Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2025

Schedule of Assets Measured at Fair Value on a Recurring Basis

The table below presents the Company's financial instruments valued on a recurring basis at the periods indicated:


		June 30, 2025		December 31, 2024
($ in thousands)	Level	Estimated Fair Value		Estimated Fair Value
Financial assets:
U.S. Treasury securities	1	$	30,146	$	29,930
Investment in BFG	3	$	8,400	$	7,700
Derivative asset	2	$	—	$	509
Financial liabilities:
Derivative liability	2	$	4	$	—

Schedule of Reconciliation of Investment in BFG

The table below presents a reconciliation of the Company’s investment in BFG classified as a Level 3 financial instrument and measured at fair value on a recurring basis for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2025		2024		2025		2024
Beginning balance	$	8,100	$	8,200	$	7,700	$	4,200
Purchase of BFG ownership interest	—		—		—		4,125
Change in fair value of BFG	300		(200)		700		(325)
Ending balance	$	8,400	$	8,000	$	8,400	$	8,000

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

The table below presents the Company’s financial instruments valued on a nonrecurring basis at the periods indicated:


($ in thousands)			Fair Value Measurements Using
Description of Financial Instrument	Fair Value		Level 1		Level 2		Level 3
June 30, 2025
Nonrecurring assets:
Individually evaluated loans	$	39,230	$	—	$	—	$	39,230
December 31, 2024
Nonrecurring assets:
Individually evaluated loans	$	35,723	$	—	$	—	$	35,723

Schedule of Quantitative Information for Level 3 Fair Value Measurements

The following table presents information about quantitative inputs and assumptions used to fair value Level 3 nonrecurring assets as of June 30, 2025 and December 31, 2024:

($ in thousands)

Fair Value

Valuation
Technique

Unobservable
Input

Range
(Weighted Average)

June 30, 2025

Individually evaluated loans

39,230

Market
comparable

Discount to appraisal value for estimated selling costs

11.40

December 31, 2024

Individually evaluated loans

35,723

Market
comparable

Discount to appraisal value for estimated selling costs

11.40

The range and weighted average of the significant unobservable inputs used to fair value the investment in BFG as of June 30, 2025 and as of December 31, 2024 are shown in the following table:


($ in thousands)	June 30, 2025 Range (Weighted Average)		December 31, 2024 Range (Weighted Average)
Discounted Cash Flows
Revenue growth rate	15.3	%	15.3	%
Expense growth rate	14.9	%	14.9	%
Discount rate	25.0	%	27.5	%
Lack of marketability discount	20.0	%	20.0	%

Guideline Public Company
Multiples of enterprise value	3.8x to 5.0x		3.5x to 5.8x

Schedule of Estimated Fair Value and Carrying Value of Financial Instrument

The tables below present the carrying amount and estimated fair value of the Company's financial instruments at the periods indicated:


	June 30, 2025
					Fair Value Measurements Using
($ in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	90,100	$	90,100	$	90,100	$	—	$	—
Investment securities available-for-sale	30,146		30,146		30,146		—		—
Investment securities held-to-maturity	11,248		10,007		—		10,007		—
Investment in FHLB stock	440		440		—		440		—
Loans held-for-investment, net	506,503		536,818		—		—		536,818
Strategic Program loans held-for-sale	147,282		147,282		—		147,282		—
Accrued interest receivable	2,380		2,380		—		2,380		—
SBA servicing asset, net	3,227		3,227		—		3,227		—
Investment in BFG	8,400		8,400		—		—		8,400

Financial liabilities:
Total deposits	$	635,174	$	612,622	$	—	$	612,622	$	—
Accrued interest payable	3,746		3,746		—		3,746		—
Derivative liability	4		4		—		4		—


	December 31, 2024
					Fair Value Measurements Using
($ in thousands)	Carrying Amount		Estimated Fair Value		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	109,162	$	109,162	$	109,162	$	—	$	—
Investment securities available-for-sale	29,930		29,930		29,930		—		—
Investment securities held-to-maturity	12,565		11,057		—		11,057		—
Investment in FHLB stock	349		349		—		349		—
Loans held-for-investment, net	447,812		478,919		—		—		478,919
Strategic Program loans held-for-sale	91,588		91,588		—		91,588		—
Accrued interest receivable	3,566		3,566		—		3,566		—
SBA servicing asset, net	3,273		3,273		—		3,273		—
Investment in BFG	7,700		7,700		—		—		7,700
Derivative asset	509		509		—		509		—
Financial liabilities:
Total deposits	$	544,952	$	528,253	$	—	$	528,253	$	—
Accrued interest payable	1,494		1,494		—		1,494		—
PPPLF	64		64		—		64		—

- 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.

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