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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2023

Assets and Liabilities Carried at Fair Value 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
	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


	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	$	—
Municipal securities	339,326		—		339,326		—
Agency commercial MBS	487,606		—		487,606		—
Agency residential CMOs	457,063		—		457,063		—
U.S. Treasury securities	670,070		670,070		—		—
Corporate debt securities	311,905		—		311,905		—
Private label commercial MBS	26,827		—		26,827		—
Collateralized loan obligations	102,261		—		102,261		—
Private label residential CMOs	166,724		—		166,724		—
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

____________________

(1) For information regarding derivative instruments, see Note 12. Derivatives.

The following table summarizes activity for our Level 3 corporate debt securities measured at fair value on a recurring basis for the years indicated:


	Year Ended
Level 3 Corporate Debt Securities	December 31, 2023
	(In thousands)
Balance, December 31, 2022	$	—

Total included in other comprehensive income	(11,501)




Transfer from Level 2	51,750





Balance, December 31, 2023	$	40,249

Unrealized net gains (losses) for the period included in other
comprehensive income for securities held at quarter-end	$	(11,501)

Fair Value Inputs, Assets, Quantitative Information

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:


	December 31, 2023
	Corporate Debt Securities
	Input or	Weighted
	Range	Average
Unobservable Inputs	of Inputs	Input (1)
Spread to 10 Year Treasury	4.8% - 10.3%	6.9%
Discount rates	8.7% - 14.2%	10.8%

____________________

(1) Unobservable inputs for corporate debt securities were weighted by the relative fair values of the instruments.

The following table presents information about the 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:


	December 31, 2023
	Equity Warrants
		Weighted
	Range	Average
Unobservable Inputs	of Inputs	Input (1)
Volatility	20.8% - 153.5%	26.9%
Risk-free interest rate	3.8% - 5.6%	4.1%
Remaining life assumption (in years)	0.08 - 5.00	3.26

__________________

(1) Unobservable inputs for equity warrants were weighted by the relative fair values of the instruments.

Schedule of Stockholders' Equity Note, Warrants or Rights

The following table summarizes activity for our Level 3 equity warrants measured at fair value on a recurring basis for the years indicated:


	Year Ended December 31,
Level 3 Equity Warrants	2023		2022
	(In thousands)
Balance, beginning of year	$	4,048	$	3,555
Total included in earnings	(718)		2,490

Exercises and settlements (1)	(218)		(2,675)
Issuances	613		696
Transfers to Level 1 (equity investments with readily
determinable fair values)	(36)		(18)
Balance, end of year	$	3,689	$	4,048

______________________

(1) Includes the exercise of warrants that upon exercise become equity securities in public companies. These are often subject to lock-up restrictions that must be met before the equity security can be sold, during which time they are reported as equity investments with readily determinable fair values.

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
	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


	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 years indicated:


	Year Ended December 31,
Loss on Assets Measured on a Non‑Recurring Basis	2023		2022		2021
	(In thousands)
Individually evaluated loans and leases	$	4,403	$	6,532	$	5,772

OREO	1,307		29		14
Total net loss	$	5,710	$	6,561	$	5,786

Fair Value Measurement Inputs and Valuations

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:

December 31, 2023

Valuation

Unobservable

Input or

Weighted

Asset

Fair Value

Technique

Inputs

Range

Average

(Dollars in thousands)

Individually evaluated

loans and leases (1)

324

Discounted cash flows

Discount rates

9.25% - 9.25%

9.25%

Individually evaluated

loans and leases

2,027

Third-party appraisals

No discounts

Total non-recurring Level 3

2,351

__________________

(1) Relates to one loan at December 31, 2023.

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:


	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, savings and money market 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		—


	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, savings and money market 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, Assets Measured on Recurring Basis

The following table summarizes activity for our Level 3 credit-linked notes measured at fair value on a recurring basis for the year indicated:


	Year Ended December 31,
Level 3 Credit-Linked Notes	2023		2022
	(In thousands)
Balance, beginning of year	$	132,030	$	—
Total included in earnings	5,404		911
Total included in other comprehensive income	(7,794)		—


Issuances	—		132,815
Principal payments	(6,524)		(1,696)





Balance, end of period	$	123,116	$	132,030