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FAIR VALUE
 9 Months Ended
Sep. 30, 2025
FAIR VALUE [Abstract]  
FAIR VALUE
NOTE 15 –
 
FAIR VALUE
Fair Value
 
Measurement
ASC Topic
 
820, “Fair
 
Value
 
Measurement,” defines
 
fair value as
 
the exchange
 
price that would
 
be received for
 
an asset or
 
paid to
transfer
 
a
 
liability
 
(an
 
exit
 
price)
 
in
 
the
 
principal
 
or
 
most
 
advantageous
 
market
 
for
 
the
 
asset
 
or
 
liability
 
in
 
an
 
orderly
 
transaction
between market
 
participants on
 
the measurement
 
date. This guidance
 
also establishes
 
a three-level
 
hierarchy for
 
measuring fair
 
value
based on the
 
observability of inputs:
 
(i) Level 1
 
inputs are quoted
 
prices in active markets
 
for identical assets and
 
liabilities; (ii) Level
2 inputs are observable
 
inputs other than Level
 
1 prices, such as quoted
 
prices for similar assets or
 
liabilities in active markets,
 
as well
as
 
inputs
 
that
 
are
 
observable
 
for
 
the
 
asset
 
or
 
liability
 
(other
 
than
 
quoted
 
prices);
 
and
 
(iii)
 
Level
 
3
 
inputs
 
are
 
unobservable
 
inputs,
requiring significant judgement due to limited or no market activity.
See Note 23 –
 
“Fair Value,”
 
to the audited consolidated
 
financial statements included
 
in the 2024 Annual
 
Report on Form 10-K
 
for
a description of the valuation methodologies used to measure financial instruments
 
at fair value on a recurring basis.
 
There
 
were
 
no
 
transfers
 
of
 
assets
 
and
 
liabilities
 
measured
 
at
 
fair
 
value
 
between
 
Level
 
1
 
and
 
Level
 
2
 
measurements
 
during
 
the
quarters and nine-month periods ended September 30, 2025 and
 
2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets and liabilities measured at fair value on a recurring basis are summarized below as of
 
the indicated dates:
As of September 30, 2025
As of December 31, 2024
Fair Value Measurements Using
 
Fair Value Measurements Using
 
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
(In thousands)
Assets:
 
Available-for-sale debt securities:
U.S. Treasury securities
$
496,803
$
-
$
-
$
496,803
$
59,189
$
-
$
-
$
59,189
Noncallable U.S. agencies debt securities
-
646,783
-
646,783
-
533,296
-
533,296
Callable U.S. agencies debt securities
-
612,631
-
612,631
-
1,307,035
-
1,307,035
MBS
-
2,836,675
3,332
(1)
2,840,007
-
2,658,967
4,195
(1)
2,663,162
Puerto Rico government obligation
-
-
1,579
1,579
-
-
1,620
1,620
Other investments
-
-
500
500
-
-
1,000
1,000
 
Equity securities
5,009
-
-
5,009
4,886
-
-
4,886
 
Derivative assets
-
332
-
332
-
318
-
318
Liabilities:
 
Derivative liabilities
-
264
-
264
-
150
-
150
(1) Related to private label MBS.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table
 
below presents
 
a reconciliation
 
of the
 
beginning and
 
ending balances
 
of all
 
assets measured
 
at fair
 
value on
 
a recurring
basis using significant unobservable inputs (Level 3) for the quarters
 
and nine-month periods ended September 30, 2025 and 2024:
Quarter Ended September 30,
Nine-Month Period Ended September 30,
2025
2024
2025
2024
Level 3 Instruments Only
 
 
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
Securities Available
for Sale
(1)
(In thousands)
Beginning balance
$
5,857
$
7,099
$
6,815
$
6,200
 
Total (losses) gains:
 
Included in other comprehensive income (unrealized)
(72)
178
219
592
 
Included in earnings (unrealized)
(2)
(146)
36
(138)
45
 
Purchases
-
-
-
1,000
 
Principal repayments and amortization
(3)
(228)
(425)
(1,485)
(949)
Ending balance
$
5,411
$
6,888
$
5,411
$
6,888
___________________
(1)
Amounts mostly related to private label MBS.
(2)
Changes in unrealized (losses) gains included in earnings were
 
recognized within provision for credit losses – expense
 
and relate to assets still held as of the reporting date.
(3)
For the nine-month period ended September 30, 2025 include
 
a $
0.5
 
million repayment of a matured debt security.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
tables
 
below
 
present
 
quantitative
 
information
 
for
 
significant
 
assets
 
measured
 
at
 
fair
 
value
 
on
 
a
 
recurring
 
basis
 
using
significant unobservable inputs (Level 3) as of the indicated dates:
September 30, 2025
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
3,332
Discounted cash flows
Discount rate
16.0%
16.0%
16.0%
Prepayment rate
1.6%
8.1%
3.4%
Projected cumulative loss rate
0.1%
11.7%
5.8%
 
Puerto Rico government obligation
$
1,579
Discounted cash flows
Discount rate
11.3%
11.3%
11.3%
Projected cumulative loss rate
24.3%
24.3%
24.3%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2024
Fair Value
Valuation Technique
Unobservable Input
Range
Weighted
Average
Minimum
 
Maximum
(Dollars in thousands)
Available-for-sale
 
debt securities:
 
Private label MBS
$
4,195
Discounted cash flows
Discount rate
16.6%
16.6%
16.6%
Prepayment rate
0.0%
5.7%
3.2%
Projected cumulative loss rate
0.1%
10.1%
4.9%
 
Puerto Rico government obligation
$
1,620
Discounted cash flows
Discount rate
11.5%
11.5%
11.5%
Projected cumulative loss rate
23.9%
23.9%
23.9%
 
 
Information about Sensitivity to Changes in Significant Unobservable Inputs
Private label
 
MBS: The
 
significant unobservable
 
inputs in
 
the valuation
 
include probability
 
of default,
 
the loss
 
severity
 
assumption,
and prepayment
 
rates. Shifts
 
in those
 
inputs would
 
result in different
 
fair value
 
measurements. Increases
 
in the probability
 
of default,
loss
 
severity
 
assumptions,
 
and
 
prepayment
 
rates
 
in
 
isolation
 
would
 
generally
 
result
 
in
 
an
 
adverse
 
effect
 
on
 
the
 
fair
 
value
 
of
 
the
instruments. The Corporation modeled meaningful and possible
 
shifts of each input to assess the effect on the fair value estimation.
Puerto Rico Government Obligation:
 
The significant unobservable input used in the
 
fair value measurement is the assumed loss rate of
the
 
underlying
 
residential
 
mortgage
 
loans
 
that
 
collateralize
 
a
 
pass-through
 
MBS
 
guaranteed
 
by
 
the
 
PRHFA.
 
A
 
significant
 
increase
(decrease) in
 
the assumed
 
rate would
 
lead to
 
a (lower)
 
higher fair
 
value estimate.
 
See Note
 
2 –
 
“Debt Securities”
 
for information
 
on
the methodology used to calculate the fair value of this debt security.
Additionally, fair value
 
is used on a non-recurring basis to evaluate certain assets in accordance with GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2025,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
assets recognized at fair value on a non-recurring basis and still held at September
 
30, 2025, as shown in the following table:
Carrying value as of September 30, 2025
Related to losses
 
recorded for the
Quarter Ended
September 30, 2025
Related to losses
 
recorded for the
Nine-Month Period Ended
September 30, 2025
Losses recorded for the
Quarter Ended
September 30, 2025
Losses recorded for the
Nine-Month Period Ended
September 30, 2025
(In thousands)
Level 3:
Loans receivable
(1)
$
250
$
9,214
$
(12)
$
(630)
OREO
(2) (3)
211
387
(1)
(5)
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The Corporation
 
generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The Corporation
 
derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions involving
 
similar assets in
 
similar locations but adjusted
 
for specific characteristics
 
and
assumptions of
 
the collateral
 
(e.g., absorption
 
rates), which
 
are not
 
market observable.
 
There were
no
 
adjustments applied
 
on appraisals
 
for the
 
quarter ended
 
September 30,
 
2025. The
adjustment applied on appraisals was of
22
% for the nine-month period ended September 30, 2025.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption rates
 
and net operating income of
 
income producing properties),
 
which are not market observable.
 
Losses were related to
market valuation adjustments
 
after the transfer
 
of the loans
 
to the OREO
 
portfolio. The
 
adjustments applied on
 
appraisals ranged
 
from
3
% to
24
% for the
 
quarter and nine-month
 
period
ended September 30, 2025.
(3)
Excludes
 
the
 
aforementioned
 
$
2.8
 
million
 
adjustment
 
in
 
connection
 
with
 
ongoing
 
litigation
 
involving
 
a
 
commercial
 
OREO
 
property
 
in
 
the
 
Virgin
 
Islands
 
region.
 
See
 
Note
 
19
 
–
“Regulatory Matters, Commitments and Contingencies” for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
 
September
 
30,
 
2024,
 
the
 
Corporation
 
recorded
 
losses
 
or
 
valuation
 
adjustments
 
for
assets recognized at fair value on a non-recurring basis and still held at September
 
30, 2024, as shown in the following table:
Carrying value as of September 30, 2024
Related to losses
 
 
recorded for the
 
Quarter Ended
 
September 30, 2024
Related to losses
 
recorded for the
Nine-Month Period Ended
 
September 30, 2024
Losses recorded for the
 
Quarter Ended
 
September 30, 2024
Losses recorded for the
Nine-Month Period Ended
September 30, 2024
(In thousands)
Level 3:
Loans receivable
(1)
$
5,910
$
22,204
$
(386)
$
(1,441)
OREO
(2)
752
1,437
(33)
(108)
Level 2:
(1)
Consists mainly of
 
collateral dependent commercial
 
and construction
 
loans. The
 
Corporation generally measured
 
losses based
 
on the fair
 
value of the
 
collateral. The
 
Corporation derived
the fair values from
 
external appraisals that
 
took into consideration prices
 
in observed transactions
 
involving similar assets
 
in similar locations but
 
adjusted for specific characteristics
 
and
assumptions of
 
the collateral
 
(e.g., absorption
 
rates), which
 
are not
 
market observable.
 
There were
no
 
adjustments applied
 
on appraisals
 
for the
 
quarter ended
 
September 30,
 
2024. The
adjustments applied on appraisals were of
4
% for the nine-month period ended September 30, 2024.
(2)
The Corporation
 
derived the
 
fair values
 
from appraisals
 
that took
 
into consideration
 
prices in
 
observed transactions
 
involving similar
 
assets in
 
similar locations
 
but adjusted
 
for specific
characteristics and assumptions of
 
the properties (e.g., absorption
 
rates and net operating income
 
of income producing properties),
 
which are not market observable.
 
Losses were related to
market
 
valuation
 
adjustments
 
after
 
the
 
transfer
 
of
 
the
 
loans
 
to
 
the
 
OREO
 
portfolio.
 
The
 
adjustments
 
applied
 
ranged
 
from
2
%
 
to
44
%
 
for
 
the
 
quarter
 
and
 
nine-month
 
period
 
ended
September 30, 2024.
See Note 23 –
 
“Fair Value,”
 
to the audited
 
consolidated financial statements
 
included in the
 
2024 Annual Report
 
on Form 10-K
 
for
qualitative
 
information
 
regarding
 
the
 
fair
 
value
 
measurements
 
for
 
Level
 
3
 
financial
 
instruments
 
measured
 
at
 
fair
 
value
 
on
 
a
nonrecurring basis.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The
 
following
 
tables
 
present
 
the
 
carrying
 
value,
 
estimated
 
fair
 
value
 
and
 
estimated
 
fair
 
value
 
level
 
of
 
the
 
hierarchy
 
of
 
financial
instruments as of the indicated dates:
Total Carrying Amount
in Statement of
Financial Condition as
of September 30, 2025
Fair Value Estimate as
 
of
September 30, 2025
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
899,570
$
899,570
$
899,570
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,598,303
4,598,303
496,803
4,096,089
5,411
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
273,363
 
Less: ACL on held-to-maturity debt securities
(698)
 
Held-to-maturity debt securities, net of ACL
$
272,665
269,253
-
184,070
85,183
Equity securities (amortized cost)
39,381
39,381
-
39,381
(1)
-
Other equity securities (fair value)
5,009
5,009
5,009
-
-
Loans held for sale (lower of cost or market)
12,546
12,793
-
12,793
-
Loans held for investment:
 
Loans held for investment (amortized cost)
13,048,684
 
Less: ACL for loans and finance leases
(246,990)
 
Loans held for investment, net of ACL
$
12,801,694
12,700,160
-
-
12,700,160
MSRs (amortized cost)
23,659
41,710
-
-
41,710
Derivative assets (fair value)
 
(2)
332
332
-
332
-
Liabilities:
Deposits (amortized cost)
$
16,861,047
$
16,864,154
$
-
$
16,864,154
$
-
Long-term advances from the FHLB (amortized cost)
290,000
292,473
-
292,473
-
Derivative liabilities (fair value)
 
(2)
264
264
-
264
-
(1) Includes FHLB stock with a carrying value of $
24.7
 
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Carrying Amount
in Statement of
Financial Condition as
of December 31, 2024
Fair Value Estimate as
 
of
December 31, 2024
Level 1
Level 2
Level 3
(In thousands)
Assets:
Cash and due from banks and money market investments (amortized
 
cost)
$
1,159,415
$
1,159,415
$
1,159,415
$
-
$
-
Available-for-sale debt
 
securities (fair value)
4,565,302
4,565,302
59,189
4,499,298
6,815
Held-to-maturity debt securities:
 
Held-to-maturity debt securities (amortized cost)
317,786
 
Less: ACL on held-to-maturity debt securities
(802)
 
Held-to-maturity debt securities, net of ACL
$
316,984
308,040
-
212,432
95,608
Equity securities (amortized cost)
47,132
47,132
-
47,132
(1)
-
Other equity securities (fair value)
4,886
4,886
4,886
-
-
Loans held for sale (lower of cost or market)
15,276
15,276
-
15,276
-
Loans held for investment:
 
 
Loans held for investment (amortized cost)
12,746,556
 
Less: ACL for loans and finance leases
(243,942)
 
Loans held for investment, net of ACL
$
12,502,614
12,406,405
-
-
12,406,405
MSRs (amortized cost)
25,019
43,046
-
-
43,046
Derivative assets (fair value)
(2)
318
318
-
318
-
Liabilities:
Deposits (amortized cost)
$
16,871,298
$
16,872,963
$
-
$
16,872,963
$
-
Long-term advances from the FHLB (amortized cost)
500,000
500,128
-
500,128
-
Junior subordinated debentures (amortized cost)
61,700
61,752
-
-
61,752
Derivative liabilities (fair value)
(2)
150
150
-
150
-
(1) Includes FHLB stock with a carrying value of $
34.0
 
million, which is considered restricted.
(2) Includes interest rate swap agreements, forward contracts, and interest rate lock commitments.
The short-term nature
 
of certain assets and
 
liabilities result in their
 
carrying value approximating
 
fair value. These include
 
cash and
cash
 
due
 
from
 
banks
 
and
 
other
 
short-term
 
assets,
 
such
 
as
 
FHLB
 
stock.
 
Certain
 
assets,
 
the
 
most
 
significant
 
being
 
premises
 
and
equipment,
 
goodwill
 
and
 
other
 
intangible
 
assets, are
 
not
 
considered
 
financial
 
instruments
 
and
 
are
 
not
 
included
 
above. Accordingly,
this
 
fair
 
value
 
information
 
is not
 
intended
 
to, and
 
does not,
 
represent
 
the Corporation’s
 
underlying
 
value.
 
Many of
 
these assets
 
and
liabilities that
 
are subject
 
to the
 
disclosure requirements
 
are not
 
actively traded,
 
requiring management
 
to estimate
 
fair values.
 
These
estimates
 
necessarily
 
involve
 
the
 
use
 
of
 
assumptions
 
and
 
judgment
 
about
 
a
 
wide
 
variety
 
of
 
factors,
 
including
 
but
 
not
 
limited
 
to,
relevancy of market prices of comparable instruments, expected future
 
cash flows, and appropriate discount rates.