v3.26.3
Disclosures About Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2026
Fair Value Disclosures [Abstract]  
Disclosures About Fair Value of Financial Instruments Disclosures About Fair Value of Financial Instruments
 
We are required to disclose fair value information about financial instruments whether or not recognized in the Consolidated Statement of Financial Condition. Fair value information of certain financial instruments and all nonfinancial instruments is not required to be disclosed. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

Financial assets and liabilities recognized or disclosed at fair value on a recurring basis and certain financial assets and liabilities on a non-recurring basis are accounted for using a three-level hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. This hierarchy gives the highest priority to quoted prices with readily available independent data in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable market inputs (Level 3). When various inputs for measurement fall within different levels of the fair value hierarchy, the lowest level input that has a significant impact on fair value measurement is used.

Financial assets and liabilities are categorized based upon the following characteristics or inputs to the valuation techniques:

•Level 1 — Financial assets and liabilities for which inputs are observable and are obtained from reliable quoted prices for identical assets or liabilities in actively traded markets. This is the most reliable fair value measurement and includes, for example, active exchange-traded equity securities.

•Level 2 — Financial assets and liabilities for which values are based on quoted prices in markets that are not active or for which values are based on similar assets or liabilities that are actively traded. Level 2 also includes pricing models in which the inputs are corroborated by market data, for example, matrix pricing.

•Level 3 — Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Level 3 inputs include the following:
◦Quotes from brokers or other external sources that are not considered binding;
◦Quotes from brokers or other external sources where it cannot be determined that market participants would in fact transact for the asset or liability at the quoted price; and
◦Quotes and other information from brokers or other external sources where the inputs are not deemed observable.

We are responsible for the valuation process and as part of this process may use data from outside sources in establishing fair value. We perform due diligence to understand the inputs used or how the data was calculated or derived. We also corroborate the reasonableness of external inputs in the valuation process.

The carrying amounts reported in the Consolidated Statement of Financial Condition approximate fair value for the following financial instruments: cash and cash equivalents, marketable securities available-for-sale, loans held-for-sale, accrued interest receivable, interest rate lock commitments, forward commitments, interest rate swaps, savings and checking deposits, foreign exchange swaps, risk participation agreements, and accrued interest payable.

Marketable Securities
 
Where available, market values are based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.
 
Debt Securities — available-for-sale - Generally, debt securities are valued using pricing for similar securities, recently executed transactions and other pricing models utilizing observable inputs. The valuation for most debt securities is classified as Level 2. Securities within Level 2 include corporate bonds, municipal bonds, mortgage-backed securities and U.S. government and agency debt securities.

Debt Securities — held-to-maturity - The fair value of debt securities held-to-maturity is determined in the same manner as debt securities available-for-sale.
 
Loans Receivable

Loans with comparable characteristics including collateral and re-pricing structures are segregated for valuation purposes. Each loan pool is separately valued utilizing a discounted cash flow analysis. Projected monthly cash flows are discounted to present value using a market rate for comparable loans, which is not considered an exit price. Characteristics of comparable loans include remaining term, coupon interest, and estimated prepayment speeds. Delinquent loans are separately evaluated given the impact delinquency has on the projected future cash flow of the loan including the approximate discount or market rate, which is not considered an exit price.

Loans Held-for-Sale

The estimated fair value of loans held-for-sale is based on market bids obtained from potential buyers.
    
FHLB Stock
 
Due to the restrictions placed on transferability of FHLB stock, it is not practical to determine the fair value. FHLB stock is recorded at cost.

Deposit Liabilities

The estimated fair value of deposits with no stated maturity, which includes demand deposits, money market, and other savings accounts, is the amount payable on demand. Although market premiums paid for depository institutions reflect an additional value for these low-cost deposits, adjusting fair value for any value expected to be derived from retaining those deposits for a future period of time or from the benefit that results from the ability to fund interest-earning assets with these deposit liabilities is prohibited. The fair value estimates of deposit liabilities do not include the benefit that results from the low-cost funding provided by these deposits compared to the cost of borrowing funds in the market. Fair values for time deposits are estimated using a discounted cash flow calculation that applies contractual cost currently being offered in the existing portfolio to current market rates being offered locally for deposits of similar remaining maturities. The valuation adjustment for the portfolio consists of the present value of the difference of these two cash flows, discounted at the assumed market rate of the corresponding maturity.

Borrowed Funds
 
Fixed rate advances are valued by comparing their contractual cost to the prevailing market cost. The carrying amount of repurchase agreements approximates their fair value.
Subordinated Debentures

The fair value of our subordinated debentures is calculated using the discounted cash flows at rates observable for other similarly traded liabilities with considerations given to early call provisions.

Junior Subordinated Debentures
 
The fair value of junior subordinated debentures is calculated using the discounted cash flows at the prevailing rate of interest.

Interest Rate Lock Commitments and Forward Commitments

The fair value of interest rate lock commitments is based on the value of underlying loans held-for-sale which is based on quoted prices for similar loans in the secondary market. This value is then adjusted based on the probability of the loan closing (i.e., the “pull-through” amount, a significant unobservable input). The fair value of forward sale commitments is based on quoted prices from the secondary market based on the settlement date of the contracts.

Interest Rate and Foreign Exchange Swap Agreements and Risk Participation Agreements

The fair value of interest rate swaps is based upon the present value of the expected future cash flows using the SOFR discount curve, the basis for the underlying interest rate. To price interest rate swaps, cash flows are first projected for each payment date using the fixed rate for the fixed side of the swap and the forward rates for the floating side of the swap. These swap cash flows are then discounted to time zero using SOFR zero-coupon interest rates. The sum of the present value of both legs is the fair market value of the interest rate swap. These valuations have been derived from our third party vendor’s proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. The fair value of the foreign exchange swap is derived from proprietary models rather than actual market quotations. The proprietary models are based upon financial principles and assumptions that we believe to be reasonable. Risk participation agreements are entered into when Northwest Bank purchases a portion of a commercial loan that has an interest rate swap. Northwest Bank assumes credit risk on its portion of the interest rate swap should the borrower fail to pay as agreed. The value of risk participation agreements is determined based on the value of the swap after considering the credit quality, probability of default, and loss given default of the borrower.
 
Off-Balance Sheet Financial Instruments
 
These financial instruments generally are not sold or traded, and estimated fair values are not readily available. However, the fair value of commitments to extend credit and standby letters of credit is estimated using the fees currently charged to enter into similar agreements. Commitments to extend credit are generally short-term in nature and, if drawn upon, are issued under current market terms. At September 30, 2026 and December 31, 2025, there was no significant unrealized appreciation or depreciation on these financial instruments.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at September 30, 2026 (in thousands):

Carrying
amount		Estimated
fair value		Level 1Level 2Level 3Netting
Adjustments (1)
Financial assets:
Cash and cash equivalents$223,310 223,310 223,310 — — — 
Securities available-for-sale1,751,568 1,751,568 — 1,751,568 — — 
Securities held-to-maturity612,731 518,383 — 518,383 — — 
Loans receivable, net13,243,670 12,637,708 — — 12,637,708 — 
Loans held-for-sale8,374 8,374 — — 8,374 — 
Accrued interest receivable59,783 59,783 59,783 — — — 
Interest rate lock commitments444 444 — — 444 — 
Forward commitments6 6 — 6 — — 
Interest rate swaps not designated as hedging instruments1,779 1,779 — 33,934 — (32,155)
FHLB stock51,439 51,439 — — — — 
Total financial assets$15,953,104 15,252,794 283,093 2,303,891 12,646,526 (32,155)
Financial liabilities:
Savings and checking deposits$11,477,068 11,477,068 11,477,068 — — — 
Time deposits2,797,970 2,804,048 — — 2,804,048 — 
Borrowed funds786,715 784,393 816,493 — — (32,100)
Junior subordinated debentures130,288 128,071 — — 128,071 — 
Interest rate swaps designated as hedging instruments134 134 — 134 — — 
Interest rate swaps not designated as hedging instruments33,880 33,880 — 33,935 — (55)
Risk participation agreements33 33 — 33 — — 
Accrued interest payable7,616 7,616 7,616 — — — 
Total financial liabilities$15,233,704 15,235,243 12,301,177 34,102 2,932,119 (32,155)
(1)     Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

The following table sets forth the carrying amount and estimated fair value of our financial instruments included in the Consolidated Statement of Financial Condition at December 31, 2025 (in thousands): 
Carrying
amount		Estimated
fair value		Level 1Level 2Level 3Netting
Adjustments (1)
Financial assets:
Cash and cash equivalents$233,647 233,647 233,647 — — — 
Securities available-for-sale1,586,382 1,586,382 — 1,586,382 — — 
Securities held-to-maturity683,369 605,929 — 605,929 — — 
Loans receivable, net12,857,104 12,418,154 — — 12,418,154 — 
Loans held-for-sale22,437 22,437 — — 22,437 — 
Accrued interest receivable 56,291 56,291 56,291 — — — 
Interest rate lock commitments617 617 — — 617 — 
Forward commitments95 95 — 95 — — 
Forward exchange swaps4 4 — 4 — — 
Interest rate swaps designated as hedging instruments— — — 51 — (51)
Interest rate swaps not designated as hedging instruments11,775 11,775 — 25,155 — (13,380)
FHLB stock36,628 36,628 — — — — 
Total financial assets$15,488,349 14,971,959 289,938 2,217,616 12,441,208 (13,431)
Financial liabilities:
Savings and checking accounts$11,026,319 11,026,319 11,026,319 — — — 
Time deposits2,916,698 2,909,139 — — 2,909,139 — 
Borrowed funds446,283 444,936 446,836 — — (1,900)
Subordinated debt114,800 114,800 — 114,800 — — 
Junior subordinated debentures130,093 120,237 — — 120,237 — 
Interest rate swaps designated as hedging instruments— — — 1,280 — (1,280)
Interest rate swaps not designated as hedging instruments15,115 15,115 — 25,366 — (10,251)
Risk participation agreements 27 27 — 27 — — 
Accrued interest payable6,846 6,846 6,846 — — — 
Total financial liabilities$14,656,181 14,637,419 11,480,001 141,473 3,029,376 (13,431)
(1)     Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
Fair value estimates are made at a point-in-time, based on relevant market data and information about the instrument. The methods and assumptions detailed above were used in estimating the fair value of financial instruments at both September 30, 2026 and December 31, 2025.
     
The following table represents assets and liabilities measured at fair value on a recurring basis at September 30, 2026 (in thousands):
Level 1Level 2Level 3Netting Adjustments (1)Total assets 
at fair value
Debt securities:
U.S. government and agencies$— 30,527 — — 30,527 
States and political subdivisions— 62,018 — — 62,018 
Corporate— 111,248 — — 111,248 
Total debt securities— 203,793 — — 203,793 
Mortgage-backed securities:
GNMA— 128,280 — — 128,280 
FNMA— 146,267 — — 146,267 
FHLMC— 206,206 — — 206,206 
Non-agency— 2 — — 2 
Collateralized mortgage obligations:
GNMA— 676,903 — — 676,903 
FNMA— 93,748 — — 93,748 
FHLMC— 296,369 — — 296,369 
Total mortgage-backed securities— 1,547,775 — — 1,547,775 
Interest rate lock commitments— — 444 — 444 
Forward commitments— 6 — — 6 
Interest rate swaps not designated as hedging instruments— 33,934 — (32,155)1,779 
Total assets$— 1,785,508 444 (32,155)1,753,797 
Interest rate swaps designated as hedging instruments$— 134 — — 134 
Interest rate swaps not designated as hedging instruments— 33,935 — (55)33,880 
Risk participation agreements— 33 — — 33 
Total liabilities $— 34,102 — (55)34,047 
(1)     Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.
The following table represents assets and liabilities measured at fair value on a recurring basis at December 31, 2025 (in thousands):
Level 1Level 2Level 3Netting
Adjustment (1)		Total assets 
at fair value
Debt securities:
U.S. government and agencies$— 35,912 — — 35,912 
Government-sponsored enterprises— 2,047 — — 2,047 
States and political subdivisions— 83,268 — — 83,268 
Corporate— 57,034 — — 57,034 
Total debt securities— 178,261 — — 178,261 
Mortgage-backed securities:
GNMA— 96,344 — — 96,344 
FNMA— 139,786 — — 139,786 
FHLMC— 167,647 — — 167,647 
Non-agency— 3 — — 3 
Collateralized mortgage obligations:
GNMA— 708,908 — — 708,908 
FNMA— 97,672 — — 97,672 
FHLMC— 197,761 — — 197,761 
Total mortgage-backed securities— 1,408,121 — — 1,408,121 
Interest rate lock commitments— — 617 — 617 
Forward commitments— 95 — — 95 
Foreign exchange swaps— 4 — — 4 
Interest rate swaps designated as hedging instruments— 51 — (51)— 
Interest rate swaps not designated as hedging instruments— 25,155 — (13,380)11,775 
Total assets$— 1,611,687 617 (13,431)1,598,873 
Interest rate swaps designated as hedging instruments— 1,280 — (1,280)— 
Interest rate swaps not designated as hedging instruments— 25,366 — (10,251)15,115 
Risk participation agreements— 27 — — 27 
Total liabilities $— 26,673 — (11,531)15,142 
(1)     Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and cash collateral held or placed with the same counterparties.

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):
For the quarter ended September 30,For the nine months ended September 30,
2026202520262025
Beginning balance$673 933 617 342 
Interest rate lock commitments:
Net activity(229)97 (173)688 
Transfers from Level 3— — — — 
Transfers into Level 3— — — — 
Ending balance$444 1,030 444 1,030 

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans individually assessed and real estate owned.
The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of September 30, 2026 (in thousands):
Level 1Level 2Level 3Total assets 
at fair value
Loans individually assessed$— — 36,713 36,713 
Real estate owned, net— — 2,772 2,772 
Total assets$— — 39,485 39,485 

The following table represents the fair market measurement for only those nonrecurring assets that had a fair market value below the carrying amount as of December 31, 2025 (in thousands): 
Level 1Level 2Level 3Total assets 
at fair value
Loans individually assessed$— — 38,698 38,698 
Real estate owned, net— — 76 76 
Total assets$— — 38,774 38,774 

Individually Assessed Loans — A loan is considered to be individually assessed as described in Note 1(f) of the Notes to the Consolidated Financial Statements in Item 8 of Part II of our 2025 Annual Report on Form 10-K. We classify loans individually assessed as nonrecurring Level 3.

Real Estate Owned — Real estate owned is comprised of property acquired through foreclosure or voluntarily conveyed by borrowers. These assets are recorded on the date acquired at the lower of the related loan balance or fair value, less estimated disposition costs, with the fair value being determined by appraisal. Subsequently, foreclosed assets are valued at the lower of the amount recorded at acquisition date or fair value, less estimated disposition costs. We classify real estate owned as nonrecurring Level 3.

The following table presents additional quantitative information about assets measured at fair value on a recurring and nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value at September 30, 2026 (in thousands): 
Fair valueValuation techniquesSignificant
unobservable inputs		Range  (weighted average)
Loans individually assessed$36,713 Appraisal value (1)Estimated cost to sell10%
Real estate owned, net2,772 Appraisal value (1)Estimated cost to sell15%
Interest rate lock commitment 444 Quoted prices for similar loans in active markets adjusted by an expected pull-through rateEstimated pull-through rate93%
(1)Fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral dependent.