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FAIR VALUE (Tables) | 9 Months Ended
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Sep. 30, 2024
Fair Value Disclosures [Abstract] |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets measured at fair value on a recurring basis at September 30, 2024 are summarized below. There were no liabilities carried at fair value on a recurring basis at September 30, 2024.
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Financial assets |  |  |  |  |  |  |
Investment securities available for sale | $ | — |  |  | $ | 37,984 |  |  | $ | — |  |  | $ | 37,984 |
Government guaranteed loans HFI, at fair value | — |  |  | — |  |  | 86,441 |  |  | 86,441 |
Assets measured at fair value on a recurring basis at December 31, 2023 are summarized below. There were no liabilities carried at fair value on a recurring basis at December 31, 2023.
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Financial assets |  |  |  |  |  |  |
Investment securities available for sale | $ | — |  |  | $ | 39,575 |  |  | $ | — |  |  | $ | 39,575 |
Government guaranteed loans HFI, at fair value | — |  |  | — |  |  | 91,508 |  |  | 91,508 |
Schedule of Fair Value for Loans | The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of HFI government guaranteed loans measured at fair value at September 30, 2024 and December 31, 2023.
| September 30, 2024
| Total Loans |  | Nonaccrual(1) |  | 90 Days or More Past Due(1)
| Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss) |  | Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss) |  | Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss)
Real estate - commercial | $ | 16,424 |  |  | $ | 16,476 |  |  | $ | (52) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial | 70,017 |  |  | 68,494 |  |  | 1,523 |  |  | 1,559 |  |  | 1,992 |  |  | (433) |  |  | — |  |  | — |  |  | — |
Total loans HFI, at fair value | $ | 86,441 |  |  | $ | 84,970 |  |  | $ | 1,471 |  |  | $ | 1,559 |  |  | $ | 1,992 |  |  | $ | (433) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
| December 31, 2023
| Total Loans |  | Nonaccrual(1) |  | 90 Days or More Past Due(1)
| Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss) |  | Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss) |  | Fair Value Carrying Amount |  | Unpaid Principal Balance |  | Fair Value Gain (Loss)
Real estate - commercial | $ | 19,219 |  |  | $ | 19,156 |  |  | $ | 63 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial and industrial | 72,289 |  |  | 68,777 |  |  | 3,512 |  |  | 485 |  |  | 585 |  |  | (100) |  |  | 162 |  |  | 182 |  |  | (20) |
Total loans HFI, at fair value | $ | 91,508 |  |  | $ | 87,933 |  |  | $ | 3,575 |  |  | $ | 485 |  |  | $ | 585 |  |  | $ | (100) |  |  | $ | 162 |  |  | $ | 182 |  |  | $ | (20) |
(1) The nonaccrual and 90 days or more past due loan balances do not include the portion of government guaranteed loan balances. The total amount of net gains and losses from changes in fair value and interest income included in earnings for the nine months ended September 30, 2024 and September 30, 2023 for government guaranteed loans HFI, at fair value, were as follows:
| Nine Months Ended September 30,
| 2024 |  | 2023
Interest income | $ | 5,978 |  |  | $ | 3,151 |
Change in fair value | 9,923 |  |  | 11,021 |
Total gain, net | $ | 15,901 |  |  | $ | 14,172 |
Schedule of Valuation Technique and Unobservable Inputs Used in the Valuation of Government Guaranteed Loans HFI, at Fair Value | The table below presents a reconciliation of government guaranteed loans HFI, at fair value, which were valued on a recurring basis and used significant unobservable inputs (Level 3) for the nine months ended September 30, 2024 and September 30, 2023:
| Nine Months Ended September 30,
| 2024 |  | 2023
Balance of government guaranteed loans HFI at fair value, beginning of period | $ | 91,508 |  |  | $ | 27,078 |
New government guaranteed originations at fair value | 105,754 |  |  | 143,535 |
Loans sold | (116,977) |  |  | (90,120) |
Principal payments | (3,767) |  |  | (7,336) |
Charge-offs | — |  |  | — |
Total fair value gains during the period | 9,923 |  |  | 11,021 |
Balance of government guaranteed loans HFI at fair value, end of period | $ | 86,441 |  |  | $ | 84,178 |
The following table provides information about the valuation techniques and unobservable inputs used in the valuation of government guaranteed loans HFI that fall within Level 3 of the fair value hierarchy at September 30, 2024 and December 31, 2023:
| Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range (Weighted Average)
September 30, 2024 |  |  |  |  |  |  |
Government guaranteed loans HFI, at fair value | $ | 86,441 |  |  | Discounted |  | Discount rate |  | 6.56%-9.94% (8.51%)
|  |  | cash flow |  | Conditional prepayment rate |  | 10.87%-12.63% (12.09%)
December 31, 2023 |  |  |  |  |  |  |
Government guaranteed loans HFI, at fair value | $ | 91,508 |  |  | Discounted |  | Discount rate |  | 7.36%-10.86% (8.74%)
|  |  | cash flow |  | Conditional prepayment rate |  | 10.38%-15.69% (13.91%)
Schedule of Assets Measured at Fair Value on a Nonrecurring Basis | Assets measured at fair value on a nonrecurring basis (Level 3) at September 30, 2024 are summarized below:
| Fair Value |  | Valuation Technique(s) |  | Significant Unobservable Input(s) |  | Discount % Amount
Repossessed assets | $ | 94 |  |  | Discounted appraisals, estimated net realizable value of collateral |  | Collateral discounts |  | 10%
Assets measured at fair value on a nonrecurring basis (Level 3) at December 31, 2023 are summarized below:
| Fair Value |  | Valuation Technique(s) |  | Significant Unobservable Input(s) |  | Discount % Amount
Individually evaluated loans | $ | 135 |  |  | Discounted appraisals, estimated net realizable value of collateral |  | Collateral discounts |  | 10%
Schedule of the Carrying Values and Estimated Values of Financial Instruments Not Carried at Fair Value | The carrying values and estimated fair values of financial instruments not carried at fair value, at September 30, 2024 and December 31, 2023 are as follows:
|  |  | September 30, 2024 |  | December 31, 2023
| Level |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 1 |  | $ | 64,383 |  |  | $ | 64,383 |  |  | $ | 58,385 |  |  | $ | 58,385 |
Time deposits in banks | 2 |  | 2,264 |  |  | 2,228 |  |  | 4,646 |  |  | 4,561 |
Investment securities held to maturity | 2 |  | 2,487 |  |  | 2,321 |  |  | 2,484 |  |  | 2,263 |
Nonmarketable equity securities, at cost | 2 |  | 4,997 |  |  | 4,997 |  |  | 4,770 |  |  | 4,770 |
Government guaranteed loans held for sale | 2 |  | 595 |  |  | 667 |  |  | — |  |  | — |
Loans HFI, at amortized cost | 3 |  | 941,818 |  |  | 937,576 |  |  | 810,721 |  |  | 786,350 |
Accrued interest receivable | 2 |  | 8,537 |  |  | 8,537 |  |  | 7,130 |  |  | 7,130 |
Government guaranteed loan servicing rights | 3 |  | 15,966 |  |  | 18,596 |  |  | 14,959 |  |  | 16,318 |
Liabilities: |  |  |  |  |  |  |  |  |
Noninterest-bearing deposits | 2 |  | $ | 95,995 |  |  | $ | 95,995 |  |  | $ | 93,708 |  |  | $ | 93,708 |
Interest-bearing transaction accounts | 2 |  | 247,923 |  |  | 247,923 |  |  | 259,422 |  |  | 259,422 |
Savings and money market deposits | 2 |  | 455,297 |  |  | 455,297 |  |  | 373,000 |  |  | 373,000 |
Time deposits | 2 |  | 312,981 |  |  | 313,339 |  |  | 259,008 |  |  | 255,372 |
FHLB borrowings | 2 |  | 10,000 |  |  | 10,000 |  |  | 10,000 |  |  | 10,000 |
Subordinated debentures | 2 |  | 5,954 |  |  | 5,485 |  |  | 5,949 |  |  | 5,215 |
Notes payable | 2 |  | 2,048 |  |  | 2,031 |  |  | 2,389 |  |  | 2,369 |
Accrued interest payable | 2 |  | 1,114 |  |  | 1,114 |  |  | 882 |  |  | 882 |

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- Definition Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 + Details
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- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 101 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-101 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 + Details
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- Definition Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482907/825-10-50-11 + Details
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 + Details
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