Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

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 March 31, 2020 and September 30, 2019.

	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of March 31, 2020
U.S. Treasury securities	$	70,583	$	70,583	$	—	$	—
Mortgage-backed securities	1,857,392		—		1,857,392		—
States and political subdivision securities	61,001		—		57,015		3,986
Other	1,051		—		1,051		—
Total securities available for sale	$	1,990,027	$	70,583	$	1,915,458	$	3,986
Derivatives-assets	$	98,723	$	—	$	98,723	$	—
Derivatives-liabilities	640		—		640		—
Fair value loans	792,117		—		792,117		—
Loan servicing rights	1,863		—		—		1,863
As of September 30, 2019
U.S. Treasury securities	$	94,745	$	94,745	$	—	$	—
Mortgage-backed securities	1,620,903		—		1,620,903		—
States and political subdivision securities	66,523		—		62,403		4,120
Other	1,037		—		1,037		—
Total securities available for sale	$	1,783,208	$	94,745	$	1,684,343	$	4,120
Derivatives-assets	$	58,534	$	—	$	58,534	$	—
Derivatives-liabilities	13		—		13		—
Fair value loans	812,991		—		812,991		—
Loan servicing rights	2,255		—		—		2,255

Schedule of changes in Level 3 financial instruments

The following table presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three and six months ended March 31, 2020 and 2019.

	Three Months Ended March 31,				Six Months Ended March 31,
	2020		2019		2020		2019
	(dollars in thousands)
Other securities available for sale
Balance, beginning of period	$	3,986	$	961	$	4,120	$	970
Additions	—		350		—		350
Principal paydown	—		—		(134)		(9)
Balance, end of period	$	3,986	$	1,311	$	3,986	$	1,311
Loan servicing rights
Balance, beginning of period	$	2,054	$	2,862	$	2,255	$	3,087
Realized and unrealized loss ¹	(191)		(188)		(392)		(413)
Balance, end of period	$	1,863	$	2,674	$	1,863	$	2,674
1 Realized and unrealized loss related to loan servicing rights are reported as a component of mortgage banking income, net on the consolidated statements of income.

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

The following table presents 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 March 31, 2020 and September 30, 2019.

	Fair Value		Level 1		Level 2		Level 3
	(dollars in thousands)
As of March 31, 2020
Other repossessed property	$	21,486	$	—	$	—	$	21,486
Impaired loans	559,155		—		—		559,155
Mortgage loans held for sale, at lower of cost or fair value	4,342		—		4,342		—
Property held for sale	706		—		—		706
As of September 30, 2019
Other repossessed property	$	34,721	$	—	$	—	$	34,721
Impaired loans	413,644		—		—		413,644
Mortgage loans held for sale, at lower of cost or fair value	7,351		—		7,351		—
Property held for sale	2,757		—		—		2,757

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 March 31, 2020 were as follows.

	Fair Value of Assets / (Liabilities) at March 31, 2020		Valuation Technique(s)	Unobservable Input	Range	Weighted Average
	(dollars in thousands)
Other repossessed property	$	21,486	Appraisal value	Property specific adjustment	N/A	N/A
Impaired loans	559,155		Appraisal value	Property specific adjustment	N/A	N/A
Property held for sale	706		Appraisal value	Property specific adjustment	N/A	N/A

Schedule of fair values for balance sheet instruments

Fair values for on-balance sheet instruments as of March 31, 2020 and September 30, 2019 are as follows.

		March 31, 2020				September 30, 2019
	Level in Fair Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(dollars in thousands)
Assets
Cash and cash equivalents	Level 1	$	347,486	$	347,486	$	243,474	$	243,474
Loans, net, excluding fair valued loans, loans held for sale and impaired loans ¹	Level 3	8,337,681		8,498,042		8,472,777		8,533,612
Liabilities
Time deposits	Level 2	1,528,234		1,532,200		2,095,676		2,101,239
FHLB advances and other borrowings	Level 2	800,000		818,669		340,000		351,517
Securities sold under repurchase agreements	Level 2	64,809		64,809		68,992		68,992
Subordinated debentures and subordinated notes payable	Level 2	108,740		97,268		108,636		101,164
1 Includes $13.7 million and $13.9 million of net deferred loan fees at March 31, 2020 and September 30, 2019, respectively, of which carrying value approximates fair value.