XML 34 R21.htm IDEA: XBRL DOCUMENT
v3.25.3

FAIR VALUE | 9 Months Ended
--- | ---
Sep. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE The term “fair value” is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The Company’s approach is to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. Fair Value Hierarchy A three-level valuation hierarchy has been established under ASC 820 for disclosure of fair value measurements. The valuation hierarchy is based on the observability of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The levels are defined as follows: •Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. •Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This includes quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability for substantially the full term of the financial instrument. •Level 3 – Unobservable inputs for the asset or liability. These inputs reflect the Company’s assumptions of what market participants would use in pricing the asset or liability. The Company’s policy regarding transfers between levels of the fair value hierarchy is that all transfers are assumed to occur at the end of the reporting period. Estimation of Fair Value Fair value is based on quoted market prices, when available. In cases where a quoted price for an asset or liability is not available, the Company uses valuation models to estimate fair value. These models incorporate inputs such as forward yield curves, loan prepayment assumptions, expected loss assumptions, market volatilities and pricing spreads utilizing market-based inputs where readily available. The Company believes its valuation methods are appropriate and consistent with those that would be used by other market participants. However, imprecision in estimating unobservable inputs and other factors may result in these fair value measurements not reflecting the amount realized in an actual sale or transfer of the asset or liability in a current market exchange. The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions and classification of the Company’s assets and liabilities valued at fair value on a recurring basis.
Asset/Liability class |  | Valuation methodology, inputs and assumptions |  | Classification
Investment securities |  |  |  |
U.S Treasury securities (Trading securities and Investment securities AFS) |  | Fair Value is based on quoted prices in an active market. |  | Level 1 recurring fair value measurement.
Investment securities AFS |  | Observable market prices of identical or similar securities are used where available. |  | Level 2 recurring fair value measurement.
|  | If market prices are not readily available, value is based on discounted cash flows using the following significant inputs: •Expected prepayment speeds •Estimated credit losses •Market liquidity adjustments |  | Level 3 recurring fair value measurement.
LHFS |  |  |  |
Single family loans |  | Fair value is based on observable market data, including: •Quoted market prices, where available •Dealer quotes for similar loans •Forward sale commitments |  | Level 2 recurring fair value measurement.
Equity securities |  | Observable market prices of identical or similar securities are used where available. |  | Level 2 recurring fair value measurement.
Mortgage servicing rights |  |  |  |
Single family MSRs |  | For information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 11, “Mortgage Banking Operations.” |  | Level 3 recurring fair value measurement.
Derivatives |  |  |  |
Futures and Options |  | Fair value is based on closing exchange prices. |  | Level 1 recurring fair value measurement.
Forward sale commitments and interest rate swaps |  | Fair value is based on quoted prices for identical or similar instruments, when available. When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs including: •Forward interest rates •Interest rate volatilities |  | Level 2 recurring fair value measurement.
IRLC |  | The fair value considers several factors including: •Fair value of the underlying loan based on quoted prices in the secondary market, when available. •Value of servicing •Fall-out factor |  | Level 3 recurring fair value measurement.
The following tables present the levels of the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis:
| September 30, 2025
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Trading securities - U.S. Treasury securities | $50,357 |  | $50,357 |  | $— |  | $—
Securities available-for-sale: |  |  |  |  |  |  |
Obligations of states and political subdivisions | 467,870 |  | — |  | 467,870 |  | —
Mortgage backed securities - residential | 2,374,155 |  | — |  | 2,372,543 |  | 1,612
Mortgage backed securities - commercial | 378,178 |  | — |  | 378,178 |  | —
Collateralized loan obligations | 188,689 |  | — |  | 188,689 |  | —
Corporate bonds | 53,484 |  | — |  | 53,437 |  | 47
U.S. Treasury securities | 20,579 |  | 20,579 |  | — |  | —
Agency debentures | 7,523 |  | — |  | 7,523 |  | —
Total securities available-for-sale | 3,490,478 |  | 20,579 |  | 3,468,240 |  | 1,659
Single family LHFS | 21,397 |  | — |  | 21,397 |  | —
Single family mortgage servicing rights | 59,536 |  | — |  | — |  | 59,536
Equity securities | 16,018 |  | — |  | 16,018 |  | —
Derivatives: |  |  |  |  |  |  |
Forward loan sale commitments | 131 |  | — |  | 131 |  | —
Interest rate lock commitments | 277 |  | — |  | — |  | 277
Interest rate swaps | 11,347 |  | — |  | 11,347 |  | —
Total assets | $3,649,541 |  | $70,936 |  | $3,517,133 |  | $61,472
Liabilities: |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Forward loan sale commitments | $112 |  | $— |  | $112 |  | $—
Interest rate swaps | 10,259 |  | — |  | 10,259 |  | —
Futures | 1 |  | 1 |  | — |  | —
Total liabilities | $10,372 |  | $1 |  | $10,371 |  | $—
| December 31, 2024
(in thousands) | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |
Obligations of states and political subdivisions | $91,299 |  | $— |  | $91,299 |  | $—
Mortgage backed securities - residential | 2,643,688 |  | — |  | 2,643,688 |  | —
Mortgage backed securities - commercial | 240,862 |  | — |  | 240,862 |  | —
Collateralized loan obligations | 50,000 |  | — |  | 50,000 |  | —
Corporate bonds | 39,402 |  | — |  | 39,402 |  | —
Total securities available-for-sale | 3,065,251 |  | — |  | 3,065,251 |  | —
Equity securities | 15,355 |  | — |  | 15,355 |  | —
Derivatives: |  |  |  |  |  |  |
Interest rate swaps | 12,835 |  | — |  | 12,835 |  |
Total assets | $3,093,441 |  | $— |  | $3,093,441 |  | $—
Liabilities: |  |  |  |  |  |  |
Derivatives: |  |  |  |  |  |  |
Interest rate swaps | $11,056 |  | $— |  | $11,056 |  | $—
Interest rate lock commitments | 7 |  | — |  | — |  | 7
Total liabilities | $11,063 |  | $— |  | $11,056 |  | $7
There were no transfers between levels of the fair value hierarchy during the quarters and nine months ended September 30, 2025 and 2024. Level 3 Recurring Fair Value Measurements The Company’s Level 3 recurring fair value measurements consist of investment securities AFS, single family MSRs, and interest rate lock commitments, which are accounted for as derivatives. For information regarding fair value changes and activity for single family MSRs during the quarter and nine months ended September 30, 2025, see Note 11, “Mortgage Banking Operations.” The fair value of IRLCs considers several factors, including the fair value in the secondary market of the underlying loan resulting from the exercise of the commitment, the expected net future cash flows related to the associated servicing of the loan (referred to as the value of servicing) and the probability that the commitment will not be converted into a funded loan (referred to as a fall-out factor). The fair value of IRLCs on LHFS, while based on interest rates observable in the market, is highly dependent on the ultimate closing of the loans. The significance of the fall-out factor to the fair value measurement of an individual IRLC is generally highest at the time that the rate lock is initiated and declines as closing procedures are performed and the underlying loan gets closer to funding. The fall-out factor applied is based on historical experience. The value of servicing is impacted by a variety of factors, including prepayment assumptions, discount rates, delinquency rates, contractually specified servicing fees, servicing costs and underlying portfolio characteristics. Because these inputs are not observable in market trades, the fall-out factor and value of servicing are considered to be Level 3 inputs. The fair value of IRLCs decreases in value upon an increase in the fall-out factor and increases in value upon an increase in the value of servicing. Changes in the fall-out factor and value of servicing do not increase or decrease based on movements in other significant unobservable inputs. The Company recognizes unrealized gains and losses from the time that an IRLC is initiated until the gain or loss is realized at the time the loan closes, which generally occurs within 30-90 days. For IRLCs that fall out, any unrealized gain or loss is reversed, which generally occurs at the end of the commitment period. The gains and losses recognized on IRLC derivatives generally correlates to volume of single family interest rate lock commitments made during the reporting period (after adjusting for estimated fallout) while the amount of unrealized gains and losses realized at settlement generally correlates to the volume of single family closed loans during the reporting period. T he following information presents significant Level 3 unobservable inputs used to measure fair value of certain assets as of September 30, 2025. As of December 31, 2024, there were no assets measured at fair value using Level 3 unobservable inputs.
(dollars in thousands) | Fair Value |  | Valuation Technique |  | Significant Unobservable Inputs |  | Low |  | High |  | Weighted Average
September 30, 2025 |  |  |  |  |  |  |  |  |  |  |
Investment securities AFS | $1,659 |  | Income approach |  | Implied spread to benchmark interest rate curve |  | 2.25% |  | 2.25% |  | 2.25%
Interest rate lock commitments, net | 277 |  | Income approach |  | Fall-out factor |  | 1.10% |  | 24.54% |  | 15.04%
|  |  |  |  | Value of servicing |  | 0.64% |  | 1.49% |  | 1.18%
The following table presents fair value changes and activity for certain Level 3 assets for the periods indicated:
(in thousands) | Beginning balance |  | Additions (1) |  | Transfers |  | Payoffs/Sales |  | Change in mark to market |  | Ending balance
Quarter Ended September 30, 2025 |  |  |  |  |  |  |  |  |  |  |
Investment securities AFS | $— |  | $1,649 |  | $— |  | $— |  | $10 |  | $1,659
Nine Months Ended September 30, 2025 |  |  |  |  |  |  |  |  |  |  |
Investment securities AFS | $— |  | $1,649 |  | $— |  | $— |  | $10 |  | $1,659
(1)Includes the assets acquired from the Merger on September 2, 2025 The following table presents fair value changes and activity for Level 3 interest rate lock commitments:
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2025
Beginning balance, net | $— |  | $—
IRLC acquired (1) | 514 |  | 514
Total realized/unrealized gains | (97) |  | (97)
Settlements | (140) |  | (140)
Ending balance, net | $277 |  | $277
(1)Represents the interest rate lock commitments acquired from the Merger on September 2, 2025. Assets and Liabilities Measured on a Nonrecurring Basis Collateral Dependent Loan and Lease Receivables: The fair value of collateral dependent loan and lease receivables with specific allocations of the allowance for credit losses based on collateral values is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Loss exposure for collateral dependent loans is typically determined by the “practical expedient” which allows these loans to be assessed using the fair value of collateral method, which compares the net realizable value of the collateral (fair value less costs of sale) to the amortized cost basis of the loan (carrying value). The fair value of real estate collateral is based on appraisals, evaluations or internal values. As of September 30, 2025 and December 31, 2024 there were no collateral dependent loans with specific allowance allocations of the allowance for credit losses, which are measured for impairment using the fair value of the collateral. Other real estate owned: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned are measured at the lower of the carrying amount or fair value, less costs to sell. Fair values are generally based on third party appraisals of the property or internal evaluations based on comparable sales, resulting in a Level 3 classification. Appraisals for both collateral-dependent impaired loans and real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Appraisal Department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. In cases where the carrying amount exceeds the fair value, less cost to sell, an impairment loss is recognized. Management also considers inputs regarding market trends or other relevant factors and selling and commission costs. Other real estate owned assets fall under a Level 3 fair value measurement methodology. The following table presents other real estate owned recorded at fair value on a nonrecurring basis and still held on the consolidated balance sheet for the periods indicated. Other real estate owned of $1.7 million as of September 30, 2025 was acquired in the Merger and recorded at fair value as of the Merger date.
(in thousands) | September 30, 2025 |  | December 31, 2024
Fair value: |  |  |
Other real estate owned | $1,675 |  | $15,600
The following table presents losses due to write-downs of other real estate owned for the periods indicated and that were still held at the end of each respective reporting period.
| Quarter Ended September 30, |  | Nine Months Ended September 30,
(in thousands) | 2025 |  | 2024 |  | 2025 |  | 2024
Losses due to write downs: |  |  |  |  |  |  |
Other real estate owned (1) | $— |  | $— |  | $— |  | $1,200
(1)Losses are included in other real estate owned related expense within noninterest expense on the consolidated income statements. The following is a summary of the estimated fair value and carrying value of the Company’s financial instruments not recorded at fair value in the consolidated financial statements as of September 30, 2025 and December 31, 2024:
| September 30, 2025
|  |  | Fair Value
(in thousands) | Carrying Value |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $1,442,647 |  | $1,442,647 |  | $1,442,647 |  | $— |  | $—
Securities held-to-maturity | 1,363,636 |  | 1,186,260 |  | — |  | 1,183,260 |  | 3,000
Loans held for sale - multifamily and other | 33,588 |  | 33,655 |  | — |  | 33,655 |  | —
Loan and lease receivables, net | 14,399,836 |  | 13,948,529 |  | — |  | — |  | 13,948,529
Mortgage servicing rights – multifamily and SBA | 29,059 |  | 29,213 |  | — |  | — |  | 29,213
Liabilities: |  |  |  |  |  |  |  |  |
Time deposits | $3,387,240 |  | $3,378,332 |  | $— |  | $3,378,332 |  | $—
Long-term debt | 190,123 |  | 198,516 |  | — |  | 198,516 |  | —
| December 31, 2024
| Carrying Value |  | Fair Value
(in thousands) |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $999,711 |  | $999,711 |  | $999,711 |  | $— |  | $—
Securities held-to-maturity | 1,440,494 |  | 1,196,000 |  | — |  | 1,193,000 |  | 3,000
Loans held for sale - single family | 543 |  | 543 |  |  |  |  |  | 543
Loan and lease receivables, net | 9,554,939 |  | 8,817,007 |  | — |  | — |  | 8,817,007
Liabilities: |  |  |  |  |  |  |  |  |
Time deposits | $970,053 |  | $960,276 |  | $— |  | $960,276 |  | $—
Fair Value Option Single family loans held for sale accounted under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings. Gains and losses from such changes in fair value are recognized in net gain on mortgage loan origination and sale activities within other noninterest income. The change in fair value of loans held for sale is primarily driven by changes in interest rates subsequent to loan funding and changes in fair value of the related servicing asset, resulting in revaluation adjustments to the recorded fair value. The use of the fair value option allows the change in the fair value of loans to more effectively offset the change in fair value of derivative instruments that are used as economic hedges of loans held for sale. The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale accounted for under the fair value option as of September 30, 2025. As of December 31, 2024, there were no single family loans held for sale accounted for under the fair value option, since this election was made following the Merger.
| September 30, 2025
(in thousands) | Fair Value |  | Aggregate Unpaid Principal Balance |  | Fair Value Less Aggregated Unpaid Principal Balance
Single family LHFS | $21,397 |  | $20,932 |  | $465

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration