Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available-for-sale:
Agency residential MBS	$	2,000,900	$	—	$	2,000,900	$	—
U.S. Treasury securities	664,202		664,202		—		—
Agency commercial MBS	470,894		—		470,894		—
Agency residential CMOs	417,979		—		417,979		—
Municipal securities	336,531		—		336,531		—
Corporate debt securities	285,288		—		282,924		2,364
Private label residential CMOs	148,946		—		148,946		—
Collateralized loan obligations	105,980		—		105,980		—
Private label commercial MBS	21,653		—		21,653		—
Asset-backed securities	20,991		—		20,991		—
SBA securities	13,808		—		13,808		—
Total securities available-for-sale	$	4,487,172	$	664,202	$	3,820,606	$	2,364
Equity investments with readily determinable fair values	$	1	$	1	$	—	$	—
Derivatives (1):
Equity warrants	3,807		—		—		3,807
Interest rate and economic contracts	8,463		—		8,463		—
Derivative liabilities	6,931		—		6,931		—
Credit-linked notes	123,782		—		—		123,782

	Fair Value Measurements as of
	December 31, 2022
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available-for-sale:
Agency residential MBS	$	2,242,042	$	—	$	2,242,042	$	—
U.S. Treasury securities	670,070		670,070		—		—
Agency commercial MBS	487,606		—		487,606		—
Agency residential CMOs	457,063		—		457,063		—
Municipal securities	339,326		—		339,326		—
Corporate debt securities	311,905		—		311,905		—
Private label residential CMOs	166,724		—		166,724		—
Collateralized loan obligations	102,261		—		102,261		—
Private label commercial MBS	26,827		—		26,827		—
Asset-backed securities	22,413		—		22,413		—
SBA securities	17,250		—		17,250		—
Total securities available-for-sale	$	4,843,487	$	670,070	$	4,173,417	$	—
Equity investments with readily determinable fair values	$	1	$	1	$	—	$	—
Derivatives (1):
Equity warrants	4,048		—		—		4,048
Interest rate and economic contracts	7,814		—		7,814		—
Derivative liabilities	5,906		—		5,906		—
Credit-linked notes	132,030		—		—		132,030

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, 2023
	Equity Warrants
		Weighted
	Range	Average
Unobservable Inputs	of Inputs	Input (1)
Volatility	13.8% - 153.8%	26.4%
Risk-free interest rate	4.6% - 5.5%	4.8%
Remaining life assumption (in years)	0.08 - 5.00	3.30

____________________

(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, 2023
			Valuation	Unobservable	Input or	Weighted
Asset	Fair Value		Technique	Inputs	Range	Average
	(Dollars in thousands)
Individually evaluated
loans and leases (1)	$	1,504	Discounted cash flows	Discount rates	9.25% - 9.25%	9.25%
Individually evaluated
loans and leases	4,605		Third-party appraisals	No discounts
Total non-recurring Level 3	$	6,109

____________________

(1)    Relates to one loan at September 30, 2023.

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, 2022	$	—	$	4,048	$	132,030
Total included in earnings	—		(545)		3,896
Total included in other comprehensive income	(636)		—		(7,107)
Issuances	—		524		—
Principal payments	—		—		(5,037)
Transfer from Level 2	3,000		—		—
Exercises and settlements	—		(184)		—
Transfers to Level 1 (equity investments with readily
determinable fair values)	—		(36)		—
Balance, September 30, 2023	$	2,364	$	3,807	$	123,782
Unrealized net gains (losses) for the period included in other
comprehensive income for securities held at quarter-end	$	(636)

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, 2023
Measured on a Non-Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Individually evaluated loans and leases	$	34,343	$	—	$	28,234	$	6,109
OREO	322		—		322		—
Total non-recurring	$	34,665	$	—	$	28,556	$	6,109

	Fair Value Measurement as of
	December 31, 2022
Measured on a Non-Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Individually evaluated loans and leases	$	34,077	$	—	$	28,065	$	6,012
OREO	47		—		47		—
Total non-recurring	$	34,124	$	—	$	28,112	$	6,012

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	2023		2022		2023		2022
	(In thousands)
Individually evaluated loans and leases	$	6,108	$	5,234	$	11,083	$	6,892
OREO	16		—		16		—
Total losses	$	6,124	$	5,234	$	11,099	$	6,892

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, 2023
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	182,261	$	182,261	$	182,261	$	—	$	—
Interest-earning deposits in financial institutions	5,887,406		5,887,406		5,887,406		—		—
Securities available-for-sale	4,487,172		4,487,172		664,202		3,820,606		2,364
Securities held-to-maturity	2,282,586		2,013,295		165,663		1,844,757		2,875
Investment in FHLB stock	17,250		17,250		—		17,250		—
Loans held for sale	188,866		188,906		—		188,906		—
Loans and leases held for investment, net	21,698,649		19,585,880		—		28,234		19,557,646
Equity investments with readily determinable fair values	1		1		1		—		—
Equity warrants	3,807		3,807		—		—		3,807
Interest rate and economic contracts	8,463		8,463		—		8,463		—
Servicing rights	701		701		—		—		701
Financial Liabilities:
Demand, checking, money market, and savings deposits	19,483,888		19,483,888		—		19,483,888		—
Time deposits	7,114,793		7,063,958		—		7,063,958		—
Borrowings	6,294,525		6,278,804		4,894,279		—		1,384,525
Subordinated debt	870,896		729,712		—		729,712		—
Derivative liabilities	6,931		6,931		—		6,931		—

	December 31, 2022
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	212,273	$	212,273	$	212,273	$	—	$	—
Interest-earning deposits in financial institutions	2,027,949		2,027,949		2,027,949		—		—
Securities available-for-sale	4,843,487		4,843,487		670,070		4,173,417		—
Securities held-to-maturity	2,269,135		2,110,472		171,700		1,938,772		—
Investment in FHLB stock	34,290		34,290		—		34,290		—
Loans held for sale	65,076		65,501		—		65,501		—
Loans and leases held for investment, net	28,408,397		26,627,985		—		28,065		26,599,920
Equity investments with readily determinable fair values	1		1		1		—		—
Equity warrants	4,048		4,048		—		—		4,048
Interest rate and economic contracts	7,814		7,814		—		7,814		—
Servicing rights	633		633		—		—		633
Financial Liabilities:
Demand, checking, money market, and savings deposits	29,198,491		29,198,491		—		29,198,491		—
Time deposits	4,737,843		4,700,054		—		4,700,054		—
Borrowings	1,764,030		1,764,037		882,000		750,007		132,030
Subordinated debt	867,087		870,534		—		870,534		—
Derivative liabilities	5,906		5,906		—		5,906		—

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, 2023
	Corporate Debt Securities
	Input or	Weighted
	Range	Average
Unobservable Inputs	of Inputs	Input (1)
Spread to 10 Year Treasury	4.2% - 6.5%	5.3%
Discount rates	8.8% - 11.1%	9.9%