FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Fair Value of Financial Instruments, by Balance Sheet Grouping

The following table presents estimated fair values of the Company’s financial instruments as of March 31, 2022 and December 31, 2021, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (dollars in thousands):


		March 31, 2022				December 31, 2021
	Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Cash and cash equivalents	1	$	1,988,388	$	1,988,388	$	2,134,300	$	2,134,300
Securities—trading	3	27,354		27,354		26,981		26,981
Securities—available-for-sale	2	3,147,547		3,147,547		3,638,993		3,638,993
Securities—held-to-maturity	2	1,006,234		958,809		464,008		484,483
Securities—held-to-maturity	3	9,708		9,731		57,347		57,370
Securities purchased under agreements to resell	2	300,000		300,000		300,000		300,000
Loans held for sale	2	64,218		64,609		96,487		96,914
Loans receivable	3	9,146,629		9,003,682		9,084,763		9,100,516
Equity securities	1	893		893		1,000		1,298
FHLB stock	3	10,000		10,000		12,000		12,000
Bank-owned life insurance	1	294,556		294,556		244,156		244,156
Mortgage servicing rights	3	16,846		32,415		16,045		24,393
SBA servicing rights	3	1,162		1,162		1,161		1,161
Investments in limited partnerships	3	10,982		10,982		10,257		10,257
Derivatives:
Interest rate swaps	2	14,685		14,685		20,826		20,826
Interest rate lock and forward sales commitments	2,3	3,062		3,062		1,555		1,555
Liabilities:
Demand, interest checking and money market accounts	2	10,869,519		10,869,519		10,703,586		10,703,586
Regular savings	2	2,853,891		2,853,891		2,784,716		2,784,716
Certificates of deposit	2	800,364		790,986		838,631		836,877
FHLB advances	2	—		—		50,000		50,287
Other borrowings	2	266,778		266,778		264,490		264,490
Subordinated notes, net	2	98,658		100,614		98,564		105,241
Junior subordinated debentures	3	70,510		70,510		119,815		119,815
Derivatives:
Interest rate swaps	2	18,574		18,574		11,336		11,336
Interest rate swaps used in cash flow hedges	2	502		502		279		279
Interest rate lock and forward sales commitments	2,3	142		142		140		140
Risk participation agreement	2	218		218		—		—

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present financial assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets and liabilities as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading


Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	27,354	$	27,354



Securities—available-for-sale
U.S. Government and agency obligations	—		194,194		—		194,194
Municipal bonds	—		272,264		—		272,264
Corporate bonds	—		117,583		—		117,583
Mortgage-backed or related securities	—		2,357,833		—		2,357,833
Asset-backed securities	—		205,673		—		205,673
	—		3,147,547		—		3,147,547

Loans held for sale(1)	—		16,890		—		16,890
Equity securities	893		—		—		893
SBA servicing rights	—		—		1,162		1,162
Investment in limited partnerships	—		—		10,982		10,982

Derivatives
Interest rate swaps	—		14,685		—		14,685
Interest rate lock and forward sales commitments	—		3,062		—		3,062
	$	893	$	3,182,184	$	39,498	$	3,222,575

Liabilities:

Junior subordinated debentures	$	—	$	—	$	70,510	$	70,510
Derivatives
Interest rate swaps	—		18,574		—		18,574
Interest rate swaps used in cash flow hedges	—		502		—		502
Interest rate lock and forward sales commitments	—		76		66		142
Risk participation agreement	—		218		—		218
	$	—	$	19,370	$	70,576	$	89,946


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading


Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	26,981	$	26,981




Securities—available-for-sale
U.S. Government and agency obligations	—		201,332		—		201,332
Municipal bonds	—		308,612		—		308,612
Corporate bonds	—		117,347		—		117,347
Mortgage-backed or related securities	—		2,805,268		—		2,805,268
Asset-backed securities	—		206,434		—		206,434

	—		3,638,993		—		3,638,993

Loans held for sale(1)	—		39,775		—		39,775

SBA servicing rights	—		—		1,161		1,161
Investment in limited partnerships	—		—		10,257		10,257

Derivatives
Interest rate swaps	—		20,826		—		20,826
Interest rate lock and forward sales commitments	—		88		1,467		1,555
	$	—	$	3,699,682	$	39,866	$	3,739,548

Liabilities:

Junior subordinated debentures	$	—	$	—	$	119,815	$	119,815
Derivatives
Interest rate swaps	—		11,336		—		11,336
Interest rate swaps used in cash flow hedges	—		279		—		279
Interest rate lock and forward sales commitments	—		140		—		140
	$	—	$	11,755	$	119,815	$	131,570

Schedule of Valuation Technique, Unobservable Input, and Qualitative Information for Unobservable Inputs

The following table provides a description of the valuation technique, unobservable inputs, and quantitative 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 and non-recurring basis at March 31, 2022 and December 31, 2021:

Weighted Average Rate / Range

Financial Instruments

Valuation Technique

Unobservable Inputs

March 31, 2022

December 31, 2021

Corporate bonds (TPS securities)

Discounted cash flows

Discount rate

4.46

3.71

Junior subordinated debentures

Discounted cash flows

Discount rate

4.46

3.71

Loans individually evaluated

Collateral valuations

Discount to appraised value

9.0% to 9.5%

8.5% to 20.0%

REO

Appraisals

Discount to appraised value

71.19

60.91

Interest rate lock commitments

Pricing model

Pull-through rate

89.26

86.64

Investments in limited partnerships

Net Asset Value

Infrequent transactions

n/a

SBA servicing rights

Discounted cash flows

Constant prepayment rate

8.76%

12.25%

Schedule of Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide a reconciliation of the assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended
	March 31, 2022
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	26,981	$	119,815	$	1,467	$	10,257	$	1,161
Net change recognized in earnings	373		1,213		(1,533)		(217)		1
Purchases, issuances and settlements	—		(50,518)		—		942		—


Ending balance at March 31, 2022	$	27,354	$	70,510	$	(66)	$	10,982	$	1,162

	Three Months Ended
	March 31, 2021
	Level 3 Fair Value Inputs
	TPS Securities		Borrowings—Junior Subordinated Debentures		Interest Rate Lock and Forward Sales Commitments		Investments in Limited Partnerships		SBA Servicing Asset
Beginning balance	$	24,980	$	116,974	$	5,221	$	2,819	$	—
Net change recognized in earnings	59		274		4,430		1,384		—




Ending balance at March 31, 2021	$	25,039	$	117,248	$	9,651	$	4,203	$	—

Schedule of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The following tables present financial assets and liabilities measured at fair value on a non-recurring basis and the level within the fair value hierarchy of the fair value measurements for those assets as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	2,388	$	2,388
REO	—		—		429		429

Loans held for sale	—		44,869		—		44,869

	December 31, 2021
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	2,989	$	2,989
REO	—		—		852		852

The following table presents the losses resulting from non-recurring fair value adjustments for the three months ended March 31, 2022 and March 31, 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Loans individually evaluated	$	—	$	302
REO	—		—
Loans held for sale	603		—
Total loss from non-recurring measurements	$	603	$	302