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Disclosure About Fair Values of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset at March 31, 2019 and December 31, 2018:

(In thousands)	Carrying Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2019
Assets
Investment securities available-for-sale	$	1,754,839	$	—	$	1,754,839	$	—
Equity securities with readily determinable fair values not held for trading		6,073		6,073		—		—
Derivative assets		182,287		—		182,287		—
Net profits interests		5,317		—		—		5,317
Other assets		15,403		—		—		15,403
Total recurring basis measured assets	$	1,963,919	$	6,073	$	1,937,126	$	20,720
Liabilities
Derivative liabilities	$	24,046	$	—	$	24,046	$	—
Total recurring basis measured liabilities	$	24,046	$	—	$	24,046	$	—

(In thousands)	Carrying Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2018
Assets
Investment securities available-for-sale	$	1,187,252	$	—	$	1,187,252	$	—
Equity securities with readily determinable fair values not held for trading		5,840		5,840		—		—
Derivative assets		11,136		—		11,136		—
Net profits interests		5,779		—		—		5,779
Other assets		11,191						11,191
Total recurring basis measured assets	$	1,221,198	$	5,840	$	1,198,388	$	16,970
Liabilities
Derivative liabilities	$	32,350	$	—	$	32,350	$	—
Total recurring basis measured liabilities	$	32,350	$	—	$	32,350	$	—

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

The tables below include a roll-forward of the consolidated balance sheet amounts for the three months ended March 31, 2019 and 2018 for changes in the fair value of financial instruments within Level 3 of the valuation hierarchy that are recorded on a recurring basis. Level 3 financial instruments typically include unobservable components, but may also include some observable components that may be validated to external sources. The gains or (losses) in the following table (which are reported in Other Noninterest Income in the consolidated income statements) may include changes to fair value due in part to observable factors that may be part of the valuation methodology.

Level 3 Assets Measured at Fair Value on a Recurring Basis

	For the Three Months Ended March 31,
	2019			2018			2019			2018
(In thousands)	Net Profits Interests						Investments in Limited Partnerships
Beginning Balance	$	5,779		$	15,833		$	11,191		$	—
Transfers in due to adoption of ASU 2016-01		—			—			—			5,518
Adjustment recorded in retained earnings due to adoption of ASU 2016-01		—			—			—			1,201
Net gains included in earnings		(174	)		(869	)		746			676
Reclassifications		—			—			(800	)		—
Contributions paid		—			—			608			225
Distributions received		(288	)		(669	)		(144	)		(106	)
Ending Balance	$	5,317		$	14,295		$	11,601		$	7,514
Net unrealized gains (losses) included in earnings relating to assets held at the end of the period	$	(174	)	$	(869	)	$	746		$	676

Summary of Assets Recorded at Fair Value on a Nonrecurring Basis

From time to time, the Company may be required to measure certain other financial assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis which were still held on the balance sheets at March 31, 2019 and December 31, 2018, the following tables provide the level of valuation assumptions used to determine each adjustment and the related carrying value:

(In thousands)	Carrying Value		(Level 1)		(Level 2)		(Level 3)
March 31, 2019
Loans held for sale	$	209,346		—	$	209,346	$	—
Impaired loans, net of specific allowance		76,882		—		—		76,882
Other real estate		2,862		—		—		2,862
Total assets measured on a nonrecurring basis	$	289,090	$	—	$	209,346	$	79,744

(In thousands)	Carrying Value		(Level 1)		(Level 2)		(Level 3)
December 31, 2018
Loans held for sale	$	59,461		—	$	59,461	$	—
Impaired loans, net of specific allowance		71,741		—		—		71,741
Other real estate		2,406		—		—		2,406
Total assets measured on a nonrecurring basis	$	133,608	$	—	$	59,461	$	74,147

Summary of Significant Unobservable Inputs Used in Level 3 Fair Value Measurements for Financial Assets Measured at Fair Value on a Nonrecurring Basis

Significant unobservable inputs used in Level 3 fair value measurements for financial assets measured at fair value on a nonrecurring basis are summarized below:

Quantitative Information about Level 3 Fair Value Measurements

(In thousands)

Carrying

Value

Valuation

Methods

Unobservable Inputs

Range

March 31, 2019

Impaired loans, net of specific allowance

76,882

Appraised value, as adjusted

Discount to fair value

0% - 20%

Discounted cash flow

Net recoverable oil and gas reserves and forward-looking commodity prices. Discount rate - 10%

0% - 10%⁽¹⁾

Discounted cash flow

Discount rates - 2.9% to 8.7%

0% - 20%⁽¹⁾

Enterprise value

Exit multiples

4 - 11%⁽¹⁾

Estimated closing costs

10%

Other real estate

2,862

Appraised value, as adjusted

Discount to fair value

0% - 20%

Estimated closing costs

10%

(1) - Represents difference of unpaid balance to fair value.

Quantitative Information about Level 3 Fair Value Measurements

(In thousands)

Carrying

Value

Valuation

Methods

Unobservable

Inputs

Range

December 31, 2018

Impaired loans, net of specific allowance

71,741

Appraised value, as adjusted

Discount to fair value

0% - 20%

Discounted cash flow

Net recoverable oil and gas reserves and forward-looking commodity prices. Discount rate - 10%

0 - 10%

Discounted cash flow

Discount rates - 2.9% to 8.7%

0% - 20%⁽¹⁾

Enterprise value

Exit multiples

0 - 15%⁽¹⁾

Other real estate

2,406

Estimated closing costs

10%

Appraised value, as adjusted

Discount to fair value

0% - 20%

Estimated closing costs

10%

(1) - Represents difference of unpaid balance to fair value.

Summary of Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments are as follows:

	March 31, 2019
(In thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	214,698	$	214,698	$	214,698	$	—	$	—
Interest-bearing deposits in other banks		322,786		322,786		322,786		—		—
Federal funds sold		5,585		5,585		5,585		—		—
Investment securities available-for-sale		1,754,839		1,754,839		—		1,754,839		—
Equity securities with readily determinable fair values not held for trading		6,073		6,073		6,073		—		—
Loans held for sale		209,346		209,346		—		209,346		—
Net loans		13,519,916		13,119,074		—		—		13,119,074
Derivative assets		182,287		182,287		—		182,287		—
Net profits interests		5,317		5,317		—		—		5,317
Other assets		59,987		59,987		—		—		59,987
Financial Liabilities:
Deposits		14,199,223		14,210,340		—		14,210,340		—
Advances from FHLB		395,000		395,000		—		395,000		—
Securities sold under agreements to repurchase		1,418		1,418		—		1,418		—
Senior debt		184,822		186,967		—		186,967		—
Subordinated debt		98,963		105,479		—		105,479		—
Junior subordinated debentures		37,075		48,671		—		48,671		—
Derivative liabilities		24,046		24,046		—		24,046		—

	December 31, 2018
(In thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets:
Cash and due from banks	$	237,342	$	237,342	$	237,342	$	—	$	—
Interest-bearing deposits in other banks		523,436		523,436		523,436		—		—
Federal funds sold		18,502		18,502		18,502		—		—
Investment securities available-for-sale		1,187,252		1,187,252		—		1,187,252		—
Equity securities with readily determinable fair values not held for trading		5,840		5,840		5,840		—		—
Loans held for sale		59,461		59,461		—		59,461		—
Net loans		9,959,545		9,735,130		—		—		9,735,130
Derivative assets		11,136		11,136		—		11,136		—
Net profits interests		5,779		5,779		—		—		5,779
Investments in limited partnerships		36,917		36,917						36,917
Financial Liabilities:
Deposits		10,708,689		10,700,350		—		10,700,350		—
Advances from FHLB		150,000		150,000		—		150,000		—
Securities sold under agreements to repurchase		1,106		1,106		—		1,106		—
Senior debt		184,801		194,762		—		194,762		—
Subordinated debt		98,910		103,008		—		103,008		—
Junior subordinated debentures		36,953		46,946		—		46,946		—
Derivative liabilities		32,350		32,350		—		32,350		—