Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2024

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, 2024 and December 31, 2023:

	June 30, 2024
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	134,921	$	—	$	134,921
Municipal obligations		—		196,472		—		196,472
Corporate debt securities		—		20,735		—		20,735
Residential mortgage-backed securities		—		2,059,132		—		2,059,132
Commercial mortgage-backed securities		—		2,514,600		—		2,514,600
Collateralized mortgage obligations		—		39,354		—		39,354
Total available for sale securities		—		4,965,214		—		4,965,214
Mortgage loans held for sale		—		26,051		—		26,051
Derivative assets (1)		—		91,000		—		91,000
Total recurring fair value measurements - assets	$	—	$	5,082,265	$	—	$	5,082,265
Liabilities
Derivative liabilities (1)	$	—	$	223,889	$	2,553	$	226,442
Total recurring fair value measurements - liabilities	$	—	$	223,889	$	2,553	$	226,442

	December 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	97,808	$	—	$	97,808
Municipal obligations		—		201,412		—		201,412
Corporate debt securities		—		20,352		—		20,352
Residential mortgage-backed securities		—		2,113,866		—		2,113,866
Commercial mortgage-backed securities		—		2,437,472		—		2,437,472
Collateralized mortgage obligations		—		44,285		—		44,285
Total available for sale securities		—		4,915,195		—		4,915,195
Mortgage loans held for sale		—		13,269		—		13,269
Derivative assets (1)		—		90,712		—		90,712
Total recurring fair value measurements - assets	$	—	$	5,019,176	$	—	$	5,019,176
Liabilities
Derivative liabilities (1)	$	—	$	205,796	$	1,342	$	207,138
Total recurring fair value measurements - liabilities	$	—	$	205,796	$	1,342	$	207,138

(1) For further disaggregation of derivative assets and liabilities, see Note 6 - 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, 2024 and the year ended December 31, 2023 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, 2022	$	1,883
Cash settlement		(2,547	)
Losses included in earnings		2,006
Balance at December 31, 2023		1,342
Cash settlement		(859	)
Losses included in earnings		2,070
Balance at June 30, 2024	$	2,553

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. The assumptions reflected in the table below for June 30, 2024 were updated in consideration of the recent exchange offer from Visa.

($ in thousands)
	Fair Value
Level 3 Class	June 30, 2024		December 31, 2023
Derivative liability	$	2,553	$	1,342
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		1.60x-1.59x
Conversion rate -weighted average	1.5950x		1.5950x
Time until resolution	40-50 months		3-9 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, 2024
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	40,099	$	—	$	40,099
Other real estate owned and foreclosed assets, net		—		—		2,114		2,114
Total nonrecurring fair value measurements	$	—	$	40,099	$	2,114	$	42,213

	December 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent loans individually evaluated for credit loss	$	—	$	15,882	$	—	$	15,882
Other real estate owned and foreclosed assets, net		—		—		3,628		3,628
Total nonrecurring fair value measurements	$	—	$	15,882	$	3,628	$	19,510

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, 2024
							Total Fair		Carrying
($ in thousands)	Level 1		Level 2		Level 3		Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	1,082,437	$	—	$	—	$	1,082,437	$	1,082,437
Available for sale securities		—		4,965,214		—		4,965,214		4,965,214
Held to maturity securities		—		2,347,957		—		2,347,957		2,570,622
Loans, net		—		40,099		23,020,822		23,060,921		23,595,468
Loans held for sale		—		27,354		—		27,354		27,354
Derivative financial instruments		—		91,000		—		91,000		91,000
Financial liabilities:
Deposits	$	—	$	—	$	29,185,869	$	29,185,869	$	29,200,718
Federal funds purchased		150,350		—		—		150,350		150,350
Securities sold under agreements to repurchase		563,609		—		—		563,609		563,609
FHLB short-term borrowings		650,000		—		—		650,000		650,000
Long-term debt		—		192,949		—		192,949		236,393
Derivative financial instruments		—		223,889		2,553		226,442		226,442

	December 31, 2023
($ in thousands)	Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	1,188,284	$	—	$	—	$	1,188,284	$	1,188,284
Available for sale securities		—		4,915,195		—		4,915,195		4,915,195
Held to maturity securities		—		2,485,918		—		2,485,918		2,684,779
Loans, net		—		15,882		23,170,377		23,186,259		23,614,010
Loans held for sale		—		26,124		—		26,124		26,124
Derivative financial instruments		—		90,712		—		90,712		90,712
Financial liabilities:
Deposits	$	—	$	—	$	29,679,228	$	29,679,228	$	29,690,059
Federal funds purchased		350		—		—		350		350
Securities sold under agreements to repurchase		454,479		—		—		454,479		454,479
FHLB short-term borrowings		700,000		—		—		700,000		700,000
Long-term debt		—		196,182		—		196,182		236,317
Derivative financial instruments		—		205,796		1,342		207,138		207,138