FAIR VALUE MEASURES (Tables)

6 Months Ended

Jun. 30, 2018

Loans Held for Sale are Carried at Fair Value

The Company’s loans held for sale are carried at fair value and are comprised of the following:



(dollars in thousands)	June 30, 2018		December 31, 2017
Mortgage loans held for sale	$	133,204	$	190,445
SBA loans held for sale	4,045		6,997
Total loans held for sale	$	137,249	$	197,442

Difference Between Fair Value and Principal Balance for Mortgage Loans Held for Sale Measured at Fair Value

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale carried at fair value as of June 30, 2018 and December 31, 2017:



(dollars in thousands)	June 30, 2018		December 31, 2017
Aggregate fair value of mortgage loans held for sale	$	133,204	$	190,445
Aggregate unpaid principal balance	128,773		185,814
Past-due loans of 90 days or more	—		—
Nonaccrual loans	—		—

Fair Value Measurements of Assets and Liabilities Measured on Recurring Basis

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of June 30, 2018 and December 31, 2017:



	Recurring Basis Fair Value Measurements
	June 30, 2018
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	159,080	$	—	$	159,080	$	—
Corporate debt securities	67,147		—		65,647		1,500
Mortgage-backed securities	927,476		—		927,476		—
Loans held for sale	137,249		—		137,249		—
Derivative financial instruments	229		—		229		—
Mortgage banking derivative instruments	4,707		—		4,707		—
Total recurring assets at fair value	$	1,295,888	$	—	$	1,294,388	$	1,500
Financial liabilities:
Mortgage banking derivative instruments	$	887	$	—	$	887	$	—
Total recurring liabilities at fair value	$	887	$	—	$	887	$	—



	Recurring Basis Fair Value Measurements
	December 31, 2017
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	137,794	$	—	$	137,794	$	—
Corporate debt securities	47,143		—		45,643		1,500
Mortgage-backed securities	625,936		—		625,936		—
Loans held for sale	197,442		—		197,442		—
Mortgage banking derivative instruments	2,888		—		2,888		—
Total recurring assets at fair value	$	1,011,203	$	—	$	1,009,703	$	1,500
Financial liabilities:
Derivative financial instruments	$	381	$	—	$	381	$	—
Mortgage banking derivative instruments	67		—		67		—
Total recurring liabilities at fair value	$	448	$	—	$	448	$	—

Summary of Fair Value Measurements of Assets Measured at Fair Value on Non-Recurring Basis

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of June 30, 2018 and December 31, 2017:



	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
June 30, 2018
Impaired loans carried at fair value	$	34,846	$	—	$	—	$	34,846
Other real estate owned	1,985		—		—		1,985
Purchased other real estate owned	7,272		—		—		7,272
Total nonrecurring assets at fair value	$	44,103	$	—	$	—	$	44,103

December 31, 2017
Impaired loans carried at fair value	$	27,684	$	—	$	—	$	27,684
Other real estate owned	323		—		—		323
Purchased other real estate owned	9,011		—		—		9,011
Total nonrecurring assets at fair value	$	37,018	$	—	$	—	$	37,018

Summary of Significant Unobservable Inputs Used in Fair Value Measurement of Level 3 Assets and Liabilities

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities:



(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
June 30, 2018
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	34,846	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	0% - 90%	20%
Other real estate owned	$	1,985	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 48%	23%
Purchased other real estate owned	$	7,272	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%	18%

December 31, 2017
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	27,684	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 90%	24%
Other real estate owned	$	323	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 15%	15%
Purchased other real estate owned	$	9,011	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%	26%

Carrying Amount and Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows. The methods used to estimate the fair value of financial instruments at December 31, 2017 approximated an entry price. In accordance with the adoption of ASU 2016-01, the methods utilized to estimate the fair value of financial instruments at June 30, 2018 represent an approximation of exit price; however, an actual price derived in an active market may differ.



			Fair Value Measurements
			June 30, 2018
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	151,539	$	151,539	$	—	$	—	$	151,539
Federal funds sold and interest-bearing deposits in banks	273,170		273,170		—		—		273,170
Time deposits in other banks	11,558		—		11,558		—		11,558
Loans, net	8,424,156		—		—		8,415,555		8,415,555
Accrued interest receivable	33,423		33,423		—		—		33,423
Financial liabilities:
Deposits	$	8,761,593	$	—	$	8,766,345	$	—	$	8,766,345
Securities sold under agreements to repurchase	11,002		11,002		—		—		11,002
Other borrowings	862,136		—		863,276		—		863,276
Subordinated deferrable interest debentures	88,646		—		85,249		—		85,249
FDIC loss-share payable	18,716		—		—		18,997		18,997
Liability for USPF acquisition contingent consideration	3,699		—		—		3,699		3,699
Accrued interest payable	4,703		4,703		—		—		4,703



			Fair Value Measurements
			December 31, 2017
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	139,313	$	139,313	$	—	$	—	$	139,313
Federal funds sold and interest-bearing deposits in banks	191,345		191,345		—		—		191,345
Loans, net	5,992,880		—		—		5,960,963		5,960,963
Accrued interest receivable	26,005		26,005		—		—		26,005
Financial liabilities:
Deposits	$	6,625,845	$	—	$	6,627,773	$	—	$	6,627,773
Securities sold under agreements to repurchase	30,638		30,638		—		—		30,638
Other borrowings	250,554		—		251,759		—		251,759
Subordinated deferrable interest debentures	85,550		—		74,243		—		74,243
FDIC loss-share payable	8,803		—		—		9,548		9,548
Accrued interest payable	3,258		3,258		—		—		3,258

- 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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