Fair Value (Tables)

9 Months Ended

Sep. 30, 2025

Schedule of Financial Instruments Measured at Fair Value on a Recurring Basis

The Company has categorized its financial instruments measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 as follows:


(in thousands)
September 30, 2025	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investment securities available-for-sale
U.S. Treasuries	$	136,541	$	136,541	$	—	$	—

Municipal	13,779		—		13,779		—
Corporate	4,792		—		4,792		—
Asset-backed securities	5,208		—		5,208		—
Mortgage-backed securities	72,320		—		72,320		—
Total	$	232,640	$	136,541	$	96,099	$	—

Loans held for sale	$	19,679	$	—	$	19,679	$	—
Loan servicing assets	$	2,070	$	—	$	2,070	$	—




December 31, 2024
Investment securities available-for-sale
U.S. Treasuries	$	126,835	$	126,835	$	—	$	—

Municipal	9,283		—		9,283		—
Corporate	4,711		—		4,711		—
Asset-backed securities	5,526		—		5,526		—
Mortgage-backed securities	77,275		—		77,275		—
Total	$	223,630	$	126,835	$	96,795	$	—

Loans held for sale	$	21,270	$	—	$	21,270	$	—
Loan servicing assets	$	5,511	$	—	$	5,511	$	—

Schedule of Fair Value of Loans Held for Sale

The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity:


Fair Value of Loans Held for Sale
(in thousands)	September 30, 2025		December 31, 2024
Aggregate fair value	$	19,679	$	21,270
Contractual principal	13,779		16,721
Difference	$	5,900	$	4,549

Schedule of Financial Instruments Measured at Fair Value on a Nonrecurring Basis

The Company has categorized its financial instruments measured at fair value on a nonrecurring basis as of September 30, 2025 and December 31, 2024 as follows:



(in thousands)	September 30, 2025		December 31, 2024
Individually evaluated loans for credit loss, net


Level 3 inputs	$	34,104	$	25,521

Foreclosed real estate
Level 3 inputs	1,377		—

Total	$	35,481	$	25,521

Schedule of Unobservable Inputs in Fair Value Measurements

The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2025 and December 31, 2024:

Unobservable Inputs

Valuation Technique

Unobservable Inputs

Range of Inputs

September 30, 2025

Individually evaluated loans

Appraised Value/Discounted Cash Flows

Discounts to appraisals or cash flows for estimated holding and/or selling costs

0 to 30% 1

Foreclosed real estate

Appraised Value

Discounts to appraisals for estimated holding and/or selling costs

0 to 30%

December 31, 2024

Valuation Technique

Unobservable Inputs

Range of Inputs

Individually evaluated loans

Appraised Value/Discounted Cash Flows

Discounts to appraisals or cash flows for estimated holding and/or selling costs

0 to 30%

(1)A discount rate of 63.4% was used for the acquired PCD loan that was evaluated as a measurement period adjustment to the Day-1 purchase accounting. All other individually evaluated loans used a range of 0 to 30%.

Schedule of Carrying Amount, Fair Value and Fair Value Hierarchy of Financial Instruments

The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments.


	September 30, 2025				December 31, 2024
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Level 1
Cash and due from banks	$	25,724	$	25,724	$	25,433	$	25,433
Interest-bearing deposits at other financial institutions	163,078		163,078		179,841		179,841

Federal funds sold	59		59		58		58
Level 2
Accrued interest receivable	$	19,011	$	19,011	$	16,664	$	16,664
Level 3

Portfolio loans receivable, net	$	2,768,938	$	2,709,594	$	2,581,511	$	2,499,578

Restricted investments	7,057		7,057		4,479		4,479
Foreclosed real estate	1,377		1,377		—		—

Financial liabilities
Level 1
Noninterest-bearing deposits	$	857,543	$	857,543	$	810,928	$	810,928

Level 2
Accrued interest payable	$	8,045	$	8,045	$	9,393	$	9,393
Level 3
Interest-bearing deposits	$	2,054,510	$	2,056,540	$	1,951,011	$	1,960,728
FHLB advances and other borrowed funds	34,062		34,029		34,062		32,372

Capital Bancorp Inc 10-Q