Fair Value Measurement and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Schedule of assets (liabilities) measured at fair value on a recurring basis

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016:




	Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of September 30, 2017
($ in thousands)	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale investment securities:
U.S. Treasury securities	$	526,332		$	526,332	$	—		$	—
U.S. government agency and U.S. government sponsored enterprise debt securities	189,185			—		189,185			—
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities	315,172			—		315,172			—
Residential mortgage-backed securities	1,150,934			—		1,150,934			—
Municipal securities	117,242			—		117,242			—
Non-agency residential mortgage-backed securities:
Investment grade	9,694			—		9,694			—
Corporate debt securities:
Investment grade	2,327			—		2,327			—
Non-investment grade	9,615			—		9,615			—
Foreign bonds:
Investment grade	489,140			—		489,140			—
Other securities	147,135			31,418		102			115,615		⁽¹⁾
Total available-for-sale investment securities	$	2,956,776		$	557,750	$	2,283,411		$	115,615

Derivative assets:
Interest rate swaps and options	$	64,822		$	—	$	64,822		$	—
Foreign exchange contracts	14,187			—		14,187			—
Credit risk participation agreements (“RPAs”)	2			—		2			—
Warrants	1,455			—		856			599
Total derivative assets	$	80,466		$	—	$	79,867		$	599

Derivative liabilities:
Interest rate swaps on certificates of deposit	$	(6,648	)	$	—	$	(6,648	)	$	—
Interest rate swaps and options	(64,212		)	—		(64,212		)	—
Foreign exchange contracts	(20,054		)	—		(20,054		)	—
RPAs	(1		)	—		(1		)	—
Total derivative liabilities	$	(90,915	)	$	—	$	(90,915	)	$	—


(1)	During the third quarter of 2017, the Company transferred a non-agency commercial mortgage-backed security with a net carrying amount of $115.6 million from held- to-maturity to available-for-sale.




	Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of December 31, 2016
($ in thousands)	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale investment securities:
U.S. Treasury securities	$	720,479		$	720,479	$	—		$	—
U.S. government agency and U.S. government sponsored enterprise debt securities	274,866			—		274,866			—
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities	266,799			—		266,799			—
Residential mortgage-backed securities	1,258,747			—		1,258,747			—
Municipal securities	147,654			—		147,654			—
Non-agency residential mortgage-backed securities:
Investment grade	11,477			—		11,477			—
Corporate debt securities:
Investment grade	222,377			—		222,377			—
Non-investment grade	9,173			—		9,173			—
Foreign bonds:
Investment grade	383,894			—		383,894			—
Other securities	40,329			30,991		9,338			—
Total available-for-sale investment securities	$	3,335,795		$	751,470	$	2,584,325		$	—

Derivative assets:
Foreign currency forward contracts	$	4,325		$	—	$	4,325		$	—
Interest rate swaps and options	67,578			—		67,578			—
Foreign exchange contracts	11,874			—		11,874			—
RPAs	3			—		3			—
Total derivative assets	$	83,780		$	—	$	83,780		$	—

Derivative liabilities:
Interest rate swaps on certificates of deposit	$	(5,976	)	$	—	$	(5,976	)	$	—
Interest rate swaps and options	(65,131		)	—		(65,131		)	—
Foreign exchange contracts	(11,213		)	—		(11,213		)	—
RPAs	(3		)	—		(3		)	—
Total derivative liabilities	$	(82,323	)	$	—	$	(82,323	)	$	—

Reconciliation of the beginning and ending balances for other securities and warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

The following table presents a reconciliation of the beginning and ending balances for other securities and warrants measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2017:



	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
($ in thousands)	Other securities		Warrants		Other securities		Warrants
Beginning balance	$	—	$	—	$	—	$	—
Issuances	—		599		—		599
Transfer from held-to-maturity investment security to available-for-sale investment security	115,615		—		115,615		—
Ending balance	$	115,615	$	599	$	115,615	$	599

Schedule of assets measured at fair value on a nonrecurring basis

The following tables present the carrying amounts of assets included on the Consolidated Balance Sheets that had fair value changes measured on a nonrecurring basis as of September 30, 2017 and December 31, 2016:




	Assets Measured at Fair Value on a Nonrecurring Basis as of September 30, 2017
($ in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non-PCI impaired loans:
Commercial real estate (“CRE”)	$	9,172	$	—	$	—	$	9,172
Commercial and industrial (“C&I”)	32,053		—		—		32,053
Residential	6,079		—		—		6,079
Consumer	633		—		—		633
Total non-PCI impaired loans	$	47,937	$	—	$	—	$	47,937
OREO	$	1,789	$	—	$	—	$	1,789




	Assets Measured at Fair Value on a Nonrecurring Basis as of December 31, 2016
($ in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non-PCI impaired loans:
CRE	$	14,908	$	—	$	—	$	14,908
C&I	52,172		—		—		52,172
Residential	2,464		—		—		2,464
Consumer	610		—		—		610
Total non-PCI impaired loans	$	70,154	$	—	$	—	$	70,154
OREO	$	345	$	—	$	—	$	345
Loans held-for-sale	$	22,703	$	—	$	22,703	$	—

Schedule of fair value adjustments of assets measured on a nonrecurring basis recognized

The following table presents the fair value adjustments of assets measured on a nonrecurring basis recognized during the three and nine months ended and which were included on the Consolidated Balance Sheets as of September 30, 2017 and 2016:




	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2017			2016			2017			2016
Non-PCI impaired loans:
CRE	$	6		$	(282	)	$	(66	)	$	1,741
C&I	(16,954		)	77			(17,648		)	(5,497		)
Residential	(3		)	(14		)	49			(14		)
Consumer	—			—			25			17
Total non-PCI impaired loans	$	(16,951	)	$	(219	)	$	(17,640	)	$	(3,753	)
OREO	$	(285	)	$	(41	)	$	(286	)	$	(994	)
Loans held-for-sale	$	—		$	—		$	—		$	(2,351	)

Schedule of the carrying and fair values per the fair value hierarchy of certain financial instruments

The following tables present the carrying and fair values per the fair value hierarchy of certain financial instruments, excluding those measured at fair value on a recurring basis, as of September 30, 2017 and December 31, 2016:




($ in thousands)	September 30, 2017
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	1,736,749	$	1,736,749	$	—	$	—	$	1,736,749
Interest-bearing deposits with banks	$	404,946	$	—	$	404,946	$	—	$	404,946
Resale agreements ⁽¹⁾	$	1,250,000	$	—	$	1,236,413	$	—	$	1,236,413
Restricted equity securities	$	73,322	$	—	$	73,322	$	—	$	73,322
Loans held-for-sale	$	178	$	—	$	178	$	—	$	178
Loans held-for-investment, net	$	28,239,431	$	—	$	—	$	27,635,961	$	27,635,961
Accrued interest receivable	$	111,710	$	—	$	111,710	$	—	$	111,710
Financial liabilities:
Customer deposits:
Demand, checking, savings and money market deposits	$	25,517,121	$	—	$	25,517,121	$	—	$	25,517,121
Time deposits	$	5,794,541	$	—	$	5,787,188	$	—	$	5,787,188
Short-term borrowings	$	24,813	$	—	$	24,813	$	—	$	24,813
FHLB advances	$	323,323	$	—	$	336,741	$	—	$	336,741
Repurchase agreements ⁽¹⁾	$	50,000	$	—	$	105,269	$	—	$	105,269
Long-term debt	$	176,513	$	—	$	139,649	$	—	$	139,649
Accrued interest payable	$	11,017	$	—	$	11,017	$	—	$	11,017


(1)	Resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. As of September 30, 2017, $400.0 million out of $450.0 million of repurchase agreements were eligible for netting against resale agreements.




($ in thousands)	December 31, 2016
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	1,878,503	$	1,878,503	$	—	$	—	$	1,878,503
Interest-bearing deposits with banks	$	323,148	$	—	$	323,148	$	—	$	323,148
Resale agreements ⁽¹⁾	$	2,000,000	$	—	$	1,980,457	$	—	$	1,980,457
Held-to-maturity investment security	$	143,971	$	—	$	—	$	144,593	$	144,593
Restricted equity securities	$	72,775	$	—	$	72,775	$	—	$	72,775
Loans held-for-sale	$	23,076	$	—	$	23,076	$	—	$	23,076
Loans held-for-investment, net	$	25,242,619	$	—	$	—	$	24,915,143	$	24,915,143
Accrued interest receivable	$	100,524	$	—	$	100,524	$	—	$	100,524
Financial liabilities:
Customer deposits:
Demand, checking, savings and money market deposits	$	24,275,714	$	—	$	24,275,714	$	—	$	24,275,714
Time deposits	$	5,615,269	$	—	$	5,611,746	$	—	$	5,611,746
Short-term borrowings	$	60,050	$	—	$	60,050	$	—	$	60,050
FHLB advances	$	321,643	$	—	$	334,859	$	—	$	334,859
Repurchase agreements ⁽¹⁾	$	350,000	$	—	$	411,368	$	—	$	411,368
Long-term debt	$	186,327	$	—	$	186,670	$	—	$	186,670
Accrued interest payable	$	9,440	$	—	$	9,440	$	—	$	9,440


(1)	Resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. As of December 31, 2016, $100.0 million out of $450.0 million of repurchase agreements were eligible for netting against resale agreements.

Fair Value, Measurements, Recurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Schedule of quantitative information about significant unobservable inputs used in the valuation of assets classified as Level 3

The following table presents quantitative information about significant unobservable inputs used in the valuation of assets measured on a recurring basis classified as Level 3 as of September 30, 2017. Significant unobservable inputs presented in the table below are those that the Company considers significant to the fair value of the Level 3 assets or liabilities. The Company considers unobservable inputs to be significant if, by their exclusion, the fair value of the Level 3 assets or liabilities would be impacted by a predetermined percentage change.




($ in thousands)	Fair Value Measurements (Level 3)		Valuation Technique	Unobservable Input(s)	Weighted Average
Available-for-sale investment securities:
Other securities	$	115,615	Discounted cash flows	Discount margin	191 Basis points

Derivative assets:
Warrants	$	599	Black-Scholes option pricing model	Volatility	44%
				Liquidity discount	47%

Fair Value, Measurements, Nonrecurring

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis

Schedule of quantitative information about significant unobservable inputs used in the valuation of assets classified as Level 3

The following table presents the quantitative information about the significant unobservable inputs used in the valuation of assets measured on a nonrecurring basis classified as Level 3 as of September 30, 2017 and December 31, 2016:




($ in thousands)	Fair Value Measurements (Level 3)		Valuation Technique(s)	Unobservable Input(s)	Range of Input(s)	Weighted Average
September 30, 2017
Non-PCI impaired loans	$	30,563	Discounted cash flows	Discount	0% — 82%	19%
	$	17,374	Market comparables	Discount ⁽¹⁾	0% — 100%	40%
OREO	$	1,789	Appraisal	Selling cost	8%	8%
December 31, 2016
Non-PCI impaired loans	$	31,835	Discounted cash flows	Discount	0% — 62%	7%
	$	38,319	Market comparables	Discount ⁽¹⁾	0% — 100%	18%
OREO	$	345	Appraisal	Selling cost	8%	8%


(1)	Discount is adjusted for factors such as liquidation cost of collateral and selling cost.