FAIR VALUE MEASUREMENTS

Recurring fair value measurements

The following table presents information about the Company's assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 and their classification within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies, in the Annual Report on Form 10-K for the year ended December 31, 2018, for a description of how fair value measurements are determined.



	March 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale	$	—	$	4,873,778	$	—	$	4,873,778
Mortgage loans held for sale	—		128,451		—		128,451
Mortgage loans held for investment, at fair value option	—		—		550		550
Derivative instruments	—		51,086		—		51,086
Total	$	—	$	5,053,315	$	550	$	5,053,865
Liabilities
Derivative instruments	$	—	$	16,756	$	—	$	16,756
Total	$	—	$	16,756	$	—	$	16,756

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets
Securities available for sale	$	—	$	4,783,579	$	—	$	4,783,579
Mortgage loans held for sale	—		107,734		—		107,734
Mortgage loans held for investment, at fair value option	—		—		3,143		3,143
Derivative instruments	—		27,048		—		27,048
Total	$	—	$	4,918,361	$	3,143	$	4,921,504
Liabilities
Derivative instruments	$	—	$	22,124	$	—	$	22,124
Total	$	—	$	22,124	$	—	$	22,124

During the three months ended March 31, 2019, there were no transfers between the Level 1 and Level 2 fair value categories.

Non-recurring fair value measurements

The Company holds certain assets that are measured at fair value, but only in certain circumstances, such as impairment. The following table presents information about the Company's assets that are measured at fair value and still held as of March 31, 2019 and December 31, 2018 for which a non-recurring fair value adjustment was recorded during the periods then ended. See Note 1, Summary of Significant Accounting Policies, in the Annual Report on Form 10-K for the year ended December 31, 2018, for a description of how fair value measurements are determined.



	March 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Impaired loans	$	—	$	—	$	63,145	$	63,145
OREO, net	—		—		8,875		8,875
Total	$	—	$	—	$	72,020	$	72,020

	December 31, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets
Impaired loans	$	—	$	—	$	65,914	$	65,914
OREO, net	—		—		6,433		6,433
Total	$	—	$	—	$	72,347	$	72,347

The tables above exclude the initial measurement of assets and liabilities that were acquired as part of business combinations. 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, and equipment) or Level 3 fair value measurements (loans, core deposit intangible assets, and debt). Refer to Note 3, Acquisition Activity, in the Annual Report on Form 10-K for the year ended December 31, 2018, for further detail.

The Company did not record any liabilities at fair value for which measurement of the fair value was made on a non-recurring basis as of March 31, 2019 and December 31, 2018.

Fair value option

The Company has elected the fair value option for originated residential mortgage loans held for sale, which allows for a more effective offset of the changes in fair values of the loans and the derivative instruments used to hedge them without the burden of complying with the requirements for hedge accounting. The Company also has a portion of mortgage loans held for investment for which the fair value option was elected upon origination and continue to be accounted for at fair value at March 31, 2019 and December 31, 2018, respectively.

The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for mortgage loans held for sale and mortgage loans held for investment measured at fair value:



	March 31, 2019							December 31, 2018
(in thousands)	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Unpaid Principal			Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Unpaid Principal
Mortgage loans held for sale, at fair value	$	128,451	$	124,410	$	4,041		$	107,734	$	104,345	$	3,389
Mortgage loans held for investment, at fair value	550		599		(49		)	3,143		3,595		(452		)

Interest income on mortgage loans held for sale and mortgage loans held for investment at fair value option is recognized based on contractual rates and is reflected in interest income on loans held for sale in the consolidated statements of comprehensive income. The following table details net gains (losses) resulting from the change in fair value of loans that were recorded in mortgage income in the consolidated statements of comprehensive income for the three months ended March 31, 2019 and 2018. The changes in fair value are mostly offset by economic hedging activities, with an insignificant portion of these changes attributable to changes in instrument-specific credit risk.



	Net Gains (Losses) Resulting From Changes in Fair Value
	For the Three Months Ended March 31,
(in thousands)	2019		2018
Fair value option
Mortgage loans held for sale, at fair value	$	652	$	(749	)
Mortgage loans held for investment, at fair value	191		(1,142		)