v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Investment securities available for sale and marketable equity securities: Fair values are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.
Servicing rights: MSR and CSR are measured at fair value on a recurring basis. These assets are classified as Level 3 as quoted prices are not available. In order to determine the fair value of MSR and CSR, the present value of net expected future cash flows is estimated. Assumptions used include market discount rates,

Interest rate swaps: The fair value of the interest rate swap agreements is determined using standard valuation models that calculate the present value of expected future cash flows. These valuation models incorporate observable market inputs, including contractual terms, interest rate yield curves, forward interest rates, and credit risk adjustments. The Company classifies its interest rate swaps within Level 2 of the fair value hierarchy.

Interest rate lock commitments: The fair value of the interest rate lock commitments are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. The pull-through rate assumptions are considered Level 3 valuation inputs and are significant to the interest rate lock commitment valuation; as such, the interest rate lock commitment derivatives are classified as Level 3.

Retail interest rate contracts: Retail interest rate contracts are valued in a model, which uses as its basis a discounted cash flow technique incorporating credit valuation adjustments to reflect nonperformance risk in the measurement of fair value. Although the Company has determined that the majority of inputs used to value its retail interest rate contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of March 31, 2026, the Company has assessed the significance of the impact of these adjustments on the overall valuation of its retail interest rate contracts and has determined that they are not significant to the overall valuation. As a result, the Company has classified its retail interest rate contract valuations in Level 2 of the fair value hierarchy.

Commitments to extend credit and standby letters of credit: The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties.  For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.  The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligation with the counterparties at the reporting date.

Assets Subject to Nonrecurring Adjustment to Fair Value

    The Company is also required to measure certain assets such as equity method investments, goodwill, intangible assets, impaired loans, and Other Real Estate Owned (“OREO”) at fair value on a nonrecurring basis in accordance with GAAP. Any nonrecurring adjustments to fair value usually result from the write-down of individual assets.

    The Company uses either in-house evaluations or external appraisals to estimate the fair value of OREO and impaired loans as of each reporting date. In-house appraisals are considered Level 3 inputs and external appraisals are considered Level 2 inputs. The Company’s determination of which method to use is based upon several factors. The Company takes into account compliance with legal and regulatory guidelines, the amount of the loan, the size of the assets, the location and type of property to be valued and how critical the timing of completion of the analysis is to the assessment of value. Those factors are balanced with the level of internal expertise, internal experience and market information available, versus external expertise available such as qualified appraisers, brokers, auctioneers and equipment specialists.

Limitations

    Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. 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.
    Estimated fair values as of the periods indicated, whether or not recognized or recorded at fair value on a recurring basis in the Consolidated Balance Sheets, are as follows:
 March 31, 2026December 31, 2025
(In Thousands)Carrying AmountFair ValueCarrying AmountFair  Value
Financial assets:  
Level 1 inputs:  
     Cash, due from banks and deposits in other banks$154,937 $154,937 $145,906 $145,906 
     Investment securities available for sale219,622 219,622 201,412 201,412 
     Marketable equity securities10,145 10,145 8,392 8,392 
Level 2 inputs:  
     Investment securities available for sale198,825 198,825 214,451 214,451 
     Loans held for sale81,179 81,179 100,323 100,323 
     Interest rate swaps8,057 8,057 7,999 7,999 
     Interest rate swap - junior subordinated debt
1,442 1,442 1,437 1,437 
     Retail interest rate contracts
5858— — 
Level 3 inputs:  
     Investment securities held to maturity31,750 30,684 26,750 26,750 
     Loans 2,358,702 2,281,431 2,295,499 2,225,114 
     Purchased receivables, net105,029 105,029 101,642 101,642 
     Interest rate lock commitments1,580 1,580 923 912 
     Mortgage servicing rights28,42628,42627,474 27,474 
     Commercial servicing rights2,3592,3592,342 2,342 
Financial liabilities:  
Level 2 inputs:  
     Time deposits$391,050 $392,932 $402,759 $405,317 
     Borrowings12,693 10,153 12,805 10,361 
     Interest rate swaps8,057 8,057 7,999 7,999 
     Retail interest rate contracts
— — 5050
Level 3 inputs:
     Junior subordinated debentures
10,310 10,720 10,310 10,950 
     Subordinated debentures
58,649 57,801 58,614 58,614 
    The following table sets forth the balances as of the periods indicated of assets and liabilities measured at fair value on a recurring basis:
(In Thousands)TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
March 31, 2026    
Assets:
    Available for sale securities    
    U.S. Treasury and government sponsored entities$382,020 $219,622 $162,398 $— 
    U.S. Agency mortgage-backed securities4,708 — 4,708 — 
    Corporate bonds4,978 — 4,978 — 
    Collateralized loan obligations26,741 — 26,741 — 
           Total available for sale securities$418,447 $219,622 $198,825 $— 
    Marketable equity securities$10,145 $10,145 $— $— 
           Total marketable equity securities$10,145 $10,145 $— $— 
Loans held for sale
$81,179 $— $81,179 $— 
Interest rate swaps9,499 — 9,499 — 
Interest rate lock commitments1,580 — — 1,580 
Mortgage servicing rights28,426 — — 28,426 
Commercial servicing rights2,359 — — 2,359 
Retail interest rate contracts58 — 58 — 
           Total other assets$123,101 $— $90,736 $32,365 
Liabilities:
Interest rate swaps$8,057 $— $8,057 $— 
           Total other liabilities$8,057 $— $8,057 $— 
December 31, 2025    
Assets:
Available for sale securities    
U.S. Treasury and government sponsored entities$388,737 $201,412 $187,325 $— 
U.S. Agency mortgage-backed securities4,798 — 4,798 — 
Corporate bonds4,952 4,952 — — 
Collateralized loan obligations22,174 — 22,174 — 
           Total available for sale securities$420,661 $206,364 $214,297 $— 
Marketable equity securities$8,392 $8,392 $— $— 
           Total marketable securities$8,392 $8,392 $— $— 
Loans held for sale
$100,323 $— $100,323 $— 
Interest rate swaps9,436 — 9,436 — 
Interest rate lock commitments923 — — 923 
Mortgage servicing rights27,474 — — 27,474 
Commercial servicing rights2,342 — — 2,342 
           Total other assets$140,498 $— $109,759 $30,739 
Liabilities:
Interest rate swaps$7,999 $— $7,999 $— 
Retail interest rate contracts50 — 50 — 
           Total other liabilities$8,049 $— $8,049 $— 

    
    
The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three-month periods ended March 31, 2026 and 2025:

(In Thousands)Beginning balanceChange included in earningsPurchases and issuancesSales and settlementsEnding balanceNet change in unrealized gains (losses) relating to items held at end of period
Three Months Ended March 31, 2026 
Interest rate lock commitments$923 ($529)$4,255 ($3,069)$1,580 $1,580 
Mortgage servicing rights27,474 (127)1,079 — 28,426 — 
Commercial servicing rights2,342 (2)19 — 2,359 — 
Total$30,739 ($658)$5,353 ($3,069)$32,365 $1,580 
Three Months Ended March 31, 2025
Interest rate lock commitments$465 ($226)$1,996 ($846)$1,389 $1,389 
Mortgage servicing rights26,439 (855)1,230 — 26,814 — 
Commercial servicing rights2,194 (73)196 — 2,317 — 
Total$29,098 ($1,154)$3,422 ($846)$30,520 $1,389 



    There were no changes in unrealized gains and losses for the three-month periods ending March 31, 2026 and 2025 included in other comprehensive income for recurring Level 3 fair value measurements and there were no transfers between levels during the three-month periods ending March 31, 2026 and 2025.

    As of and for the periods ending March 31, 2026 and December 31, 2025, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis.  For loans individually measured for credit losses, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.               
(In Thousands)TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
March 31, 2026    
  Loans individually measured for credit losses$4,226 $— $— $4,226 
Total$4,226 $— $— $4,226 
December 31, 2025    
  Loans individually measured for credit losses$2,729 $— $— $2,729 
Total$2,729 $— $— $2,729 
    
The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three-month periods ended March 31, 2026 and 2025:

Three Months Ended March 31,Three Months Ended March 31,
(In Thousands)2026202520262025
Loans individually measured for credit losses$783 $— $783 $— 
Total loss from nonrecurring measurements$783 $— $783 $— 

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)
    The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and nonrecurring basis at March 31, 2026 and December 31, 2025:
Financial Instrument
Valuation Technique - Recurring Basis
Unobservable InputWeighted Average Rate Range
March 31, 2026
Interest rate lock commitmentExternal pricing modelPull through rate92.1 %
Mortgage servicing rightsDiscounted cash flowConstant prepayment rate
7.45% - 24.97%
Discount rate
9.50% - 10.02%
Commercial servicing rightsDiscounted cash flowConstant prepayment rate
3.84% - 17.55%
Discount rate12.00 %
December 31, 2025
Interest rate lock commitmentExternal pricing modelPull through rate91.53 %
Mortgage servicing rightsDiscounted cash flowConstant prepayment rate
5.88% - 20.96%
Discount rate
9.50% - 11.00%
Commercial servicing rightsDiscounted cash flowConstant prepayment rate
3.84% - 17.55%
Discount rate12.00 %
Financial InstrumentValuation Technique - Nonrecurring BasisUnobservable InputWeighted Average Rate Range
March 31, 2026
Loans individually measured for credit lossesDiscounted cash flowDiscount rate
10.00% - 100.00%
December 31, 2025
Loans individually measured for credit lossesDiscounted cash flowDiscount rate10.00 %