Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of information regarding financial assets and liabilities measured at fair value on a recurring basis

The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands).


	Level 1		Level 2		Level 3		Total
June 30, 2018	Inputs		Inputs		Inputs		Fair Value
Trading securities	$	1,051	$	633,146	$	—	$	634,197
Available for sale securities		—		811,218		—		811,218
Equity securities		21,218		—		—		21,218
Loans held for sale		—		1,773,333		40,781		1,814,114
Derivative assets		—		56,050		—		56,050
MSR asset		—		—		57,373		57,373
Securities sold, not yet purchased		183,714		67,867		—		251,581
Derivative liabilities		—		30,179		—		30,179


	Level 1		Level 2		Level 3			Total
December 31, 2017	Inputs		Inputs		Inputs			Fair Value
Trading securities	$	3,329	$	727,356	$	—	$	730,685
Available for sale securities		—		744,319		—		744,319
Equity securities		21,241		—		—		21,241
Loans held for sale		—		1,544,631		36,972		1,581,603
Derivative assets		—		34,150		—		34,150
MSR asset		—		—		54,714		54,714
Securities sold, not yet purchased		156,586		76,235		—		232,821
Derivative liabilities		—		13,197		—		13,197

Rollforward for financial instruments measured at fair value using Level 3 inputs

The following tables include a rollforward for those financial instruments measured at fair value using Level 3 inputs (in thousands).


							Total Gains or Losses
							(Realized or Unrealized)
	Balance at								Included in Other
	Beginning of		Purchases/		Sales/		Included in		Comprehensive		Balance at
	Period		Additions		Reductions		Net Income		Income (Loss)		End of Period
Three months ended June 30, 2018
Loans held for sale	$	43,483	$	8,071	$	(8,538)	$	(2,235)	$	—	$	40,781
MSR asset		63,957		3,068		(9,303)		(349)		—		57,373
Total	$	107,440	$	11,139	$	(17,841)	$	(2,584)	$	—	$	98,154

Six months ended June 30, 2018
Loans held for sale	$	36,972	$	20,550	$	(12,513)	$	(4,228)	$	—	$	40,781
MSR asset		54,714		9,729		(9,303)		2,233		—		57,373
Total	$	91,686	$	30,279	$	(21,816)	$	(1,995)	$	—	$	98,154

Three months ended June 30, 2017
Loans held for sale		30,214		8,675		(6,722)		(2,130)		—		30,037
MSR asset		45,573		1,266		—		(3,259)		—		43,580
Total	$	75,787	$	9,941	$	(6,722)	$	(5,389)	$	—	$	73,617

Six months ended June 30, 2017
Loans held for sale		35,801		16,503		(17,423)		(4,844)		—		30,037
MSR asset		61,968		2,490		(17,499)		(3,379)		—		43,580
Total	$	97,769	$	18,993	$	(34,922)	$	(8,223)	$	—	$	73,617

Schedule of significant unobservable inputs used in the fair value measurements

For Level 3 financial instruments measured at fair value on a recurring basis at June 30, 2018, the significant unobservable inputs used in the fair value measurements were as follows.


			Range
Financial instrument	Valuation Technique	Unobservable Inputs	(Weighted-Average)
Loans held for sale	Discounted cash flows / Market comparable	Projected price	94	-	97	%	(	94	%)

MSR asset	Discounted cash flows	Constant prepayment rate			9.27		%
		Discount rate			11.09		%

Schedule of changes in fair value for instruments reported at fair value under the Fair Value Option

The following table presents those changes in fair value of instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands).


	Three Months Ended June 30, 2018						Three Months Ended June 30, 2017
			Other		Total				Other		Total
	Net		Noninterest		Changes in		Net		Noninterest		Changes in
	Gains (Losses)		Income		Fair Value		Gains (Losses)		Income		Fair Value
Loans held for sale	$	22,604	$	—	$	22,604	$	22,231	$	—	$	22,231
MSR asset		(349)		—		(349)		(3,259)		—		(3,259)


	Six Months Ended June 30, 2018						Six Months Ended June 30, 2017
			Other		Total				Other		Total
	Net		Noninterest		Changes in		Net		Noninterest		Changes in
	Gains (Losses)		Income		Fair Value		Gains (Losses)		Income		Fair Value
Loans held for sale	$	7,724	$	—	$	7,724	$	31,093	$	—	$	31,093
MSR asset		2,233		—		2,233		(3,379)		—		(3,379)

Schedule of significant unobservable inputs weighted average rates on Impaired Loans

At June 30, 2018, estimates for these significant unobservable inputs were as follows.


	PCI Loans
	PlainsCapital		FNB		SWS
	Merger		Transaction		Merger
Weighted average default rate	81	%	38	%	69	%
Weighted average loss severity rate	66	%	15	%	29	%
Weighted average prepayment speed	0	%	6	%	0	%

Schedule of information regarding certain assets and liabilities measured at fair value on a non-recurring basis for which a change in fair value has been recorded during reporting periods subsequent to initial recognition

The following table presents information regarding certain assets and liabilities measured at fair value on a non-recurring basis for which a change in fair value has been recorded during reporting periods subsequent to initial recognition (in thousands).


									Total Gains (Losses) for the				Total Gains (Losses) for the
	Level 1		Level 2		Level 3		Total		Three Months Ended June 30,				Six Months Ended June 30,
June 30, 2018	Inputs		Inputs		Inputs		Fair Value		2018		2017		2018		2017
Non-covered impaired loans	$	—	$	—	$	19,465	$	19,465	$	(1,446)	$	(274)	$	(1,471)	$	(470)
Covered impaired loans		—		—		72,953		72,953		844		(611)		746		(977)
Non-covered other real estate owned		—		225		—		225		(25)		(108)		(76)		(123)
Covered other real estate owned		—		15,996		—		15,996		(669)		(943)		(1,724)		(2,135)

Schedule of carrying values and estimated fair values of financial instruments

The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands).


			Estimated Fair Value
	Carrying		Level 1		Level 2		Level 3
June 30, 2018	Amount		Inputs		Inputs		Inputs		Total
Financial assets:
Cash and cash equivalents	$	353,835	$	353,835	$	—	$	—	$	353,835
Securities purchased under agreements to resell		229,172		—		229,172		—		229,172
Assets segregated for regulatory purposes		128,417		128,417		—		—		128,417
Held to maturity securities		353,192		—		339,702		—		339,702
Loans held for sale		139,448		—		139,448		—		139,448
Non-covered loans, net		6,324,664		—		600,162		5,812,057		6,412,219
Covered loans, net		158,996		—		—		234,533		234,533
Broker-dealer and clearing organization receivables		1,614,951		—		1,614,951		—		1,614,951
FDIC indemnification asset		23,525		—		—		17,787		17,787
Other assets		66,245		—		65,951		294		66,245

Financial liabilities:
Deposits		7,813,622		—		7,802,515		—		7,802,515
Broker-dealer and clearing organization payables		1,409,904		—		1,409,904		—		1,409,904
Short-term borrowings		1,610,735		—		1,610,735		—		1,610,735
Debt		294,748		—		292,494		—		292,494
Other liabilities		4,583		—		4,583		—		4,583


			Estimated Fair Value
	Carrying		Level 1		Level 2		Level 3
December 31, 2017	Amount		Inputs		Inputs		Inputs		Total
Financial assets:
Cash and cash equivalents	$	487,382	$	487,382	$	—	$	—	$	487,382
Securities purchased under agreements to resell		186,537		—		186,537		—		186,537
Assets segregated for regulatory purposes		186,578		186,578		—		—		186,578
Held to maturity securities		355,849		—		349,939		—		349,939
Loans held for sale		133,754		—		133,754		—		133,754
Non-covered loans, net		6,212,712		—		577,889		5,828,868		6,406,757
Covered loans, net		179,400		—		—		269,386		269,386
Broker-dealer and clearing organization receivables		1,464,378		—		1,464,378		—		1,464,378
FDIC indemnification asset		29,340		—		—		20,122		20,122
Other assets		64,862		—		59,053		5,809		64,862

Financial liabilities:
Deposits		7,978,119		—		7,973,101		—		7,973,101
Broker-dealer and clearing organization payables		1,287,563		—		1,287,563		—		1,287,563
Short-term borrowings		1,206,424		—		1,206,424		—		1,206,424
Debt		275,821		—		289,719		—		289,719
Other liabilities		4,795		—		4,795		—		4,795

Schedule of adjustments to the carrying value of these investments

The following table presents the adjustments to the carrying value of these investments (in thousands).


	Three months ended,		Six months ended,
	June 30, 2018		June 30, 2018
Balance, beginning of period	$	21,906	$	22,946
Impairments and downward adjustments		(2)		(1,314)
Additional investments and upward adjustments		4,247		4,519
Balance, end of period	$	26,151	$	26,151

- Definition

Tabular disclosure of the application of the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected, provide the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (b) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (c) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) for loans and other receivables held as assets, the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk; (c) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk, the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk; and (3) certain other disclosures as required or determined to be provided.

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