Fair Values of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2018

Summary Of Balances Of Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented:



	June 30, 2018
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	30,216	$	—	$	30,216	$	—
U.S. Government agencies	114,408		—		110,926		3,482
Municipal	132,593		—		36,027		96,566
Corporate notes	95,377		—		95,377		—
Mortgage-backed	1,568,193		—		1,568,193		—
Trading account securities	862		—		862		—
Equity securities with readily determinable fair value	37,839		—		37,839		—
Mortgage loans held-for-sale	455,712		—		455,712		—
Loans held-for-investment	67,181		—		53,417		13,764
MSRs	63,194		—		—		63,194
Nonqualified deferred compensation assets	12,053		—		12,053		—
Derivative assets	92,156		—		88,337		3,819
Total	$	2,669,784	$	—	$	2,488,959	$	180,825
Derivative liabilities	$	69,364	$	—	$	69,364	$	—



	December 31, 2017
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	143,822	$	—	$	143,822	$	—
U.S. Government agencies	156,915		—		153,136		3,779
Municipal	115,352		—		38,171		77,181
Corporate notes	31,050		—		31,050		—
Mortgage-backed	1,319,725		—		1,319,725		—
Equity securities	36,802		—		36,802		—
Trading account securities	995		—		995		—
Mortgage loans held-for-sale	313,592		—		313,592		—
Loans held-for-investment	33,717		—		—		33,717
MSRs	33,676		—		—		33,676
Nonqualified deferred compensation assets	11,065		—		11,065		—
Derivative assets	52,069		—		49,912		2,157
Total	$	2,248,780	$	—	$	2,098,270	$	150,510
Derivative liabilities	$	35,671	$	—	$	35,671	$	—



	June 30, 2017
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	119,081	$	—	$	119,081	$	—
U.S. Government agencies	157,510		—		153,400		4,110
Municipal	124,120		—		46,779		77,341
Corporate notes	60,598		—		60,598		—
Mortgage-backed	1,153,290		—		1,153,290		—
Equity securities	35,037		—		35,037		—
Trading account securities	1,987		—		1,987		—
Mortgage loans held-for-sale	382,837		—		382,837		—
Loans held-for-investment	30,173		—		—		30,173
MSRs	27,307		—		—		27,307
Nonqualified deferred compensation assets	10,556		—		10,556		—
Derivative assets	49,703		—		48,656		1,047
Total	$	2,152,199	$	—	$	2,012,221	$	139,978
Derivative liabilities	$	37,651	$	—	$	37,651	$	—

Summary Of Changes In Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis during the three and six months ended June 30, 2018 and 2017 are summarized as follows:



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
Balance at April 1, 2018	$	84,592		$	3,616		$	26,620		$	54,572	$	4,605
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			(260		)	8,622		(786		)
Other comprehensive loss	(895		)	(134		)	—			—		—
Purchases	14,746			—			—			—		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(1,877		)	—			(16,402		)	—		—
Net transfers into/(out of) Level 3	—			—			3,806			—		—
Balance at June 30, 2018	$	96,566		$	3,482		$	13,764		$	63,194	$	3,819


(1)	Changes in the balance of MSRs and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
Balance at January 1, 2018	$	77,181		$	3,779		$	33,717		$	33,676	$	2,157
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			(1,388		)	15,712		1,662
Other comprehensive loss	(3,085		)	(297		)	—			—		—
Purchases ⁽²⁾	27,016			—			—			13,806		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(4,546		)	—			(22,657		)	—		—
Net transfers into/(out of) Level 3	—			—			4,092			—		—
Balance at June 30, 2018	$	96,566		$	3,482		$	13,764		$	63,194	$	3,819



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
Balance at April 1, 2017	$	79,745		$	4,283		$	28,548		$	21,596	$	3,582
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			1,304			5,711		(2,535		)
Other comprehensive income (loss)	2,572			(173		)	—			—		—
Purchases	3,293			—			—			—		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(8,269		)	—			(2,159		)	—		—
Net transfers into/(out of) Level 3	—			—			2,480			—		—
Balance at June 30, 2017	$	77,341		$	4,110		$	30,173		$	27,307	$	1,047



				U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
(Dollars in thousands)	Municipal			U.S. Government Agencies			Loans held-for- investment			Mortgage servicing rights		Derivative Assets
Balance at January 1, 2017	$	79,626		$	—		$	22,137		$	19,103	$	2,291
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—			1,192			8,204		(1,244		)
Other comprehensive income (loss)	3,029			(173		)	—			—		—
Purchases	10,879			—			—			—		—
Issuances	—			—			—			—		—
Sales	—			—			—			—		—
Settlements	(16,193		)	—			(5,491		)	—		—
Net transfers into/(out of) Level 3	—			4,283			12,335			—		—
Balance at June 30, 2017	$	77,341		$	4,110		$	30,173		$	27,307	$	1,047


(1)	Changes in the balance of MSRs and derivative assets related to fair value adjustments are recorded as components of mortgage banking revenue. Changes in the balance of loans held-for-investment related to fair value adjustments are recorded as other non-interest income.


(2)	Purchased as a part of the Veterans First business combination. See Note 3 - Business Combinations for further discussion.

Summary Of Assets Measured At Fair Value On A Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis that were still held in the balance sheet at the end of the period, the following table provides the carrying value of the related individual assets or portfolios at June 30, 2018.



	June 30, 2018								Three Months Ended June 30, 2018 Fair Value Losses Recognized, net		Six Months Ended June 30, 2018 Fair Value Losses Recognized, net
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans—collateral based	$	67,700	$	—	$	—	$	67,700	$	3,288	$	7,174
Other real estate owned ⁽¹⁾	35,331		—		—		35,331		1,511		3,669
Total	$	103,031	$	—	$	—	$	103,031	$	4,799	$	10,843


(1)	Fair value losses recognized, net on other real estate owned include valuation adjustments and charge-offs during the respective period.

Schedule Of Valuation Techniques And Significant Unobservable Inputs Used To Measure Both Recurring And Non-Recurring

The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at June 30, 2018 were as follows:

(Dollars in thousands)

Fair Value

Valuation Methodology

Significant Unobservable Input

Range

of Inputs

Weighted

Average

of Inputs

Impact to valuation

from an increased or

higher input value

Measured at fair value on a recurring basis:

Municipal Securities

96,566

Bond pricing

Equivalent rating

BBB-AA+

N/A

Increase

U.S. Government agencies

3,482

Bond pricing

Equivalent rating

AAA

Increase

Loans held-for-investment

13,764

Discounted cash flows

Discount rate

4%-5%

4.40%

Decrease

Credit discount

0%-3%

1.21%

Decrease

Constant prepayment rate (CPR)

9.59%

Decrease

MSRs

63,194

Discounted cash flows

Discount rate

6%-16%

10.04%

Decrease

Constant prepayment rate (CPR)

0%-88%

9.28%

Decrease

Cost of servicing

$15-$200

$78

Decrease

Cost of servicing - delinquent

$200-$1,000

$375

Decrease

Derivatives

3,819

Discounted cash flows

Pull-through rate

33%-100%

81.35%

Increase

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

67,700

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Other real estate owned

35,331

Appraisal value

Appraisal adjustment - cost of sale

10%

10.00%

Decrease

Summary Of Carrying Amounts And Estimated Fair Values Of Financial Instruments

The table below presents the carrying amounts and estimated fair values of the Company’s financial instruments as of the dates shown:



	At June 30, 2018				At December 31, 2017				At June 30, 2017
	Carrying		Fair		Carrying		Fair		Carrying		Fair
(Dollars in thousands)	Value		Value		Value		Value		Value		Value
Financial Assets:
Cash and cash equivalents	$	304,642	$	304,642	$	277,591	$	277,591	$	296,161	$	296,161
Interest bearing deposits with banks	1,221,407		1,221,407		1,063,242		1,063,242		1,011,635		1,011,635
Available-for-sale securities	1,940,787		1,940,787		1,803,666		1,803,666		1,649,636		1,649,636
Held-to-maturity securities	890,834		851,842		826,449		812,516		793,376		787,489
Trading account securities	862		862		995		995		1,987		1,987
Equity securities with readily determinable fair value	37,839		37,839		—		—		—		—
FHLB and FRB stock, at cost	96,699		96,699		89,989		89,989		80,812		80,812
Brokerage customer receivables	16,649		16,649		26,431		26,431		23,281		23,281
Mortgage loans held-for-sale, at fair value	455,712		455,712		313,592		313,592		382,837		382,837
Loans held-for-investment, at fair value	67,181		67,181		33,717		33,717		30,173		30,173
Loans held-for-investment, at amortized cost	22,543,379		22,767,838		21,607,080		21,768,978		20,763,278		21,921,002
MSRs	63,194		63,194		33,676		33,676		27,307		27,307
Nonqualified deferred compensation assets	12,053		12,053		11,065		11,065		10,556		10,556
Derivative assets	92,156		92,156		52,069		52,069		49,703		49,703
Accrued interest receivable and other	240,790		240,790		227,649		227,649		215,291		215,291
Total financial assets	$	27,984,184	$	28,169,651	$	26,367,211	$	26,515,176	$	25,336,033	$	26,487,870
Financial Liabilities
Non-maturity deposits	$	19,465,510	$	19,465,510	$	18,775,977	$	18,775,977	$	18,086,300	$	18,086,300
Deposits with stated maturities	4,899,969		4,911,324		4,407,370		4,350,004		4,519,392		4,503,645
FHLB advances	667,000		669,406		559,663		544,750		318,270		316,799
Other borrowings	255,701		255,701		266,123		266,123		277,710		277,710
Subordinated notes	139,148		137,782		139,088		144,266		139,029		143,126
Junior subordinated debentures	253,566		257,465		253,566		264,696		253,566		253,330
Derivative liabilities	69,364		69,364		35,671		35,671		37,651		37,651
FDIC indemnification liability	—		—		—		—		15,375		15,375
Accrued interest payable	9,802		9,802		8,030		8,030		6,460		6,460
Total financial liabilities	$	25,760,060	$	25,776,354	$	24,445,488	$	24,389,517	$	23,653,753	$	23,640,396