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FAIR VALUE (Tables)

9 Months Ended

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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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).

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