v3.25.4
FAIR VALUE DISCLOSURES
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE DISCLOSURES FAIR VALUE DISCLOSURES
Fair value is the exchange price that would be received for 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 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.
Assets and liabilities measured at estimated fair value on a recurring basis are summarized in the table below.
(Dollars in thousands)Fair Value Measurements UsingTotal
Fair Value
December 31, 2025Level 1Level 2Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential$— $88,500 $— $88,500 
Asset-backed securities— 811 — 811 
State and municipal— 2,589 — 2,589 
CLO securities— 271,074 — 271,074 
Corporate bonds— 263 — 263 
SBA pooled securities— 1,040 — 1,040 
$— $364,277 $— $364,277 
Equity securities with readily determinable fair values
Mutual fund$4,588 $— $— $4,588 
Loans held for sale$— $459 $— $459 
Revenue share asset$— $— $1,598 $1,598 
(Dollars in thousands)Fair Value Measurements UsingTotal
Fair Value
December 31, 2024Level 1Level 2Level 3
Assets measured at fair value on a recurring basis
Securities available for sale
Mortgage-backed securities, residential$— $84,185 $— $84,185 
Asset-backed securities— 905 — 905 
State and municipal— 3,063 — 3,063 
CLO Securities— 291,913 — 291,913 
Corporate bonds— 262 — 262 
SBA pooled securities— 1,233 — 1,233 
 $— $381,561 $— $381,561 
Equity securities with readily determinable fair values
Mutual fund$4,445 $— $— $4,445 
Loans held for sale$— $1,172 $— $1,172 
Revenue share asset$— $— $2,616 $2,616 
There were no transfers between levels for the years ended December 31, 2025 and 2024.
The Company used the following methods and assumptions to estimate fair value of financial instruments that are measured at fair value on a recurring basis:
Securities available for sale – The estimated fair values of debt securities available for sale are determined by third-party 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 inputs).
Equity securities with readily determinable fair values – The fair values of equity securities are determined based on quoted market prices in active markets and are classified in Level 1 of the valuation hierarchy.
Loans held for sale – The estimated fair value of loans held for sale is determined using commitments on hand from investors or prevailing market prices and are classified in Level 2 of the valuation hierarchy.
Revenue Share Asset
On June 30, 2022 and September 6, 2022, the Company entered into and closed two separate agreements to sell two separate portfolios of factored receivables. The June 30, 2022 agreement contains revenue share provisions that entitles the Company to an amount equal to fifteen percent of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The September 6, 2022 agreement contains revenue share provisions that entitles the Company to an amount ranging from fifteen to twenty percent, depending on the client, of the future gross monthly revenue of the clients associated with the sold factored receivable portfolio. The estimated fair value of the revenue share assets is calculated each reporting period, and changes in the estimated fair value of the revenue share assets are recorded in noninterest income in the consolidated statements of income. The revenue share asset estimated fair value is considered a Level 3 classification.
At December 31, 2025 and 2024, the estimated cash payments expected to be received from the purchaser for the Company's share of future gross monthly revenue was $2,256,000 and $3,572,000, respectively, and a discount rate of 10.0% was applied to calculate the present value of the revenue share asset. A reconciliation of the opening balance to the closing balance of the estimated fair value of the revenue share asset is as follows:
(Dollars in thousands)202520242023
Beginning balance$2,616 $2,516 $5,515 
Revenue share asset recognized — — — 
Change in estimated fair value of revenue share asset recognized in earnings(9)1,309 (1,743)
Revenue share payments received(1,009)(1,209)(1,256)
Ending balance$1,598 $2,616 $2,516 
Assets measured at estimated fair value on a non-recurring basis are summarized in the table below. There were no liabilities measured at fair value on a non-recurring basis at December 31, 2025 and 2024.
(Dollars in thousands)Fair Value Measurements UsingTotal
Fair Value
December 31, 2025Level 1Level 2Level 3
Collateral dependent loans
Commercial— — 5,515 5,515 
Factored receivables— — 2,072 2,072 
$— $— $7,587 $7,587 
(Dollars in thousands)Fair Value Measurements UsingTotal
Fair Value
December 31, 2024Level 1Level 2Level 3
Collateral dependent loans
Commercial real estate$— $— $745 $745 
Commercial— — 18,727 18,727 
Factored receivables— — 28,780 28,780 
$— $— $48,252 $48,252 
Collateral Dependent Loans Specific Allocation of ACL
A loan is considered to be a collateral dependent loan when, based on current information and events, the Company expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Company has determined that the borrower is experiencing financial difficulty as of the measurement date. The ACL is measured by estimating the fair value of the loan based on the present value of expected cash flows, the market price of the loan, or the underlying estimated fair value of the loan’s collateral. For real estate loans, estimated fair value of the loan’s collateral is determined by third-party appraisals, which are then adjusted for the estimated selling and closing costs related to liquidation of the collateral. For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. For example, land is generally based on the sales comparable method while construction is based on the income and/or sales comparable methods. The unobservable inputs may vary depending on the individual assets with no one of the three methods being the predominant approach. The Company reviews the third-party appraisal for appropriateness and adjusts the value downward to consider selling and closing costs, which typically range from 5% to 8% of the appraised value. For non-real estate loans, estimated fair value of the loan’s collateral may be determined using an appraisal, net book value per 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 client and client’s business.
The estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis were as follows:
December 31, 2025
Carrying
Amount		Fair Value Measurements UsingTotal
Fair Value
(Dollars in thousands)Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$248,471 $248,471 $— $— $248,471 
Securities - held to maturity1,550 — — 1,878 1,878 
Loans not previously presented, gross4,983,720 31,254 — 4,903,148 4,934,402 
FHLB and other restricted stock14,253  N/A  N/A  N/A N/A
Accrued interest receivable46,254 46,254 — — 46,254 
Financial liabilities:
Deposits4,950,216 — 4,948,300 — 4,948,300 
Federal Home Loan Bank advances280,000 — 280,000 — 280,000 
Subordinated notes69,879 — 65,581 — 65,581 
Junior subordinated debentures42,991 — 44,021 — 44,021 
Accrued interest payable14,890 14,890 — — 14,890 
December 31, 2024
Carrying
Amount		Fair Value Measurements UsingTotal
Fair Value
(Dollars in thousands)Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$330,117 $330,117 $— $— $330,117 
Securities - held to maturity1,876 — — 2,514 2,514 
Loans not previously presented, gross4,505,408 49,860 — 4,389,000 4,438,860 
FHLB and other restricted stock14,054 N/AN/AN/AN/A
Accrued interest receivable41,940 41,940 — — 41,940 
Financial liabilities:
Deposits4,820,820 — 4,817,208 — 4,817,208 
Federal Home Loan Bank advances30,000 — 30,000 — 30,000 
Subordinated notes69,662 — 56,643 — 56,643 
Junior subordinated debentures42,352 — 43,835 — 43,835 
Accrued interest payable9,766 9,766 — — 9,766 
For those financial instruments not previously described, the following methods and assumptions were used by the Company in estimating the fair values of financial instruments as disclosed herein:
Cash and Cash Equivalents
For financial instruments with a shorter term or with no stated maturity, prevailing market rates, and limited credit risk, the carrying amounts approximate fair value and are considered a Level 1 classification.
Securities held to maturity
The estimated fair values of the Company’s investments in the subordinated notes of Trinitas IV and Trinitas VI classified as securities held to maturity are determined based on the securities’ discounted projected future cash flows (net present value), resulting in a Level 3 classification.
Loans
Loans include loans held for investment, excluding collateral dependent loans previously described above. For variable rate loans that reprice frequently and have no significant changes in credit risk, excluding previously presented collateral dependent loans measured at estimated fair value on a non-recurring basis, fair values are based on carrying values. Fair values for fixed rate loans are estimated using discounted cash flow analyses. The discount rates used to determine the estimated fair value of loans use interest rate spreads that reflect factors such as liquidity, credit, and nonperformance risk of the loans. These loans are considered a Level 3 classification.
The fair values of commercial loans in the Company’s liquid credit portfolio are determined based on quoted market prices in active markets and are considered a Level 1 classification.
FHLB and other restricted stock
FHLB and other restricted stock is restricted to member banks and there are restrictions placed on its transferability. As a result, the estimated fair value of FHLB and other restricted stock was not practicable to determine.
Deposits
The estimated fair values disclosed for demand deposits and non-maturity transaction accounts are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts) and are considered a Level 2 classification. Estimated fair values for fixed rate time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on time deposits to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.
Federal Home Loan Bank advances
The Company’s FHLB advances have variable rates or a maturity of less than three months and therefore estimated fair value materially approximates carrying value and is considered a Level 2 classification.
Subordinated notes
The subordinated notes were valued based on quoted market prices, but due to limited trading activity for the subordinated notes in these markets, the subordinated notes are considered a Level 2 classification.
Junior subordinated debentures
The junior subordinated debentures were valued by discounting future cash flows using current interest rates for similar financial instruments, resulting in a Level 2 classification.
Accrued Interest Receivable and Accrued Interest Payable
The carrying amounts of accrued interest receivable and accrued interest payable approximate their fair values given the short-term nature of the receivables and are considered a Level 1 classification.