Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

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

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented:



	December 31, 2014
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	381,805	$	—	$	381,805	$	—
U.S. Government agencies	668,316		—		668,316		—
Municipal	238,529		—		179,576		58,953
Corporate notes	133,579		—		133,579		—
Mortgage-backed	318,710		—		318,710		—
Equity securities	51,139		—		27,428		23,711
Trading account securities	1,206		—		1,206		—
Mortgage loans held-for-sale	351,290		—		351,290		—
Mortgage servicing rights	8,435		—		—		8,435
Nonqualified deferred compensations assets	7,951		—		7,951		—
Derivative assets	47,964		—		47,964		—
Total	$	2,208,924	$	—	$	2,117,825	$	91,099
Derivative liabilities	$	41,180	$	—	$	41,180	$	—

	December 31, 2013
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	336,095	$	—	$	336,095	$	—
U.S. Government agencies	895,688		—		895,688		—
Municipal	152,716		—		116,330		36,386
Corporate notes	135,038		—		135,038		—
Mortgage-backed	605,225		—		605,225		—
Equity securities	51,528		—		29,365		22,163
Trading account securities	497		—		497		—
Mortgage loans held-for-sale	332,485		—		332,485		—
Mortgage servicing rights	8,946		—		—		8,946
Nonqualified deferred compensations assets	7,222		—		7,222		—
Derivative assets	48,221		—		48,221		—
Total	$	2,573,661	$	—	$	2,506,166	$	67,495
Derivative liabilities	$	37,264	$	—	$	37,264	$	—

Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis during the year ended December 31, 2014 are summarized as follows:



				Equity securities		Mortgage servicing rights
(Dollars in thousands)	Municipal			Equity securities		Mortgage servicing rights
Balance at January 1, 2014	$	36,386		$	22,163	$	8,946
Total net (losses) gains included in:
Net income ⁽¹⁾	—			—		(1,214		)
Other comprehensive income	202			1,548		—
Purchases	27,437			—		703
Issuances	—			—		—
Sales	—			—		—
Settlements	(13,954		)	—		—
Net transfers into/(out of) Level 3⁽²⁾	8,882			—		—
Balance at December 31, 2014	$	58,953		$	23,711	$	8,435


(1)	Changes in the balance of mortgage servicing rights are recorded as a component of mortgage banking revenue in non-interest income.


(2)	Transfers into Level 3 relate to a reclassification of municipal bonds in the third quarter of 2014.

The changes in Level 3 assets measured at fair value on a recurring basis during the year ended December 31, 2013 are summarized as follows:



(Dollars in thousands)	Municipal			Equity securities			Mortgage servicing rights
Balance at January 1, 2013	$	30,770		$	22,169		$	6,750
Total net (losses) gains included in:
Net income ⁽¹⁾	—			(3,328		)	2,196
Other comprehensive income	(296		)	3,322			—
Purchases	22,209			—			—
Issuances	—			—			—
Sales	—			—			—
Settlements	(16,297		)	—			—
Net transfers into/(out of) of Level 3	—			—			—
Balance at December 31, 2013	$	36,386		$	22,163		$	8,946


(1)	Changes in the balance of mortgage servicing rights are recorded as a component of mortgage banking revenue in non-interest income.

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis that were still held in the balance sheet at the end of the period, the following table provides the carrying value of the related individual assets or portfolios at December 31, 2014.



	December 31, 2014								Twelve Months Ended December 31, 2014 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans-collateral based	$	65,608	$	—	$	—	$	65,608	$	24,462
Other real estate owned, including covered other real estate owned ⁽¹⁾	87,925		—		—		87,925		12,093
Total	$	153,533	$	—	$	—	$	153,533	$	36,555


(1)	Fair value losses recognized, net on other real estate owned include valuation adjustments and charge-offs during the respective period.

Schedule of Valuation Techniques and Significant Unobservable Inputs Used to Measure Both Recurring and Nonrecurring

The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at December 31, 2014 were as follows:

(Dollars in thousands)

Fair Value

Valuation Methodology

Significant Unobservable Input

Range

of Inputs

Weighted

Average

of Inputs

Impact to valuation

from an increased or

higher input value

Measured at fair value on a recurring basis:

Municipal Securities

58,953

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

Equity Securities

23,711

Discounted cash flows

Discount rate

2.05%-2.35%

2.22%

Decrease

Mortgage Servicing Rights

8,435

Discounted cash flows

Discount rate

9%-12%

9.15%

Decrease

Constant prepayment rate (CPR)

11%-20%

12.76%

Decrease

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

65,608

Appraisal value

N/A

Other real estate owned, including covered other real-estate owned

87,925

Appraisal value

Property specific valuation adjustment

(92)%-82%

2.39%

Increase

Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of the Company’s financial instruments as of the dates shown:



	December 31, 2014				December 31, 2013
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	230,707	$	230,707	$	263,864	$	263,864
Interest bearing deposits with banks	998,437		998,437		495,574		495,574
Available-for-sale securities	1,792,078		1,792,078		2,176,290		2,176,290
Trading account securities	1,206		1,206		497		497
Federal Home Loan Bank and Federal Reserve Bank stock, at cost	91,582		91,582		79,261		79,261
Brokerage customer receivables	24,221		24,221		30,953		30,953
Mortgage loans held-for-sale, at fair value	351,290		351,290		332,485		332,485
Mortgage loans held-for-sale, at lower of cost or market	—		—		1,842		1,857
Total loans	14,636,107		15,346,266		13,243,033		13,867,255
Mortgage servicing rights	8,435		8,435		8,946		8,946
Nonqualified deferred compensation assets	7,951		7,951		7,222		7,222
Derivative assets	47,964		47,964		48,221		48,221
FDIC indemnification asset	11,846		11,846		85,672		85,672
Accrued interest receivable and other	169,156		169,156		163,732		163,732
Total financial assets	$	18,370,980	$	19,081,139	$	16,937,592	$	17,561,829
Financial Liabilities
Non-maturity deposits	$	12,142,034	$	12,142,034	$	10,442,077	$	10,442,077
Deposits with stated maturities	4,139,810		4,143,161		4,226,712		4,242,172
Federal Home Loan Bank advances	733,050		738,113		417,762		422,750
Other borrowings	196,465		197,883		255,104		255,104
Subordinated notes	140,000		143,639		—		—
Junior subordinated debentures	249,493		250,305		249,493		250,672
Derivative liabilities	41,180		41,180		37,264		37,264
Accrued interest payable	8,001		8,001		8,556		8,556
Total financial liabilities	$	17,650,033	$	17,664,316	$	15,636,968	$	15,658,595

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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