Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2026

Schedule of Rollforward of Level 3 Equity Warrant Asset Fair Values

The table below provides a rollforward of the fair value of the Level 3 equity warrant assets:


	Three Months Ended March 31,
Equity Warrant Assets	2026		2025
Balance at beginning of period	$	1,775	$	7,162
New equity warrant assets	118		217
Changes in fair value, net	26		(304)
Settlements	(3)		(40)
Balance at end of period	$	1,916	$	7,035

Schedule of Record Amount of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis.


March 31, 2026	Total		Level 1		Level 2		Level 3
Investment securities available-for-sale
U.S. government agencies	$	20,254	$	—	$	20,254	$	—
Mortgage-backed securities	1,411,220		—		1,411,220		—
Municipal bonds (1)	3,064		—		2,981		83

Loans held for investment (2)	244,940		—		—		244,940
Servicing assets (3)	64,520		—		—		64,520

Equity warrant assets	1,916		—		—		1,916
Total assets at fair value	$	1,745,914	$	—	$	1,434,455	$	311,459


December 31, 2025	Total		Level 1		Level 2		Level 3
Investment securities available-for-sale
U.S. government agencies	$	13,617	$	—	$	13,617	$	—
Mortgage-backed securities	1,410,679		—		1,410,679		—
Municipal bonds (1)	3,105		—		3,022		83


Loans held for investment (2)	260,625		—		—		260,625
Servicing assets (3)	62,941		—		—		62,941
Mutual fund (4)	19		—		19		—
Equity warrant assets	1,775		—		—		1,775
Total assets at fair value	$	1,752,761	$	—	$	1,427,337	$	325,424


(1)			During the three months ended March 31, 2026 and 2025 there were no level 3 fair value adjustment gains or losses.
(2)			Loans accounted for under the fair value option.
(3)			See Note 6 for a rollforward of recurring Level 3 fair values for servicing assets.
(4)			Included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets.

Schedule of Fair Value Carrying Amount and Unpaid Principal Outstanding of Loans Under Fair Value Option

The following tables provide more information about the fair value carrying amount and the unpaid principal outstanding of loans accounted for under the fair value option at March 31, 2026 and December 31, 2025.


	March 31, 2026
	Total Loans						Nonaccruals						90 Days or More Past Due
	Fair Value Carrying Amount		Unpaid Principal Balance		Difference		Fair Value Carrying Amount		Unpaid Principal Balance		Difference		Fair Value Carrying Amount		Unpaid Principal Balance		Difference
Fair Value Option Elections
Loans held for investment	$	244,940	$	253,668	$	(8,728)	$	61,563	$	62,839	$	(1,276)	$	48,109	$	49,087	$	(978)
	$	244,940	$	253,668	$	(8,728)	$	61,563	$	62,839	$	(1,276)	$	48,109	$	49,087	$	(978)


	December 31, 2025
	Total Loans						Nonaccruals						90 Days or More Past Due
	Fair Value Carrying Amount		Unpaid Principal Balance		Difference		Fair Value Carrying Amount		Unpaid Principal Balance		Difference		Fair Value Carrying Amount		Unpaid Principal Balance		Difference
Fair Value Option Elections
Loans held for investment	$	260,625	$	269,851	$	(9,226)	$	61,602	$	62,824	$	(1,222)	$	45,784	$	46,824	$	(1,040)
	$	260,625	$	269,851	$	(9,226)	$	61,602	$	62,824	$	(1,222)	$	45,784	$	46,824	$	(1,040)

The following table presents the net losses from changes in fair value.


	Three Months Ended March 31,
Losses on Loans Accounted for under the Fair Value Option	2026		2025
Loans held for investment	$	(1,165)	$	(1,034)
	$	(1,165)	$	(1,034)

Schedule of the Activity Pertaining to Loans Accounted for Under Fair Value Option

The following tables summarize the activity pertaining to loans accounted for under the fair value option:


	Three Months Ended March 31,
Loans held for investment	2026		2025
Balance at beginning of period	$	260,625	$	328,746
Repurchases	2,945		6,252
Fair value changes	(1,165)		(1,034)

Settlements	(17,465)		(17,157)
Balance at end of period	$	244,940	$	316,807

Schedule of Recorded Amount of Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The tables below present the recorded amount of assets measured at fair value on a non-recurring basis. The Company has no liabilities recorded at fair value on a non-recurring basis.


March 31, 2026	Total		Level 1		Level 2		Level 3
Collateral-dependent loans	$	36,054	$	—	$	—	$	36,054
Foreclosed assets	9,550		—		—		9,550
Total assets at fair value	$	45,604	$	—	$	—	$	45,604


December 31, 2025	Total		Level 1		Level 2		Level 3
Collateral-dependent loans	$	20,619	$	—	$	—	$	20,619
Foreclosed assets	6,877		—		—		6,877
Equity security investment with a non-readily determinable fair value	2,101		—		—		2,101
Total assets at fair value	$	29,597	$	—	$	—	$	29,597

Schedule of Analysis of Level 3 Valuation Techniques

For Level 3 assets measured at fair value on a recurring or non-recurring basis as of March 31, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows:


March 31, 2026
Level 3 Assets with Significant Unobservable Inputs	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range		Weighted Average (1)
Recurring fair value
Municipal bond	$	83	Discounted expected cash flows	Discount rate	7.0	%	N/A
				Prepayment speed	5.0	%	N/A


Loans held for investment	$	244,940	Discounted expected cash flows	Loss rate	0.0 % - 5.5 %		1.1	%
				Discount rate	6.6 % - 18.0 %		8.8	%
				Prepayment speed	16.2 % - 24.1 %		18.2	%

Servicing assets	$	64,520	Discounted expected cash flows	Discount rate	12.8	%	12.8	%
				Prepayment speed	12.2 % - 19.1 %		16.6	%
Equity warrant assets	$	1,916	Black-Scholes option pricing model	Volatility	13.1 % - 104.4 %		58.4	%
				Risk-free interest rate	3.9 % - 4.3 %		4.3	%
				Marketability discount	20.0 % - 100.0 %		20.4	%
				Remaining life	2.3 - 11.8 years		8.0 years
Non-recurring fair value
Collateral-dependent loans	$	36,054	Discounted appraisals	Appraisal adjustments (2)	6.1 % - 90.3 %		33.2	%
Foreclosed assets	$	9,550	Discounted appraisals	Appraisal adjustments (2)	7.1% - 10.0 %		10.0	%


December 31, 2025
Level 3 Assets with Significant Unobservable Inputs	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range		Weighted Average (1)
Recurring fair value
Municipal bond	$	83	Discounted expected cash flows	Discount rate	7.0	%	N/A
				Prepayment speed	5.0	%	N/A
Loans held for investment	$	260,625	Discounted expected cash flows	Loss rate	0.0% - 4.6%		1.1	%
				Discount rate	6.7% - 10.0%		8.6	%
				Prepayment speed	15.1% - 21.2%		17.2	%
Servicing assets	$	62,941	Discounted expected cash flows	Discount rate	12.8	%	12.8	%
				Prepayment speed	12.0% - 18.8%		16.2	%
Equity warrant assets	$	1,775	Black-Scholes option pricing model	Volatility	13.1% - 104.4%		58.3	%
				Risk-free interest rate	3.7% - 4.2%		4.2	%
				Marketability discount	20.0% - 100.0%		20.4	%
				Remaining life	2.5 - 11.5 years		8.2 years
Non-recurring fair value
Collateral-dependent loans	$	20,619	Discounted appraisals	Appraisal adjustments (2)	10.0% - 82.7%		39.7	%
Foreclosed assets	$	6,877	Discounted appraisals	Appraisal adjustments (2)	10.0	%	10.0	%
Equity security investment with a non-readily determinable fair value	$	2,101	Market Approach	Revenue Multiple	3.75		N/A


(1)			Weighted averages are determined by the relative fair value of the instruments or the relative contribution to the instruments fair value.
(2)			Appraisals may be adjusted by management for customized discounting criteria, estimated sales costs, and other qualitative adjustments.

Schedule of Carrying Amount and Estimated Fair Value of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value on a recurring or non-recurring basis are as follows:


March 31, 2026	Carrying Amount		Quoted Price In Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Financial assets
Cash and due from banks	$	816,135	$	816,135	$	—	$	—	$	816,135

Certificates of deposit with other banks	250		250		—		—		250
Loans held for sale	435,313		—		—		460,878		460,878
Loans and leases held for investment, net of allowance for credit losses on loans and leases	11,719,997		—		—		11,548,151		11,548,151
Financial liabilities
Deposits	13,835,058		—		13,181,865		—		13,181,865
Borrowings	99,746		—		—		107,267		107,267


December 31, 2025	Carrying Amount		Quoted Price In Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value
Financial assets
Cash and due from banks	$	864,904	$	864,904	$	—	$	—	$	864,904

Certificates of deposit with other banks	250		250		—		—		250
Loans held for sale	420,055		—		—		440,928		440,928
Loans and leases held for investment, net of allowance for credit losses on loans and leases	11,520,733		—		—		11,329,479		11,329,479
Financial liabilities
Deposits	13,688,659		—		13,096,941		—		13,096,941
Borrowings	102,404		—		—		110,782		110,782

- 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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