Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair value is defined by applicable accounting guidance as the price to sell an asset or transfer a liability in an orderly transaction between market participants in the principal market for the given asset or liability at the measurement date based on market conditions at that date. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Certain assets and liabilities are recorded in the Company’s financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis.

For some assets and liabilities, observable market transactions and market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. A hierarchy for fair value has been established which categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels are as follows:

Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) - fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.

Significant Other Observable Inputs (Level 2) - fair value is based on significant other observable inputs which are generally determined based on a single price for each financial instrument provided to us by an applicable third-party pricing service and is based on one or more of the following:


•	Quoted prices for similar, but not identical, assets or liabilities in active markets;


•	Quoted prices for identical or similar assets or liabilities in inactive markets;


•	Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates;


•	Other inputs derived from or corroborated by observable market inputs.

Significant Unobservable Inputs (Level 3) - fair value is based upon model-based valuation techniques for which at least one significant assumption is not observable in the market.

Transfers between levels are recognized as of the end of the reporting period. There were no transfers in or out of quoted prices in active markets for identical instruments to significant other observable inputs or significant unobservable inputs during the year ended December 31, 2019 and 2018, respectively. Transfers between significant other observable inputs and significant unobservable inputs during the year ended December 31, 2019 and 2018 are included in the summary of changes in recurring fair values measured using unobservable inputs. Additionally, $208 million of held-to-maturity other debt securities were transferred from significant other observable inputs to significant unobservable inputs at December 31, 2018 due to a lack of currently available observable inputs.

The underlying methods used by the third-party pricing services are considered in determining the primary inputs used to determine fair values. Management has evaluated the methodologies employed by the third-party pricing services by comparing the price provided by the pricing service with other sources, including brokers' quotes, sales or purchases of similar instruments and discounted cash flows to establish a basis for reliance on the pricing service values. Significant differences between the pricing service provided value and other sources are discussed with the pricing service to understand the basis for their values. Based on all observable inputs, management may adjust prices obtained from third-party pricing services to more appropriately reflect the prices that would be received to sell assets or paid to transfer liabilities in orderly transactions in the current market. No significant adjustments were made to prices provided by third-party pricing services at December 31, 2019 and 2018.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of financial assets and liabilities that are measured on a recurring basis is as follows as of December 31, 2019 (in thousands):



	Total		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
Assets:
Trading securities:
U.S. government agency debentures	$	44,264	$	—	$	44,264	$	—
Residential agency mortgage-backed securities	1,504,651		—		1,504,651		—
Municipal and other tax-exempt securities	26,196		—		26,196		—
Asset-backed securities	14,084		—		14,084		—
Other trading securities	34,726		—		34,726		—
Total trading securities	1,623,921		—		1,623,921		—
Available for sale securities:
U.S. Treasury	1,600		1,600		—		—
Municipal and other tax-exempt securities	1,861		—		1,861		—
Residential agency mortgage-backed securities	8,046,096		—		8,046,096		—
Residential non-agency mortgage-backed securities	41,609		—		41,609		—
Commercial agency mortgage-backed securities guaranteed	3,178,005		—		3,178,005		—
Other debt securities	472		—		—		472
Total available for sale securities	11,269,643		1,600		11,267,571		472
Fair value option securities:
U.S. Treasury	9,917		9,917		—		—
Residential agency mortgage-backed securities	1,088,660		—		1,088,660		—
Total fair value option securities	1,098,577		9,917		1,088,660		—
Residential mortgage loans held for sale	182,271		—		173,958		8,313
Mortgage servicing rights, net¹	201,886		—		—		201,886
Derivative contracts, net of cash margin²	323,375		8,944		314,431		—
Liabilities:
Derivative contracts, net of cash margin²	251,128		—		251,128		—


¹	A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 7, Mortgage Banking Activities.

See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts in a net asset position that were valued based on quoted prices in active markets or identical instruments (Level 1) are exchange-traded interest rate and energy derivative contracts, net of cash margin. Derivative contracts in a net liability position that were valued using quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate and agricultural derivative contracts, fully offset by cash margin.

The fair value of financial assets and liabilities that are measured on a recurring basis is as follows as of December 31, 2018 (in thousands):



	Total		Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs
Assets:
Trading securities:
U.S. government agency debentures	$	63,765	$	—	$	63,765	$	—
Residential agency mortgage-backed securities	1,791,584		—		1,791,584		—
Municipal and other tax-exempt securities	34,507		—		34,507		—
Asset-backed securities	42,656		—		42,656		—
Other trading securities	24,411		—		24,411		—
Total trading securities	1,956,923		—		1,956,923		—
Available for sale securities:
U.S. Treasury	493		493		—		—
Municipal and other tax-exempt securities	2,864		—		2,864		—
Residential agency mortgage-backed securities	5,804,708		—		5,804,708		—
Residential non-agency mortgage-backed securities	59,736		—		59,736		—
Commercial agency mortgage-backed securities guaranteed	2,953,889		—		2,953,889		—
Other debt securities	35,430		—		34,958		472
Total available for sale securities	8,857,120		493		8,856,155		472
Fair value option securities – Residential agency mortgage-backed securities	283,235		—		283,235		—
Residential mortgage loans held for sale	149,221		—		134,014		15,207
Mortgage servicing rights, net¹	259,254		—		—		259,254
Derivative contracts, net of cash margin²	320,929		44,074		276,855		—
Liabilities:
Derivative contracts, net of cash margin ²	362,306		—		362,306		—


¹	A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 7, Mortgage Banking Activities.

See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts in a net asset position that were valued based on quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate, energy and agricultural derivative contracts, net of cash margin. Derivative contracts in a net liability position that were valued using quoted prices in active markets for identical instruments based on quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate derivative contracts, fully offset by cash margin.

Following is a description of the Company's valuation methodologies used for assets and liabilities measured on a recurring basis:

Securities

The fair values of trading, available for sale and fair value option securities are based on quoted prices for identical instruments in active markets, when available. If quoted prices for identical instruments are not available, fair values are based on significant other observable inputs such as quoted prices of comparable instruments or interest rates and credit spreads, yield curves, volatilities, prepayment speeds and loss severities.

The fair value of certain available for sale and held-to-maturity municipal and other debt securities may be based on significant unobservable inputs. These significant unobservable inputs include limited observed trades, projected cash flows, current credit rating of the issuers and, when applicable, the insurers of the debt and observed trades of similar debt. Discount rates are primarily based on reference to interest rate spreads on comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar securities. A summary of significant inputs used to value these securities follows. A management committee composed of senior members from the Company's Capital Markets, Risk Management and Finance departments assess the appropriateness of these inputs quarterly.

Derivatives

All derivative instruments are carried on the balance sheet at fair value. Fair values for exchange-traded contracts are based on quoted prices. Fair values for over-the-counter interest rate, commodity and foreign exchange contracts are based on valuations provided either by third-party dealers in the contracts, quotes provided by independent pricing services, or a third-party provided pricing model that uses significant other observable market inputs.

Credit risk is considered in determining the fair value of derivative instruments. Management determines fair value adjustments based on various risk factors including but not limited to counterparty credit rating or equivalent loan grading, derivative contract notional size, price volatility of the underlying commodity, duration of the derivative contracts and expected loss severity. Expected loss severity is based on historical losses for similarly risk graded commercial loan customers. Decreases in counterparty credit rating or grading and increases in price volatility and expected loss severity all tend to increase the credit quality adjustment which reduces the fair value of asset contracts.

We also consider our own credit risk in determining the fair value of derivative contracts. Changes in our credit rating would affect the fair value of our derivative liabilities. In the event of a credit downgrade, the fair value of our derivative liabilities would increase.

Residential Mortgage Loans Held for Sale

Residential mortgage loans held for sale are carried on the balance sheet at fair value. The fair values of conforming residential mortgage loans held for sale are based upon quoted market prices of such loans sold in securitization transactions, including related unfunded loan commitments. The fair value of mortgage loans that are unable to be sold to U.S. government agencies is determined using quoted prices of loans that are sold in securitization transactions with a liquidity discount applied.

The following represents the changes related to assets measured at fair value on a recurring basis using significant unobservable inputs (in thousands):



	Available for Sale Securities					Residential mortgage loans held for sale
	Municipal and other tax-exempt securities			Other debt securities		Residential mortgage loans held for sale
Balance, December 31, 2017	$	4,802		$	472	$	12,299
Transfer to Level 3 from Level 2¹	—			—		6,183
Purchases and capital calls	—			—		—
Redemptions and distributions	(5,095		)	—		—
Proceeds from sales	—			—		(2,706		)
Gain (loss) recognized in earnings:
Mortgage banking revenue	—			—		(569		)
Other comprehensive income (loss):
Net change in unrealized gain (loss)	293			—		—
Balance, December 31, 2018	—			472		15,207
Transfer to Level 3 from Level 2¹	—			—		2,449
Purchases and capital calls	—			—		—
Redemptions and distributions	—			—		—
Proceeds from sales	—			—		(9,972		)
Gain (loss) recognized in earnings:
Mortgage banking revenue	—			—		629
Other comprehensive income (loss):
Net change in unrealized gain (loss)	—			—		—
Balance, December 31, 2019	$	—		$	472	$	8,313


¹	Recurring transfers to Level 3 from Level 2 consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards.

A summary of quantitative information about assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of December 31, 2019 follows (in thousands):



Quantitative Information about Level 3 Recurring Fair Value Measurements
	Fair Value	Valuation Technique(s)		Significant Unobservable Input	Range (Weighted Average)
Available for sale securities:
Other debt securities	472	Discounted cash flows	¹	Interest rate spread	7.08%-7.08% (7.08%)	³
Other debt securities	472	Discounted cash flows	¹	Interest rate spread	94.4%-94.4% (94.4%)	²
Residential mortgage loans held for sale	8,313	Quoted prices of loans sold in securitization transactions, with a liquidity discount applied		Liquidity discount applied to the market value of mortgage loans qualifying for sale to U.S. government agencies	95.23%


¹	Discounted cash flows developed using discount rates primarily based on reference to interest rate spreads for comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies, adjusted for lack of trading volume.


²	Represents fair value as a percentage of par value.


³	Interest rate yields used to value investment grade taxable securities based on comparable short-term taxable securities which are generally yielding approximately 3%.

A summary of quantitative information about Recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of December 31, 2018 follows (in thousands):



Quantitative Information about Level 3 Recurring Fair Value Measurements
	Fair Value	Valuation Technique(s)		Significant Unobservable Input	Range (Weighted Average)
Available for sale securities:
Other debt securities	472	Discounted cash flows	¹	Interest rate spread	7.88%-7.88% (7.88%)	³
Other debt securities	472	Discounted cash flows	¹	Interest rate spread	94.44%-94.44% (94.44%)	²
Residential mortgage loans held for sale	15,207	Quoted prices of loans sold in securitization transactions, with a liquidity discount applied		Liquidity discount applied to the market value of mortgage loans qualifying for sale to U.S. government agencies	92.38%


¹	Discounted cash flows developed using discount rates primarily based on reference to interest rate spreads for comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies, adjusted for lack of trading volume.


²	Represents fair value as a percentage of par value.


³	Interest rate yields used to value investment grade taxable securities based on comparable short-term taxable securities which are generally yielding less than 3%.

Fair Value of Assets and Liabilities Measured on a Non-Recurring Basis

Assets measured at fair value on a non-recurring basis include pension plan assets, which are based on quoted prices in active markets for identical instruments, collateral for certain impaired loans and real property and other assets acquired to satisfy loans, which are based primarily on comparisons to completed sales of similar assets.

The following represents the carrying value of assets measured at fair value on a non-recurring basis and related losses recorded during the year. The carrying value represents only those assets with the balance sheet date for which the fair value was adjusted during the year:



	Carrying Value at December 31, 2019						Fair Value Adjustments for the Year Ended December 31, 2019 Recognized In:
	Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Net losses (gains) and expenses of repossessed assets, net
Impaired loans	$	—	$	41	$	55,665	$	31,305	$	—
Real estate and other repossessed assets	—		5,986		1,551		—		(461		)



	Carrying Value at December 31, 2018						Fair Value Adjustments for the Year Ended December 31, 2018 Recognized In:
	Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Net losses (gains) and expenses of repossessed assets, net
Impaired loans	$	—	$	1,074	$	17,401	$	17,434	$	—
Real estate and other repossessed assets	—		4,795		6,366		—		7,269

The fair value of collateral-dependent impaired loans and real estate and other repossessed assets and the related fair value adjustments are generally based on unadjusted third-party appraisals. Our appraisal review policies require appraised values to be supported by observed inputs derived principally from or corroborated by observable market data. Appraisals that are not based on observable inputs or that require significant adjustments or fair value measurements that are not based on third-party appraisals are considered to be based on significant unobservable inputs. Non-recurring fair value measurements of collateral-dependent impaired loans and real estate and other repossessed assets based on significant unobservable inputs are generally due to estimates of current fair values between appraisal dates. Significant unobservable inputs include listing prices for comparable assets, uncorroborated expert opinions or management's knowledge of the collateral or industry. Non-recurring fair value measurements of collateral dependent loans secured by mineral rights are generally determined by our internal staff of engineers on projected cash flows under current market conditions and are based on significant unobservable inputs. Projected cash flows are discounted according to risk characteristics of the underlying oil and gas properties. Assets are evaluated to demonstrate with reasonable certainty that crude oil, natural gas and natural gas liquids can be recovered from known oil and gas reservoirs under existing economic and operating conditions at current prices with existing conventional equipment, operating methods and costs. Significant unobservable inputs are developed by asset management and workout professionals and approved by senior Credit Administration executives.

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of December 31, 2019 follows (in thousands):



Quantitative Information about Level 3 Non-recurring Fair Value Measurements
	Fair Value		Valuation Technique(s)	Significant Unobservable Input	Range (Weighted Average)
Impaired loans	$	55,665	Discounted cash flows	Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil & gas reserves, forward looking commodity prices, and estimated operating costs	4% - 94% (55%)¹
Real estate and other repossessed assets	1,551		Discounted cash flows	Marketability adjustments off appraised value²	74% - 86% (84%)


¹	Represents fair value as a percentage of the unpaid principal balance.

² Marketability adjustments include consideration of estimated costs to sell which is approximately 10% of the fair value.

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of December 31, 2018 follows (in thousands):



Quantitative Information about Level 3 Non-recurring Fair Value Measurements
	Fair Value		Valuation Technique(s)	Significant Unobservable Input	Range (Weighted Average)
Impaired loans	$	17,401	Discounted cash flows	Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil & gas reserves, forward looking commodity prices, and estimated operating costs	35% - 80% (50%)¹
Real estate and other repossessed assets	6,366		Discounted cash flows	Recoverable oil and gas reserves, forward-looking commodity prices and estimated operating costs	N/A


¹	Represents fair value as a percentage of the unpaid principal balance.

The table above excludes the initial measurement of assets and liabilities that were acquired as part of the CoBiz acquisition in October 1, 2018. These assets and liabilities were recorded at their fair value upon acquisition in accordance with U.S. GAAP and were not re-measured during the periods presented unless specifically required by U.S. GAAP. Acquisition date fair values represent either Level 2 fair value measurements (investment securities, deposits, property, equipment, and debt) or Level 3 fair value measurements (loans and core deposit intangible assets).

The fair value of pension plan assets was approximately $36 million at December 31, 2019 and $34 million at December 31, 2018, determined by significant other observable inputs. Fair value adjustments of pension plan assets along with changes in the projected benefit obligation are recognized in other comprehensive income.

Fair Value of Financial Instruments

The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring (dollars in thousands):



	December 31, 2019
	Carrying Value			Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	$	735,836		$	735,836	$	735,836	$	—	$	—
Interest-bearing cash and cash equivalents	522,985			522,985		522,985		—		—
Trading securities:
U.S. government agency debentures	44,264			44,264		—		44,264		—
Residential agency mortgage-backed securities	1,504,651			1,504,651		—		1,504,651		—
Municipal and other tax-exempt securities	26,196			26,196		—		26,196		—
Asset-backed securities	14,084			14,084		—		14,084		—
Other trading securities	34,726			34,726		—		34,726		—
Total trading securities	1,623,921			1,623,921		—		1,623,921		—
Investment securities:
Municipal and other tax-exempt securities	93,653			96,897		—		96,897		—
Residential agency mortgage-backed securities	10,676			11,164		—		11,164		—
Other debt securities	189,089			206,341		—		8,206		198,135
Total investment securities	293,418			314,402		—		116,267		198,135
Available for sale securities:
U.S. Treasury	1,600			1,600		1,600		—		—
Municipal and other tax-exempt securities	1,861			1,861		—		1,861		—
Residential agency mortgage-backed securities	8,046,096			8,046,096		—		8,046,096		—
Residential non-agency mortgage-backed securities	41,609			41,609		—		41,609		—
Commercial agency mortgage-backed securities	3,178,005			3,178,005		—		3,178,005		—
Other debt securities	472			472		—		—		472
Total available for sale securities	11,269,643			11,269,643		1,600		11,267,571		472
Fair value option securities:
U.S. Treasury	9,917			9,917		9,917		—		—
Residential agency mortgage-backed securities	1,088,660			1,088,660		—		1,088,660		—
Total fair value option securities	1,098,577			1,098,577		9,917		1,088,660		—
Residential mortgage loans held for sale	182,271			182,271		—		173,958		8,313
Loans:
Commercial	14,031,650			13,966,221		—		—		13,966,221
Commercial real estate	4,433,783			4,422,717		—		—		4,422,717
Residential mortgage	2,084,172			2,098,093		—		—		2,098,093
Personal	1,201,382			1,202,298		—		—		1,202,298
Total loans	21,750,987			21,689,329		—		—		21,689,329
Allowance for loan losses	(210,759		)	—		—		—		—
Loans, net of allowance	21,540,228			21,689,329		—		—		21,689,329
Mortgage servicing rights	201,886			201,886		—		—		201,886
Derivative instruments with positive fair value, net of cash margin	323,375			323,375		8,944		314,431		—
Deposits with no stated maturity	25,403,319			25,403,319		—		—		25,403,319
Time deposits	2,217,849			2,212,467		—		—		2,212,467
Other borrowed funds	8,345,405			8,315,860		—		—		8,315,860
Subordinated debentures	275,923			284,627		—		284,627		—
Derivative instruments with negative fair value, net of cash margin	251,128			251,128		—		251,128		—



	December 31, 2018
	Carrying Value			Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	$	741,749		$	741,749	$	741,749	$	—	$	—
Interest-bearing cash and cash equivalents	401,675			401,675		401,675		—		—
Trading securities:
U.S. government agency debentures	63,765			63,765		—		63,765		—
Residential agency mortgage-backed securities	1,791,584			1,791,584		—		1,791,584		—
Municipal and other tax-exempt securities	34,507			34,507		—		34,507		—
Asset-backed securities	42,656			42,656		—		42,656		—
Other trading securities	24,411			24,411		—		24,411		—
Total trading securities	1,956,923			1,956,923		—		1,956,923		—
Investment securities:
Municipal and other tax-exempt securities	137,296			138,562		—		138,562		—
Residential agency mortgage-backed securities	12,612			12,770		—		12,770		—
Other debt securities	205,279			215,966		—		7,905		208,061
Total investment securities	355,187			367,298		—		159,237		208,061
Available for sale securities:
U.S. Treasury securities	493			493		493		—		—
Municipal and other tax-exempt securities	2,864			2,864		—		2,864		—
Residential agency mortgage-backed securities	5,804,708			5,804,708		—		5,804,708		—
Residential non-agency mortgage-backed securities	59,736			59,736		—		59,736		—
Commercial agency mortgage-backed securities	2,953,889			2,953,889		—		2,953,889		—
Other debt securities	35,430			35,430		—		34,958		472
Total available for sale securities	8,857,120			8,857,120		493		8,856,155		472
Fair value option securities – Residential agency mortgage-backed securities	283,235			283,235		—		283,235		—
Residential mortgage loans held for sale	149,221			149,221		—		134,014		15,207
Loans:
Commercial	13,636,078			13,526,162		—		—		13,526,162
Commercial real estate	4,764,813			4,713,747		—		—		4,713,747
Residential mortgage	2,230,033			2,213,951		—		—		2,213,951
Personal	1,025,806			1,024,368		—		—		1,024,368
Total loans	21,656,730			21,478,228		—		—		21,478,228
Allowance for loan losses	(207,457		)	—		—		—		—
Loans, net of allowance	21,449,273			21,478,228		—		—		21,478,228
Mortgage servicing rights	259,254			259,254		—		—		259,254
Derivative instruments with positive fair value, net of cash margin	320,929			320,929		44,074		276,855		—
Deposits with no stated maturity	23,150,383			23,150,383		—		—		23,150,383
Time deposits	2,113,380			2,073,538		—		—		2,073,538
Other borrowed funds	7,142,801			7,071,953		—		—		7,071,953
Subordinated debentures	275,913			261,977		—		261,977		—
Derivative instruments with negative fair value, net of cash margin	362,306			362,306		—		362,306		—

Because no market exists for certain of these financial instruments and management does not intend to sell these financial instruments, the fair values shown in the tables above may not represent values at which the respective financial instruments could be sold individually or in the aggregate at the given reporting date.

Fair Value Election

As more fully disclosed in Note 2 and Note 7 to the Consolidated Financial Statements, the Company has elected to carry all U.S. government agency residential mortgage-backed securities held as economic hedges against changes in the fair value of mortgage servicing rights and all residential mortgage loans originated for sale at fair value. Changes in the fair value of these financial instruments are recognized in earnings.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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