Fair Value Disclosures (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of assets and liabilities measured at fair value

Assets and liabilities measured at fair value are as follows:



	Fair Value Measurements Using
(in thousands)	Level 1		Level 2		Level 3
December 31, 2019
Available-for-sale debt securities:(1)
Residential mortgage-backed securities	$	—	$	5,266	$	—
Tax-exempt asset-backed securities	—		—		197,027
CRT Securities	—		—		11,964
Equity securities(1)(2)	18,484		7,130		—
Loans held for sale(3)	—		2,564,281		7,043
Loans held for investment(4)(6)	—		—		109,585
Derivative assets(7)	—		48,684		—
Derivative liabilities(7)	—		51,310		—
Non-qualified deferred compensation plan liabilities(8)	18,484		—		—

December 31, 2018
Available-for-sale debt securities:(1)
Residential mortgage-backed securities	$	—	$	7,242	$	—
Tax-exempt asset-backed securities	—		—		95,804
Equity securities(1)(2)	10,262		6,908		—
Loans held for sale(3)	—		1,952,760		16,415
Loans held for investment(4)(6)	—		—		29,885
OREO(5)(6)	—		—		79
Derivative assets(7)	—		21,806		—
Derivative liabilities(7)	—		41,375		—
Non-qualified deferred compensation plan liabilities(8)	10,148		—		—


(1)	Securities are measured at fair value on a recurring basis, generally monthly, except for tax-exempt asset-backed securities and CRT securities which are measured quarterly.


(2)	Equity securities consist of Community Reinvestment Act funds and investments related to our non-qualified deferred compensation plan.


(3)	Loans held for sale purchased through our MCA program are measured at fair value on a recurring basis, generally monthly.


(4)	Includes impaired loans that have been measured for impairment at the fair value of the loan’s collateral.


(5)	OREO is transferred from loans to OREO at fair value less selling costs.


(6)	Loans held for investment and OREO are measured on a nonrecurring basis, generally annually or more often as warranted by market and economic conditions.


(7)	Derivative assets and liabilities are measured at fair value on a recurring basis, generally quarterly.

(8)

Non-qualified deferred compensation plan liabilities represent the fair value of the obligation to the employee, which generally correspond to the fair value of the invested assets, and are measured at fair value on a recurring basis, generally monthly.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents a reconciliation of the level 3 fair value category measured at fair value on a recurring basis:



								Net Realized/Unrealized Gains (Losses)
(in thousands)	Balance at Beginning of Period		Purchases / Additions		Sales / Reductions			Realized			Unrealized			Balance at End of Period
Year ended December 31, 2019
Available-for-sale debt securities:(1)
Tax-exempt asset-backed securities	$	95,804	$	92,010	$	(4,302	)	$	—		$	13,515		$	197,027
CRT Securities	$	—	$	15,044	$	—		$	(331	)	$	(2,749	)	$	11,964
Loans held for sale(2)	$	16,415	$	321	$	(10,690	)	$	190		$	807		$	7,043

Year ended December 31, 2018
Tax-exempt asset-backed securities(1)	$	—	$	95,521	$	(3	)	$	—		$	286		$	95,804
Loans held for sale(2)	$	—	$	38,430	$	(20,591	)	$	(173	)	$	(1,251	)	$	16,415


(1)	Unrealized gains/(losses) on available-for-sale debt securities are recorded in AOCI. Realized gains/(losses) are recorded in other non-interest income.

(2)

Realized and unrealized gains/(losses) on loans held for sale are recorded in gain/(loss) on sale of loans held for sale.

Summary of the carrying amounts and estimated fair values of financial instruments

A summary of the carrying amounts and estimated fair values of financial instruments is as follows:



	December 31, 2019				December 31, 2018
(in thousands)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	4,425,583	$	4,425,583	$	3,080,065	$	3,080,065
Investment securities	18,484		18,484		10,262		10,262
Level 2 inputs:
Investment securities	12,396		12,396		14,150		14,150
Loans held for sale	2,570,091		2,570,091		1,953,059		1,953,059
Derivative assets	48,684		48,684		21,806		21,806
Level 3 inputs:
Investment securities	208,991		208,991		95,804		95,804
Loans held for sale	7,043		7,043		16,415		16,415
Loans held for investment, net	24,451,215		24,478,586		22,376,552		22,347,876
Financial liabilities:
Level 2 inputs:
Federal funds purchased	132,270		132,270		629,169		629,169
Customer repurchase agreements	9,496		9,496		12,005		12,005
Other borrowings	2,400,000		2,400,000		3,900,000		3,900,000
Subordinated notes	282,129		292,302		281,767		283,349
Trust preferred subordinated debentures	113,406		113,406		113,406		113,406
Derivative liabilities	51,310		51,310		41,375		41,375
Level 3 inputs:
Deposits	26,478,593		29,357,121		20,606,113		20,608,494