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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair value, assets measured on recurring basis

The following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of the dates indicated:

			Fair Value Measurements as of
			March 31, 2024
Measured on a Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Securities available-for-sale:
Agency residential MBS			$	1,137,469					$	—					$	1,137,469					$	—
Agency commercial MBS			243,387						—						243,387						—
Agency residential CMOs			281,569						—						281,569						—
Municipal securities			33,259						—						33,259						—
Corporate debt securities			277,198						—						275,098						2,100
Private label residential CMOs			153,412						—						153,412						—
Collateralized loan obligations			109,078						—						109,078						—
Private label commercial MBS			19,491						—						19,491						—
Asset-backed securities			18,908						—						18,908						—
SBA securities			12,911						—						12,911						—
Total securities available-for-sale			$	2,286,682					$	—					$	2,284,582					$	2,100
Equity investments with readily determinable fair values			$	1					$	1					$	—					$	—
Derivatives (1):
Equity warrants			3,708						—						—						3,708
Interest rate and economic contracts			10,205						—						10,205						—
Derivative liabilities			7,337						—						7,337						—
Credit-linked notes			123,824						—						—						123,824

			Fair Value Measurements as of
			December 31, 2023
Measured on a Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Securities available-for-sale:
Agency residential MBS			$	1,187,609					$	—					$	1,187,609					$	—
U.S. Treasury securities			4,968						4,968						—						—
Agency commercial MBS			253,306						—						253,306						—
Agency residential CMOs			284,334						—						284,334						—
Municipal securities			28,083						—						28,083						—
Corporate debt securities			267,232						—						226,983						40,249
Private label residential CMOs			158,412						—						158,412						—
Collateralized loan obligations			108,416						—						108,416						—
Private label commercial MBS			20,813						—						20,813						—
Asset-backed securities			19,952						—						19,952						—
SBA securities			13,739						—						13,739						—
Total securities available-for-sale			$	2,346,864					$	4,968					$	2,301,647					$	40,249
Equity investments with readily determinable fair values			$	1					$	1					$	—					$	—
Derivatives (1):
Equity warrants			3,689						—						—						3,689
Interest rate and economic contracts			8,309						—						8,309						—
Derivative liabilities			10,549						—						10,549						—
Credit-linked notes			123,116						—						—						123,116

____________________

(1)    For information regarding derivative instruments, see Note 9. Derivatives.

Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques

Fair value inputs, assets, quantitative information

The following table presents information about quantitative inputs and assumptions used in the modified Black-Scholes option pricing model to determine the fair value for our Level 3 equity warrants measured at fair value on a recurring basis as of the date indicated:

			March 31, 2024
			Equity Warrants
									Weighted
			Range						Average
Unobservable Inputs			of Inputs						Input (1)
Volatility			19.0% - 196.9%						26.7%
Risk-free interest rate			4.2% - 5.5%						4.5%
Remaining life assumption (in years)			0.08 - 4.97						3.24

____________________

(1)    Unobservable inputs for equity warrants were weighted by the relative fair values of the instruments.

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of the date indicated:

March 31, 2024

Valuation

Unobservable

Input or

Weighted

Asset

Fair Value

Technique

Inputs

Range

Average

(In thousands)

Individually evaluated

loans and leases

3,037

Third-party appraisals

No discounts

Total non-recurring Level 3

$

3,037

Fair value, assets measured on recurring basis, significant unobservable inputs (level 3) reconciliation

The following table summarizes activity for our Level 3 private label commercial MBS available-for-sale, equity warrants, and credit-linked notes measured at fair value on a recurring basis for the period indicated:

			Corporate						Equity						Credit-Linked
			Debt Securities						Warrants						Notes
			(In thousands)
Balance, December 31, 2023			$	40,249					$	3,689					$	123,116
Total included in earnings			—						178						348
Total included in other comprehensive income			—						—						1,251
Issuances			—						115						—
Principal payments			—						—						(891)
Transfer to Level 2			(38,149)						—						—
Exercises and settlements			—						(272)						—
Transfers to Level 1 (equity investments with readily
determinable fair values)			—						(2)						—
Balance, March 31, 2024			$	2,100					$	3,708					$	123,824
Unrealized net gains (losses) for the period included in other
comprehensive income for securities held at quarter-end			$	(900)

Assets carried at fair value on a nonrecurring basis

The following tables present assets measured at fair value on a non-recurring basis as of the dates indicated:

			Fair Value Measurement as of
			March 31, 2024
Measured on a Non-Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Individually evaluated loans and leases			$	5,639					$	—					$	2,602					$	3,037
OREO			2,511						—						2,511						—
Total non-recurring			$	8,150					$	—					$	5,113					$	3,037

			Fair Value Measurement as of
			December 31, 2023
Measured on a Non-Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Individually evaluated loans and leases			$	6,402					$	—					$	4,051					$	2,351
OREO			3,422						—						3,422						—
Total non-recurring			$	9,824					$	—					$	7,473					$	2,351

Net losses (gains) on nonrecurring assets

The following table presents losses recognized on assets measured on a nonrecurring basis for the periods indicated:

			Three Months Ended
Losses on Assets			March 31,
Measured on a Non-Recurring Basis			2024						2023
			(In thousands)
Individually evaluated loans and leases			$	832					$	4,911
OREO			297						—
Total losses			$	1,129					$	4,911

Fair value, by balance sheet grouping

The following tables present carrying amounts and estimated fair values of certain financial instruments as of the dates indicated:

			March 31, 2024
			Carrying						Estimated Fair Value
			Amount						Total						Level 1						Level 2						Level 3
			(In thousands)
Financial Assets:
Cash and due from banks			$	199,922					$	199,922					$	199,922					$	—					$	—
Interest-earning deposits in financial institutions			2,885,306						2,885,306						2,885,306						—						—
Securities available-for-sale			2,286,682						2,286,682						—						2,284,582						2,100
Securities held-to-maturity			2,291,984						2,153,349						172,338						1,963,818						17,193
Investment in FRB and FHLB stock			129,314						129,314						—						129,314						—
Loans held for sale			80,752						82,383						—						82,383						—
Loans and leases held for investment, net			25,181,519						23,553,410						—						2,602						23,550,808
Equity investments with readily determinable fair values			1						1						1						—						—
Equity warrants			3,708						3,708						—						—						3,708
Interest rate and economic contracts			10,205						10,205						—						10,205						—
Servicing rights			21,384						22,242						—						—						22,242
Financial Liabilities:
Demand, checking, money market, and savings deposits			22,706,213						22,706,213						—						22,706,213						—
Time deposits			6,186,194						6,260,651						—						6,260,651						—
Borrowings			2,139,498						2,135,757						—						2,011,933						123,824
Subordinated debt			937,717						850,984						—						850,984						—
Derivative liabilities			7,337						7,337						—						7,337						—

			December 31, 2023
			Carrying						Estimated Fair Value
			Amount						Total						Level 1						Level 2						Level 3
			(In thousands)
Financial Assets:
Cash and due from banks			$	202,427					$	202,427					$	202,427					$	—					$	—
Interest-earning deposits in financial institutions			5,175,149						5,175,149						5,175,149						—						—
Securities available-for-sale			2,346,864						2,346,864						4,968						2,301,647						40,249
Securities held-to-maturity			2,287,291						2,168,316						175,579						1,976,015						16,722
Investment in FRB and FHLB stock			126,346						126,346						—						126,346						—
Loans held for sale			122,757						126,646						—						126,646						—
Loans and leases held for investment, net			25,208,000						23,551,725						—						4,051						23,547,674
Equity investments with readily determinable fair values			1						1						1						—						—
Equity warrants			3,689						3,689						—						—						3,689
Interest rate and economic contracts			8,309						8,309						—						8,309						—
Servicing rights			22,174						22,174						—						—						22,174
Financial Liabilities:
Demand, checking, money market, and savings deposits			23,768,896						23,768,896						—						23,768,896						—
Time deposits			6,632,873						6,732,246						—						6,732,246						—
Borrowings			2,911,322						2,908,527						—						2,785,411						123,116
Subordinated debt			936,599						851,625						—						851,625						—
Derivative liabilities			10,549						10,549						—						10,549						—

Fair Value Quantitative Inputs and Assumptions for Outside Services

The following table presents information about quantitative inputs and assumptions used to determine the fair values provided by our third-party pricing service for our Level 3 corporate debt securities available-for-sale measured at fair value on a recurring basis as of the date indicated:

			March 31, 2024
			Corporate Debt Securities
			Input or						Weighted
			Range						Average
Unobservable Inputs			of Inputs						Input (1)
Spread to 10 Year Treasury			6.3% - 8.8%						7.6%
Discount rates			10.5% - 13.0%						11.8%

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