Fair Values of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 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:



	September 30, 2019
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	221,670	$	221,670	$	—	$	—
U.S. Government agencies	225,459		—		222,648		2,811
Municipal	146,104		—		33,046		113,058
Corporate notes	94,004		—		94,004		—
Mortgage-backed	1,582,822		—		1,582,822		—
Trading account securities	3,204		—		3,204		—
Equity securities with readily determinable fair value	46,086		38,020		8,066		—
Mortgage loans held-for-sale	464,727		—		464,727		—
Loans held-for-investment	116,022		—		106,023		9,999
MSRs	75,585		—		—		75,585
Nonqualified deferred compensation assets	13,750		—		13,750		—
Derivative assets	138,286		—		135,307		2,979
Total	$	3,127,719	$	259,690	$	2,663,597	$	204,432
Derivative liabilities	$	171,009	$	—	$	171,009	$	—



	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	$	—



	September 30, 2018
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	124,761	$	—	$	124,761	$	—
U.S. Government agencies	111,020		—		107,705		3,315
Municipal	133,373		—		35,787		97,586
Corporate notes	93,453		—		93,453		—
Mortgage-backed	1,702,378		—		1,702,378		—
Trading account securities	688		—		688		—
Equity securities with readily determinable fair value	36,414		—		36,414		—
Mortgage loans held-for-sale	338,111		—		338,111		—
Loans held-for-investment	77,883		—		64,427		13,456
MSRs	74,530		—		—		74,530
Nonqualified deferred compensation assets	12,503		—		12,503		—
Derivative assets	96,153		—		93,661		2,492
Total	$	2,801,267	$	—	$	2,609,888	$	191,379
Derivative liabilities	$	71,381	$	—	$	71,381	$	—

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 and nine months ended September 30, 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 July 1, 2019	$	110,296		$	2,977		$	10,481		$	72,850	$	3,596
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			86			2,735		(617		)
Other comprehensive income (loss)	(1,722		)	(9		)	—			—		—
Purchases	5,668			—			—			—		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(1,184		)	(157		)	(1,203		)	—		—
Net transfers into/(out of) Level 3	—			—			635			—		—
Balance at September 30, 2019	$	113,058		$	2,811		$	9,999		$	75,585	$	2,979


(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, 2019	$	108,926		$	3,150		$	11,347		$	75,183		$	2,457
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			371			(5		)	522
Other comprehensive income (loss)	6,334			134			—			—			—
Purchases⁽²⁾	7,192			—			—			407			—
Issuances	—			—			—			—			—
Sales	—			—			—			—			—
Settlements	(9,394		)	(473		)	(2,554		)	—			—
Net transfers into/(out of) Level 3	—			—			835			—			—
Balance at September 30, 2019	$	113,058		$	2,811		$	9,999		$	75,585		$	2,979



				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 July 1, 2018	$	96,566		$	3,482		$	13,764		$	63,194	$	3,819
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			(32		)	11,336		(1,327		)
Other comprehensive income (loss)	(2,573		)	(9		)	—			—		—
Purchases	4,830			—			—			—		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(1,237		)	(158		)	(1,520		)	—		—
Net transfers into/(out of) Level 3	—			—			1,244			—		—
Balance at September 30, 2018	$	97,586		$	3,315		$	13,456		$	74,530	$	2,492



				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⁾	—			—			(1,420		)	27,048		335
Other comprehensive income (loss)	(5,658		)	(306		)	—			—		—
Purchases ⁽²⁾	31,846			—			—			13,806		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(5,783		)	(158		)	(24,177		)	—		—
Net transfers into/(out of) Level 3	—			—			5,336			—		—
Balance at September 30, 2018	$	97,586		$	3,315		$	13,456		$	74,530	$	2,492


(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)	Mortgage servicing rights purchased as a part of the ROC and Veterans First business combinations in 2019 and 2018, respectively. 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 September 30, 2019.



	September 30, 2019								Three Months Ended September 30, 2019 Fair Value Losses Recognized, net		Nine Months Ended September 30, 2019 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans—collateral based	$	91,103	$	—	$	—	$	91,103	$	9,159	$	32,139
Other real estate owned ⁽¹⁾	17,482		—		—		17,482		862		2,468
Total	$	108,585	$	—	$	—	$	108,585	$	10,021	$	34,607

(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 September 30, 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

113,058

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

U.S. Government agencies

2,811

Bond pricing

Equivalent rating

AAA

Increase

Loans held-for-investment

9,999

Discounted cash flows

Discount rate

3%-4%

3.36%

Decrease

Credit discount

0%-7%

1.35%

Decrease

Constant prepayment rate (CPR)

15.03%

Decrease

MSRs

75,585

Discounted cash flows

Discount rate

9%-19%

9.96%

Decrease

Constant prepayment rate (CPR)

0%-93%

15.03%

Decrease

Cost of servicing

$70-$200

$77

Decrease

Cost of servicing - delinquent

$200-$1,000

$399

Decrease

Derivatives

2,979

Discounted cash flows

Pull-through rate

0%-100%

75%

Increase

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

91,103

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Other real estate owned

17,482

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 September 30, 2019				At December 31, 2018				At September 30, 2018
	Carrying		Fair		Carrying		Fair		Carrying		Fair
(In thousands)	Value		Value		Value		Value		Value		Value
Financial Assets:
Cash and cash equivalents	$	448,814	$	448,814	$	392,200	$	392,200	$	279,993	$	279,993
Interest bearing deposits with banks	2,260,806		2,260,806		1,099,594		1,099,594		1,137,044		1,137,044
Available-for-sale securities	2,270,059		2,270,059		2,126,081		2,126,081		2,164,985		2,164,985
Held-to-maturity securities	1,095,802		1,104,903		1,067,439		1,036,096		966,438		911,597
Trading account securities	3,204		3,204		1,692		1,692		688		688
Equity securities with readily determinable fair value	46,086		46,086		34,717		34,717		36,414		36,414
FHLB and FRB stock, at cost	92,714		92,714		91,354		91,354		99,998		99,998
Brokerage customer receivables	14,943		14,943		12,609		12,609		15,649		15,649
Mortgage loans held-for-sale, at fair value	464,727		464,727		264,070		264,070		338,111		338,111
Loans held-for-investment, at fair value	116,022		116,022		93,857		93,857		77,883		77,883
Loans held-for-investment, at amortized cost	25,594,149		25,472,310		23,726,834		23,780,739		23,046,068		23,261,545
Nonqualified deferred compensation assets	13,750		13,750		11,282		11,282		12,503		12,503
Derivative assets	138,286		138,286		73,172		73,172		96,153		96,153
Accrued interest receivable and other	272,072		272,072		260,281		260,281		254,879		254,879
Total financial assets	$	32,831,434	$	32,718,696	$	29,255,182	$	29,277,744	$	28,526,806	$	28,687,442
Financial Liabilities
Non-maturity deposits	$	23,091,143	$	23,091,143	$	20,833,837	$	20,833,837	$	19,456,677	$	19,456,677
Deposits with stated maturities	5,619,236		5,635,597		5,260,841		5,283,063		5,460,038		5,475,048
FHLB advances	574,847		620,136		426,326		429,830		615,000		615,342
Other borrowings	410,488		410,488		393,855		393,855		373,571		373,571
Subordinated notes	435,979		451,947		139,210		138,345		139,172		146,838
Junior subordinated debentures	253,566		254,426		253,566		263,846		253,566		258,488
Derivative liabilities	171,009		171,009		68,088		68,088		71,381		71,381
Accrued interest payable	22,899		22,899		16,025		16,025		15,374		15,374
Total financial liabilities	$	30,579,167	$	30,657,645	$	27,391,748	$	27,426,889	$	26,384,779	$	26,412,719