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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

Schedule of Fair Value Option Disclosures

The table below shows the income statement impact for these fair value adjustments for the three months ended March 31, 2025 and 2024.


(dollars in thousands)	For the Three Months Ended March 31,
	2025		2024
Loans	$	2,962	$	148
Loans held for sale	1,810		(781)

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present information about the Company’s assets measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024 and the valuation techniques used by the Company to determine those fair values (dollars in thousands).


	Fair Value on a Recurring Basis at March 31, 2025
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31
Financial Assets:
Equity securities	$	1,325	$	—	$	—	$	1,325
Available for sale debt securities	—		—		8,594		8,594
Mortgage banking assets:
Loans held for sale	—		207,633		—		207,633
Loans held for Investment	—		174,348		—		174,348
Interest rate lock commitments	—		—		4,550		4,550
Forward sales commitments	—		31		—		31
Mortgage servicing rights	—		—		15,492		15,492
Lender risk account	—		—		29,037		29,037
Financial Liabilities:
Interest rate lock commitments	—		—		—		—
Forward sales commitments	—		774		—		774


	Fair Value on a Recurring Basis at December 31, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at December 31
Financial Assets:
Equity securities	$	1,305	$	—	$	—	$	1,305
Available for sale debt securities	—		—		8,576		8,576
Mortgage banking assets:
Loans held for sale	—		217,073		—		217,073
Loans held for investment	—		172,960		—		172,960
Interest rate lock commitments	—		—		2,064		2,064
Forward sales commitments	—		1,332		—		1,332
Mortgage servicing rights	—		—		15,133		15,133
Lender risk account	—		—		28,436		28,436
Financial Liabilities:
Interest rate lock commitments	—		—		17		17
Forward sales commitments	—		131		—		131

Schedule of Lender Risk Account

The following table presents a reconciliation of the Level 3 available for sale debt securities measured at fair value on a recurring basis for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	For the Three Months Ended March 31,
	2025		2024
Balance at beginning of period	$	8,576	$	8,923



Unrealized	18		40
Balance at end of period	$	8,594	$	8,963

The following table presents a reconciliation of the Level 3 lender risk account measured at fair value on a recurring basis for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	For the Three Months Ended March 31,
	2025		2024
Beginning of period	$	28,436	$	31,694
Due to loan sales	400		210
Releases and claims paid to the Company	(628)		(2,320)
Change in fair value recognized in gain on sale of loans	829		(203)
End of period	$	29,037	$	29,381

Schedule of Reconciliation of Interest Rate Lock

The following table presents a reconciliation of the Level 3 interest rate lock commitments measured at fair value on a recurring basis for the three months ended March 31, 2025 and 2024 (dollars in thousands):


	For the Three Months Ended March 31,
	2025		2024
Balance at beginning of period	$	2,047	$	2,948
Change in fair value	2,503		745
Balance at end of period	$	4,550	$	3,693

Schedule of Significant Assumptions Used

The following is a summary of the key unobservable inputs used in the valuation of the Level 3 interest rate lock commitments:


	For the Three Months Ended March 31,
	2025		2024
Pull-through rate	82.2	%	84.8	%

The Company estimates the fair value of the lender risk account using management’s best estimate of key assumptions. These assumptions include prepayment rates, discount rates, and projected annual losses on unpaid principal of the sold loan portfolio. The weighted average of unobservable inputs for these valuation assumptions is as follows as of the dates indicated (dollars in thousands):


	Fair Value		Valuation Technique	Unobservable Inputs	Range of Inputs		Weighted Average
Assets:
March 31, 2025
Lender Risk Account	$	29,037	Present value of	Credit losses	—% -0.21%		0.09	%
			cash flows	Prepayment rates	6.60	%	6.60	%
				Discount rates	5.86% - 6.70%		5.96	%
December 31, 2024
Lender Risk Account	$	28,436	Present value of	Credit losses	—% - 0.10%		0.08	%
			cash flows	Prepayment rates	11.97	%	11.97	%
				Discount rates	5.70% -6.65%		6.39	%

Schedule of Nonrecurring Fair Value Measurements

The following asset classes were measured at fair value on the accompanying consolidated balance sheets as of the dates indicated due to declines in the fair value. Certain individually analyzed loans and other real estate carried at original cost, which exceeds fair value, have been omitted from the disclosure below (dollars in thousands):


	Assets Measured at Fair Value on a Nonrecurring Basis at March 31, 2025
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Balance at December 31
Individually analyzed loans	—	—	$	5,257	$	5,257
Other real estate owned	—	—	378		378


	Assets Measured at Fair Value on a Nonrecurring Basis at December 31, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Balance at December 31
Individually analyzed loans	—	—	$	6,603	$	6,603
Other real estate owned	—	—	1,651		1,651

Schedule of Fair Value by Balance Sheet Grouping

The following presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which fair value measurements falls as of the dates indicated (dollars in thousands):


	March 31, 2025
	Fair Value Hierarchy	Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	Level 1	$	321,499	$	321,499
Equity securities	Level 1	1,325		1,325
Debt securities available for sale	Level 3	8,594		8,594
FHLB stock	Level 2	69,574		69,574
Loans held for sale	Level 2	207,633		207,633
Loans, net	Level 2	5,134,855		5,028,414
Interest receivable	Level 2	21,274		21,274
Financial Liabilities:
Deposits	Level 2	3,822,622		3,828,609
Borrowings	Level 2	1,371,158		1,362,641
Subordinated debentures	Level 2	24,159		24,159
Subordinated debentures issued through trusts	Level 2	5,000		5,000
Interest payable	Level 2	15,154		15,154


	December 31, 2024
	Fair Value Hierarchy	Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	Level 1	$	376,295	$	376,295
Equity securities	Level 1	1,305		1,305
Debt securities available for sale	Level 3	8,576		8,576
FHLB stock	Level 2	69,574		69,574
Loans held for sale	Level 2	217,073		217,073
Loans, net	Level 2	4,416,564		4,312,773
Interest receivable	Level 2	20,934		20,934
Financial Liabilities:
Deposits	Level 2	3,422,555		3,423,196
Borrowings	Level 2	1,258,750		1,232,310
Subordinated debentures	Level 2	38,933		38,933
Subordinated debentures issued through trusts	Level 2	5,000		5,000
Interest payable	Level 2	8,114		8,114

- 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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