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Fair Value Disclosures
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Disclosures
Fair Value Hierarchy
The Company uses fair value measurements to record fair value adjustments to certain financial and nonfinancial assets and liabilities and to determine fair value disclosures. Various financial instruments such as AFS and trading securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets and liabilities on a nonrecurring basis, such as loans, loans held for sale, mortgage servicing rights, and certain other investment securities. These nonrecurring fair value adjustments typically involve lower of cost or market accounting or write-downs of individual assets.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Depending on the nature of the asset or liability, the Company uses various valuation techniques and assumptions when estimating fair value, which are in accordance with ASC 820. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
•Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
•Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liabilities, either directly or indirectly (such as interest rates, yield curves, and prepayment speeds).
•Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value. These may be internally developed, using the Company’s best information and assumptions that a market participant would consider.
When determining the fair value measurements for assets and liabilities required or permitted to be recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets or liabilities. When identical assets and liabilities are not traded in active markets, the Company looks to market observable data for similar assets and liabilities.
Valuation Methods for Instruments Measured at Fair Value on a Recurring Basis
The following table presents assets and liabilities measured at fair value on a recurring basis (including items that are required to be measured at fair value) at December 31, 2025 and 2024.
Fair value measurements at December 31, 2025 using
Total fair valueQuoted prices
in active
markets for
identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
(dollars in thousands)
Assets:
Loans held for sale$54,119 $- $54,119 $- 
Available-for-sale investment securities:
U.S. government obligations and government-sponsored enterprises6,349,320 928,287 5,421,033 - 
Obligations of states and political subdivisions16,644 - 16,644 - 
Other securities6,499 1,018 5,481 - 
Equity investments48,200 - 36,690 11,510 
Derivatives7,969 - 7,969 - 
Total assets$6,482,752 $929,305 $5,541,937 $11,510 
Liabilities:
Derivatives$7,021 $- $7,021 $- 
Total liabilities$7,021 $- $7,021 $- 
Fair value measurements at December 31, 2024 using
Total fair valueQuoted prices
in active
markets for
identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
(dollars in thousands)
Assets:
Loans held for sale$34,264 $- $34,264 $- 
Available-for-sale investment securities:
U.S. government obligations and government-sponsored enterprises5,553,593 1,269,553 4,284,040 - 
Obligations of states and political subdivisions21,141 - 21,141 - 
Other securities28,989 614 28,375 - 
Equity investments48,770 724 36,765 11,281 
Trading666 - 666 - 
Derivatives10,312 - 10,312 - 
Total assets$5,697,735 $1,270,891 $4,415,563 $11,281 
Liabilities:
Derivatives$8,842 $- $8,842 $- 
Total liabilities$8,842 $- $8,842 $- 
Following is a description of the Company’s valuation methodologies used for instruments measured at fair value on a recurring basis:
Securities
Securities are identified as trading, available-for-sale, or held-to-maturity at the time of purchase based on the intent of management.
Trading securities are carried at fair value with unrealized gains and losses included in current period earnings.
AFS securities are accounted for in accordance with ASC 320 and are carried at fair value. Unrealized gains and losses are recorded, net of deferred income taxes, as accumulated other comprehensive income (loss) in stockholder's equity. AFS securities are separately identified as pledged to creditors if the creditor has the right to sell or re-pledge the collateral. This portfolio comprises the majority of the assets the Company records at fair value.
The fair value of our securities, which consist primarily of obligations of the U.S. government and government sponsored enterprises (GSEs), is generally based on instrument-level pricing provided to us by a third-party pricing service which utilizes a combination of market quotations in an active market where available, and industry-standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace.
We periodically evaluate the pricing supplied by third-party pricing services by comparing the provided pricing with other sources including, but not limited to, recent transactions in similar instruments, dealer quotes and modeled values using various observable market inputs. Based on the results of such evaluations, management may adjust prices obtained from third-party pricing services to more appropriately reflect its estimate of prices that could be realized in orderly transactions in the current market.
The various portions of the estimated fair value of the Company’s equity securities are based on several inputs. Where quoted prices are available in an active market, the measurements are classified as Level 1. Equity securities which are infrequently traded or restricted, such as equity interests in the Federal Reserve and Federal Home Loan Bank, are classified as Level 2. The fair value of equity securities based on unobservable inputs and estimates are classified as Level 3.
Loans Held for Sale
Loans held for sale are carried at fair value. The portfolio consists primarily of residential real estate loans that are originated with the intent to sell. The Company contracts to sell the loans to FHLMC, FNMA, and other private investors. Fair value measurements on these loans held for sale are based on quoted market prices for similar loans in the secondary market and are classified as Level 2. No write-down was necessary at December 31, 2025 and 2024.
Derivatives
The Company’s derivative instruments include interest rate swaps, interest rate lock commitments (IRLC) and to-be-announced (TBA) contracts for hedging our mortgage loan pipeline. Valuations for interest rate swaps are derived from a proprietary model whose significant inputs are readily observable market parameters, primarily yield curves used to calculate current exposure. The results of the model are constantly validated through comparison to active trading in the marketplace. The fair value measurements of interest rate swaps and floors are classified as Level 2 due to the observable nature of the significant inputs utilized. Derivatives relating to residential mortgage loan sale activity include commitments to originate mortgage loans held for sale, forward loan sale contracts, and forward commitments to sell TBA securities. The fair values of loan commitments and sale contracts are estimated using quoted market prices for loans similar to the underlying loans in these instruments. The valuations of loan commitments are further adjusted to include embedded servicing value and the probability of funding. These assumptions are considered Level 2 inputs and are significant to the loan commitment valuation; accordingly, the measurement of loan commitments is classified as Level 2. The fair value measurement of TBA contracts is based on security prices published on trading platforms and is classified as Level 2.
Valuation Methods for Instruments Measured at Fair Value on a Nonrecurring Basis
The following table presents assets measured at fair value on a nonrecurring basis (including items that are required to be measured at fair value) at December 31, 2025 and 2024.
Fair value measurements at December 31, 2025 using
Total fair valueQuoted prices
in active
markets for
identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
(dollars in thousands)
Assets:
Collateral dependent loans$20,628 $- $- $20,628 
Mortgage servicing rights59,997 - - 59,997 
Total assets$80,625 $- $- $80,625 
Fair value measurements at December 31, 2024 using
Total fair valueQuoted prices
in active
markets for
identical
assets
(Level 1)		Significant
other
observable
inputs
(Level 2)		Significant
unobservable
inputs
(Level 3)
(dollars in thousands)
Assets:
Collateral dependent loans$15,376 $- $- $15,376 
Mortgage servicing rights60,339 - - 60,339 
Total assets$75,715 $- $- $75,715 
Following is a description of the Company’s valuation methodologies used for other financial instruments measured at fair value on a nonrecurring basis:
Mortgage Servicing Rights
The Company initially measures its mortgage servicing rights at fair value and amortizes them over the period of estimated net servicing income. They are periodically assessed for impairment based on fair value at the reporting date. Mortgage servicing rights do not trade in an active market with readily observable prices. Accordingly, the fair value is estimated based on a valuation model, which calculates the present value of estimated future net servicing income. The model incorporates assumptions that market participants use in estimating future net servicing income, including estimates of prepayment speeds, market discount rates, cost to service, float earnings rates, and other ancillary income, including late fees. The fair value measurements are classified as Level 3. There was no valuation adjustment recorded on the mortgage servicing rights at December 31, 2025.
Collateral Dependent Loans
While the overall portfolio is not carried at fair value, adjustments are recorded on certain loans to reflect partial write-downs that are based on the value of the underlying collateral. Nonrecurring adjustments also include certain impairment amounts for collateral dependent loans when establishing the allowance for credit losses on loans. In determining the value of real estate collateral, the Company relies on external appraisals and assessment of property values by its internal staff. In the case of non-real estate collateral, reliance is placed on a variety of sources, including external estimates of value and judgments based on the experience and expertise of internal specialists. Because many of these inputs are not observable, the measurements are classified as Level 3.
Foreclosed Assets
Foreclosed assets consist of loan collateral, which has been repossessed through foreclosure. This collateral is comprised of commercial and residential real estate and other non-real estate property. Foreclosed assets are recorded as held for sale initially at the lower of the loan balance or fair value of the collateral less estimated selling costs. After foreclosure, valuations are updated periodically, and the assets may be marked down further, reflecting a new cost basis. Fair value measurements may be based upon appraisals, third-party price opinions, or internally developed pricing methods. These measurements are classified as Level 3.
Fair Value of Financial Instruments
The carrying amounts and estimated fair values of financial instruments held by the Company, in addition to a discussion of the methods used and assumptions made in computing the estimates, are set forth below.
Cash and Due from Banks, Short-term Interest-Bearing Deposits, Federal Funds Sold and Securities Purchased Under Agreement to Resell, and Accrued Interest Receivable
The carrying amounts for cash and due from banks, short-term interest-bearing deposits, and federal funds sold, and securities purchased under agreements to resell, and accrued interest receivable approximate fair value because they mature in 90 days or less and do not present unanticipated credit concerns.
Held-to-Maturity Securities
The fair value of our HTM investment securities is generally based on instrument-level pricing provided to us by a third-party pricing service which utilizes a combination of market quotations in an active market where available, and industry standard models that consider various assumptions, including time value, yield curves, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all these assumptions are observable in the marketplace, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace.
We periodically evaluate the pricing supplied by third-party pricing services by comparing the provided pricing with other sources including, but not limited to, recent transactions in similar instruments, dealer quotes and modeled values using various observable market inputs. Based on the results of such evaluations, management may adjust prices obtained from third-party pricing services to more appropriately reflect its estimate of prices that could be realized in orderly transactions in the current market.
Loans
The estimated fair value of the Company’s loan portfolio is based on the segregation of loans by type – commercial, residential mortgage, and consumer. Each loan category is further segmented into fixed and adjustable-rate interest categories. In estimating the fair value of each category of loan, the carrying amount of the loan is reduced by an allocation of the allowance for loan losses. Such allocation is based on management’s loan classification system, which is designed to measure the credit risk inherent in each classification category.
The estimated fair value for variable rate loans is the carrying value of such loans, reduced by an allocation of the allowance for credit losses based on management’s loan classification system.
The estimated fair value of fixed-rate loans is calculated by discounting the scheduled cash flows for each loan category – commercial, residential real estate, and consumer. The cash flows through maturity for each category of fixed-rate loans are aggregated for the Company. Prepayment estimates for residential real estate and installment consumer loans are based on estimates for similar instruments in the secondary market with similar maturity schedules and interest rates. Discount rates used for each loan category of fixed rate loans represent rates the Company believes are reflective of what the Company could sell loans for based on market conditions and the Company’s assessment of credit quality.
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase
The estimated fair value of federal funds purchased and securities sold under agreements to repurchase approximate their carrying values because of the short-term nature of these borrowings.
Accrued Interest Payable
The estimated fair value of accrued interest payable approximates the carrying value because of the short-term nature of the liability.
The estimated fair values of the Company’s financial instruments are as follows:
December 31, 2025
Carrying
amount		Estimated fair value
Level 1Level 2Level 3
(dollars in thousands)
Financial Assets
Cash and due from banks$258,588 $258,588 $- $- 
Short-term interest-bearing deposits1,805,215 1,805,215 - - 
Time deposits1,039 - - 1,039 
Federal funds sold and securities purchased under agreements to resell340 340 - - 
Investment securities
Available for sale6,372,463 929,305 5,443,158 - 
Held to maturity1,689 - 1,023 677 
Equity48,200 - 36,690 11,510 
Trading- - - - 
Net loans held for investment11,284,931 - - 11,285,348 
Loans held for sale54,119 - 54,119 - 
Derivatives7,969 - 7,969 - 
Total assets$19,834,553 $2,993,448 $5,542,959 $11,298,574 
December 31, 2024
Carrying
amount		Estimated fair value
Level 1Level 2Level 3
(dollars in thousands)
Financial Assets
Cash and due from banks$265,209 $265,209 $- $- 
Short-term interest-bearing deposits969,416 969,416 - - 
Time deposits699 - - 699 
Federal funds sold and securities purchased under agreements to resell7,183 7,183 - - 
Investment securities
Available for sale5,603,723 1,270,167 4,333,556 - 
Held to maturity3,225 - 2,554 677 
Equity48,770 724 36,765 11,281 
Trading666 - 666 - 
Net loans held for investment11,469,812 - - 11,283,393 
Loans held for sale34,264 - 34,264 - 
Derivatives10,312 - 10,312 - 
Total assets$18,413,279 $2,512,699 $4,418,117 $11,296,050 
December 31, 2025
Carrying
amount		Estimated fair value
Level 1Level 2Level 3
(dollars in thousands)
Financial Liabilities
Federal funds purchased and customer repurchase agreements$1,011,851 $1,011,851 $- $- 
Accrued interest payable9,306 9,306 - - 
Derivatives7,021 - 7,021 - 
December 31, 2024
Carrying
amount		Estimated fair value
Level 1Level 2Level 3
(dollars in thousands)
Financial Liabilities
Federal funds purchased and customer repurchase agreements$1,007,295 $1,007,295 $- $- 
Accrued interest payable10,291 10,291 - - 
Derivatives8,842 - 8,842 - 
Limitations
Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective, involve uncertainties and cannot be determined with precision. Changes in assumptions could significantly affect the estimates.