Fair Value Measurements

3 Months Ended

Mar. 31, 2025

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 available for sale debt securities, equity securities, trading debt securities, certain investments relating to private equity activities, and derivatives 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 mortgage servicing rights and certain other investment securities. These nonrecurring fair value adjustments typically involve lower of cost or fair value accounting or write-downs of individual assets.

Fair value is 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. For accounting disclosure purposes, a three-level valuation hierarchy of fair value measurements has been established. 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 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, quoted prices for identical or similar assets and liabilities in markets that are not active, 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.

The valuation methodologies for assets and liabilities measured at fair value on a recurring and non-recurring basis are described in the Fair Value Measurements note in the Company's 2024 Annual Report on Form 10-K. There have been no significant changes in these methodologies since then.

Instruments Measured at Fair Value on a Recurring Basis

The table below presents the March 31, 2025 and December 31, 2024 carrying values of assets and liabilities measured at fair value on a recurring basis. There were no transfers among levels during the first three months of 2025 or the year ended December 31, 2024.


			Fair Value Measurements Using
(In thousands)	Total Fair Value		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:
Residential mortgage loans held for sale	$	2,702	$	—	$	2,702	$	—
Available for sale debt securities:
U.S. government and federal agency obligations	2,626,635		2,626,635		—		—
Government-sponsored enterprise obligations	44,056		—		44,056		—
State and municipal obligations	721,187		—		720,240		947
Agency mortgage-backed securities	3,430,566		—		3,430,566		—
Non-agency mortgage-backed securities	566,126		—		566,126		—
Asset-backed securities	1,625,282		—		1,625,282		—
Other debt securities	251,095		—		251,095		—
Trading debt securities	56,569		10,325		46,244		—
Equity securities	48,951		48,951		—		—
Private equity investments	175,618		—		—		175,618
Derivatives *	69,339		—		69,189		150
Assets held in trust for deferred compensation plan	20,873		20,873		—		—
Total assets	9,638,999		2,706,784		6,755,500		176,715
Liabilities:
Derivatives *	23,312		—		23,233		79
Liabilities held in trust for deferred compensation plan	20,873		20,873		—		—
Total liabilities	$	44,185	$	20,873	$	23,233	$	79
December 31, 2024
Assets:
Residential mortgage loans held for sale	$	2,981	$	—	$	2,981	$	—
Available for sale debt securities:
U.S. government and federal agency obligations	2,555,252		2,555,252		—		—
Government-sponsored enterprise obligations	42,849		—		42,849		—
State and municipal obligations	742,891		—		741,927		964
Agency mortgage-backed securities	3,444,891		—		3,444,891		—
Non-agency mortgage-backed securities	568,689		—		568,689		—
Asset-backed securities	1,557,015		—		1,557,015		—
Other debt securities	225,266		—		225,266		—
Trading debt securities	38,034		10,219		27,815		—
Equity securities	48,359		48,359		—		—
Private equity investments	184,386		—		—		184,386
Derivatives *	62,648		—		62,555		93
Assets held in trust for deferred compensation plan	21,849		21,849		—		—
Total assets	9,495,110		2,635,679		6,673,988		185,443
Liabilities:
Derivatives *	26,963		—		26,905		58
Liabilities held in trust for deferred compensation plan	21,849		21,849		—		—
Total liabilities	$	48,812	$	21,849	$	26,905	$	58

* The fair value of each class of derivative is shown in Note 11.

The changes in the Company's Level 3 assets and liabilities measured at fair value on a recurring basis are summarized as follows:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(In thousands)	State and Municipal Obligations		Private Equity Investments		Total
For the three months ended March 31, 2025
Balance January 1, 2025	$	964	$	184,386	$	185,350
Total gains (losses) realized/unrealized:
Included in earnings	—		(8,525)		(8,525)
Included in other comprehensive income *	(18)		—		(18)

Discount accretion	1		—		1
Purchases of private equity investments	—		5,698		5,698
Sale/pay down of private equity investments	—		(5,958)		(5,958)
Capitalized interest/dividends	—		17		17


Balance at March 31, 2025	$	947	$	175,618	$	176,565
Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2025	$	—	$	(8,525)	$	(8,525)
*Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2025	$	(18)	$	—	$	(18)
For the three months ended March 31, 2024
Balance January 1, 2024	$	947	$	176,667	$	177,614
Total gains (losses) realized/unrealized:
Included in earnings	—		7,100		7,100
Included in other comprehensive income *	9		—		9


Purchases of private equity investments	—		9,477		9,477
Sale/pay down of private equity investments	—		(9,400)		(9,400)
Capitalized interest/dividends	—		(138)		(138)


Balance at March 31, 2024	$	956	$	183,706	$	184,662
Total gains (losses) for the three months included in earnings attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2024	$	—	$	7,100	$	7,100
*Total gains (losses) for the three months included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2024	$	9	$	—	$	9

* Included in "net unrealized gains (losses) on available for sale debt securities" in the consolidated statements of comprehensive income.

Gains and losses included in earnings for the Company's Level 3 assets and liabilities in the previous table are reported in the following line items in the consolidated statements of income:


(In thousands)	Investment Securities Gains (Losses), Net
For the three months ended March 31, 2025



Total gains or losses included in earnings	$	(8,525)
Change in unrealized gains or losses relating to assets still held at March 31, 2025	$	(8,525)



For the three months ended March 31, 2024
Total gains or losses included in earnings	$	7,100
Change in unrealized gains or losses relating to assets still held at March 31, 2024	$	7,100

Level 3 Inputs

The Company's Level 3 measurements at March 31, 2025, which employ unobservable inputs that are readily quantifiable, pertain to investments in portfolio concerns held by the Company's private equity subsidiaries. Information about these inputs is presented in the table below.

Quantitative Information about Level 3 Fair Value Measurements

Weighted

Valuation Technique

Unobservable Input

Range

Average*

Private equity investments

Market comparable companies

EBITDA multiple

3.8

6.0

5.0

* Unobservable inputs were weighted by the relative fair value of the instruments.

Instruments Measured at Fair Value on a Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis during the first three months of 2025 and 2024, and still held as of March 31, 2025 and 2024, the following table provides the adjustments to fair value recognized during the respective periods, the level of valuation inputs used to determine each adjustment, and the carrying value of the related individual assets or portfolios at March 31, 2025 and 2024.


			Fair Value Measurements Using
(In thousands)	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Gains (Losses) Recognized During the Three Months Ended March 31
March 31, 2025
Collateral dependent loans	$	3,940	$	—	$	—	$	3,940	$	(400)



Foreclosed assets	112		—		—		112		(55)


March 31, 2024
Collateral dependent loans	$	63	$	—	$	—	$	63	$	(32)