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Fair Value Measurements (Tables) | 6 Months Ended
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Jun. 30, 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
| June 30, 2024
Measured on a Recurring Basis | Total |  | Level 1 |  | Level 2 |  | Level 3
| (In thousands)
Securities available-for-sale: |  |  |  |  |  |  |
Agency residential MBS | $ | 1,101,861 |  |  | $ | — |  |  | $ | 1,101,861 |  |  | $ | — |
Agency commercial MBS | 241,343 |  |  | — |  |  | 241,343 |  |  | — |
Agency residential CMOs | 278,260 |  |  | — |  |  | 278,260 |  |  | — |
Municipal securities | 33,057 |  |  | — |  |  | 33,057 |  |  | — |
Corporate debt securities | 281,962 |  |  | — |  |  | 267,843 |  |  | 14,119 |
Private label residential CMOs | 150,286 |  |  | — |  |  | 150,286 |  |  | — |
Collateralized loan obligations | 109,354 |  |  | — |  |  | 109,354 |  |  | — |
Private label commercial MBS | 18,076 |  |  | — |  |  | 18,076 |  |  | — |
Asset-backed securities | 17,444 |  |  | — |  |  | 17,444 |  |  | — |
SBA securities | 12,388 |  |  | — |  |  | 12,388 |  |  | — |
Total securities available-for-sale | $ | 2,244,031 |  |  | $ | — |  |  | $ | 2,229,912 |  |  | $ | 14,119 |
Equity investments with readily determinable fair values | $ | 1 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |
Derivatives (1): |  |  |  |  |  |  |
Equity warrants | 3,557 |  |  | — |  |  | — |  |  | 3,557 |
Interest rate and economic contracts | 10,727 |  |  | — |  |  | 10,727 |  |  | — |
Derivative liabilities | 7,609 |  |  | — |  |  | 7,609 |  |  | — |
Credit-linked notes | 124,434 |  |  | — |  |  | — |  |  | 124,434 |
| 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 10. 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:
| June 30, 2024
| Equity Warrants
|  |  | Weighted
| Range |  | Average
Unobservable Inputs | of Inputs |  | Input (1)
Volatility | 16.1% - 171.0% |  | 25.3%
Risk-free interest rate | 4.3% - 5.5% |  | 4.6%
Remaining life assumption (in years) | 0.08 - 5.00 |  | 3.27
____________________ (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:
|  | June 30, 2024
|  |  |  | Valuation |  | Unobservable |  | Input or |  | Weighted
Asset |  | Fair Value |  | Technique |  | Inputs |  | Range |  | Average
|  | (In thousands)
Individually evaluated |  |  |  |  |  |  |  |  |  |
loans and leases |  | 5,654 |  | Third-party appraisals |  | No discounts |  |  |  |
Total non-recurring Level 3 |  | $ | 5,654 |  |  |  |  |  |  |  |
Fair value, assets measured on recurring basis, significant unobservable inputs (level 3) reconciliation | The following table summarizes activity for our Level 3 corporate debt securities 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 | — |  |  | (146) |  |  | 2,775 |
Total included in other comprehensive income | (1,021) |  |  | — |  |  | 615 |
Issuances | — |  |  | 296 |  |  | — |
Principal payments | — |  |  | — |  |  | (2,072) |
Transfer from Level 2 | 8,750 |  |  | — |  |  | — |
Transfer to Level 2 | (33,859) |  |  | — |  |  | — |
Exercises and settlements | — |  |  | (280) |  |  | — |
Transfers to Level 1 (equity investments with readily |  |  |  |  |
determinable fair values) | — |  |  | (2) |  |  | — |
Balance, June 30, 2024 | $ | 14,119 |  |  | $ | 3,557 |  |  | $ | 124,434 |
Unrealized net gains (losses) for the period included in other |  |  |  |  |
comprehensive income for securities held at quarter-end | $ | (3,131) |  |  |  |  |
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
| June 30, 2024
Measured on a Non-Recurring Basis | Total |  | Level 1 |  | Level 2 |  | Level 3
| (In thousands)
Individually evaluated loans and leases | $ | 29,027 |  |  | $ | — |  |  | $ | 23,373 |  |  | $ | 5,654 |
OREO | 2,800 |  |  | — |  |  | 2,800 |  |  | — |
Total non-recurring | $ | 31,827 |  |  | $ | — |  |  | $ | 26,173 |  |  | $ | 5,654 |
| 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 |  | Six Months Ended
Losses on Assets | June 30, |  | June 30,
Measured on a Non-Recurring Basis | 2024 |  | 2023 |  | 2024 |  | 2023
| (In thousands)
Individually evaluated loans and leases | $ | 2,680 |  |  | $ | 925 |  |  | $ | 11,232 |  |  | $ | 4,946 |
OREO | 340 |  |  | 158 |  |  | 579 |  |  | 158 |
Total losses | $ | 3,020 |  |  | $ | 1,083 |  |  | $ | 11,811 |  |  | $ | 5,104 |
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:
| June 30, 2024
| Carrying |  | Estimated Fair Value
| Amount |  | Total |  | Level 1 |  | Level 2 |  | Level 3
| (In thousands)
Financial Assets: |  |  |  |  |  |  |  |  |
Cash and due from banks | $ | 203,467 |  |  | $ | 203,467 |  |  | $ | 203,467 |  |  | $ | — |  |  | $ | — |
Interest-earning deposits in financial institutions | 2,495,343 |  |  | 2,495,343 |  |  | 2,495,343 |  |  | — |  |  | — |
Securities available-for-sale | 2,244,031 |  |  | 2,244,031 |  |  | — |  |  | 2,229,912 |  |  | 14,119 |
Securities held-to-maturity | 2,296,708 |  |  | 2,145,929 |  |  | 171,929 |  |  | 1,970,633 |  |  | 3,367 |
Investment in FRB and FHLB stock | 132,380 |  |  | 132,380 |  |  | — |  |  | 132,380 |  |  | — |
Loans held for sale | 1,935,455 |  |  | 1,936,118 |  |  | — |  |  | 1,936,118 |  |  | — |
Loans and leases held for investment, net | 22,981,147 |  |  | 21,809,106 |  |  | — |  |  | 23,373 |  |  | 21,785,733 |
Equity investments with readily determinable fair values | 1 |  |  | 1 |  |  | 1 |  |  | — |  |  | — |
Equity warrants | 3,557 |  |  | 3,557 |  |  | — |  |  | — |  |  | 3,557 |
Interest rate and economic contracts | 10,727 |  |  | 10,727 |  |  | — |  |  | 10,727 |  |  | — |
Servicing rights | 20,783 |  |  | 21,988 |  |  | — |  |  | — |  |  | 21,988 |
Financial Liabilities: |  |  |  |  |  |  |  |  |
Demand, checking, money market, and savings deposits | 22,012,326 |  |  | 22,012,326 |  |  | — |  |  | 22,012,326 |  |  | — |
Time deposits | 6,792,124 |  |  | 6,847,891 |  |  | — |  |  | 6,847,891 |  |  | — |
Borrowings | 1,440,875 |  |  | 1,441,407 |  |  | — |  |  | 1,316,973 |  |  | 124,434 |
Subordinated debt | 939,287 |  |  | 873,446 |  |  | — |  |  | 873,446 |  |  | — |
Derivative liabilities | 7,609 |  |  | 7,609 |  |  | — |  |  | 7,609 |  |  | — |
| 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:
| June 30, 2024
| Corporate Debt Securities
| Input or |  | Weighted
| Range |  | Average
Unobservable Inputs | of Inputs |  | Input (1)
Spread to 10 Year Treasury | 4.4% - 9.1% |  | 6.2%
Discount rates | 8.8% - 13.5% |  | 10.6%

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