Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2021

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


		September 30, 2021				December 31, 2020
(in thousands)	Level	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	1	$	3,744,589	$	3,744,589	$	2,573,181	$	2,573,181
Equity and other investment securities	1,2	81,575		81,575		83,077		83,077
Investment securities available for sale	2	3,723,171		3,723,171		2,932,558		2,932,558
Investment securities held to maturity	3	2,795		3,581		3,034		3,883
Loans held for sale	2	352,466		352,466		766,225		766,225
Loans and leases, net	2,3	21,712,380		21,853,775		21,450,966		21,904,189
Restricted equity securities	1	10,946		10,946		41,666		41,666
Residential mortgage servicing rights	3	105,834		105,834		92,907		92,907
Bank owned life insurance	1	325,646		325,646		323,470		323,470
Derivatives	2,3	210,688		210,688		342,510		342,510
Financial liabilities:
Deposits	1,2	$	26,908,397	$	26,911,910	$	24,622,201	$	24,641,876
Securities sold under agreements to repurchase	2	467,760		467,760		375,384		375,384
Borrowings	2	6,367		7,160		771,482		774,586
Junior subordinated debentures, at fair value	3	299,508		299,508		255,217		255,217
Junior subordinated debentures, at amortized cost	3	88,098		76,686		88,268		67,425
Derivatives	2	9,661		9,661		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 September 30, 2021 and December 31, 2020:


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

Investments in mutual funds and other securities	$	69,157	$	51,820	$	17,337	$	—
Equity securities held in rabbi trusts	12,418		12,418		—		—

Investment securities available for sale
U.S. Treasury and agencies	838,977		—		838,977		—
Obligations of states and political subdivisions	283,409		—		283,409		—
Residential mortgage-backed securities and collateralized mortgage obligations	2,600,785		—		2,600,785		—

Loans held for sale, at fair value	352,466		—		352,466		—
Loans and leases, at fair value	353,912		—		353,912		—
Residential mortgage servicing rights, at fair value	105,834		—		—		105,834
Derivatives
Interest rate lock commitments	8,258		—		—		8,258
Interest rate forward sales commitments	3,367		—		3,367		—
Interest rate swaps	198,607		—		198,607		—
Foreign currency derivative	456		—		456		—
Total assets measured at fair value	$	4,827,646	$	64,238	$	4,649,316	$	114,092
Financial liabilities:
Junior subordinated debentures, at fair value	$	299,508	$	—	$	—	$	299,508
Derivatives
Interest rate forward sales commitments	374		—		374		—
Interest rate swaps	8,944		—		8,944		—
Foreign currency derivative	343		—		343		—
Total liabilities measured at fair value	$	309,169	$	—	$	9,661	$	299,508


(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 September 30, 2021:


Financial Instrument	Fair Value (in thousands)		Valuation Technique	Unobservable Input	Range of Inputs	Weighted Average
Residential mortgage servicing rights	$	105,834	Discounted cash flow
				Constant prepayment rate	8.20% - 72.17%	16.21%
				Discount rate	9.50% - 12.50%	9.69%
Interest rate lock commitments	$	8,258	Internal pricing model
				Pull-through rate	70.00% - 100.00%	88.03%
Junior subordinated debentures	$	299,508	Discounted cash flow
				Credit spread	1.57% - 4.42%	3.46%

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 nine months ended September 30, 2021 and 2020:


	Three Months Ended						Three Months Ended
	September 30, 2021						September 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	$	102,699	$	13,210	$	287,723	$	96,356	$	25,537	$	232,936

Change included in earnings	(5,315)		1,301		2,344		(17,122)		3,723		2,536
Change in fair values included in comprehensive income/loss	—		—		11,946		—		—		14,555
Purchases and issuances	8,450		16,007		—		14,014		55,854		—
Sales and settlements	—		(22,260)		(2,505)		—		(56,275)		(2,982)
Ending balance	$	105,834	$	8,258	$	299,508	$	93,248	$	28,839	$	247,045
Change in unrealized gains or losses for the period included in earnings for assets and liabilities held at end of period	$	(634)	$	8,258	$	2,344	$	(12,244)	$	28,839	$	2,536
Change in unrealized gains or losses for the period included in other comprehensive income for assets and liabilities held at end of period	$	—	$	—	$	11,946	$	—	$	—	$	14,555

	Nine Months Ended						Nine Months Ended
	September 30, 2021						September 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	(17,918)		199		7,087		(59,246)		10,946		9,509
Change in fair values included in comprehensive income/loss	—		—		44,504		—		—		(26,857)
Purchases and issuances	30,845		67,730		—		37,484		130,862		—
Sales and settlements	—		(87,815)		(7,300)		—		(120,025)		(10,419)
Ending Balance	$	105,834	$	8,258	$	299,508	$	93,248	$	28,839	$	247,045
Change in unrealized gains or losses for the period included in earnings for assets held at end of period	$	(4,326)	$	8,258	$	7,087	$	(43,997)	$	28,839	$	9,509
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at end of period	$	—	$	—	$	44,504	$	—	$	—	$	(26,857)

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.


	September 30, 2021
(in thousands)	Total		Level 1		Level 2		Level 3
Loans and leases	$	5,835	$	—	$	—	$	5,835


Total assets measured at fair value on a nonrecurring basis	$	5,835	$	—	$	—	$	5,835


	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 nine months ended September 30, 2021 and 2020:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020



Loans and leases	$	8,470	$	14,797	$	43,480	$	53,336
Goodwill impairment	—		—		—		1,784,936
Total loss from nonrecurring measurements	$	8,470	$	14,797	$	43,480	$	1,838,272

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 September 30, 2021 and December 31, 2020:


	September 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	$	352,466	$	340,670	$	11,796	$	688,079	$	654,555	$	33,524
Loans	$	353,912	$	340,664	$	13,248	$	—	$	—	$	—