Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 30, 2023 and December 31, 2022:

	September 30, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	114,190	$	—	$	114,190
Municipal obligations		—		193,111		—		193,111
Corporate debt securities		—		20,107		—		20,107
Residential mortgage-backed securities		—		1,960,567		—		1,960,567
Commercial mortgage-backed securities		—		2,841,351		—		2,841,351
Collateralized mortgage obligations		—		58,830		—		58,830
Total available for sale securities		—		5,188,156		—		5,188,156
Mortgage loans held for sale		—		13,298		—		13,298
Derivative assets (1)		—		124,431		—		124,431
Total recurring fair value measurements - assets	$	—	$	5,325,885	$	—	$	5,325,885
Liabilities
Derivative liabilities (1)	$	—	$	306,237	$	1,432	$	307,669
Total recurring fair value measurements - liabilities	$	—	$	306,237	$	1,432	$	307,669

	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 nine months ended September 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		(1,997	)
Losses included in earnings		1,546
Balance at September 30, 2023	$	1,432

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, 2023		December 31, 2022
Derivative liability	$	1,432	$	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.

	September 30, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	17,658	$	—	$	17,658
Other real estate owned and foreclosed assets, net		—		—		4,527		4,527
Total nonrecurring fair value measurements	$	—	$	17,658	$	4,527	$	22,185

	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.

	September 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	$	1,359,300	$	—	$	—	$	1,359,300	$	1,359,300
Available for sale securities		—		5,188,156		—		5,188,156		5,188,156
Held to maturity securities		—		2,430,287		—		2,430,287		2,727,945
Loans, net		—		17,658		23,058,357		23,076,015		23,677,388
Loans held for sale		—		15,862		—		15,862		15,862
Derivative financial instruments		—		124,431		—		124,431		124,431
Financial liabilities:
Deposits	$	—	$	—	$	30,298,620	$	30,298,620	$	30,320,337
Federal funds purchased		350		—		—		350		350
Securities sold under agreements to repurchase		525,578		—		—		525,578		525,578
FHLB short-term borrowings		—		899,995		—		899,995		900,000
Long-term debt		—		183,901		—		183,901		236,279
Derivative financial instruments		—		306,237		1,432		307,669		307,669

	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