v3.26.3
FAIR VALUE
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
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 as of the measurement date.  There are three levels of inputs that may be used to measure fair value:

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 reporting entity's own assumptions about the assumptions market participants would use in pricing an asset or liability.

The Corporation used the following methods and significant assumptions to estimate fair value:

Available for Sale Securities:  The fair values of securities available for sale are usually determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or matrix pricing, which is a mathematical technique widely used 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). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3 inputs).

Equity Investments: Securities that are held to fund a non-qualified deferred compensation plan and securities that have a readily determinable fair market value are recorded with changes in fair value included in earnings. The fair values of equity investments are determined by quoted market prices (Level 1 inputs).

Collateral-Dependent Loans: Collateral-dependent individually analyzed loans for which a specific allocation is recorded as part of the allowance for credit losses or which have been partially charged off are measured at fair value on a nonrecurring basis. For collateral-dependent loans, fair value is commonly based on 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 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 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, typically resulting in the utilization of Level 3 inputs. These loans are analyzed on a quarterly basis for additional credit losses and adjusted accordingly.

Other Real Estate Owned (OREO) & Repossessed Vehicles: Assets acquired through or in lieu of loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. 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 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. Subsequent declines in fair value are recorded through the establishment of a valuation allowance, which may be reversed should fair value increase after the establishment of the valuation allowance.

Appraisals for both collateral-dependent individually analyzed loans and OREO are performed by certified general appraisers (commercial properties) or certified residential appraisers (residential properties) whose qualifications and licenses have been reviewed and verified by the Corporation. Once received, appraisals are reviewed for reasonableness of assumptions, approaches utilized, Uniform Standards of Professional Appraisal Practice and other regulatory compliance, as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are generally completed within the 12 month period prior to a property being placed into OREO and updated appraisals are typically completed for collateral-dependent loans when management determines analysis on an individual basis is required. For individually analyzed loans, appraisal values are adjusted based on the age of the appraisal, the position of the lien, the type of the property, and its condition.
The fair value of repossessed vehicles is estimated based on expected net liquidation proceeds on the sale of vehicles using an internally developed recovery rate, typically resulting in a Level 3 classification of inputs. The estimated recovery rate is applied to the then outstanding loan balance at the point of repossession and transfer to bank-owned assets, and is based primarily upon the Corporation's recent historical loss experience for similar repossessed vehicle loans.

Derivatives: The fair value of interest rate swaps is based on valuation models using observable market data as of the measurement date (Level 2 inputs). Derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair value of derivatives is determined using quantitative models utilizing multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices, and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty's nonperformance risk in fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation has considered the impact of any applicable credit enhancements, such as collateral postings. Although the Corporation has determined the majority of inputs used to value its derivatives are considered Level 2 inputs, credit valuation adjustments are based on credit default rate assumptions, which are considered Level 3 inputs. As of September 30, 2026, the Corporation evaluated the effect of credit valuation adjustments on the fair value of its derivative positions, and determined their impact was not significant; accordingly, the Corporation classifies the entirety of its derivative valuations within Level 2 of the hierarchy.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
Fair Value Measurement as of September 30, 2026 Using
Financial Assets:Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
  Mortgage-backed securities, residential$223,481 $— $223,481 $— 
  Collateralized mortgage obligations7,297 — 7,297 — 
  Obligations of states and political subdivisions8,932 — 8,932 — 
  Corporate bonds and notes13,719 — 10,619 3,100 
  Total available for sale securities$253,429 $— $250,329 $3,100 
  Equity investments, at fair value$3,668 $3,668 $— $— 
  Derivative assets$27,918 $— $27,918 $— 
Financial Liabilities:
  Derivative liabilities$27,980 $— $27,980 $— 
Fair Value Measurement as of December 31, 2025 Using
Financial Assets:Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
  Mortgage-backed securities, residential$250,375 $— $250,375 $— 
  Collateralized mortgage obligations2,931 — 2,931 — 
  Obligations of states and political subdivisions10,310 — 10,310 — 
  Corporate bonds and notes16,982 — 12,620 4,362 
  Total available for sale securities$280,598 $— $276,236 $4,362 
  Equity investments, at fair value$3,288 $3,288 $— $— 
  Derivative assets$17,280 $— $17,280 $— 
Financial Liabilities:
  Derivative liabilities$17,412 $— $17,412 $— 

The Corporation transfers assets and liabilities between levels within the fair value inputs hierarchy when methodologies to obtain fair value change such that there are either more or fewer unobservable inputs as of the end of the indicated reporting period. The Corporation utilizes a beginning of reporting period timing assumption when recognizing transfers between hierarchy levels, consistent with ASC 820-10-50-2.
There were no transfers between Level 1 and Level 2 during the three and nine month periods ended September 30, 2026 and 2025.
There were no transfers between Level 2 and Level 3 during the three and nine month periods ended September 30, 2026 or the three month period ended September 30, 2025. During the nine month period ended September 30, 2025, the Corporation transferred seven corporate subordinated debt issuances from Level 2 to Level 3 during the first quarter due to the lack of observable market data for the issuances or similar issuances. During the second quarter of 2025, the Corporation transferred 13 corporate subordinated debt issuances, including those seven, from Level 3 to Level 2 due to improved availability of observable market data, attributable in part to greater issuance activity for comparable subordinated debt and improved market liquidity. Additionally, during the three and nine month periods ended September 30, 2026, $1.7 million in Level 3 corporate subordinated debt issuances were called, comprised of one partial redemption and one full redemption. During the nine month period ended September 30, 2025, one Level 3 corporate subordinated debt issuance totaling $1.0 million was redeemed by the issuer prior to its initial call date due to merger-related regulatory requirements.
The following tables present a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three and nine month periods ended September 30, 2026 and 2025, and qualitative information regarding Level 3 significant unobservable inputs as of September 30, 2026 and December 31, 2025 (in thousands):
For the Three
Months Ended 		For the Nine
Months Ended
Level 3 Financial Assets - Corporate bonds and notesSeptember 30, 2026September 30, 2025September 30, 2026September 30, 2025
Balance of recurring Level 3 assets as of beginning of period$4,467 $5,880 $4,362 $12,132 
Total gains or losses for the period:
     Included in other comprehensive income 300 189 405 1,083 
Repayments, calls, and maturities(1,667)— (1,667)(1,000)
Transfers into Level 3— — — 9,884 
Transfers out of Level 3— — — (16,030)
     Balance of recurring Level 3 assets as of end of period$3,100 $6,069 $3,100 $6,069 
September 30, 2026Fair ValueValuation TechniqueUnobservable InputRange [Weighted Average] as of September 30, 2026
Corporate bonds and notes$3,100 Discounted cash flowMarket discount rate
10.00% - 10.00%
[10.00%]

December 31, 2025Fair ValueValuation TechniqueUnobservable InputRange [Weighted Average] as of December 31, 2025
Corporate bonds and notes$4,362 Discounted cash flowMarket discount rate
10.00% - 10.00%
[10.00%]


Assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2026 and December 31, 2025 are summarized below (in thousands):
Fair Value Measurement as of September 30, 2026 Using
Financial Assets:Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Collateral-dependent loans:
Commercial real estate:
Non-owner occupied commercial real estate$294 $— $— $294 
Other real estate owned:
Commercial real estate:
Non-owner occupied commercial real estate$1,724 $— $— $1,724 
Residential mortgages171 — — 171 
Total other real estate owned, net$1,895 $— $— $1,895 
Repossessed vehicles$385 $— $— $385 

Fair Value Measurement as of December 31, 2025 Using
Financial Assets:Fair ValueQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Collateral-dependent loans:
Commercial real estate:
Non-owner occupied commercial real estate$945 $— $— $945 
Repossessed vehicles$257 $— $— $257 
The following tables present quantitative information regarding Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a nonrecurring basis as of September 30, 2026 and December 31, 2025 (in thousands):
DescriptionFair Value as of September 30, 2026Valuation TechniqueUnobservable InputsRange [Weighted Average] as of September 30, 2026
Collateral-dependent loans:
Commercial real estate:
Non-owner occupied commercial real estate$294 Sales comparisonAdjustment to appraised value
10.00% - 10.00%
[10.00%]
Other real estate owned:
Commercial real estate:
Non-owner occupied commercial real estate$374 Sales comparisonAdjustment to appraised value
10.00% - 10.00%
[10.00%]
Non-owner occupied commercial real estate1,350 Income approachAdjustment to appraised value
10.00% - 10.00%
[10.00%]
Residential mortgages171 Sales comparisonAdjustment to appraised value
20.80% - 20.80%
[20.80%]
Total other real estate owned, net$1,895 
Repossessed vehicles$385 Estimated liquidation valueEstimated recovery rate
50.00% - 50.00%
[50.00%]

DescriptionFair Value as of December 31, 2025Valuation TechniqueUnobservable InputsRange [Weighted Average] as of December 31, 2025
Collateral-dependent loans:
Commercial real estate:
Non-owner occupied commercial real estate$945 Income approachAdjustment to appraised value
10.00% - 10.00%
[10.00%]
Repossessed vehicles$257 Estimated liquidation valueEstimated recovery rate
50.00% - 50.00%
[50.00%]
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts and estimated fair values of financial instruments, as of September 30, 2026 and December 31, 2025, are as follows (in thousands):
September 30, 2026
Financial assets:Carrying AmountQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Estimated Fair Value (1)
Cash and due from financial institutions$32,928 $32,928 $— $— $32,928 
Interest-earning deposits in other financial institutions38,911 38,911 — — 38,911 
Equity investments3,668 3,668 — — 3,668 
Securities available for sale253,429 — 250,329 3,100 253,429 
Securities held to maturity1,560 — — 1,560 1,560 
FHLBNY and FRBNY stock9,554 — — — N/A
Loans, net of deferred loan fees, and loans held for sale2,403,470 — — 2,315,286 2,315,286 
Derivative assets27,918 — 27,918 — 27,918 
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits$1,945,382 $1,945,382 $— $— $1,945,382 
Time deposits439,867 — 440,636 — 440,636 
FHLBNY advances85,000 — 84,996 — 84,996 
Subordinated debt, net of deferred issuance costs44,105 — 46,383 — 46,383 
Derivative liabilities27,980 — 27,980 — 27,980 
(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
December 31, 2025
Financial assets:Carrying AmountQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Estimated Fair Value (1)
   Cash and due from financial institutions$22,772 $22,772 $— $— $22,772 
   Interest-earning deposits in other financial institutions27,325 27,325 — — 27,325 
   Equity investments3,765 3,765 — — 3,765 
   Securities available for sale280,598 — 276,236 4,362 280,598 
   Securities held to maturity640 — — 640 640 
   FHLBNY and FRBNY stock9,466 — — — N/A
Loans, net of deferred loan fees, and loans held for sale2,271,663 — — 2,209,059 2,209,059 
   Derivative assets17,280 — 17,280 — 17,280 
Financial liabilities:
   Deposits:
      Demand, savings, and insured money market deposits$1,807,058 $1,807,058 $— $— $1,807,058 
      Time deposits463,616 — 464,144 — 464,144 
FHLBNY overnight advances87,110 — 87,126 — 87,126 
Subordinated debt, net of issuance costs44,028 — 46,350 — 46,350 
Derivative liabilities17,412 — 17,412 — 17,412 
(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.