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Fair Value Measurements
 9 Months Ended
Sep. 30, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
The Company uses fair value to measure certain assets and liabilities on a recurring basis, primarily AFS securities, derivatives, and certain debt liabilities. For assets measured at the lower of cost or fair value, the fair value measurement criteria may or may not be met during a reporting period and such measurements are therefore considered “nonrecurring” for purposes of disclosing our fair value measurements. Fair value is used on a nonrecurring basis to adjust carrying values for individually evaluated loans and leases and other real estate owned and also to record impairment on certain assets, such as goodwill, CDI, and other long-lived assets.
For information regarding the valuation methodologies used to measure our assets recorded at fair value (under ASC Topic 820), and for estimating fair value for financial instruments not recorded at fair value (under ASC Topic 825, as amended by ASU 2016-01 and ASU 2018-03), see Note 1. Nature of Operations and Summary of Significant Accounting Policies and Note 15. Fair Value Measurements to the Consolidated Financial Statements of the Company's Form 10-K.
The Company also holds SBIC investments measured at fair value using the NAV per share practical expedient that are not required to be classified in the fair value hierarchy. At September 30, 2025, the fair value of these investments was $116.9 million.
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, 2025
Measured on a Recurring BasisTotalLevel 1Level 2Level 3
(In thousands)
Securities available-for-sale:
Agency residential MBS$844,155 $— $844,155 $— 
Agency commercial MBS50,882 — 50,882 — 
Agency residential CMOs781,982 — 781,982 — 
Corporate debt securities256,948 — 254,623 2,325 
Private label residential CMOs258,693 — 258,693 — 
Collateralized loan obligations206,474 — 206,474 — 
Private label commercial MBS10,274 — 10,274 — 
Asset-backed securities13,882 — 13,882 — 
SBA securities3,444 — 3,444 — 
Total securities available-for-sale$2,426,734 $— $2,424,409 $2,325 
Equity investments with readily determinable fair values$3 $3 $— $— 
Derivatives (1):
Derivative assets
Interest rate and foreign exchange contracts4,396 — 4,396 — 
Equity warrants 3,418 — — 3,418 
Derivative liabilities
Cash flow hedges4,394 — 4,394 — 
Interest rate and foreign exchange contracts4,343 — 4,343 — 
Credit-linked notes115,022 — — 115,022 
____________________
(1)    For information regarding derivative instruments, see Note 9. Derivatives.
Fair Value Measurements as of
December 31, 2024
Measured on a Recurring BasisTotalLevel 1Level 2Level 3
(In thousands)
Securities available-for-sale:
Agency residential MBS$861,840 $— $861,840 $— 
Agency commercial MBS51,564 — 51,564 — 
Agency residential CMOs446,631 — 446,631 — 
Municipal securities594 — 594 — 
Corporate debt securities257,712 — 255,582 2,130 
Private label residential CMOs316,910 — 316,910 — 
Collateralized loan obligations279,416 — 279,416 — 
Private label commercial MBS12,372 — 12,372 — 
Asset-backed securities15,600 — 15,600 — 
SBA securities4,200 — 4,200 — 
Total securities available-for-sale$2,246,839 $— $2,244,709 $2,130 
Equity investments with readily determinable fair values$3 $3 $— $— 
Derivatives (1):
Derivative assets
Cash flow hedges1,442 — 1,442 — 
Interest rate and foreign exchange contracts7,031 — 7,031 — 
Equity warrants 3,763 — — 3,763 
Derivative liabilities
Interest rate and foreign exchange contracts7,562 — 7,562 — 
Credit-linked notes118,838 — — 118,838 
____________________
(1)    For information regarding derivative instruments, see Note 9. Derivatives.
During the nine months ended September 30, 2025, there was a $2,000 transfer from Level 3 equity warrants to Level 1 equity investments with readily determinable fair values measured on a recurring basis. There was no transfer of AFS corporate debt securities from Level 3 to Level 2 during the nine months ended September 30, 2025 and no transfer of AFS corporate debt securities from Level 2 to Level 3 during the same period.
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, 2025
Corporate Debt Securities
Input or
Weighted
Range
Average
Unobservable Inputsof Inputs
Input (1)
Spread to 10 Year Treasury
3.1% - 8.5%
5.5%
Discount rates
7.2% - 12.7%
9.7%
____________________
(1)    Unobservable inputs for corporate debt securities were weighted by the relative fair values of the instruments.
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, 2025
Equity Warrants
Weighted
RangeAverage
Unobservable Inputsof Inputs
Input (2)
Volatility (1)
17.4% - 1,905.1%
25.0%
Risk-free interest rate
3.6% - 4.2%
3.7%
Remaining life assumption (in years)
0.08 - 4.97
3.22
____________________
(1)    The high-end volatility input relates to an out-of-the-money warrant with an immaterial fair value and near-term expiration.
(2)    Unobservable inputs for equity warrants were weighted by the relative fair values of the instruments.
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 SecuritiesWarrantsNotes
(In thousands)
Balance, December 31, 2024$2,130 $3,763 $118,838 
Total included in earnings— 1,365 141 
Total included in other comprehensive income 195 — (990)
Issuances— 247 — 
Principal payments— — (2,967)
Exercises and settlements — (1,955)— 
Transfers to Level 1 (equity investments with readily
determinable fair values)— (2)— 
Balance, September 30, 2025$2,325 $3,418 $115,022 
Unrealized net loss for the period included in other
comprehensive income for securities held at quarter-end$(675)
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, 2025
Measured on a Non-Recurring BasisTotalLevel 1Level 2Level 3
(In thousands)
Individually evaluated loans and leases $19,113 $— $16,248 $2,865 
OREO467 — 467 — 
Total non-recurring$19,580 $— $16,715 $2,865 

Fair Value Measurement as of
December 31, 2024
Measured on a Non-Recurring BasisTotalLevel 1Level 2Level 3
(In thousands)
Individually evaluated loans and leases $58,948 $— $45,962 $12,986 
OREO3,372 — 3,372 — 
Total non-recurring$62,320 $— $49,334 $12,986 
In addition to individually evaluated loans and leases and OREO, loans held for sale are carried at the lower of cost or market and may be measured at fair value on a nonrecurring basis when fair value is less than cost. Fair value is based on active bids and other observable market inputs, such as appraised value of the underlying collaterals, adjusted for specific attributes of that loan or other available market data for similar loans. Loans held for sale are classified as Level 2 in the fair value hierarchy.
The following table presents losses recognized on assets measured on a nonrecurring basis for the periods indicated:
Three Months EndedNine Months Ended
Losses on Assets September 30,September 30,
Measured on a Non-Recurring Basis2025202420252024
(In thousands)
Individually evaluated loans and leases$827 $8,945 $1,743 $29,192 
OREO123 207 274 336 
Total losses$950 $9,152 $2,017 $29,528 
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, 2025
ValuationUnobservableInput or
Weighted
Asset
Fair Value
TechniqueInputsRange
Average
(In thousands)
Individually evaluated
loans and leases$2,865Third-party appraisalsNo discounts
Total non-recurring Level 3$2,865
The following tables present carrying amounts and estimated fair values of certain financial instruments as of the dates indicated:
September 30, 2025
Carrying
Estimated Fair Value
AmountTotalLevel 1Level 2Level 3
(In thousands)
Financial Assets:
Cash and due from banks$205,364 $205,364 $205,364 $— $— 
Interest-earning deposits in financial institutions2,192,901 2,192,901 2,192,901 — — 
Securities available-for-sale2,426,734 2,426,734 — 2,424,409 2,325 
Securities held-to-maturity2,303,657 2,223,622 183,536 2,036,210 3,876 
Investment in FRB and FHLB stock159,337 159,337 — 159,337 — 
Loans held for sale211,454 211,613 — 211,613 — 
Loans and leases held for investment, net23,870,141 22,968,320 — 16,248 22,952,072 
Equity investments with readily determinable fair values3 3 3 — — 
Equity warrants3,418 3,418 — — 3,418 
Interest rate and foreign exchange contracts4,396 4,396 — 4,396 — 
Servicing rights17,998 19,818 — — 19,818 
Financial Liabilities:
Demand, checking, money market, and savings deposits22,458,245 22,458,245 — 22,458,245 — 
Time deposits4,726,520 4,721,428 — 4,721,428 — 
Borrowings2,005,022 2,008,135 190,000 1,703,113 115,022 
Subordinated debt950,888 934,793 — 934,793 — 
Cash flow hedges4,394 4,394 — 4,394 — 
Interest rate and foreign exchange contracts4,343 4,343 — 4,343 — 

December 31, 2024
Carrying
Estimated Fair Value
AmountTotalLevel 1Level 2Level 3
(In thousands)
Financial Assets:
Cash and due from banks$192,006 $192,006 $192,006 $— $— 
Interest-earning deposits in financial institutions2,310,206 2,310,206 2,310,206 — — 
Securities available-for-sale2,246,839 2,246,839 — 2,244,709 2,130 
Securities held-to-maturity2,306,149 2,156,694 173,283 1,976,265 7,146 
Investment in FRB and FHLB stock147,773 147,773 — 147,773 — 
Loans held for sale26,331 26,562 — 26,562 — 
Loans and leases held for investment, net23,542,303 22,412,073 — 45,962 22,366,111 
Equity investments with readily determinable fair values3 3 3 — — 
Equity warrants3,763 3,763 — — 3,763 
Cash flow hedges1,442 1,442 — 1,442 — 
Interest rate and foreign exchange contracts7,031 7,031 — 7,031 — 
Servicing rights19,623 21,040 — — 21,040 
Financial Liabilities:
Demand, checking, money market, and savings deposits22,625,485 22,625,485 — 22,625,485 — 
Time deposits4,566,424 4,556,575 — 4,556,575 — 
Borrowings1,391,814 1,382,742 — 1,263,904 118,838 
Subordinated debt941,923 901,532 — 901,532 — 
Interest rate and foreign exchange contracts7,562 7,562 — 7,562 — 
Limitations
Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect income taxes or any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a portion of the Company’s financial instruments, fair value estimates are based on what management believes to be reasonable judgments regarding expected future cash flows, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimated fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Since the fair values have been estimated as of September 30, 2025, the amounts that will actually be realized or paid at settlement or maturity of the instruments could be significantly different.