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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.
The 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