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Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 30, 2019 and December 31, 2018:

	September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities	$	—	$	95,141	$	—	$	95,141
Municipal obligations		—		252,163		—	$	252,163
Corporate debt securities		—		3,897		—	$	3,897
Residential mortgage-backed securities		—		1,339,471		—	$	1,339,471
Commercial mortgage-backed securities		—		1,624,169		—	$	1,624,169
Collateralized mortgage obligations		—		234,816		—	$	234,816
Total available for sale securities		—		3,549,657		—		3,549,657
Derivative assets (1)		—		71,904		—		71,904
Total recurring fair value measurements - assets	$	—	$	3,621,561	$	—	$	3,621,561
Liabilities
Derivative liabilities (1)	$	—	$	17,218	$	6,249	$	23,467
Total recurring fair value measurements - liabilities	$	—	$	17,218	$	6,249	$	23,467

	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 nine months ended September 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		(1,262	)
Losses included in earnings		207
Balance at September 30, 2019	$	6,249

Overview of the Valuation Techniques and Significant Unobservable Inputs

($ in thousands)

Fair Value

Level 3 Class

September 30, 2019

December 31, 2018

Valuation Technique

Unobservable Input

Values Utilized

Visa Class A appreciation

6% - 18%

Derivative liability

6,249

7,304

Discounted cash flow

Conversion rate

1.62x - 1.59x

Time until resolution

24-39 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.

	September 30, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Collateral-dependent impaired loans	$	—	$	170,425	$	—	$	170,425
Other real estate owned and foreclosed assets, net		—		—		30,955	$	30,955
Total nonrecurring fair value measurements	$	—	$	170,425	$	30,955	$	201,380

	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:

	September 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	$	517,576	$	—	$	—	$	517,576	$	517,576
Available for sale securities		—		3,549,657		—		3,549,657		3,549,657
Held to maturity securities		—		2,920,356		—		2,920,356		2,855,062
Loans, net		—		170,425		20,812,059		20,982,484		20,840,380
Loans held for sale		—		75,789		—		75,789		75,789
Derivative financial instruments		—		71,904		—		71,904		71,904
Financial liabilities:
Deposits		—		—		24,188,274		24,188,274		24,201,299
Federal funds purchased		125,400		—		—		125,400		125,400
Securities sold under agreements to repurchase		545,915		—		—		545,915		545,915
FHLB short-term borrowings		1,437,500		—		—		1,437,500		1,437,500
Long-term debt		—		245,715		—		245,715		246,641
Derivative financial instruments		—		17,218		6,249		23,467		23,467

	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