FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2022 and December 31, 2021, whether or not recognized or recorded in the Consolidated Statements of Financial Condition (dollars in thousands):


		June 30, 2022				December 31, 2021
	Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Assets:
Cash and cash equivalents	1	$	1,170,847	$	1,170,847	$	2,134,300	$	2,134,300
Securities—trading	3	27,886		27,886		26,981		26,981
Securities—available-for-sale	2	3,094,422		3,094,422		3,638,993		3,638,993
Securities—held-to-maturity	2	1,142,646		1,026,736		464,008		484,483
Securities—held-to-maturity	3	9,543		9,565		57,347		57,370
Securities purchased under agreements to resell	2	300,000		300,000		300,000		300,000
Loans held for sale	2	69,161		69,189		96,487		96,914
Loans receivable	3	9,456,829		9,322,390		9,084,763		9,100,516
Equity securities	1	584		584		1,000		1,298
FHLB stock	3	10,000		10,000		12,000		12,000
Bank-owned life insurance	1	293,631		293,631		244,156		244,156
Mortgage servicing rights	3	16,618		35,290		16,045		24,393
SBA servicing rights	3	1,015		1,015		1,161		1,161
Investments in limited partnerships	3	11,881		11,881		10,257		10,257
Derivatives:
Interest rate swaps	2	22,229		22,229		20,826		20,826
Interest rate lock and forward sales commitments	2,3	470		470		1,555		1,555
Liabilities:
Demand, interest checking and money market accounts	2	10,655,075		10,655,075		10,703,586		10,703,586
Regular savings	2	2,801,177		2,801,177		2,784,716		2,784,716
Certificates of deposit	2	756,312		741,783		838,631		836,877
FHLB advances	2	—		—		50,000		50,287
Other borrowings	2	234,737		234,737		264,490		264,490
Subordinated notes, net	2	98,752		98,263		98,564		105,241
Junior subordinated debentures	3	72,229		72,229		119,815		119,815
Derivatives:
Interest rate swaps	2	32,842		32,842		11,336		11,336
Interest rate swaps used in cash flow hedges	2	398		398		279		279
Interest rate lock and forward sales commitments	2	88		88		140		140
Risk participation agreement	2	139		139		—		—

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 June 30, 2022 and December 31, 2021 (in thousands):


	June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Securities—trading


Corporate bonds (Trust Preferred Securities)	$	—	$	—	$	27,886	$	27,886



Securities—available-for-sale
U.S. Government and agency obligations	—		190,893		—		190,893
Municipal bonds	—		251,300		—		251,300
Corporate bonds	—		127,504		—		127,504
Mortgage-backed or related securities	—		2,323,473		—		2,323,473
Asset-backed securities	—		201,252		—		201,252
	—		3,094,422		—		3,094,422

Loans held for sale(1)	—		9,939		—		9,939
Equity securities	584		—		—		584
SBA servicing rights	—		—		1,015		1,015
Investment in limited partnerships	—		—		11,881		11,881

Derivatives
Interest rate swaps	—		22,229		—		22,229
Interest rate lock and forward sales commitments	—		113		357		470
	$	584	$	3,126,703	$	41,139	$	3,168,426

Liabilities:

Junior subordinated debentures	$	—	$	—	$	72,229	$	72,229
Derivatives
Interest rate swaps	—		32,842		—		32,842
Interest rate swaps used in cash flow hedges	—		398		—		398
Interest rate lock and forward sales commitments	—		88		—		88
Risk participation agreement	—		139		—		139
	$	—	$	33,467	$	72,229	$	105,696


	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 June 30, 2022 and December 31, 2021:

Weighted Average Rate / Range

Financial Instruments

Valuation Technique

Unobservable Inputs

June 30, 2022

December 31, 2021

Corporate bonds (TPS securities)

Discounted cash flows

Discount rate

5.79

3.71

Junior subordinated debentures

Discounted cash flows

Discount rate

5.79

3.71

Loans individually evaluated

Collateral valuations

Discount to appraised value

9.5%

8.5% to 20.0%

REO

Appraisals

Discount to appraised value

68.35

60.91

Interest rate lock commitments

Pricing model

Pull-through rate

88.95

86.64

Investments in limited partnerships

Net Asset Value

Infrequent transactions

n/a

SBA servicing rights

Discounted cash flows

Constant prepayment rate

16.16%

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 and six months ended June 30, 2022 and 2021 (in thousands):


	Three Months Ended
	June 30, 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	$	27,354	$	70,510	$	(66)	$	10,982	$	1,162
Net change recognized in earnings	532		1,719		423		(155)		(147)
Purchases, issuances and settlements	—		—		—		1,054		—


Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015

	Six Months Ended
	June 30, 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	905		2,932		(1,110)		(372)		(146)
Purchases, issuances and settlements	—		—		—		1,996		—
Redemptions	—		(50,518)		—		—		—


Ending balance at June 30, 2022	$	27,886	$	72,229	$	357	$	11,881	$	1,015

	Three Months Ended
	June 30, 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	$	25,039	$	117,248	$	2,937	$	4,203	$	—
Net change recognized in earnings	58		272		(363)		323		—



Ending balance at June 30, 2021	$	25,097	$	117,520	$	2,574	$	4,526	$	—

	Six Months Ended
	June 30, 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	117		546		(2,647)		1,707		—



Ending balance at June 30, 2021	$	25,097	$	117,520	$	2,574	$	4,526	$	—

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 June 30, 2022 and December 31, 2021 (in thousands):


	June 30, 2022
	Level 1		Level 2		Level 3		Total
Loans individually evaluated	$	—	$	—	$	684	$	684
REO	—		—		340		340

Loans held for sale	—		57,905		—		57,905

	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 and six months ended June 30, 2022 and June 30, 2021 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Loans individually evaluated	$	—	$	(1)	$	—	$	(303)
REO	—		—		—		—
Loans held for sale	(458)		—		(1,061)		—
Total loss from non-recurring measurements	$	(458)	$	(1)	$	(1,061)	$	(303)