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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present for each of the fair value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis in the consolidated balance sheets at June 30, 2019 and December 31, 2018:

	June 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	81,864	$	—	$	81,864
Municipal obligations		—		249,341		—		249,341
Corporate debt securities		—		3,500		—		3,500
Residential mortgage-backed securities		—		1,367,651		—		1,367,651
Commercial mortgage-backed securities		—		934,575		—		934,575
Collateralized mortgage obligations		—		153,537		—		153,537
Total available for sale securities		—		2,790,468		—		2,790,468
Derivative assets (1)		—		51,609		—		51,609
Total recurring fair value measurements - assets	$	—	$	2,842,077	$	—	$	2,842,077
Liabilities
Derivative liabilities (1)	$	—	$	12,646	$	6,602	$	19,248
Total recurring fair value measurements - liabilities	$	—	$	12,646	$	6,602	$	19,248

	December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	71,706	$	—	$	71,706
Municipal obligations		—		240,427		—		240,427
Corporate debt securities		—		3,500		—		3,500
Residential mortgage-backed securities		—		1,443,402		—		1,443,402
Commercial mortgage-backed securities		—		770,077		—		770,077
Collateralized mortgage obligations		—		161,925		—		161,925
Total available for sale securities		—		2,691,037		—		2,691,037
Derivative assets (1)		—		16,980		—		16,980
Total recurring fair value measurements - assets		—	$	2,708,017		—	$	2,708,017
Liabilities
Derivative liabilities (1)	$	—	$	14,923	$	7,304	$	22,227
Total recurring fair value measurements - liabilities	$	—	$	14,923	$	7,304	$	22,227

(1)	For further disaggregation of derivative assets and liabilities, see Note 7 - Derivatives.

Consolidated Balance Sheets for Financial Instruments of Material Nature Measured at Fair Value on Recurring Basis

The table below presents a rollforward of the amounts on the consolidated balance sheets for the six months ended June 30, 2019 and the year ended December 31, 2018 for financial instruments of a material nature that are classified within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis:

(in thousands)
Balance at December 31, 2017	$	—
Entry into derivative contract		7,304
Balance at December 31, 2018		7,304
Cash settlements		(843	)
Losses included in earnings		141
Balance at June 30, 2019	$	6,602

Overview of the Valuation Techniques and Significant Unobservable Inputs

($ in thousands)

Fair Value

Level 3 Class

June 30, 2019

December 31, 2018

Valuation Technique

Unobservable Input

Values Utilized

Visa Class A appreciation

6% - 18%

Derivative liability

6,602

7,304

Discounted cash flow

Conversion rate

1.62x - 1.59x

Time until resolution

24-48 months

Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.

	June 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	168,190	$	—	$	168,190
Other real estate owned and foreclosed assets, net		—		—		7,103		7,103
Total nonrecurring fair value measurements	$	—	$	168,190	$	7,103	$	175,293

	December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	170,918	$	—	$	170,918
Other real estate owned and foreclosed assets, net		—		—		14,594		14,594
Total nonrecurring fair value measurements	$	—	$	170,918	$	14,594	$	185,512

Estimated Fair Values of Financial Instruments

The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amounts:

	June 30, 2019
							Total Fair		Carrying
(in thousands)	Level 1		Level 2		Level 3		Value		Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	516,214	$	—	$	—	$	516,214	$	516,214
Available for sale securities		—		2,790,468		—		2,790,468		2,790,468
Held to maturity securities		—		2,979,401		—		2,979,401		2,935,267
Loans, net		—		168,190		19,894,266		20,062,456		19,980,187
Loans held for sale		—		36,150		—		36,150		36,150
Derivative financial instruments		—		51,609		—		51,609		51,609
Financial liabilities:
Deposits	$	—	$	—	$	23,220,712	$	23,220,712	$	23,236,042
Federal funds purchased		550		—		—		550		550
Securities sold under agreements to repurchase		631,048		—		—		631,048		631,048
FHLB short-term borrowings		1,010,000		—		—		1,010,000		1,010,000
Long-term debt		—		224,547		—		224,547		232,754
Derivative financial instruments		—		12,646		6,602		19,248		19,248

	December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total Fair Value		Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold	$	494,466	$	—	$	—	$	494,466	$	494,466
Available for sale securities		—		2,691,037		—		2,691,037		2,691,037
Held to maturity securities		—		2,935,856		—		2,935,856		2,979,547
Loans, net		—		170,918		19,555,969		19,726,887		19,831,897
Loans held for sale		—		28,150		—		28,150		28,150
Derivative financial instruments		—		16,980		—		16,980		16,980
Financial liabilities:
Deposits	$	—	$	—	$	23,129,574	$	23,129,574	$	23,150,185
Federal funds purchased		425		—		—		425		425
Securities sold under agreements to repurchase		428,599		—		—		428,599		428,599
FHLB short-term borrowings		1,160,104		—		—		1,160,104		1,160,104
Long-term debt		—		223,135		—		223,135		224,993
Derivative financial instruments		—		14,923		7,304		22,227		22,227