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Fair Value
 9 Months Ended
Sep. 30, 2025
Fair Value [Abstract]  
Fair Value

NOTE 6 - FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for 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 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 asset and liability:

Securities available for sale: The fair value of securities available for sale is determined using pricing models that vary based on asset class and include available trade, bid and other market information or 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).

Derivatives: The fair value of derivatives, which includes interest rate lock commitments and interest rate swaps, is based on valuation models using observable market data as of the measurement date (Level 2).

Loans held for sale: Loans held for sale are carried at fair value, as determined by outstanding commitments from third-party investors (Level 2).

Assets and liabilities measured at fair value on a recurring basis, including financial assets and liabilities for which the Company has elected the fair value option, are summarized below:

 

 

 

Fair Value
Measurements at
September 30, 2025
using Significant
Other Observable
Inputs

 

 

 

(Level 2)

 

 

 

(unaudited)

 

Financial Assets:

 

 

 

 

Securities available for sale:

 

 

 

 

Corporate debt

 

$

 

8,200

 

Issued by U.S. government-sponsored entities and agencies:

 

 

 

 

U.S. Treasury

 

 

 

999

 

Total securities available for sale

 

$

 

9,199

 

Loans held for sale

 

$

 

2,484

 

Derivative assets

 

$

 

3,977

 

Financial Liabilities:

 

 

 

 

Derivative liabilities

 

$

 

3,977

 

 

 

 

Fair Value
Measurements at
December 31, 2024
using Significant
Other Observable
Inputs

 

 

 

(Level 2)

 

Financial Assets:

 

 

 

 

Securities available for sale:

 

 

 

 

Corporate debt

 

$

 

7,700

 

Issued by U.S. government-sponsored entities and agencies:

 

 

 

 

U.S. Treasury

 

 

 

983

 

Total securities available for sale

 

$

 

8,683

 

Loans held for sale

 

$

 

2,623

 

Derivative assets

 

$

 

3,730

 

Financial Liabilities:

 

 

 

 

Derivative liabilities

 

$

 

3,730

 

 

The Company had no assets or liabilities measured at fair value on a recurring basis that were measured using Level 1 or Level 3 inputs at September 30, 2025 or December 31, 2024. There were no transfers of assets or liabilities measured at fair value between levels during the periods ended September 30, 2025 and December 31, 2024.

Assets and liabilities measured at fair value on a non-recurring basis at September 30, 2025 are summarized below:

 

Fair Value Measurements at September 30, 2025 Using

Significant Unobservable Inputs (Level 3)

(unaudited)

Collateral dependent impaired loans:

 

 

Commercial

$

766

Real Estate:

 

 

Commercial:

 

 

Owner occupied

 

388

Total collateral dependent impaired loans

$

1,154

 

There were no assets or liabilities measured at fair value on a non-recurring basis at December 31, 2024.

There were $7.0 million in charge offs on individually evaluated collateral dependent loans during the three and nine months ended September 30, 2025. There were no charge offs on individually evaluated collateral dependent loans during the three and nine months ended September 30, 2024.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at September 30, 2025:

 

 

 

 

Fair Value

 

Valuation Technique(s)

 

Unobservable Inputs

 

Weighted Average

Collateral dependent impaired loans:

 

 

 

 

 

 

 

 

 

Commercial

 

$

766

 

Comparable sales approach

 

Adjustment for differences between the stated value and net realizable value

 

8.00%

Real estate:

 

 

 

 

 

 

 

 

 

Commercial:

 

 

 

 

 

 

 

 

 

Owner occupied

 

 

388

 

Comparable sales approach

 

Adjustment for differences between the comparable market transactions

 

4.00%

 

Financial Instruments Recorded Using Fair Value Option

The Company has elected the fair value option for loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan and in accordance with the Company’s policy on loans held for investment. None of these loans were 90 days or more past due or on nonaccrual as of September 30, 2025 or December 31, 2024.

As of September 30, 2025 and December 31, 2024, the aggregate fair value, contractual balance and gain or loss on loans held for sale were as follows:

 

 

 

September 30, 2025

 

 

December 31, 2024

 

 

 

(unaudited)

 

 

 

 

 

Aggregate fair value

 

$

 

2,484

 

 

$

 

2,623

 

Contractual balance

 

 

 

2,484

 

 

 

 

2,623

 

Gain (loss)

 

$

 

—

 

 

$

 

—

 

 

The total amount of gains and losses from changes in fair value included in earnings for the three and nine months ended September 30, 2025 and 2024 for loans held for sale were:

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

(unaudited)

 

 

(unaudited)

 

Interest income

 

$

 

40

 

 

$

 

59

 

 

$

 

117

 

 

$

 

118

 

Interest expense

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Change in fair value

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Total change in fair value

 

$

 

40

 

 

$

 

59

 

 

$

 

117

 

 

$

 

118

 

 

The carrying amounts and estimated fair values of financial instruments at September 30, 2025 were as follows:

 

 

 

Fair Value Measurements at September 30, 2025 Using:

 

 

 

Carrying

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

272,361

 

 

$

 

272,361

 

 

$

 

—

 

 

$

 

—

 

 

$

 

272,361

 

Interest-bearing deposits in other financial
   institutions

 

 

 

100

 

 

 

 

100

 

 

 

 

—

 

 

 

 

—

 

 

 

 

100

 

Securities available for sale

 

 

 

9,199

 

 

 

 

—

 

 

 

 

9,199

 

 

 

 

—

 

 

 

 

9,199

 

Loans held for sale

 

 

 

2,484

 

 

 

 

—

 

 

 

 

2,484

 

 

 

 

—

 

 

 

 

2,484

 

Loans and leases, net

 

 

 

1,728,284

 

 

 

 

—

 

 

 

 

—

 

 

 

 

1,715,734

 

 

 

 

1,715,734

 

FHLB and FRB stock

 

 

 

8,343

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Accrued interest receivable

 

 

 

9,455

 

 

 

 

349

 

 

 

 

154

 

 

 

 

8,952

 

 

 

 

9,455

 

Derivative assets

 

 

 

3,977

 

 

 

 

—

 

 

 

 

3,977

 

 

 

 

—

 

 

 

 

3,977

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

 

(1,778,606

)

 

$

 

(1,081,799

)

 

$

 

(697,471

)

 

$

 

—

 

 

$

 

(1,779,270

)

FHLB advances and other borrowings

 

 

 

(100,956

)

 

 

 

—

 

 

 

 

(103,692

)

 

 

 

—

 

 

 

 

(103,692

)

Advances by borrowers for taxes and
   insurance

 

 

 

(1,479

)

 

 

 

—

 

 

 

 

—

 

 

 

 

(1,479

)

 

 

 

(1,479

)

Subordinated debentures

 

 

 

(15,029

)

 

 

 

—

 

 

 

 

(16,790

)

 

 

 

—

 

 

 

 

(16,790

)

Accrued interest payable

 

 

 

(2,564

)

 

 

 

—

 

 

 

 

(2,564

)

 

 

 

—

 

 

 

 

(2,564

)

Derivative liabilities

 

 

 

(3,977

)

 

 

 

—

 

 

 

 

(3,977

)

 

 

 

—

 

 

 

 

(3,977

)

The carrying amounts and estimated fair values of financial instruments at December 31, 2024 were as follows:

 

 

 

Fair Value Measurements at December 31, 2024 Using:

 

 

 

Carrying

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

235,272

 

 

$

 

235,272

 

 

$

 

—

 

 

$

 

—

 

 

$

 

235,272

 

Interest-bearing deposits in other financial
   institutions

 

 

 

100

 

 

 

 

100

 

 

 

 

—

 

 

 

 

—

 

 

 

 

100

 

Securities available for sale

 

 

 

8,683

 

 

 

 

—

 

 

 

 

8,683

 

 

 

 

—

 

 

 

 

8,683

 

Equity securities

 

 

 

5,000

 

 

 

 

—

 

 

 

 

5,000

 

 

 

 

—

 

 

 

 

5,000

 

Loans held for sale

 

 

 

2,623

 

 

 

 

—

 

 

 

 

2,623

 

 

 

 

—

 

 

 

 

2,623

 

Loans and leases, net

 

 

 

1,722,019

 

 

 

 

—

 

 

 

 

—

 

 

 

 

1,691,030

 

 

 

 

1,691,030

 

FHLB and FRB stock

 

 

 

8,918

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

 

 

n/a

 

Accrued interest receivable

 

 

 

8,395

 

 

 

 

182

 

 

 

 

151

 

 

 

 

8,062

 

 

 

 

8,395

 

Derivative assets

 

 

 

3,730

 

 

 

 

—

 

 

 

 

3,730

 

 

 

 

—

 

 

 

 

3,730

 

Financial Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

 

(1,755,795

)

 

$

 

(1,065,780

)

 

$

 

(689,282

)

 

$

 

—

 

 

$

 

(1,755,062

)

FHLB advances and other borrowings

 

 

 

(92,680

)

 

 

 

—

 

 

 

 

(94,414

)

 

 

 

—

 

 

 

 

(94,414

)

Advances by borrowers for taxes and
   insurance

 

 

 

(2,238

)

 

 

 

—

 

 

 

 

—

 

 

 

 

(2,238

)

 

 

 

(2,238

)

Subordinated debentures

 

 

 

(15,000

)

 

 

 

—

 

 

 

 

(17,021

)

 

 

 

—

 

 

 

 

(17,021

)

Accrued interest payable

 

 

 

(2,259

)

 

 

 

—

 

 

 

 

(2,259

)

 

 

 

—

 

 

 

 

(2,259

)

Derivative liabilities

 

 

 

(3,730

)

 

 

 

—

 

 

 

 

(3,730

)

 

 

 

—

 

 

 

 

(3,730

)