Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value

Schedule of assets and liabilities measured at fair value on a recurring basis

	Fair Value Measurements as of September 30, 2023
	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
(dollars in thousands)	(Level 1)		Inputs (Level 2)		Inputs (Level 3)		Total
Assets
U.S. Treasury and government agency debt securities	$	—	$	114,159	$	—	$	114,159
Government-sponsored enterprises debt securities		—		19,260		—		19,260
Mortgage-backed securities:
Residential - Government agency(1)		—		52,362		—		52,362
Residential - Government-sponsored enterprises(1)		—		1,005,782		—		1,005,782
Commercial - Government agency		—		211,897		—		211,897
Commercial - Government-sponsored enterprises		—		84,920		—		84,920
Commercial - Non-agency		—		21,602		—		21,602
Collateralized mortgage obligations:
Government agency		—		565,852		—		565,852
Government-sponsored enterprises		—		400,748		—		400,748
Collateralized loan obligations		—		246,122		—		246,122
Total available-for-sale securities		—		2,722,704		—		2,722,704
Other assets(2)		1,287		12,902		—		14,189
Liabilities
Other liabilities(3)		—		(5,880)		(1,200)		(7,080)
Total	$	1,287	$	2,729,726	$	(1,200)	$	2,729,813

(1) Backed by residential real estate.

(2) Other assets classified as Level 1 include money market funds that have quoted prices in active markets and are related to the Company’s deferred compensation plans. Other assets classified as Level 2 include derivative assets.

(3) Other liabilities include derivative liabilities.

	Fair Value Measurements as of December 31, 2022
	Quoted Prices in		Significant
	Active Markets for		Other		Significant
	Identical Assets		Observable		Unobservable
(dollars in thousands)	(Level 1)		Inputs (Level 2)		Inputs (Level 3)		Total
Assets
U.S. Treasury and government agency debt securities	$	—	$	150,982	$	—	$	150,982
Government-sponsored enterprises debt securities		—		44,301		—		44,301
Mortgage-backed securities:
Residential - Government agency(1)		—		59,723		—		59,723
Residential - Government-sponsored enterprises(1)		—		1,160,455		—		1,160,455
Commercial - Government agency		—		237,853		—		237,853
Commercial - Government-sponsored enterprises		—		119,573		—		119,573
Commercial - Non-agency		—		21,471		—		21,471
Collateralized mortgage obligations:
Government agency		—		653,322		—		653,322
Government-sponsored enterprises		—		462,132		—		462,132
Collateralized loan obligations		—		241,321		—		241,321
Total available-for-sale securities		—		3,151,133		—		3,151,133
Other assets(2)		5,376		10,945		—		16,321
Liabilities
Other liabilities(3)		—		(49,268)		(851)		(50,119)
Total	$	5,376	$	3,112,810	$	(851)	$	3,117,335

(1) Backed by residential real estate.

(2) Other assets classified as Level 1 include mutual funds and money market funds that have quoted prices in active markets and are related to the Company’s deferred compensation plans. Other assets classified as Level 2 include derivative assets.

(3) Other liabilities include derivative liabilities.

Summary of changes in Level 3 liabilities measured at fair value on a recurring basis

	Visa Derivative
(dollars in thousands)	2023		2022
Three Months Ended September 30,
Balance as of July 1,	$	(1,200)	$	(3,786)
Total net (losses) gains included in other noninterest income		(1,350)		273
Settlements		1,350		1,154
Balance as of September 30,	$	(1,200)	$	(2,359)
Total net (losses) gains included in net income attributable to the change in unrealized gains or losses related to liabilities still held as of September 30,	$	(1,350)	$	273
Nine Months Ended September 30,
Balance as of January 1,	$	(851)	$	(5,530)
Total net losses included in other noninterest income		(5,129)		(1,084)
Settlements		4,780		4,255
Balance as of September 30,	$	(1,200)	$	(2,359)
Total net losses included in net income attributable to the change in unrealized losses related to liabilities still held as of September 30,	$	(5,129)	$	(1,084)

Summary of estimated fair value of financial instruments not required to be carried at fair value on a recurring basis

	September 30, 2023
			Fair Value Measurements
			Quoted Prices in		Significant		Significant
			Active Markets		Other		Unobservable
			for Identical		Observable		Inputs
(dollars in thousands)	Book Value		Assets (Level 1)		Inputs (Level 2)		(Level 3)		Total
Financial assets:
Cash and cash equivalents	$	1,213,428	$	246,028	$	967,400	$	—	$	1,213,428
Investment securities held-to-maturity		4,104,114		—		3,433,029		—		3,433,029
Loans(1)		13,999,820		—		—		13,166,377		13,166,377
Financial liabilities:
Time deposits(2)	$	3,661,131	$	—	$	3,625,116	$	—	$	3,625,116
Short-term borrowings		500,000		—		495,306		—		495,306

	December 31, 2022
			Fair Value Measurements
			Quoted Prices in		Significant		Significant
			Active Markets		Other		Unobservable
			for Identical		Observable		Inputs
(dollars in thousands)	Book Value		Assets (Level 1)		Inputs (Level 2)		(Level 3)		Total
Financial assets:
Cash and cash equivalents	$	526,624	$	297,502	$	229,122	$	—	$	526,624
Investment securities held-to-maturity		4,320,639		—		3,814,822		—		3,814,822
Loans(1)		13,793,922		—		—		13,138,787		13,138,787
Financial liabilities:
Time deposits(2)	$	2,476,050	$	—	$	2,423,231	$	—	$	2,423,231
Short-term borrowings		75,000		—		74,991		—		74,991

(1) Excludes financing leases of $332.5 million at September 30, 2023 and $298.1 million at December 31, 2022.

(2) Excludes deposit liabilities with no defined or contractual maturity of $17.9 billion as of September 30, 2023 and $19.2 billion as of December 31, 2022.

Significant unobservable inputs used in fair value measurements for Level 3 assets and liabilities measured at fair value on a recurring basis

	Quantitative Information about Level 3 Fair Value Measurements at September 30, 2023
				Significant
(dollars in thousands)	Fair value		Valuation Technique	Unobservable Input	Range
Visa derivative	$	(1,200)	Discounted Cash Flow	Expected Conversion Rate - 1.5875(1)	1.5289-1.5875
				Expected Term - 3 months(2)	0 - 6 months
				Growth Rate - 17%(3)	7% - 24%

	Quantitative Information about Level 3 Fair Value Measurements at December 31, 2022
				Significant
(dollars in thousands)	Fair value		Valuation Technique	Unobservable Input	Range
Visa derivative	$	(851)	Discounted Cash Flow	Expected Conversion Rate - 1.5991(1)	1.5514-1.5991
				Expected Term - 3 months(2)	0 - 6 months
				Growth Rate - 26%(3)	10% - 38%

(1) Due to the uncertainty in the movement of the conversion rate, the current conversion rate was utilized in the fair value calculation.

(2) The expected term of 3 months was based on the median of 0 to 6 months.

(3) The growth rate was based on the arithmetic average of analyst price targets.