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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2024
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 to transfer a liability would take place between market participants at the measurement date under current market conditions (i.e., an exit price concept). See Note 1 for the Corporation’s accounting policy for fair value measurements. Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy. Assets and Liabilities Measured at Fair Value on a Recurring Basis AFS Investment Securities: Where quoted prices are available in an active market, investment securities are classified in Level 1 of the fair value hierarchy. If quoted market prices are not available for the specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and are classified in Level 2 of the fair value hierarchy. Lastly, in certain cases where there is limited activity or less transparency around inputs to the estimated fair value, securities are classified within Level 3 of the fair value hierarchy. To validate the fair value estimates, assumptions, and controls, the Corporation looks to transactions for similar instruments and utilizes independent pricing provided by third party vendors or brokers and relevant market indices. While none of these sources are solely indicative of fair value, they serve as directional indicators for the appropriateness of the Corporation’s fair value estimates. The Corporation has determined that the fair value measures of its AFS investment securities are classified predominantly within Level 2 of the fair value hierarchy. See Note 2 for additional disclosure regarding the Corporation’s AFS investment securities. Equity Securities with Readily Determinable Fair Values: The Corporation's portfolio of equity securities with readily determinable fair values is primarily comprised of mutual funds. Since quoted prices for the Corporation's equity securities are readily available in an active market, they are classified within Level 1 of the fair value hierarchy. See Note 2 for additional disclosure regarding the Corporation’s equity securities. Residential Loans Held For Sale: Residential loans held for sale, which consist generally of current production of certain fixed-rate, first-lien residential mortgage loans, are carried at estimated fair value. As of December 31, 2024, this balance also includes residential mortgages included in the mortgage portfolio sale as part of the balance sheet repositioning announced in the fourth quarter of 2024. Management has elected the fair value option to account for all newly originated mortgage loans held for sale, which results in the financial impact of changing market conditions being reflected currently in earnings as opposed to being dependent upon the timing of sales. Therefore, the continually adjusted values better reflect the price the Corporation expects to receive from the sale of such loans. The estimated fair value is based on what secondary markets are currently offering for portfolios with similar characteristics, which the Corporation classifies as a Level 2 fair value measurement. Derivative Financial Instruments (Interest Rate-Related Instruments - Both Designated and Not Designated as Hedging Instruments): The Corporation uses interest rate-related instruments (swaps and caps) to hedge its exposure to changes in fair value of its fixed-rate debt as well as to hedge its exposure to variability in cash flows on its floating rate assets, both due to changes in benchmark interest rates. Additionally, the Corporation also offers interest rate-related instruments (swaps and caps) to service its customers’ needs, for which the Corporation simultaneously enters into offsetting derivative financial instruments (i.e., mirror interest rate-related instruments) with third parties to manage its interest rate risk associated with these financial instruments. The valuation of the Corporation’s derivative financial instruments is determined using discounted cash flow analysis on the expected cash flows of each derivative and also includes a nonperformance/credit risk component (credit valuation adjustment). See Note 13 for additional disclosure regarding the Corporation’s interest rate-related instruments. The discounted cash flow analysis component in the fair value measurement reflects the contractual terms of the derivative financial instruments, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. More specifically, the fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) with the variable cash payments (or receipts) based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Likewise, the fair values of interest rate options (i.e., interest rate caps) are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fall below (or rise above) the strike rate of the floors (or caps), with the variable interest rates used in the calculation of projected receipts on the floor (or cap) based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative financial instruments for the effect of nonperformance risk, the Corporation has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. While the Corporation has determined that the majority of the inputs used to value its interest rate-related derivative financial instruments fall within Level 2 of the fair value hierarchy, the credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Corporation has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions as of December 31, 2024 and 2023, and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments for interest rate-related instruments. Therefore, the Corporation has determined that the fair value measures of its derivative financial instruments for interest rate-related instruments in their entirety are classified within Level 2 of the fair value hierarchy. Derivative Financial Instruments (Foreign Currency Exchange Forwards - Both Designated and Not Designated as Hedging Instruments): The Corporation provides foreign currency exchange services to customers. In addition, the Corporation may enter into a foreign currency exchange forward to mitigate the exchange rate risk attached to the cash flows of a loan or as an offsetting contract to a forward entered into as a service to its customer. The valuation of the Corporation’s foreign currency exchange forwards is determined using quoted prices of foreign currency exchange forwards with similar characteristics, with consideration given to the nature of the quote and the relationship of recently evidenced market activity to the fair value estimate, and is classified within Level 2 of the fair value hierarchy. See Note 13 for additional disclosures regarding the Corporation’s foreign currency exchange forwards. For Level 3 assets and liabilities measured at fair value on a recurring basis as of December 31, 2024, the Corporation utilized the following valuation techniques and significant unobservable inputs: Mortgage Servicing Rights: The Corporation sells residential mortgage loans in the secondary market and typically retains the rights to service the loans sold. Upon sale, an MSRs asset is capitalized, which represents the then current fair value of future net cash flows expected to be realized for performing servicing activities. The Corporation has made the irrevocable election to account for its MSRs asset under the fair value measurement method. Under this methodology, changes in the fair value are recognized in earnings as they occur through mortgage banking, net on the consolidated statements of income. MSRs are not traded in active markets. A cash flow model is used to determine fair value. Key assumptions and estimates, including projected prepayment speeds, assumed servicing costs, ancillary income, costs to service delinquent loans, costs of foreclosure, and discount rates with option-adjusted spreads, used by this model are based on current market sources. Assumptions used to value MSRs are considered significant unobservable inputs. A separate third-party model is used to estimate prepayment speeds based on interest rates, housing turnover rates, estimated loan curtailment, anticipated defaults, and other relevant factors. Fair value estimates from outside sources are received periodically to corroborate the results of the valuation model. Due to the nature of the valuation inputs, MSRs are classified within Level 3 of the fair value hierarchy. See Note 4 for additional disclosure regarding the Corporation’s MSRs. Derivative Financial Instruments (Mortgage Derivative — Interest Rate Lock Commitments to Originate Residential Mortgage Loans Held For Sale): The fair value is determined by the change in value from each loan's rate lock date to the expected rate lock expiration date based on the underlying loan attributes, estimated closing ratios, and investor price matrix determined to be reasonably applicable to each loan commitment. The closing ratio calculation takes into consideration historical experience and loan-level attributes, particularly the change in the current interest rates from the time of initial rate lock. The closing ratio is periodically reviewed for reasonableness and reported to the Associated Mortgage Risk Management Committee. Derivative Financial Instruments (Mortgage Derivative—Forward Commitments to Sell Mortgage Loans): Mortgage derivatives include forward commitments to deliver closed-end residential mortgage loans into conforming Agency MBS or conforming Cash Forward sales. The fair value of such instruments is determined by the difference of current market prices for such traded instruments or available from forward cash delivery commitments and the original traded price for such commitments. The Corporation also relies on an internal valuation model to estimate the fair value of its forward commitments to sell residential mortgage loans (i.e., an estimate of what the Corporation would receive or pay to terminate the forward delivery contract based on market prices for similar financial instruments), which includes matching specific terms and maturities of the forward commitments against applicable investor pricing available. While there are Level 2 and 3 inputs used in the valuation models, the Corporation has determined that the majority of the inputs significant in the valuation of both of the mortgage derivatives fall within Level 3 of the fair value hierarchy. See Note 13 for additional disclosure regarding the Corporation’s mortgage derivatives. The tables below present the Corporation’s financial instruments measured at fair value on a recurring basis and carrying amounts and estimated fair values of certain financial instruments, aggregated by the level in the fair value hierarchy within which those measurements fall:
| December 31, 2024
($ in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3
Assets |  |  |  |  |
Cash and due from banks | $ | 544,059 |  | $ | 544,059 |  | $ | 544,059 |  | $ | — |  | $ | — |
Interest-bearing deposits in other financial institutions | 453,590 |  | 453,590 |  | 453,590 |  | — |  | — |
Federal funds sold and securities purchased under agreements to resell | 21,955 |  | 21,955 |  | 21,955 |  | — |  | — |
AFS investment securities: |  |  |  |  |
Obligations of state and political subdivisions (municipal securities) | 3,005 |  | 3,005 |  | — |  | 3,005 |  | — |
Residential mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 110,928 |  | 110,928 |  | — |  | 110,928 |  | — |
GNMA | 4,227,727 |  | 4,227,727 |  | — |  | 4,227,727 |  | — |
Commercial mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 17,000 |  | 17,000 |  | — |  | 17,000 |  | — |
GNMA | 111,475 |  | 111,475 |  | — |  | 111,475 |  | — |
Asset backed securities: |  |  |  |  |
FFELP | 107,839 |  | 107,839 |  | — |  | 107,839 |  | — |
SBA | 471 |  | 471 |  | — |  | 471 |  | — |
Other debt securities | 2,989 |  | 2,989 |  | — |  | 2,989 |  | — |
Total AFS investment securities | 4,581,434 |  | 4,581,434 |  | — |  | 4,581,434 |  | — |
HTM investment securities: |  |  |  |  |
U.S. Treasury securities | 1,000 |  | 999 |  | 999 |  | — |  | — |
Obligations of state and political subdivisions (municipal securities), net | 1,659,662 |  | 1,486,582 |  | — |  | 1,486,582 |  | — |
Residential mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 885,476 |  | 721,946 |  | — |  | 721,946 |  | — |
GNMA | 43,693 |  | 39,927 |  | — |  | 39,927 |  | — |
Private-label | 324,182 |  | 266,353 |  | — |  | 266,353 |  | — |
Commercial mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 772,456 |  | 623,595 |  | — |  | 623,595 |  | — |
GNMA | 52,219 |  | 46,032 |  | — |  | 46,032 |  | — |
Total HTM investment securities, net | 3,738,687 |  | 3,185,434 |  | 999 |  | 3,184,435 |  | — |
Equity securities: |  |  |  |  |
Equity securities | 10,742 |  | 10,742 |  | 10,670 |  | — |  | 72 |
Equity securities at NAV | 12,500 |  | 12,500 |  |  |  |
Total equity securities | 23,242 |  | 23,242 |  |  |  |
FHLB and Federal Reserve Bank stocks | 179,665 |  | 179,665 |  | — |  | 179,665 |  | — |
Residential loans held for sale | 646,687 |  | 646,687 |  | — |  | 646,687 |  | — |
Commercial loans held for sale | 32,634 |  | 32,634 |  | — |  | 32,634 |  | — |
Loans, net | 29,373,557 |  | 28,327,115 |  | — |  | — |  | 28,327,115 |
Bank and corporate owned life insurance | 689,000 |  | 689,000 |  | — |  | 689,000 |  | — |
Mortgage servicing rights, net | 87,683 |  | 87,683 |  | — |  | — |  | 87,683 |
Interest rate-related instruments designated as hedging instruments(a) | 2,960 |  | 2,960 |  | — |  | 2,960 |  | — |
Foreign currency exchange forwards designated as hedging instruments(a) | 2,457 |  | 2,457 |  | — |  | 2,457 |  | — |
Interest rate-related and other instruments not designated as hedging instruments(a) | 88,541 |  | 88,541 |  | — |  | 88,541 |  | — |
Foreign currency exchange forwards not designated as hedging instruments(a) | 4,315 |  | 4,315 |  | — |  | 4,315 |  | — |
Interest rate lock commitments to originate residential mortgage loans held for sale | 327 |  | 327 |  | — |  | — |  | 327 |
Forward commitments to sell residential mortgage loans | 254 |  | 254 |  | — |  | — |  | 254 |
Total selected assets at fair value | $ | 40,471,048 |  | $ | 38,871,352 |  | $ | 1,031,273 |  | $ | 9,412,129 |  | $ | 28,415,450 |
(a) Figures are presented gross before netting. See Note 13 and Note 14 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place.
| December 31, 2024
($ in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3
Liabilities |  |  |  |  |
Deposits: |  |  |  |  |
Noninterest-bearing demand | $ | 5,775,657 |  | $ | 5,775,657 |  | $ | — |  | $ | — |  | $ | 5,775,657 |
Savings | 5,133,295 |  | 5,133,295 |  | — |  | — |  | 5,133,295 |
Interest-bearing demand | 9,124,741 |  | 9,124,741 |  | — |  | — |  | 9,124,741 |
Money market | 6,637,915 |  | 6,637,915 |  | — |  | — |  | 6,637,915 |
Brokered CDs(a) | 4,276,309 |  | 4,276,309 |  | — |  | 4,276,309 |  | — |
Other time deposits(a) | 3,700,518 |  | 3,700,518 |  | — |  | 3,700,518 |  | — |
Total deposits | 34,648,434 |  | 34,648,434 |  | — |  | 7,976,827 |  | 26,671,607 |
Federal funds purchased and securities sold under agreements to repurchase | 470,369 |  | 470,370 |  | — |  | 470,370 |  | — |
FHLB advances | 1,853,807 |  | 1,852,685 |  | — |  | 1,852,685 |  | — |
Other long-term funding | 837,635 |  | 823,991 |  | — |  | 823,991 |  | — |
Standby letters of credit(b) | 2,546 |  | 2,546 |  | — |  | 2,546 |  | — |
Interest rate-related instruments designated as hedging instruments(c) | 2,976 |  | 2,976 |  | — |  | 2,976 |  | — |
Foreign currency exchange forwards designated as hedging instruments(c) | 563 |  | 563 |  | — |  | 563 |  | — |
Interest rate-related and other instruments not designated as hedging instruments(c) | 170,928 |  | 170,928 |  | — |  | 170,928 |  | — |
Foreign currency exchange forwards not designated as hedging instruments(c) | 4,106 |  | 4,106 |  | — |  | 4,106 |  | — |
Total selected liabilities at fair value | $ | 37,991,364 |  | $ | 37,976,599 |  | $ | — |  | $ | 11,304,992 |  | $ | 26,671,607 |
(a) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value. (b) The commitment on standby letters of credit was $254 million at December 31, 2024. See Note 15 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments. (c) Figures are presented gross before netting. See Note 13 and Note 14 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place.
| December 31, 2023
($ in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3
Assets |  |  |  |  |
Cash and due from banks | $ | 484,384 |  | $ | 484,384 |  | $ | 484,384 |  | $ | — |  | $ | — |
Interest-bearing deposits in other financial institutions | 425,089 |  | 425,089 |  | 425,089 |  | — |  | — |
Federal funds sold and securities purchased under agreements to resell | 14,350 |  | 14,350 |  | 14,350 |  | — |  | — |
AFS investment securities: |  |  |  |  |
U.S. Treasury securities | 35,902 |  | 35,902 |  | 35,902 |  | — |  | — |
Obligations of state and political subdivisions (municipal securities) | 91,817 |  | 91,817 |  | — |  | 91,817 |  | — |
Residential mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 1,120,794 |  | 1,120,794 |  | — |  | 1,120,794 |  | — |
GNMA | 2,042,675 |  | 2,042,675 |  | — |  | 2,042,675 |  | — |
Commercial mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 16,937 |  | 16,937 |  | — |  | 16,937 |  | — |
GNMA | 154,793 |  | 154,793 |  | — |  | 154,793 |  | — |
Asset backed securities: |  |  |  |  |
FFELP | 133,975 |  | 133,975 |  | — |  | 133,975 |  | — |
SBA | 1,051 |  | 1,051 |  | — |  | 1,051 |  | — |
Other debt securities | 2,950 |  | 2,950 |  | — |  | 2,950 |  | — |
Total AFS investment securities | 3,600,892 |  | 3,600,892 |  | 35,902 |  | 3,564,990 |  | — |
HTM investment securities: |  |  |  |  |
U.S. Treasury securities | 999 |  | 963 |  | 963 |  | — |  | — |
Obligations of state and political subdivisions (municipal securities), net | 1,682,398 |  | 1,553,984 |  | — |  | 1,553,984 |  | — |
Residential mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 941,973 |  | 804,393 |  | — |  | 804,393 |  | — |
GNMA | 48,979 |  | 46,170 |  | — |  | 46,170 |  | — |
Private-label | 345,083 |  | 289,507 |  | — |  | 289,507 |  | — |
Commercial mortgage-related securities: |  |  |  |  |
FNMA / FHLMC | 780,995 |  | 632,914 |  | — |  | 632,914 |  | — |
GNMA | 59,733 |  | 52,619 |  | — |  | 52,619 |  | — |
Total HTM investment securities, net | 3,860,160 |  | 3,380,550 |  | 963 |  | 3,379,586 |  | — |
Equity securities: |  |  |  |  |
Equity securities | 31,651 |  | 31,651 |  | 6,883 |  | — |  | 24,769 |
Equity securities at NAV | 10,000 |  | 10,000 |  |  |  |
Total equity securities | 41,651 |  | 41,651 |  |  |  |
FHLB and Federal Reserve Bank stocks | 229,171 |  | 229,171 |  | — |  | 229,171 |  | — |
Residential loans held for sale | 33,011 |  | 33,011 |  | — |  | 33,011 |  | — |
Commercial loans held for sale | 90,303 |  | 90,303 |  | — |  | 90,303 |  | — |
Loans, net | 28,865,124 |  | 27,371,086 |  | — |  | — |  | 27,371,086 |
Bank and corporate owned life insurance | 682,649 |  | 682,649 |  | — |  | 682,649 |  | — |
Mortgage servicing rights, net | 84,390 |  | 84,390 |  | — |  | — |  | 84,390 |
Interest rate-related instruments designated as hedging instruments(a) | 8,075 |  | 8,075 |  | — |  | 8,075 |  | — |
Foreign currency exchange forwards designated as hedging instruments(a) | 632 |  | 632 |  | — |  | 632 |  | — |
Interest rate-related and other instruments not designated as hedging instruments(a) | 111,623 |  | 111,623 |  | — |  | 111,623 |  | — |
Foreign currency exchange forwards not designated as hedging instruments(a) | 2,954 |  | 2,954 |  | — |  | 2,954 |  | — |
Interest rate lock commitments to originate residential mortgage loans held for sale | 439 |  | 439 |  | — |  | — |  | 439 |
Total selected assets at fair value | $ | 38,534,897 |  | $ | 36,561,249 |  | $ | 967,570 |  | $ | 8,102,995 |  | $ | 27,480,684 |
(a) Figures are presented gross before netting. See Note 13 and Note 14 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place.
| December 31, 2023
($ in thousands) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3
Liabilities |  |  |  |  |
Deposits: |  |  |  |  |
Noninterest-bearing demand | $ | 6,119,956 |  | $ | 6,119,956 |  | $ | — |  | $ | — |  | $ | 6,119,956 |
Savings | 4,835,701 |  | 4,835,701 |  | — |  | — |  | 4,835,701 |
Interest-bearing demand | 8,843,967 |  | 8,843,967 |  | — |  | — |  | 8,843,967 |
Money market | 6,330,453 |  | 6,330,453 |  | — |  | — |  | 6,330,453 |
Brokered CDs(a) | 4,447,479 |  | 4,447,479 |  | — |  | 4,447,479 |  | — |
Other time deposits(a) | 2,868,494 |  | 2,868,494 |  | — |  | 2,868,494 |  | — |
Total deposits | 33,446,049 |  | 33,446,049 |  | — |  | 7,315,973 |  | 26,130,076 |
Federal funds purchased and securities sold under agreements to repurchase | 326,780 |  | 326,757 |  | — |  | 326,757 |  | — |
FHLB advances | 1,940,194 |  | 1,944,600 |  | — |  | 1,944,600 |  | — |
Other long-term funding | 541,269 |  | 534,983 |  | — |  | 534,983 |  | — |
Standby letters of credit(b) | 2,157 |  | 2,157 |  | — |  | 2,157 |  | — |
Interest rate-related instruments designated as hedging instruments(c) | 930 |  | 930 |  | — |  | 930 |  | — |
Foreign currency exchange forwards designated as hedging instruments(c) | 2,946 |  | 2,946 |  | — |  | 2,946 |  | — |
Interest rate-related and other instruments not designated as hedging instruments(c) | 195,662 |  | 195,662 |  | — |  | 195,662 |  | — |
Foreign currency exchange forwards not designated as hedging instruments(c) | 2,746 |  | 2,746 |  | — |  | 2,746 |  | — |
Forward commitments to sell residential mortgage loans | 673 |  | 673 |  | — |  | — |  | 673 |
Total selected liabilities at fair value | $ | 36,459,407 |  | $ | 36,457,504 |  | $ | — |  | $ | 10,326,755 |  | $ | 26,130,749 |
(a) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value. (b) The commitment on standby letters of credit was $212 million at December 31, 2023. See Note 15 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments. (c) Figures are presented gross before netting. See Note 13 and Note 14 for information relating to the impact of offsetting derivative assets and liabilities and cash collateral with the same counterparty where there is a legally enforceable master netting agreement in place. The table below presents a rollforward of the consolidated balance sheets amounts for the Corporation's mortgage derivatives measured on a recurring basis and classified within Level 3 of the fair value hierarchy:
($ in thousands) | Interest rate lock commitments to originate residential mortgage loans held for sale | Forward commitments to sell residential mortgage loans | Total
Balance December 31, 2022 | $ | 86 |  | $ | 46 |  | $ | 40 |
New production | 6,557 |  | (1,816) |  | 8,373 |
Closed loans / settlements | (4,171) |  | 2,494 |  | (6,665) |
Other | (2,033) |  | (51) |  | (1,982) |
Change in mortgage derivative | 352 |  | 627 |  | (274) |
Balance December 31, 2023 | $ | 439 |  | $ | 673 |  | $ | (234) |
New production | $ | 11,771 |  | $ | (4,000) |  | $ | 15,771 |
Closed loans / settlements | (8,816) |  | 3,512 |  | (12,328) |
Other | (3,068) |  | (438) |  | (2,630) |
Change in mortgage derivative | (113) |  | (927) |  | 814 |
Balance December 31, 2024 | $ | 327 |  | $ | (254) |  | $ | 580 |
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Following is a description of the valuation methodologies used for the Corporation’s more significant instruments measured on a nonrecurring basis at LOCOM, including the general classification of such instruments pursuant to the valuation hierarchy. Commercial Loans Held For Sale: The estimated fair value is based on a discounted cash flow analysis, which the Corporation classifies as a Level 2 nonrecurring fair value measurement. OREO: Certain OREO, upon initial recognition, was re-measured and reported at fair value through a charge off to the allowance for loan losses based upon the estimated fair value of the OREO, less estimated selling costs. The fair value of OREO, upon initial recognition or subsequent impairment, was estimated using appraised values, which the Corporation classifies as a Level 2 nonrecurring fair value measurement. For Level 3 assets and liabilities measured at fair value on a nonrecurring basis as of December 31, 2024, the Corporation utilized the following valuation techniques and significant unobservable inputs: Individually Evaluated Loans: The Corporation individually evaluates loans when a commercial loan relationship over $500,000 is in nonaccrual status or, prior to 2023, when a commercial or consumer loan relationship had its terms restructured in a TDR or when a loan met the Corporation's definition of a probable TDR. On January 1, 2023, the Corporation adopted ASU 2022-02 prospectively. As a result, loans that were restructured prior to adoption are no longer considered TDRs and are not individually evaluated. See Note 3 for additional information regarding the Corporation’s individually evaluated loans. Equity Securities Without Readily Determinable Fair Values: The Corporation measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with such changes recognized in earnings. Included in equity securities without readily determinable fair values were Visa Class B restricted shares carried at fair value, of which the Corporation sold all remaining shares during the first quarter of 2024. In its determination of the new carrying values upon observable price changes, the Corporation will adjust the prices if deemed necessary to arrive at the Corporation's estimated fair values. Such adjustments may include adjustments to reflect the different rights and obligations of similar securities and other adjustments. See Note 2 for additional disclosure regarding the Corporation’s equity securities without readily determinable fair values. The following table presents a rollforward of the fair value of Level 3 equity securities that are measured under the measurement alternative, and the related adjustments recorded during the periods presented for those securities with observable price changes:
($ in thousands) |
Fair value as of December 31, 2022 | $ | 19,225 |
Gains recognized in investment securities gains, net | 5,861 |
Purchases | 11 |
Sales | (329) |
Fair value as of December 31, 2023 | $ | 24,769 |
Gains recognized in investment securities gains, net | $ | 4,054 |
Purchases | 22 |
Sales | (28,772) |
Fair value as of December 31, 2024 | $ | 72 |
The table below presents the Corporation’s assets measured at fair value on a nonrecurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall:
($ in thousands) | Fair Value Hierarchy | Fair Value | Consolidated Statements of Income Category of Adjustment Recognized in Income | Adjustment Recognized on the Consolidated Statements of Income(a)
December 31, 2024 |  |  |  |
Assets |  |  |
Individually evaluated loans | Level 3 | $ | 31,483 |  | Provision for credit losses | $ | 17,454 |
OREO(b) | Level 2 | 276 |  | Other noninterest expense / provision for credit losses(c) | 1,067 |
December 31, 2023 |  |  |  |
Assets |  |  |  |
Individually evaluated loans | Level 3 | $ | 47,221 |  | Provision for credit losses | $ | 45,709 |
OREO(b) | Level 2 | 3,139 |  | Other noninterest expense / provision for credit losses(c) | 2,532 |
Equity securities without readily determinable fair values | Level 3 | 24,671 |  | Investment securities gains (losses), net | 5,785 |
(a) Includes the full year impact on the consolidated statements of income. (b) If the fair value of the collateral exceeds the carrying amount of the asset, no charge off or adjustment is necessary, the asset is not considered to be carried at fair value, and is therefore not included in the table. (c) When a property's value is written down at the time it is transferred to OREO, the charge off is booked to the provision for credit losses. When a property is already in OREO and subsequently written down, the charge off is booked to other noninterest expense. The table below presents the unobservable inputs that are readily quantifiable pertaining to Level 3 measurements:
December 31, 2024 | Valuation Technique | Significant Unobservable Input | Range of Inputs | Weighted Average Input Applied
Mortgage servicing rights | Discounted cash flow | Option adjusted spread | 5% | - | 8% | 5%
Mortgage servicing rights | Discounted cash flow | Constant prepayment rate | —% | - | 100% | 4%
Individually evaluated loans | Appraisals / discounted cash flow | Collateral / discount factor | —% | - | 77% | 61%
Interest rate lock commitments to originate residential mortgage loans held for sale | Discounted cash flow | Closing ratio | 55% | - | 100% | 92%

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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