Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2016

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, 2016
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	141,983	$	—	$	141,983	$	—
U.S. Government agencies	189,152		—		189,152		—
Municipal	131,809		—		52,183		79,626
Corporate notes	65,391		—		65,391		—
Mortgage-backed	1,161,084		—		1,161,084		—
Equity securities	35,248		—		35,248		—
Trading account securities	1,989		—		1,989		—
Mortgage loans held-for-sale	418,374		—		418,374		—
Loans held-for-investment	22,137		—		—		22,137
MSRs	19,103		—		—		19,103
Nonqualified deferred compensations assets	9,228		—		9,228		—
Derivative assets	56,394		—		54,103		2,291
Total	$	2,251,892	$	—	$	2,128,735	$	123,157
Derivative liabilities	$	39,839	$	—	$	39,839	$	—

	December 31, 2015
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	306,729	$	—	$	306,729	$	—
U.S. Government agencies	70,236		—		70,236		—
Municipal	108,595		—		39,982		68,613
Corporate notes	81,545		—		81,545		—
Mortgage-backed	1,092,597		—		1,092,597		—
Equity securities	56,686		—		31,487		25,199
Trading account securities	448		—		448		—
Mortgage loans held-for-sale	388,038		—		388,038		—
Loans held-for-investment	11,361		—		11,361		—
MSRs	9,092		—		—		9,092
Nonqualified deferred compensations assets	8,517		—		8,517		—
Derivative assets	51,298		—		44,277		7,021
Total	$	2,185,142	$	—	$	2,075,217	$	109,925
Derivative liabilities	$	45,019	$	—	$	45,019	$	—

Summary of Changes in Level Three 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, 2016 are summarized as follows:



				Equity securities			Loans held-for-investment		MSRs		Derivative assets
(Dollars in thousands)	Municipal			Equity securities			Loans held-for-investment		MSRs		Derivative assets
Balance at January 1, 2016	$	68,613		$	25,199		$	—	$	9,092	$	7,021
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			437		10,011		(4,730		)
Other comprehensive income	(949		)	(12		)	—		—		—
Purchases	31,031			—			—		—		—
Issuances	—			—			—		—		—
Sales	—			(25,187		)	—		—		—
Settlements	(19,069		)	—			—		—		—
Net transfers into/(out of) Level 3 ⁽²⁾	—			—			21,700		—		—
Balance at December 31, 2016	$	79,626		$	—		$	22,137	$	19,103	$	2,291


(1)	Changes in the balance of MSRs and derivative assets as presented in the table above are recorded as a component of mortgage banking revenue in non-interest income.


(2)	Transfers into Level 3 relate to loans reclassified from the held-for-sale portfolio at the time of market conditions or other developments changing management’s intent with respect to the disposition of those loans.

The changes in Level 3 assets measured at fair value on a recurring basis during the year ended December 31, 2015 are summarized as follows:



(Dollars in thousands)	Municipal			Equity securities		Loans held-for-investment		MSRs		Derivative assets
Balance at January 1, 2015	$	58,953		$	23,711	$	—	$	8,435	$	9,153
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—		—		657		(2,132		)
Other comprehensive income	(1,198		)	1,488		—		—		—
Purchases	33,998			—		—		—		—
Issuances	—			—		—		—		—
Sales	—			—		—		—		—
Settlements	(23,140		)	—		—		—		—
Net transfers into/(out of) of Level 3	—			—		—		—		—
Balance at December 31, 2015	$	68,613		$	25,199	$	—	$	9,092	$	7,021


(1)	Changes in the balance of MSRs and derivative assets as presented in the table above 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, 2016.



	December 31, 2016								Twelve Months Ended December 31, 2016 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans-collateral based	$	64,184	$	—	$	—	$	64,184	$	14,813
Other real estate owned, including covered other real estate owned ⁽¹⁾	45,584		—		—		45,584		5,774
Total	$	109,768	$	—	$	—	$	109,768	$	20,587


(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, 2016 were as follows:



(Dollars in thousands)
(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	$	79,626	Bond pricing	Equivalent rating	BBB-AA+		N/A			Increase
Loans held-for-investment	22,137		Discounted cash flows	Credit spread	1%-3%		3.03%			Decrease
				Constant prepayment rate (CPR)	9.13%		9.13%			Decrease
MSRs	19,103		Discounted cash flows	Discount rate	4%-8%		6.27%			Decrease
				Constant prepayment rate (CPR)	5%-80%		9.25%			Decrease
				Cost of servicing	$	65.00	$	65.00		Decrease
				Cost of servicing - delinquent	$	240.00	$	240.00		Decrease
Derivatives	2,291		Discounted cash flows	Pull-through rate	35%-100%		85.5		%	Increase
Measured at fair value on a non-recurring basis:
Impaired loans—collateral based	64,184		Appraisal value	Appraisal adjustment - cost of sale	10%		10.00%			Decrease
Other real estate owned, including covered other real-estate owned	45,584		Appraisal value	Appraisal adjustment - cost of sale	10%		10.00%			Decrease

Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments

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



	December 31, 2016				December 31, 2015
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	270,045	$	270,045	$	275,795	$	275,795
Interest bearing deposits with banks	980,457		980,457		607,782		607,782
Available-for-sale securities	1,724,667		1,724,667		1,716,388		1,716,388
Held-to-maturity securities	635,705		607,602		884,826		878,111
Trading account securities	1,989		1,989		448		448
FHLB and FRB stock, at cost	133,494		133,494		101,581		101,581
Brokerage customer receivables	25,181		25,181		27,631		27,631
Mortgage loans held-for-sale, at fair value	418,374		418,374		388,038		388,038
Loans held-for-investment, at fair value	22,137		22,137		11,361		11,361
Loans held-for-investment, at amortized cost	19,739,180		20,755,320		17,255,429		18,095,468
MSRs	19,103		19,103		9,092		9,092
Nonqualified deferred compensation assets	9,228		9,228		8,517		8,517
Derivative assets	56,394		56,394		51,298		51,298
Accrued interest receivable and other	204,513		204,513		193,092		193,092
Total financial assets	$	24,240,467	$	25,228,504	$	21,531,278	$	22,364,602
Financial Liabilities
Non-maturity deposits	$	17,383,729	$	17,383,729	$	14,634,957	$	14,634,957
Deposits with stated maturities	4,274,903		4,263,576		4,004,677		3,998,180
FHLB advances	153,831		157,051		853,431		863,437
Other borrowings	262,486		262,486		265,785		265,785
Subordinated notes	138,971		135,268		138,861		140,302
Junior subordinated debentures	253,566		254,384		268,566		268,046
Derivative liabilities	39,839		39,839		45,019		45,019
FDIC indemnification liability	16,701		16,701		6,100		6,100
Accrued interest payable	6,421		6,421		7,394		7,394
Total financial liabilities	$	22,530,447	$	22,519,455	$	20,224,790	$	20,229,220