Fair Value (Tables)

9 Months Ended

Sep. 30, 2018

Financial Assets and Liabilities Measured at Fair Value Recurring Basis

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value ($ in thousands). There were no transfers between fair value levels for the nine months ended September 30, 2018 and the year ended December 31, 2017.

	September 30, 2018
	Total		Level 1			Level 2		Level 3
U.S. Government agency obligations	$	32,371	$	—		$	32,371	$	—
Obligations of states and political subdivisions		57,264		—			57,264		—
Mortgage-backed securities		1,774,998		—			1,774,998		—
Securities available for sale		1,864,633		—			1,864,633		—
Loans held for sale		182,664		—			182,664		—
Mortgage servicing rights		101,374		—			—		101,374
Other assets - derivatives		3,287		(1,531	)		3,925		893
Other liabilities - derivatives		4,311		1,070			3,241		—

	December 31, 2017
	Total		Level 1			Level 2		Level 3
U.S. Government agency obligations	$	45,285	$	—		$	45,285	$	—
Obligations of states and political subdivisions		79,229		—			79,229		—
Mortgage-backed securities		2,114,121		—			2,114,121		—
Securities available for sale		2,238,635		—			2,238,635		—
Loans held for sale		180,512		—			180,512		—
Mortgage servicing rights		84,269		—			—		84,269
Other assets - derivatives		1,516		(1,013	)		1,629		900
Other liabilities - derivatives		2,678		616			2,062		—

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2018 and 2017 are summarized as follows ($ in thousands):

	MSR			Other Assets - Derivatives
Balance, January 1, 2018	$	84,269		$	900
Total net (loss) gain included in Mortgage banking, net (1)		4,857			3,345
Additions		12,248			—
Sales		—			(3,352	)
Balance, September 30, 2018	$	101,374		$	893

The amount of total gains (losses) for the period included in earnings that are attributable to the change in unrealized gains or losses still held at September 30, 2018	$	13,879		$	247

Balance, January 1, 2017	$	80,239		$	1,001
Total net (loss) gain included in Mortgage banking, net (1)		(10,392	)		3,436
Additions		11,630			—
Sales		—			(3,431	)
Balance, September 30, 2017	$	81,477		$	1,006

The amount of total gains (losses) for the period included in earnings that are attributable to the change in unrealized gains or losses still held at September 30, 2017	$	(2,218	)	$	(1,483	)

(1)	Total net (loss) gain included in Mortgage banking, net relating to the MSR includes changes in fair value due to market changes and due to run-off.

Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at September 30, 2018 and December 31, 2017, are as follows ($ in thousands):

	September 30, 2018				December 31, 2017
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets:
Level 2 Inputs:
Cash and short-term investments	$	433,471	$	433,471	$	336,383	$	336,383
Securities held to maturity		943,883		907,317		1,056,486		1,046,247
Level 3 Inputs:
Net LHFI		8,658,156		8,560,091		8,493,234		8,507,469
Net acquired loans		130,901		130,901		257,438		257,438

Financial Liabilities:
Level 2 Inputs:
Deposits		10,956,910		10,953,348		10,577,512		10,577,858
Short-term liabilities		676,888		676,888		1,440,876		1,440,876
Long-term FHLB advances		896		831		946		946
Junior subordinated debt securities		61,856		53,815		61,856		45,773

Fair Value and the Contractual Principal Outstanding of the LHFS

The following table provides information about the fair value and the contractual principal outstanding of the LHFS accounted for under the fair value option as of September 30, 2018 and December 31, 2017 ($ in thousands):

	September 30, 2018		December 31, 2017
Fair value of LHFS	$	134,874	$	132,300
LHFS contractual principal outstanding		134,598		129,347
Fair value less unpaid principal	$	276	$	2,953