Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2017

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 June 30, 2017 and September 30, 2016:



	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of June 30, 2017
U.S. Treasury securities	$	228,577	$	228,577	$	—	$	—
Mortgage-backed securities	1,064,305		—		1,064,305		—
States and political subdivision securities	72,523		—		71,454		1,069
Corporate debt securities	—		—		—		—
Other	1,037		—		1,037		—
Total securities available for sale	$	1,366,442	$	228,577	$	1,136,796	$	1,069
Derivatives-assets	$	56			$	56	$	—
Derivatives-liabilities	18,232		—		18,232		—
Fair value loans and written loan commitments	1,049,548		—		1,049,548		—

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 and nine months ended June 30, 2017 and 2016:



	Three Months Ended						Nine Months Ended
	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
	(dollars in thousands)
Balance, beginning of period	$	1,224		$	1,458		$	1,315		$	1,835
Additions	—			15			—			15
Principal paydown	(155		)	(158		)	(246		)	(235		)
Realized loss on securities	—			—			—			(300		)
Balance, end of period	$	1,069		$	1,315		$	1,069		$	1,315

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 June 30, 2017 and September 30, 2016:



	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of June 30, 2017
Other real estate owned	$	3,985	$	—	$	—	$	3,985
Impaired loans	203,786		—		—		203,786
Loans held for sale, at lower of cost or fair value	11,504		—		11,504		—
Loan servicing rights	4,530		—		—		4,530
Property held for sale	5,074		—		—		5,074

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 June 30, 2017 were as follows:



	Fair Value of Assets / (Liabilities) at June 30, 2017		Valuation Technique(s)	Unobservable Input	Range	Weighted Average
	(dollars in thousands)
Other real estate owned	$	3,985	Appraisal value	Property specific adjustment	N/A	N/A
Impaired loans	203,786		Appraisal value	Property specific adjustment	N/A	N/A
Loan servicing rights	4,530		Discounted cash flows	Constant prepayment rate Discount rate	9.4 - 22.3% 10.0 - 15.0%	12.0% 11.9%
Property held for sale	5,074		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 June 30, 2017 and September 30, 2016, are as follows:



		June 30, 2017				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	$	327,901	$	327,901	$	524,611	$	524,611
Loans, net excluding fair valued loans and loans held for sale	Level 3	7,666,586		7,586,629		7,473,973		7,433,851
Accrued interest receivable	Level 2	45,478		45,478		49,531		49,531
Cash surrender value of life insurance policies	Level 2	29,403		29,403		29,166		29,166
Federal Home Loan Bank stock	Level 2	30,752		30,752		47,025		47,025

Liabilities
Deposits	Level 2	$	8,959,102	$	8,960,335	$	8,604,790	$	8,603,708
FHLB advances and other borrowings	Level 2	471,719		473,204		871,037		874,763
Securities sold under repurchase agreements	Level 2	123,851		123,851		141,688		141,688
Accrued interest payable	Level 2	5,006		5,006		4,074		4,074
Subordinated debentures and subordinated notes payable	Level 2	108,261		108,324		111,873		112,826