v3.24.3
Fair Value Disclosures
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Disclosures Fair Value Disclosures
The Company determines the fair market values of its assets and liabilities measured at fair value on a recurring and nonrecurring basis using the fair value hierarchy as prescribed in Accounting Standards Codification 820, Fair Value Measurements and Disclosures. See Note 1 - Operations and Summary of Significant Accounting Policies in our 2023 Form 10-K for information regarding the fair value hierarchy and a description of the methods and significant assumptions used by the Company in estimating its fair value disclosures for financial statements.
Assets and liabilities measured at fair value are as follows:
 Fair Value Measurements Using
(in thousands)Level 1Level 2Level 3
September 30, 2024
Available-for-sale debt securities:(1)
U.S. Treasury securities$275,804 $— $— 
Residential mortgage-backed securities— 3,230,856 — 
CRT securities— — 12,002 
Equity securities(1)(2)58,140 16,286 — 
Loans held for investment(4)
— — 20,709 
Derivative assets(5)
— 43,030 — 
Securities sold not yet purchased(6)
33,244 — — 
Derivative liabilities(5)
— 31,675 — 
Non-qualified deferred compensation plan liabilities(7)
18,727 — — 
December 31, 2023
Available-for-sale debt securities:(1)
U.S. Treasury securities$636,473 $— $— 
U.S. government agency securities— 106,592 — 
Residential mortgage-backed securities— 2,470,832 — 
CRT securities— — 11,995 
Equity securities(1)(2)40,661 11,164 — 
Mortgage loans held for sale(3)— 706 — 
Loans held for investment(4)— — 38,341 
Derivative assets(5)
— 32,944 — 
Securities sold not yet purchased(6)
10,602 — — 
Derivative liabilities(5)
— 70,917 — 
Non-qualified deferred compensation plan liabilities(7)
20,387 — — 
(1)Available-for-sale debt securities and equity securities are measured at fair value on a recurring basis, generally monthly.
(2)Equity securities consist of investments that qualify for consideration under the regulations implementing the Community Reinvestment Act and investments in exchange traded funds.
(3)Loans held for sale are measured at fair value on a recurring basis, generally monthly.
(4)Includes certain collateral-dependent loans held for investment for which a specific allocation of the allowance for credit losses is based upon the fair value of the loan’s underlying collateral. These loans held for investment are measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions.
(5)Derivative assets and liabilities are measured at fair value on a recurring basis, generally quarterly.
(6)Securities sold not yet purchased are measured at fair value on a recurring basis, generally monthly.
(7)Non-qualified deferred compensation plan liabilities represent the fair value of the obligation to the employee, which generally corresponds to the fair value of the invested assets, and are measured at fair value on a recurring basis, generally monthly.
Level 3 Valuations
The following table presents a reconciliation of the level 3 fair value category measured at fair value on a recurring basis:
Net Gains/(Losses)
(in thousands)Balance at Beginning of PeriodPurchases / AdditionsSales / ReductionsRealizedUnrealizedBalance at End of Period
Three Months Ended September 30, 2024
Available-for-sale debt securities:(1)
CRT securities$12,328 $— $(346)$— $20 $12,002 
Three Months Ended September 30, 2023
Available-for-sale debt securities:(1)
CRT securities$11,756 $— $(341)$— $676 $12,091 
Nine Months Ended September 30, 2024
Available-for-sale debt securities:(1)
CRT securities$11,995 $— $(846)$— $853 $12,002 
Nine Months Ended September 30, 2023
Available-for-sale debt securities:(1)
CRT securities$11,861 $— $(828)$— $1,058 $12,091 
(1)Unrealized gains/(losses) on available-for-sale debt securities are recorded in AOCI. Realized gains/(losses) are recorded in other non-interest income on the consolidated statements of income and other comprehensive income/(loss).
CRT securities
The fair value of CRT securities is based on a discounted cash flow model, which utilizes Level 3 inputs, the most significant of which were a discount rate and weighted-average life. At September 30, 2024, the discount rates utilized ranged from 4.52% to 6.09% and the weighted-average life ranged from 4.63 years to 6.91 years. On a combined amortized cost weighted-average basis a discount rate of 5.12% and a weighted-average life of 5.50 years were utilized to determine the fair value of these securities at September 30, 2024. At December 31, 2023, the combined weighted-average discount rate and weighted-average life utilized were 6.57% and 6.06 years, respectively.
Loans held for investment
Certain collateral-dependent loans held for investment are reported at fair value when, based upon an individual evaluation, the specific allocation of the allowance for credit losses that is deducted from the loan's amortized cost is based upon the fair value of the loan's underlying collateral. The $20.7 million fair value of loans held for investment at September 30, 2024 reported above includes impaired loans with a carrying value of $47.1 million that were reduced by specific allowance allocations totaling $26.4 million based on collateral valuations utilizing Level 3 inputs. The $38.3 million fair value of loans held for investment at December 31, 2023 reported above includes impaired loans with a carrying value of $58.3 million that were reduced by specific allowance allocations totaling $20.0 million based on collateral valuations utilizing Level 3 inputs.
Fair Value of Financial Instruments
A summary of the carrying amounts and estimated fair values of financial instruments is as follows:
Carrying
Amount		Estimated Fair Value
(in thousands)TotalLevel 1Level 2Level 3
September 30, 2024
Financial assets:
Cash and cash equivalents$4,191,585 $4,191,585 $4,191,585 $— $— 
Available-for-sale debt securities3,518,662 3,518,662 275,804 3,230,856 12,002 
Held-to-maturity debt securities812,432 727,743 — 727,743 — 
Equity securities74,426 74,426 58,140 16,286 — 
Loans held for sale9,022 9,022 — 9,022 — 
Loans held for investment, net22,021,028 21,978,258 — — 21,978,258 
Derivative assets43,030 43,030 — 43,030 — 
Financial liabilities:
Total deposits25,865,255 25,873,387 — — 25,873,387 
Short-term borrowings1,035,000 1,035,000 — 1,035,000 — 
Long-term debt660,172 624,776 — 624,776 — 
Securities sold not yet purchased33,244 33,244 33,244 — — 
Derivative liabilities31,675 31,675 — 31,675 — 
December 31, 2023
Financial assets:
Cash and cash equivalents$3,242,850 $3,242,850 $3,242,850 $— $— 
Available-for-sale debt securities3,225,892 3,225,892 636,473 2,577,424 11,995 
Held-to-maturity debt securities865,477 763,844 — 763,844 — 
Equity securities51,825 51,825 40,661 11,164 — 
Loans held for sale44,105 44,105 15,000 29,105 — 
Loans held for investment, net20,090,585 20,050,974 — — 20,050,974 
Derivative assets32,944 32,944 — 32,944 — 
Financial liabilities:
Total deposits22,371,839 22,379,452 — — 22,379,452 
Short-term borrowings1,500,000 1,500,000 — 1,500,000 — 
Long-term debt859,147 801,309 — 801,309 — 
Securities sold not yet purchased10,602 10,602 10,602 — — 
Derivative liabilities70,917 70,917 — 70,917 —