v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Fair value represents the estimated price at which an orderly transaction to sell an asset or transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept), and is a market-based measurement versus an entity-specific measurement. The Company records and/or discloses certain financial instruments on a fair value basis. These financial assets and financial liabilities are measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the assumptions used to determine fair value. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect assumptions of the reporting entity about how
market participants would price the asset or liability based on the best information available under the circumstances. The three fair value levels are:
•Level 1 – quoted market prices in active markets for identical assets or liabilities that a company has the ability to access at the measurement date
•Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly
•Level 3 – significant unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity
In instances where the fair value measurement is based on inputs from different levels, the level within which the entire fair value measurement will be categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. This assessment of the significance of an input requires management judgment.
Recurring basis fair value measurements:
The following table presents the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented.
(in thousands)Fair Value Measurements Using
Measured at Fair Value on a Recurring Basis:TotalLevel 1Level 2Level 3
June 30, 2026
U.S. Treasury securities$284,702 $— $284,702 $— 
U.S. government agency securities26,777 — 26,777 — 
State, county and municipals350,226 — 349,644 582 
Mortgage-backed securities1,216,526 — 1,216,526 — 
Corporate debt securities128,732 — 122,527 6,205 
Securities AFS
$2,006,963 $— $2,000,176 $6,787 
Other investments (equity securities)$12,763 $12,763 $— $— 
Derivative assets$16,297 $— $16,063 $234 
Derivative liabilities$16,101 $— $16,069 $32 
December 31, 2025
U.S. Treasury securities$24,054 $— $24,054 $— 
U.S. government agency securities4,172 — 4,172 — 
State, county and municipals274,824 — 274,057 767 
Mortgage-backed securities496,781 — 496,781 — 
Corporate debt securities60,003 — 54,146 5,857 
Securities AFS
$859,834 $— $853,210 $6,624 
Other investments (equity securities)$9,505 $9,505 $— $— 
Derivative assets$610 $— $376 $234 
Derivative liabilities$450 $— $376 $74 
The following is a description of the valuation methodologies used by the Company for the assets and liabilities measured at fair value on a recurring basis, noted in the tables above.
Securities AFS and Equity Securities: Where quoted market prices on securities exchanges are available, the investments are classified as Level 1. Level 1 investments primarily include exchange-traded equity securities. If quoted market prices are not available, fair value is generally determined using prices obtained from independent pricing vendors who use pricing models (with typical inputs including benchmark yields, reported trades for similar securities, issuer spreads or relationship to other benchmark quoted securities), or discounted cash flows, and are classified as Level 2. Examples of these investments include U.S. Treasury securities, U.S. government agency securities, mortgage-backed securities, obligations of state, county and municipals, and certain corporate debt securities. Finally, in certain cases where there is limited activity or less transparency around inputs to the estimated fair value, investments are classified within Level 3 of the hierarchy. Examples of these include private corporate debt securities, which are primarily trust preferred security investments, as well as certain municipal bonds. At June 30, 2026 and December 31, 2025, it was determined that carrying value was the best approximation of fair value for the majority of these Level 3 securities, based primarily on the internal analysis on these securities.
Derivatives: The derivative assets and liabilities include interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans held for sale, which are considered derivative instruments (“mortgage derivatives”), as well as interest rate swaps with corresponding mirror interest rate swaps. The fair
value of interest rate lock commitments is determined using the projected sale price of individual loans based on changes in the market interest rates, projected pull-through rates (the probability that an interest rate lock commitment will ultimately result in an originated loan), the reduction in the value of the applicant’s option due to the passage of time, and the remaining origination costs to be incurred based on management’s estimate of market costs. The fair value of forward commitments is determined using quoted prices of to-be-announced securities in active markets, or benchmarked to such securities. The mortgage derivative assets and liabilities are classified within Level 3 of the hierarchy. The fair value of the interest rate swap derivative assets and liabilities is determined using a discounted cash flow analysis of the expected cash flows of each derivative, which considers the contractual terms of the underlying derivative financial instrument and observable market-based inputs, such as interest rate curves. The interest rate swap derivative assets and liabilities are classified within Level 2 of the hierarchy.
The following table presents the changes in Level 3 securities AFS measured at fair value on a recurring basis.
(in thousands)Six Months EndedYear Ended
Level 3 Fair Value Measurements:June 30, 2026December 31, 2025
Balance at beginning of year$6,624 $7,625 
Transfer out(2,003)— 
Purchases (acquired with MidWestOne)
2,741 — 
Maturities / Paydowns(677)(1,099)
Unrealized gain / (loss)102 98 
Balance at end of period$6,787 $6,624 
Nonrecurring basis fair value measurements:
The following table presents the Company’s assets measured at fair value on a nonrecurring basis, aggregated by level in the fair value hierarchy within which those measurements fall.
(in thousands)Fair Value Measurements Using
Measured at Fair Value on a Nonrecurring Basis:TotalLevel 1Level 2Level 3
June 30, 2026
Collateral dependent loans$49,591 $— $— $49,591 
MSR asset (disclosure)27,307 — — 27,307 
December 31, 2025
Collateral dependent loans$27,426 $— $— $27,426 
MSR asset (disclosure)18,474 — — 18,474 
The following is a description of the valuation methodologies used by the Company for the assets and liabilities measured at fair value on a nonrecurring basis, noted in the table above.
Collateral dependent loans: For individually evaluated collateral dependent loans, the estimated fair value is based upon the present value of expected future cash flows discounted at the loan’s effective interest rate, the estimated fair value of the underlying collateral with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral, or the estimated liquidity of the note.
MSR asset: To estimate the fair value of the MSR asset, the underlying serviced loan pools are stratified by interest rate tranche and term of the loan, and a valuation model is used to calculate the present value of the expected future cash flows for each stratum. The servicing valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as costs to service, a discount rate, ancillary income, default rates and losses, and prepayment speeds. Although some of these assumptions are based on observable market data, other assumptions are based on unobservable estimates of what market participants would use to measure fair value.
Financial instruments:
The carrying amounts and estimated fair values of the Company’s financial instruments are shown below.
June 30, 2026
(in thousands)Carrying
Amount		Estimated
Fair Value		Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$465,248 $465,248 $465,248 $— $— 
Securities AFS2,006,963 2,006,963 — 2,000,176 6,787 
Other investments, including equity securities116,575 116,560 12,763 83,981 19,816 
Loans held for sale19,388 19,786 — 19,786 — 
Other assets held for sale (loans)401,899 401,899 — — 401,899 
Loans, net10,714,580 10,499,054 — — 10,499,054 
MSR asset24,476 27,307 — — 27,307 
LSR asset4,416 4,416 — — 4,416 
Accrued interest receivable53,263 53,263 53,263 — — 
Financial liabilities:
Deposits$12,523,336 $12,514,031 $— $— $12,514,031 
Long-term borrowings92,750 85,725 — — 85,725 
Other liabilities held for sale (deposits)387,939 387,939 — — 387,939 
Accrued interest payable15,198 15,198 15,198 — — 
December 31, 2025
(in thousands)Carrying
Amount		Estimated
Fair Value		Level 1Level 2Level 3
Financial assets:
Cash and cash equivalents$660,232 $660,232 $660,232 $— $— 
Securities AFS859,834 859,834 — 853,210 6,624 
Other investments63,247 63,241 9,505 43,233 10,503 
Loans held for sale13,620 13,935 — 13,935 — 
Loans, net6,767,539 6,627,011 — — 6,627,011 
MSR asset13,173 18,474 — — 18,474 
LSR asset5,152 5,152 — — 5,152 
Accrued interest receivable26,602 26,602 26,602 — — 
Financial liabilities:
Deposits$7,730,771 $7,737,106 $— $— $7,737,106 
Long-term borrowings134,860 131,840 — — 131,840 
Accrued interest payable8,672 8,672 8,672 — — 
The valuation methodologies for the financial instruments disclosed in the above table are described in Note 18, Fair Value Measurements, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.