v3.25.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair values:
Level 1: Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds.
Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs.
Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.
(a) Recurring and Nonrecurring Basis
The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis:
Investment Securities:
The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Investment security valuations are obtained from third-party pricing services.
Collateral-Dependent Loans:
Collateral-dependent loans are identified for the calculation of the ACL on loans. The fair value used to measure credit loss for this type of loan is commonly based on recent real estate appraisals which are generally obtained at least every 18 months or earlier if there are changes to risk characteristics of the underlying loan. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. The Company also incorporates an estimate of cost to sell the collateral when the sale is probable. Such adjustments may be significant and result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and customer’s business (Level 3). Individually evaluated loans are analyzed for credit loss on a quarterly basis and the ACL on loans is adjusted as required based on the results.
Appraisals on collateral-dependent loans 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, the Company's internal appraisal department reviews and approves the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics.
Derivative Financial Instruments:
The Company obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2), and incorporates credit valuation adjustments to reflect nonperformance risk in the measurement of fair value (Level 3). Although the Company has determined that the majority of the inputs used to value its interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as borrower risk ratings, to evaluate the likelihood of default by itself and its counterparties. As of June 30, 2025 and December 31, 2024, the Company assessed the significance of the impact of the credit valuation adjustment on the overall valuation of its interest rate swap derivatives and determined the credit valuation adjustment was not significant to the overall valuation of its interest rate swap derivatives. As a result, the Company has classified its interest rate swap derivative valuations in Level 2 of the fair value hierarchy.
Recurring Basis
The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:
June 30, 2025
TotalLevel 1Level 2Level 3
(Dollars in thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities$11,510 $— $11,510 $— 
Municipal securities50,215 — 50,215 — 
Residential CMO and MBS(1)
317,214 — 317,214 — 
Commercial CMO and MBS(1)
260,720 — 260,720 — 
June 30, 2025
TotalLevel 1Level 2Level 3
(Dollars in thousands)
Corporate obligations10,010 — 10,010 — 
Other asset-backed securities6,783 — 6,783 — 
Total investment securities available for sale656,452 — 656,452 — 
Equity security285 285 — — 
Derivative assets - interest rate swaps17,466 — 17,466 — 
Liabilities
Derivative liabilities - interest rate swaps$17,466 $— $17,466 $— 
(1) U.S. government agency and government-sponsored enterprise CMO and MBS.
December 31, 2024
TotalLevel 1Level 2Level 3
(Dollars in thousands)
Assets
Investment securities available for sale:
U.S. government and agency securities$12,544 $— $12,544 $— 
Municipal securities50,942 — 50,942 — 
Residential CMO and MBS(1)
369,331 — 369,331 — 
Commercial CMO and MBS(1)
309,741 — 309,741 — 
Corporate obligations11,770 — 11,770 — 
Other asset-backed securities10,066 — 10,066 — 
Total investment securities available for sale764,394 — 764,394 — 
Equity security297 297 — — 
Derivative assets - interest rate swaps23,867 — 23,867 — 
Liabilities
Derivative liabilities - interest rate swaps$23,867 $— $23,867 $— 
(1) U.S. government agency and government-sponsored enterprise CMO and MBS.
Nonrecurring Basis
The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables present assets measured at fair value on a nonrecurring basis at the dates indicated:
Fair Value at June 30, 2025
TotalLevel 1Level 2Level 3
(Dollars in thousands)
Collateral-dependent loans:
Commercial business:
Owner-occupied CRE$138 $— $— $138 
Total assets measured at fair value on a nonrecurring basis$138 $— $— $138 
Fair Value at December 31, 2024
TotalLevel 1Level 2Level 3
(Dollars in thousands)
Collateral-dependent loans:
Commercial business:
Owner-occupied CRE$2,250 $— $— $2,250 
 Total commercial business2,250 — — 2,250 
Consumer160 — — 160 
Total assets measured at fair value on a nonrecurring basis$2,410 $— $— $2,410 
The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:
June 30, 2025
Fair
Value		Valuation
Technique(s)		Unobservable Input(s)Range of Inputs
Weighted
Average (1)
(Dollars in thousands)
Collateral-dependent loans$138 Market approachAdjustments to reflect current conditions and selling costs
10.0% - 10.0%
10.0%
December 31, 2024
Fair
Value		Valuation
Technique(s)		Unobservable Input(s)Range of Inputs
Weighted
Average (1)
(Dollars in thousands)
Collateral-dependent loans$2,410 Market approachAdjustments to reflect current conditions and selling costs
10.0% - 10.0%
10.0%
(1) Weighted by net discount to net appraisal fair value
(b) Fair Value of Financial Instruments
Broadly traded markets do not exist for most of the Company’s financial instruments; therefore, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein does not represent, and should not be construed to represent, the underlying value of the Company.
The following tables present the carrying value of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated:
June 30, 2025
Carrying
Value		Fair
Value		Fair Value Measurements Using:
Level 1Level 2Level 3
(Dollars in thousands)
Financial Assets:
Cash and cash equivalents$254,096 $254,096 $254,096 $— $— 
Investment securities available for sale656,452 656,452 — 656,452 — 
Investment securities held to maturity689,822 629,658 — 629,658 — 
Loans receivable, net4,722,326 4,684,464 — — 4,684,464 
Derivative assets - interest rate swaps17,466 17,466 — 17,466 — 
Equity security285 285 285 — — 
Financial Liabilities:
Non-maturity deposits$4,802,763 $4,802,763 $4,802,763 $— $— 
Certificates of deposit 981,650 989,539 — 989,539 — 
June 30, 2025
Carrying
Value		Fair
Value		Fair Value Measurements Using:
Level 1Level 2Level 3
(Dollars in thousands)
Borrowings263,200 263,189 — 263,189 — 
Junior subordinated debentures22,204 20,540 — — 20,540 
Derivative liabilities - interest rate swaps17,466 17,466 — 17,466 — 
December 31, 2024
Carrying
Value		Fair
Value		Fair Value Measurements Using:
Level 1Level 2Level 3
(Dollars in thousands)
Financial Assets:
Cash and cash equivalents$117,100 $117,100 $117,100 $— $— 
Investment securities available for sale764,394 764,394 — 764,394 — 
Investment securities held to maturity703,285 623,452 — 623,452 — 
Loans receivable, net4,749,655 4,694,516 — — 4,694,516 
Derivative assets - interest rate swaps23,867 23,867 — 23,867 — 
Equity security297 297 297 — — 
Financial Liabilities:
Non-maturity deposits$4,707,362 $4,707,362 $4,707,362 $— $— 
Certificates of deposit 977,251 985,602 — 985,602 — 
Borrowings383,000 383,222 — 383,222 — 
Junior subordinated debentures22,058 20,357 — — 20,357 
Derivative liabilities - interest rate swaps23,867 23,867 — 23,867 —