FAIR VALUE MEASURES (Tables)

9 Months Ended

Sep. 30, 2018

Loans Held for Sale are Carried at Fair Value

The Company’s loans held for sale are carried at fair value and are comprised of the following:



(dollars in thousands)	September 30, 2018		December 31, 2017
Mortgage loans held for sale	$	130,179	$	190,445
SBA loans held for sale	—		6,997
Total loans held for sale	$	130,179	$	197,442

Difference Between Fair Value and Principal Balance for Mortgage Loans Held for Sale Measured at Fair Value

The following table summarizes the difference between the fair value and the principal balance for mortgage loans held for sale carried at fair value as of September 30, 2018 and December 31, 2017:



(dollars in thousands)	September 30, 2018		December 31, 2017
Aggregate fair value of mortgage loans held for sale	$	130,179	$	190,445
Aggregate unpaid principal balance	126,903		185,814
Past-due loans of 90 days or more	—		—
Nonaccrual loans	—		—

Fair Value Measurements of Assets and Liabilities Measured on Recurring Basis

The following table presents the fair value measurements of assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall as of September 30, 2018 and December 31, 2017:



	Recurring Basis Fair Value Measurements
	September 30, 2018
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	151,749	$	—	$	151,749	$	—
Corporate debt securities	67,118		—		65,618		1,500
Mortgage-backed securities	943,703		—		943,703		—
Loans held for sale	130,179		—		130,179		—
Derivative financial instruments	315		—		315		—
Mortgage banking derivative instruments	3,668		—		3,668		—
Total recurring assets at fair value	$	1,296,732	$	—	$	1,295,232	$	1,500



	Recurring Basis Fair Value Measurements
	December 31, 2017
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
Financial assets:
State, county and municipal securities	$	137,794	$	—	$	137,794	$	—
Corporate debt securities	47,143		—		45,643		1,500
Mortgage-backed securities	625,936		—		625,936		—
Loans held for sale	197,442		—		197,442		—
Mortgage banking derivative instruments	2,888		—		2,888		—
Total recurring assets at fair value	$	1,011,203	$	—	$	1,009,703	$	1,500
Financial liabilities:
Derivative financial instruments	$	381	$	—	$	381	$	—
Mortgage banking derivative instruments	67		—		67		—
Total recurring liabilities at fair value	$	448	$	—	$	448	$	—

Summary of Fair Value Measurements of Assets Measured at Fair Value on Non-Recurring Basis

The following table presents the fair value measurements of assets measured at fair value on a non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy as of September 30, 2018 and December 31, 2017:



	Nonrecurring Basis Fair Value Measurements
(dollars in thousands)	Fair Value		Level 1		Level 2		Level 3
September 30, 2018
Impaired loans carried at fair value	$	31,182	$	—	$	—	$	31,182
Other real estate owned	2,734		—		—		2,734
Purchased other real estate owned	7,692		—		—		7,692
Total nonrecurring assets at fair value	$	41,608	$	—	$	—	$	41,608

December 31, 2017
Impaired loans carried at fair value	$	27,684	$	—	$	—	$	27,684
Other real estate owned	323		—		—		323
Purchased other real estate owned	9,011		—		—		9,011
Total nonrecurring assets at fair value	$	37,018	$	—	$	—	$	37,018

Summary of Significant Unobservable Inputs Used in Fair Value Measurement of Level 3 Assets and Liabilities

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities:



(dollars in thousands)	Fair Value		Valuation Technique	Unobservable Inputs	Range of Discounts	Weighted Average Discount
September 30, 2018
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	31,182	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	10% - 90%	26%
Other real estate owned	$	2,734	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 54%	23%
Purchased other real estate owned	$	7,692	Third-party appraisals	Collateral discounts and estimated costs to sell	6% - 74%	38%

December 31, 2017
Recurring:
Investment securities available for sale	$	1,500	Discounted par values	Credit quality of underlying issuer	0%	0%
Nonrecurring:
Impaired loans	$	27,684	Third-party appraisals and discounted cash flows	Collateral discounts and discount rates	20% - 90%	24%
Other real estate owned	$	323	Third-party appraisals and sales contracts	Collateral discounts and estimated costs to sell	15% - 15%	15%
Purchased other real estate owned	$	9,011	Third-party appraisals	Collateral discounts and estimated costs to sell	10% - 74%	26%

Carrying Amount and Estimated Fair Value of Financial Instruments

The carrying amount and estimated fair value of the Company’s financial instruments, not shown elsewhere in these financial statements, were as follows. The methods used to estimate the fair value of financial instruments at December 31, 2017 approximated an entry price. In accordance with the adoption of ASU 2016-01, the methods utilized to estimate the fair value of financial instruments at September 30, 2018 represent an approximation of exit price; however, an actual price derived in an active market may differ.



			Fair Value Measurements
			September 30, 2018
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	158,453	$	158,453	$	—	$	—	$	158,453
Federal funds sold and interest-bearing deposits in banks	470,804		470,804		—		—		470,804
Time deposits in other banks	11,558		—		11,558		—		11,558
Loans, net	8,470,220		—		—		8,421,188		8,421,188
Accrued interest receivable	36,846		—		5,498		31,348		36,846
Financial liabilities:
Deposits	$	9,181,363	$	—	$	9,175,256	$	—	$	9,175,256
Securities sold under agreements to repurchase	14,071		14,071		—		—		14,071
Other borrowings	656,831		—		658,197		—		658,197
Subordinated deferrable interest debentures	88,986		—		85,400		—		85,400
FDIC loss-share payable	18,740		—		—		18,901		18,901
Liability for USPF acquisition contingent consideration	2,514		—		—		2,514		2,514
Accrued interest payable	4,462		—		4,462		—		4,462



			Fair Value Measurements
			December 31, 2017
(dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial assets:
Cash and due from banks	$	139,313	$	139,313	$	—	$	—	$	139,313
Federal funds sold and interest-bearing deposits in banks	191,345		191,345		—		—		191,345
Loans, net	5,992,880		—		—		5,960,963		5,960,963
Accrued interest receivable	26,005		26,005		—		—		26,005
Financial liabilities:
Deposits	$	6,625,845	$	—	$	6,627,773	$	—	$	6,627,773
Securities sold under agreements to repurchase	30,638		30,638		—		—		30,638
Other borrowings	250,554		—		251,759		—		251,759
Subordinated deferrable interest debentures	85,550		—		74,243		—		74,243
FDIC loss-share payable	8,803		—		—		9,548		9,548
Accrued interest payable	3,258		3,258		—		—		3,258