Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2021

The following table presents estimated fair values of the Company's financial instruments as of June 30, 2021 and December 31, 2020, whether or not recognized or recorded at fair value in the Condensed Consolidated Balance Sheets:


		June 30, 2021				December 31, 2020
(in thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	1	$	3,085,811	$	3,085,811	$	2,573,181	$	2,573,181
Equity and other investment securities	1,2	82,099		82,099		83,077		83,077
Investment securities available for sale	2	3,473,950		3,473,950		2,932,558		2,932,558
Investment securities held to maturity	3	2,876		3,690		3,034		3,883
Loans held for sale	2	429,052		429,052		766,225		766,225
Loans and leases, net	2,3	21,863,852		22,174,722		21,450,966		21,904,189
Restricted equity securities	1	15,247		15,247		41,666		41,666
Residential mortgage servicing rights	3	102,699		102,699		92,907		92,907
Bank owned life insurance	1	324,998		324,998		323,470		323,470
Derivatives	2,3	236,018		236,018		342,510		342,510
Financial liabilities:
Deposits	1,2	$	26,153,553	$	26,160,749	$	24,622,201	$	24,641,876
Securities sold under agreements to repurchase	2	480,302		480,302		375,384		375,384
Borrowings	2	111,405		112,364		771,482		774,586
Junior subordinated debentures, at fair value	3	287,723		287,723		255,217		255,217
Junior subordinated debentures, at amortized cost	3	88,155		65,044		88,268		67,425
Derivatives	2	6,928		6,928		8,782		8,782

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020:


(in thousands)	June 30, 2021
Description	Total		Level 1		Level 2		Level 3
Financial assets:
Equity and other investment securities

Investments in mutual funds and other securities	$	69,500	$	52,163	$	17,337	$	—
Equity securities held in rabbi trusts	12,599		12,599		—		—

Investment securities available for sale
U.S. Treasury and agencies	774,368		—		774,368		—
Obligations of states and political subdivisions	278,126		—		278,126		—
Residential mortgage-backed securities and collateralized mortgage obligations	2,421,456		—		2,421,456		—

Loans held for sale, at fair value	429,052		—		429,052		—
Loans and leases, at fair value	359,273		—		359,273		—
Residential mortgage servicing rights, at fair value	102,699		—		—		102,699
Derivatives
Interest rate lock commitments	13,210		—		—		13,210
Interest rate forward sales commitments	411		—		411		—
Interest rate swaps	221,567		—		221,567		—
Foreign currency derivative	830		—		830		—
Total assets measured at fair value	$	4,683,091	$	64,762	$	4,502,420	$	115,909
Financial liabilities:
Junior subordinated debentures, at fair value	$	287,723	$	—	$	—	$	287,723
Derivatives
Interest rate forward sales commitments	1,295		—		1,295		—
Interest rate swaps	4,919		—		4,919		—
Foreign currency derivative	714		—		714		—
Total liabilities measured at fair value	$	294,651	$	—	$	6,928	$	287,723


(in thousands)	December 31, 2020
Description	Total		Level 1		Level 2		Level 3
Financial assets:
Equity and other investment securities

Investments in mutual funds and other securities	$	70,203	$	52,866	$	17,337	$	—
Equity securities held in rabbi trusts	12,814		12,814		—		—
Other investments securities (1)	60		—		60		—
Investment securities available for sale
U.S. Treasury and agencies	762,202		—		762,202		—
Obligations of states and political subdivisions	279,511		—		279,511		—
Residential mortgage-backed securities and collateralized mortgage obligations	1,890,845		—		1,890,845		—

Loans held for sale, at fair value	688,079		—		688,079		—
Residential mortgage servicing rights, at fair value	92,907		—		—		92,907
Derivatives
Interest rate lock commitments	28,144		—		—		28,144
Interest rate forward sales commitments	7		—		7		—
Interest rate swaps	313,090		—		313,090		—
Foreign currency derivative	1,269		—		1,269		—
Total assets measured at fair value	$	4,139,131	$	65,680	$	3,952,400	$	121,051
Financial liabilities:
Junior subordinated debentures, at fair value	$	255,217	$	—	$	—	$	255,217
Derivatives
Interest rate forward sales commitments	7,257		—		7,257		—
Interest rate swaps	370		—		370		—
Foreign currency derivative	1,155		—		1,155		—
Total liabilities measured at fair value	$	263,999	$	—	$	8,782	$	255,217

(1) Other investment securities includes securities held by Umpqua Investments as trading debt securities.

Fair Value Measurement Inputs and Valuation Techniques

The following table provides a description of the valuation technique, significant unobservable inputs, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at June 30, 2021:


Financial Instrument	Fair Value (in thousands)		Valuation Technique	Unobservable Input	Range of Inputs	Weighted Average
Residential mortgage servicing rights	$	102,699	Discounted cash flow
				Constant prepayment rate	8.52% - 72.22%	16.75%
				Discount rate	9.50% - 12.50%	9.70%
Interest rate lock commitments	$	13,210	Internal pricing model
				Pull-through rate	70.32% - 100.00%	86.42%
Junior subordinated debentures	$	287,723	Discounted cash flow
				Credit spread	1.94% - 4.97%	3.81%

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and six months ended June 30, 2021 and 2020:


	Three Months Ended						Three Months Ended
	June 30, 2021						June 30, 2020
(in thousands)	Residential mortgage servicing rights		Interest rate lock commitments, net		Junior subordinated debentures, at fair value		Residential mortgage servicing rights		Interest rate lock commitments, net		Junior subordinated debentures, at fair value
Beginning balance	$	100,413	$	14,755	$	281,580	$	94,346	$	23,727	$	195,521

Change included in earnings	(6,044)		2,356		2,367		(11,437)		2,529		3,083
Change in fair values included in comprehensive income/loss	—		—		5,996		—		—		37,450
Purchases and issuances	8,330		21,548		—		13,447		48,007		—
Sales and settlements	—		(25,449)		(2,220)		—		(48,726)		(3,118)
Ending balance	$	102,699	$	13,210	$	287,723	$	96,356	$	25,537	$	232,936
Change in unrealized gains or losses for the period included in earnings for assets and liabilities held at end of period	$	(1,678)	$	13,210	$	2,367	$	(6,395)	$	25,537	$	3,083
Change in unrealized gains or losses for the period included in other comprehensive income for assets and liabilities held at end of period	$	—	$	—	$	5,996	$	—	$	—	$	37,450

	Six Months Ended						Six Months Ended
	June 30, 2021						June 30, 2020
(in thousands)	Residential mortgage servicing rights		Interest rate lock commitments, net		Junior subordinated debentures, at fair value		Residential mortgage servicing rights		Interest rate lock commitments, net		Junior subordinated debentures, at fair value
Beginning Balance	$	92,907	$	28,144	$	255,217	$	115,010	$	7,056	$	274,812

Change included in earnings	(12,603)		(1,102)		4,743		(42,124)		7,223		6,973
Change in fair values included in comprehensive income/loss	—		—		32,558		—		—		(41,412)
Purchases and issuances	22,395		51,723		—		23,470		75,008		—
Sales and settlements	—		(65,555)		(4,795)		—		(63,750)		(7,437)
Ending Balance	$	102,699	$	13,210	$	287,723	$	96,356	$	25,537	$	232,936
Change in unrealized gains or losses for the period included in earnings for assets held at end of period	$	(3,692)	$	13,210	$	4,743	$	(31,753)	$	25,537	$	6,973
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at end of period	$	—	$	—	$	32,558	$	—	$	—	$	(41,412)

Fair Value Measurements, Nonrecurring

The following tables present information about the Company's assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting period. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon.


	June 30, 2021
(in thousands)	Total		Level 1		Level 2		Level 3
Loans and leases	$	3,997	$	—	$	—	$	3,997


Total assets measured at fair value on a nonrecurring basis	$	3,997	$	—	$	—	$	3,997


	December 31, 2020
(in thousands)	Total		Level 1		Level 2		Level 3



Loans and leases	$	8,231	$	—	$	—	$	8,231

Total assets measured at fair value on a nonrecurring basis	$	8,231	$	—	$	—	$	8,231

Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings

The following table presents the losses resulting from nonrecurring fair value adjustments for the three and six months ended June 30, 2021 and 2020:


	Three Months Ended				Six Months Ended
(in thousands)	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020



Loans and leases	$	16,697	$	16,497	$	35,010	$	38,539
Goodwill impairment	—		—		—		1,784,936
Total loss from nonrecurring measurements	$	16,697	$	16,497	$	35,010	$	1,823,475

Fair Value Option, Disclosures

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale and loans held for investment accounted for under the fair value option as of June 30, 2021 and December 31, 2020:


	June 30, 2021						December 31, 2020
(in thousands)	Fair Value		Aggregate Unpaid Principal Balance		Fair Value Less Aggregate Unpaid Principal Balance		Fair Value		Aggregate Unpaid Principal Balance		Fair Value Less Aggregate Unpaid Principal Balance
Loans held for sale	$	429,052	$	412,744	$	16,308	$	688,079	$	654,555	$	33,524
Loans	$	359,273	$	349,457	$	9,816	$	—	$	—	$	—