Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and December 31, 2022:

	March 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	111,515	$	—	$	111,515
Municipal obligations		—		204,469		—		204,469
Corporate debt securities		—		20,124		—		20,124
Residential mortgage-backed securities		—		2,219,264		—		2,219,264
Commercial mortgage-backed securities		—		2,942,605		—		2,942,605
Collateralized mortgage obligations		—		67,643		—		67,643
Total available for sale securities		—		5,565,620		—		5,565,620
Mortgage loans held for sale		—		14,923		—		14,923
Derivative assets (1)		—		91,945		—		91,945
Total recurring fair value measurements - assets	$	—	$	5,672,488	$	—	$	5,672,488
Liabilities
Derivative liabilities (1)	$	—	$	214,798	$	1,403	$	216,201
Total recurring fair value measurements - liabilities	$	—	$	214,798	$	1,403	$	216,201

	December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	110,865	$	—	$	110,865
Municipal obligations		—		203,092		—		203,092
Corporate debt securities		—		21,080		—		21,080
Residential mortgage-backed securities		—		2,256,986		—		2,256,986
Commercial mortgage-backed securities		—		2,893,430		—		2,893,430
Collateralized mortgage obligations		—		70,588		—		70,588
Total available for sale securities		—		5,556,041		—		5,556,041
Mortgage loans held for sale				10,843		—		10,843
Derivative assets (1)		—		109,497		—		109,497
Total recurring fair value measurements - assets	$	—	$	5,676,381	$	—	$	5,676,381
Liabilities
Derivative liabilities (1)	$	—	$	202,238	$	1,883	$	204,121
Total recurring fair value measurements - liabilities	$	—	$	202,238	$	1,883	$	204,121

(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 three months ended March 31, 2023 and the year ended December 31, 2022 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, 2021	$	4,116
Cash settlement		(2,429	)
Losses included in earnings		196
Balance at December 31, 2022		1,883
Conversion rate adjustment		(283	)
Cash settlement		(430	)
Losses included in earnings		233
Balance at March 31, 2023	$	1,403

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	March 31, 2023		December 31, 2022
Derivative liability	$	1,403	$	1,883
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	1.60x-1.59x		1.61x-1.60x
Conversion rate -weighted average	1.5950x		1.6030x
Time until resolution	3-9 months		3-12 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.

	March 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	13,212	$	—	$	13,212
Other real estate owned and foreclosed assets, net		—		—		1,976		1,976
Total nonrecurring fair value measurements	$	—	$	13,212	$	1,976	$	15,188

	December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	4,692	$	—	$	4,692
Other real estate owned and foreclosed assets, net		—		—		2,017		2,017
Total nonrecurring fair value measurements	$	—	$	4,692	$	2,017	$	6,709

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.

	March 31, 2023
							Total Fair		Carrying
($ in thousands)	Level 1		Level 2		Level 3		Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	2,882,521	$	—	$	—	$	2,882,521	$	2,882,521
Available for sale securities		—		5,565,620		—		5,565,620		5,565,620
Held to maturity securities		—		2,623,760		—		2,623,760		2,825,064
Loans, net		—		13,212		22,970,797		22,984,009		23,095,138
Loans held for sale		—		23,436		—		23,436		23,436
Derivative financial instruments		—		91,945		—		91,945		91,945
Financial liabilities:
Deposits	$	—	$	—	$	29,587,071	$	29,587,071	$	29,613,070
Federal funds purchased		350		—		—		350		350
Securities sold under agreements to repurchase		419,147		—		—		419,147		419,147
FHLB short-term borrowings		—		3,100,275		—		3,100,275		3,100,000
Long-term debt		—		206,659		—		206,659		242,115
Derivative financial instruments		—		214,798		1,403		216,201		216,201

	December 31, 2022
($ in thousands)	Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	888,519	$	—	$	—	$	888,519	$	888,519
Available for sale securities		—		5,556,041		—		5,556,041		5,556,041
Held to maturity securities		—		2,615,398		—		2,615,398		2,852,495
Loans, net		—		4,692		22,132,683		22,137,375		22,806,257
Loans held for sale		—		26,385		—		26,385		26,385
Derivative financial instruments		—		109,497		—		109,497		109,497
Financial liabilities:
Deposits	$	—	$	—	$	29,041,635	$	29,041,635	$	29,070,349
Federal funds purchased		1,850		—		—		1,850		1,850
Securities sold under agreements to repurchase		444,421		—		—		444,421		444,421
FHLB short-term borrowings		1,425,000		—		—		1,425,000		1,425,000
Long-term debt		—		200,060		—		200,060		242,077
Derivative financial instruments		—		202,238		1,883		204,121		204,121