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Fair Value Measurements (Tables)

9 Months Ended

Sep. 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
			September 30, 2024
Measured on a Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Securities available-for-sale:
Agency residential MBS			$	922,448					$	—					$	922,448					$	—
Agency commercial MBS			33,532						—						33,532						—
Agency residential CMOs			418,240						—						418,240						—
Municipal securities			597						—						597						—
Corporate debt securities			266,630						—						251,221						15,409
Private label residential CMOs			339,725						—						339,725						—
Collateralized loan obligations			284,973						—						284,973						—
Private label commercial MBS			13,622						—						13,622						—
Asset-backed securities			16,204						—						16,204						—
SBA securities			4,313						—						4,313						—
Total securities available-for-sale			$	2,300,284					$	—					$	2,284,875					$	15,409
Equity investments with readily determinable fair values			$	1					$	1					$	—					$	—
Derivatives (1):
Equity warrants			3,297						—						—						3,297
Interest rate and economic contracts			7,565						—						7,565						—
Derivative liabilities			13,327						—						13,327						—
Credit-linked notes			119,624						—						—						119,624

			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:

			September 30, 2024
			Equity Warrants
									Weighted
			Range						Average
Unobservable Inputs			of Inputs						Input (1)
Volatility			20.8% - 166.8%						25.7%
Risk-free interest rate			3.6% - 4.9%						3.7%
Remaining life assumption (in years)			0.08 - 4.98						3.18

____________________

(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:

September 30, 2024

Valuation

Unobservable

Input or

Weighted

Asset

Fair Value

Technique

Inputs

Range

Average

(In thousands)

Individually evaluated

loans and leases (1)

$

13,957

Discounted cash flows

Discount rates

8.50% - 8.50%

8.50%

Individually evaluated

loans and leases

7,358

Third-party appraisals

No discounts

Total non-recurring Level 3

$

21,315

__________________

(1)    Relates to one loan at September 30, 2024.

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			—						65						(1,624)
Total included in other comprehensive income			(3,441)						—						2,110
Issuances			—						347						—
Principal payments			—						—						(3,978)
Transfer from Level 2			16,750						—						—
Transfer to Level 2			(38,149)						—						—
Exercises and settlements			—						(784)						—
Transfers to Level 1 (equity investments with readily
determinable fair values)			—						(20)						—
Balance, September 30, 2024			$	15,409					$	3,297					$	119,624
Unrealized net gains (losses) for the period included in other
comprehensive income for securities held at quarter-end			$	(4,341)

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
			September 30, 2024
Measured on a Non-Recurring Basis			Total						Level 1						Level 2						Level 3
			(In thousands)
Individually evaluated loans and leases			$	55,519					$	—					$	34,204					$	21,315
OREO			4,479						—						4,479						—
Total non-recurring			$	59,998					$	—					$	38,683					$	21,315

			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												Nine Months Ended
Losses on Assets			September 30,												September 30,
Measured on a Non-Recurring Basis			2024						2023						2024						2023
			(In thousands)
Individually evaluated loans and leases			$	8,945					$	6,108					$	29,192					$	11,083
OREO			207						16						336						16
Total losses			$	9,152					$	6,124					$	29,528					$	11,099

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:

			September 30, 2024
			Carrying						Estimated Fair Value
			Amount						Total						Level 1						Level 2						Level 3
			(In thousands)
Financial Assets:
Cash and due from banks			$	251,869					$	251,869					$	251,869					$	—					$	—
Interest-earning deposits in financial institutions			2,302,358						2,302,358						2,302,358						—						—
Securities available-for-sale			2,300,284						2,300,284						—						2,284,875						15,409
Securities held-to-maturity			2,301,263						2,229,482						180,427						2,045,576						3,479
Investment in FRB and FHLB stock			145,123						145,123						—						145,123						—
Loans held for sale			28,639						29,355						—						29,355						—
Loans and leases held for investment, net			23,273,432						22,198,131						—						34,204						22,163,927
Equity investments with readily determinable fair values			1						1						1						—						—
Equity warrants			3,297						3,297						—						—						3,297
Interest rate and economic contracts			7,565						7,565						—						7,565						—
Servicing rights			20,102						20,661						—						—						20,661
Financial Liabilities:
Demand, checking, money market, and savings deposits			22,383,666						22,383,666						—						22,383,666						—
Time deposits			4,444,603						4,513,879						—						4,513,879						—
Borrowings			1,591,833						1,564,364						—						1,444,740						119,624
Subordinated debt			942,151						886,815						—						886,815						—
Derivative liabilities			13,327						13,327						—						13,327						—

			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:

			September 30, 2024
			Corporate Debt Securities
			Input or						Weighted
			Range						Average
Unobservable Inputs			of Inputs						Input (1)
Spread to 10 Year Treasury			4.0% - 9.2%						5.6%
Discount rates			7.8% - 13.0%						9.4%

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