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Fair Value Disclosures (Tables) | 6 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements, Recurring and Nonrecurring | Assets and liabilities measured at fair value, including financial assets for which we have elected the fair value option, were as follows:
|  |  | Fair Value Measurements Using |
| Fair Value Measure- ments |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Un- observable Inputs (Level 3) |
| (In thousands) |
June 30, 2025: |  |  |  |  |  |  |  |
Measured at Fair Value on a Recurring Basis |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |
Securities available for sale |  |  |  |  |  |  |  |
U.S. agency | $ | 8,647 |  |  | $ | — |  |  | $ | 8,647 |  |  | $ | — |  |
U.S. agency residential mortgage-backed | 71,796 |  |  | — |  |  | 71,796 |  |  | — |  |
U.S. agency commercial mortgage-backed | 11,166 |  |  | — |  |  | 11,166 |  |  | — |  |
Private label mortgage-backed | 44,929 |  |  | — |  |  | 44,929 |  |  | — |  |
Other asset backed | 33,917 |  |  | — |  |  | 33,917 |  |  | — |  |
Obligations of states and political subdivisions | 276,746 |  |  | — |  |  | 276,746 |  |  | — |  |
Corporate | 61,333 |  |  | — |  |  | 61,333 |  |  | — |  |
Trust preferred | 977 |  |  | — |  |  | 977 |  |  | — |  |
Loans held for sale, carried at fair value | 12,492 |  |  | — |  |  | 12,492 |  |  | — |  |
Capitalized mortgage loan servicing rights | 32,053 |  |  | — |  |  | — |  |  | 32,053 |  |
Derivatives (1) | 34,191 |  |  | — |  |  | 34,191 |  |  | — |  |
Liabilities |  |  |  |  |  |  |  |
Derivatives (2) | 20,754 |  |  | — |  |  | 20,754 |  |  | — |  |
Measured at Fair Value on a Non-recurring Basis: |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |
Collateral dependent loans (3) |  |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |  |
Commercial and industrial | 3,702 |  |  | — |  |  | — |  |  | 3,702 |  |
Commercial real estate | 12,627 |  |  | — |  |  | — |  |  | 12,627 |  |
Mortgage |  |  |  |  |  |  |  |
1-4 family owner occupied - non-jumbo | 601 |  |  | — |  |  | — |  |  | 601 |  |
1-4 family non-owner occupied | 61 |  |  | — |  |  | — |  |  | 61 |  |
1-4 family - 2nd lien | 194 |  |  | — |  |  | — |  |  | 194 |  |
Resort lending | 37 |  |  | — |  |  | — |  |  | 37 |  |
Installment |  |  |  |  |  |  |  |
Boat lending | 431 |  |  | — |  |  | — |  |  | 431 |  |
Recreational vehicle lending | 125 |  |  | — |  |  | — |  |  | 125 |  |
Other | 23 |  |  | — |  |  | — |  |  | 23 |  |
________________________________ (1)Included in accrued income and other assets (2)Included in accrued expenses and other liabilities (3)Only includes individually evaluated loans with specific allocations of the ACL based on collateral value.
|  |  | Fair Value Measurements Using
| Fair Value Measure- ments |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Un- observable Inputs (Level 3)
| (In thousands)
December 31, 2024: |  |  |  |  |  |  |
Measured at Fair Value on a Recurring Basis |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Securities available for sale |  |  |  |  |  |  |
U.S. agency | $ | 8,159 |  |  | $ | — |  |  | $ | 8,159 |  |  | $ | — |
U.S. agency residential mortgage-backed | 71,137 |  |  | — |  |  | 71,137 |  |  | — |
U.S. agency commercial mortgage-backed | 11,641 |  |  | — |  |  | 11,641 |  |  | — |
Private label mortgage-backed | 70,035 |  |  | — |  |  | 70,035 |  |  | — |
Other asset backed | 38,516 |  |  | — |  |  | 38,516 |  |  | — |
Obligations of states and political subdivisions | 288,791 |  |  | — |  |  | 288,791 |  |  | — |
Corporate | 69,921 |  |  | — |  |  | 69,921 |  |  | — |
Trust preferred | 982 |  |  | — |  |  | 982 |  |  | — |
Loans held for sale, carried at fair value | 7,643 |  |  | — |  |  | 7,643 |  |  | — |
Capitalized mortgage loan servicing rights | 46,796 |  |  | — |  |  | — |  |  | 46,796 |
Derivatives (1) | 37,059 |  |  | — |  |  | 37,059 |  |  | — |
Liabilities |  |  |  |  |  |  |
Derivatives (2) | 18,623 |  |  | — |  |  | 18,623 |  |  | — |
Measured at Fair Value on a Non-recurring Basis: |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Collateral dependent loans (3) |  |  |  |  |  |  |
Commercial |  |  |  |  |  |  |
Commercial and industrial | 4,205 |  |  | — |  |  | — |  |  | 4,205 |
Commercial real estate | 132 |  |  | — |  |  | — |  |  | 132 |
Mortgage |  |  |  |  |  |  |
1-4 family owner occupied - non-jumbo | 627 |  |  | — |  |  | — |  |  | 627 |
1-4 family - 2nd lien | 170 |  |  | — |  |  | — |  |  | 170 |
Resort lending | 92 |  |  | — |  |  | — |  |  | 92 |
Installment |  |  |  |  |  |  |
Boat lending | 56 |  |  | — |  |  | — |  |  | 56 |
Recreational vehicle lending | 172 |  |  | — |  |  | — |  |  | 172 |
Other | 59 |  |  | — |  |  | — |  |  | 59 |
_________________________________ (1)Included in accrued income and other assets (2)Included in accrued expenses and other liabilities (3)Only includes individually evaluated loans with specific allocations of the ACL based on collateral value.
Fair Value Option, Disclosures | Changes in fair values for financial assets which we have elected the fair value option for the periods presented were as follows:
| Changes in Fair Values for the Six Month Periods Ended June 30 for items Measured at Fair Value Pursuant to Election of the Fair Value Option
| Net Gains (losses) on Assets |  | Mortgage Loan Servicing, net |  | Total Change in Fair Values Included in Current Period Earnings
| Mortgage Loans |  |
| (In thousands)
2025 |  |  |  |  |
Loans held for sale | $ | 120 |  |  | $ | — |  |  | $ | 120 |
Capitalized mortgage loan servicing rights | — |  |  | (3,505) |  |  | (3,505) |
2024 |  |  |  |  |
Loans held for sale | 160 |  |  | — |  |  | 160 |
Capitalized mortgage loan servicing rights | — |  |  | 383 |  |  | 383 |
Reconciliation for all Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | A reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) follows:
| Capitalized Mortgage Loan Servicing Rights
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (In thousands) |  | (In thousands)
Beginning balance | $ | 32,171 |  |  | $ | 43,577 |  |  | $ | 46,796 |  |  | $ | 42,243 |
Total gains (losses) realized and unrealized: |  |  |  |  |  |  |
Included in results of operations | (1,081) |  |  | (123) |  |  | (3,505) |  |  | 383 |
Included in results of operations - gain on sale(1) | (78) |  |  | — |  |  | (172) |  |  | — |
Included in other comprehensive loss | — |  |  | — |  |  | — |  |  | — |
Purchases, issuances, settlements, maturities and calls | 963 |  |  | 952 |  |  | 1,818 |  |  | 1,780 |
Sales(1) | 78 |  |  | — |  |  | (12,884) |  |  | — |
Transfers in and/or out of Level 3 | — |  |  | — |  |  | — |  |  | — |
Ending balance | $ | 32,053 |  |  | $ | 44,406 |  |  | $ | 32,053 |  |  | $ | 44,406 |
Amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at June 30 | $ | (1,081) |  |  | $ | (123) |  |  | $ | (3,505) |  |  | $ | 383 |
(1) On January 31, 2025 we sold $931.6 million of mortgage loan servicing rights (26.3% of total servicing portfolio) and transferred the servicing on March 3, 2025. This sale represented approximately $13.1 million (27.9%) of the total capitalized mortgage loan servicing right asset. While there remains a customary hold back of final settlement funds of approximately $0.7 million relating to this transaction, we are not aware of any issues that will have a material impact on this final payment. While we have a target date of the fourth quarter, 2025, we have until the first quarter, 2026 to receive this final payment. Transaction expenses relating to this sale were approximately $0.2 million and was expensed during the first six months of 2025.
Fair Value Measurement Inputs and Valuation Techniques (Level 3) | Quantitative information about our Level 3 fair value measurements measured on a recurring basis follows:
| Asset Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range |  | Weighted Average
| (In thousands) |  |  |  |  |  |  |  |
June 30, 2025 |  |  |  |  |  |  |  |  |
Capitalized mortgage loan servicing rights | $ | 32,053 |  |  | Present value of net servicing revenue |  | Discount rate |  | 9.50% to 18.34% |  | 9.95 | %
|  |  |  |  | Cost to service |  | $68 to $817 |  | $ | 80 |
|  |  |  |  | Ancillary income |  | 19 to 30 |  | 21 |
|  |  |  |  | Float rate |  | 3.71 | % |  | 3.71 | %
|  |  |  |  | Prepayment rate |  | 5.39% to 31.32% |  | 9.37 | %
December 31, 2024 |  |  |  |  |  |  |  |  |
Capitalized mortgage loan servicing rights | $ | 46,796 |  |  | Present value of net servicing revenue |  | Discount rate |  | 10.00% to 19.15% |  | 10.37 | %
|  |  |  |  | Cost to service |  | $70 to $817 |  | $ | 79 |
|  |  |  |  | Ancillary income |  | 20 to 30 |  | 20 |
|  |  |  |  | Float rate |  | 4.33 | % |  | 4.33 | %
|  |  |  |  | Prepayment rate |  | 5.40% to 28.28% |  | 7.54%
Quantitative information about Level 3 fair value measurements measured on a non-recurring basis follows:
| Asset Fair Value |  | Valuation Technique |  | Unobservable Inputs |  | Range |  | Weighted Average
| (In thousands) |  |  |  |  |  |  |  |
June 30, 2025 |  |  |  |  |  |  |  |  |
Collateral dependent loans |  |  |  |  |  |  |  |  |
Commercial | $ | 2,729 |  |  | Discounting financial statement and machinery and equipment appraised values |  | Discount rates used |  | 50.0% to 65.0% |  | 58.8 | %
| 13,600 |  |  | Sales comparison approach |  | Adjustment for differences between comparable sales |  | (20.0) to 65.0 |  | (2.0) |
Mortgage and Installment(1) | 1,472 |  |  | Sales comparison approach |  | Adjustment for differences between comparable sales |  | (28.1) to 16.9 |  | (1.2)
December 31, 2024 |  |  |  |  |  |  |  |  |
Collateral dependent loans |  |  |  |  |  |  |  |  |
Commercial | $ | 3,478 |  |  | Discounting financial statement and machinery and equipment appraised values |  | Discount rates used |  | 45.0% to 55.0% |  | 50.5 | %
| 859 |  |  | Sales comparison approach |  | Adjustment for differences between comparable sales |  | (20.0) to 35.0 |  | (1.4) |
Mortgage and Installment(1) | 1,176 |  |  | Sales comparison approach |  | Adjustment for differences between comparable sales |  | (22.0) to 21.7 |  | (0.4) |
(1) | In addition to the valuation techniques and unobservable inputs discussed above, at June 30, 2025 and December 31, 2024 certain collateral dependent installment loans totaling approximately $0.58 million and $0.29 million, respectively, are secured by collateral other than real estate. For the majority of these loans, we apply internal discount rates to industry valuation guides.
Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance for Loans Held for Sale | The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding for loans held for sale for which the fair value option has been elected for the periods presented.
| Aggregate Fair Value |  | Difference |  | Contractual Principal
| (In thousands)
Loans held for sale |  |  |  |  |
June 30, 2025 | $ | 12,492 |  |  | $ | 198 |  |  | $ | 12,294 |
December 31, 2024 | 7,643 |  |  | 78 |  |  | 7,565 |

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