Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2016

Schedule of fair value measurements of assets and liabilities

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2016 and September 30, 2016:



	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of December 31, 2016
U.S. Treasury securities	$	228,667	$	228,667	$	—	$	—
Mortgage-backed securities	1,070,212		—		1,070,212		—
States and political subdivision securities	66,604		—		65,380		1,224
Corporate debt securities	5,022		—		5,022		—
Other	1,053		—		1,053		—
Total securities available for sale	$	1,371,558	$	228,667	$	1,141,667	$	1,224
Derivatives-assets	$	105			$	105	$	—
Derivatives-liabilities	17,882		—		17,882		—
Fair value loans and written loan commitments	1,078,465		—		1,078,465		—

As of September 30, 2016
U.S. Treasury securities	$	230,980	$	230,980	$	—	$	—
Mortgage-backed securities	1,024,838		—		1,024,838		—
States and political subdivision securities	55,484		—		54,169		1,315
Corporate debt securities	5,022		—		5,022		—
Other	1,062		—		1,062		—
Total securities available for sale	$	1,317,386	$	230,980	$	1,085,091	$	1,315
Derivatives-assets	$	66	$	—	$	66	$	—
Derivatives-liabilities	81,515		—		81,515		—
Fair value loans and written loan commitments	1,131,111		—		1,131,111		—

Schedule of changes in Level 3 financial instruments

The following table presents the changes in Level 3 financial instruments for the three months ended December 31, 2016 and 2015:



	Three months ended December 31,
	2016			2015
	(dollars in thousands)
Balance, beginning of period	$	1,315		$	1,835
Principal paydown	(91		)	(77		)
Realized loss on securities	—			(300		)
Balance, end of period	$	1,224		$	1,458

Summary of mortgage loans held-for-sale, fair value measurement

The following tables present the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2016 and September 30, 2016:



	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of December 31, 2016
Other real estate owned	$	1,020	$	—	$	—	$	1,020
Impaired loans	194,051		—		—		194,051
Loans held for sale, at lower of cost or fair value	9,086		—		9,086		—
Loan servicing rights	5,278		—		—		5,278
Property held for sale	8,067		—		—		8,067

As of September 30, 2016
Other real estate owned	$	6,911	$	—	$	—	$	6,911
Impaired loans	190,743		—		—		190,743
Loans held for sale, at lower of cost or fair value	12,918		—		12,918		—
Loan servicing rights	5,781		—		—		5,781
Property held for sale	8,112		—		—		8,112

Summary of valuation techniques and significant unobservable inputs used to measure Level 3 fair value measurements

The valuation techniques and significant unobservable inputs used to measure Level 3 fair value measurements at December 31, 2016 were as follows:



	Fair Value of Assets / (Liabilities) at December 31, 2016		Valuation Technique(s)	Unobservable Input	Range	Weighted Average
	(dollars in thousands)
Other real estate owned	$	1,020	Appraisal value	Property specific adjustment	N/A	N/A
Impaired loans	194,051		Appraisal value	Property specific adjustment	N/A	N/A
Loan servicing rights	5,278		Discounted cash flows	Constant prepayment rate Discount rate	9.0 - 21.0% 9.5 - 16.0%	12.7% 11.9%
Property held for sale	8,067		Appraisal value	Property specific adjustment	N/A	N/A

Schedule of fair values for balance sheet instruments

Fair values for balance sheet instruments as of December 31, 2016 and September 30, 2016, are as follows:



		December 31, 2016				September 30, 2016
	Level in Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(dollars in thousands)
Assets
Cash and cash equivalents	Level 1	$	270,168	$	270,168	$	524,611	$	524,611
Loans, net excluding fair valued loans and loans held for sale	Level 3	7,624,789		7,567,288		7,473,973		7,433,851
Accrued interest receivable	Level 2	49,357		49,357		49,531		49,531
Cash surrender value of life insurance policies	Level 2	29,387		29,387		29,166		29,166
Federal Home Loan Bank stock	Level 2	40,513		40,513		47,025		47,025

Liabilities
Deposits	Level 2	$	8,706,247	$	8,705,302	$	8,604,790	$	8,603,708
FHLB advances and other borrowings	Level 2	711,029		713,227		871,037		874,763
Securities sold under repurchase agreements	Level 2	142,741		142,741		141,688		141,688
Accrued interest payable	Level 2	4,592		4,592		4,074		4,074
Subordinated debentures and subordinated notes payable	Level 2	108,178		108,183		111,873		112,826