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FAIR VALUE | 12 Months Ended
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Jun. 30, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1: |  | Quoted prices in active markets for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2: |  | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include securities with quoted prices that are traded less frequently than exchange-traded instruments and whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
Level 3: |  | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
When available, the Company generally uses quoted market prices to determine fair value. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2. The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and are given little, if any, weight in measuring fair value. If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable. The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair-value hierarchy in which each instrument is generally classified: Securities—trading and available-for-sale. Trading securities are recorded at fair value. Available-for-sale securities are recorded at fair value and consist of mortgage-backed securities (“MBS”) issued by U.S. government-backed, including Ginne Mae, or government-sponsored enterprises including Fannie Mae and Freddie Mac (“agency”), MBS issued by non-agencies, municipal securities as well as other Non-MBS securities. Fair value for agency securities and municipal securities are generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. These securities are classified in Level 2. There continues to be significant illiquidity in the market for MBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency MBS in the same manner (as described below) whether available-for-sale or held-to-maturity. To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. The Company inputs for each security a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of the security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by or decreased by the forecasted increase or decrease in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The most updated unemployment rate reported in June 2022 was 3.6%. Consensus estimates for unemployment are that the rate will continue to decrease. The Company agrees with consensus estimates and thus is projecting lower monthly default rates. The Company projects that severities will continue to improve as HPA improves. To determine the discount rates used to compute the present value of the expected cash flows for these non-agency MBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency MBS securities using market-participant assumptions for risk, capital and return on equity. The default rates and the severities are projected for every non-agency MBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above. Based upon the actual performance of the underlying collateral, the securities’ credit enhancement will be impacted. The range of existing credit enhancement is from 0.0% to 96.5%, with a weighted average credit enhancement 19.7%. The Company applies its discount rates to the projected monthly cash flows, which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at June 30, 2022, the Company computed its discount rates as a spread between 273 and 928 basis points over the LIBOR Index using the LIBOR forward curve. The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of each security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about level 3 fair value measurements. Loans Held for Sale. Loans held for sale at fair value are primarily single-family residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors. These loans held for sale are classified under Level 2. Other Real Estate Owned and Repossessed Vehicles. Fair values are generally based on third party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Mortgage Servicing Rights. Fair value is derived from market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is input from observable market activity, market participants, and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset. Mortgage Banking Derivatives. The fair value of interest rate locks is estimated based on changes in to be announced (“TBA”) values which are based upon mortgage interest rates from the date the interest on the loan is locked, adjusted for items such as estimated fallout and costs to originate the loan. These are classified under level 3. The fair value of forward sale commitments is based upon prices in active secondary markets for identical securities or based on quoted market prices of similar assets used to form a dealer quote or a pricing matrix. If no such quoted price exists, the fair value of a commitment is determined by quoted prices for a similar commitment or commitments, adjusted for the specific attributes of each commitment. These are classified under level 3. FAIR VALUE - RECURRING BASIS The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
| June 30, 2022
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
ASSETS: |  |  |  |  |  |  |
Securities—Trading: Municipal | $ | — |  |  | $ | 1,758 |  |  | $ | — |  |  | $ | 1,758 |
Securities—Available-for-Sale: |  |  |  |  |  |  |
Agency MBS 1 | — |  |  | 25,325 |  |  | — |  |  | 25,325 |
Non-Agency MBS 2 | — |  |  | — |  |  | 186,814 |  |  | 186,814 |
Municipal | — |  |  | 3,248 |  |  | — |  |  | 3,248 |
Asset-backed securities and structured notes | — |  |  | 47,131 |  |  | — |  |  | 47,131 |
Total—Securities—Available-for-Sale | $ | — |  |  | $ | 75,704 |  |  | $ | 186,814 |  |  | $ | 262,518 |
Loans Held for Sale | $ | — |  |  | $ | 4,973 |  |  | $ | — |  |  | $ | 4,973 |
Mortgage servicing rights | $ | — |  |  | $ | — |  |  | $ | 25,213 |  |  | $ | 25,213 |
Other assets—Derivative instruments | $ | — |  |  | $ | — |  |  | $ | 464 |  |  | $ | 464 |
LIABILITIES: |  |  |  |  |  |  |
Other liabilities—Derivative instruments | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
| June 30, 2021
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
ASSETS: |  |  |  |  |  |  |
Securities—Trading: Municipal | $ | — |  |  | $ | 1,983 |  |  | $ | — |  |  | $ | 1,983 |
Securities—Available-for-Sale: |  |  |  |  |  |  |
Agency MBS 1 | $ | — |  |  | $ | 23,913 |  |  | $ | — |  |  | $ | 23,913 |
Non-Agency MBS 2 | — |  |  | — |  |  | 67,615 |  |  | 67,615 |
Municipal | — |  |  | 3,565 |  |  | — |  |  | 3,565 |
Asset-backed securities and structured notes | — |  |  | 92,242 |  |  | — |  |  | 92,242 |
Total—Securities—Available-for-Sale | $ | — |  |  | $ | 119,720 |  |  | $ | 67,615 |  |  | $ | 187,335 |
Loans Held for Sale | $ | — |  |  | $ | 29,768 |  |  | $ | — |  |  | $ | 29,768 |
Mortgage servicing rights | $ | — |  |  | $ | — |  |  | $ | 17,911 |  |  | $ | 17,911 |
Other assets—Derivative Instruments | $ | — |  |  | $ | — |  |  | $ | 2,280 |  |  | $ | 2,280 |
LIABILITIES: |  |  |  |  |  |  |
Other liabilities—Derivative instruments | $ | — |  |  | $ | — |  |  | $ | 75 |  |  | $ | 75 |
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac. 2 Private sponsors of securities collateralized primarily by first - lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option ARM mortgages. The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
|  |  | Year Ended June 30, 2022
(Dollars in thousands) |  |  | Securities- Available-for- Sale: Non- Agency MBS |  | Mortgage Servicing Rights 1 |  | Derivative Instruments, net |  | Total
Assets: |  |  |  |  |  |  |  |  |
Opening Balance |  |  | $ | 67,615 |  |  | $ | 17,911 |  |  | $ | 2,205 |  |  | $ | 87,731 |
Transfers into Level 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Transfers out of Level 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Total gains or losses for the period: |  |  |  |  |  |  |  |  |
Included in earnings—Mortgage banking income |  |  | — |  |  | 2,278 |  |  | (1,741) |  |  | 537 |
Included in other comprehensive income |  |  | (3,244) |  |  | — |  |  | — |  |  | (3,244) |
Purchases, retentions, issues, sales and settlements: |  |  |  |  |  |  |  |  |
Purchases/Retentions |  |  | 131,446 |  |  | 5,024 |  |  | — |  |  | 136,470 |
Settlements |  |  | (9,003) |  |  | — |  |  | — |  |  | (9,003) |
Closing balance |  |  | $ | 186,814 |  |  | $ | 25,213 |  |  | $ | 464 |  |  | $ | 212,491 |
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period |  |  | $ | — |  |  | $ | 2,278 |  |  | $ | (1,741) |  |  | $ | 537 |
1 Earnings from mortgage servicing rights were attributable to: Time and payoffs, representing a decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $4.1 million, and an increase in MSR value resulting from market-driven changes in interest rates of $6.4 million. Additions to mortgage servicing rights were retained upon sale of loans held for sale.
|  |  | Year Ended June 30, 2021
(Dollars in thousands) |  |  | Securities- Available-for- Sale: Non- Agency MBS |  | Mortgage Servicing Rights 1 |  | Derivative Instruments, net |  | Total
Assets: |  |  |  |  |  |  |  |  |
Opening Balance |  |  | $ | 18,332 |  |  | $ | 10,675 |  |  | $ | 7,416 |  |  | $ | 36,423 |
Transfers into Level 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Transfers out of Level 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Total gains or losses for the period: |  |  |  |  |  |  |  |  |
Included in earnings—Mortgage banking income |  |  | — |  |  | (6,319) |  |  | (5,211) |  |  | (11,530) |
Included in other comprehensive income |  |  | 2,289 |  |  | — |  |  | — |  |  | 2,289 |
Purchases, retentions, issues, sales and settlements: |  |  |  |  |  |  |  |  |
Purchases/Retentions |  |  | 49,245 |  |  | 13,555 |  |  | — |  |  | 62,800 |
Settlements |  |  | (2,251) |  |  | — |  |  | — |  |  | (2,251) |
Closing balance |  |  | $ | 67,615 |  |  | $ | 17,911 |  |  | $ | 2,205 |  |  | $ | 87,731 |
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period |  |  | $ | — |  |  | $ | (6,319) |  |  | $ | (5,211) |  |  | $ | (11,530) |
1 Earnings from mortgage servicing rights were attributable to: Time and payoffs, representing a decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $7.2 million, and an increase in MSR value resulting from market-driven changes in interest rates of $0.9 million. Additions to mortgage servicing rights were retained upon sale of loans held for sale. The table below summarizes the quantitative information about Level 3 fair value measurements as of the dates indicated:
| June 30, 2022
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Inputs | Range and Weighted Average
Securities – Non-agency MBS | $ | 186,814 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR | 0.0 to 30.0% (21.4%) 0.0 to 7.9% (2.2%) 0.0 to 68.4% (26.7%) 2.7 to 9.3% (2.8%)
Mortgage Servicing Rights | $ | 25,213 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 7.9 to 56.3% (11.0%) 1.2 to 9.9 (8.4) 9.5 to 11.5% (9.5%)
Derivative Instruments | $ | 464 |  | Sales Comparison Approach | Projected Sales Profit of Underlying Loans | -3.1 to 0.8% (-1.2%)
| June 30, 2021
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Inputs | Range and Weighted Average
Securities – Non-agency MBS | $ | 67,615 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR | 0.0 to 25.0% (2.7%) 0.0 to 5.6% (0.6%) 0.0 to 100.0% (19.4%) 2.7 to 7.2% (3.1%)
Mortgage Servicing Rights | $ | 17,911 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 7.5 to 37.4% (11.5%) 1.7 to 7.5 (6.4) 9.5 to 13.0% (9.6%)
Derivative Instruments | $ | 2,205 |  | Sales Comparison Approach | Projected Sales Profit of Underlying Loans | 0.2 to 0.5% (0.3%)
The significant unobservable inputs used in the fair value measurement of the Company’s mortgage-backed securities are projected prepayment rates, probability of default, and projected loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the projected loss severity and a directionally opposite change in the assumption used for projected prepayment rates.
The table below summarizes the fair value of assets measured for impairment on a non-recurring basis:
| June 30, 2022
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance
Other real estate owned and foreclosed assets: |  |  |  |  |  |  |
Autos & RVs | $ | — |  |  | $ | — |  |  | $ | 798 |  |  | $ | 798 |
Total | $ | — |  |  | $ | — |  |  | $ | 798 |  |  | $ | 798 |
| June 30, 2021
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance
Other real estate owned and foreclosed assets: |  |  |  |  |  |  |
Single family real estate | $ | — |  |  | $ | — |  |  | $ | 6,547 |  |  | $ | 6,547 |
Autos & RVs | — |  |  | — |  |  | 235 |  |  | 235 |
Total | $ | — |  |  | $ | — |  |  | $ | 6,782 |  |  | $ | 6,782 |
Other real estate owned and foreclosed assets, which are measured at the lower of carrying value or fair value less costs to sell, had a net carrying amount of $0.8 million after charge-offs of $0.1 million at June 30, 2022. Our other real estate owned and foreclosed assets had a net carrying amount was $6.8 million after charge-offs of $0.1 million during the year ended June 30, 2021. The aggregate fair value, contractual balance (including accrued interest), and unrealized gain for loans held for sale was as follows:
| At June 30,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
Aggregate fair value | $ | 4,973 |  |  | $ | 29,768 |  |  | $ | 51,995 |
Contractual balance | 4,881 |  |  | 28,940 |  |  | 49,700 |
Unrealized gain | $ | 92 |  |  | $ | 828 |  |  | $ | 2,295 |
The total amount of gains and losses from changes in fair value included in earnings for the period indicated below for loans held for sale were:
| At June 30,
(Dollars in thousands) | 2022 |  | 2021 |  | 2020
Interest income | $ | 739 |  |  | $ | 1,411 |  |  | $ | 1,113 |
Change in fair value | (2,474) |  |  | (6,680) |  |  | 7,531 |
Total | $ | (1,735) |  |  | $ | (5,269) |  |  | $ | 8,644 |
The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated:
| June 30, 2022
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1
Other real estate owned and foreclosed assets: |  |  |
Autos and RVs | $ | 798 |  | Sales comparison approach | Adjustment for differences between the comparable sales | -17.2 to 4.6% (-7.5%)
1 For other real estate owned and foreclosed assets, the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.
| June 30, 2021
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)1
Other real estate owned and foreclosed assets: |  |  |
Single family real estate | $ | 6,547 |  | Sales comparison approach | Adjustment for differences between the comparable sales | -1.5 to 6.1% (2.0%)
Autos & RVs | $ | 235 |  | Sales comparison approach | Adjustment for differences between the comparable sales | -2.1 to 14.7% (-2.1%)
1 For other real estate owned and foreclosed assets, the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount and estimated fair values of financial instruments at year-end were as follows:
| June 30, 2022
(Dollars in thousands) | Carrying Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
Financial assets: |  |  |  |  |  |  |  |  |
Cash, cash equivalents, cash segregated, and federal funds sold | $ | 1,574,699 |  |  | $ | 1,574,699 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,574,699 |
Securities trading | 1,758 |  |  | — |  |  | 1,758 |  |  | — |  |  | 1,758 |
Securities available-for-sale | 262,518 |  |  | — |  |  | 75,704 |  |  | 186,814 |  |  | 262,518 |
Loans held for sale, at fair value | 4,973 |  |  | — |  |  | 4,973 |  |  | — |  |  | 4,973 |
Loans held for sale, at lower of cost or fair value | 10,938 |  |  | — |  |  | — |  |  | 10,985 |  |  | 10,985 |
Loans held for investment—net | 14,091,061 |  |  | — |  |  | — |  |  | 14,015,157 |  |  | 14,015,157 |
Securities borrowed | 338,980 |  |  | — |  |  | — |  |  | 329,963 |  |  | 329,963 |
Customer, broker-dealer and clearing receivables | 417,417 |  |  | — |  |  | — |  |  | 414,383 |  |  | 414,383 |
Mortgage servicing rights | 25,213 |  |  | — |  |  | — |  |  | 25,213 |  |  | 25,213 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Total deposits | 13,946,422 |  |  | — |  |  | 12,812,512 |  |  | — |  |  | 12,812,512 |
Advances from the Federal Home Loan Bank | 117,500 |  |  | — |  |  | 117,500 |  |  | — |  |  | 117,500 |
Borrowings, subordinated notes and debentures | 445,244 |  |  | — |  |  | 416,947 |  |  | — |  |  | 416,947 |
Securities loaned | 474,400 |  |  | — |  |  | — |  |  | 473,831 |  |  | 473,831 |
Customer, broker-dealer and clearing payables | 511,654 |  |  | — |  |  | — |  |  | 471,859 |  |  | 471,859 |
| June 30, 2021
(Dollars in thousands) | Carrying Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
Financial assets: |  |  |  |  |  |  |  |  |
Cash, cash equivalents, cash segregated, and federal funds sold | $ | 1,037,777 |  |  | $ | 1,037,777 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,037,777 |
Securities trading | 1,983 |  |  | — |  |  | 1,983 |  |  | — |  |  | 1,983 |
Securities available-for-sale | 187,335 |  |  | — |  |  | 119,720 |  |  | 67,615 |  |  | 187,335 |
Loans held for sale, at fair value | 29,768 |  |  | — |  |  | 29,768 |  |  | — |  |  | 29,768 |
Loans held for sale, at lower of cost or fair value | 12,294 |  |  | — |  |  | — |  |  | 12,336 |  |  | 12,336 |
Loans and leases held for investment—net | 11,414,814 |  |  | — |  |  | — |  |  | 11,833,102 |  |  | 11,833,102 |
Securities borrowed | 619,088 |  |  | — |  |  | — |  |  | 619,274 |  |  | 619,274 |
Customer, broker-dealer and clearing receivables | 369,815 |  |  | — |  |  | — |  |  | 369,815 |  |  | 369,815 |
Mortgage servicing rights | 17,911 |  |  | — |  |  | — |  |  | 17,911 |  |  | 17,911 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Total deposits | 10,815,797 |  |  | — |  |  | 10,297,450 |  |  | — |  |  | 10,297,450 |
Advances from the Federal Home Loan Bank | 353,500 |  |  | — |  |  | 353,500 |  |  | — |  |  | 353,500 |
Borrowings, subordinated notes and debentures | 221,358 |  |  | — |  |  | 210,196 |  |  | — |  |  | 210,196 |
Securities loaned | 728,988 |  |  | — |  |  | — |  |  | 731,467 |  |  | 731,467 |
Customer, broker-dealer and clearing payables | 535,425 |  |  | — |  |  | — |  |  | 535,425 |  |  | 535,425 |
The methods and assumptions, not previously presented, used to estimate fair value are described as follows: Carrying amount is the estimated fair value for cash and cash equivalents, interest bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available for sale securities and loans held for sale can be found earlier in this footnote. The carrying amount of stock of regulatory agencies approximates the estimated fair value of this investment. The fair value of off-balance sheet items is not considered material.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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