Fair Values of Assets and Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

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:



	March 31, 2019
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	126,718	$	126,718	$	—	$	—
U.S. Government agencies	130,687		—		127,694		2,993
Municipal	136,353		—		32,519		103,834
Corporate notes	93,333		—		93,333		—
Mortgage-backed	1,698,691		—		1,698,691		—
Trading account securities	559		—		559		—
Equity securities with readily determinable fair value	47,653		39,587		8,066		—
Mortgage loans held-for-sale	248,557		—		248,557		—
Loans held-for-investment	101,071		—		89,822		11,249
MSRs	71,022		—		—		71,022
Nonqualified deferred compensation assets	13,230		—		13,230		—
Derivative assets	75,504		—		72,415		3,089
Total	$	2,743,378	$	166,305	$	2,384,886	$	192,187
Derivative liabilities	$	73,868	$	—	$	73,868	$	—



	December 31, 2018
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	126,404	$	126,404	$	—	$	—
U.S. Government agencies	140,307		—		137,157		3,150
Municipal	138,490		—		29,564		108,926
Corporate notes	91,045		—		91,045		—
Mortgage-backed	1,629,835		—		1,629,835		—
Trading account securities	1,692		—		1,692		—
Equity securities with readily determinable fair value	34,717		—		34,717		—
Mortgage loans held-for-sale	264,070		—		264,070		—
Loans held-for-investment	93,857		—		82,510		11,347
MSRs	75,183		—		—		75,183
Nonqualified deferred compensation assets	11,282		—		11,282		—
Derivative assets	73,172		—		70,715		2,457
Total	$	2,680,054	$	126,404	$	2,352,587	$	201,063
Derivative liabilities	$	68,088	$	—	$	68,088	$	—



	March 31, 2018
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	24,727	$	—	$	24,727	$	—
U.S. Government agencies	149,336		—		145,720		3,616
Municipal	121,758		—		37,166		84,592
Corporate notes	99,714		—		99,714		—
Mortgage-backed	1,500,153		—		1,500,153		—
Trading account securities	1,682		—		1,682		—
Equity securities with readily determinable fair value	37,832		—		37,832		—
Mortgage loans held-for-sale	411,505		—		411,505		—
Loans held-for-investment	67,962		—		41,342		26,620
MSRs	54,572		—		—		54,572
Nonqualified deferred compensation assets	11,724		—		11,724		—
Derivative assets	78,960		—		74,355		4,605
Total	$	2,559,925	$	—	$	2,385,920	$	174,005
Derivative liabilities	$	55,699	$	—	$	55,699	$	—

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 three months ended March 31, 2019 and 2018 are summarized as follows:



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights			Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights			Derivative Assets
Balance at January 1, 2019	$	108,926		$	3,150		$	11,347		$	75,183		$	2,457
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			167			(4,161		)	632
Other comprehensive loss	1,537			1			—			—			—
Purchases	969			—			—			—			—
Issuances	—			—			—			—			—
Sales	—			—			—			—			—
Settlements	(7,598		)	(158		)	(465		)	—			—
Net transfers into/(out of) Level 3	—			—			200			—			—
Balance at March 31, 2019	$	103,834		$	2,993		$	11,249		$	71,022		$	3,089


(1)	Changes in the balance of MSRs and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
Balance at January 1, 2018	$	77,181		$	3,779		$	33,717		$	33,676	$	2,157
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			(1,128		)	7,090		2,448
Other comprehensive income (loss)	(2,190		)	(163		)	—			—		—
Purchases ⁽²⁾	12,270			—			—			13,806		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(2,669		)	—			(6,255		)	—		—
Net transfers into/(out of) Level 3	—			—			286			—		—
Balance at March 31, 2018	$	84,592		$	3,616		$	26,620		$	54,572	$	4,605


(1)	Changes in the balance of MSRs and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.


(2)	Purchased as a part of the Veterans First business combination. See Note 3 - Business Combinations and Asset Acquisitions for further discussion.

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 March 31, 2019.



	March 31, 2019								Three Months Ended March 31, 2019 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans—collateral based	$	101,331	$	—	$	—	$	101,331	$	4,378
Other real estate owned ⁽¹⁾	21,520		—		—		21,520		574
Total	$	122,851	$	—	$	—	$	122,851	$	4,952


(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 Non-Recurring

The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at March 31, 2019 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

103,834

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

U.S. Government agencies

2,993

Bond pricing

Equivalent rating

AAA

Increase

Loans held-for-investment

11,249

Discounted cash flows

Discount rate

3%-4%

3.94%

Decrease

Credit discount

0%-7%

1.24%

Decrease

Constant prepayment rate (CPR)

14.01%

Decrease

MSRs

71,022

Discounted cash flows

Discount rate

7%-17%

9.96%

Decrease

Constant prepayment rate (CPR)

0%-93%

14.01%

Decrease

Cost of servicing

$70-$200

$77

Decrease

Cost of servicing - delinquent

$200-$1,000

$407

Decrease

Derivatives

3,089

Discounted cash flows

Pull-through rate

0%-100%

78.82%

Increase

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

101,331

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Other real estate owned

21,520

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:



	At March 31, 2019				At December 31, 2018				At March 31, 2018
	Carrying		Fair		Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Value		Value		Value		Value		Value		Value
Financial Assets:
Cash and cash equivalents	$	270,823	$	270,823	$	392,200	$	392,200	$	231,464	$	231,464
Interest bearing deposits with banks	1,609,852		1,609,852		1,099,594		1,099,594		980,380		980,380
Available-for-sale securities	2,185,782		2,185,782		2,126,081		2,126,081		1,895,688		1,895,688
Held-to-maturity securities	1,051,542		1,041,695		1,067,439		1,036,096		892,937		862,527
Trading account securities	559		559		1,692		1,692		1,682		1,682
Equity securities with readily determinable fair value	47,653		47,653		34,717		34,717		37,832		37,832
FHLB and FRB stock, at cost	89,013		89,013		91,354		91,354		104,956		104,956
Brokerage customer receivables	14,219		14,219		12,609		12,609		24,531		24,531
Mortgage loans held-for-sale, at fair value	248,557		248,557		264,070		264,070		411,505		411,505
Loans held-for-investment, at fair value	101,071		101,071		93,857		93,857		67,962		67,962
Loans held-for-investment, at amortized cost	24,113,558		24,123,328		23,726,834		23,780,739		21,994,172		22,234,795
Nonqualified deferred compensation assets	13,230		13,230		11,282		11,282		11,724		11,724
Derivative assets	75,504		75,504		73,172		73,172		78,960		78,960
Accrued interest receivable and other	275,464		275,464		260,281		260,281		236,131		236,131
Total financial assets	$	30,096,827	$	30,096,750	$	29,255,182	$	29,277,744	$	26,969,924	$	27,180,137
Financial Liabilities
Non-maturity deposits	$	21,454,035	$	21,454,035	$	20,833,837	$	20,833,837	$	18,941,201	$	18,941,201
Deposits with stated maturities	5,350,707		5,377,388		5,260,841		5,283,063		4,338,126		4,344,584
FHLB advances	576,353		604,976		426,326		429,830		915,000		916,513
Other borrowings	372,194		372,194		393,855		393,855		247,092		247,092
Subordinated notes	139,235		144,019		139,210		138,345		139,111		140,889
Junior subordinated debentures	253,566		252,451		253,566		263,846		253,566		268,873
Derivative liabilities	73,868		73,868		68,088		68,088		55,699		55,699
Accrued interest payable	19,569		19,569		16,025		16,025		11,442		11,442
Total financial liabilities	$	28,239,527	$	28,298,500	$	27,391,748	$	27,426,889	$	24,901,237	$	24,926,293