Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present for each of the fair value hierarchy levels the Company’s financial assets and liabilities that are measured at fair value on a recurring basis in the consolidated balance sheets at September 30, 2022 and December 31, 2021:

	September 30, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	42,287	$	—	$	42,287
Municipal obligations		—		197,865		—		197,865
Corporate debt securities		—		21,317		—		21,317
Residential mortgage-backed securities		—		2,306,365		—		2,306,365
Commercial mortgage-backed securities		—		2,823,920		—		2,823,920
Collateralized mortgage obligations		—		75,089		—		75,089
Total available for sale securities		—		5,466,843		—		5,466,843
Mortgage loans held for sale		—		15,149		—		15,149
Derivative assets (1)		—		119,100		—		119,100
Total recurring fair value measurements - assets	$	—	$	5,601,092	$	—	$	5,601,092
Liabilities
Derivative liabilities (1)	$	—	$	224,143	$	2,295	$	226,438
Total recurring fair value measurements - liabilities	$	—	$	224,143	$	2,295	$	226,438

	December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	419,298	$	—	$	419,298
Municipal obligations		—		314,158		—		314,158
Corporate debt securities		—		18,702		—		18,702
Residential mortgage-backed securities		—		3,035,798		—		3,035,798
Commercial mortgage-backed securities		—		3,077,859		—		3,077,859
Collateralized mortgage obligations		—		120,883		—		120,883
Total available for sale securities		—		6,986,698		—		6,986,698
Mortgage loans held for sale				41,022				41,022
Derivative assets (1)		—		75,867		—		75,867
Total recurring fair value measurements - assets	$	—	$	7,103,587	$	—	$	7,103,587
Liabilities
Derivative liabilities (1)	$	—	$	30,930	$	4,116	$	35,046
Total recurring fair value measurements - liabilities	$	—	$	30,930	$	4,116	$	35,046

(1)For further disaggregation of derivative assets and liabilities, see Note 5 - Derivatives.

Consolidated Balance Sheets for Financial Instruments of Material Nature Measured at Fair Value on Recurring Basis

The table below presents a rollforward of the amounts on the consolidated balance sheets for the nine months ended September 30, 2022 and the year ended December 31, 2021 for financial instruments of a material nature that are classified within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis:

(in thousands)
Balance at December 31, 2020	$	5,645
Cash settlement		(1,767	)
Losses included in earnings		238
Balance at December 31, 2021		4,116
Cash settlement		(1,994	)
Losses included in earnings		173
Balance at September 30, 2022	$	2,295

Overview of the Valuation Techniques and Significant Unobservable Inputs

The table below provides an overview of the valuation techniques and significant unobservable inputs used in those techniques to measure the financial instrument measured on a recurring basis and classified within Level 3 of the valuation. The range of sensitivities that management utilized in its fair value calculations is deemed acceptable in the industry with respect to the identified financial instrument.

($ in thousands)
	Fair Value
Level 3 Class	September 30, 2022		December 31, 2021
Derivative liability	$	2,295	$	4,116
Valuation technique	Discounted cash flow		Discounted cash flow
Unobservable inputs:
Visa Class A appreciation - range	6-12%		6%-12%
Visa Class A appreciation - weighted average	9%		9%
Conversion rate - range	1.61x-1.60x		1.62x-1.60x
Conversion rate -weighted average	1.6030x		1.6091x
Time until resolution	3-15 months		3-24 months

Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.

	September 30, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	4,756	$	—	$	4,756
Other real estate owned and foreclosed assets, net		—		—		2,085		2,085
Total nonrecurring fair value measurements	$	—	$	4,756	$	2,085	$	6,841

	December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	13,253	$	—	$	13,253
Other real estate owned and foreclosed assets, net		—		—		7,533		7,533
Total nonrecurring fair value measurements	$	—	$	13,253	$	7,533	$	20,786

Estimated Fair Values of Financial Instruments

The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amounts.

	September 30, 2022
							Total Fair		Carrying
(in thousands)	Level 1		Level 2		Level 3		Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	851,251	$	—	$	—	$	851,251	$	851,251
Available for sale securities		—		5,466,843		—		5,466,843		5,466,843
Held to maturity securities		—		2,606,080		—		2,606,080		2,866,348
Loans, net		—		4,756		21,457,199		21,461,955		22,279,469
Loans held for sale		—		33,008		—		33,008		33,008
Derivative financial instruments		—		119,100		—		119,100		119,100
Financial liabilities:
Deposits	$	—	$	—	$	28,925,735	$	28,925,735	$	28,951,274
Federal funds purchased		1,850		—		—		1,850		1,850
Securities sold under agreements to repurchase		541,131		—		—		541,131		541,131
FHLB short-term borrowings		1,000,000		—		—		1,000,000		1,000,000
Long-term debt		—		197,059		—		197,059		236,410
Derivative financial instruments		—		224,143		2,295		226,438		226,438

	December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	4,231,836	$	—	$	—	$	4,231,836	$	4,231,836
Available for sale securities		—		6,986,698		—		6,986,698		6,986,698
Held to maturity securities		—		1,631,482		—		1,631,482		1,565,751
Loans, net		—		13,253		20,720,568		20,733,821		20,792,217
Loans held for sale		—		93,069		—		93,069		93,069
Derivative financial instruments		—		75,867		—		75,867		75,867
Financial liabilities:
Deposits	$	—	$	—	$	30,432,646	$	30,432,646	$	30,465,897
Federal funds purchased		1,850		—		—		1,850		1,850
Securities sold under agreements to repurchase		563,211		—		—		563,211		563,211
FHLB short-term borrowings		—		1,119,026		—		1,119,026		1,100,000
Long-term debt		—		253,677		—		253,677		244,220
Derivative financial instruments		—		30,930		4,116		35,046		35,046