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Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements [Text Block] Fair Value Measurements
Fair value is defined by applicable accounting guidance as the price to sell an asset or transfer a liability in an orderly transaction between market participants in the principal market for the given asset or liability at the measurement date based on market conditions at that date. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Certain assets and liabilities are recorded in the Company's financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis.

For some assets and liabilities, observable market transactions and market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. A hierarchy for fair value has been established which categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels are as follows:

•Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.
•Significant Other Observable Inputs (Level 2) - Fair value is based on significant other observable inputs which are generally determined based on a single price for each financial instrument provided to us by an applicable third-party pricing service and is based on one or more of the following:

•Quoted prices for similar, but not identical, assets or liabilities in active markets;
•Quoted prices for identical or similar assets or liabilities in inactive markets;
•Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates;
•Other inputs derived from or corroborated by observable market inputs.

•Significant Unobservable Inputs (Level 3) - Fair value is based upon model-based valuation techniques for which at least one significant assumption is not observable in the market.

Transfers between levels are recognized as of the end of the reporting period. There were no transfers in or out of quoted prices in active markets for identical instruments to significant other observable inputs or significant unobservable inputs during the three and nine months ended September 30, 2024, and 2023, respectively. Transfers between significant other observable inputs and significant unobservable inputs during the three and nine months ended September 30, 2024, and 2023 were immaterial.

The underlying methods used by the third-party pricing services are considered in determining the primary inputs used to determine fair values. Management has evaluated the methodologies employed by the third-party pricing services by comparing the price provided by the pricing service with other sources, including brokers' quotes, sales or purchases of similar instruments, and discounted cash flows to establish a basis for reliance on the pricing service values. Significant differences between the pricing service provided value and other sources are discussed with the pricing service to understand the basis for their values. Based on all observable inputs, management may adjust prices obtained from third-party pricing services to more appropriately reflect the prices that would be received to sell assets or paid to transfer liabilities in orderly transactions in the current market. No significant adjustments were made to prices provided by third-party pricing services at September 30, 2024, or December 31, 2023.
Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of September 30, 2024 (in thousands):
 TotalQuoted Prices in Active Markets for Identical Instruments (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs
(Level 3)
Assets:    
Trading securities:
U.S. government securities$332,466 $308,370 $24,096 $— 
Residential agency mortgage-backed securities4,672,427 — 4,672,427 — 
Municipal securities76,004 — 76,004 — 
Other trading securities58,828 — 58,828 — 
Total trading securities5,139,725 308,370 4,831,355 — 
Available-for-sale securities:
    
U.S. Treasury951 951 — — 
Municipal securities228,171 — 228,171 — 
Residential agency mortgage-backed securities8,577,928 — 8,577,928 — 
Residential non-agency mortgage-backed securities838,783 — 838,783 — 
Commercial agency mortgage-backed securities
3,369,680 — 3,369,680 — 
Other debt securities473 — — 473 
Total available-for-sale securities
13,015,986 951 13,014,562 473 
Fair value option securities — Residential agency mortgage-backed securities19,172 — 19,172 — 
Residential mortgage loans held for sale1
95,494 — 88,161 7,333 
Mortgage servicing rights2
315,920 — — 315,920 
Derivative contracts, net of cash collateral3
334,382 1,426 332,956 — 
Liabilities: 
Derivative contracts, net of cash collateral3
$402,559 $— $402,559 $— 
1Residential mortgage loans held for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards and are valued at 82.54% of the unpaid principal balance.
2A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 5, Mortgage Banking Activities.
3See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts in asset and liability positions that were valued based on quoted prices in active markets for identical instruments (Level 1) are primarily exchange-traded interest rate derivative contracts held for trading purposes.
The fair value of financial assets and liabilities measured on a recurring basis was as follows as of December 31, 2023 (in thousands):
 TotalQuoted Prices in Active Markets for Identical Instruments (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs
(Level 3)
Assets:    
Trading securities:
U.S. government securities$10,959 $9,017 $1,942 $— 
Residential agency mortgage-backed securities5,105,137 — 5,105,137 — 
Municipal securities37,413 — 37,413 — 
Other trading securities39,996 — 39,996 — 
Total trading securities5,193,505 9,017 5,184,488 — 
Available-for-sale securities:
    
U.S. Treasury925 925 — — 
Municipal securities502,833 — 502,833 — 
Residential agency mortgage-backed securities6,834,720 — 6,834,720 — 
Residential non-agency mortgage-backed securities799,877 — 799,877 — 
Commercial agency mortgage-backed securities
4,147,853 — 4,147,853 — 
Other debt securities473 — — 473 
Total available-for-sale securities
12,286,681 925 12,285,283 473 
Fair value option securities — Residential agency mortgage-backed securities20,671 — 20,671 — 
Residential mortgage loans held for sale1
56,935 — 49,749 7,186 
Mortgage servicing rights2
293,884 — — 293,884 
Derivative contracts, net of cash collateral3
410,304 — 410,304 — 
Liabilities:
Derivative contracts, net of cash collateral3
$587,473 $2,607 $584,866 $— 
1Residential mortgage loans held for sale measured at fair value on a recurring basis using significant unobservable inputs (Level 3) consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards and are valued at 77.74% of the unpaid principal balance.
2A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 5, Mortgage Banking Activities.
3See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts in asset and liability positions that were valued based on quoted prices in active markets for identical instruments (Level 1) are primarily exchange-traded interest rate derivative contracts held for trading purposes.
Following is a description of the Company's valuation methodologies used for assets and liabilities measured on a recurring basis:
Securities

The fair values of trading, available-for-sale, and fair value option securities are based on quoted prices for identical instruments in active markets, when available. If quoted prices for identical instruments are not available, fair values are based on significant other observable inputs such as quoted prices of comparable instruments or interest rates and credit spreads, yield curves, volatilities, prepayment speeds, and loss severities. The Company has elected to carry all residential mortgage-backed securities guaranteed by U.S. government agencies held as economic hedges against changes in the fair value of mortgage servicing rights at fair value with changes in the fair value recognized in earnings.

The fair value of certain available-for-sale municipal and other debt securities may be based on significant unobservable inputs. These significant unobservable inputs include limited observed trades, projected cash flows, current credit rating of the issuers and, when applicable, the insurers of the debt and observed trades of similar debt. Discount rates are primarily based on references to interest rate spreads on comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar securities. A summary of significant inputs used to value these securities follows. A management committee composed of senior members from the Company's Corporate Treasury, Risk Management and Finance departments assesses the appropriateness of these inputs quarterly.

Derivatives

All derivative instruments are carried on the balance sheet at fair value. Fair values for exchange-traded contracts are based on quoted prices. Fair values for over-the-counter interest rate, commodity, and foreign exchange contracts are based on valuations provided either by third-party dealers in the contracts, quotes provided by independent pricing services, or a third-party provided pricing model that uses significant other observable market inputs.

Credit risk is considered in determining the fair value of derivative instruments. Management determines fair value adjustments based on various risk factors including, but not limited to, current fair value, probability of default, and loss given default.

We also consider our own credit risk in determining the fair value of derivative contracts. Changes in our credit rating would affect the fair value of our derivative liabilities. In the event of a credit downgrade, the fair value of our derivative liabilities would increase.

Residential Mortgage Loans Held for Sale

Residential mortgage loans held for sale are carried on the balance sheet at fair value. The Company has elected to carry all residential mortgage loans originated for sale at fair value. Changes in the fair value of these financial instruments are recognized in earnings. The fair values of residential mortgage loans held for sale are based upon quoted market prices of such loans sold in securitization transactions, including related unfunded loan commitments and forward sales contracts. The fair value of mortgage loans that were unable to be sold to U.S. government agencies were determined using quoted prices of loans that are sold in securitization transactions with a liquidity discount applied.
Fair Value of Assets and Liabilities Measured on a Non-Recurring Basis

Assets measured at fair value on a non-recurring basis include collateral for certain nonaccruing loans and real property and other assets acquired to satisfy loans, which are based primarily on comparisons to completed sales of similar assets.

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at September 30, 2024, for which the fair value was adjusted during the nine months ended September 30, 2024 (in thousands):
Fair Value Adjustments for the
 Carrying Value at September 30, 2024Three Months Ended
September 30, 2024 Recognized in:		Nine Months Ended
Sep. 30, 2024 Recognized in:
 Quoted Prices
in Active Markets for Identical Instruments		Significant
Other
Observable
Inputs		Significant
Unobservable
Inputs		Gross charge-offs against allowance for loan lossesOther gains (losses), netGross charge-offs against allowance for loan lossesOther gains (losses), net
Nonaccruing loans$— $62 $5,100 $400 $— $6,743 $— 
Real estate and other repossessed assets
— 23 — — (5)— (5)

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at September 30, 2023, for which the fair value was adjusted during the nine months ended September 30, 2023 (in thousands):
Fair Value Adjustments for the
 Carrying Value at September 30, 2023Three Months Ended
Sep. 30, 2023 Recognized in:		Nine Months Ended
Sep. 30, 2023 Recognized in:
 Quoted Prices
in Active Markets for Identical Instruments		Significant
Other
Observable
Inputs		Significant
Unobservable
Inputs		Gross charge-offs against allowance for loan lossesOther gains (losses), netGross charge-offs against allowance for loan lossesOther gains (losses), net
Nonaccruing loans$— $— $796 $2,135 $— $4,932 $— 

The fair value of collateral-dependent nonaccruing loans secured by real estate and real estate and other repossessed assets and the related fair value adjustments are generally based on unadjusted third-party appraisals. Our appraisal review policies require appraised values to be supported by observed inputs derived principally from or corroborated by observable market data. Appraisals that are not based on observable inputs or that require significant adjustments or fair value measurements that are not based on third-party appraisals are considered to be based on significant unobservable inputs. Non-recurring fair value measurements of collateral-dependent nonaccruing loans and real estate and other repossessed assets based on significant unobservable inputs are generally due to estimates of current fair values between appraisal dates. Significant unobservable inputs include listing prices for the same or comparable assets, uncorroborated expert opinions, or management's knowledge of the collateral or industry. Non-recurring fair value measurements of collateral dependent loans secured by mineral rights are generally determined by our internal staff of engineers on projected cash flows under current market conditions and are based on significant unobservable inputs. Projected cash flows are discounted according to risk characteristics of the underlying oil and gas properties. Assets are evaluated to demonstrate with reasonable certainty that crude oil, natural gas, and natural gas liquids can be recovered from known oil and gas reservoirs under existing economic and operating conditions at current prices with existing conventional equipment, operating methods, and costs. Significant unobservable inputs are developed by asset management and workout professionals and approved by senior Credit Administration executives.
A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of September 30, 2024, follows (dollars in thousands):

Fair ValueValuation Technique(s)Unobservable InputRange
(Weighted Average)
Nonaccruing loans$5,100 Discounted cash flowsManagement knowledge of industry and non-real estate collateral
36% - 36% (36%)1
1    Represents fair value as a percentage of the unpaid principal balance.    

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of September 30, 2023, follows (dollars in thousands):

Fair ValueValuation Technique(s)Unobservable InputRange
(Weighted Average)
Nonaccruing loans$796 Discounted cash flowsManagement knowledge of industry and non-real estate collateral
12% - 14% (14%)1
1    Represents fair value as a percentage of the unpaid principal balance.
Fair Value of Financial Instruments

The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or are measured at fair value on a non-recurring basis as of September 30, 2024 (in thousands):
Carrying
Value		Estimated
Fair
Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Cash and due from banks$928,997 $928,997 $928,997 $— $— 
Interest-bearing cash and cash equivalents547,043 547,043 547,043 — — 
Trading securities:
U.S. government securities332,466 332,466 308,370 24,096 — 
Residential agency mortgage-backed securities4,672,427 4,672,427 — 4,672,427 — 
Municipal securities76,004 76,004 — 76,004 — 
Other trading securities58,828 58,828 — 58,828 — 
Total trading securities5,139,725 5,139,725 308,370 4,831,355 — 
Investment securities:  
Municipal securities104,775 108,213 — 11,837 96,376 
Residential agency mortgage-backed securities1,933,393 1,799,308 — 1,799,308 — 
Commercial agency mortgage-backed securities16,143 15,603 — 15,603 — 
Other debt securities15,788 14,783 — 14,783 — 
Total investment securities2,070,099 1,937,907 — 1,841,531 96,376 
Allowance for credit losses(234)— — — — 
Investment securities, net of allowance2,069,865 1,937,907 — 1,841,531 96,376 
Available-for-sale securities:
  
U.S. Treasury951 951 951 — — 
Municipal securities228,171 228,171 — 228,171 — 
Residential agency mortgage-backed securities8,577,928 8,577,928 — 8,577,928 — 
Residential non-agency mortgage-backed securities838,783 838,783 — 838,783 — 
Commercial agency mortgage-backed securities
3,369,680 3,369,680 — 3,369,680 — 
Other debt securities473 473 — — 473 
Total available-for-sale securities
13,015,986 13,015,986 951 13,014,562 473 
Fair value option securities — Residential agency mortgage-backed securities19,172 19,172 — 19,172 — 
Residential mortgage loans held for sale95,494 95,494 — 88,161 7,333 
Loans:  
Commercial14,877,922 14,989,899 — — 14,989,899 
Commercial real estate5,188,655 5,157,125 — — 5,157,125 
Loans to individuals3,918,484 3,831,981 — — 3,831,981 
Total loans23,985,061 23,979,005 — — 23,979,005 
Allowance for loan losses(284,456)— — — — 
Loans, net of allowance23,700,605 23,979,005 — — 23,979,005 
Mortgage servicing rights315,920 315,920 — — 315,920 
Derivative instruments with positive fair value, net of cash collateral
334,382 334,382 1,426 332,956 — 
Deposits with no stated maturity33,389,162 33,389,162 — — 33,389,162 
Time deposits3,837,956 3,828,500 — — 3,828,500 
Other borrowed funds5,473,783 5,473,783 — — 5,473,783 
Subordinated debentures131,188 117,682 — 117,682 — 
Derivative instruments with negative fair value, net of cash collateral
402,559 402,559 — 402,559 — 
The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or are measured at fair value on a non-recurring basis as of December 31, 2023 (in thousands):
Carrying
Value		Estimated
Fair
Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)
Cash and due from banks$947,613 $947,613 $947,613 $— $— 
Interest-bearing cash and cash equivalents400,652 400,652 400,652 — — 
Trading securities:
U.S. government securities10,959 10,959 9,017 1,942 — 
Residential agency mortgage-backed securities5,105,137 5,105,137 — 5,105,137 — 
Municipal securities37,413 37,413 — 37,413 — 
Other trading securities39,996 39,996 — 39,996 — 
Total trading securities5,193,505 5,193,505 9,017 5,184,488 — 
Investment securities:  
Municipal securities120,705 125,525 — 12,305 113,220 
Residential agency mortgage-backed securities2,092,083 1,917,810 — 1,917,810 — 
Commercial agency mortgage-backed securities15,914 15,067 — 15,067 — 
Other debt securities15,787 14,184 — 14,184 — 
Total investment securities2,244,489 2,072,586 — 1,959,366 113,220 
Allowance for credit losses(336)— — — — 
Investment securities, net of allowance2,244,153 2,072,586 — 1,959,366 113,220 
Available-for-sale securities:
  
U.S. Treasury925 925 925 — — 
Municipal securities502,833 502,833 — 502,833 — 
Residential agency mortgage-backed securities6,834,720 6,834,720 — 6,834,720 — 
Residential non-agency mortgage-backed securities799,877 799,877 — 799,877 — 
Commercial agency mortgage-backed securities
4,147,853 4,147,853 — 4,147,853 — 
Other debt securities473 473 — — 473 
Total available-for-sale securities
12,286,681 12,286,681 925 12,285,283 473 
Fair value option securities — Residential agency mortgage-backed securities20,671 20,671 — 20,671 — 
Residential mortgage loans held for sale56,935 56,935 — 49,749 7,186 
Loans:  
Commercial14,803,769 14,862,873 — — 14,862,873 
Commercial real estate5,337,647 5,270,657 — — 5,270,657 
Loans to individuals3,763,552 3,634,855 — — 3,634,855 
Total loans23,904,968 23,768,385 — — 23,768,385 
Allowance for loan losses(277,123)— — — — 
Loans, net of allowance23,627,845 23,768,385 — — 23,768,385 
Mortgage servicing rights293,884 293,884 — — 293,884 
Derivative instruments with positive fair value, net of cash collateral
410,304 410,304 — 410,304 — 
Deposits with no stated maturity31,007,679 31,007,679 — — 31,007,679 
Time deposits3,012,022 2,993,685 — — 2,993,685 
Other borrowed funds8,824,300 8,824,299 — — 8,824,299 
Subordinated debentures131,150 115,798 — 115,798 — 
Derivative instruments with negative fair value, net of cash collateral
587,473 587,473 2,607 584,866 — 

Because no market exists for certain of these financial instruments and management does not intend to sell these financial instruments, the fair values shown in the tables above may not represent values at which the respective financial instruments could be sold individually or in the aggregate at the given reporting date.