v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The following tables present estimated fair values of the Company’s financial instruments as of the period indicated, whether or not recognized or recorded in the consolidated balance sheets at the period indicated:
March 31, 2026Fair Value Measurements Using
Carrying
Value		Estimated
Fair Value		Level 1Level 2Level 3
(dollars in thousands; unaudited)
Financial assets
Cash and due from banks$52,695 $52,695 $52,695 $— $— 
Interest earning deposits with other banks1,442,772 1,442,772 1,442,772 — — 
Investment securities46,169 46,411 — 46,411 — 
Other investments14,023 14,023 — 12,202 1,821 
Loans held for sale124,039 124,039 — 124,039 
Loans receivable3,859,379 3,738,084 — — 3,738,084 
Accrued interest receivable20,139 20,139 — 20,139 — 
Financial liabilities
Deposits$5,041,164 5,018,459 $— $5,018,459 $— 
Subordinated debt44,480 44,167 — 44,167 — 
Junior subordinated debentures3,594 3,633 — 3,633 — 
Accrued interest payable2,665 2,665 — 2,665 — 
December 31, 2025Fair Value Measurements Using
Carrying
Value		Estimated
Fair Value		Level 1Level 2Level 3
(dollars in thousands; unaudited)
Financial assets
Cash and due from banks$34,241 $34,241 $34,241 $— $— 
Interest earning deposits with other banks702,729 702,729 702,729 — — 
Investment securities48,247 48,742 — 48,742 — 
Other investments12,837 12,837 — 10,666 2,171 
Loans held for sale71,216 71,216 — 71,216 
Loans receivable, net3,749,531 3,738,084 — — 3,738,084 
Accrued interest receivable18,613 18,613 — 18,613 — 
Financial liabilities     
Deposits$4,144,199 $4,130,842 $— $4,130,842 $— 
Subordinated debt44,443 44,132 — 44,132 — 
Junior subordinated debentures3,593 3,719 — 3,719 — 
Accrued interest payable1,435 1,435 — 1,435 — 
The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). GAAP establishes a consistent framework for measuring fair value and disclosure requirements about fair value measurements. Among other things, the accounting standard requires the reporting entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions. These two types of inputs create the following fair value hierarchy:
•Level 1 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available.
•Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data.
•Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation; also includes observable inputs from nonbinding single dealer quotes not corroborated by observable market data.
The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for certain financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values.
Items measured at fair value on a recurring basis – The following fair value hierarchy table presents information about the Company’s assets that are measured at fair value on a recurring basis at the dates indicated:
Level 1Level 2Level 3Total
Fair Value
(dollars in thousands; unaudited)
March 31, 2026
Available-for-sale
U.S. Agency collateralized mortgage obligations$— $28 $— $28 
$— $28 $— $28 
December 31, 2025
Available-for-sale
U.S. Agency collateralized mortgage obligations$— $29 $— $29 
$— $29 $— $29 
The following methods were used to estimate the fair value of the class of financial instruments above:
Investment securities - The fair value of securities is based on quoted market prices, pricing models, quoted prices of similar securities, independent pricing sources, and discounted cash flows.
Limitations: The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2026 and December 31, 2025. The factors used in the fair values estimates are subject to change subsequent to the dates the fair value estimates are completed, therefore, current estimates of fair value may differ significantly from the amounts presented herein.
Items measured at Level 3 fair value on a nonrecurring basis – The following table presents financial assets and liabilities measured at fair value on a nonrecurring basis that are classified within Level 3 of the fair value hierarchy at the dates indicated:
Level 1Level 2Level 3Total
Fair Value
(dollars in thousands; unaudited)
March 31, 2026
Collateral dependent loans$— $— $— $— 
Equity securities$— $— $1,821 $1,821 
Total$— $— $1,821 $1,821 
December 31, 2025
Collateral dependent loans$— $— $97 $97 
Equity securities— — 2,171 2,171 
Total$— $— $2,268 $2,268 
The amounts disclosed above represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported on.
Collateral dependent loans - Fair values for individually evaluated collateral dependent loans are estimated using the fair value of the collateral less selling costs if the loan results in a Level 3 classification. Individually evaluated loan amounts are initially valued at the lower of cost or fair value. Individually evaluated loans carried at fair value generally receive specific allocations of the allowance for credit losses. For collateral dependent real estate loans, fair value is commonly based on recent real estate appraisals. 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 the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically 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 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, resulting in a Level 3 fair value classification. Individually evaluated loans are evaluated on a quarterly basis for additional credit losses and adjusted accordingly. The estimated fair values of financial instruments disclosed above follow the guidance in ASU 2016-01 which prescribes an “exit price” approach in estimating and disclosing fair value of financial instruments incorporating discounts for credit, liquidity, and marketability factors. Valuation is measured based on the fair value of the underlying collateral or the discounted cash expected future cash flows. Subsequent changes in the value of loans are included within the provision for credit losses on loans in the same manner in which it initially was recognized or as a reduction in the provision that would otherwise be reported. Loans are evaluated quarterly to determine if valuation adjustments should be recorded. The need for valuation adjustments arises when observable market prices or current appraised values of collateral indicate a shortfall in collateral value compared to current carrying values of the related loan. If the Company determines that the value of the individually evaluated loan is less than the carrying value of the loan, the Company either establishes a reserve as a specific component of the allowance for credit losses or charges off that amount. These valuation adjustments are considered nonrecurring fair value adjustments.
Equity securities – The Company measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with price changes recognized in earnings.
Equity securities without readily determinable fair values
The following table presents the carrying value of equity securities without readily determinable fair values, as of March 31, 2026, with adjustments recorded during the periods presented for those securities with observable price changes, if applicable. These equity securities are included in other investments on the balance sheet.
•The Company had a $1.8 million and $2.2 million equity interest in a specialized bank technology company as of the quarters ended March 31, 2026 and 2025, respectively.
•The Company had a $350,000 equity interest in a technology company as of the quarters ended March 31, 2026 and 2025.
•The Company had a $500,000 equity interest in financial technology company as of the quarter ended March 31, 2026. This was a new equity investment, so there was no equity interest at March 31, 2025.
•The Company had a $42,000 and $47,000 equity interest in a technology company as of the quarters ended March 31, 2026 and 2025, respectively.
For the Three Months Ended
March 31,
(dollars in thousands; unaudited)20262025
Carrying value, beginning of period$2,171 $2,619 
Purchases500 — 
Observable price change— — 
Carrying value, end of period$2,671 $2,619 
The following table provides a description of the valuation technique, unobservable inputs, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a nonrecurring basis at the date indicated:
(unaudited)Valuation TechniqueUnobservable Inputs
March 31, 2026
Weighted
Average Rate
December 31, 2025
Weighted
Average Rate
Collateral dependent loansCollateral valuationsDiscount to appraised value8.3%8.1%