Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

Estimated fair values as of the periods indicated are as follows:


	March 31, 2025		December 31, 2024
(In Thousands)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial assets:
Level 1 inputs:
Cash, due from banks and deposits in other banks	$65,523	$65,523	$62,736	$62,736
Investment securities available for sale	247,392	247,392	268,781	268,781
Marketable equity securities	8,669	8,669	8,719	8,719

Level 2 inputs:
Investment securities available for sale	215,704	215,704	209,836	209,836
Loans held for sale	159,603	159,603	59,957	59,957
Interest rate swaps	11,768	11,768	14,788	14,788

Level 3 inputs:
Investment securities held to maturity	36,750	35,689	36,750	35,750
Loans	2,124,330	2,182,020	2,129,263	2,014,070
Purchased receivables, net	95,489	95,489	74,078	74,078
Interest rate lock commitments	1,389	1,389	465	465
Mortgage servicing rights	26,814	26,814	26,439	26,439
Commercial servicing rights	2,317	2,317	2,194	2,194

Financial liabilities:
Level 2 inputs:
Deposits	$2,777,977	$2,779,991	$2,680,189	$2,683,029
Borrowings	13,136	10,393	23,045	19,991
Interest rate swaps	10,235	10,235	13,011	13,011

Level 3 inputs:
Junior subordinated debentures	10,310	11,061	10,310	10,897

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table sets forth the balances as of the periods indicated of assets and liabilities measured at fair value on a recurring basis:


(In Thousands)	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
March 31, 2025
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities	$416,971	$247,392	$169,579	$—

U.S. Agency mortgage-backed securities	5,063	—	5,063	—
Corporate bonds	4,836	—	4,836	—
Collateralized loan obligations	36,226	—	36,226	—
Total available for sale securities	$463,096	$247,392	$215,704	$—
Marketable equity securities	$8,669	$8,669	$—	$—
Total marketable equity securities	$8,669	$8,669	$—	$—
Interest rate swaps	$11,768	$—	$11,768	$—
Interest rate lock commitments	1,389	—	—	1,389
Mortgage servicing rights	26,814	—	—	26,814
Commercial servicing rights	2,317	—	—	2,317

Total other assets	$42,288	$—	$11,768	$30,520
Liabilities:
Interest rate swaps	$10,235	$—	$10,235	$—
Retail interest rate contracts	172	—	172	—
Total other liabilities	$10,407	$—	$10,407	$—
December 31, 2024
Assets:
Available for sale securities
U.S. Treasury and government sponsored entities	$432,931	$259,986	$172,945	$—
Municipal securities	—	—	—	—

Corporate bonds	8,795	8,795	—	—
Collateralized loan obligations	36,891	—	36,891	—
Total available for sale securities	$478,617	$268,781	$209,836	$—
Marketable equity securities	$8,719	$8,719	$—	$—
Total marketable securities	$8,719	$8,719	$—	$—
Interest rate swaps	$14,788	$—	$14,788	$—
Interest rate lock commitments	465	—	—	465
Mortgage servicing rights	26,439	—	—	26,439
Commercial servicing rights	2,194	—	—	2,194
Retail interest rate contracts	49	—	49	—
Total other assets	$43,935	$—	$14,837	$29,098
Liabilities:
Interest rate swaps	$13,011	$—	$13,011	$—

Total other liabilities	$13,011	$—	$13,011	$—

Fair Value, Assets Measured on Recurring Basis using Significant Unobservable Inputs

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and three-month periods ended March 31, 2025 and 2024:


(In Thousands)	Beginning balance	Change included in earnings	Purchases and issuances	Sales and settlements	Ending balance	Net change in unrealized gains (losses) relating to items held at end of period
Three Months Ended March 31, 2025
Interest rate lock commitments	$465	($226)	$1,996	($846)	$1,389	$1,389
Mortgage servicing rights	26,439	(855)	1,230	—	26,814	—
Commercial servicing rights	2,194	(73)	196	—	2,317	—
Total	$29,098	($1,154)	$3,422	($846)	$30,520	$1,389
Three Months Ended March 31, 2024
Interest rate lock commitments	$342	($275)	$2,513	($1,815)	$765	$765
Mortgage servicing rights	19,564	(25)	516	—	20,055	—
Commercial servicing rights	2,200	(129)	29	—	2,100	—
Total	$22,106	($429)	$3,058	($1,815)	$22,920	$765

Fair Value, Assets Measured on Nonrecurring Basis

As of and for the periods ending March 31, 2025 and December 31, 2024, except for certain assets as shown in the following table, no impairment or valuation adjustment was recognized for assets recognized at fair value on a nonrecurring basis. For loans individually measured for credit losses, the Company classifies fair value measurements using observable inputs, such as external appraisals, as Level 2 valuations in the fair value hierarchy, and unobservable inputs, such as in-house evaluations, as Level 3 valuations in the fair value hierarchy.

(In Thousands)

Total

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

March 31, 2025

Loans individually measured for credit losses

$—

Total

$—

December 31, 2024

Loans individually measured for credit losses

$—

Total

$—

The following table presents the (gains) losses resulting from nonrecurring fair value adjustments for the three-month periods ended March 31, 2025 and 2024:


	Three Months Ended March 31,
(In Thousands)	2025	2024
Loans individually measured for credit losses	$—	$184
Other real estate owned	—	—

Total loss from nonrecurring measurements	$—	$184

Schedule of Valuation Assumptions

The following tables provide a description of the valuation technique, unobservable input, and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring and nonrecurring basis at March 31, 2025 and December 31, 2024:


Financial Instrument	Valuation Technique - Recurring Basis	Unobservable Input	Weighted Average Rate Range
March 31, 2025



Interest rate lock commitment	External pricing model	Pull through rate	91.19	%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	8.45% - 21.31%
		Discount rate	9.50% - 11.00%
Commercial servicing rights	Discounted cash flow	Constant prepayment rate	3.13% - 18.23%
		Discount rate	12.00	%
December 31, 2024



Interest rate lock commitment	External pricing model	Pull through rate	93.35	%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	2.01% - 14.91%
		Discount rate	9.50% - 11.00%
Commercial servicing rights	Discounted cash flow	Constant prepayment rate	3.13% - 18.23%
		Discount rate	12.00	%

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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