Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

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, 2020
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	304,971	$	304,971	$	—	$	—
U.S. Government agencies	84,513		—		82,547		1,966
Municipal	146,910		—		37,034		109,876
Corporate notes	91,405		—		91,405		—
Mortgage-backed	2,428,040		—		2,428,040		—
Trading account securities	671		—		671		—
Equity securities with readily determinable fair value	90,862		82,796		8,066		—
Mortgage loans held-for-sale	1,272,090		—		1,272,090		—
Loans held-for-investment	55,134		—		44,854		10,280
MSRs	92,081		—		—		92,081
Nonqualified deferred compensations assets	15,398		—		15,398		—
Derivative assets	278,423		—		230,332		48,091
Total	$	4,860,498	$	387,767	$	4,210,437	$	262,294
Derivative liabilities	$	288,465	$	—	$	288,465	$	—

	December 31, 2019
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	121,088	$	121,088	$	—	$	—
U.S. Government agencies	365,442		—		362,796		2,646
Municipal	145,318		—		33,368		111,950
Corporate notes	94,841		—		94,841		—
Mortgage-backed	2,379,525		—		2,379,525		—
Trading account securities	1,068		—		1,068		—
Equity securities with readily determinable fair value	50,840		42,774		8,066		—
Mortgage loans held-for-sale	377,313		—		377,313		—
Loans held-for-investment	132,718		—		123,098		9,620
MSRs	85,638		—		—		85,638
Nonqualified deferred compensations assets	14,213		—		14,213		—
Derivative assets	103,644		—		101,013		2,631
Total	$	3,871,648	$	163,862	$	3,495,301	$	212,485
Derivative liabilities	$	129,204	$	—	$	129,204	$	—

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 years ended December 31, 2020 and 2019 are summarized as follows:


			U.S. Government Agencies		Loans held-for-investment		MSRs		Derivative assets
(Dollars in thousands)	Municipal
Balance at January 1, 2020	$	111,950	$	2,646	$	9,620	$	85,638	$	2,631
Total net gains (losses) included in:
Net income (1)	—		—		184		6,443		45,460
Other comprehensive income	(1,302)		(50)		—		—		—
Purchases (2)	39,365		—		—		—		—
Issuances	—		—		—		—		—
Sales	—		—		—		—		—
Settlements	(40,137)		(630)		(21,025)		—		—
Net transfers into/(out of) Level 3	—		—		21,501		—		—
Balance at December 31, 2020	$	109,876	$	1,966	$	10,280	$	92,081	$	48,091


(Dollars in thousands)	Municipal		U.S. Government Agencies		Loans held-for-investment		MSRs		Derivative assets
Balance at January 1, 2019	$	108,926	$	3,150	$	11,347	$	75,183	$	2,457
Total net gains included in:
Net income (1)	—		—		827		10,047		174
Other comprehensive income	3,147		126		—		—		—
Purchases (2)	38,686		—		—		408		—
Issuances	—		—		—		—		—
Sales	—		—		—		—		—
Settlements	(38,809)		(630)		(5,447)		—		—
Net transfers into/(out of) Level 3	—		—		2,893		—		—
Balance at December 31, 2019	$	111,950	$	2,646	$	9,620	$	85,638	$	2,631

(1)Changes in the balance of MSRs and derivative assets related to fair value adjustments are recorded as a component 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 business combination in 2019. See Note 7 - 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 December 31, 2020.


	December 31, 2020								Year Ended December 31, 2020 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Individually assessed loans - foreclosure probable and collateral-dependent	$	100,154	$	—	$	—	$	100,154	$	33,369
Other real estate owned (1)	16,558		—		—		16,558		1,076
Total	$	116,712	$	—	$	—	$	116,712	$	34,445

(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, 2020 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

109,876

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

U.S. Government agencies

1,966

Bond pricing

Equivalent rating

AAA

Increase

Loans held-for-investment

10,280

Discounted cash flows

Discount rate

2.50%

Decrease

Credit discount

0%-3%

0.19%

Decrease

Constant prepayment rate (CPR)

17.88%

Decrease

MSRs

92,081

Discounted cash flows

Discount rate

4%-19%

9.93%

Decrease

Constant prepayment rate (CPR)

0%-84%

17.88%

Decrease

Cost of servicing

$70-$200

Decrease

Cost of servicing - delinquent

$200-1,000

309

Decrease

Derivatives

48,091

Discounted cash flows

Pull-through rate

0%-100%

76.13

Increase

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

100,154

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Other real estate owned

16,558

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, 2020				December 31, 2019
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	322,474	$	322,474	$	286,476	$	286,476
Interest-bearing deposits with banks	4,802,527		4,802,527		2,164,560		2,164,560
Available-for-sale securities	3,055,839		3,055,839		3,106,214		3,106,214
Held-to-maturity securities	579,138		593,767		1,134,400		1,138,396
Trading account securities	671		671		1,068		1,068
Equity securities with readily determinable fair value	90,862		90,862		50,840		50,840
FHLB and FRB stock, at cost	135,588		135,588		100,739		100,739
Brokerage customer receivables	17,436		17,436		16,573		16,573
Mortgage loans held-for-sale, at fair value	1,272,090		1,272,090		377,313		377,313
Loans held-for-investment, at fair value	55,134		55,134		132,718		132,718
Loans held-for-investment, at amortized cost	32,023,939		31,871,683		26,667,572		26,659,903

Nonqualified deferred compensation assets	15,398		15,398		14,213		14,213
Derivative assets	278,423		278,423		103,644		103,644
Accrued interest receivable and other	272,339		272,339		303,090		303,090
Total financial assets	$	42,921,858	$	42,784,231	$	34,459,420	$	34,455,747
Financial Liabilities:
Non-maturity deposits	$	32,116,023	$	32,116,023	$	24,483,867	$	24,483,867
Deposits with stated maturities	4,976,628		4,969,849		5,623,271		5,635,475
FHLB advances	1,228,429		1,172,315		674,870		715,129
Other borrowings	518,928		518,928		418,174		418,174
Subordinated notes	436,506		473,093		436,095		458,796
Junior subordinated debentures	253,566		204,713		253,566		243,158
Derivative liabilities	288,465		288,465		129,204		129,204

Accrued interest payable	15,645		15,645		19,940		19,940
Total financial liabilities	$	39,834,190	$	39,759,031	$	32,038,987	$	32,103,743