Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 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 on the consolidated balance sheets at June 30, 2023 and December 31, 2022:

	June 30, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	109,852	$	—	$	109,852
Municipal obligations		—		200,505		—		200,505
Corporate debt securities		—		19,823		—		19,823
Residential mortgage-backed securities		—		2,126,563		—		2,126,563
Commercial mortgage-backed securities		—		2,895,216		—		2,895,216
Collateralized mortgage obligations		—		62,730		—		62,730
Total available for sale securities		—		5,414,689		—		5,414,689
Mortgage loans held for sale		—		24,163		—		24,163
Derivative assets (1)		—		108,474		—		108,474
Total recurring fair value measurements - assets	$	—	$	5,547,326	$	—	$	5,547,326
Liabilities
Derivative liabilities (1)	$	—	$	272,157	$	1,403	$	273,560
Total recurring fair value measurements - liabilities	$	—	$	272,157	$	1,403	$	273,560

	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 six months ended June 30, 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
Cash settlement		(869	)
Losses included in earnings		389
Balance at June 30, 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	June 30, 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.

	June 30, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	37,507	$	—	$	37,507
Other real estate owned and foreclosed assets, net		—		—		2,174		2,174
Total nonrecurring fair value measurements	$	—	$	37,507	$	2,174	$	39,681

	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.

	June 30, 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	$	1,237,899	$	—	$	—	$	1,237,899	$	1,237,899
Available for sale securities		—		5,414,689		—		5,414,689		5,414,689
Held to maturity securities		—		2,540,256		—		2,540,256		2,780,990
Loans, net		—		37,507		22,970,743		23,008,250		23,475,390
Loans held for sale		—		55,902		—		55,902		55,902
Derivative financial instruments		—		108,474		—		108,474		108,474
Financial liabilities:
Deposits	$	—	$	—	$	30,014,127	$	30,014,127	$	30,043,501
Federal funds purchased		400		—		—		400		400
Securities sold under agreements to repurchase		529,138		—		—		529,138		529,138
FHLB short-term borrowings		—		1,099,992		—		1,099,992		1,100,000
Long-term debt		—		195,972		—		195,972		236,241
Derivative financial instruments		—		272,157		1,403		273,560		273,560

	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