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Fair Value of Financial Instruments | 12 Months Ended
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Dec. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements, defines fair value as the 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. ASU Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 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 for substantially the full term of the assets or liabilities 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 Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Available-for-Sale Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. 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. The Company did not own any securities classified within Level 1 of the hierarchy as of December 31, 2025 or December 31, 2024. Level 2 securities include U.S. Government-sponsored agencies, municipal securities, mortgage and asset-backed securities and corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. The Company did not own any securities classified within Level 3 of the hierarchy as of December 31, 2025 or December 31, 2024. Servicing Asset Fair value is based on a loan-by-loan basis taking into consideration the origination dates of the loans, the current age of the loans and the remaining term to maturity. The valuation methodology utilized for the servicing asset begins with generating estimated future cash flows for each servicing asset based on its unique characteristics and market-based assumptions for prepayment speeds and costs to service. The present value of the future cash flows is then calculated utilizing market-based discount rate assumptions (Level 3). Interest Rate Swap Agreements Back-to-Back The Company offers interest rate swaps to certain loan customers to allow them to hedge the risk of rising interest rates on their variable rate loans. The Company originates a variable rate loan and enters into a variable-to-fixed interest rate contract with the customer. The Company also enters into an offsetting interest rate swap with a correspondent bank. These back-to-back swap agreements are intended to offset each other and allow the Company to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. The fair value of these derivatives is based on a discounted cash flow approach. The following tables present the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2025 and 2024.
|  |  |  | December 31, 2025
|  |  |  | Fair Value Measurements Using
|  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
U.S. Government-sponsored agencies |  | $ | 63,764 |  |  | $ | — |  |  | $ | 63,764 |  |  | $ | — |
Municipal securities |  | 63,386 |  |  | — |  |  | 63,386 |  |  | — |
Agency mortgage-backed securities - residential |  | 389,457 |  |  | — |  |  | 389,457 |  |  | — |
Agency mortgage-backed securities - commercial |  | 58,477 |  |  | — |  |  | 58,477 |  |  | — |
Private label mortgage-backed securities - residential |  | 123,673 |  |  | — |  |  | 123,673 |  |  | — |
Asset-backed securities |  | 42,553 |  |  | — |  |  | 42,553 |  |  | — |
Corporate securities |  | 37,377 |  |  | — |  |  | 37,377 |  |  | — |
Total available-for-sale securities |  | $ | 778,687 |  |  | $ | — |  |  | $ | 778,687 |  |  | $ | — |
Servicing asset |  | 22,793 |  |  | — |  |  | — |  |  | 22,793 |
Interest rate swap agreements - assets (back-to-back) |  | 210 |  |  | — |  |  | 210 |  |  | — |
Interest rate swap agreements - liabilities (back-to-back) |  | (210) |  |  | — |  |  | (210) |  |  | — |
|  |  |  | December 31, 2024
|  |  |  | Fair Value Measurements Using
|  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
U.S. Government-sponsored agencies |  | $ | 82,816 |  |  | $ | — |  |  | $ | 82,816 |  |  | $ | — |
Municipal securities |  | 63,654 |  |  | — |  |  | 63,654 |  |  | — |
Agency mortgage-backed securities - residential |  | 269,641 |  |  | — |  |  | 269,641 |  |  | — |
Agency mortgage-backed securities - commercial |  | 63,331 |  |  | — |  |  | 63,331 |  |  | — |
Private label mortgage-backed securities - residential |  | 45,821 |  |  | — |  |  | 45,821 |  |  | — |
Asset-backed securities |  | 23,821 |  |  | — |  |  | 23,821 |  |  | — |
Corporate securities |  | 38,271 |  |  | — |  |  | 38,271 |  |  | — |
Total available-for-sale securities |  | $ | 587,355 |  |  | $ | — |  |  | $ | 587,355 |  |  | $ | — |
Servicing asset |  | 16,389 |  |  | — |  |  | — |  |  | 16,389 |
Interest rate swap agreements - assets (back-to-back) |  | 200 |  |  | — |  |  | 200 |  |  | — |
Interest rate swap agreements - liabilities (back-to-back) |  | (200) |  |  | — |  |  | (200) |  |  | — |
The following table reconciles the beginning and ending balances of recurring fair value measurements recognized in the accompanying consolidated balance sheets using significant unobservable (Level 3) inputs.
| Servicing Asset |  | Interest Rate Lock Commitments
Balance as of January 1, 2023 | $ | 6,255 |  |  | $ | 133 |
Total realized gains |  |  |
Additions | 5,775 |  |  | — |
Paydowns | (1,842) |  |  | — |
Change in fair value | 379 |  |  | (133) |
Balance, December 31, 2023 | 10,567 |  |  | — |
Total realized gains |  |  |
Additions | 8,359 |  |  | — |
Paydowns | (3,005) |  |  | — |
Change in fair value | 468 |  |  | — |
Balance, December 31, 2024 | 16,389 |  |  | — |
Total realized gains |  |  |
Additions | 11,870 |  |  | — |
Paydowns | (4,297) |  |  | — |
Change in fair value | (1,169) |  |  | — |
Balance, December 31, 2025 | $ | 22,793 |  |  | $ | — |
The following describes the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. Individually Analyzed Collateral Dependent Loans Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. The amount of impairment may be determined based on the fair value of the underlying collateral, less costs to sell, the estimated present value of future cash flows, or the loan’s observable market price. If the individually evaluated loan is identified as collateral dependent, the fair value of the underlying collateral, less costs to sell, is used to measure impairment. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the individually evaluated loan is not collateral dependent, the Company utilizes a discounted cash flow analysis to measure impairment. Individually evaluated loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets. The following table presents the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurement falls at December 31, 2025 and December 31, 2024.
|  |  |  | December 31, 2025 |  |  |  |  |  |  |  |
|  |  |  | Fair Value Measurements Using |  |  |  |  |  |  |  |
|  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  |  |  |  |  |  |  |
Collateral dependent loans |  | $ | 336 |  |  | $ | — |  |  | $ | — |  |  | $ | 336 |  |  |  |  |  |  |  |  |
Other real estate owned |  | 2,631 |  |  | — |  |  | — |  |  | 2,631 |  |  |  |  |  |  |  |  |
|  |  |  | December 31, 2024
|  |  |  | Fair Value Measurements Using
|  | Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Collateral dependent loans |  | $ | 4,296 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,296 |
Significant (Level 3) Inputs The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.
|  | Fair Value at December 31, 2025 |  | Valuation Technique |  | Significant Unobservable Inputs |  | Range |  | Weighted-Average Range
Collateral dependent loans |  | $ | 336 |  |  | Fair value of collateral |  | Discount for type of property and current market conditions |  | 0% - 40% |  | 30.8%
Servicing asset |  | 22,793 |  |  | Discounted cash flow |  | Prepayment speeds Discount rate |  | 0% - 25% 13% - 15% |  | 11.9% 13%
Other real estate owned |  | 2,631 |  |  | Fair value of collateral |  | Discount to reflect current market conditions |  | 30% - 35% |  | 32%
|  | Fair Value at December 31, 2024 |  | Valuation Technique |  | Significant Unobservable Inputs |  | Range |  | Weighted - Average Range
Collateral dependent loans |  | $ | 4,296 |  |  | Fair value of collateral |  | Discount for type of property and current market conditions |  | 0% - 75% |  | 24.2%
Servicing asset |  | 16,389 |  |  | Discounted cash flow |  | Prepayment speeds Discount rate |  | 0% - 25% 14% |  | 11.7% 14%
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value: Cash and Cash Equivalents For these instruments, the carrying amount is a reasonable estimate of fair value. Securities Held-to-Maturity Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. 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. The Company did not own any securities classified within Level 1 of the hierarchy as of December 31, 2025 or December 31, 2024. Level 2 securities include agency mortgage-backed securities - residential, municipal securities and corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. The Company did not own any securities classified within Level 3 of the hierarchy as of December 31, 2025 or December 31, 2024. Loans Held-for-Sale For loans that are sold in an active secondary market, the fair value of these loans is estimated based on secondary market price indications for loans with similar interest rate and maturity characteristics. The fair value of other loans held-for-sale approximates carrying value. Net Loans The fair value of loans is estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. Accrued Interest Receivable The fair value of these financial instruments approximates carrying value. Federal Home Loan Bank of Indianapolis Stock The fair value of this financial instrument approximates carrying value. Deposits The fair value of noninterest-bearing and interest-bearing demand deposits, savings accounts and money market accounts approximates carrying value. The fair value of fixed maturity certificates of deposit and brokered deposits are estimated using rates currently offered for deposits of similar remaining maturities. Advances from Federal Home Loan Bank The fair value of fixed rate advances is estimated using rates currently offered for similar remaining maturities. The carrying value of variable rate advances approximates fair value. Subordinated Debt The fair value of the Company’s publicly traded subordinated debt is obtained from quoted market prices. The fair value of the Company’s remaining subordinated debt is estimated using discounted cash flow analysis based on current borrowing rates for similar types of debt instruments. Accrued Interest Payable The fair value of these financial instruments approximates carrying value. Commitments The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates. The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at December 31, 2025 and 2024. The following tables provide the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2025 and 2024:
|  | December 31, 2025
|  | Fair Value Measurements Using
|  | Carrying Amount |  | Fair Value |  | Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Cash and cash equivalents |  | $ | 456,777 |  |  | $ | 456,777 |  |  | $ | 456,777 |  |  | $ | — |  |  | $ | — |
Securities held-to-maturity |  | 250,609 |  |  | 238,815 |  |  | — |  |  | 238,815 |  |  | — |
Loans held-for-sale |  | 108,608 |  |  | 117,917 |  |  | — |  |  | 117,917 |  |  | — |
Net loans |  | 3,691,042 |  |  | 3,642,632 |  |  | — |  |  | — |  |  | 3,642,632 |
Accrued interest receivable |  | 27,909 |  |  | 27,909 |  |  | 27,909 |  |  | — |  |  | — |
Federal Home Loan Bank of Indianapolis stock |  | 28,350 |  |  | 28,350 |  |  | — |  |  | 28,350 |  |  | — |
Deposits |  | 4,839,813 |  |  | 4,853,941 |  |  | 2,559,565 |  |  | — |  |  | 2,294,376 |
Advances from Federal Home Loan Bank |  | 249,500 |  |  | 252,046 |  |  | — |  |  | 252,046 |  |  | — |
Subordinated debt |  | 105,465 |  |  | 105,492 |  |  | 37,059 |  |  | 68,433 |  |  | — |
Accrued interest payable |  | 1,744 |  |  | 1,744 |  |  | 1,744 |  |  | — |  |  | — |
|  | December 31, 2024
|  | Fair Value Measurements Using
|  | Carrying Amount |  | Fair Value |  | Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Cash and cash equivalents |  | $ | 466,410 |  |  | $ | 466,410 |  |  | $ | 466,410 |  |  | $ | — |  |  | $ | — |
Securities held-to-maturity |  | 249,796 |  |  | 228,851 |  |  | — |  |  | 228,851 |  |  | — |
Loans held-for-sale |  | 54,695 |  |  | 58,510 |  |  | — |  |  | 58,510 |  |  | — |
Net loans |  | 4,125,877 |  |  | 3,935,009 |  |  | — |  |  | — |  |  | 3,935,009 |
Accrued interest receivable |  | 28,180 |  |  | 28,180 |  |  | 28,180 |  |  | — |  |  | — |
Federal Home Loan Bank of Indianapolis stock |  | 28,350 |  |  | 28,350 |  |  | — |  |  | 28,350 |  |  | — |
Deposits |  | 4,933,206 |  |  | 4,943,961 |  |  | 2,236,724 |  |  | — |  |  | 2,707,237 |
Advances from Federal Home Loan Bank |  | 295,000 |  |  | 291,208 |  |  | — |  |  | 291,208 |  |  | — |
Subordinated debt |  | 105,150 |  |  | 103,062 |  |  | 37,059 |  |  | 66,003 |  |  | — |
Accrued interest payable |  | 2,495 |  |  | 2,495 |  |  | 2,495 |  |  | — |  |  | — |

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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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