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Note 7 - Other Assets and Other Liabilities

9 Months Ended

Sep. 30, 2025

Other Assets and Liabilities Disclosure [Text Block]

Note 7: Other Assets and Other Liabilities

Other assets consisted of the following:

	At September 30,		At December 31,
	2025		2024
	(In thousands)
Equity securities not held for trading at cost:
Federal Reserve Bank stock ⁽¹⁾	$	14,069	$	14,069
Other investments		158		158
Total equity securities not held for trading at cost		14,227		14,227
Equity securities held for trading at fair value		436		-
Total equity securities		14,663		14,227
Bank owned life insurance cash surrender value		70,467		68,578
Net deferred tax asset		56,825		88,606
Right-of-use asset		22,425		17,985
Limited partnership investments		30,806		28,551
Interest receivable		39,384		44,606
Prepaid assets		4,908		5,697
Other assets		6,596		12,635
Total other assets	$	246,074	$	280,885

⁽¹⁾A bank applying for membership in the Federal Reserve System is required to subscribe to stock in the Federal Reserve Bank (FRB) in its district in a sum equal to six percent of the bank’s paid-up capital stock and surplus. One-half of the amount of the bank's subscription shall be paid to the FRB and the remaining half will be subject to call when deemed necessary by the Board of Governors of the Federal Reserve System.

At September 30, 2025, the Company had marketable equity securities held for trading at fair value of $436 thousand. The Company recognized unrealized losses of $90 thousand in net income during the three months ended September 30, 2025. There were no purchases or sales of securities held for trading during the three months ended September 30, 2025 and September 30, 2024. There were no marketable equity securities at December 31, 2024.

The Company owns 211 thousand shares of Visa Inc. (“Visa”) Class B-1 common stock, which have transfer restrictions; the carrying value is $-0- thousand. Following the resolution of certain litigation involving Visa, shares of Visa’s Class B-1 stock will convert to shares of Visa Class A common stock based on a conversion factor (1.5549 as of September 30, 2025), which is periodically adjusted to reflect Visa’s ongoing litigation costs. Given the transfer restrictions and continuing uncertainty regarding the likelihood, ultimate timing and eventual conversion of Visa Class B-1 common stock for shares of Visa Class A common stock or other marketable classes of Visa common stock, these shares are not considered to have a readily determinable fair value and have no carrying value. Visa Class A common stock trades on the New York Stock Exchange and had a closing price of $341.38 per share on September 30, 2025, the last trading day for the third quarter 2025. The ultimate value of the Company’s Visa Class B-1 shares is subject to the extent of Visa’s future litigation escrow fundings, the resulting conversion rate to Visa Class A common stock, and current and future transfer restrictions on the Visa Class B-1 common stock. At September 30, 2025, the Company did not record an adjustment to the carrying value of the Visa Class B-1 shares.

The Company invests in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for low-income housing tax credits. At September 30, 2025, these investments totaled $30,806 thousand and $11,320 thousand of this amount represents outstanding equity capital commitments that are included in other liabilities. At December 31, 2024, these investments totaled $28,551 thousand and $11,368 thousand of this amount represents outstanding equity capital commitments that are included in other liabilities. At September 30, 2025, the $11,320 thousand of outstanding equity capital commitments are expected to be paid as follows: $2,808 thousand in the remainder of 2025, $4,688 thousand in 2026, $2,569 thousand in 2027, $348 thousand in 2028, $396 thousand in 2029 and $511 thousand in 2030 or thereafter.

The amounts recognized in net income for these investments include:

	For the Three Months Ended				For the Nine Months Ended
	September 30,
	2025		2024		2025		2024
	(In thousands)
Investment loss included in pre-tax income	$	915	$	1,210	$	2,745	$	4,090
Tax credits recognized in provision for income taxes		975		785		2,925		2,735

Other liabilities consisted of the following:

	At September 30,		At December 31,
	2025		2024
	(In thousands)
Operating lease liability	$	22,425	$	17,985
Securities purchases pending settlement		4,298		-
Other liabilities		29,239		36,160
Total other liabilities	$	55,962	$	54,145

The Company has entered into leases for most branch locations and certain other offices that were classified as operating leases primarily with original terms of five years. Certain lease arrangements contain extension options, which can be exercised at the Company’s option, for one or more additional five year terms. Unexercised extension options are not considered reasonably certain of exercise and have not been included in the lease term used to determine the lease liability or right-of-use asset. The Company did not have any finance leases as of September 30, 2025.

As of September 30, 2025, the Company’s lease liability and right-of-use asset were $22,425 thousand. The weighted average remaining life of operating leases and weighted average discount rate used to determine operating lease liabilities were 3.9 years and 3.80%, respectively, at September 30, 2025. The Company did not have any material lease incentives, unamortized initial direct costs, prepaid lease expense, or accrued lease expense as of September 30, 2025.

Total lease costs were $1,700 thousand and $5,071 thousand in the three and nine months ended September 30, 2025, respectively, and were recorded within occupancy and equipment expense. Total lease costs were $1,663 thousand and $5,020 thousand in the three and nine months ended September 30, 2024, respectively, and were recorded within occupancy and equipment expense. The Company did not have any material short-term or variable lease costs or sublease income during the nine months ended September 30, 2025 and September 30, 2024.

The following table summarizes the remaining lease payments of operating lease liabilities:

	Minimum future lease payments
	At September 30,
	2025
	(In thousands)
The remainder of 2025	$	1,639
2026		6,184
2027		5,814
2028		4,914
2029		3,185
Thereafter		2,479
Total minimum lease payments		24,215
Less: discount		(1,790	)
Present value of lease liability	$	22,425