Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2025

Fair Value Measurements, Recurring and Nonrecurring

Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:


			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
June 30, 2025:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	8,647	$	—	$	8,647	$	—
U.S. agency residential mortgage-backed	71,796		—		71,796		—
U.S. agency commercial mortgage-backed	11,166		—		11,166		—
Private label mortgage-backed	44,929		—		44,929		—
Other asset backed	33,917		—		33,917		—
Obligations of states and political subdivisions	276,746		—		276,746		—
Corporate	61,333		—		61,333		—
Trust preferred	977		—		977		—
Loans held for sale, carried at fair value	12,492		—		12,492		—
Capitalized mortgage loan servicing rights	32,053		—		—		32,053
Derivatives (1)	34,191		—		34,191		—
Liabilities
Derivatives (2)	20,754		—		20,754		—

Measured at Fair Value on a Non-recurring Basis:
Assets
Collateral dependent loans (3)
Commercial
Commercial and industrial	3,702		—		—		3,702
Commercial real estate	12,627		—		—		12,627
Mortgage
1-4 family owner occupied - non-jumbo	601		—		—		601
1-4 family non-owner occupied	61		—		—		61
1-4 family - 2nd lien	194		—		—		194
Resort lending	37		—		—		37
Installment
Boat lending	431		—		—		431
Recreational vehicle lending	125		—		—		125
Other	23		—		—		23

________________________________

(1)Included in accrued income and other assets

(2)Included in accrued expenses and other liabilities

(3)Only includes individually evaluated loans with specific allocations of the ACL based on collateral value.


			Fair Value Measurements Using
	Fair Value Measure- ments		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Un- observable Inputs (Level 3)
	(In thousands)
December 31, 2024:
Measured at Fair Value on a Recurring Basis
Assets
Securities available for sale
U.S. agency	$	8,159	$	—	$	8,159	$	—
U.S. agency residential mortgage-backed	71,137		—		71,137		—
U.S. agency commercial mortgage-backed	11,641		—		11,641		—
Private label mortgage-backed	70,035		—		70,035		—
Other asset backed	38,516		—		38,516		—
Obligations of states and political subdivisions	288,791		—		288,791		—
Corporate	69,921		—		69,921		—
Trust preferred	982		—		982		—
Loans held for sale, carried at fair value	7,643		—		7,643		—
Capitalized mortgage loan servicing rights	46,796		—		—		46,796
Derivatives (1)	37,059		—		37,059		—
Liabilities
Derivatives (2)	18,623		—		18,623		—

Measured at Fair Value on a Non-recurring Basis:
Assets

Collateral dependent loans (3)
Commercial
Commercial and industrial	4,205		—		—		4,205
Commercial real estate	132		—		—		132
Mortgage
1-4 family owner occupied - non-jumbo	627		—		—		627

1-4 family - 2nd lien	170		—		—		170
Resort lending	92		—		—		92
Installment
Boat lending	56		—		—		56
Recreational vehicle lending	172		—		—		172
Other	59		—		—		59

_________________________________

(1)Included in accrued income and other assets

(2)Included in accrued expenses and other liabilities

(3)Only includes individually evaluated loans with specific allocations of the ACL based on collateral value.

Fair Value Option, Disclosures

Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:


	Changes in Fair Values for the Six Month Periods Ended June 30 for items Measured at Fair Value Pursuant to Election of the Fair Value Option
	Net Gains (losses) on Assets		Mortgage Loan Servicing, net		Total Change in Fair Values Included in Current Period Earnings
	Mortgage Loans
	(In thousands)
2025
Loans held for sale	$	120	$	—	$	120
Capitalized mortgage loan servicing rights	—		(3,505)		(3,505)

2024
Loans held for sale	160		—		160
Capitalized mortgage loan servicing rights	—		383		383

Reconciliation for all Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3)

A reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:


	Capitalized Mortgage Loan Servicing Rights
	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(In thousands)				(In thousands)
Beginning balance	$	32,171	$	43,577	$	46,796	$	42,243
Total gains (losses) realized and unrealized:
Included in results of operations	(1,081)		(123)		(3,505)		383
Included in results of operations - gain on sale(1)	(78)		—		(172)		—
Included in other comprehensive loss	—		—		—		—
Purchases, issuances, settlements, maturities and calls	963		952		1,818		1,780
Sales(1)	78		—		(12,884)		—
Transfers in and/or out of Level 3	—		—		—		—
Ending balance	$	32,053	$	44,406	$	32,053	$	44,406

Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30	$	(1,081)	$	(123)	$	(3,505)	$	383

(1) On January 31, 2025 we sold $931.6 million of mortgage loan servicing rights (26.3% of total servicing portfolio) and transferred the servicing on March 3, 2025. This sale represented approximately $13.1 million (27.9%) of the total capitalized mortgage loan servicing right asset. While there remains a customary hold back of final settlement funds of approximately $0.7 million relating to this transaction, we are not aware of any issues that will have a material impact on this final payment. While we have a target date of the fourth quarter, 2025, we have until the first quarter, 2026 to receive this final payment. Transaction expenses relating to this sale were approximately $0.2 million and was expensed during the first six months of 2025.

Fair Value Measurement Inputs and Valuation Techniques (Level 3)

Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:


	Asset Fair Value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
	(In thousands)
June 30, 2025
Capitalized mortgage loan servicing rights	$	32,053	Present value of net servicing revenue	Discount rate	9.50% to 18.34%		9.95		%
				Cost to service	$68 to $817		$	80
				Ancillary income	19 to 30		21
				Float rate	3.71	%	3.71		%
				Prepayment rate	5.39% to 31.32%		9.37		%
December 31, 2024
Capitalized mortgage loan servicing rights	$	46,796	Present value of net servicing revenue	Discount rate	10.00% to 19.15%		10.37		%
				Cost to service	$70 to $817		$	79
				Ancillary income	20 to 30		20
				Float rate	4.33	%	4.33		%
				Prepayment rate	5.40% to 28.28%		7.54%

Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:

Asset
Fair
Value

Valuation
Technique

Unobservable
Inputs

Range

Weighted
Average

(In thousands)

June 30, 2025

Collateral dependent loans

Commercial

2,729

Discounting financial statement and machinery and equipment appraised values

Discount rates used

50.0% to 65.0%

58.8

13,600

Sales comparison approach

Adjustment for differences between comparable sales

(20.0) to 65.0

(2.0)

Mortgage and Installment(1)

1,472

Sales comparison approach

Adjustment for differences between comparable sales

(28.1) to 16.9

(1.2)

December 31, 2024

Collateral dependent loans

Commercial

3,478

Discounting financial statement and machinery and equipment appraised values

Discount rates used

45.0% to 55.0%

50.5

859

Sales comparison approach

Adjustment for differences between comparable sales

(20.0) to 35.0

(1.4)

Mortgage and Installment(1)

1,176

Sales comparison approach

Adjustment for differences between comparable sales

(22.0) to 21.7

(0.4)


(1)			In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2025 and December 31, 2024 certain collateral dependent installment loans totaling approximately $0.58 million and $0.29 million, respectively, are secured by collateral other than real estate. For the majority of these loans, we apply internal discount rates to industry valuation guides.

Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance for Loans Held for Sale

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.


	Aggregate Fair Value		Difference		Contractual Principal
	(In thousands)
Loans held for sale
June 30, 2025	$	12,492	$	198	$	12,294
December 31, 2024	7,643		78		7,565

- 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.

+ References + Details