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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present for each of the fair value hierarchy levels the Company’s assets and liabilities that are measured at fair value on a recurring basis in the consolidated balance sheets at September 30, 2020 and December 31, 2019:

		September 30, 2020
(in thousands)		Level 1				Level 2				Level 3				Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities		$	—			$	198,616			$	—			$	198,616
Municipal obligations			—				313,656				—				313,656
Corporate debt securities			—				8,183				—				8,183
Residential mortgage-backed securities			—				2,606,690				—				2,606,690
Commercial mortgage-backed securities			—				2,101,000				—				2,101,000
Collateralized mortgage obligations			—				419,170				—				419,170
Total available for sale securities			—				5,647,315				—				5,647,315
Derivative assets (1)			—				168,822				—				168,822
Total recurring fair value measurements - assets		$	—			$	5,816,137			$	—			$	5,816,137
Liabilities
Derivative liabilities (1)		$	—			$	51,662			$	4,616			$	56,278
Total recurring fair value measurements - liabilities		$	—			$	51,662			$	4,616			$	56,278

		December 31, 2019
(in thousands)		Level 1				Level 2				Level 3				Total
Assets
Available for sale debt securities:
U.S. Treasury and government agency securities		$	—			$	98,672			$	—			$	98,672
Municipal obligations			—				249,805				—				249,805
Corporate debt securities			—				7,988				—				7,988
Residential mortgage-backed securities			—				1,924,157				—				1,924,157
Commercial mortgage-backed securities			—				1,586,467				—				1,586,467
Collateralized mortgage obligations			—				808,215				—				808,215
Total available for sale securities			—				4,675,304				—				4,675,304
Derivative assets (1)			—				54,446				—				54,446
Total recurring fair value measurements - assets		$	—			$	4,729,750			$	—			$	4,729,750
Liabilities
Derivative liabilities (1)		$	—			$	15,385			$	5,704			$	21,089
Total recurring fair value measurements - liabilities		$	—			$	15,385			$	5,704			$	21,089

(1) For further disaggregation of derivative assets and liabilities, see Note 7 - Derivatives.

Consolidated Balance Sheets for Financial Instruments of Material Nature Measured at Fair Value on Recurring Basis

The table below presents a rollforward of the amounts on the consolidated balance sheets for the nine months ended September 30, 2020 and the year ended December 31, 2019 for financial instruments of a material nature that are classified within Level 3 of the fair value hierarchy and are measured at fair value on a recurring basis:

(in thousands)
Balance at December 31, 2018		$	7,304
Cash settlement			(1,900	)
Losses included in earnings			300
Balance at December 31, 2019			5,704
Cash settlement			(1,243	)
Losses included in earnings			155
Balance at September 30, 2020		$	4,616

Overview of the Valuation Techniques and Significant Unobservable Inputs

($ in thousands)
		Fair Value
Level 3 Class		September 30, 2020				December 31, 2019
Derivative liability		$	4,616			$	5,704
Valuation technique		Discounted cash flow				Discounted cash flow
Unobservable inputs:
Visa Class A appreciation - range		6% - 18%				6% - 18%
Visa Class A appreciation - weighted average		12%				12%
Conversion rate - range		1.63x - 1.59x				1.63x - 1.59x
Conversion rate -weighted average		1.6109x				1.616x
Time until resolution		3-27 months				12 - 36 months

Financial Assets Measured at Fair Value on Nonrecurring Basis

The following tables present the Company’s financial assets that are measured at fair value on a nonrecurring basis for each of the fair value hierarchy levels.

		September 30, 2020
(in thousands)		Level 1				Level 2				Level 3				Total
Collateral-dependent impaired loans		$	—			$	91,819			$	—			$	91,819
Other real estate owned and foreclosed assets, net			—				—				11,219				11,219
Total nonrecurring fair value measurements		$	—			$	91,819			$	11,219			$	103,038

		December 31, 2019
(in thousands)		Level 1				Level 2				Level 3				Total
Collateral-dependent impaired loans		$	—			$	182,377			$	—			$	182,377
Other real estate owned and foreclosed assets, net			—				—				24,422				24,422
Total nonrecurring fair value measurements		$	—			$	182,377			$	24,422			$	206,799

Estimated Fair Values of Financial Instruments

The following tables present the estimated fair values of the Company’s financial instruments by fair value hierarchy levels and the corresponding carrying amounts:

		September 30, 2020
														Total Fair				Carrying
(in thousands)		Level 1				Level 2				Level 3				Value				Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold		$	1,263,372			$	—			$	—			$	1,263,372			$	1,263,372
Available for sale securities			—				5,647,315				—				5,647,315				5,647,315
Held to maturity securities			—				1,517,688				—				1,517,688				1,408,961
Loans, net			—				91,819				21,970,946				22,062,765				21,791,530
Loans held for sale			—				103,566				—				103,566				103,566
Derivative financial instruments			—				168,822				—				168,822				168,822
Financial liabilities:
Deposits			—				—				27,017,416				27,017,416				27,030,659
Federal funds purchased			250				—				—				250				250
Securities sold under agreements to repurchase			806,645				—				—				806,645				806,645
FHLB short-term borrowings			—				1,161,666				—				1,161,666				1,100,000
Long-term debt			—				434,597				—				434,597				385,887
Derivative financial instruments			—				51,662				4,616				56,278				56,278

		December 31, 2019
(in thousands)		Level 1				Level 2				Level 3				Total Fair Value				Carrying Amount
Financial assets:
Cash, interest-bearing bank deposits, and federal funds sold		$	542,333			$	—			$	—			$	542,333			$	542,333
Available for sale securities			—				4,675,304				—				4,675,304				4,675,304
Held to maturity securities			—				1,611,004				—				1,611,004				1,568,009
Loans, net			—				182,377				20,861,702				21,044,079				21,021,504
Loans held for sale			—				55,864				—				55,864				55,864
Derivative financial instruments			—				54,446				—				54,446				54,446
Financial liabilities:
Deposits		$	—			$	—			$	23,786,775			$	23,786,775			$	23,803,575
Federal funds purchased			195,450				—				—				195,450				195,450
Securities sold under agreements to repurchase			484,422				—				—				484,422				484,422
FHLB short-term borrowings			2,035,000				—				—				2,035,000				2,035,000
Long-term debt			—				226,098				—				226,098				233,462
Derivative financial instruments			—				15,385				5,704				21,089				21,089

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- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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