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FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: •Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets. •Level 2: Significant other observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. •Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment securities. The fair value of investment securities available for sale are determined by quoted market prices, if available (Level 1). For investment securities available for sale where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. There were no transfers between Levels 1, 2 or 3 during the period presented for assets measured at fair value on a recurring basis. The fair value of equity securities is determined using quoted prices or market prices for similar securities (Level 2). Residential loans held for sale. The fair value of residential loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Credit enhancement asset. The fair value of the credit enhancement asset is calculated using the Income Approach Valuation Method (Level 3). Derivative instruments. The fair value of derivative instruments are determined based on derivative valuation models using observable market data as of the measurement date (Level 2). Nonperforming loans. Nonaccrual loans are considered nonperforming and are reviewed individually for the amount of impairment, if any. We measure collateral dependent nonperforming loans based on the estimated fair value of such collateral. In cases where the Company has an agreed upon selling price for the collateral, the fair value is set at the selling price (Level 1). The fair value of each loan’s collateral is generally based on estimated market prices from an independently prepared appraisal, which is then adjusted for the cost related to liquidating such collateral (Level 2). When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). The nonperforming loans categorized as Level 3 also include unsecured loans and other secured loans whose fair values are based significantly on unobservable inputs such as the strength of a guarantor, cash flows discounted at the effective loan rate, and management’s judgment. Commercial loans held for sale. The fair value of commercial loans held for sale may be based upon third party bids to purchase the specific notes, or the estimated fair value of the underlying collateral. The fair value of the collateral is based on estimated market prices from an independently prepared appraisal, which is adjusted to reflect the cost of liquidating such collateral, and various other factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). Consumer loans held for sale. The fair value of consumer loans held for sale are calculated using discounted cash flows or other market indicators (Level 3). Other Real Estate Owned. OREO is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Fair value for OREO is based on an appraisal performed upon foreclosure. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between comparable sales and income data available. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value (Level 2). When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). Appraisals for both collateral-dependent loans and other real estate owned 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. Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis at September 30, 2025 and December 31, 2024, are summarized below:
| September 30, 2025
(dollars in thousands) | Carrying amount |  | Quoted prices in active markets for identical assets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Assets and liabilities measured at fair value on a recurring basis: |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. government sponsored entities and U.S. agency securities | $ | 15,123 |  |  | $ | — |  |  | $ | 15,123 |  |  | $ | — |
Mortgage-backed securities - agency | 1,048,803 |  |  | — |  |  | 1,048,803 |  |  | — |
Mortgage-backed securities - non-agency | 93,860 |  |  | — |  |  | 93,860 |  |  | — |
Asset-backed student loans | 43,258 |  |  | — |  |  | 43,258 |  |  | — |
State and municipal securities | 73,290 |  |  | — |  |  | 73,290 |  |  | — |
Collateralized loan obligations | 47,845 |  |  | — |  |  | 47,845 |  |  | — |
Corporate securities | 56,728 |  |  | — |  |  | 56,728 |  |  | — |
Equity securities | 4,214 |  |  | 4,214 |  |  | — |  |  | — |
Residential loans held for sale | 7,535 |  |  | — |  |  | 7,535 |  |  | — |
Credit enhancement asset | 5,765 |  |  | — |  |  | — |  |  | 5,765 |
Derivative assets | 3,910 |  |  | — |  |  | 3,910 |  |  | — |
Total | $ | 1,400,331 |  |  | $ | 4,214 |  |  | $ | 1,390,352 |  |  | $ | 5,765 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities | $ | 6,309 |  |  | $ | — |  |  | $ | 6,309 |  |  | $ | — |
Total | $ | 6,309 |  |  | $ | — |  |  | $ | 6,309 |  |  | $ | — |
Assets measured at fair value on a non-recurring basis: |  |  |  |  |  |  |
Nonperforming loans | $ | 44,368 |  |  | $ | — |  |  | $ | — |  |  | $ | 44,368 |
Other real estate owned | 393 |  |  | — |  |  | — |  |  | 393 |
| December 31, 2024
(dollars in thousands) | Carrying amount |  | Quoted prices in active markets for identical assets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Assets and liabilities measured at fair value on a recurring basis: |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Investment securities available for sale: |  |  |  |  |  |  |
U.S. government sponsored entities and U.S. agency securities | $ | 20,141 |  |  | $ | — |  |  | $ | 20,141 |  |  | $ | — |
Mortgage-backed securities - agency | 847,056 |  |  | — |  |  | 847,056 |  |  | — |
Mortgage-backed securities - non-agency | 101,012 |  |  | — |  |  | 101,012 |  |  | — |
Asset-backed student loans | 49,973 |  |  | — |  |  | 49,973 |  |  | — |
State and municipal securities | 69,061 |  |  | — |  |  | 69,061 |  |  | — |
Collateralized loan obligations | 40,450 |  |  | — |  |  | 40,450 |  |  | — |
Corporate securities | 79,881 |  |  | — |  |  | 79,881 |  |  | — |
Equity securities | 4,792 |  |  | 4,792 |  |  | — |  |  | — |
Loans held for sale | 8,228 |  |  | — |  |  | 8,228 |  |  | — |
Credit enhancement asset | 16,804 |  |  | — |  |  | — |  |  | 16,804 |
Derivative assets | 3,837 |  |  | — |  |  | 3,837 |  |  | — |
Total | $ | 1,241,235 |  |  | $ | 4,792 |  |  | $ | 1,219,639 |  |  | $ | 16,804 |
Liabilities |  |  |  |  |  |  |
Derivative liabilities | $ | 5,655 |  |  | $ | — |  |  | $ | 5,655 |  |  | $ | — |
Total | $ | 5,655 |  |  | $ | — |  |  | $ | 5,655 |  |  | $ | — |
Assets measured at fair value on a non-recurring basis: |  |  |  |  |  |  |
Nonperforming loans | $ | 120,222 |  |  | $ | — |  |  | $ | — |  |  | $ | 120,222 |
Consumer loans held for sale | 336,719 |  |  | — |  |  | — |  |  | 336,719 |
Other real estate owned | 4,941 |  |  | — |  |  | — |  |  | 4,941 |
The following table presents losses recognized on assets measured on a nonrecurring basis for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024 |  |
Nonperforming loans | $ | 5,821 |  |  | $ | 355 |  |  | 16,114 |  |  | 14,225 |  |  |
Other real estate owned | — |  |  | 548 |  |  | — |  |  | 1,278 |  |  |
Total losses on assets measured on a nonrecurring basis | $ | 5,821 |  |  | $ | 903 |  |  | $ | 16,114 |  |  | $ | 15,503 |  |  |
The following tables present quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured on a nonrecurring basis at September 30, 2025 and December 31, 2024:
(dollars in thousands) |  | Fair value |  | Valuation technique |  | Unobservable input / assumptions |  | Range (weighted average)(1) |  |  |  |
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 44,368 |  |  | Fair value of collateral |  | Discount for type of property, age of appraisal, and/or current status |  | 0.00% - 60.05% (2.58%) |  |  |  |
Other real estate owned |  | 393 |  |  | Fair value of collateral |  | Discount for type of property, age of appraisal, and/or current status |  | 39.00% - 72.88% (56.42%) |  |  |  |
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |
Nonperforming loans |  | $ | 120,222 |  |  | Fair value of collateral |  | Discount to reflect current market conditions and ultimate collectability |  | 0.00% - 34.15% (0.67%) |  |  |  |
Other real estate owned |  | 4,941 |  |  | Fair value of collateral |  | Discount for type of property, age of appraisal, and/or current status |  | 0.00% - 43.54% (10.68%.) |  |  |  |
Consumer loans held for sale(2) |  | 336,719 |  |  | Discounted cash flow |  | Discount rate |  | 8.98% |  |  |  |
(1)Unobservable inputs were weighted by the relative fair value of the instruments. (2)There was one pool of loans at December 31, 2024 with write-downs during 2024, so no range or weighted average is reported. ASC Topic 825, Financial Instruments, requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements. The Company has elected the fair value option for newly originated residential loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification. The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of September 30, 2025 and December 31, 2024:
| September 30, 2025 |  | December 31, 2024
(dollars in thousands) | Aggregate fair value |  | Difference |  | Contractual principal |  | Aggregate fair value |  | Difference |  | Contractual principal
Residential loans held for sale | $ | 7,535 |  |  | $ | 369 |  |  | $ | 7,166 |  |  | $ | 8,228 |  |  | $ | 282 |  |  | $ | 7,946 |
The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the three and nine months ended September 30, 2025 and 2024:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024 |  |
Residential loans held for sale | $ | (56) |  |  | $ | 133 |  |  | $ | 80 |  |  | $ | 150 |  |  |
The carrying values and estimated fair value of certain financial instruments not carried at fair value at September 30, 2025 and December 31, 2024 were as follows:
| September 30, 2025
(dollars in thousands) | Carrying amount |  | Fair value |  | Quoted prices in active markets for identical assets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Assets |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 165,673 |  |  | $ | 165,673 |  |  | $ | 165,673 |  |  | $ | — |  |  | $ | — |
Federal funds sold | 474 |  |  | 474 |  |  | 474 |  |  | — |  |  | — |
Loans | 4,766,701 |  |  | 4,688,350 |  |  | — |  |  | — |  |  | 4,688,350 |
Accrued interest receivable | 26,672 |  |  | 26,672 |  |  | — |  |  | 26,672 |  |  | — |
Liabilities |  |  |  |  |  |  |  |  |
Deposits | $ | 5,604,825 |  |  | $ | 5,567,878 |  |  | $ | — |  |  | $ | 5,567,878 |  |  | $ | — |
Short-term borrowings | 146,766 |  |  | 146,766 |  |  | — |  |  | 146,766 |  |  | — |
FHLB and other borrowings | 373,000 |  |  | 374,874 |  |  | — |  |  | 374,874 |  |  | — |
Subordinated debt | 27,014 |  |  | 23,090 |  |  | — |  |  | 23,090 |  |  | — |
Trust preferred debentures | 51,684 |  |  | 49,781 |  |  | — |  |  | 49,781 |  |  | — |
| December 31, 2024
(dollars in thousands) | Carrying amount |  | Fair value |  | Quoted prices in active markets for identical assets (Level 1) |  | Significant other observable inputs (Level 2) |  | Significant unobservable inputs (Level 3)
Assets |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 114,055 |  |  | $ | 114,055 |  |  | $ | 114,055 |  |  | $ | — |  |  | $ | — |
Federal funds sold | 711 |  |  | 711 |  |  | 711 |  |  | — |  |  | — |
Loans | 5,056,370 |  |  | 4,872,824 |  |  | — |  |  | — |  |  | 4,872,824 |
Accrued interest receivable | 25,329 |  |  | 25,329 |  |  | — |  |  | 25,329 |  |  | — |
Liabilities |  |  |  |  |  |  |  |  |
Deposits | $ | 6,197,243 |  |  | $ | 6,183,807 |  |  | $ | — |  |  | $ | 6,183,807 |  |  | $ | — |
Short-term borrowings | 87,499 |  |  | 87,499 |  |  | 75,000 |  |  | 12,499 |  |  | — |
FHLB and other borrowings | 258,000 |  |  | 253,520 |  |  | — |  |  | 253,520 |  |  | — |
Subordinated debt | 77,749 |  |  | 69,827 |  |  | — |  |  | 69,827 |  |  | — |
Trust preferred debentures | 51,205 |  |  | 49,056 |  |  | — |  |  | 49,056 |  |  | — |
The methods utilized to measure fair value of financial instruments at September 30, 2025 and December 31, 2024 represent an approximation of exit price; however, an actual exit price may differ.

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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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