5. Other Assets

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Bank-Owned Life Insurance

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During 2026 and 2025, the Company entered into noncash exchanges of certain bank-owned life insurance (“BOLI”) policies in accordance with Internal Revenue Code (“IRC”) Section 1035. Cash surrender value of $2.2 million was transferred into new policies during both the three and six months ended June 30, 2026. Cash surrender value of $81.6 million and $81.7 million were transferred into new policies during the three and six months ended June 30, 2025, respectively. No gain or loss was recognized as part of these exchanges.

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Mortgage Servicing Rights

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Mortgage servicing activities include collecting principal, interest, tax and insurance payments from borrowers while accounting for and remitting payments to investors, taxing authorities and insurance companies. The Company also monitors delinquencies and administers foreclosure proceedings.

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Mortgage loan servicing income is recorded in noninterest income as a part of other service charges and fees and amortization of the servicing assets is recorded in noninterest income as part of other income. The Company’s maximum potential exposure to repurchases is limited to the unpaid principal amount of residential real estate loans serviced for others, which were $1.1 billion as of both June 30, 2026 and December 31, 2025. Servicing fees include contractually specified fees, late charges and ancillary fees and were $0.7 million for both three months ended June 30, 2026 and 2025, and $1.4 million and $1.5 million for the six months ended June 30, 2026 and 2025, respectively.

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Amortization of mortgage servicing rights (“MSRs”) were $0.2 million for both three months ended June 30, 2026 and 2025, and $0.4 million for both six months ended June 30, 2026 and 2025. The estimated future amortization expenses for MSRs over the next five years are as follows:

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The details of the Company’s MSRs are presented below:

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The following table presents changes in amortized MSRs for the three and six months ended June 30, 2026 and 2025:

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MSRs are evaluated for impairment if events and circumstances indicate a possible impairment. No impairment of MSRs was recorded for the three and six months ended June 30, 2026 and 2025.

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The quantitative assumptions used in determining the lower of cost or fair value of the Company’s MSRs as of June 30, 2026 and December 31, 2025 were as follows:

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The sensitivities surrounding MSRs are expected to have an immaterial impact on fair value.

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Low-Income Housing Tax Credit Investments

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The Company has a limited partnership interest or is a member in a limited liability company (“LLC”) in several low-income housing partnerships. These partnerships or LLCs provide funds for the construction and operation of apartment complexes that provide affordable housing to that segment of the population with lower family income. If these developments successfully attract a specified percentage of residents falling in that lower income range, state and/or federal income tax credits are made available to the partners or members. The tax credits are generally recognized over 5 or 10 years. In order to continue receiving the tax credits each year over the life of the partnership or LLC, the low-income residency targets must be maintained.

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The Company generally accounts for its interests in these low-income housing partnerships using the proportional amortization method. The Company had $297.8 million and $302.3 million in affordable housing and other tax credit investment partnership interests as of June 30, 2026 and December 31, 2025, respectively, included in other assets on the unaudited interim consolidated balance sheets. The amount of amortization of such investments reported in the provision for income taxes was $8.9 million and $7.6 million during the three months ended June 30, 2026 and 2025, respectively, and $17.9 million and $15.2 million during the six months ended June 30, 2026 and 2025, respectively. The affordable housing tax credits and other benefits recognized were $12.0 million and $9.6 million during the three months ended June 30, 2026 and 2025, respectively, and $23.9 million and $19.3 million during the six months ended June 30, 2026 and 2025, respectively, and were included in the provision for income taxes on the unaudited interim consolidated statements of income and net income on the unaudited interim consolidated statements of cash flows.

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Unfunded commitments to fund these investments were $145.2 million and $153.3 million as of June 30, 2026 and December 31, 2025, respectively. These unfunded commitments are unconditional and legally binding and are recorded in other liabilities in the unaudited interim consolidated balance sheets.