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Fair Value Measurements
 3 Months Ended 12 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Fair Value Disclosures [Abstract]    
Fair Value Measurements
Note 10. Fair Value Measurements
GAAP sets forth a definition of fair value, establishes a consistent framework for measuring fair value, and requires disclosure for each major asset and liability category measured at fair value on either a recurring or
non-recurring
basis. GAAP also clarifies that fair value is an “exit” price, representing the amount that would be received when selling an asset, or paid when transferring a liability, in an orderly transaction between market participants. Fair value is thus a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value 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 asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
  •  
Level 3 – Inputs to the valuation methodology are significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants use in pricing an asset or liability.
A financial instrument’s categorization within this valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The following tables present assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020, and that were included in the Company’s Consolidated Statements of Condition at those dates:
 
   
Fair Value Measurements at March 31, 2021
  
(in thousands)
  
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
    
Significant
Other
Observable
Inputs
(Level 2)
    
Significant
Unobservable
Inputs
(Level 3)
    
Netting
Adjustments
     
Total Fair
Value
  
Assets:
           
Mortgage-Related Debt Securities Available for Sale:
           
GSE certificates
   $ —       $ 1,209,318     $ —       $ —        $ 1,209,318  
GSE CMOs
     —         1,986,270       —         —          1,986,270  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total mortgage-related debt securities
   $ —       $ 3,195,588     $ —       $ —        $ 3,195,588  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Other Debt Securities Available for Sale:
           
U. S. Treasury obligations
   $ 64,998     $ —       $ —       $ —        $ 64,998  
GSE debentures
     —         1,368,341       —         —          1,368,341  
Asset-backed securities
     —         520,773       —         —          520,773  
Municipal bonds
     —         26,011       —         —          26,011  
Corporate bonds
     —         882,070       —         —          882,070  
Foreign notes
     —         25,993            25,993  
Capital trust notes
     —         94,131       —         —          94,131  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total other debt securities
   $ 64,998     $ 2,917,319     $ —       $ —        $ 2,982,317  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total debt securities available for sale
   $ 64,998     $ 6,112,907     $ —       $ —        $ 6,177,905  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Equity securities:
           
Mutual funds
     —         15,801       —         —          15,801  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total equity securities
   $ —       $ 15,801     $ —       $ —        $ 15,801  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total securities
   $ 64,998     $ 6,128,708     $ —       $ —        $ 6,193,706  
 
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Th
e
Company reviews and updates the fair value hierarchy classifications for its assets on a quarterly basis. Changes from one quarter to the next that are related to the observability of inputs for a fair value measurement may result in a reclassification from one hierarchy level to another.
A description of the methods and significant assumptions utilized in estimating the fair values of securities follows:
Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and exchange-traded securities.
If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, models incorporate transaction details such as maturity and cash flow assumptions. Securities valued in this manner would generally be classified within Level 2 of the valuation hierarchy, and primarily include such instruments as mortgage-related and corporate debt securities.
Periodically, the Company uses fair values supplied by independent pricing services to corroborate the fair values derived from the pricing models. In addition, the Company reviews the fair values supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness. The Company challenges pricing service valuations that appear to be unusual or unexpected.
While the Company believes its valuation methods are appropriate, and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair values of certain financial instruments could result in different estimates of fair values at a reporting date.
Assets Measured at Fair Value on a
Non-Recurring
Basis
Certain assets are measured at fair value on a
non-recurring
basis. Such instruments are subject to fair value adjustments under certain circumstances (e.g., when there is evidence of impairment). The following tables present assets and liabilities that were measured at fair value on a
non-recurring
basis as of March 31, 2021 and December 31, 2020, and that were included in the Company’s Consolidated Statements of Condition at those dates:
 
    
Fair Value Measurements at March 31, 2021 Using
  
(in thousands)
   
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
     
Significant Other
Observable
Inputs
(Level 2)
     
Significant
Unobservable
Inputs
(Level 3)
     
Total Fair
Value
  
Certain nonaccrual loans
(1)
    $ —      $ —      $ 23,172      $ 23,172  
Other assets
(2)
      —        —        10,583        10,583  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ —      $ —      $ 33,755      $ 33,755  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Represents the fair value of impaired loans, based on the value of the collateral.
(2)
Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity investments without readily determinable fair values. These equity investments are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
 
    
Fair Value Measurements at December 31, 2020 Using
  
(in thousands)
   
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
     
Significant Other
Observable
Inputs
(Level 2)
     
Significant
Unobservable
Inputs
(Level 3)
     
Total Fair
Value
  
Certain nonaccrual loans
(1)
    $ —      $ —      $ 41,066      $ 41,066  
Other assets
(2)
      —        —        5,655        5,655  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ —      $ —      $ 46,721      $ 46,721  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Represents the fair value of impaired loans, based on the value of the collateral.
(2)
Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity investments without readily determinable fair values. These equity investments are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
The fair values of collateral-dependent impaired loans are determined using various valuation techniques, including consideration of appraised values and other pertinent real estate and other market data.
Other Fair Value Disclosures
For the disclosure of fair value information about the Company’s
on-
and
off-balance
sheet financial instruments, when available, quoted market prices are used as the measure of fair value. In cases where quoted market prices are not available, fair values are based on present-value estimates or other valuation techniques. Such fair values are significantly affected by the assumptions used, the timing of future cash flows, and the discount rate.
Because assumptions are inherently subjective in nature, estimated fair values cannot be substantiated by comparison to independent market quotes. Furthermore, in many cases, the estimated fair values provided would not necessarily be realized in an immediate sale or settlement of such instruments.
The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at March 31, 2021 and December 31, 2020:
 
    
March 31, 2021
  
                  
Fair Value Measurement Using
  
(in thousands)
  
Carrying
Value
     
Estimated
Fair
Value
     
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
    
Significant
Other
Observable
Inputs
(Level 2)
    
Significant
Unobservable
Inputs
(Level 3)
  
Financial Assets:
             
Cash and cash equivalents
    $ 2,722,915      $ 2,722,915      $ 2,722,915     $ —       $ —    
FHLB stock
(1)
      698,984        698,984        —         698,984       —    
Loans, net
      43,068,816        42,433,118        —         —         42,433,118  
Financial Liabilities:
             
Deposits
    $ 34,197,136      $ 34,215,071      $ 24,582,838
(2)
 		   $ 9,632,233
(3)
 		   $ —    
Borrowed funds
      15,758,787        16,475,503        —         16,475,503       —    
 
(1)
Carrying value and estimated fair value are at cost.
(2)
Interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts.
(3)
Certificates of deposit.
 
    
December 31, 2020
  
                  
Fair Value Measurement Using
  
(in thousands)
   
Carrying
Value
     
Estimated
Fair
Value
     
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
    
Significant
Other
Observable
Inputs
(Level 2)
    
Significant
Unobservable
Inputs
(Level 3)
  
Financial Assets:
             
Cash and cash equivalents
    $ 1,947,931      $ 1,947,931      $ 1,947,931     $ —       $ —    
FHLB stock
(1)
      714,005        714,005        —         714,005       —    
Loans, net
      42,806,691        42,376,214        —       $ —         42,376,214  
Financial Liabilities:
             
Deposits
    $ 32,436,813      $ 32,466,013      $ 22,106,133
(2)
 		   $ 10,359,880
(3)
 		   $ —    
Borrowed funds
      16,083,544        16,794,338        —         16,794,338       —    
 
(1)
Carrying value and estimated fair value are at cost.
(2)
Interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts.
(3)
Certificates of deposit.
The methods and significant assumptions used to estimate fair values for the Company’s financial instruments follow:
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks and federal funds sold. The estimated fair values of cash and cash equivalents are assumed to equal their carrying values, as these financial instruments are either due on demand or have short-term maturities.
Securities
If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, pricing models also incorporate transaction details such as maturities and cash flow assumptions.
Federal Home Loan Bank Stock
Ownership in equity securities of the
FHLB-NY
is generally restricted and there is no established liquid market for their resale. The carrying amount approximates the fair value.
Loans
The Company discloses the fair value of loans measured at amortized cost using an exit price notion. The Company determined the fair value on substantially all of its loans for disclosure purposes, on an individual loan basis. The discount rates reflect current market rates for loans with similar terms to borrowers having similar credit quality on an exit price basis. The estimated fair values of
non-performing
mortgage and other loans are based on recent collateral appraisals. For those loans where a discounted cash flow technique was not considered reliable, the Company used a quoted market price for each individual loan.
Deposits
The fair values of deposit liabilities with no stated maturity (i.e., interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts) are equal to the carrying amounts payable on demand. The fair values of CDs represent contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. These estimated fair values do not include the intangible value of core deposit relationships, which comprise a significant portion of the Company’s deposit base.
Borrowed Funds
The estimated fair value of borrowed funds is based either on bid quotations received from securities dealers or the discounted value of contractual cash flows with interest rates currently in effect for borrowed funds with similar maturities and structures.
Off-Balance
Sheet Financial Instruments
The fair values of commitments to extend credit and unadvanced lines of credit are estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the commitments and the creditworthiness of the potential borrowers. The estimated fair values of such
off-balance
sheet financial instruments were insignificant at March 31, 2021 and December 31, 2020.
NOTE 16: FAIR VALUE MEASUREMENTS
GAAP sets forth a definition of fair value, establishes a consistent framework for measuring fair value, and requires disclosure for each major asset and liability category measured at fair value on either a recurring or
non-recurring
basis. GAAP also clarifies that fair value is an “exit” price, representing the amount that would be received when selling an asset, or paid when transferring a liability, in an orderly transaction between market participants. Fair value is thus a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value 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 asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
  •  
Level 3 — Inputs to the valuation methodology are significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants use in pricing an asset or liability.
A financial instrument’s categorization within this valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
 
The following tables present assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019, and that were included in the Company’s Consolidated Statements of Condition at those dates:
 
     Fair Value Measurements at December 31, 2020  
(in thousands)
    Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)		      Significant
Other
Observable
Inputs (Level
2)		      Significant
Unobservable
Inputs
(Level 3)		      Netting
Adjustments		      Total
Fair
Value		  
Assets:
               
Mortgage-related Debt Securities Available for Sale:
               
GSE certificates
    $ —        $ 1,209,610      $ —        $ —        $ 1,209,610  
GSE CMOs
      —          1,828,715        —          —          1,828,715  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total mortgage-related debt securities
    $ —        $ 3,038,325      $ —        $ —        $ 3,038,325  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Other Debt Securities Available for Sale:
               
U. S. Treasury obligations
    $ 64,985      $ —        $ —        $ —        $ 64,985  
GSE debentures
      —          1,158,302        —          —          1,158,302  
Asset-backed securities
      —          527,099        —          —          527,099  
Municipal bonds
      —          26,311        —          —          26,311  
Corporate bonds
      —          882,226        —          —          882,226  
Foreign notes
      —          25,538        —          —          25,538  
Capital trust notes
      —          90,547        —          —          90,547  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total other debt securities
    $ 64,985      $ 2,710,023      $ —        $ —        $ 2,775,008  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total debt securities available for sale
    $ 64,985      $ 5,748,348      $ —        $ —        $ 5,813,333  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Equity securities:
            —          —       
Preferred stock
    $ 15,493      $ —        $ —        $ —        $ 15,493  
Mutual funds
      —          16,083        —          —          16,083  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total equity securities
    $ 15,493      $ 16,083      $ —        $ —        $ 31,576  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total securities
    $ 80,478      $ 5,764,431      $ —        $ —        $ 5,844,909  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
     Fair Value Measurements at December 31, 2019  
(in thousands)
    Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		      Netting
Adjustments		      Total
Fair Value		  
Assets:
                                             
Mortgage-Related Debt Securities Available for Sale:
                                             
GSE certificates
    $ —        $ 1,552,623      $ —        $ —        $ 1,552,623  
GSE CMOs
      —          1,801,112        —          —          1,801,112  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total mortgage-related debt securities
    $ —        $ 3,353,735      $ —        $ —        $ 3,353,735  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Other Debt Securities Available for Sale:
                                             
U.S. Treasury obligations
    $ 41,839      $ —        $ —        $ —        $ 41,839  
GSE debentures
      —          1,094,240        —          —          1,094,240  
Asset-backed securities
      —          373,254        —          —          373,254  
Municipal bonds
      —          26,892        —          —          26,892  
Corporate bonds
      —          867,182        —          —          867,182  
Capital trust notes
      —          95,915        —          —          95,915  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total other debt securities
    $ 41,839      $ 2,457,483      $ —        $ —        $ 2,499,322  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total debt securities available for sale
    $ 41,839      $ 5,811,218      $ —        $ —        $ 5,853,057  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Equity securities:
                        —          —             
Preferred stock
    $ 15,414      $ —        $ —        $ —        $ 15,414  
Mutual funds and common stock
      —          17,416        —          —          17,416  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total equity securities
    $ 15,414      $ 17,416      $ —        $ —        $ 32,830  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Total securities
    $ 57,253      $ 5,828,634      $ —        $ —        $ 5,885,887  
    
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
The Company reviews and updates the fair value hierarchy classifications for its assets on a quarterly basis. Changes from one quarter to the next that are related to the observability of inputs for a fair value measurement may result in a reclassification from one hierarchy level to another.
A description of the methods and significant assumptions utilized in estimating the fair values of securities follows:
Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include highly liquid government securities and exchange-traded securities.
If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, models incorporate transaction details such as maturity and cash flow assumptions. Securities valued in this manner would generally be classified within Level 2 of the valuation hierarchy, and primarily include such instruments as mortgage-related and corporate debt securities.
Periodically, the Company uses fair values supplied by independent pricing services to corroborate the fair values derived from the pricing models. In addition, the Company reviews the fair values supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness. The Company challenges pricing service valuations that appear to be unusual or unexpected.
While the Company believes its valuation methods are appropriate, and consistent with those of other market participants, the use of different methodologies or assumptions to determine the fair values of certain financial instruments could result in different estimates of fair values at a reporting date.
Fair Value Option
Gains and Losses Included in Income for Assets Where the Fair Value Option Has Been Elected
The assets accounted for under the fair value option are initially measured at fair value. Gains and losses from the initial measurement and subsequent changes in fair value are recognized in earnings. The following table presents the changes in fair value related to initial measurement, and the subsequent changes in fair value included in earnings, for MSRs for the periods indicated:
 
     (Loss) Gain Included in Mortgage Banking
Income from Changes in Fair Value 
(1)
  
     For the Twelve Months Ended December 31,  
(in thousands)
    2020      2019      2018  
Loans held for sale
    $ —        $ —        $ —    
Mortgage servicing rights
      —          —          (224 ) 
    
 
 
     
 
 
     
 
 
  
Total loss
    $ —        $ —        $ (224 ) 
    
 
 
     
 
 
     
 
 
  
 
(1)
Included in
“Non-interest
income.”
Assets Measured at Fair Value on a
Non-Recurring
Basis
Certain assets are measured at fair value on a
non-recurring
basis. Such instruments are subject to fair value adjustments under certain circumstances (e.g., when there is evidence of impairment). The following tables present assets that were measured at fair value on a
non-recurring
basis as of December 31, 2020 and 2019, and that were included in the Company’s Consolidated Statements of Condition at those dates:
 
     Fair Value Measurements at December 31, 2020 Using  
(in thousands)
    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		      Total Fair
Value		  
Certain loans
(1)
    $ —        $ —        $ 41,066      $ 41,066  
Other assets
(2)
      —          —          5,655        5,655  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ —        $ —        $ 46,721      $ 46,721  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Represents the fair value of certain loans individually assessed for impairment, based on the value of the collateral.
(2)
Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity securities without readily determinable fair values. These equity securities are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
 
     Fair Value Measurements at December 31, 2019 Using  
(in thousands)
    Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		      Significant
Other
Observable
Inputs
(Level 2)		      Significant
Unobservable
Inputs
(Level 3)		      Total Fair
Value		  
Certain impaired loans
(1)
    $ —        $ —        $ 42,767      $ 42,767  
Other assets
(2)
      —          —          1,481        1,481  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total
    $ —        $ —        $ 44,248      $ 44,248  
    
 
 
     
 
 
     
 
 
     
 
 
  
 
(1)
Represents the fair value of impaired loans, based on the value of the collateral.
(2)
Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets.
The fair values of collateral-dependent impaired loans are determined using various valuation techniques, including consideration of appraised values and other pertinent real estate and other market data.
Other Fair Value Disclosures
For the disclosure of fair value information about the Company’s
on-
and
off-balance
sheet financial instruments, when available, quoted market prices are used as the measure of fair value. In cases where quoted market prices are not available, fair values are based on present-value estimates or other valuation techniques. Such fair values are significantly affected by the assumptions used, the timing of future cash flows, and the discount rate.
Because assumptions are inherently subjective in nature, estimated fair values cannot be substantiated by comparison to independent market quotes. Furthermore, in many cases, the estimated fair values provided would not necessarily be realized in an immediate sale or settlement of such instruments.
The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at December 31, 2020 and 2019:
 
     December 31, 2020  
                   Fair Value Measurement Using  
(in thousands)
    Carrying Value      Estimated
Fair Value		      Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  
Financial Assets:
             
Cash and cash equivalents
    $ 1,947,931      $ 1,947,931      $ 1,947,931     $ —       $ —    
FHLB stock
(1)
      714,005        714,005        —         714,005       —    
Loans and leases, net
      42,806,691        42,376,214        —         —         42,376,214  
Financial Liabilities:
             
Deposits
    $ 32,436,813      $ 32,466,013      $ 22,106,133
 (2)
 		   $ 10,359,880
 (3)
 		   $ —    
Borrowed funds
      16,083,544        16,794,338        —         16,794,338       —    
 
(1)
Carrying value and estimated fair value are at cost.
(2)
Interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts.
(3)
Certificates of deposit.
 
     December 31, 2019  
                   Fair Value Measurement Using  
(in thousands)
    Carrying
Value		      Estimated
Fair Value		      Quoted Prices
in Active
Markets
for Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)		  
Financial Assets:
             
Cash and cash equivalents
    $ 741,870      $ 741,870      $ 741,870     $ —       $ —    
FHLB stock
(1)
      647,562        647,562        —         647,562       —    
Loans and leases, net
      41,746,517        41,699,929        —         —         41,699,929  
Financial Liabilities:
             
Deposits
    $ 31,657,132      $ 31,713,945      $ 17,442,274
 (2)
 		   $ 14,271,671
 (3)
 		   $ —    
Borrowed funds
      14,557,593        14,882,776        —         14,882,776       —    
 
(1)
Carrying value and estimated fair value are at cost.
(2)
Interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts.
(3)
Certificates of deposit.
The methods and significant assumptions used to estimate fair values for the Company’s financial instruments follow:
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks and federal funds sold. The estimated fair values of cash and cash equivalents are assumed to equal their carrying values, as these financial instruments are either due on demand or have short-term maturities.
Securities
If quoted market prices are not available for a specific security, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. These pricing models primarily use market-based or independently sourced market parameters as inputs, including, but not limited to, yield curves, interest rates, equity or debt prices, and credit spreads. In addition to observable market information, pricing models also incorporate transaction details such as maturities and cash flow assumptions.
Federal Home Loan Bank Stock
Ownership in equity securities of the FHLB is generally restricted and there is no established liquid market for their resale. The carrying amount approximates the fair value.
Loans
The Company discloses the fair value of loans measured at amortized cost using an exit price notion. The Company determined the fair value on substantially all of its loans for disclosure purposes, on an individual loan basis. The discount rates reflect current market rates for loans with similar terms to borrowers having similar credit quality on an exit price basis. The estimated fair values of
non-performing
mortgage and other loans are based on recent collateral appraisals. For those loans where a discounted cash flow technique was not considered reliable, the Company used a quoted market price for each individual loan.
Deposits
The fair values of deposit liabilities with no stated maturity (i.e., interest-bearing checking and money market accounts, savings accounts, and
non-interest-bearing
accounts) are equal to the carrying amounts payable on demand. The fair values of CDs represent contractual cash flows, discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. These estimated fair values do not include the intangible value of core deposit relationships, which comprise a portion of the Company’s deposit base.
Borrowed Funds
The estimated fair value of borrowed funds is based either on bid quotations received from securities dealers or the discounted value of contractual cash flows with interest rates currently in effect for borrowed funds with similar maturities and structures.
Off-Balance
Sheet Financial Instruments
The fair values of commitments to extend credit and unadvanced lines of credit are estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions, considering the remaining terms of the commitments and the creditworthiness of the potential borrowers. The estimated fair values of such
off-balance
sheet financial instruments were insignificant at December 31, 2020 and 2019.