v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Corporation uses derivatives to manage its exposure to certain market risks, including interest rate and foreign currency risks, and to assist customers with their risk management objectives. Certain of the Corporation's outstanding derivative contracts are designated as hedges, and none are entered into for speculative purposes. The Corporation enters into derivative contracts that are intended to economically hedge certain of its risks, even if hedge accounting does not apply or the Corporation elects not to apply hedge accounting.

For additional information on our derivative accounting policies see "Note 1 - Summary of Significant Accounting Policies" under the heading "Derivative Financial Instruments" in our Annual Report on Form 10-K for the year ended December 31, 2025.
The following table presents a summary of the notional amounts and fair values of derivative financial instruments:

June 30, 2026December 31, 2025
Notional
Amount		Asset
(Liability)
Fair Value		Notional
Amount		Asset
(Liability)
Fair Value
(dollars in thousands)
Interest Rate Locks with Customers
Positive fair values$216,536 $974 $203,580 $563 
Negative fair values1,794 (18)926 (6)
Forward Commitments
Positive fair values78,401 49 — — 
Negative fair values— — 71,207 (156)
Interest Rate Derivatives with Customers(1)
Positive fair values1,432,303 15,958 2,118,722 39,236 
Negative fair values3,540,011 (151,612)2,747,758 (130,521)
Interest Rate Derivatives with Dealer Counterparties
Positive fair values 3,540,011 95,138 2,747,758 77,528 
Negative fair values1,432,303 (16,324)2,118,722 (39,606)
Interest Rate Derivatives used in Cash Flow Hedges
Positive fair values
2,000,000 2,359 2,950,000 11,489 
Negative fair values
1,050,000 (3,846)— — 
Foreign Exchange Contracts with Customers
Positive fair values11,532 242 1,239 8 
Negative fair values5,181 (269)13,007 (714)
Foreign Exchange Contracts with Correspondent Banks
Positive fair values8,993 378 14,424 883 
Negative fair values12,496 (218)1,870 (6)
(1) Fair values are net of a valuation allowance of $366 thousand as of June 30, 2026 and December 31, 2025.
The following table presents the effect of cash flow hedge accounting on AOCI:

Amount of Gain (Loss) Recognized in OCI on Derivatives Amount of Gain (Loss) Recognized in OCI Included ComponentAmount of Gain (Loss) Recognized in OCI Excluded ComponentLocation of Gain (Loss) Recognized from AOCI into IncomeAmount of Gain (Loss) Reclassified from AOCI into Income Amount of Gain (Loss) Reclassified from AOCI into Income Included ComponentAmount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
(dollars in thousands)
Three months ended June 30, 2026
Interest Rate Products$(6,910)$(6,910)$— Interest Income$(628)$(628)$— 
Interest Rate Products— — — Interest Expense(201)(201)— 
Total$(6,910)$(6,910)$— $(829)$(829)$— 
Three months ended June 30, 2025
Interest Rate Products$(285)$(285)$— Interest Income$(5,048)$(5,048)$— 
Interest Rate Products341 341 — Interest Expense(66)(66)— 
Total$56 $56 $— $(5,114)$(5,114)$— 
Six months ended June 30, 2026
Interest Rate Products$(14,042)$(14,042)$— Interest Income$(4,349)$(4,349)$— 
Interest Rate Products— — — Interest Expense(433)(433)— 
Total$(14,042)$(14,042)$— $(4,782)$(4,782)$— 
Six months ended June 30, 2025
Interest Rate Products$3,256 $3,256 $— Interest Income$(9,538)$(9,538)$— 
Interest Rate Products(919)(919)— Interest Expense(120)(120)— 
Total$2,337 $2,337 $— $(9,658)$(9,658)$— 
The following table presents the effect of fair value and cash flow hedge accounting on the income statement:

Consolidated Statements of Income Classification
20262025
Interest IncomeInterest ExpenseInterest IncomeInterest Expense
(dollars in thousands)
Three months ended June 30,
Total amounts of income line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded$(628)$(201)$(5,048)$(66)
The effects of fair value and cash flow hedging:
Amount of (loss) gain reclassified from AOCI into income(628)(201)(5,048)(66)
Interest rate derivatives:
Amount of (loss) gain reclassified from AOCI into income as a result of a forecasted transaction that is no longer probable of occurring— — — — 
Amount of (loss) gain reclassified from AOCI into income - included component(628)(201)(5,048)(66)
Amount of (loss) gain reclassified from AOCI into income - excluded component— — — — 
Six months ended June 30,
Total amounts of income line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are recorded$(4,349)$(433)$(9,538)$(120)
The effects of fair value and cash flow hedging:
Amount of (loss) gain reclassified from AOCI into income(4,349)(433)(9,538)(120)
Interest rate derivatives:
Amount of (loss) gain reclassified from AOCI into income as a result of a forecasted transaction that is no longer probable of occurring— — — — 
Amount of (loss) gain reclassified from AOCI into income - included component(4,349)(433)(9,538)(120)
Amount of (loss) gain reclassified from AOCI into income - excluded component— — — — 

During the next twelve months, the Corporation estimates that an additional $8.0 million will be reclassified as a decrease to net interest income.
The following table presents the fair value gains (losses) on derivative financial instruments:

Consolidated Statements of Income ClassificationThree months ended June 30, Six months ended June 30,
2026202520262025
(dollars in thousands)
Mortgage banking derivatives(1)
Mortgage banking income$(126)$181 $604 $(134)
Interest rate derivativesOther income— 9 (38)131 
Foreign exchange contractsOther income148 31 (38)142 
Net fair value gains on derivative financial instruments$22 $221 $528 $139 
(1) Includes interest rate locks with customers and forward commitments.

The Corporation has elected to measure mortgage and commercial loans held for sale at fair value. The following table presents mortgage and commercial loans held for sale and the impact of the fair value election on the Consolidated Financial Statements:

June 30,
2026		December 31,
2025
(dollars in thousands)
Amortized cost(1)
$33,349 $16,005 
Fair value33,902 16,316 
(1) Cost basis of mortgage and commercial loans held for sale represents the unpaid principal balance.

Gains related to changes in fair values of mortgage and commercial loans held for sale were $0.5 million for the three months ended June 30, 2026 compared to a gain of $0.2 million for the three months ended June 30, 2025. Gains related to changes in fair values of mortgage and commercial loans held for sale were $0.2 million for the six months ended June 30, 2026 compared to a gain of $0.3 million for the six months ended June 30, 2025.
Balance Sheet Offsetting

The fair values of interest rate derivative agreements and foreign exchange contracts the Corporation enters into with customers and dealer counterparties may be eligible for offset on the Consolidated Balance Sheets if they are subject to master netting arrangements or similar agreements. The Corporation has elected to net its financial assets and liabilities designated as interest rate derivatives when offsetting is permitted. The following table presents the Corporation's financial instruments that are eligible for offset, and the effects of offsetting, on the Consolidated Balance Sheets:

Gross AmountsGross Amounts Not Offset
Recognized on the Consolidated
on the Balance Sheets
ConsolidatedFinancialCashNet
Balance Sheets
Instruments(1)
Collateral(2)
Amount
(dollars in thousands)
June 30, 2026
Interest rate derivative assets$113,455 $(17,475)$— $95,980 
Foreign exchange derivative assets with correspondent banks378 (378)— — 
Total $113,833 $(17,853)$— $95,980 
Interest rate derivative liabilities$171,782 $(15,988)$(64,506)$91,288 
Foreign exchange derivative liabilities with correspondent banks218 (378)— (160)
Total$172,000 $(16,366)$(64,506)$91,128 
December 31, 2025
Interest rate derivative assets$128,253 $(18,829)$— $109,424 
Foreign exchange derivative assets with correspondent banks883 (883)— — 
Total$129,136 $(19,712)$— $109,424 
Interest rate derivative liabilities$170,127 $(30,318)$(54,200)$85,609 
Foreign exchange derivative liabilities with correspondent banks6 (883)— (877)
Total$170,133 $(31,201)$(54,200)$84,732 
(1) For interest rate derivative assets, amounts represent any derivative liability fair values that could be offset in the event of counterparty or customer default.
For interest rate derivative liabilities, amounts represent any derivative asset fair values that could be offset in the event of counterparty or customer default.
(2) Amounts represent cash collateral received from the counterparty or posted by the Corporation on interest rate derivative transactions and foreign exchange
contracts with financial institution counterparties. Interest rate derivatives with customers are collateralized by the same collateral securing the underlying
loans to those borrowers. Cash and securities collateral amounts are included in the table only to the extent of the net derivative fair values.