v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value is the exchange price that would be received to sell the asset or paid to transfer the 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.
Fair value measurement establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 — Quoted prices for similar assets or liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
The following tables present assets and liabilities carried at fair value and the basis of measurement used at the periods presented:
June 30, 2026
(In thousands)BasisLevel 1Level 2Level 3Total
Assets
Equity securities with readily determinable fair valuesRecurring$938 $— $— $938 
AFS Investment Securities:
U.S. Government and agencies— 53,099 — 53,099 
Collateralized mortgage obligations— 92,019 — 92,019 
Residential mortgage-backed securities— 165,859 — 165,859 
Commercial mortgage-backed securities— 116,748 — 116,748 
State and municipal— 10,522 — 10,522 
Corporate bonds— 27,969 — 27,969 
Total AFS Investment SecuritiesRecurring$— $466,216 $— $466,216 
Loans held for saleRecurring— 33,528 — 33,528 
Derivative financial instruments - assetsRecurring— 5,977 — 5,977 
Individually evaluated loansNon-recurring— — 243 243 
Foreclosed assets held for resaleNon-recurring— — 569 569 
Liabilities
Derivative financial instruments - liabilitiesRecurring$— $4,079 $— $4,079 
December 31, 2025
(In thousands)BasisLevel 1Level 2Level 3Total
Assets
Equity securities with readily determinable fair valuesRecurring$949 $— $— $949 
AFS Investment Securities:
U.S. Government and agencies— 59,352 — 59,352 
Collateralized mortgage obligations— 74,030 — 74,030 
Residential mortgage-backed securities— 173,688 — 173,688 
Commercial mortgage-backed securities— 122,209 — 122,209 
State and municipal— 8,450 — 8,450 
Corporate bonds— 29,165 — 29,165 
Total AFS Investment SecuritiesRecurring$— $466,894 $— $466,894 
Loans held for saleRecurring— 28,170 — 28,170 
Derivative financial instruments - assetsRecurring— 5,159 — 5,159 
Individually evaluated loansNon-recurring— — 550 550 
Foreclosed assets held for resaleNon-recurring— — 19 19 
Liabilities
Derivative financial instruments - liabilitiesRecurring$— $3,816 $— $3,816 
The valuation techniques used to measure fair value for the items in the preceding tables are as follows:
Equity securities — The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Statements of Condition, with realized and unrealized gains and losses reported in noninterest income on the Consolidated Statements of Income. They are classified as Level 1 assets.
Available for sale investment securities — Included in this asset category are debt and pass through securities. Level 2 investment securities are valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate available market information, including quoted prices of investment securities with similar characteristics. Because many fixed income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing. Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data, including market research publications. For certain security types, additional inputs may be used, or some of the standard market inputs may not be applicable.
•     U.S. Government and agencies — Fair values are determined by a third-party pricing service, as detailed above. These debt securities are classified as Level 2.
•     Collateralized mortgage obligations, Mortgage-backed securities and State and Municipal securities — Fair values are determined by a third-party pricing service, as detailed above. These debt securities are classified as Level 2.
•     Corporate bonds — This category consists of subordinated and senior debt issued by financial institutions and the fair values for these corporate debt securities are determined by a third-party pricing service, as detailed above. They are classified as Level 2 investments.
Loans held for sale — This category includes mortgage loans HFS that are measured at fair value utilizing Level 2 measurements. Fair values are measured as the price that secondary market investors were offering for loans with similar characteristics.
Derivative financial instruments — Derivative financial instruments include interest rate lock commitments, forward commitments and interest rate derivatives. The fair value of interest rate lock commitments is derived from the value of the underlying loans, adjusted for changes in market interest rates relative to the committed rate. The fair value of forward commitments is based on quoted prices for mortgage-backed securities with similar characteristics. The fair value of interest rate derivatives and risk participations is based upon broker quotes. The fair value of both the assets and the related liabilities are determined in the same manner and are all classified as Level 2 assets.
Individually evaluated loans — This category consists of loans that were individually evaluated for impairment and have a specific reserve. They are classified as Level 3 assets.
Foreclosed assets held for resale — This category consists of foreclosed assets that are held for resale and classified as Level 3 assets, for which the fair values were based on estimated selling prices less estimated selling costs for similar assets in active markets.
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis for which the Corporation has utilized Level 3 inputs to determine fair value:
(Dollars in thousands)Fair Value Estimate
Valuation Technique 1
Unobservable Input 2
RangeWeighted Average
June 30, 2026
Individually evaluated loans$243 Appraisal of collateral Appraisal adjustments
26% – 100%
84%
Foreclosed assets held for resale569 Appraisal of collateralAppraisal adjustments
27%
27%
December 31, 2025
Individually evaluated loans$550 Appraisal of collateralAppraisal adjustments
16% – 100%
43%
Foreclosed assets held for resale19 Appraisal of collateralAppraisal adjustments
3%
3%
__________________________________________________________________
1Fair value is generally determined through management’s estimate or independent third-party appraisals of the underlying collateral, which generally
includes various Level 3 inputs which are not observable.
2Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percentage of the appraisal. Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received and/or age of the appraisal.
Management uses its best judgment in estimating the fair value of the Corporation’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Corporation could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective reporting dates and have not been reevaluated or updated for purposes of these Consolidated Financial Statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period end. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Corporation’s disclosures and those of other companies may not be meaningful.
FHLB and Atlantic Community Banker’s Bank stock represent restricted investments and are carried at cost less any impairment on the Consolidated Statement of Condition, which is a reasonable estimate of fair value. There was no impairment identified as of June 30, 2026 or December 31, 2025.
The following tables present the carrying amount and the estimated fair value of the Corporation’s financial instruments:
June 30, 2026
Carrying AmountEstimated Fair Value
(In thousands)TotalLevel 1Level 2Level 3
Financial assets:
Cash and due from banks$27,995 $27,995 $27,995 $— $— 
Interest-bearing deposits with banks53,840 53,840 53,840 — — 
Equity securities with readily determinable fair values938 938 938 — — 
Investment securities AFS466,216 466,216 — 466,216 — 
Investment securities HTM62,620 56,576 — 56,576 — 
Loans held for sale33,528 33,528 — 33,528 — 
Loans, net2,374,098 2,375,817 — — 2,375,817 
Accrued interest receivable10,920 10,920 — 10,920 — 
Derivative assets5,977 5,977 — 5,977 — 
Financial liabilities:
Demand deposits, savings and money markets$2,054,781 $2,054,781 $— $2,054,781 $— 
Time deposits480,895 474,689 — 474,689 — 
Securities sold under repurchase agreements13,888 13,888 — 13,888 — 
Federal funds purchased4,371 4,371 — 4,371 — 
FHLB Advances285,000 285,700 — 285,700 — 
Trust preferred and subordinated debt19,884 20,301 — 20,301 — 
Accrued interest payable1,996 1,996 — 1,996 — 
Derivative liabilities4,079 4,079 — 4,079 — 
December 31, 2025
Carrying AmountEstimated Fair Value
(In thousands)TotalLevel 1Level 2Level 3
Financial assets:
Cash and due from banks$20,611 $20,611 $20,611 $— $— 
Interest-bearing deposits with banks45,037 45,037 45,037 — — 
Equity securities with readily determinable fair values949 949 949 — — 
Investment securities AFS466,894 466,894 — 466,894 — 
Investment securities HTM63,288 57,537 — 57,537 — 
Loans held for sale28,170 28,170 — 28,170 — 
Loans, net2,306,842 2,294,388 — — 2,294,388 
Accrued interest receivable10,950 10,950 — 10,950 — 
Derivative assets5,159 5,159 — 5,159 — 
Financial liabilities:
Demand deposits, savings and money markets$1,997,256 $1,997,256 $— $1,997,256 $— 
Time deposits452,929 448,051 — 448,051 — 
Securities sold under repurchase agreements16,129 16,129 — 16,129 — 
Federal funds purchased3,611 3,611 — 3,611 — 
FHLB Advances280,000 282,910 — 282,910 — 
Trust preferred and subordinated debt20,376 19,626 — 19,626 — 
Accrued interest payable2,186 2,186 — 2,186 — 
Derivative liabilities3,816 3,816 — 3,816 —