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Fair Value Measurement | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurement | (13) Fair Value Measurement The Company uses a fair value hierarchy to measure fair value. This hierarchy describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices for identical assets in active markets that are identifiable on the measurement date; Level 2: Significant other observable inputs, such as quoted prices for similar assets, quoted prices in markets that are not active and other inputs that are observable or can be corroborated by observable market data; and Level 3: Significant unobservable inputs that reflect the Company’s own view about the assumptions that market participants would use in pricing an asset. Debt securities: The fair values of securities available-for-sale are determined by matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Equity securities: The Company’s equity securities are not actively traded in an open market. The fair value of these equity securities available-for-sale not actively traded in an open market is determined by using market data inputs for similar securities that are observable (Level 2 inputs). Real estate held for sale: Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are then reviewed monthly for valuation changes and are accounted for at lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which may utilize a single valuation approach or a combination of approaches including cost, comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments may be significant and typically result in a Level 2 classification of the inputs for determining fair value. Appraisals for both individually analyzed collateral-dependent loans and other real estate owned ("OREO") are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Company’s asset quality or collections department reviews the assumptions and approaches utilized in the appraisal. Appraisal values are discounted from 0% to 30% to account for other factors that may impact the value of collateral. In determining the value of individually analyzed collateral dependent loans and OREO, significant unobservable inputs may be used, which include but are not limited to physical condition of comparable properties sold, net operating income generated by the property and investor rates of return. Swap assets/liabilities: The fair values of interest rate swap positions, both assets and liabilities, are based on valuation pricing models using an income approach reflecting readily observable market parameters such as interest rate yield curves (Level 2). Collateral Dependent Loans: The Company generally measures the fair value of collateral dependent loans based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties. In some cases, management may adjust the appraised value due to the age of the appraisal, changes in market conditions, or observable deterioration of the property since the appraisal was completed. Additionally, management makes estimates about expected costs to sell the property which are also included in the net realizable value. If the fair value of the collateral dependent loan is less than the carrying amount of the loan, a specific reserve for the loan is made in the allowance for credit losses or a charge-off is taken to reduce the loan to the fair value of the collateral (less estimated selling costs) and the loan is included in the table below as a Level 3 measurement. Assets and liabilities measured at fair value are summarized in the tables below.
|  | Fair Value Measurements at September 30, 2025 Using: |
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Assets measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |
Securities available-for-sale |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 36,126 |  |  | $ | — |  |  | $ | — |
Obligations of U.S. Government agencies |  |  | — |  |  |  | 29,620 |  |  | $ | — |
Obligations of states and political subdivisions |  |  | — |  |  |  | 321,606 |  |  |  | — |
Mortgage-backed securities in government sponsored entities |  |  | — |  |  |  | 267,264 |  |  |  | — |
Total securities available-for-sale |  |  | 36,126 |  |  | $ | 618,490 |  |  |  | — |
Equity securities |  |  | — |  |  |  | 2,573 |  |  |  | — |
Loans held for sale, at fair value |  |  | — |  |  |  | 8,012 |  |  |  | — |
Swap asset |  |  | — |  |  |  | 3,684 |  |  |  | — |
Liabilities measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |
Swap liability |  | $ | — |  |  | $ | 6,222 |  |  | $ | — |
Assets measured at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |
Collateral-dependent loans |  | $ | — |  |  | $ | — |  |  | $ | 6,982 |
|  | Fair Value Measurements at December 31, 2024 Using: |
|  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Assets measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |
Securities available-for-sale |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 64,571 |  |  | $ | — |  |  | $ | — |
Obligations of U.S. Government agencies |  |  | — |  |  |  | 32,816 |  |  |  | — |
Obligations of states and political subdivisions |  |  | — |  |  |  | 325,119 |  |  |  | — |
Mortgage-backed securities in government sponsored entities |  |  | — |  |  |  | 225,561 |  |  |  | — |
Total securities available-for-sale |  |  | 64,571 |  |  |  | 583,496 |  |  |  | — |
Equity securities |  |  | — |  |  |  | 2,421 |  |  |  | — |
Loans held for sale |  |  | — |  |  |  | 665 |  |  |  | — |
Swap asset |  |  | — |  |  |  | 5,308 |  |  |  | — |
Liabilities measured at fair value on a recurring basis: |  |  |  |  |  |  |  |  |
Swap liability |  | $ | — |  |  | $ | 11,638 |  |  | $ | — |
Assets measured at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |
Collateral-dependent loans |  | $ | — |  |  | $ | — |  |  | $ | 19,177 |
The following tables present quantitative information about the Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis a September 30, 2025 and December 31, 2024.
|  | Quantitative Information about Level 3 Fair Value Measurements
September 30, 2025 |  | Fair Value |  |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
Collateral-dependent loans |  | $ | 6,982 |  |  | Appraisals which utilize sales comparison, net income and cost approach |  | Discounts for collection issues and changes in market conditions |  | 10 - 40% |  | 23%
|  | Quantitative Information about Level 3 Fair Value Measurements
December 31, 2024 |  | Fair Value |  |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average
Collateral-dependent loans |  | $ | 19,177 |  |  | Appraisals which utilize sales comparison, net income and cost approach |  | Discounts for collection issues and changes in market conditions |  | 10 - 75% |  | 25%
Fair Value of Financial Instruments Much of the information used to arrive at “fair value” is highly subjective and judgmental in nature and therefore the results may not be precise. Subjective factors include, among other things, estimated cash flows, risk characteristics and interest rates, all of which are subject to change. With the exception of investment securities, the Company’s financial instruments are not readily marketable and market prices do not exist. Since negotiated prices for the instruments, which are not readily marketable, depend greatly on the motivation of the buyer and seller, the amounts that will actually be realized or paid per settlement or maturity of these instruments could be significantly different. The carrying amounts of cash and cash equivalents and accrued interest receivable, as a result of their short-term nature, are considered to be equal to fair value and are classified as Level 1. The carrying amounts of investments in time deposits and loans held for sale are classified as Level 2. The carrying amount of other securities, which consist of FHLB and other bank stock, approximates fair value as the stock is nonmarketable and has restrictions placed on its transferability. The Company uses an exit price income approach to determine the fair value of the loan portfolio. The model utilizes a discounted cash flow approach to estimate the fair value of the loans using assumptions for the coupon rates, remaining maturities, prepayment speeds, projected default probabilities, losses given defaults, and estimates of prevailing discount rates. The discounted cash flow approach models the credit losses directly in the projected cash flows. The model applies various assumptions regarding credit, interest, and prepayment risks for the loans based on loan types, payment types and fixed or variable classifications. For all periods presented, the estimated fair value of individually analyzed loans is based on the fair value of the collateral, less estimated cost to sell, or the present value of the loan’s expected future cash flows (discounted at the loan’s effective interest rate). All individually analyzed loans are classified as Level 3 within the valuation hierarchy. The fair values of noninterest-bearing deposits are considered equal to the amount payable on demand at the reporting date (i.e., carrying value) and are classified as Level 1. The fair value of savings, NOW and certain money market accounts are equal to their carrying amounts and are a Level 1 classification. Fair values of fixed rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 3 classification. The fair values of subordinated debentures are estimated using a discounted cash flow calculation that applies interest rates currently being offered on subordinated debentures to the schedule of maturities on the subordinated debt tranches resulting in a Level 3 classification. FHLB advances with maturities greater than 90 days are valued based on a discounted cash flow analysis, using interest rates currently being quoted for similar characteristics and maturities resulting in a Level 3 classification. The carrying amount and fair values of financial instruments not measured at fair value on a recurring or nonrecurring basis at September 30, 2025 were as follows:
September 30, 2025 |  | Carrying Amount |  |  | Total Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 62,766 |  |  | $ | 62,766 |  |  | $ | 62,766 |  |  | $ | — |  |  | $ | — |
Investments in time deposits |  |  | 735 |  |  |  | 735 |  |  |  | — |  |  |  | 735 |  |  |  | — |
Other securities |  |  | 27,901 |  |  |  | 27,901 |  |  |  | 27,901 |  |  |  | — |  |  |  | — |
Loans, net of allowance |  |  | 3,055,740 |  |  |  | 2,951,845 |  |  |  | — |  |  |  | — |  |  |  | 2,951,845 |
Accrued interest receivable |  |  | 14,070 |  |  |  | 14,070 |  |  |  | 14,070 |  |  |  | — |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonmaturing deposits |  |  | 2,203,706 |  |  |  | 2,203,706 |  |  |  | 2,203,706 |  |  |  | — |  |  |  | — |
Time deposits |  |  | 1,026,757 |  |  |  | 1,029,837 |  |  |  | — |  |  |  | — |  |  |  | 1,029,837 |
Short-term FHLB advances |  |  | 232,000 |  |  |  | 232,000 |  |  |  | 232,000 |  |  |  | — |  |  |  | — |
Long-term FHLB advances |  |  | 970 |  |  |  | 946 |  |  |  | — |  |  |  | — |  |  |  | 946 |
Subordinated debentures |  |  | 104,213 |  |  |  | 103,007 |  |  |  | — |  |  |  | — |  |  |  | 103,007 |
Other borrowings |  |  | 4,699 |  |  |  | 4,699 |  |  |  | — |  |  |  | — |  |  |  | 4,699 |
Accrued interest payable |  |  | 8,257 |  |  |  | 8,257 |  |  |  | 8,257 |  |  |  | — |  |  |  | — |
The carrying amount and fair values of financial instruments not measured at fair value on a recurring or nonrecurring basis at December 31, 2024 were as follows:
December 31, 2024 |  | Carrying Amount |  |  | Total Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and due from financial institutions |  | $ | 63,155 |  |  | $ | 63,155 |  |  | $ | 63,155 |  |  | $ | — |  |  | $ | — |
Investments in time deposits |  |  | 1,450 |  |  |  | 1,450 |  |  |  | — |  |  |  | 1,450 |  |  |  | — |
Other securities |  |  | 30,352 |  |  |  | 30,352 |  |  |  | 30,352 |  |  |  | — |  |  |  | — |
Loans, net of allowance |  |  | 3,041,561 |  |  |  | 2,919,899 |  |  |  | — |  |  |  | — |  |  |  | 2,919,899 |
Accrued interest receivable |  |  | 13,453 |  |  |  | 13,453 |  |  |  | 13,453 |  |  |  | — |  |  |  | — |
Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nonmaturing deposits |  |  | 2,266,916 |  |  |  | 2,266,916 |  |  |  | 2,266,916 |  |  |  | — |  |  |  | — |
Time deposits |  |  | 944,954 |  |  |  | 948,734 |  |  |  | — |  |  |  | — |  |  |  | 948,734 |
Short-term FHLB advances |  |  | 339,000 |  |  |  | 339,000 |  |  |  | 339,000 |  |  |  | — |  |  |  | — |
Long-term FHLB advances |  |  | 1,501 |  |  |  | 1,418 |  |  |  | — |  |  |  | — |  |  |  | 1,418 |
Subordinated debentures |  |  | 104,089 |  |  |  | 101,175 |  |  |  | — |  |  |  | — |  |  |  | 101,175 |
Other borrowings |  |  | 6,293 |  |  |  | 6,293 |  |  |  | — |  |  |  | — |  |  |  | 6,293 |
Accrued interest payable |  |  | 9,518 |  |  |  | 9,518 |  |  |  | 9,518 |  |  |  | — |  |  |  | — |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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