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FAIR VALUE MEASURES (Tables)

9 Months Ended

Sep. 30, 2019

The Company's loans held for sale under the fair value option are comprised of the following:



(dollars in thousands)	September 30, 2019		December 31, 2018
Mortgage loans held for sale	$	1,183,417	$	107,428
SBA loans held for sale	4,134		3,870
Total loans held for sale	$	1,187,551	$	111,298

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 measured at fair value as of September 30, 2019 and December 31, 2018:



(dollars in thousands)	September 30, 2019		December 31, 2018
Aggregate fair value of mortgage loans held for sale	$	1,183,417	$	107,428
Aggregate unpaid principal balance of mortgage loans held for sale	1,148,283		103,319
Past-due loans of 90 days or more	—		—
Nonaccrual loans	—		—

The following table summarizes the difference between the fair value and the principal balance for SBA loans held for sale measured at fair value as of September 30, 2019 and December 31, 2018:



(dollars in thousands)	September 30, 2019		December 31, 2018
Aggregate fair value of SBA loans held for sale	$	4,134	$	3,870
Aggregate unpaid principal balance of SBA loans held for sale	3,755		3,581
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 September 30, 2019 and December 31, 2018:



	Recurring Basis Fair Value Measurements
	September 30, 2019
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
U.S. government sponsored agencies	$	22,360	$	—	$	22,360	$	—
State, county and municipal securities	116,349		—		116,349		—
Corporate debt securities	52,918		—		51,418		1,500
Mortgage-backed securities	1,299,580		—		1,299,580		—
Loans held for sale	1,187,551		—		1,187,551		—
Mortgage banking derivative instruments	15,935		—		15,935		—
Total recurring assets at fair value	$	2,694,693	$	—	$	2,693,193	$	1,500
Financial liabilities:
Derivative financial instruments	$	237	$	—	$	237	$	—
Mortgage banking derivative instruments	1,195		—		1,195		—
Total recurring liabilities at fair value	$	1,432	$	—	$	1,432	$	—



	Recurring Basis Fair Value Measurements
	December 31, 2018
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	150,733	$	—	$	150,733	$	—
Corporate debt securities	67,314		—		65,814		1,500
Mortgage-backed securities	974,376		—		974,376		—
Loans held for sale	111,298		—		111,298		—
Derivative financial instruments	102		—		102		—
Mortgage banking derivative instruments	2,537		—		2,537		—
Total recurring assets at fair value	$	1,306,360	$	—	$	1,304,860	$	1,500
Financial liabilities:
Mortgage banking derivative instruments	$	1,276	$	—	$	1,276	$	—
Total recurring liabilities at fair value	$	1,276	$	—	$	1,276	$	—

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 September 30, 2019 and December 31, 2018:



	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
September 30, 2019
Impaired loans carried at fair value	$	34,487	$	—	$	—	$	34,487
Other real estate owned	196		—		—		196
Purchased other real estate owned	15,784		—		—		15,784
Total nonrecurring assets at fair value	$	50,467	$	—	$	—	$	50,467

December 31, 2018
Impaired loans carried at fair value	$	28,653	$	—	$	—	$	28,653
Other real estate owned	408		—		—		408
Purchased other real estate owned	9,535		—		—		9,535
Total nonrecurring assets at fair value	$	38,596	$	—	$	—	$	38,596

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:



(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
September 30, 2019
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	28,653	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 92%	28%
Other real estate owned	$	408	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 42%	33%
Purchased other real estate owned	$	9,535	Third-party appraisals	Collateral discounts and estimated costs to sell	8% - 91%	28%

December 31, 2018
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	28,653	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	3% - 53%	30%
Other real estate owned	$	408	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 69%	31%
Purchased other real estate owned	$	9,535	Third-party appraisals	Collateral discounts and estimated costs to sell	6% - 74%	39%

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.



			Fair Value Measurements
			September 30, 2019
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	193,976	$	193,976	$	—	$	—	$	193,976
Federal funds sold and interest-bearing deposits in banks	285,713		285,713		—		—		285,713
Time deposits in other banks	499		—		499		—		499
Loans, net	12,756,267		—		—		12,759,699		12,759,699
Accrued interest receivable	50,077		—		6,012		44,065		50,077
Financial liabilities:
Deposits	$	13,659,594	$	—	$	13,658,398	$	—	$	13,658,398
Securities sold under agreements to repurchase	17,744		17,744		—		—		17,744
Other borrowings	1,351,172		—		1,352,726		—		1,352,726
Subordinated deferrable interest debentures	127,075		—		124,130		—		124,130
FDIC loss-share payable	19,490		—		—		19,489		19,489
Accrued interest payable	11,107		—		11,107		—		11,107



			Fair Value Measurements
			December 31, 2018
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	172,036	$	172,036	$	—	$	—	$	172,036
Federal funds sold and interest-bearing deposits in banks	507,491		507,491		—		—		507,491
Time deposits in other banks	10,812		—		10,812		—		10,812
Loans, net	8,454,442		—		—		8,365,293		8,365,293
Accrued interest receivable	36,970		—		5,456		31,514		36,970
Financial liabilities:
Deposits	$	9,649,313	$	—	$	9,645,617	$	—	$	9,645,617
Securities sold under agreements to repurchase	20,384		20,384		—		—		20,384
Other borrowings	151,774		—		152,873		—		152,873
Subordinated deferrable interest debentures	89,187		—		90,180		—		90,180
FDIC loss-share payable	19,487		—		—		19,576		19,576
Accrued interest payable	5,669		—		5,669		—		5,669