabilities that are not required to be recorded or disclosed at fair value like premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Methods and assumptions used to estimate fair value of each class of financial instruments for which it is practicable to estimate fair value are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. The Company classifies this debt in Level 2 of the fair value table. There have been no other material changes from the fair value estimate methods and assumptions previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The following table presents estimated fair values of the Company’s financial instruments as of the dates indicated.
  Fair Value Measurements at March 31, 2026
(dollars in thousands)Carrying AmountTotalLevel 1Level 2Level 3
Financial Assets
Cash and cash equivalents$223,484 $223,484 $223,484 $— $— 
Investment securities available for sale385,729 385,729 — 385,729 — 
Investment securities held to maturity530 531 — 531 — 
Mortgage loans held for sale1,558 1,558 — 1,558 — 
Loans, net2,694,466 2,715,880 — 2,708,080 7,800 
Cash surrender value of BOLI49,842 49,842 49,842 — — 
Derivative assets(1)
1,101 1,101 — 1,101 — 
Financial Liabilities
Deposits$3,026,781 $3,024,455 $2,285,279 $739,176 $— 
Subordinated debt, net of issuance cost54,729 54,415 — 54,415 — 
Derivative liabilities(1)
211 211 — 211 — 
  Fair Value Measurements at December 31, 2025
(dollars in thousands)Carrying AmountTotalLevel 1Level 2Level 3
Financial Assets
Cash and cash equivalents$141,605 $141,605 $141,605 $— $— 
Investment securities available for sale391,448 391,448 — 391,448 — 
Investment securities held to maturity1,065 1,066 — 1,066 — 
Mortgage loans held for sale1,558 1,558 — 1,558 — 
Loans, net2,710,881 2,728,477 — 2,723,536 4,941 
Cash surrender value of BOLI49,557 49,557 49,557 — — 
Derivative assets(1)
1,311 1,311 — 1,311 — 
Financial Liabilities
Deposits$2,972,806 $2,971,389 $2,167,183 $804,206 $— 
Subordinated debt, net of issuance cost54,675 54,520 — 54,520 — 
Long-term FHLB advances3,024 3,012 — 3,012 — 
Derivative liabilities(1)
294 294 — 294 — 
(1)Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition.