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Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented:


	September 30, 2024
(In thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	98,323	$	98,323	$	—	$	—
U.S. government agencies	47,654		—		47,654		—
Municipal	200,212		—		64,962		135,250
Corporate notes	80,117		—		80,117		—
Mortgage-backed	3,485,926		—		3,485,926		—
Trading account securities	3,472		—		3,472		—
Equity securities with readily determinable fair value	125,310		117,244		8,066		—
Mortgage loans held-for-sale	461,067		—		402,004		59,063
Loans held-for-investment	138,038		—		93,263		44,775
MSRs	186,308		—		—		186,308
Nonqualified deferred compensation assets	16,756		—		16,756		—
Derivative assets	255,662		—		250,520		5,142
Total	$	5,098,845	$	215,567	$	4,452,740	$	430,538
Derivative liabilities	$	199,339	$	—	$	199,339	$	—


	December 31, 2023
(In thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	6,968	$	6,968	$	—	$	—
U.S. government agencies	45,124		—		45,124		—
Municipal	140,958		—		54,721		86,237
Corporate notes	76,531		—		76,531		—
Mortgage-backed	3,233,334		—		3,233,334		—
Trading account securities	4,707		—		4,707		—
Equity securities with readily determinable fair value	139,268		131,202		8,066		—
Mortgage loans held-for-sale	292,722		—		265,887		26,835
Loans held-for-investment	155,261		—		94,591		60,670
MSRs	192,456		—		—		192,456
Nonqualified deferred compensation assets	15,238		—		15,238		—
Derivative assets	275,726		—		271,216		4,510
Total	$	4,578,293	$	138,170	$	4,069,415	$	370,708
Derivative liabilities	$	267,255	$	—	$	267,255	$	—


	September 30, 2023
(In thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	4,931	$	4,931	$	—	$	—
U.S. government agencies	72,430		—		72,430		—
Municipal	168,523		—		55,304		113,219
Corporate notes	76,606		—		76,606		—
Mortgage-backed	3,289,345		—		3,289,345		—
Trading account securities	1,663		—		1,663		—
Equity securities with readily determinable fair value	134,310		126,244		8,066		—
Mortgage loans held-for-sale	304,808		—		279,621		25,187
Loans held-for-investment	171,178		—		113,217		57,961
MSRs	210,524		—		—		210,524
Nonqualified deferred compensation assets	14,449		—		14,449		—
Derivative assets	323,705		—		321,189		2,516
Total	$	4,772,472	$	131,175	$	4,231,890	$	409,407
Derivative liabilities	$	458,706	$	—	$	458,706	$	—

Schedule of Changes In Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis during the three and nine months ended September 30, 2024 and 2023 are summarized as follows:


			Mortgage loans held-for-sale		Loans held-for- investment		Mortgage servicing rights		Derivative assets
(In thousands)	Municipal
Balance at July 1, 2024	$	95,792	$	40,545	$	45,721	$	204,610	$	4,795
Total net (losses) gains included in:
Net income (1)	—		126		381		(18,302)		347
Other comprehensive income or loss	968		—		—		—		—
Purchases	38,490		—		—		—		—


Settlements	—		(8,078)		(7,924)		—		—
Net transfers into Level 3	—		26,470		6,597		—		—
Balance at September 30, 2024	$	135,250	$	59,063	$	44,775	$	186,308	$	5,142


			Mortgage loans held-for-sale		Loans held-for- investment		Mortgage servicing rights		Derivative assets
(In thousands)	Municipal
Balance at July 1, 2023	$	114,155	$	29,406	$	61,123	$	200,692	$	3,487
Total net (losses) gains included in:
Net income (1)	—		626		(260)		9,832		(971)
Other comprehensive income or loss	(1,614)		—		—		—		—
Purchases	678		—		—		—		—

Sales	—		—		—		—		—
Settlements	—		(18,454)		(16,852)		—		—
Net transfers into Level 3	—		13,609		13,950		—		—
Balance at September 30, 2023	$	113,219	$	25,187	$	57,961	$	210,524	$	2,516

(1)Changes in the balance of mortgage loans held-for-sale, MSRs, and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.


			Mortgage loans held-for-sale		Loans held-for- investment		Mortgage servicing rights		Derivative Assets
(In thousands)	Municipal
Balance at January 1, 2024	$	86,237	$	26,835	$	60,670	$	192,456	$	4,510
Total net (losses) gains included in:
Net income (1)	—		398		130		(6,148)		632
Other comprehensive income or loss	(1,700)		—		—		—		—
Purchases	56,556		—		—		—		—
Issuances	—		—		—		—		—
Sales	—		—		—		—		—
Settlements	(5,843)		(28,687)		(31,436)		—		—
Net transfers into Level 3	—		60,517		15,411		—		—
Balance at September 30, 2024	$	135,250	$	59,063	$	44,775	$	186,308	$	5,142


			Mortgage loans held-for-sale		Loans held-for- investment		Mortgage servicing rights		Derivative Assets
(In thousands)	Municipal
Balance at January 1, 2023	$	117,537	$	48,655	$	84,165	$	230,225	$	1,711
Total net (losses) gains included in:
Net income (1)	—		1,494		(515)		10,469		805
Other comprehensive income or loss	(6,437)		—		—		—		—
Purchases	12,074		—		—		—		—

Sales	—		—		—		(30,170)		—
Settlements	(9,955)		(61,046)		(53,767)		—		—
Net transfers into Level 3	—		36,084		28,078		—		—
Balance at September 30, 2023	$	113,219	$	25,187	$	57,961	$	210,524	$	2,516

(1)Changes in the balance of mortgage loans held-for-sale, MSRs and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

For assets measured at fair value on a non-recurring basis that were still held in the balance sheet at the end of the period, the following table provides the carrying value of the related individual assets or portfolios at September 30, 2024:


	September 30, 2024								Three Months Ended September 30, 2024 Fair Value Losses Recognized, net		Nine Months Ended September 30, 2024 Fair Value Losses Recognized, net
(In thousands)	Total		Level 1		Level 2		Level 3
Individually assessed loans - foreclosure probable and collateral-dependent	$	124,586	$	—	$	—	$	124,586	$	22,908	$	64,747
Other real estate owned (1)	13,682		—		—		13,682		—		207
Total	$	138,268	$	—	$	—	$	138,268	$	22,908	$	64,954

(1)Net fair value losses recognized on other real estate owned include valuation adjustments and charge-offs during the respective period.

Schedule of Valuation Techniques and Significant Unobservable Inputs Used to Measure Both Recurring and Non Recurring

The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at September 30, 2024 were as follows:

(Dollars in thousands)

Fair Value

Valuation Methodology

Significant Unobservable Input

Input / Range of Inputs

Weighted
Average
of Inputs

Impact to valuation
from an increased or
higher input value

Measured at fair value on a recurring basis:

Municipal securities

135,250

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

Mortgage loans held-for-sale

59,063

Discounted cash flows

Discount rate

6.14%

Decrease

Credit discount

0% - 14%

0.52%

Decrease

Loans held-for-investment

44,775

Discounted cash flows

Discount rate

6.12% - 6.14%

6.14%

Decrease

Credit discount

0% - 39%

1.07%

Decrease

Constant prepayment rate (CPR) - current loans

9.21%

Decrease

Average life - delinquent loans (in years)

1.4 years - 11.3 years

5.9 years

Decrease

MSRs

186,308

Discounted cash flows

Discount rate

6% - 20%

10.96%

Decrease

Constant prepayment rate (CPR)

6% - 90%

9.21%

Decrease

Cost of servicing

$70 - $200

Decrease

Cost of servicing - delinquent

$200 - 1,000

386

Decrease

Derivatives

5,142

Discounted cash flows

Pull-through rate

1% - 100%

80.71

Increase

Measured at fair value on a non-recurring basis:

Individually assessed loans - foreclosure probable and collateral-dependent

124,586

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Other real estate owned

13,682

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments

The table below presents the carrying amounts and estimated fair values of the Company’s financial instruments as of the dates shown:


	At September 30, 2024				At December 31, 2023				At September 30, 2023
	Carrying		Fair		Carrying		Fair		Carrying		Fair
(In thousands)	Value		Value		Value		Value		Value		Value
Financial Assets:
Cash and cash equivalents	$	731,128	$	731,128	$	423,464	$	423,464	$	418,148	$	418,148

Interest-bearing deposits with banks	3,648,117		3,648,117		2,084,323		2,084,323		2,448,570		2,448,570
Available-for-sale securities	3,912,232		3,912,232		3,502,915		3,502,915		3,611,835		3,611,835
Held-to-maturity securities	3,677,420		3,121,820		3,856,916		3,215,468		3,909,150		3,057,959
Trading account securities	3,472		3,472		4,707		4,707		1,663		1,663
Equity securities with readily determinable fair value	125,310		125,310		139,268		139,268		134,310		134,310
FHLB and FRB stock, at cost	266,908		266,908		205,003		205,003		204,040		204,040
Brokerage customer receivables	16,662		16,662		10,592		10,592		14,042		14,042
Mortgage loans held-for-sale, at fair value	461,067		461,067		292,722		292,722		304,808		304,808
Loans held-for-investment, at fair value	138,038		138,038		155,261		155,261		171,178		171,178
Loans held-for-investment, at amortized cost	46,929,409		46,081,849		41,976,570		41,090,010		41,274,854		40,300,208
Nonqualified deferred compensation assets	16,756		16,756		15,238		15,238		14,449		14,449
Derivative assets	255,662		255,662		275,726		275,726		323,705		323,705
Accrued interest receivable and other	588,594		588,594		477,832		477,832		465,117		465,117
Total financial assets	$	60,770,775	$	59,367,615	$	53,420,537	$	51,892,529	$	53,295,869	$	51,470,032
Financial Liabilities
Non-maturity deposits	$	41,406,393	$	41,406,393	$	38,772,098	$	38,772,098	$	38,204,017	$	38,204,017
Time certificates of deposit	9,998,573		9,985,778		6,625,072		6,603,746		6,788,669		6,744,989
FHLB advances	3,171,309		3,334,183		2,326,071		2,367,107		2,326,071		2,189,101
Other borrowings	647,043		646,272		645,813		643,755		643,999		641,514
Subordinated notes	298,188		289,260		437,866		413,501		437,731		400,520
Junior subordinated debentures	253,566		253,662		253,566		253,579		253,566		253,568
Derivative liabilities	199,339		199,339		267,255		267,255		458,706		458,706
Accrued interest payable	75,254		75,254		51,116		51,116		54,383		54,383
Total financial liabilities	$	56,049,665	$	56,190,141	$	49,378,857	$	49,372,157	$	49,167,142	$	48,946,798

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details