x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
95-4703316
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
Large accelerated filer x
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company ¨
|
PART I - FINANCIAL INFORMATION
|
4
|
||
Item 1.
|
4
|
||
8
|
|||
Item 2.
|
54
|
||
Item 3.
|
81
|
||
Item 4.
|
81
|
||
PART II - OTHER INFORMATION
|
82
|
||
Item 1.
|
82
|
||
Item 1A.
|
82
|
||
Item 2.
|
82
|
||
Item 3.
|
82
|
||
Item 4.
|
82
|
||
Item 5.
|
82
|
||
Item 6.
|
83
|
||
83
|
|
·
|
our ability to manage the loan portfolio acquired from FDIC-assisted acquisitions within the limits of the loss protection provided by the FDIC;
|
|
·
|
changes in our borrowers’ performance on loans;
|
|
·
|
changes in the commercial and consumer real estate markets;
|
|
·
|
changes in our costs of operation, compliance and expansion;
|
|
·
|
changes in the economy, including inflation;
|
|
·
|
changes in government interest rate policies;
|
|
·
|
changes in laws or the regulatory environment;
|
|
·
|
changes in critical accounting policies and judgments;
|
|
·
|
changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies;
|
|
·
|
changes in the equity and debt securities markets;
|
|
·
|
changes in competitive pressures on financial institutions;
|
|
·
|
effect of additional provision for loan losses;
|
|
·
|
fluctuations of our stock price;
|
|
·
|
success and timing of our business strategies;
|
|
·
|
impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity;
|
|
·
|
changes in our ability to receive dividends from our subsidiaries; and
|
|
·
|
political developments, wars or other hostilities may disrupt or increase volatility in securities or otherwise affect economic conditions.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 1,105,888 | $ | 1,333,949 | ||||
Short-term investments
|
66,009 | 143,560 | ||||||
Federal funds sold
|
30,000 | — | ||||||
Securities purchased under resale agreements
|
951,824 | 500,000 | ||||||
Investment securities available-for-sale, at fair value (with amortized cost of $3,318,301 at September 30, 2011 and $2,900,410 at December 31, 2010)
|
3,279,592 | 2,875,941 | ||||||
Loans held for sale
|
251,920 | 220,055 | ||||||
Loans receivable, excluding covered loans (net of allowance for loan losses of $211,738 at September 30, 2011 and $230,408 at December 31, 2010)
|
9,578,766 | 8,430,199 | ||||||
Covered loans (net of allowance for loan losses of $6,434 at September 30, 2011and $4,225 at December 31, 2010)
|
4,139,902 | 4,800,876 | ||||||
Total loans receivable, net
|
13,718,668 | 13,231,075 | ||||||
FDIC indemnification asset
|
569,157 | 785,035 | ||||||
Other real estate owned, net
|
21,178 | 21,865 | ||||||
Other real estate owned covered, net
|
87,298 | 123,902 | ||||||
Total other real estate owned
|
108,476 | 145,767 | ||||||
Investment in affordable housing partnerships
|
172,407 | 155,074 | ||||||
Premises and equipment, net
|
119,035 | 135,919 | ||||||
Accrued interest receivable
|
93,042 | 82,090 | ||||||
Due from customers on acceptances
|
225,470 | 73,796 | ||||||
Premiums on deposits acquired, net
|
70,115 | 79,518 | ||||||
Goodwill
|
337,438 | 337,438 | ||||||
Other assets
|
714,005 | 601,320 | ||||||
TOTAL
|
$ | 21,813,046 | $ | 20,700,537 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Customer deposit accounts:
|
||||||||
Noninterest-bearing
|
$ | 3,377,559 | $ | 2,676,466 | ||||
Interest-bearing
|
13,931,141 | 12,964,793 | ||||||
Total deposits
|
17,308,700 | 15,641,259 | ||||||
Federal Home Loan Bank advances
|
457,075 | 1,214,148 | ||||||
Securities sold under repurchase agreements
|
1,024,949 | 1,083,545 | ||||||
Notes payable and other borrowings
|
89,969 | 60,686 | ||||||
Bank acceptances outstanding
|
225,470 | 73,796 | ||||||
Long-term debt
|
214,178 | 235,570 | ||||||
Accrued expenses and other liabilities
|
231,536 | 277,602 | ||||||
Total liabilities
|
19,551,877 | 18,586,606 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 11)
|
||||||||
STOCKHOLDERS' EQUITY
|
||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; Series A, non-cumulative convertible, 200,000 shares issued and 85,710 and 85,741 shares outstanding in 2011 and 2010, respectively.
|
83,027 | 83,058 | ||||||
Common stock, $0.001 par value, 200,000,000 shares authorized; 156,370,318 and 155,743,241 shares issued in 2011 and 2010, respectively; 148,961,927 and 148,542,940 shares outstanding in 2011 and 2010, respectively.
|
156 | 156 | ||||||
Additional paid in capital
|
1,436,940 | 1,434,277 | ||||||
Retained earnings
|
877,595 | 720,116 | ||||||
Treasury stock, at cost -- 7,408,391 shares in 2011 and 7,200,301 shares in 2010
|
(114,954 | ) | (111,262 | ) | ||||
Accumulated other comprehensive (loss) income, net of tax
|
(21,595 | ) | (12,414 | ) | ||||
Total stockholders' equity
|
2,261,169 | 2,113,931 | ||||||
TOTAL
|
$ | 21,813,046 | $ | 20,700,537 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
INTEREST AND DIVIDEND INCOME
|
||||||||||||||||
Loans receivable, including fees
|
$ | 244,523 | $ | 210,086 | $ | 712,822 | $ | 731,813 | ||||||||
Investment securities
|
24,503 | 15,725 | 66,613 | 50,642 | ||||||||||||
Securities purchased under resale agreements
|
5,064 | 2,410 | 14,443 | 11,303 | ||||||||||||
Investment in Federal Home Loan Bank stock
|
75 | 194 | 432 | 431 | ||||||||||||
Investment in Federal Reserve Bank stock
|
710 | 623 | 2,128 | 2,042 | ||||||||||||
Short-term investments
|
7,866 | 2,362 | 15,106 | 7,405 | ||||||||||||
Total interest and dividend income
|
282,741 | 231,400 | 811,544 | 803,636 | ||||||||||||
INTEREST EXPENSE
|
||||||||||||||||
Customer deposit accounts
|
28,216 | 28,498 | 83,328 | 91,078 | ||||||||||||
Federal Home Loan Bank advances
|
3,013 | 5,725 | 12,746 | 20,905 | ||||||||||||
Securities sold under repurchase agreements
|
12,218 | 12,189 | 36,351 | 36,775 | ||||||||||||
Long-term debt
|
1,424 | 1,685 | 4,783 | 4,823 | ||||||||||||
Other borrowings
|
88 | 498 | 384 | 1,903 | ||||||||||||
Total interest expense
|
44,959 | 48,595 | 137,592 | 155,484 | ||||||||||||
Net interest income before provision for loan losses
|
237,782 | 182,805 | 673,952 | 648,152 | ||||||||||||
Provision for loan losses
|
22,000 | 38,648 | 75,006 | 170,325 | ||||||||||||
Net interest income after provision for loan losses
|
215,782 | 144,157 | 598,946 | 477,827 | ||||||||||||
NONINTEREST (LOSS) INCOME
|
||||||||||||||||
Gain on acquisition
|
— | — | — | 27,571 | ||||||||||||
Impairment loss on investment securities
|
— | (6,522 | ) | (5,555 | ) | (17,515 | ) | |||||||||
Less: Noncredit-related impairment loss recorded in other comprehensive income
|
— | 5,634 | 5,091 | 7,186 | ||||||||||||
Net impairment loss on investment securities recognized in earnings
|
— | (888 | ) | (464 | ) | (10,329 | ) | |||||||||
(Decrease) increase in FDIC indemnification asset and receivable
|
(43,451 | ) | 5,826 | (79,700 | ) | (47,170 | ) | |||||||||
Branch fees
|
8,872 | 7,976 | 25,704 | 24,953 | ||||||||||||
Net gain on sales of investment securities
|
3,191 | 2,791 | 6,823 | 24,749 | ||||||||||||
Net gain on sales of fixed assets
|
30 | 25 | 2,236 | 77 | ||||||||||||
Letters of credit fees and foreign exchange income
|
6,450 | 3,914 | 17,636 | 11,023 | ||||||||||||
Ancillary loan fees
|
2,076 | 2,367 | 6,122 | 6,425 | ||||||||||||
Income from life insurance policies
|
982 | 1,100 | 3,088 | 3,306 | ||||||||||||
Net gain on sales of loans
|
5,452 | 4,177 | 18,753 | 12,250 | ||||||||||||
Other operating income
|
2,853 | 2,027 | 9,789 | 3,694 | ||||||||||||
Total noninterest (loss) income
|
(13,545 | ) | 29,315 | 9,987 | 56,549 | |||||||||||
NONINTEREST EXPENSE
|
||||||||||||||||
Compensation and employee benefits
|
39,885 | 38,693 | 119,025 | 131,051 | ||||||||||||
Occupancy and equipment expense
|
12,580 | 13,963 | 37,353 | 39,022 | ||||||||||||
Amortization of investments in affordable housing partnerships
|
5,287 | 1,442 | 14,410 | 7,117 | ||||||||||||
Amortization of premiums on deposits acquired
|
3,067 | 3,352 | 9,403 | 10,046 | ||||||||||||
Deposit insurance premiums and regulatory assessments
|
2,430 | 5,676 | 16,454 | 21,785 | ||||||||||||
Loan-related expenses
|
5,208 | 6,316 | 12,591 | 14,567 | ||||||||||||
Other real estate owned expense
|
4,489 | 5,694 | 29,738 | 44,689 | ||||||||||||
Legal expense
|
6,028 | 5,301 | 16,920 | 14,391 | ||||||||||||
Prepayment penalty for FHLB advances and other borrowings
|
3,826 | — | 12,281 | 13,832 | ||||||||||||
Data processing
|
1,827 | 2,646 | 6,530 | 8,174 | ||||||||||||
Deposit-related expenses
|
1,667 | 1,239 | 4,199 | 3,381 | ||||||||||||
Consulting expense
|
2,094 | 1,612 | 6,098 | 5,672 | ||||||||||||
Other operating expenses
|
16,164 | 14,011 | 43,936 | 50,446 | ||||||||||||
Total noninterest expense
|
104,552 | 99,945 | 328,938 | 364,173 | ||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES
|
97,685 | 73,527 | 279,995 | 170,203 | ||||||||||||
PROVISION FOR INCOME TAXES
|
35,253 | 26,576 | 100,967 | 61,988 | ||||||||||||
NET INCOME
|
62,432 | 46,951 | 179,028 | 108,215 | ||||||||||||
PREFERRED STOCK DIVIDENDS AND AMORTIZATION OF PREFERRED
|
||||||||||||||||
STOCK DISCOUNT
|
1,714 | 6,732 | 5,143 | 19,017 | ||||||||||||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$ | 60,718 | $ | 40,219 | $ | 173,885 | $ | 89,198 | ||||||||
EARNINGS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS
|
||||||||||||||||
BASIC
|
$ | 0.41 | $ | 0.27 | $ | 1.18 | $ | 0.66 | ||||||||
DILUTED
|
$ | 0.41 | $ | 0.27 | $ | 1.17 | $ | 0.61 | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
|
||||||||||||||||
BASIC
|
147,162 | 146,454 | 147,013 | 134,396 | ||||||||||||
DILUTED
|
153,453 | 147,113 | 153,372 | 146,993 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE
|
$ | 0.05 | $ | 0.01 | $ | 0.11 | $ | 0.03 |
Preferred |
Additional
Paid In |
Common |
Additional
Paid In |
Retained | Treasury |
Accumulated
Other
Comprehensive |
Comprehensive
|
Total
Stockholders'
|
||||||||||||||||||||||||||||
Stock
|
Stock
|
Stock
|
Stock
|
Earnings
|
Stock
|
Net of Tax
|
Income
|
Equity
|
||||||||||||||||||||||||||||
BALANCE, JANAURY 1, 2010
|
$ | — | $ | 693,803 | $ | 117 | $ | 1,091,047 | $ | 604,223 | $ | (105,130 | ) | $ | 599 | $ | 2,284,659 | |||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||
Net income
|
108,215 | $ | 108,215 | 108,215 | ||||||||||||||||||||||||||||||||
Net unrealized gain on investment securities available-for-sale,net of taxes of $6,057 and reclassification of $8,363 net gain included in net income
|
7,142 | 7,142 | 7,142 | |||||||||||||||||||||||||||||||||
Noncredit-related impairment loss on securities, net of tax benefits of $2,366
|
(3,268 | ) | (3,268 | ) | (3,268 | ) | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax expense of $480
|
662 | 662 | 662 | |||||||||||||||||||||||||||||||||
Total comprehensive income
|
$ | 112,751 | ||||||||||||||||||||||||||||||||||
Stock compensation costs
|
6,164 | 6,164 | ||||||||||||||||||||||||||||||||||
Tax provision from stock compensation plans, net
|
(156 | ) | (156 | ) | ||||||||||||||||||||||||||||||||
Issuance of 1,216,392 shares of common stock pursuant to various stock compensation plans and agreements
|
1 | 2,245 | 2,246 | |||||||||||||||||||||||||||||||||
Conversion of 335,047 shares of Series C preferred stock into 37,103,734 shares of common stock
|
(325,299 | ) | 37 | 325,262 | — | |||||||||||||||||||||||||||||||
Issuance of 17,910 shares pursuant to Director retainer fee
|
281 | 281 | ||||||||||||||||||||||||||||||||||
Cancellation of 293,105 shares of common stock due to forfeitures of issued restricted stock
|
4,050 | (4,050 | ) | — | ||||||||||||||||||||||||||||||||
Purchase of 26,182 shares of treasury stock due to the vesting of restricted stock
|
(481 | ) | (481 | ) | ||||||||||||||||||||||||||||||||
Amortization of Series B preferred stock discount
|
2,378 | (2,378 | ) | — | ||||||||||||||||||||||||||||||||
Preferred stock dividends
|
(16,640 | ) | (16,640 | ) | ||||||||||||||||||||||||||||||||
Common stock dividends
|
(4,064 | ) | (4,064 | ) | ||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2010
|
$ | — | $ | 370,882 | $ | 155 | $ | 1,428,893 | $ | 689,356 | $ | (109,661 | ) | $ | 5,135 | $ | 2,384,760 | |||||||||||||||||||
BALANCE, JANAURY 1, 2011
|
$ | — | $ | 83,058 | $ | 156 | $ | 1,434,277 | $ | 720,116 | $ | (111,262 | ) | $ | (12,414 | ) | $ | 2,113,931 | ||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||
Net income
|
179,028 | $ | 179,028 | 179,028 | ||||||||||||||||||||||||||||||||
Net unrealized loss on investment securities available-for-sale,net of tax benefits of $3,913 and reclassification of $10,925 net loss included in net income
|
(5,403 | ) | (5,403 | ) | (5,403 | ) | ||||||||||||||||||||||||||||||
Noncredit-related impairment loss on securities, net of tax benefits of $2,139
|
(2,952 | ) | (2,952 | ) | (2,952 | ) | ||||||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax benefits of $424
|
(586 | ) | (586 | ) | (586 | ) | ||||||||||||||||||||||||||||||
Net unrealized loss on other asset investment, net of taxes benefits of $174
|
(240 | ) | (240 | ) | (240 | ) | ||||||||||||||||||||||||||||||
Total comprehensive income
|
$ | 169,847 | ||||||||||||||||||||||||||||||||||
Stock compensation costs
|
9,330 | 9,330 | ||||||||||||||||||||||||||||||||||
Tax benefit from stock compensation plans, net
|
546 | 546 | ||||||||||||||||||||||||||||||||||
Issuance of 597,232 shares of common stock pursuant to various stock compensation plans and agreements
|
3,663 | 3,663 | ||||||||||||||||||||||||||||||||||
Conversion of 31 shares of Series A preferred stock into 2,014 shares of common stock
|
(31 | ) | 31 | — | ||||||||||||||||||||||||||||||||
Issuance of 27,831 shares pursuant to Director retainer fee
|
520 | 520 | ||||||||||||||||||||||||||||||||||
Cancellation of 180,152 shares of common stock due to forfeitures of issued restricted stock
|
3,073 | (3,073 | ) | — | ||||||||||||||||||||||||||||||||
Purchase of 27,938 shares of treasury stock due to the vesting of restricted stock
|
(619 | ) | (619 | ) | ||||||||||||||||||||||||||||||||
Preferred stock dividends
|
(5,143 | ) | (5,143 | ) | ||||||||||||||||||||||||||||||||
Common stock dividends
|
(16,406 | ) | (16,406 | ) | ||||||||||||||||||||||||||||||||
Repurchase of 1,517,555 common stock warrants
|
(14,500 | ) | (14,500 | ) | ||||||||||||||||||||||||||||||||
BALANCE, SEPTEMBER 30, 2011
|
$ | — | $ | 83,027 | $ | 156 | $ | 1,436,940 | $ | 877,595 | $ | (114,954 | ) | $ | (21,595 | ) | $ | 2,261,169 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$ | 179,028 | $ | 108,215 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
48,823 | 48,153 | ||||||
(Accretion) of discount and amortization of premiums, net
|
(162,319 | ) | (159,226 | ) | ||||
Decrease in FDIC indemnification asset and receivable
|
79,700 | 47,170 | ||||||
Gain on acquisition
|
— | (27,571 | ) | |||||
Stock compensation costs
|
9,850 | 6,164 | ||||||
Deferred tax expense
|
64,398 | 32,355 | ||||||
Provision for loan losses
|
75,006 | 170,325 | ||||||
Impairment on other real estate owned
|
22,440 | 36,508 | ||||||
Net gain on sales of investment securities, loans and other assets
|
(29,586 | ) | (39,260 | ) | ||||
Originations and purchases of loans held for sale
|
(40,193 | ) | (22,013 | ) | ||||
Proceeds from sales of loans held for sale
|
30,180 | 20,389 | ||||||
Prepayment penalty for Federal Home Loan Bank advances and other borrowings
|
12,281 | 13,832 | ||||||
Net proceeds from FDIC shared-loss agreements
|
147,121 | 249,175 | ||||||
Net change in accrued interest receivable and other assets
|
(134,500 | ) | 29,211 | |||||
Net change in accrued expenses and other liabilities
|
(100,393 | ) | 162,446 | |||||
Other net operating activities
|
(2,383 | ) | 10,833 | |||||
Total adjustments
|
20,425 | 578,491 | ||||||
Net cash provided by operating activities
|
199,453 | 686,706 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Net cash acquired in WFIB acquisition
|
— | 67,186 | ||||||
Net (increase) decrease in loans
|
(720,348 | ) | 662,655 | |||||
Net decrease in short-term investments
|
77,551 | 95,288 | ||||||
Net increase in federal funds sold
|
(30,000 | ) | (75,000 | ) | ||||
Purchases of:
|
||||||||
Securities purchased under resale agreements
|
(1,119,711 | ) | (750,000 | ) | ||||
Investment securities available-for-sale
|
(2,464,002 | ) | (3,612,331 | ) | ||||
Loans receivable
|
(569,946 | ) | (580,396 | ) | ||||
Federal Reserve Bank stock
|
(99 | ) | (10,500 | ) | ||||
Premises and equipment
|
(7,460 | ) | (90,051 | ) | ||||
Investments in affordable housing partnerships
|
(22,756 | ) | (37,773 | ) | ||||
Proceeds from sale of:
|
||||||||
Investment securities available-for-sale
|
602,625 | 1,047,173 | ||||||
Loans receivable
|
151,961 | 427,087 | ||||||
Loans held for sale originated for investment
|
607,291 | 147,194 | ||||||
Other real estate owned
|
135,461 | 77,804 | ||||||
Premises and equipment
|
9,200 | 84 | ||||||
Repayments, maturities and redemptions of investment securities available-for-sale
|
1,447,842 | 2,268,589 | ||||||
Paydowns, maturities and termination of securities purchased under resale agreements
|
667,887 | 630,000 | ||||||
Redemption of Federal Home Loan Bank stock
|
19,424 | 13,427 | ||||||
Net cash (used in) provided by investing activities
|
(1,215,080 | ) | 280,436 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net increase (decrease) in:
|
||||||||
Deposits
|
1,668,073 | (87,053 | ) | |||||
Short-term borrowings
|
(58,596 | ) | 2,214 | |||||
Proceeds from:
|
||||||||
FHLB advances
|
— | 350,000 | ||||||
Issuance of common stock pursuant to various stock plans and agreements
|
3,663 | 2,527 | ||||||
Payment for:
|
||||||||
Repayment of FHLB advances
|
(760,274 | ) | (1,198,312 | ) | ||||
Repayment of long-term debt
|
(21,918 | ) | (24,825 | ) | ||||
Repayment of notes payable and other borrowings
|
(6,250 | ) | — | |||||
Repurchase of common stock warrants
|
(14,500 | ) | — | |||||
Cash dividends
|
(21,512 | ) | (20,704 | ) | ||||
Other net financing activities
|
(73 | ) | (637 | ) | ||||
Net cash provided by (used in) financing activities
|
788,613 | (976,790 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents
|
(1,047 | ) | 500 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
(228,061 | ) | (9,148 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
1,333,949 | 1,099,084 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 1,105,888 | $ | 1,089,936 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$ | 135,037 | $ | 159,742 | ||||
Income tax payments, net of refunds
|
262,988 | 24,292 | ||||||
Noncash investing and financing activities:
|
||||||||
Transfers to other real estate owned/affordable housing investments
|
140,987 | 203,276 | ||||||
Conversion of preferred stock to common stock
|
31 | 325,299 | ||||||
Loans to facilitate sales of other real estate owned
|
8,792 | 13,550 | ||||||
Loans to facilitate sales of loans
|
21,637 | 42,022 | ||||||
Loans to facilitate sales of premises and equipment
|
11,100 | — | ||||||
Loans transferred to loans held for sale
|
631,407 | 138,792 |
|
·
|
Level 1 – Quoted prices for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Level 1 financial instruments typically include U.S. Treasury securities.
|
|
·
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 2 financial instruments typically include U.S. Government debt and agency mortgage-backed securities, municipal securities, single issue trust preferred securities, equity swap agreements, foreign exchange options, interest rate swaps and other real estate owned (“OREO”).
|
|
·
|
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category typically includes mortgage servicing assets, impaired loans, private-label mortgage-backed securities, pooled trust preferred securities and derivatives payable.
|
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | ||||||||||||||||
as of September 30, 2011 | ||||||||||||||||
Fair Value Measurements September 30, 2011
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 20,761 | $ | 20,761 | $ | — | $ | — | ||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
642,951 | — | 642,951 | — | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities:
|
||||||||||||||||
Commercial mortgage-backed securities
|
16,823 | — | 16,823 | — | ||||||||||||
Residential mortgage-backed securities
|
1,093,829 | — | 1,093,829 | — | ||||||||||||
Municipal securities
|
77,466 | — | 77,466 | — | ||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||
Investment grade
|
— | — | — | — | ||||||||||||
Non-investment grade
|
— | — | — | — | ||||||||||||
Corporate debt securities:
|
||||||||||||||||
Investment grade
|
1,403,432 | — | 1,403,432 | — | ||||||||||||
Non-investment grade
|
14,195 | — | 11,840 | 2,355 | ||||||||||||
Other securities
|
10,135 | — | 10,135 | — | ||||||||||||
Total investment securities available-for-sale
|
$ | 3,279,592 | $ | 20,761 | $ | 3,256,476 | $ | 2,355 | ||||||||
Equity swap agreements
|
$ | 200 | $ | — | $ | 200 | $ | — | ||||||||
Foreign exchange options
|
4,392 | — | 4,392 | — | ||||||||||||
Interest rate swaps
|
17,791 | — | 17,791 | — | ||||||||||||
Derivative liabilities
|
(20,206 | ) | — | (17,237 | ) | (2,969 | ) |
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | ||||||||||||||||
as of December 31, 2010 | ||||||||||||||||
Fair Value Measurements December 31, 2010
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 20,454 | $ | 20,454 | $ | — | $ | — | ||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
1,333,465 | — | 1,333,465 | — | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities:
|
||||||||||||||||
Commercial mortgage-backed securities
|
19,132 | — | 19,132 | — | ||||||||||||
Residential mortgage-backed securities
|
306,714 | — | 306,714 | — | ||||||||||||
Municipal securities
|
— | — | — | — | ||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||
Investment grade
|
— | — | — | — | ||||||||||||
Non-investment grade
|
6,254 | — | — | 6,254 | ||||||||||||
Corporate debt securities:
|
||||||||||||||||
Investment grade
|
1,056,867 | — | 1,056,867 | — | ||||||||||||
Non-investment grade
|
38,730 | — | 35,957 | 2,773 | ||||||||||||
Other securities
|
94,325 | — | 94,325 | — | ||||||||||||
Total investment securities available-for-sale
|
$ | 2,875,941 | $ | 20,454 | $ | 2,846,460 | $ | 9,027 | ||||||||
Equity swap agreements
|
$ | 206 | $ | — | $ | 206 | $ | — | ||||||||
Foreign exchange options
|
5,084 | — | 5,084 | — | ||||||||||||
Interest rate swaps
|
13 | — | 13 | — | ||||||||||||
Derivative liabilities
|
(3,463 | ) | — | (14 | ) | (3,449 | ) |
Assets Measured at Fair Value on a Non-Recurring Basis | ||||||||||||||||||||
as of and for the Three Months Ended September 30, 2011 | ||||||||||||||||||||
Fair Value Measurements as of September 30, 2011
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Gains (Losses) for the Three Months Ended September 30, 2011
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Non-covered impaired loans:
|
||||||||||||||||||||
Total residential
|
$ | 9,637 | $ | — | $ | — | $ | 9,637 | $ | (3,142 | ) | |||||||||
Total commercial real estate
|
40,997 | — | — | 40,997 | (16,645 | ) | ||||||||||||||
Total commercial and industrial
|
4,405 | — | — | 4,405 | (6,328 | ) | ||||||||||||||
Total consumer
|
315 | — | — | 315 | (265 | ) | ||||||||||||||
Total non-covered impaired loans
|
$ | 55,354 | $ | — | $ | — | $ | 55,354 | $ | (26,380 | ) | |||||||||
Mortgage servicing assets (single-family, multifamily and commercial)
|
$ | 12,495 | $ | — | $ | — | $ | 12,495 | $ | (212 | ) | |||||||||
Non-covered OREO
|
$ | 36 | $ | — | $ | 36 | $ | — | $ | (17 | ) | |||||||||
Covered OREO (1)
|
$ | 18,068 | $ | — | $ | 18,068 | $ | — | $ | (3,252 | ) | |||||||||
Loans held for sale
|
$ | 2,714 | $ | — | $ | — | $ | 2,714 | $ | (260 | ) |
Assets Measured at Fair Value on a Non-Recurring Basis | ||||||||||||||||||||
as of and for the Three Months Ended September 30, 2010 | ||||||||||||||||||||
Fair Value Measurements as of September 30, 2010
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Gains (Losses) for the Three Months Ended September 30, 2010
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Non-covered impaired loans:
|
||||||||||||||||||||
Total residential
|
$ | 2,694 | $ | — | $ | — | $ | 2,694 | $ | (772 | ) | |||||||||
Total commercial real estate
|
41,212 | — | — | 41,212 | (16,046 | ) | ||||||||||||||
Total commercial and industrial
|
7,830 | — | — | 7,830 | (3,053 | ) | ||||||||||||||
Total consumer
|
167 | — | — | 167 | 96 | |||||||||||||||
Total non-covered impaired loans
|
$ | 51,903 | $ | — | $ | — | $ | 51,903 | $ | (19,775 | ) | |||||||||
|
||||||||||||||||||||
Mortgage servicing assets (single-family, multifamily and commercial)
|
$ | 15,973 | $ | — | $ | — | $ | 15,973 | $ | (284 | ) | |||||||||
Non-covered OREO
|
$ | 2,574 | $ | — | $ | 2,574 | $ | — | $ | (1,099 | ) | |||||||||
Covered OREO (1)
|
$ | 27,205 | $ | — | $ | 27,205 | $ | — | $ | (6,569 | ) | |||||||||
Loans held for sale
|
$ | 359 | $ | — | $ | — | $ | 359 | $ | (228 | ) |
(1)
|
Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company’s liability for losses is 20% of the $3.3 million in losses, or $650 thousand, and 20% of the $6.6 million in losses, or $1.3 million, for the three months ended September 30, 2011 and 2010, respectively.
|
Assets Measured at Fair Value on a Non-Recurring Basis | ||||||||||||||||||||
as of and for the Nine Months Ended September 30, 2011 | ||||||||||||||||||||
Fair Value Measurements as of September 30, 2011
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Gains (Losses) for the Nine Months Ended September 30, 2011
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Non-covered impaired loans:
|
||||||||||||||||||||
Total residential
|
$ | 12,533 | $ | — | $ | — | $ | 12,533 | $ | (3,727 | ) | |||||||||
Total commercial real estate
|
44,840 | — | — | 44,840 | (34,192 | ) | ||||||||||||||
Total commercial and industrial
|
5,513 | — | — | 5,513 | (9,915 | ) | ||||||||||||||
Total consumer
|
359 | — | — | 359 | (443 | ) | ||||||||||||||
Total non-covered impaired loans
|
$ | 63,245 | $ | — | $ | — | $ | 63,245 | $ | (48,277 | ) | |||||||||
|
||||||||||||||||||||
Mortgage servicing assets (single-family, multifamily and commercial)
|
$ | 12,495 | $ | — | $ | — | $ | 12,495 | $ | (675 | ) | |||||||||
Non-covered OREO
|
$ | 13,692 | $ | — | $ | 13,692 | $ | — | $ | (1,529 | ) | |||||||||
Covered OREO (1)
|
$ | 110,133 | $ | — | $ | 110,133 | $ | — | $ | (18,655 | ) | |||||||||
Loans held for sale
|
$ | 2,714 | $ | — | $ | — | $ | 2,714 | $ | (260 | ) |
Assets Measured at Fair Value on a Non-Recurring Basis | ||||||||||||||||||||
as of and for the Nine Months Ended September 30, 2010 | ||||||||||||||||||||
Fair Value Measurements as of September 30, 2010
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
Total Gains (Losses) for the Nine Months Ended September 30, 2010
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Non-covered impaired loans:
|
||||||||||||||||||||
Total residential
|
$ | 5,953 | $ | — | $ | — | $ | 5,953 | $ | (2,234 | ) | |||||||||
Total commercial real estate
|
74,630 | — | — | 74,630 | (36,230 | ) | ||||||||||||||
Total commercial and industrial
|
7,925 | — | — | 7,925 | (4,836 | ) | ||||||||||||||
Total consumer
|
166 | — | — | 166 | (245 | ) | ||||||||||||||
Total non-covered impaired loans
|
$ | 88,674 | $ | — | $ | — | $ | 88,674 | $ | (43,545 | ) | |||||||||
|
||||||||||||||||||||
Mortgage servicing assets (single-family, multifamily and commercial)
|
$ | 15,973 | $ | — | $ | — | $ | 15,973 | $ | (348 | ) | |||||||||
Non-covered OREO
|
$ | 4,101 | $ | — | $ | 4,101 | $ | — | $ | (4,012 | ) | |||||||||
Covered OREO (1)
|
$ | 57,234 | $ | — | $ | 57,234 | $ | — | $ | (32,496 | ) | |||||||||
Loans held for sale
|
$ | 3,737 | $ | — | $ | — | $ | 3,737 | $ | (2,059 | ) |
(1)
|
Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company’s liability for losses is 20% of the $18.7 million in losses, or $3.7 million, and 20% of the $32.5 million in losses, or $6.5 million, for the nine months ended September 30, 2011 and 2010, respectively.
|
Investment Securities Available-for-Sale | ||||||||||||||||||||
Other Residential Mortgage-Backed Securities,
|
Corporate Debt Securities
|
|||||||||||||||||||
Total
|
Non-Investment Grade
|
Investment Grade
|
Non-Investment Grade
|
Derivatives Payable
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Beginning balance, July 1, 2011
|
$ | 2,453 | $ | — | $ | — | $ | 2,453 | $ | (3,247 | ) | |||||||||
Total gains or (losses): (1)
|
||||||||||||||||||||
Included in earnings
|
— | — | — | — | 278 | |||||||||||||||
Included in accumulated other comprehensive loss (unrealized) (2)
|
(90 | ) | — | — | (90 | ) | — | |||||||||||||
Purchases, issuances, sales, settlements (3)
|
||||||||||||||||||||
Purchases
|
— | — | — | — | — | |||||||||||||||
Issuances
|
— | — | — | — | — | |||||||||||||||
Sales
|
— | — | — | — | — | |||||||||||||||
Settlements
|
(8 | ) | — | — | (8 | ) | — | |||||||||||||
Transfer from investment grade to non-investment grade
|
— | — | — | — | — | |||||||||||||||
Transfers in and/or out of Level 3 (4)
|
— | — | — | — | — | |||||||||||||||
Ending balance, September 30, 2011
|
$ | 2,355 | $ | — | $ | — | $ | 2,355 | $ | (2,969 | ) | |||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at September 30, 2011
|
$ | — | $ | — | $ | — | $ | — | $ | (278 | ) |
Investment Securities Available-for-Sale | ||||||||||||||||||||
Other Residential Mortgage-Backed Securities,
|
Corporate Debt Securities
|
|||||||||||||||||||
Total
|
Non-Investment Grade
|
Investment Grade
|
Non-Investment Grade
|
Derivatives Payable
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Beginning balance, July 1, 2010
|
$ | 15,350 | $ | 12,506 | $ | — | $ | 2,844 | $ | (1,888 | ) | |||||||||
Total gains or (losses): (1)
|
||||||||||||||||||||
Included in earnings
|
(864 | ) | — | — | (864 | ) | (459 | ) | ||||||||||||
Included in accumulated other comprehensive loss (unrealized) (2)
|
508 | 328 | — | 180 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3)
|
(7 | ) | — | — | (7 | ) | (254 | ) | ||||||||||||
Transfer from investment grade to non-investment grade
|
— | — | — | — | — | |||||||||||||||
Transfers in and/or out of Level 3 (4)
|
— | — | — | — | — | |||||||||||||||
Ending balance, September 30, 2010
|
$ | 14,987 | $ | 12,834 | $ | — | $ | 2,153 | $ | (2,601 | ) | |||||||||
Changes in unrealized losses included in earnings relating to to assets and liabilities still held at September 30, 2010
|
$ | 888 | $ | — | $ | — | $ | 888 | $ | 459 |
(1)
|
Total gains or losses represent the total realized and unrealized gains and losses recorded for Level 3 assets and liabilities. Realized gains or losses are reported in the condensed consolidated statements of income.
|
(2)
|
Unrealized gains or losses on investment securities are reported in accumulated other comprehensive loss, net of tax, in the condensed consolidated statements of changes in stockholders’ equity and comprehensive income.
|
(3)
|
Purchases, issuances, sales, and settlements represent Level 3 assets and liabilities that were either purchased, issued, sold, or settled during the period. The amounts are recorded at their end of period fair values.
|
(4)
|
Transfers in and/or out represent existing assets and liabilities that were either previously categorized as a higher level and the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 and the lowest significant input became observable during the period. These assets and liabilities are recorded at their end of period fair values.
|
Investment Securities Available-for-Sale
|
||||||||||||||||||||
Other Residential Mortgage-Backed Securities,
|
Corporate Debt Securities
|
|||||||||||||||||||
Total
|
Non-Investment Grade
|
Investment Grade
|
Non-Investment Grade
|
Derivatives Payable
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Beginning balance, January 1, 2011
|
$ | 9,027 | $ | 6,254 | $ | — | $ | 2,773 | $ | (3,449 | ) | |||||||||
Total gains or (losses): (1)
|
||||||||||||||||||||
Included in earnings
|
(6,124 | ) | (5,660 | ) | — | (464 | ) | 480 | ||||||||||||
Included in accumulated other comprehensive loss (unrealized) (2)
|
8,756 | 8,763 | — | (7 | ) | — | ||||||||||||||
Purchases, issuances, sales, settlements (3)
|
||||||||||||||||||||
Purchases
|
— | — | — | — | — | |||||||||||||||
Issuances
|
— | — | — | — | — | |||||||||||||||
Sales
|
(9,357 | ) | (9,357 | ) | — | — | — | |||||||||||||
Settlements
|
53 | — | — | 53 | — | |||||||||||||||
Transfer from investment grade to non-investment grade
|
— | — | — | — | — | |||||||||||||||
Transfers in and/or out of Level 3 (4)
|
— | — | — | — | — | |||||||||||||||
Ending balance, September 30, 2011
|
$ | 2,355 | $ | — | $ | — | $ | 2,355 | $ | (2,969 | ) | |||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at September 30, 2011
|
$ | 464 | $ | — | $ | — | $ | 464 | $ | (480 | ) |
Investment Securities Available-for-Sale | ||||||||||||||||||||
Other Residential Mortgage-Backed Securities,
|
Corporate Debt Securities
|
|||||||||||||||||||
Total
|
Non-Investment Grade
|
Investment Grade
|
Non-Investment Grade
|
Derivatives Payable
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Beginning balance, January 1, 2010
|
$ | 15,671 | $ | 12,738 | $ | 978 | $ | 1,955 | $ | (14,185 | ) | |||||||||
Total gains or (losses): (1)
|
||||||||||||||||||||
Included in earnings
|
(7,589 | ) | 436 | 5 | (8,030 | ) | (625 | ) | ||||||||||||
Included in accumulated other comprehensive loss (unrealized) (2)
|
7,047 | 90 | 308 | 6,649 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3)
|
(142 | ) | (430 | ) | (9 | ) | 297 | 12,209 | ||||||||||||
Transfer from investment grade to non-investment grade
|
— | — | (1,282 | ) | 1,282 | — | ||||||||||||||
Transfers in and/or out of Level 3 (4)
|
— | — | — | — | — | |||||||||||||||
Ending balance, September 30, 2010
|
$ | 14,987 | $ | 12,834 | $ | — | $ | 2,153 | $ | (2,601 | ) | |||||||||
Changes in unrealized losses included in earnings relating to to assets and liabilities still held at September 30, 2010
|
$ | 8,107 | $ | — | $ | — | $ | 8,107 | $ | 625 |
(1)
|
Total gains or losses represent the total realized and unrealized gains and losses recorded for Level 3 assets and liabilities. Realized gains or losses are reported in the condensed consolidated statements of income.
|
(2)
|
Unrealized gains or losses on investment securities are reported in accumulated other comprehensive loss, net of tax, in the condensed consolidated statements of changes in stockholders’ equity and comprehensive income.
|
(3)
|
Purchases, issuances, sales, and settlements represent Level 3 assets and liabilities that were either purchased, issued, sold, or settled during the period. The amounts are recorded at their end of period fair values.
|
(4)
|
Transfers in and/or out represent existing assets and liabilities that were either previously categorized as a higher level and the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 and the lowest significant input became observable during the period. These assets and liabilities are recorded at their end of period fair values.
|
September 30, 2011 | December 31, 2010 | |||||||||||||||
Carrying
|
Carrying
|
|||||||||||||||
Amount or
|
Amount or
|
|||||||||||||||
Notional
|
Estimated
|
Notional
|
Estimated
|
|||||||||||||
Amount
|
Fair Value
|
Amount
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$ | 1,105,888 | $ | 1,105,888 | $ | 1,333,949 | $ | 1,333,949 | ||||||||
Short-term investments
|
66,009 | 66,009 | 143,560 | 143,560 | ||||||||||||
Federal funds sold
|
30,000 | 30,000 | — | — | ||||||||||||
Securities purchased under resale agreements
|
951,824 | 982,118 | 500,000 | 505,826 | ||||||||||||
Investment securities available-for-sale
|
3,279,592 | 3,279,592 | 2,875,941 | 2,875,941 | ||||||||||||
Loans held for sale
|
251,920 | 257,631 | 220,055 | 225,221 | ||||||||||||
Loans receivable, net
|
13,718,668 | 13,284,682 | 13,231,075 | 13,043,932 | ||||||||||||
Investment in Federal Home Loan Bank stock
|
143,381 | 143,381 | 162,805 | 162,805 | ||||||||||||
Investment in Federal Reserve Bank stock
|
47,384 | 47,384 | 47,285 | 47,285 | ||||||||||||
Accrued interest receivable
|
93,042 | 93,042 | 82,090 | 82,090 | ||||||||||||
Equity swap agreements
|
22,709 | 200 | 22,884 | 206 | ||||||||||||
Foreign exchange options
|
85,614 | 4,392 | 85,614 | 5,084 | ||||||||||||
Interest rate swaps
|
510,898 | 17,791 | 4,098 | 13 | ||||||||||||
Financial Liabilities:
|
||||||||||||||||
Customer deposit accounts:
|
||||||||||||||||
Demand, savings and money market deposits
|
9,824,307 | 9,119,064 | 8,875,806 | 7,896,736 | ||||||||||||
Time deposits
|
7,484,393 | 7,519,569 | 6,765,453 | 6,762,892 | ||||||||||||
Federal funds purchased
|
— | — | 22 | 22 | ||||||||||||
Federal Home Loan Bank advances
|
457,075 | 489,680 | 1,214,148 | 1,199,151 | ||||||||||||
Securities sold under repurchase agreements
|
1,024,949 | 1,077,835 | 1,083,545 | 1,296,522 | ||||||||||||
Notes payable
|
85,014 | 85,014 | 49,690 | 49,690 | ||||||||||||
Accrued interest payable
|
16,352 | 16,352 | 13,797 | 13,797 | ||||||||||||
Long-term debt
|
214,178 | 139,143 | 235,570 | 125,633 | ||||||||||||
Derivative liabilities
|
486,235 | 20,206 | 79,640 | 3,463 |
Weighted
|
|||||||||||||
Weighted
|
Average
|
Aggregate
|
|||||||||||
Average
|
Remaining
|
Intrinsic
|
|||||||||||
Exercise
|
Contractual
|
Value
|
|||||||||||
Shares
|
Price
|
Term
|
(In thousands)
|
||||||||||
Outstanding at beginning of period
|
1,438,979 | $ | 24.21 | ||||||||||
Granted
|
8,654 | 23.11 | |||||||||||
Exercised
|
(255,258 | ) | 12.60 | ||||||||||
Forfeited
|
(90,309 | ) | 26.34 | ||||||||||
Outstanding at end of period
|
1,102,066 | $ | 26.72 |
2.22 years
|
$ | 419 | |||||||
Vested or expected to vest at end of period
|
1,089,954 | $ | 26.81 |
2.20 years
|
$ | 396 | |||||||
Exercisable at end of period
|
912,255 | $ | 28.45 |
1.90 years
|
$ | 181 |
Weighted Average
|
||||||||
Grant Date Fair Value
|
||||||||
Unvested Options
|
Shares
|
(per share)
|
||||||
Unvested at January 1, 2011
|
416,851 | $ | 5.04 | |||||
Granted
|
8,654 | 13.21 | ||||||
Vested
|
(225,582 | ) | 5.60 | |||||
Forfeited
|
(10,112 | ) | 4.69 | |||||
Unvested at September 30, 2011
|
189,811 | $ | 4.76 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011 (5)
|
2010 (5)
|
2011
|
2010 (5)
|
|||||||||||||
Expected term (1)
|
N/A | N/A |
4 years
|
N/A | ||||||||||||
Expected volatility (2)
|
N/A | N/A | 78.1 | % | N/A | |||||||||||
Expected dividend yield (3)
|
N/A | N/A | 0.2 | % | N/A | |||||||||||
Risk-free interest rate (4)
|
N/A | N/A | 1.6 | % | N/A |
|
(1)
|
The expected term (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees.
|
|
(2)
|
The expected volatility was based on historical volatility for a period equal to the stock option’s expected term.
|
|
(3)
|
The expected dividend yield is based on the Company’s prevailing dividend rate at the time of grant.
|
|
(4)
|
The risk-free rate is based on the U.S. Treasury strips in effect at the time of grant equal to the stock option’s expected term.
|
|
(5)
|
The Company did not issue any stock options during the three months ended September 30, 2011 and the three and nine months ended September 30, 2010.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Weighted average grant date fair value of stock options granted during the period (1)
|
$ | — | $ | — | $ | 13.21 | $ | — | ||||||||
Total intrinsic value of options exercised (in thousands)
|
$ | 123 | $ | 353 | $ | 2,175 | $ | 989 | ||||||||
Total fair value of options vested (in thousands)
|
$ | — | $ | 32 | $ | 1,263 | $ | 2,108 |
|
(1)
|
The Company did not issue any stock options during the three months ended September 30, 2011 and the three and nine months ended September 30, 2010.
|
Weighted
|
||||||||
Average
|
||||||||
Shares
|
Price
|
|||||||
Outstanding unvested at beginning of period
|
1,789,498 | $ | 17.09 | |||||
Granted
|
704,970 | 21.42 | ||||||
Vested
|
(198,510 | ) | 24.44 | |||||
Forfeited
|
(202,671 | ) | 17.76 | |||||
Outstanding unvested at end of period
|
2,093,287 | $ | 17.79 |
Gross
|
Gross
|
Estimated
|
||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
As of September 30, 2011
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 19,881 | $ | 880 | $ | — | $ | 20,761 | ||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
641,698 | 1,961 | (708 | ) | 642,951 | |||||||||||
U.S. Government agency and U.S. Government sponsored enterprise
|
||||||||||||||||
mortgage-backed securities:
|
||||||||||||||||
Commercial mortgage-backed securities
|
16,335 | 488 | — | 16,823 | ||||||||||||
Residential mortgage-backed securities
|
1,058,168 | 36,728 | (1,067 | ) | 1,093,829 | |||||||||||
Municipal securities
|
74,557 | 3,042 | (133 | ) | 77,466 | |||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||
Investment grade
|
— | — | — | — | ||||||||||||
Non-investment grade
|
— | — | — | — | ||||||||||||
Corporate debt securities:
|
||||||||||||||||
Investment grade
|
1,471,569 | 6,140 | (74,277 | ) | 1,403,432 | |||||||||||
Non-investment grade (1)
|
26,175 | — | (11,980 | ) | 14,195 | |||||||||||
Other securities
|
9,918 | 218 | (1 | ) | 10,135 | |||||||||||
Total investment securities available-for-sale
|
$ | 3,318,301 | $ | 49,457 | $ | (88,166 | ) | $ | 3,279,592 | |||||||
As of December 31, 2010
|
||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||
U.S. Treasury securities
|
$ | 19,847 | $ | 607 | $ | — | $ | 20,454 | ||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
1,349,289 | 2,297 | (18,121 | ) | 1,333,465 | |||||||||||
U.S. Government agency and U.S. Government sponsored enterprise
|
||||||||||||||||
mortgage-backed securities:
|
||||||||||||||||
Commercial mortgage-backed securities
|
18,620 | 512 | — | 19,132 | ||||||||||||
Residential mortgage-backed securities
|
295,140 | 11,574 | — | 306,714 | ||||||||||||
Municipal securities
|
— | — | — | — | ||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||
Investment grade
|
— | — | — | — | ||||||||||||
Non-investment grade
|
14,996 | — | (8,742 | ) | 6,254 | |||||||||||
Corporate debt securities:
|
||||||||||||||||
Investment grade
|
1,056,537 | 9,095 | (8,765 | ) | 1,056,867 | |||||||||||
Non-investment grade (1)
|
50,015 | 31 | (11,316 | ) | 38,730 | |||||||||||
Other securities
|
95,966 | 267 | (1,908 | ) | 94,325 | |||||||||||
Total investment securities available-for-sale
|
$ | 2,900,410 | $ | 24,383 | $ | (48,852 | ) | $ | 2,875,941 |
|
(1)
|
For the nine months ended September 30, 2011, the Company recorded $464 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. The Company recorded $16.7 million, on a pre-tax basis, of the credit portion of OTTI through earnings and $15.4 million of the non-credit portion of OTTI for pooled trust preferred securities and other mortgage-backed securities in other comprehensive income for the year ended December 31, 2010.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Beginning balance
|
$ | 115,243 | $ | 114,891 | $ | 124,340 | $ | 107,671 | ||||||||
Addition of other-than-temporary impairment that was not previously recognized
|
— | — | — | — | ||||||||||||
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized
|
— | 888 | 464 | 8,108 | ||||||||||||
Reduction for securities sold
|
— | — | (9,561 | ) | — | |||||||||||
Ending balance
|
$ | 115,243 | $ | 115,779 | $ | 115,243 | $ | 115,779 |
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
As of September 30, 2011
|
||||||||||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||||||||||
U.S. Treasury securities
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
177,715 | (708 | ) | — | — | 177,715 | (708 | ) | ||||||||||||||||
U.S. Government agency and U.S. Government
|
||||||||||||||||||||||||
sponsored enterprise mortgage-backed securities:
|
||||||||||||||||||||||||
Commercial mortage-backed securities
|
— | — | — | — | — | — | ||||||||||||||||||
Residential mortage-backed securities
|
195,248 | (1,067 | ) | — | — | 195,248 | (1,067 | ) | ||||||||||||||||
Municipal securities
|
9,715 | (133 | ) | — | — | 9,715 | (133 | ) | ||||||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||||||||||
Investment grade
|
— | — | — | — | — | — | ||||||||||||||||||
Non-investment grade
|
— | — | — | — | — | — | ||||||||||||||||||
Corporate debt securities:
|
||||||||||||||||||||||||
Investment grade
|
944,337 | (61,314 | ) | 247,020 | (12,963 | ) | 1,191,357 | (74,277 | ) | |||||||||||||||
Non-investment grade
|
5,580 | (387 | ) | 8,616 | (11,593 | ) | 14,196 | (11,980 | ) | |||||||||||||||
Other securities
|
4,490 | (1 | ) | — | — | 4,490 | (1 | ) | ||||||||||||||||
Total investment securities available-for-sale
|
$ | 1,337,085 | $ | (63,610 | ) | $ | 255,636 | $ | (24,556 | ) | $ | 1,592,721 | $ | (88,166 | ) |
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
As of December 31, 2010
|
||||||||||||||||||||||||
Investment securities available-for-sale:
|
||||||||||||||||||||||||
U.S. Treasury securities
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
935,654 | (18,121 | ) | — | — | 935,654 | (18,121 | ) | ||||||||||||||||
U.S. Government agency and U.S. Government
|
||||||||||||||||||||||||
sponsored enterprise mortgage-backed securities:
|
||||||||||||||||||||||||
Commercial mortage-backed securities
|
— | — | — | — | — | — | ||||||||||||||||||
Residential mortage-backed securities
|
— | — | — | — | — | — | ||||||||||||||||||
Municipal securities
|
— | — | — | — | — | — | ||||||||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||||||||||
Investment grade
|
— | — | — | — | — | — | ||||||||||||||||||
Non-investment grade
|
— | — | 6,254 | (8,742 | ) | 6,254 | (8,742 | ) | ||||||||||||||||
Corporate debt securities:
|
||||||||||||||||||||||||
Investment grade
|
656,434 | (8,765 | ) | — | — | 656,434 | (8,765 | ) | ||||||||||||||||
Non-investment grade
|
24,105 | (623 | ) | 9,926 | (10,693 | ) | 34,031 | (11,316 | ) | |||||||||||||||
Other securities
|
76,692 | (1,908 | ) | — | — | 76,692 | (1,908 | ) | ||||||||||||||||
Total investment securities available-for-sale
|
$ | 1,692,885 | $ | (29,417 | ) | $ | 16,180 | $ | (19,435 | ) | $ | 1,709,065 | $ | (48,852 | ) |
Amortized
|
Estimated
|
|||||||
Cost
|
Fair Value
|
|||||||
(In thousands)
|
||||||||
Due within one year
|
$ | 801,503 | $ | 795,333 | ||||
Due after one year through five years
|
360,252 | 351,417 | ||||||
Due after five years through ten years
|
1,030,845 | 978,194 | ||||||
Due after ten years
|
1,125,701 | 1,154,648 | ||||||
Total investment securities available-for-sale
|
$ | 3,318,301 | $ | 3,279,592 |
Fair Values of Derivative Instruments
|
||||||||||||||||||||||||
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||
Notional
|
Derivative
|
Derivative
|
Notional
|
Derivative
|
Derivative
|
|||||||||||||||||||
Amount
|
Assets (1)
|
Liabilities (1)
|
Amount
|
Assets (1)
|
Liabilities (1)
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||||||
Interest rate swaps on certificates of deposit—fair value
|
$ | 100,000 | $ | 1,658 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Total derivatives designated as hedging instruments
|
$ | 100,000 | $ | 1,658 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Derivatives not designated as hedging instruments:
|
||||||||||||||||||||||||
Equity swap agreements
|
$ | 22,709 | $ | 200 | $ | 203 | $ | 22,884 | $ | 206 | $ | 210 | ||||||||||||
Foreign exchange options
|
85,614 | 4,392 | 2,766 | 85,614 | 5,084 | 3,239 | ||||||||||||||||||
Interest rate swaps
|
410,898 | 16,133 | 17,237 | 4,098 | 13 | 14 | ||||||||||||||||||
Total derivatives not designated as hedging instruments
|
$ | 519,221 | $ | 20,725 | $ | 20,206 | $ | 112,596 | $ | 5,303 | $ | 3,463 |
(1)
|
Derivative assets, which are a component of other assets, include the estimated gain to settle a derivative contract. Derivative liabilities, which are a component of other liabilities and deposits, include the estimated loss to settle a derivative contract.
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
Location in
|
September 30,
|
September 30,
|
|||||||||||||||
Condensed Consolidated
|
|||||||||||||||||
Statements of Income
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
|||||||||||||||||
Derivatives designated as hedging instruments
|
|||||||||||||||||
Interest rate swaps on certificates of deposit—fair value
|
Interest expense
|
$ | 1,740 | $ | — | $ | 2,958 | $ | — | ||||||||
Total net income
|
$ | 1,740 | $ | — | $ | 2,958 | $ | — | |||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||
Equity swap agreements
|
Noninterest expense
|
$ | (1 | ) | $ | (74 | ) | $ | 2 | $ | (122 | ) | |||||
Foreign exchange options
|
Noninterest income
|
(211 | ) | 533 | (221 | ) | 747 | ||||||||||
Foreign exchange options
|
Noninterest expense
|
(51 | ) | — | (1 | ) | — | ||||||||||
Interest rate swaps
|
Noninterest income
|
(832 | ) | — | (1,102 | ) | — | ||||||||||
Total net (expense/loss) income/gain
|
$ | (1,095 | ) | $ | 459 | $ | (1,322 | ) | $ | 625 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Real estate loans:
|
||||||||
Residential single-family
|
$ | 470,368 | $ | 553,541 | ||||
Residential multifamily
|
959,188 | 1,093,331 | ||||||
Commercial and industrial real estate
|
1,883,843 | 2,085,674 | ||||||
Construction and land
|
718,938 | 1,043,717 | ||||||
Total real estate loans
|
4,032,337 | 4,776,263 | ||||||
Other loans:
|
||||||||
Commercial business
|
884,772 | 1,072,020 | ||||||
Other consumer
|
101,158 | 107,490 | ||||||
Total other loans
|
985,930 | 1,179,510 | ||||||
Total principal balance
|
5,018,267 | 5,955,773 | ||||||
Covered discount
|
(871,931 | ) | (1,150,672 | ) | ||||
Net valuation of loans
|
4,146,336 | 4,805,101 | ||||||
Allowance on covered loans
|
(6,434 | ) | (4,225 | ) | ||||
Total covered loans, net
|
$ | 4,139,902 | $ | 4,800,876 |
Special
|
||||||||||||||||||||
Pass/Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2011
|
||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential single-family
|
$ | 445,223 | $ | 2,586 | $ | 22,559 | $ | — | $ | 470,368 | ||||||||||
Residential multifamily
|
785,022 | 31,755 | 142,411 | — | 959,188 | |||||||||||||||
Commercial and industrial real estate
|
1,304,704 | 47,389 | 523,480 | 8,270 | 1,883,843 | |||||||||||||||
Construction and land
|
251,416 | 42,955 | 418,318 | 6,249 | 718,938 | |||||||||||||||
Total real estate loans
|
2,786,365 | 124,685 | 1,106,768 | 14,519 | 4,032,337 | |||||||||||||||
Other loans:
|
||||||||||||||||||||
Commercial business
|
665,944 | 41,116 | 169,913 | 7,799 | 884,772 | |||||||||||||||
Other consumer
|
99,350 | 176 | 1,632 | — | 101,158 | |||||||||||||||
Total other loans
|
765,294 | 41,292 | 171,545 | 7,799 | 985,930 | |||||||||||||||
Total principal balance
|
$ | 3,551,659 | $ | 165,977 | $ | 1,278,313 | $ | 22,318 | $ | 5,018,267 |
Special
|
||||||||||||||||||||
Pass/Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
December 31, 2010 |
(In thousands)
|
|||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||
Residential single-family
|
$ | 525,979 | $ | 2,153 | $ | 25,157 | $ | 252 | $ | 553,541 | ||||||||||
Residential multifamily
|
1,008,274 | 15,114 | 67,366 | 2,577 | 1,093,331 | |||||||||||||||
Commercial and industrial real estate
|
1,520,135 | 89,870 | 466,588 | 9,081 | 2,085,674 | |||||||||||||||
Construction and land
|
328,214 | 125,688 | 556,070 | 33,745 | 1,043,717 | |||||||||||||||
Total real estate loans
|
3,382,602 | 232,825 | 1,115,181 | 45,655 | 4,776,263 | |||||||||||||||
Other loans:
|
||||||||||||||||||||
Commercial business
|
834,252 | 64,702 | 161,401 | 11,665 | 1,072,020 | |||||||||||||||
Other consumer
|
106,232 | 336 | 922 | — | 107,490 | |||||||||||||||
Total other loans
|
940,484 | 65,038 | 162,323 | 11,665 | 1,179,510 | |||||||||||||||
Total principal balance
|
$ | 4,323,086 | $ | 297,863 | $ | 1,277,504 | $ | 57,320 | $ | 5,955,773 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Covered nonaccrual loans (1)
|
$ | 245,986 | $ | 379,797 | ||||
Covered loans past due 90 days or more but not on nonaccrual
|
— | — | ||||||
Total nonperforming loans
|
245,986 | 379,797 | ||||||
Other real estate owned covered, net
|
87,298 | 123,902 | ||||||
Total covered nonperforming assets
|
$ | 333,284 | $ | 503,699 |
(1)
|
Covered nonaccrual loans meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Balance at beginning of period
|
$ | 980,932 | $ | 986,389 | $ | 1,153,272 | $ | 983,107 | ||||||||
Additions
|
— | — | — | 84,556 | ||||||||||||
Accretion
|
(51,307 | ) | (3,601 | ) | (162,747 | ) | (11,118 | ) | ||||||||
Changes in expected cash flows
|
(49,581 | ) | (24,314 | ) | (110,481 | ) | (98,071 | ) | ||||||||
Balance at end of period
|
$ | 880,044 | $ | 958,474 | $ | 880,044 | $ | 958,474 |
|
•
|
estimate of the remaining life of acquired loans which may change the amount of future interest income;
|
|
•
|
estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and
|
|
•
|
indices for acquired loans with variable rates of interest.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
(In thousands)
|
|||||||||||||||
Balance at beginning of period
|
$ | 630,437 | $ | 939,913 | $ | 785,035 | $ | 1,084,716 | ||||||||
Addition due to WFIB acquisition
|
— | — | — | 41,131 | ||||||||||||
(Amortization) Accretion
|
(14,325 | ) | 7,118 | (48,034 | ) | 29,210 | ||||||||||
Reductions (1)(2)
|
(43,349 | ) | (79,370 | ) | (164,238 | ) | (287,396 | ) | ||||||||
Estimate of FDIC repayment (3)
|
(3,606 | ) | — | (3,606 | ) | — | ||||||||||
Balance at end of period
|
$ | 569,157 | $ | 867,661 | $ | 569,157 | $ | 867,661 |
(1)
|
Reductions relate to cash flows received from principal amortization, partial prepayments, loan payoffs and loan sales.
|
(2)
|
For the three and nine months ended September 30, 2011, the reduction amounts of $43.3 million and $164.2 million, respectively, include charge-offs, of which $18.4 million and $92.8 million, respectively, of these charge-offs are recoverable from the FDIC and recorded in other assets. For the three and nine months ended September 30, 2010, the reduction amounts of $79.4 million and $287.4 million, respectively, also include charge-offs, of which $70.8 million and $188.8 million, respectively, is recoverable from the FDIC and recorded in other assets.
|
(3)
|
This represents the change in the calculated estimate the company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses.
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(In thousands)
|
||||||||
Residential:
|
||||||||
Single-family
|
$ | 1,517,954 | $ | 1,119,024 | ||||
Multifamily
|
942,428 | 974,745 | ||||||
Total residential
|
2,460,382 | 2,093,769 | ||||||
Commercial Real Estate ("CRE"):
|
||||||||
Income producing
|
3,459,001 | 3,392,984 | ||||||
Construction
|
192,988 | 278,047 | ||||||
Land
|
179,152 | 235,707 | ||||||
Total CRE
|
3,831,141 | 3,906,738 | ||||||
Commercial and Industrial ("C&I"):
|
||||||||
Commercial business
|
2,542,313 | 1,674,698 | ||||||
Trade finance
|
469,839 | 308,657 | ||||||
Total C&I
|
3,012,152 | 1,983,355 | ||||||
Consumer:
|
||||||||
Student loans
|
260,283 | 490,314 | ||||||
Other consumer
|
243,292 | 243,212 | ||||||
Total consumer
|
503,575 | 733,526 | ||||||
Total gross loans receivable, excluding covered loans
|
9,807,250 | 8,717,388 | ||||||
Unearned fees, premiums, and discounts, net
|
(16,746 | ) | (56,781 | ) | ||||
Allowance for loan losses, excluding covered loans
|
(211,738 | ) | (230,408 | ) | ||||
Loans receivable, excluding covered loans, net
|
$ | 9,578,766 | $ | 8,430,199 |
Special | ||||||||||||||||||||
Pass/Watch
|
Mention |
Substandard
|
Doubtful |
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
September 30, 2011
|
||||||||||||||||||||
Residential:
|
||||||||||||||||||||
Single-family
|
$ | 1,483,509 | $ | 11,780 | $ | 22,665 | $ | — | $ | 1,517,954 | ||||||||||
Multifamily
|
811,509 | 20,815 | 110,104 | — | 942,428 | |||||||||||||||
CRE:
|
||||||||||||||||||||
Income producing
|
3,175,101 | 81,370 | 202,530 | — | 3,459,001 | |||||||||||||||
Construction
|
134,865 | — | 58,123 | — | 192,988 | |||||||||||||||
Land
|
117,471 | 7,998 | 53,683 | — | 179,152 | |||||||||||||||
C&I:
|
||||||||||||||||||||
Commercial business
|
2,421,858 | 32,461 | 87,162 | 832 | 2,542,313 | |||||||||||||||
Trade finance
|
447,734 | 6,210 | 15,895 | — | 469,839 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Student loans
|
243,292 | — | — | — | 243,292 | |||||||||||||||
Other consumer
|
255,864 | 127 | 4,292 | — | 260,283 | |||||||||||||||
Total
|
$ | 9,091,203 | $ | 160,761 | $ | 554,454 | $ | 832 | $ | 9,807,250 |
Special | ||||||||||||||||||||
Pass/Watch
|
Mention |
Substandard
|
Doubtful |
Total
|
||||||||||||||||
December 31, 2010
|
||||||||||||||||||||
Residential:
|
||||||||||||||||||||
Single-family
|
$ | 1,076,281 | $ | 12,376 | $ | 30,367 | $ | — | $ | 1,119,024 | ||||||||||
Multifamily
|
789,631 | 42,887 | 142,227 | — | 974,745 | |||||||||||||||
CRE:
|
||||||||||||||||||||
Income producing
|
3,054,197 | 80,714 | 258,073 | — | 3,392,984 | |||||||||||||||
Construction
|
202,385 | — | 75,662 | — | 278,047 | |||||||||||||||
Land
|
146,499 | 4,656 | 84,552 | — | 235,707 | |||||||||||||||
C&I:
|
||||||||||||||||||||
Commercial business
|
1,553,218 | 34,449 | 81,185 | 5,846 | 1,674,698 | |||||||||||||||
Trade finance
|
296,430 | 4,069 | 8,158 | — | 308,657 | |||||||||||||||
Consumer:
|
||||||||||||||||||||
Student loans
|
490,314 | — | — | — | 490,314 | |||||||||||||||
Other consumer
|
238,964 | 1,486 | 2,762 | — | 243,212 | |||||||||||||||
Total
|
$ | 7,847,919 | $ | 180,637 | $ | 682,986 | $ | 5,846 | $ | 8,717,388 |
Accruing
Loans
30-59 Days
Past Due
|
Accruing
Loans
60-89 Days
Past Due
|
Total
Accruing
Past Due
Loans
|
Nonaccrual
Loans Less
Than 90 Days
Past Due
|
Nonaccrual
Loans
90 or More
Days Past Due
|
Total
Nonaccrual
Past Due
Loans
|
Current
Loans
|
Total
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
September 30, 2011
|
||||||||||||||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||||||
Single-family
|
$ | 6,196 | $ | 1,201 | $ | 7,397 | $ | 99 | $ | 5,687 | $ | 5,786 | $ | 1,504,771 | $ | 1,517,954 | ||||||||||||||||
Multifamily
|
10,797 | 1,048 | 11,845 | 5,468 | 12,906 | 18,374 | 912,209 | 942,428 | ||||||||||||||||||||||||
CRE:
|
||||||||||||||||||||||||||||||||
Income producing
|
23,833 | — | 23,833 | 17,544 | 27,707 | 45,251 | 3,389,917 | 3,459,001 | ||||||||||||||||||||||||
Construction
|
472 | — | 472 | 1,665 | 26,648 | 28,313 | 164,203 | 192,988 | ||||||||||||||||||||||||
Land
|
— | 2,197 | 2,197 | 1,867 | 10,113 | 11,980 | 164,975 | 179,152 | ||||||||||||||||||||||||
C&I:
|
||||||||||||||||||||||||||||||||
Commercial business
|
2,211 | — | 2,211 | 3,275 | 10,827 | 14,102 | 2,526,000 | 2,542,313 | ||||||||||||||||||||||||
Trade finance
|
— | — | — | — | 294 | 294 | 469,545 | 469,839 | ||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||
Student loans
|
— | — | — | — | — | 260,283 | 260,283 | |||||||||||||||||||||||||
Other consumer
|
259 | 127 | 386 | — | 2,935 | 2,935 | 239,971 | 243,292 | ||||||||||||||||||||||||
Loans held for sale
|
— | — | — | — | 20,674 | 20,674 | 231,246 | 251,920 | ||||||||||||||||||||||||
Total
|
$ | 43,768 | $ | 4,573 | $ | 48,341 | $ | 29,918 | $ | 117,791 | $ | 147,709 | $ | 9,863,120 | 10,059,170 | |||||||||||||||||
Unearned fees, premiums and discounts, net |
(16,746)
|
|||||||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ |
10,042,424
|
Accruing
Loans
30-59 Days
Past Due
|
Accruing
Loans
60-89 Days
Past Due
|
Total
Accruing
Past Due
Loans
|
Nonaccrual
Loans Less
Than 90 Days
Past Due
|
Nonaccrual
Loans
90 or More
Days Past Due
|
Total
Nonaccrual
Past Due
Loans
|
Current
Loans
|
Total | |||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||||||
Single-family
|
$ | 5,449 | $ | 5,432 | $ | 10,881 | $ | 355 | $ | 7,058 | $ | 7,413 | $ | 1,100,730 | $ | 1,119,024 | ||||||||||||||||
Multifamily
|
18,894 | 4,368 | 23,262 | 7,694 | 9,687 | 17,381 | 934,102 | 974,745 | ||||||||||||||||||||||||
CRE:
|
||||||||||||||||||||||||||||||||
Income producing
|
27,002 | 6,034 | 33,036 | 7,962 | 38,454 | 46,416 | 3,313,532 | 3,392,984 | ||||||||||||||||||||||||
Construction
|
— | 1,486 | 1,486 | 25,688 | 9,778 | 35,466 | 241,095 | 278,047 | ||||||||||||||||||||||||
Land
|
479 | — | 479 | 20,761 | 8,138 | 28,899 | 206,329 | 235,707 | ||||||||||||||||||||||||
C&I:
|
||||||||||||||||||||||||||||||||
Commercial business
|
3,216 | 1,086 | 4,302 | 14,437 | 8,235 | 22,672 | 1,647,724 | 1,674,698 | ||||||||||||||||||||||||
Trade finance
|
— | — | — | — | — | — | 308,657 | 308,657 | ||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||
Student loans
|
— | — | — | — | — | — | 490,314 | 490,314 | ||||||||||||||||||||||||
Other consumer
|
781 | 1,485 | 2,266 | — | 620 | 620 | 240,326 | 243,212 | ||||||||||||||||||||||||
Loans held for sale
|
— | — | — | — | 14,062 | 14,062 | 205,993 | 220,055 | ||||||||||||||||||||||||
Total
|
$ | 55,821 | $ | 19,891 | $ | 75,712 | $ | 76,897 | $ | 96,032 | $ | 172,929 | $ | 8,688,802 | 8,937,443 | |||||||||||||||||
Unearned fees, premiums and discounts, net |
(56,781)
|
|||||||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ |
8,880,662
|
For the Three Months Ended
|
For the Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||
(In thousands)
|
|||||||||||||||
Interest income that would have been recognized had nonaccrual loans performed in accordance with their original terms
|
$ | 2,360 | $ | 3,957 | $ | 7,923 | $ | 11,479 | |||||||
Less: Interest income recognized on nonaccrual loans on a cash basis
|
(756 | ) | (3,235 | ) | (2,267 | ) | (5,437 | ) | |||||||
Interest income foregone on nonaccrual loans
|
$ | 1,604 | $ | 722 | $ | 5,656 | $ | 6,042 |
Loans Modified as TDRs During the
|
||||||||||||||||
Three Months Ended September 30, 2011
|
||||||||||||||||
Pre-Modification
|
Post-Modification
|
|||||||||||||||
Number
|
Outstanding
|
Outstanding
|
||||||||||||||
of | Recorded | Recorded | Financial | |||||||||||||
Contracts
|
Investment
|
Investment (1)
|
Impact (2)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential:
|
||||||||||||||||
Single-family
|
4 | $ | 990 | $ | 987 | $ | 328 | |||||||||
Multifamily
|
4 | $ | 1,722 | $ | 1,040 | $ | 1,220 | |||||||||
CRE:
|
||||||||||||||||
Income producing
|
2 | $ | 5,116 | $ | 5,097 | $ | — | |||||||||
Construction
|
1 | $ | 2,859 | $ | 2,859 | $ | — | |||||||||
Land
|
6 | $ | 4,311 | $ | 4,307 | $ | 1,507 | |||||||||
C&I:
|
||||||||||||||||
Commercial business
|
4 | $ | 548 | $ | 542 | $ | 885 | |||||||||
Trade finance
|
1 | $ | 4,127 | $ | 4,127 | $ | — | |||||||||
Consumer:
|
||||||||||||||||
Student loans
|
— | $ | — | $ | — | $ | — | |||||||||
Other consumer
|
— | $ | — | $ | — | $ | — |
Loans Modified as TDRs During the
|
||||||||||||||||
Nine Months Ended September 30, 2011
|
||||||||||||||||
Pre-Modification
|
Post-Modification
|
|||||||||||||||
Number
|
Outstanding
|
Outstanding
|
||||||||||||||
of
|
Recorded
|
Recorded
|
Financial
|
|||||||||||||
Contracts
|
Investment
|
Investment (1)
|
Impact (2)
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential:
|
||||||||||||||||
Single-family
|
9 | $ | 2,204 | $ | 2,089 | $ | 430 | |||||||||
Multifamily
|
11 | $ | 5,136 | $ | 4,436 | $ | 1,344 | |||||||||
CRE:
|
||||||||||||||||
Income producing
|
8 | $ | 22,648 | $ | 19,273 | $ | 3,796 | |||||||||
Construction
|
2 | $ | 3,267 | $ | 3,748 | $ | — | |||||||||
Land
|
15 | $ | 40,651 | $ | 36,111 | $ | 1,874 | |||||||||
C&I:
|
||||||||||||||||
Commercial business
|
16 | $ | 8,916 | $ | 7,233 | $ | 2,053 | |||||||||
Trade finance
|
1 | $ | 4,127 | $ | 4,127 | $ | — | |||||||||
Consumer:
|
||||||||||||||||
Student loans
|
— | $ | — | $ | — | $ | — | |||||||||
Other consumer
|
— | $ | — | $ | — | $ | — |
|
(1)
|
Includes subsequent payments after modification and reflects the balance as of September 30, 2011.
|
|
(2)
|
The financial impact includes chargeoffs and specific reserves recorded at modification date.
|
Loans Modified as TDRs that Subsequently
|
||||||||
Defaulted During the
|
||||||||
Nine Months Ended September 30, 2011
|
||||||||
Number of
|
Recorded
|
|||||||
Contracts
|
Investment
|
|||||||
(Dollars in thousands)
|
||||||||
Residential:
|
||||||||
Single-family
|
— | $ | — | |||||
Multifamily
|
— | $ | — | |||||
CRE:
|
||||||||
Income producing
|
— | $ | — | |||||
Construction
|
1 | $ | 890 | |||||
Land
|
5 | $ | 13,241 | |||||
C&I:
|
||||||||
Commercial business
|
1 | $ | 51 | |||||
Trade finance
|
— | $ | — | |||||
Consumer:
|
||||||||
Student loans
|
— | $ | — | |||||
Other consumer
|
— | $ | — |
For the three months
|
For the nine months
|
|||||||||||||||||||||||||||||||||||
|
ended September 30, 2011
|
ended September 30, 2011
|
||||||||||||||||||||||||||||||||||
Unpaid
Principal
Balance
|
Recorded
InvestmentAllowance
|
Recorded
InvestmentAllowance
|
Total
Recorded
Investment
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized (1)
|
Average
Recorded
Investment
|
Interest
Income
Recognized (1)
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
As of and for the three and nine months ended September 30, 2011
|
||||||||||||||||||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||||||||||
Single-family
|
$ | 11,678 | $ | 10,064 | $ | 1,286 | $ | 11,350 | $ | 487 | $ | 11,502 | $ | 20 | $ | 11,666 | $ | 61 | ||||||||||||||||||
Multifamily
|
35,400 | 28,767 | 4,609 | 33,376 | 997 | 34,764 | 94 | 35,074 | 283 | |||||||||||||||||||||||||||
CRE:
|
||||||||||||||||||||||||||||||||||||
Income producing
|
89,316 | 54,555 | 9,969 | 64,524 | 2,563 | 65,496 | 259 | 66,745 | 776 | |||||||||||||||||||||||||||
Construction
|
64,526 | 35,065 | 595 | 35,660 | 595 | 47,064 | 183 | 51,520 | 550 | |||||||||||||||||||||||||||
Land
|
44,832 | 30,816 | 3,799 | 34,615 | 1,648 | 38,428 | 92 | 39,393 | 276 | |||||||||||||||||||||||||||
C&I:
|
||||||||||||||||||||||||||||||||||||
Commercial business
|
34,074 | 17,802 | 3,362 | 21,164 | 2,147 | 26,375 | 104 | 27,730 | 311 | |||||||||||||||||||||||||||
Trade finance
|
4,489 | 4,421 | — | 4,421 | — | 4,466 | 1 | 4,472 | 2 | |||||||||||||||||||||||||||
Consumer:
|
||||||||||||||||||||||||||||||||||||
Student loans
|
— | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Other consumer
|
3,728 | 2,852 | — | 2,852 | — | 3,029 | 3 | 3,099 | 8 | |||||||||||||||||||||||||||
Total
|
$ | 288,043 | $ | 184,342 | $ | 23,620 | $ | 207,962 | $ | 8,437 | $ | 231,124 | $ | 756 | $ | 239,699 | $ | 2,267 |
Unpaid
Principal |
Recorded
Investment |
Recorded
Investment |
Total
Recorded |
Related
|
Average
Recorded |
Interest
Income |
||||||||||||||||||||||
Balance
|
Allowance
|
Allowance
|
Investment
|
Allowance
|
Investment
|
Recognized (1)
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
As of and for the year ended December 31, 2010 (2)
|
||||||||||||||||||||||||||||
Residential:
|
||||||||||||||||||||||||||||
Single-family
|
$ | 19,769 | $ | 18,521 | $ | 355 | $ | 18,876 | $ | 219 | $ | 21,212 | $ | 209 | ||||||||||||||
Multifamily
|
34,708 | 32,012 | 631 | 32,643 | 90 | 39,350 | 540 | |||||||||||||||||||||
CRE:
|
||||||||||||||||||||||||||||
Income producing
|
95,899 | 82,345 | 6,354 | 88,699 | 1,557 | 100,004 | 2,174 | |||||||||||||||||||||
Construction
|
88,586 | 81,789 | 2,436 | 84,225 | 1,366 | 95,324 | 1,728 | |||||||||||||||||||||
Land
|
39,937 | 22,082 | 6,920 | 29,002 | 4,324 | 32,820 | 1,326 | |||||||||||||||||||||
C&I:
|
||||||||||||||||||||||||||||
Commercial business
|
37,668 | 23,044 | 3,897 | 26,941 | 2,468 | 27,378 | 1,199 | |||||||||||||||||||||
Trade finance
|
— | — | — | — | — | — | ||||||||||||||||||||||
Consumer:
|
— | |||||||||||||||||||||||||||
Student loans
|
— | — | — | — | — | — | ||||||||||||||||||||||
Other consumer
|
1,261 | 620 | — | 620 | — | 1,072 | 28 | |||||||||||||||||||||
Total
|
$ | 317,828 | $ | 260,413 | $ | 20,593 | $ | 281,006 | $ | 10,024 | $ | 317,160 | $ | 7,204 |
(1)
|
Excludes interest from performing TDRs.
|
(2)
|
The table has been corrected to include performing TDRs in the prior period presentation. Previously, the Company did not include performing TDRs as impaired loans. The amount of performing TDR’s as of December 31, 2010 totaled approximately $122 million.
|
Covered Loans
|
||||||||||||||||||||||||||||
Subject to
|
||||||||||||||||||||||||||||
Allowance for
|
||||||||||||||||||||||||||||
Residential
|
CRE
|
C&I
|
Consumer
|
Loan Losses (1)
|
Unallocated
|
Total
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
Nine months ended September 30, 2011
|
||||||||||||||||||||||||||||
Beginning balance
|
$ | 49,491 | $ | 117,752 | $ | 59,737 | $ | 3,428 | $ | 4,225 | $ | — | $ | 234,633 | ||||||||||||||
Provision for loan losses
|
7,618 | 10,861 | 51,223 | 1,850 | 2,209 | 1,245 | 75,006 | |||||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit
|
— | — | — | — | (1,245 | ) | (1,245 | ) | ||||||||||||||||||||
Charge-offs
|
(9,388 | ) | (60,248 | ) | (29,410 | ) | (1,659 | ) | — | — | (100,705 | ) | ||||||||||||||||
Recoveries
|
449 | 4,502 | 5,419 | 113 | — | — | 10,483 | |||||||||||||||||||||
Net charge-offs
|
(8,939 | ) | (55,746 | ) | (23,991 | ) | (1,546 | ) | — | — | (90,222 | ) | ||||||||||||||||
Ending balance
|
$ | 48,170 | $ | 72,867 | $ | 86,969 | $ | 3,732 | $ | 6,434 | $ | — | $ | 218,172 |
Covered Loans
|
||||||||||||||||||||||||||||
Subject to
|
||||||||||||||||||||||||||||
Allowance for
|
||||||||||||||||||||||||||||
Residential
|
CRE
|
C&I
|
Consumer
|
Loan Losses (1)
|
Unallocated
|
Total
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
Three Months Ended September 30, 2011
|
||||||||||||||||||||||||||||
Beginning balance
|
$ | 44,630 | $ | 85,686 | $ | 79,985 | $ | 3,524 | $ | 6,731 | $ | — | $ | 220,556 | ||||||||||||||
Provision for loan losses
|
7,172 | 1,193 | 13,471 | 461 | (297 | ) | — | 22,000 | ||||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Charge-offs
|
(3,835 | ) | (15,863 | ) | (7,602 | ) | (275 | ) | — | — | (27,575 | ) | ||||||||||||||||
Recoveries
|
203 | 1,851 | 1,115 | 22 | — | — | 3,191 | |||||||||||||||||||||
Net charge-offs
|
(3,632 | ) | (14,012 | ) | (6,487 | ) | (253 | ) | — | — | (24,384 | ) | ||||||||||||||||
Ending balance
|
$ | 48,170 | $ | 72,867 | $ | 86,969 | $ | 3,732 | $ | 6,434 | $ | — | $ | 218,172 | ||||||||||||||
Ending balance allocated to:
|
||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 1,484 | $ | 4,843 | $ | 2,147 | $ | — | $ | — | $ | — | $ | 8,474 | ||||||||||||||
Loans collectively evaluated for impairment
|
46,686 | 68,024 | 84,822 | 3,732 | 6,434 | — | 209,698 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (2)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Ending balance
|
$ | 48,170 | $ | 72,867 | $ | 86,969 | $ | 3,732 | $ | 6,434 | $ | — | $ | 218,172 |
Covered Loans
|
||||||||||||||||||||||||||||
Subject to
|
||||||||||||||||||||||||||||
Allowance for
|
||||||||||||||||||||||||||||
Residential
|
CRE
|
C&I
|
Consumer
|
Loan Losses (1)
|
Unallocated
|
Total
|
||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||
Year ended December 31, 2010
|
||||||||||||||||||||||||||||
Beginning balance
|
$ | 38,025 | $ | 147,591 | $ | 50,487 | $ | 2,730 | $ | — | $ | — | $ | 238,833 | ||||||||||||||
Provision for loan losses
|
59,525 | 97,548 | 34,613 | 2,415 | 4,225 | 1,833 | 200,159 | |||||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit
|
— | — | — | — | — | (1,833 | ) | (1,833 | ) | |||||||||||||||||||
Charge-offs
|
(49,685 | ) | (137,460 | ) | (35,479 | ) | (2,579 | ) | — | — | (225,203 | ) | ||||||||||||||||
Recoveries
|
1,626 | 10,073 | 10,116 | 862 | — | — | 22,677 | |||||||||||||||||||||
Net charge-offs
|
(48,059 | ) | (127,387 | ) | (25,363 | ) | (1,717 | ) | — | — | (202,526 | ) | ||||||||||||||||
Ending balance
|
$ | 49,491 | $ | 117,752 | $ | 59,737 | $ | 3,428 | $ | 4,225 | $ | — | $ | 234,633 | ||||||||||||||
Ending balance allocated to:
|
||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 309 | $ | 7,247 | $ | 2,468 | $ | — | $ | — | $ | — | $ | 10,024 | ||||||||||||||
Loans collectively evaluated for impairment
|
49,182 | 110,505 | 57,269 | 3,428 | 4,225 | — | 224,609 | |||||||||||||||||||||
Loans acquired with deteriorated credit quality (2)
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Ending balance
|
$ | 49,491 | $ | 117,752 | $ | 59,737 | $ | 3,428 | $ | 4,225 | $ | — | $ | 234,633 |
|
(1)
|
This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses.
|
|
(2)
|
The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30.
|
Covered Loans
|
||||||||||||||||||||||||
Subject to
|
||||||||||||||||||||||||
Allowance for
|
||||||||||||||||||||||||
Residential
|
CRE
|
C&I
|
Consumer
|
Loan Losses
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
September 30, 2011 | ||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 44,726 | $ | 134,799 | $ | 25,585 | $ | 2,852 | $ | — | $ | 207,962 | ||||||||||||
Loans collectively evaluated for impairment
|
2,415,656 | 3,696,342 | 2,986,567 | 500,723 | 586,604 | 10,185,892 | ||||||||||||||||||
Loans acquired with deteriorated credit quality (1)
|
1,401,215 | 2,487,186 | 471,994 | 71,268 | — | 4,431,663 | ||||||||||||||||||
Ending balance
|
$ | 3,861,597 | $ | 6,318,327 | $ | 3,484,146 | $ | 574,843 | $ | 586,604 | $ | 14,825,517 |
Covered Loans
|
||||||||||||||||||||||||
Subject to
|
||||||||||||||||||||||||
Allowance for
|
||||||||||||||||||||||||
Residential
|
CRE
|
C&I
|
Consumer
|
Loan Losses
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2010
|
||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$ | 51,519 | $ | 201,926 | $ | 26,941 | $ | 620 | $ | — | $ | 281,006 | ||||||||||||
Loans collectively evaluated for impairment
|
2,042,250 | 3,704,812 | 1,956,415 | 732,905 | 561,725 | 8,998,107 | ||||||||||||||||||
Loans acquired with deteriorated credit quality (1)
|
1,614,732 | 3,059,133 | 634,560 | 85,623 | — | 5,394,048 | ||||||||||||||||||
Ending balance
|
$ | 3,708,501 | $ | 6,965,871 | $ | 2,617,916 | $ | 819,148 | $ | 561,725 | $ | 14,673,161 |
(1)
|
The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The total principal balance is presented and excludes the purchase discount and any additional advances subsequent to acquisition date.
|
Estimated Amortization Expense of Premiums on Acquired Deposits
|
Amount
|
|||
(In thousands)
|
||||
Three Months Ending December 31, 2011
|
$ | 2,924 | ||
Year Ending December 31, 2012
|
10,906 | |||
Year Ending December 31, 2013
|
9,365 | |||
Year Ending December 31, 2014
|
8,454 | |||
Year Ending December 31, 2015
|
7,543 | |||
Thereafter
|
30,923 | |||
Total
|
$ | 70,115 |
Three Months Ended September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Net Income
|
Net Income
|
|||||||||||||||||||||||
Available to
|
Number
|
Per
|
Available to
|
Number
|
Per
|
|||||||||||||||||||
Common
|
of
|
Share
|
Common
|
of
|
Share
|
|||||||||||||||||||
Stockholders
|
Shares
|
Amounts
|
Stockholders
|
Shares
|
Amounts
|
|||||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||||||
Net income
|
$ | 62,432 | $ | 46,951 | ||||||||||||||||||||
Less:
|
||||||||||||||||||||||||
Preferred stock dividends and amortization of preferred stock discount
|
(1,714 | ) | (6,732 | ) | ||||||||||||||||||||
Basic EPS – income available to common stockholders
|
$ | 60,718 | 147,162 | $ | 0.41 | $ | 40,219 | 146,454 | $ | 0.27 | ||||||||||||||
Effect of dilutive securities:
|
||||||||||||||||||||||||
Stock options
|
— | 37 | — | 126 | ||||||||||||||||||||
Restricted stock
|
34 | 683 | 4 | 430 | ||||||||||||||||||||
Convertible preferred stock
|
1,714 | 5,571 | — | — | ||||||||||||||||||||
Stock warrants
|
— | — | — | 103 | ||||||||||||||||||||
Diluted EPS – income available to common stockholders
|
$ | 62,466 | 153,453 | $ | 0.41 | $ | 40,223 | 147,113 | $ | 0.27 |
Nine Months Ended September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Net Income
|
Net Income
|
|||||||||||||||||||||||
Available to
|
Number
|
Per
|
Available to
|
Number
|
Per
|
|||||||||||||||||||
Common
|
of
|
Share
|
Common
|
of
|
Share
|
|||||||||||||||||||
Stockholders
|
Shares
|
Amounts
|
Stockholders
|
Shares
|
Amounts
|
|||||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||||||
Net income
|
$ | 179,028 | $ | 108,215 | ||||||||||||||||||||
Less:
|
||||||||||||||||||||||||
Preferred stock dividends and amortization of preferred stock discount
|
(5,143 | ) | (19,017 | ) | ||||||||||||||||||||
Basic EPS – income available to common stockholders
|
$ | 173,885 | 147,013 | $ | 1.18 | $ | 89,198 | 134,396 | $ | 0.66 | ||||||||||||||
Effect of dilutive securities:
|
||||||||||||||||||||||||
Stock options
|
— | 74 | — | 150 | ||||||||||||||||||||
Restricted stock
|
75 | 681 | 10 | 344 | ||||||||||||||||||||
Convertible preferred stock
|
5,143 | 5,571 | — | 11,947 | ||||||||||||||||||||
Stock warrants
|
— | 33 | — | 156 | ||||||||||||||||||||
Diluted EPS – income available to common stockholders
|
$ | 179,103 | 153,372 | $ | 1.17 | $ | 89,208 | 146,993 | $ | 0.61 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Convertible preferred stock
|
— | 5,573 | — | 5,573 | ||||||||||||
Stock options
|
936 | 1,087 | 851 | 1,083 | ||||||||||||
Restricted stock
|
519 | 32 | 342 | 271 |
Three Months Ended September 30, 2011
|
||||||||||||||||
Retail
|
Commercial
|
|||||||||||||||
Banking
|
Lending
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Interest income
|
$ | 88,189 | $ | 166,789 | $ | 27,763 | $ | 282,741 | ||||||||
Charge for funds used
|
(22,394 | ) | (33,575 | ) | 2,257 | (53,712 | ) | |||||||||
Interest spread on funds used
|
65,795 | 133,214 | 30,020 | 229,029 | ||||||||||||
Interest expense
|
(21,407 | ) | (9,248 | ) | (14,304 | ) | (44,959 | ) | ||||||||
Credit on funds provided
|
46,480 | 3,291 | 3,941 | 53,712 | ||||||||||||
Interest spread on funds provided
|
25,073 | (5,957 | ) | (10,363 | ) | 8,753 | ||||||||||
Net interest income
|
$ | 90,868 | $ | 127,257 | $ | 19,657 | $ | 237,782 | ||||||||
Provision for loan losses
|
$ | (11,185 | ) | $ | (10,815 | ) | $ | — | $ | (22,000 | ) | |||||
Depreciation, amortization and accretion
|
(6,815 | ) | (2,912 | ) | (6,943 | ) | (16,670 | ) | ||||||||
Goodwill
|
320,566 | 16,872 | — | 337,438 | ||||||||||||
Segment pre-tax profit
|
15,773 | 64,290 | 17,622 | 97,685 | ||||||||||||
Segment assets
|
6,230,680 | 10,345,990 | 5,236,376 | 21,813,046 |
Three Months Ended September 30, 2010
|
||||||||||||||||
Retail
|
Commercial
|
|||||||||||||||
Banking
|
Lending
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Interest income
|
$ | 69,311 | $ | 143,729 | $ | 18,360 | $ | 231,400 | ||||||||
Charge for funds used
|
(29,159 | ) | (46,446 | ) | 21,583 | (54,022 | ) | |||||||||
Interest spread on funds used
|
40,152 | 97,283 | 39,943 | 177,378 | ||||||||||||
Interest expense
|
(26,851 | ) | (5,885 | ) | (15,859 | ) | (48,595 | ) | ||||||||
Credit on funds provided
|
48,391 | 2,431 | 3,200 | 54,022 | ||||||||||||
Interest spread on funds provided
|
21,540 | (3,454 | ) | (12,659 | ) | 5,427 | ||||||||||
Net interest income
|
$ | 61,692 | $ | 93,829 | $ | 27,284 | $ | 182,805 | ||||||||
Provision for loan losses
|
$ | (26,261 | ) | $ | (12,387 | ) | $ | — | $ | (38,648 | ) | |||||
Depreciation, amortization and accretion
|
(19,282 | ) | (46,469 | ) | (2,543 | ) | (68,294 | ) | ||||||||
Goodwill
|
320,566 | 16,872 | — | 337,438 | ||||||||||||
Segment pre-tax (loss) profit
|
(18,021 | ) | 64,698 | 26,850 | 73,527 | |||||||||||
Segment assets
|
6,450,883 | 9,728,305 | 4,238,058 | 20,417,246 |
Nine Months Ended September 30, 2011
|
||||||||||||||||
Retail
|
Commercial
|
|||||||||||||||
Banking
|
Lending
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Interest income
|
$ | 270,943 | $ | 465,138 | $ | 75,463 | $ | 811,544 | ||||||||
Charge for funds used
|
(72,073 | ) | (111,128 | ) | 2,759 | (180,442 | ) | |||||||||
Interest spread on funds used
|
198,870 | 354,010 | 78,222 | 631,102 | ||||||||||||
Interest expense
|
(67,515 | ) | (23,236 | ) | (46,841 | ) | (137,592 | ) | ||||||||
Credit on funds provided
|
158,212 | 10,225 | 12,005 | 180,442 | ||||||||||||
Interest spread on funds provided
|
90,697 | (13,011 | ) | (34,836 | ) | 42,850 | ||||||||||
Net interest income
|
$ | 289,567 | $ | 340,999 | $ | 43,386 | $ | 673,952 | ||||||||
Provision for loan losses
|
$ | (20,128 | ) | $ | (54,878 | ) | $ | — | $ | (75,006 | ) | |||||
Depreciation, amortization and accretion
|
(34,941 | ) | (51,012 | ) | (14,129 | ) | (100,082 | ) | ||||||||
Goodwill
|
320,566 | 16,872 | — | 337,438 | ||||||||||||
Segment pre-tax profit
|
81,443 | 164,258 | 34,294 | 279,995 | ||||||||||||
Segment assets
|
6,230,680 | 10,345,990 | 5,236,376 | 21,813,046 |
Nine Months Ended September 30, 2010
|
||||||||||||||||
Retail
|
Commercial
|
|||||||||||||||
Banking
|
Lending
|
Other
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Interest income
|
$ | 269,453 | $ | 473,004 | $ | 61,179 | $ | 803,636 | ||||||||
Charge for funds used
|
(87,078 | ) | (111,119 | ) | 11,406 | (186,791 | ) | |||||||||
Interest spread on funds used
|
182,375 | 361,885 | 72,585 | 616,845 | ||||||||||||
Interest expense
|
(89,422 | ) | (19,015 | ) | (47,047 | ) | (155,484 | ) | ||||||||
Credit on funds provided
|
161,796 | 11,738 | 13,257 | 186,791 | ||||||||||||
Interest spread on funds provided
|
72,374 | (7,277 | ) | (33,790 | ) | 31,307 | ||||||||||
Net interest income
|
$ | 254,749 | $ | 354,608 | $ | 38,795 | $ | 648,152 | ||||||||
Provision for loan losses
|
$ | (59,976 | ) | $ | (110,349 | ) | $ | — | $ | (170,325 | ) | |||||
Depreciation, amortization and accretion
|
(50,669 | ) | (91,081 | ) | (5,363 | ) | (147,113 | ) | ||||||||
Goodwill
|
320,566 | 16,872 | — | 337,438 | ||||||||||||
Segment pre-tax (loss) profit
|
(1,172 | ) | 106,165 | 65,210 | 170,203 | |||||||||||
Segment assets
|
6,450,883 | 9,728,305 | 4,238,058 | 20,417,246 |
|
·
|
fair valuation of financial instruments;
|
|
·
|
investment securities;
|
|
·
|
acquired loans;
|
|
·
|
covered loans;
|
|
·
|
covered other real estate owned;
|
|
·
|
FDIC indemnification asset;
|
|
·
|
allowance for loan losses;
|
|
·
|
other real estate owned;
|
|
·
|
loan, OREO, and note sales;
|
|
·
|
goodwill impairment; and
|
|
·
|
share-based compensation.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In millions)
|
||||||||||||||||
Net interest income
|
$ | 237.8 | $ | 182.8 | $ | 674.0 | $ | 648.2 | ||||||||
Provision for loan losses
|
(22.0 | ) | (38.6 | ) | (75.0 | ) | (170.3 | ) | ||||||||
Noninterest (loss) income
|
(13.5 | ) | 29.3 | 10.0 | 56.5 | |||||||||||
Noninterest expense
|
(104.6 | ) | (99.9 | ) | (328.9 | ) | (364.2 | ) | ||||||||
Provision for income taxes
|
(35.3 | ) | (26.6 | ) | (101.0 | ) | (62.0 | ) | ||||||||
Net income
|
$ | 62.4 | $ | 47.0 | $ | 179.0 | $ | 108.2 | ||||||||
Annualized return on average total assets
|
1.13 | % | 0.93 | % | 1.11 | % | 0.72 | % | ||||||||
Annualized return on average common equity
|
10.99 | % | 8.11 | % | 10.92 | % | 6.47 | % | ||||||||
Annualized return on average total equity
|
10.88 | % | 7.96 | % | 10.82 | % | 6.21 | % |
Three Months Ended September 30,
|
|||||||||||||||||||||||||
2011
|
2010
|
||||||||||||||||||||||||
Average
|
Average Yield
|
Average
|
Average Yield
|
||||||||||||||||||||||
Balance
|
Interest
|
Rate (1)
|
Balance
|
Interest
|
Rate (1)
|
||||||||||||||||||||
(Dollars in thousands)
|
|||||||||||||||||||||||||
ASSETS
|
|||||||||||||||||||||||||
Interest-earning assets:
|
|||||||||||||||||||||||||
Due from banks and short-term investments
|
$ | 1,164,302 | $ | 7,866 | 2.68 | % | $ | 736,658 | $ | 2,362 | 1.27 | % | |||||||||||||
Securities purchased under resale agreements
|
1,117,493 | 5,064 | 1.80 | % | 648,136 | 2,410 | 1.46 | % | |||||||||||||||||
Investment securities available-for-sale (3)(4)
|
3,255,701 | 24,503 | 2.99 | % | 2,482,951 | 15,725 | 2.51 | % | |||||||||||||||||
Loans receivable (2)(3)
|
9,825,559 | 120,596 | 4.87 | % | 8,499,048 | 116,029 | 5.42 | % | |||||||||||||||||
Loans receivable - covered(2)(3)
|
4,253,687 | 123,927 | 11.56 | % | 5,105,793 | 94,057 | 7.31 | % | |||||||||||||||||
FHLB and FRB stock
|
193,891 | 785 | 1.61 | % | 219,416 | 817 | 1.49 | % | |||||||||||||||||
Total interest-earning assets | 19,810,633 | 282,741 | 5.66 | % | 17,692,002 | 231,400 | 5.19 | % | |||||||||||||||||
Noninterest-earning assets:
|
|||||||||||||||||||||||||
Cash and cash equivalents
|
254,918 | 668,277 | |||||||||||||||||||||||
Allowance for loan losses
|
(225,395 | ) | (253,078 | ) | |||||||||||||||||||||
Other assets
|
2,137,967 | 1,989,941 | |||||||||||||||||||||||
Total assets
|
$ | 21,978,123 | $ | 20,097,142 | |||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||
Interest-bearing liabilities:
|
|||||||||||||||||||||||||
Checking accounts
|
$ | 895,223 | $ | 936 | 0.41 | % | $ | 731,267 | $ | 550 | 0.30 | % | |||||||||||||
Money market accounts
|
4,453,224 | 4,798 | 0.43 | % | 4,162,847 | 7,103 | 0.68 | % | |||||||||||||||||
Savings deposits
|
1,048,004 | 756 | 0.29 | % | 960,927 | 818 | 0.34 | % | |||||||||||||||||
Time deposits
|
7,665,429 | 21,726 | 1.12 | % | 6,719,637 | 20,028 | 1.18 | % | |||||||||||||||||
FHLB advances
|
508,913 | 3,013 | 2.35 | % | 1,020,640 | 5,725 | 2.23 | % | |||||||||||||||||
Securities sold under repurchase agreements
|
1,035,466 | 12,218 | 4.68 | % | 1,047,697 | 12,189 | 4.55 | % | |||||||||||||||||
Long-term debt
|
222,490 | 1,424 | 2.54 | % | 235,570 | 1,685 | 2.80 | % | |||||||||||||||||
Other borrowings
|
14,003 | 88 | 2.49 | % | 32,337 | 497 | 6.01 | % | |||||||||||||||||
Total interest-bearing liabilities | 15,842,752 | 44,959 | 1.13 | % | 14,910,922 | 48,595 | 1.29 | % | |||||||||||||||||
Noninterest-bearing liabilities:
|
|||||||||||||||||||||||||
Demand deposits
|
3,236,683 | 2,436,031 | |||||||||||||||||||||||
Other liabilities
|
622,885 | 390,164 | |||||||||||||||||||||||
Stockholders' equity
|
2,275,803 | 2,360,025 | |||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 21,978,123 | $ | 20,097,142 | |||||||||||||||||||||
Interest rate spread
|
4.53 | % | 3.90 | % | |||||||||||||||||||||
Net interest income and net interest margin
|
$ | 237,782 | 4.76 | % | $ | 182,805 | 4.10 | % |
(1)
|
Annualized.
|
(2)
|
Average balances include nonperforming loans.
|
(3)
|
Includes net accretion of discounts on investment securities and loans receivable totaling $529 thousand and net amortization of $1.2 million for the three months ended September 30, 2011 and 2010, respectively. Also includes the net amortization of deferred loans fees totaling $3.7 million and $1.8 million for the three months ended September 30, 2011 and September 30, 2010, respectively.
|
(4)
|
September 30, 2010 average balances exclude unrealized gains or losses.
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||
Average
|
Average Yield
|
Average
|
Average Yield
|
|||||||||||||||||||||
Balance
|
Interest
|
Rate (1)
|
Balance
|
Interest
|
Rate (1)
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Due from banks and short-term investments
|
$ | 1,052,091 | $ | 15,106 | 1.92 | % | $ | 914,471 | $ | 7,405 | 1.08 | % | ||||||||||||
Securities purchased under resale agreements
|
1,029,000 | 14,443 | 1.88 | % | 455,824 | 11,303 | 3.27 | % | ||||||||||||||||
Investment securities available-for-sale(3)(4)
|
3,100,000 | 66,613 | 2.87 | % | 2,291,588 | 50,656 | 2.94 | % | ||||||||||||||||
Loans receivable(2)(3)
|
9,458,403 | 355,246 | 5.02 | % | 8,525,484 | 354,973 | 5.57 | % | ||||||||||||||||
Loans receivable - covered(2)(3)
|
4,477,467 | 357,576 | 10.68 | % | 5,175,251 | 376,840 | 9.74 | % | ||||||||||||||||
FHLB and FRB stock
|
201,251 | 2,560 | 1.70 | % | 221,856 | 2,473 | 1.49 | % | ||||||||||||||||
Total interest-earning assets
|
19,318,212 | 811,544 | 5.62 | % | 17,584,474 | 803,650 | 6.11 | % | ||||||||||||||||
Noninterest-earning assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
269,700 | 547,403 | ||||||||||||||||||||||
Allowance for loan losses
|
(230,020 | ) | (254,153 | ) | ||||||||||||||||||||
Other assets
|
2,126,154 | 2,172,214 | ||||||||||||||||||||||
Total assets
|
$ | 21,484,046 | $ | 20,049,938 | ||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Checking accounts
|
$ | 820,518 | $ | 2,283 | 0.37 | % | $ | 672,817 | $ | 1,691 | 0.34 | % | ||||||||||||
Money market accounts
|
4,400,912 | 16,621 | 0.50 | % | 3,868,588 | 23,405 | 0.81 | % | ||||||||||||||||
Savings deposits
|
1,018,215 | 2,421 | 0.32 | % | 971,381 | 3,234 | 0.45 | % | ||||||||||||||||
Time deposits
|
7,487,935 | 62,003 | 1.11 | % | 6,914,615 | 62,749 | 1.21 | % | ||||||||||||||||
FHLB advances
|
751,822 | 12,746 | 2.27 | % | 1,427,903 | 20,905 | 1.96 | % | ||||||||||||||||
Securities sold under repurchase agreements
|
1,059,770 | 36,351 | 4.59 | % | 1,039,636 | 36,775 | 4.66 | % | ||||||||||||||||
Long-term debt
|
231,087 | 4,783 | 2.77 | % | 235,570 | 4,823 | 2.70 | % | ||||||||||||||||
Other borrowings
|
15,408 | 384 | 3.33 | % | 60,552 | 1,902 | 4.19 | % | ||||||||||||||||
Total interest-bearing liabilities
|
15,785,667 | 137,592 | 1.17 | % | 15,191,062 | 155,484 | 1.37 | % | ||||||||||||||||
Noninterest-bearing liabilities:
|
||||||||||||||||||||||||
Demand deposits
|
2,966,343 | 2,323,950 | ||||||||||||||||||||||
Other liabilities
|
520,663 | 213,236 | ||||||||||||||||||||||
Stockholders' equity
|
2,211,373 | 2,321,690 | ||||||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 21,484,046 | $ | 20,049,938 | ||||||||||||||||||||
Interest rate spread
|
4.45 | % | 4.74 | % | ||||||||||||||||||||
Net interest income and net interest margin
|
$ | 673,952 | 4.66 | % | $ | 648,166 | 4.93 | % |
(1)
|
Annualized.
|
(2)
|
Average balances include nonperforming loans.
|
(3)
|
Includes net accretion of discounts on investment securities and loans receivable totaling $8.3 million and $9.2 million for the nine months ended September 30, 2011 and 2010, respectively. Also includes the net amortization of deferred loans fees totaling $9.2 million and $5.5 million for the nine months ended September 30, 2011 and 2010, respectively.
|
(4)
|
September 30, 2010 average balances exclude unrealized gains or losses. Interest income calculated on a fully taxable equivalent basis using the current statutory federal tax rate for the nine months ended September 30, 2010.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
2011 vs. 2010
|
2011 vs. 2010
|
|||||||||||||||||||||||
Total
|
Changes Due to
|
Total
|
Changes Due to
|
|||||||||||||||||||||
Change
|
Volume (1)
|
Rate (1)
|
Change
|
Volume (1)
|
Rate (1)
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
INTEREST-EARNING ASSETS:
|
||||||||||||||||||||||||
Due from banks and short-term investments
|
$ | 5,504 | $ | 1,893 | $ | 3,611 | $ | 7,701 | $ | 1,255 | $ | 6,446 | ||||||||||||
Securities purchased under resale agreements
|
2,654 | 2,038 | 616 | 3,140 | 9,628 | (6,488 | ) | |||||||||||||||||
Investment securities available-for-sale
|
8,778 | 5,468 | 3,310 | 15,957 | 17,408 | (1,451 | ) | |||||||||||||||||
Loans receivable
|
4,567 | 16,999 | (12,432 | ) | 273 | 36,836 | (36,563 | ) | ||||||||||||||||
Loans receivable - covered
|
29,870 | (17,733 | ) | 47,603 | (19,264 | ) | (53,672 | ) | 34,408 | |||||||||||||||
FHLB and FRB stock
|
(32 | ) | (100 | ) | 68 | 87 | (243 | ) | 330 | |||||||||||||||
Total interest and dividend income
|
$ | 51,341 | $ | 8,565 | $ | 42,776 | $ | 7,894 | $ | 11,212 | $ | (3,318 | ) | |||||||||||
INTEREST-BEARING LIABILITIES:
|
||||||||||||||||||||||||
Checking accounts
|
$ | 386 | $ | 141 | $ | 245 | $ | 592 | $ | 398 | $ | 194 | ||||||||||||
Money market accounts
|
(2,305 | ) | 466 | (2,771 | ) | (6,784 | ) | 2,896 | (9,680 | ) | ||||||||||||||
Savings deposits
|
(62 | ) | 70 | (132 | ) | (813 | ) | 149 | (962 | ) | ||||||||||||||
Time deposits
|
1,698 | 2,716 | (1,018 | ) | (746 | ) | 4,981 | (5,727 | ) | |||||||||||||||
FHLB advances
|
(2,712 | ) | (3,014 | ) | 302 | (8,159 | ) | (11,071 | ) | 2,912 | ||||||||||||||
Securities sold under repurchase agreements
|
29 | (143 | ) | 172 | (424 | ) | 704 | (1,128 | ) | |||||||||||||||
Long-term debt
|
(261 | ) | (90 | ) | (171 | ) | (40 | ) | (92 | ) | 52 | |||||||||||||
Other borrowings
|
(409 | ) | (200 | ) | (209 | ) | (1,518 | ) | (1,189 | ) | (329 | ) | ||||||||||||
Total interest expense
|
$ | (3,636 | ) | $ | (54 | ) | $ | (3,582 | ) | $ | (17,892 | ) | $ | (3,224 | ) | $ | (14,668 | ) | ||||||
CHANGE IN NET INTEREST INCOME
|
$ | 54,977 | $ | 8,619 | $ | 46,358 | $ | 25,786 | $ | 14,436 | $ | 11,350 |
(1)
|
Changes in interest income/expense not arising from volume or rate variances are allocated proportionately to rate and volume.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In millions)
|
||||||||||||||||
Gain on acquisition
|
$ | — | $ | — | $ | — | $ | 27.6 | ||||||||
Impairment loss on investment securities recognized in earnings
|
— | (0.9 | ) | (0.5 | ) | (10.3 | ) | |||||||||
(Decrease) increase in FDIC indemnification asset and receivable
|
(43.5 | ) | 5.8 | (79.7 | ) | (47.2 | ) | |||||||||
Branch fees
|
8.9 | 8.0 | 25.7 | 25.0 | ||||||||||||
Net gain on sales of investment securities
|
3.2 | 2.8 | 6.8 | 24.7 | ||||||||||||
Net gain on sales of fixed assets
|
— | — | 2.2 | — | ||||||||||||
Letters of credit fees and foreign exchange income
|
6.5 | 3.9 | 17.6 | 11.0 | ||||||||||||
Ancillary loan fees
|
2.1 | 2.4 | 6.1 | 6.4 | ||||||||||||
Income from life insurance policies
|
1.0 | 1.1 | 3.1 | 3.3 | ||||||||||||
Net gain on sales of loans
|
5.5 | 4.2 | 18.8 | 12.3 | ||||||||||||
Other operating income
|
2.8 | 2.0 | 9.9 | 3.7 | ||||||||||||
Total
|
$ | (13.5 | ) | $ | 29.3 | $ | 10.0 | $ | 56.5 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In millions)
|
||||||||||||||||
Compensation and employee benefits
|
$ | 39.9 | $ | 38.7 | $ | 119.0 | $ | 131.1 | ||||||||
Occupancy and equipment expense
|
12.6 | 14.0 | 37.4 | 39.0 | ||||||||||||
Amortization of investments in affordable housing partnerships
|
5.3 | 1.4 | 14.4 | 7.1 | ||||||||||||
Amortization of premiums on deposits acquired
|
3.1 | 3.4 | 9.4 | 10.0 | ||||||||||||
Deposit insurance premiums and regulatory assessments
|
2.4 | 5.7 | 16.5 | 21.8 | ||||||||||||
Loan-related expenses
|
5.2 | 6.3 | 12.6 | 14.6 | ||||||||||||
Other real estate owned expense
|
4.5 | 5.7 | 29.7 | 44.7 | ||||||||||||
Legal expense
|
6.0 | 5.3 | 16.9 | 14.4 | ||||||||||||
Prepayment penalty for FHLB advances and other borrowings
|
3.8 | — | 12.3 | 13.8 | ||||||||||||
Data processing
|
1.8 | 2.6 | 6.5 | 8.2 | ||||||||||||
Deposit-related expenses
|
1.7 | 1.3 | 4.2 | 3.4 | ||||||||||||
Consulting expense
|
2.1 | 1.6 | 6.1 | 5.7 | ||||||||||||
Other operating expenses
|
16.2 | 14.0 | 43.9 | 50.4 | ||||||||||||
Total noninterest expense
|
$ | 104.6 | $ | 99.9 | $ | 328.9 | $ | 364.2 | ||||||||
Efficiency Ratio(1)
|
41.19 | % | 44.67 | % | 42.79 | % | 48.47 | % |
(1)
|
Represents noninterest expense, excluding the amortization of intangibles, amortization and impairment loss of premiums on deposits acquired, amortization of investments in affordable housing partnerships and prepayment penalties for FHLB advances, divided by the aggregate of net interest income before provision for loan losses and noninterest income, excluding items that are non-recurring in nature.
|
After One
|
After Five
|
|||||||||||||||||||||||||||||||||||||||||||||||
Within
|
But Within
|
But Within
|
After
|
Indeterminate
|
||||||||||||||||||||||||||||||||||||||||||||
One Year
|
Five Years
|
Ten Years
|
Ten Years
|
Maturity
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale
|
||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasury securities
|
$ | — | — | % | $ | 20,761 | 2.11 | % | $ | — | — | % | $ | — | — | % | $ | — | — | % | $ | 20,761 | 2.11 | % | ||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities
|
635,836 | 2.10 | % | 7,115 | 2.09 | % | — | — | % | — | — | % | — | — | % | 642,951 | 2.10 | % | ||||||||||||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities
|
1,260 | 6.79 | % | 774 | 3.33 | % | 7,666 | 4.05 | % | 7,123 | 3.62 | % | — | — | % | 16,823 | 4.04 | % | ||||||||||||||||||||||||||||||
Residential mortgage-backed securities
|
2,983 | — | % | — | — | % | 42,905 | 2.98 | % | 1,047,941 | 3.04 | % | — | — | % | 1,093,829 | 3.03 | % | ||||||||||||||||||||||||||||||
Municipal securities
|
14,839 | 5.62 | % | 9,675 | 2.22 | % | 37,399 | 3.30 | % | 15,553 | 5.09 | % | — | — | % | 77,466 | 3.95 | % | ||||||||||||||||||||||||||||||
Other residential mortgage-backed securities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Investment grade
|
— | — | % | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||||||
Non-investment grade
|
— | — | % | — | — | % | — | — | % | — | — | % | — | — | % | — | — | % | ||||||||||||||||||||||||||||||
Corporate debt securities:
|
||||||||||||||||||||||||||||||||||||||||||||||||
Investment grade
|
122,924 | 3.25 | % | 307,513 | 3.05 | % | 890,224 | 3.54 | % | 82,771 | 5.77 | % | — | — | % | 1,403,432 | 3.54 | % | ||||||||||||||||||||||||||||||
Non-investment grade
|
7,354 | 1.64 | % | 5,580 | 5.38 | % | — | — | % | 1,261 | 3.74 | % | — | — | % | 14,195 | 3.00 | % | ||||||||||||||||||||||||||||||
Other securities
|
10,135 | 2.19 | % | — | — | % | — | — | % | — | — | % | — | — | % | 10,135 | 2.19 | % | ||||||||||||||||||||||||||||||
Total investment securities available-for-sale
|
$ | 795,331 | $ | 351,418 | $ | 978,194 | $ | 1,154,649 | $ | — | $ | 3,279,592 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Real estate loans:
|
||||||||||||||||
Residential single-family
|
$ | 470,368 | 9.4 | % | $ | 553,541 | 9.3 | % | ||||||||
Residential multifamily
|
959,188 | 19.1 | % | 1,093,331 | 18.4 | % | ||||||||||
Commercial and industrial real estate
|
1,883,843 | 37.6 | % | 2,085,674 | 35.0 | % | ||||||||||
Construction and land
|
718,938 | 14.3 | % | 1,043,717 | 17.5 | % | ||||||||||
Total real estate loans
|
4,032,337 | 80.4 | % | 4,776,263 | 80.2 | % | ||||||||||
Other loans:
|
||||||||||||||||
Commercial business
|
884,772 | 17.6 | % | 1,072,020 | 18.0 | % | ||||||||||
Other consumer
|
101,158 | 2.0 | % | 107,490 | 1.8 | % | ||||||||||
Total other loans
|
985,930 | 19.6 | % | 1,179,510 | 19.8 | % | ||||||||||
Total principal balance
|
5,018,267 | 100.0 | % | 5,955,773 | 100.0 | % | ||||||||||
Covered discount
|
(871,931 | ) | (1,150,672 | ) | ||||||||||||
Allowance on covered loans
|
(6,434 | ) | (4,225 | ) | ||||||||||||
Total covered loans, net
|
$ | 4,139,902 | $ | 4,800,876 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential:
|
||||||||||||||||
Single-family
|
$ | 1,517,954 | 15.5 | % | $ | 1,119,024 | 12.8 | % | ||||||||
Multifamily
|
942,428 | 9.6 | % | 974,745 | 11.2 | % | ||||||||||
Total residential
|
2,460,382 | 25.1 | % | 2,093,769 | 24.0 | % | ||||||||||
Commercial Real Estate ("CRE"):
|
||||||||||||||||
Income producing
|
3,459,001 | 35.3 | % | 3,392,984 | 39.0 | % | ||||||||||
Construction
|
192,988 | 2.0 | % | 278,047 | 3.2 | % | ||||||||||
Land
|
179,152 | 1.8 | % | 235,707 | 2.7 | % | ||||||||||
Total CRE
|
3,831,141 | 39.1 | % | 3,906,738 | 44.9 | % | ||||||||||
Commercial and Industrial ("C&I"):
|
||||||||||||||||
Commercial business
|
2,542,313 | 25.9 | % | 1,674,698 | 19.2 | % | ||||||||||
Trade finance
|
469,839 | 4.8 | % | 308,657 | 3.5 | % | ||||||||||
Total C&I
|
3,012,152 | 30.7 | % | 1,983,355 | 22.7 | % | ||||||||||
Consumer:
|
||||||||||||||||
Student loans
|
260,283 | 2.6 | % | 490,314 | 5.6 | % | ||||||||||
Other consumer
|
243,292 | 2.5 | % | 243,212 | 2.8 | % | ||||||||||
Total consumer
|
503,575 | 5.1 | % | 733,526 | 8.4 | % | ||||||||||
Total gross loans
|
9,807,250 | 100.0 | % | 8,717,388 | 100.0 | % | ||||||||||
Unearned fees, premiums, and discounts, net
|
(16,746 | ) | (56,781 | ) | ||||||||||||
Allowance for loan losses
|
(211,738 | ) | (230,408 | ) | ||||||||||||
Loans held for sale
|
251,920 | 220,055 | ||||||||||||||
Loans receivable, net
|
$ | 9,830,686 | $ | 8,650,254 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in thousands)
|
||||||||
Nonaccrual loans
|
$ | 147,709 | $ | 172,929 | ||||
Loans 90 or more days past due but not on nonaccrual
|
— | — | ||||||
Total nonperforming loans
|
147,709 | 172,929 | ||||||
Non-covered other real estate owned, net
|
21,178 | 21,865 | ||||||
Total nonperforming assets
|
$ | 168,887 | $ | 194,794 | ||||
Total nonperforming assets to total assets
|
0.77 | % | 0.94 | % | ||||
Allowance for non-covered loan losses to nonperforming loans
|
143.35 | % | 133.24 | % | ||||
Nonperforming loans to total gross non-covered loans
|
1.47 | % | 1.93 | % | ||||
Performing troubled debt restructured loans
|
$ | 81,010 | $ | 122,100 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential:
|
||||||||||||||||
Single-family
|
$ | 11,350 | 5.5 | % | $ | 18,876 | 6.7 | % | ||||||||
Multifamily
|
33,376 | 16.0 | % | 32,643 | 11.6 | % | ||||||||||
Total residential impaired loans
|
$ | 44,726 | 21.5 | % | $ | 51,519 | 18.3 | % | ||||||||
Commercial Real Estate ("CRE"):
|
||||||||||||||||
Income producing
|
$ | 64,524 | 31.0 | % | $ | 88,699 | 31.6 | % | ||||||||
Construction
|
35,660 | 17.2 | % | 84,225 | 30.0 | % | ||||||||||
Land
|
34,615 | 16.6 | % | 29,002 | 10.3 | % | ||||||||||
Total CRE impaired loans
|
$ | 134,799 | 64.8 | % | $ | 201,926 | 71.9 | % | ||||||||
Commercial and Industrial ("C&I"):
|
||||||||||||||||
Commercial business
|
$ | 21,164 | 10.2 | % | $ | 26,941 | 9.6 | % | ||||||||
Trade finance
|
4,421 | 2.1 | % | — | — | % | ||||||||||
Total C&I impaired loans
|
$ | 25,585 | 12.3 | % | $ | 26,941 | 9.6 | % | ||||||||
Consumer:
|
||||||||||||||||
Student loans
|
$ | — | — | % | $ | — | — | % | ||||||||
Other consumer
|
2,852 | 1.4 | % | 620 | 0.2 | % | ||||||||||
Total consumer impaired loans
|
$ | 2,852 | 1.4 | % | $ | 620 | 0.2 | % | ||||||||
Total gross impaired loans
|
$ | 207,962 | 100.0 | % | $ | 281,006 | 100.0 | % |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Allowance balance, beginning of period
|
$ | 220,556 | $ | 249,462 | $ | 234,633 | $ | 238,833 | ||||||||
Allowance for unfunded loan commitments and letters of credit
|
— | 1,133 | (1,245 | ) | (790 | ) | ||||||||||
Provision for loan losses
|
22,000 | 38,648 | 75,006 | 170,325 | ||||||||||||
Gross charge-offs:
|
||||||||||||||||
Residential
|
3,836 | 22,161 | 9,389 | 42,357 | ||||||||||||
Commercial real estate
|
15,863 | 20,879 | 60,248 | 108,969 | ||||||||||||
Commercial and industrial
|
7,602 | 4,939 | 29,410 | 24,836 | ||||||||||||
Consumer
|
275 | 332 | 1,659 | 1,757 | ||||||||||||
Total gross charge-offs
|
27,576 | 48,311 | 100,706 | 177,919 | ||||||||||||
Gross recoveries:
|
||||||||||||||||
Residential
|
204 | 15 | 450 | 1,116 | ||||||||||||
Commercial real estate
|
1,851 | 800 | 4,502 | 6,955 | ||||||||||||
Commercial and industrial
|
1,115 | 2,400 | 5,419 | 5,454 | ||||||||||||
Consumer
|
22 | 39 | 113 | 212 | ||||||||||||
Total gross recoveries
|
3,192 | 3,254 | 10,484 | 13,737 | ||||||||||||
Net charge-offs
|
24,384 | 45,057 | 90,222 | 164,182 | ||||||||||||
Allowance balance, end of period(1)
|
$ | 218,172 | $ | 244,186 | $ | 218,172 | $ | 244,186 | ||||||||
Average loans outstanding
|
$ | 9,825,559 | $ | 8,499,048 | $ | 9,458,403 | $ | 8,525,484 | ||||||||
Total gross loans outstanding, end of period
|
$ | 9,807,250 | $ | 8,599,459 | $ | 9,807,250 | $ | 8,599,459 | ||||||||
Annualized net charge-offs to average loans
|
0.99 | % | 2.12 | % | 1.27 | % | 2.57 | % | ||||||||
Allowance for non-covered loan losses to total gross non-covered loans held for investment at end of period
|
2.16 | % | 2.79 | % | 2.16 | % | 2.79 | % |
(1)
|
$6.4 million and $3.9 million of the balances of allowance for loan losses is allocated to covered loans not accounted for under ASC 310-30 as of September 30, 2011 and September 30, 2010, respectively.
|
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Amount
|
%
|
Amount
|
%
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Residential
|
$ | 48,170 | 25.1 | % | $ | 49,491 | 24.0 | % | ||||||||
Commercial Real Estate
|
72,868 | 39.1 | % | 117,752 | 44.9 | % | ||||||||||
Commercial and Industrial
|
86,968 | 30.7 | % | 59,737 | 22.7 | % | ||||||||||
Consumer
|
3,732 | 5.1 | % | 3,428 | 8.4 | % | ||||||||||
Covered loans subject to allowance for loan losses
|
6,434 | 0.0 | % | 4,225 | 0.0 | % | ||||||||||
Total
|
$ | 218,172 | 100.0 | % | $ | 234,633 | 100.0 | % |
September 30,
|
December 31,
|
Increase (Decrease)
|
||||||||||||||
2011
|
2010
|
Amount
|
Percentage
|
|||||||||||||
(Dollars in thousands)
|
||||||||||||||||
Core deposits:
|
||||||||||||||||
Noninterest-bearing demand
|
$ | 3,377,559 | $ | 2,676,466 | $ | 701,093 | 26.2 | % | ||||||||
Interest-bearing checking
|
948,679 | 757,446 | 191,233 | 25.2 | % | |||||||||||
Money market
|
4,434,983 | 4,457,376 | (22,393 | ) | -0.5 | % | ||||||||||
Savings
|
1,063,086 | 984,518 | 78,568 | 8.0 | % | |||||||||||
Total core deposits
|
9,824,307 | 8,875,806 | 948,501 | 10.7 | % | |||||||||||
Time deposits
|
7,484,393 | 6,765,453 | 718,940 | 10.6 | % | |||||||||||
Total deposits
|
$ | 17,308,700 | $ | 15,641,259 | $ | 1,667,441 | 10.7 | % |
Payment Due by Period
|
||||||||||||||||||||||||
Less than
|
After
|
Indeterminate
|
||||||||||||||||||||||
Contractual Obligations
|
1 year
|
1-3 years
|
3-5 years
|
5 years
|
Maturity
|
Total
|
||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Deposits
|
$ | 6,649,961 | $ | 700,673 | $ | 178,912 | $ | 80,411 | $ | 9,910,300 | $ | 17,520,257 | ||||||||||||
Federal funds purchased
|
— | — | — | — | — | — | ||||||||||||||||||
FHLB advances
|
17,745 | 156,690 | 43,708 | 284,940 | — | 503,083 | ||||||||||||||||||
Securities sold under repurchase agreements
|
77,360 | 94,823 | 624,564 | 454,966 | — | 1,251,713 | ||||||||||||||||||
Notes payable
|
— | — | — | — | 85,014 | 85,014 | ||||||||||||||||||
Long-term debt obligations
|
3,961 | 7,922 | 81,842 | 195,453 | — | 289,178 | ||||||||||||||||||
Operating lease obligations (1)
|
23,773 | 42,875 | 30,052 | 37,402 | — | 134,102 | ||||||||||||||||||
Unrecognized tax benefits
|
(2,166 | ) | (2,720 | ) | (5,242 | ) | — | — | (10,128 | ) | ||||||||||||||
Postretirement benefit obligations
|
265 | 770 | 907 | 17,785 | — | 19,727 | ||||||||||||||||||
Total contractual obligations
|
$ | 6,770,899 | $ | 1,001,033 | $ | 954,743 | $ | 1,070,957 | $ | 9,995,314 | $ | 19,792,946 |
(1)
|
Represents the Company’s lease obligation for all non-owned premises.
|
Commitments
|
||||
Outstanding
|
||||
(In thousands)
|
||||
Undisbursed loan commitments
|
$ | 2,194,784 | ||
Standby letters of credit
|
1,613,908 | |||
Commercial letters of credit
|
88,490 |
East West
Bancorp
|
East West
Bank |
Minimum
Regulatory
Requirements
|
Well
Capitalized
Requirements
|
|||||||||||||
Total Capital (to Risk-Weighted Assets)
|
16.2 | % | 16.0 | % | 8.0 | % | 10.0 | % | ||||||||
Tier 1 Capital (to Risk-Weighted Assets)
|
14.6 | % | 14.5 | % | 4.0 | % | 6.0 | % | ||||||||
Tier 1 Capital (to Average Assets)
|
9.3 | % | 9.2 | % | 4.0 | % | 5.0 | % |
Net Interest Income
|
Net Portfolio Value
|
|||||||||||||||||
Volatility (1)
|
Volatility (2)
|
|||||||||||||||||
Change in Interest Rates
|
September 30,
|
December 31,
|
September 30,
|
December 31,
|
||||||||||||||
(Basis Points)
|
2011
|
2010
|
2011
|
2010
|
||||||||||||||
+200 | 5.4 | % | (0.4 | )% | 1.4 | % | 1.5 | % | ||||||||||
+100 | 2.3 | % | (1.6 | )% | 0.4 | % | 0.4 | % | ||||||||||
-100 | (0.0 | )% | 6.8 | % | (3.8 | )% | 0.5 | % | ||||||||||
-200 | (0.2 | )% | 7.1 | % | (11.3 | )% | (0.9 | )% |
(1)
|
The percentage change represents net interest income for twelve months in a stable interest rate environment versus net interest income in the various rate scenarios.
|
(2)
|
The percentage change represents net portfolio value of the Bank in a stable interest rate environment versus net portfolio value in the various rate scenarios.
|
Expected Maturity or Repricing Date by Year
|
||||||||||||||||||||||||||||||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Thereafter | Total | Fair Value at
September 30,
2011
|
|||||||||||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Assets:
|
||||||||||||||||||||||||||||||||||
CD investments
|
$ | 453,261 | $ | — | $ | 250 | $ | — | $ | — | $ | — | $ | 453,511 | $ | 456,217 | ||||||||||||||||||
Average yield (fixed rate)
|
4.51 | % | — | 4.00 | % | — | — | — | 4.51 | % | ||||||||||||||||||||||||
Short-term investments(1)
|
$ | 267,924 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 267,924 | $ | 267,924 | ||||||||||||||||||
Weighted average rate
|
1.70 | % | — | — | — | — | — | 1.70 | % | |||||||||||||||||||||||||
Securities purchased under resale agreements
|
$ | 905,595 | $ | 50,000 | $ | — | $ | — | $ | — | $ | 225,000 | $ | 1,180,595 | $ | 1,210,889 | ||||||||||||||||||
Weighted average rate
|
1.16 | % | 7.27 | % | — | — | — | 4.12 | % | 1.98 | % | |||||||||||||||||||||||
Investment securities
|
$ | 2,060,756 | $ | 270,501 | $ | 141,729 | $ | 113,839 | $ | 126,340 | $ | 566,427 | $ | 3,279,592 | $ | 3,279,592 | ||||||||||||||||||
Weighted average rate
|
2.98 | % | 3.85 | % | 3.81 | % | 4.40 | % | 4.42 | % | 5.19 | % | 3.57 | % | ||||||||||||||||||||
Investment securities available-for-sale (fixed rate)
|
$ | 673,241 | $ | 150,355 | $ | 108,633 | $ | 84,682 | $ | 85,566 | $ | 541,719 | $ | 1,644,196 | $ | 1,676,327 | ||||||||||||||||||
Weighted average rate
|
3.48 | % | 3.42 | % | 3.80 | % | 4.47 | % | 4.35 | % | 4.94 | % | 4.19 | % | ||||||||||||||||||||
Investment securities available-for-sale (floating rate)(2)
|
$ | 1,387,515 | $ | 120,146 | $ | 33,096 | $ | 29,157 | $ | 40,774 | $ | 24,708 | $ | 1,635,396 | $ | 1,603,265 | ||||||||||||||||||
Weighted average rate
|
2.73 | % | 4.39 | % | 3.86 | % | 4.21 | % | 4.58 | % | 10.74 | % | 3.04 | % | ||||||||||||||||||||
Total covered gross loans
|
$ | 3,924,201 | $ | 446,364 | $ | 186,578 | $ | 129,855 | $ | 105,246 | $ | 234,831 | $ | 5,027,075 | $ | 4,860,530 | ||||||||||||||||||
Weighted average rate
|
4.74 | % | 0.00 | % | 6.40 | % | 6.41 | % | 6.30 | % | 6.45 | % | 4.54 | % | ||||||||||||||||||||
Total non-covered gross loans
|
$ | 7,973,975 | $ | 786,948 | $ | 433,615 | $ | 271,101 | $ | 197,082 | $ | 397,169 | $ | 10,059,890 | $ | 9,792,450 | ||||||||||||||||||
Weighted average rate
|
4.76 | % | 5.44 | % | 5.88 | % | 5.84 | % | 5.91 | % | 5.40 | % | 4.94 | % | ||||||||||||||||||||
Liabilities:
|
||||||||||||||||||||||||||||||||||
Checking accounts
|
$ | 948,679 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 948,679 | $ | 877,970 | ||||||||||||||||||
Weighted average rate
|
0.32 | % | — | — | — | — | — | 0.32 | % | |||||||||||||||||||||||||
Money market accounts
|
$ | 4,434,983 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 4,434,983 | $ | 4,321,998 | ||||||||||||||||||
Weighted average rate
|
0.38 | % | — | — | — | — | — | 0.38 | % | |||||||||||||||||||||||||
Savings deposits
|
$ | 1,063,086 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,063,086 | $ | 984,714 | ||||||||||||||||||
Weighted average rate
|
0.26 | % | — | — | — | — | — | 0.26 | % | |||||||||||||||||||||||||
Time deposits
|
$ | 6,589,124 | $ | 612,903 | $ | 66,266 | $ | 133,757 | $ | 32,857 | $ | 49,486 | $ | 7,484,393 | $ | 7,519,569 | ||||||||||||||||||
Weighted average rate
|
1.01 | % | 1.32 | % | 1.63 | % | 1.71 | % | 1.71 | % | 4.06 | % | 1.07 | % | ||||||||||||||||||||
FHLB advances
|
$ | — | $ | — | $ | 125,000 | $ | — | $ | 20,000 | $ | 280,000 | $ | 425,000 | $ | 489,680 | ||||||||||||||||||
Weighted average rate
|
— | — | 4.43 | % | — | 4.46 | % | 4.04 | % | 4.18 | % | |||||||||||||||||||||||
Short-term repurchase agreements
|
$ | 29,949 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 29,949 | $ | 29,948 | ||||||||||||||||||
Weighted average rate
|
0.65 | % | — | — | — | — | — | 0.65 | % | |||||||||||||||||||||||||
Securities sold under repurchase agreements (fixed rate)
|
$ | — | $ | — | $ | — | $ | 120,000 | $ | 425,000 | $ | 400,000 | $ | 945,000 | $ | 1,073,024 | ||||||||||||||||||
Weighted average rate
|
— | — | — | 4.47 | % | 4.88 | % | 4.82 | % | 4.80 | % | |||||||||||||||||||||||
Securities sold under repurchase agreements (variable rate)
|
$ | 50,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 50,000 | $ | 55,592 | ||||||||||||||||||
Weighted average rate
|
4.15 | % | — | — | — | — | — | 4.15 | % | |||||||||||||||||||||||||
Subordinated notes (variable rate)
|
$ | 75,000 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 75,000 | $ | 67,655 | ||||||||||||||||||
Weighted average rate
|
1.37 | % | — | — | — | — | — | 1.37 | % | |||||||||||||||||||||||||
Junior subordinated debt (variable rate)
|
$ | 139,178 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 139,178 | $ | 71,488 | ||||||||||||||||||
Weighted average rate
|
2.00 | % | — | — | — | — | — | 2.00 | % | |||||||||||||||||||||||||
Other borrowing (variable rate)
|
$ | 5,000 | $ | — | $ | — | $ | — | $ | — | $ | 84,969 | $ | 89,969 | $ | 89,968 | ||||||||||||||||||
Weighted average rate
|
1.79 | % | — | — | — | — | — | 0.10 | % |
(1)
|
Includes interest-bearing non-time deposits in other banks.
|
(2)
|
Includes hybrid securities that have fixed interest rates for the first three or five years. Thereafter, interest rates become adjustable based on a predetermined index.
|
Period
|
Total
Number
of Shares
Purchased(1)
|
Average
Price Paid
per Share
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
|
Approximate
Dollar Value
in Millions of
Shares that May
Yet Be Purchased
Under the Plans
or Programs(2)
|
||||||||||||
July 31, 2011
|
— | $ | — | — | $ | 26.2 | ||||||||||
August 31, 2011
|
— | — | — | 26.2 | ||||||||||||
September 30, 2011
|
— | — | — | 26.2 | ||||||||||||
Total
|
— | $ | — | — | $ | 26.2 |
(1)
|
Excludes 208,090 in repurchased shares totaling $3.7 million due to forfeitures and vesting of restricted stock awards pursuant to the Company’s 1998 Stock Incentive Plan, as amended.
|
(2)
|
During the first quarter of 2007, the Company’s Board of Directors announced a repurchase program authorizing the repurchase of up to $80.0 million of its common stock. This repurchase program has no expiration date and, to date, 1,392,176 shares totaling $53.8 million have been purchased under this program.
|
(i) |
Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
(ii) |
Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
(iii) |
Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(iv) |
Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(v) |
Exhibit 10.1
|
Form of July 2011 Executive Compensation Agreement- Dominic Ng+ [Incorporated by reference from Registrant’s Current Report on Form 8-K filed with the Commission on July 29, 2011.]
|
(vi) |
Exhibit 10.2
|
Form of July 2011 Executive Compensation Agreement- Julia Gouw+ [Incorporated by reference from Registrant’s Current Report on Form 8-K filed with the Commission on July 29, 2011.]
|
(vii) |
101.INS
|
XBRL Instance Document
|
(viii) |
101.SCH
|
XBRL Taxonomy Extension Schema
|
(ix) |
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
(x) |
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
(xi) |
101.PRE
|
XBRL Extension Presentation Linkbase
|
(xii) |
101.DEF
|
XBRL Extension Definition Linkbase
|
EAST WEST BANCORP, INC. | |||
|
By:
|
/s/ IRENE H. OH | |
Irene H. Oh | |||
Executive Vice President | |||
Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of East West Bancorp, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 08, 2011 | |||
|
By:
|
/s/ DOMINIC NG | |
Dominic Ng | |||
Chairman and Chief Executive Officer | |||
1.
|
I have reviewed this quarterly report on Form 10-Q of East West Bancorp, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 08, 2011 | |||
|
By:
|
/s/ IRENE H.OH | |
Irene H. Oh | |||
Executive Vice President and | |||
Chief Financial Officer |
|
(a)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 08, 2011 | |||
|
By:
|
/s/ DOMINIC NG | |
Dominic Ng | |||
Chairman and Chief Executive Officer | |||
|
(a)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: November 08, 2011 | |||
By:
|
/s/ IRENE H. OH | ||
Irene H. Oh | |||
Executive Vice President and | |||
Chief Financial Officer |
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Troubled Debt Restructurings) (Details) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Performing [Member] | Dec. 31, 2010
Performing [Member] | Sep. 30, 2011
Performing [Member]
A/B Note Splits [Member] | Dec. 31, 2010
Performing [Member]
A/B Note Splits [Member] | Sep. 30, 2011
Performing [Member]
Residential [Member] | Sep. 30, 2011
Performing [Member]
Commercial and Industrial [Member] | Sep. 30, 2011
Performing [Member]
Commercial Real Estate [Member] | Sep. 30, 2011
Nonperforming [Member] | Dec. 31, 2010
Nonperforming [Member] | Sep. 30, 2011
Nonperforming [Member]
Residential [Member] | Sep. 30, 2011
Nonperforming [Member]
Commercial and Industrial [Member] | Sep. 30, 2011
Nonperforming [Member]
Commercial Real Estate [Member] | Sep. 30, 2011
A/B Note Splits [Member]
Residential [Member] | Sep. 30, 2011
Residential [Member] | Sep. 30, 2011
Commercial and Industrial [Member] | Sep. 30, 2011
Unallocated [Member] | Sep. 30, 2011
Commercial Real Estate [Member] | Sep. 30, 2011
Consumer [Member] | Sep. 30, 2011
Residential, Single-family [Member] | Sep. 30, 2011
Residential, Single-family [Member] | Sep. 30, 2011
Residential, Single-family [Member] | Sep. 30, 2011
Residential, Multifamily [Member] | Sep. 30, 2011
Residential, Multifamily [Member] | Sep. 30, 2011
Residential, Multifamily [Member] | Sep. 30, 2011
CRE, Income Producing [Member] | Sep. 30, 2011
CRE, Income Producing [Member] | Sep. 30, 2011
CRE, Income Producing [Member] | Sep. 30, 2011
CRE, Construction [Member] | Sep. 30, 2011
CRE, Construction [Member] | Sep. 30, 2011
CRE, Construction [Member] | Sep. 30, 2011
CRE, Land [Member] | Sep. 30, 2011
CRE, Land [Member] | Sep. 30, 2011
CRE, Land [Member] | Sep. 30, 2011
C&I, Commercial Business [Member] | Sep. 30, 2011
C&I, Commercial Business [Member] | Sep. 30, 2011
C&I, Commercial Business [Member] | Sep. 30, 2011
C&I, Trade Finance [Member] | Sep. 30, 2011
C&I, Trade Finance [Member] | Sep. 30, 2011
C&I, Trade Finance [Member] | Sep. 30, 2011
Consumer, Student Loans [Member] | Sep. 30, 2011
Consumer, Student Loans [Member] | Sep. 30, 2011
Consumer, Student Loans [Member] | Sep. 30, 2011
Other Consumer [Member] | Sep. 30, 2011
Other Consumer [Member] | Sep. 30, 2011
Other Consumer [Member] | |||||||||||||||||||||||
Restructured loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recorded investment | $ 81,000,000 | $ 122,100,000 | $ 29,100,000 | $ 57,300,000 | $ 20,600,000 | $ 11,200,000 | $ 49,300,000 | $ 39,000,000 | $ 42,100,000 | $ 2,000,000 | $ 900,000 | $ 36,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Contracts | 4 | 9 | 4 | 11 | 2 | 8 | 1 | 2 | 6 | 15 | 4 | 16 | 1 | 1 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-Modification Outstanding Recorded Investment | 990,000 | 2,204,000 | 1,722,000 | 5,136,000 | 5,116,000 | 22,648,000 | 2,859,000 | 3,267,000 | 4,311,000 | 40,651,000 | 548,000 | 8,916,000 | 4,127,000 | 4,127,000 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Post-Modification Outstanding Recorded Investment | 987,000 | [1] | 2,089,000 | [1] | 1,040,000 | [1] | 4,436,000 | [1] | 5,097,000 | [1] | 19,273,000 | [1] | 2,859,000 | [1] | 3,748,000 | [1] | 4,307,000 | [1] | 36,111,000 | [1] | 542,000 | [1] | 7,233,000 | [1] | 4,127,000 | [1] | 4,127,000 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | |||||||||||||||||||||||||||||||||
Financial Impact | 328,000 | [2] | 430,000 | [2] | 1,220,000 | [2] | 1,344,000 | [2] | 0 | [2] | 3,796,000 | [2] | 0 | [2] | 0 | [2] | 1,507,000 | [2] | 1,874,000 | [2] | 885,000 | [2] | 2,053,000 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | 0 | [2] | |||||||||||||||||||||||||||||||||
Loans modified as TDRs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Modified troubled debt restructurings | 13,700,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period beyond which a TDR generally becomes delinquent (in days) | 90D | 30D | 30D | 30D | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for non-covered loans receivable | (211,738,000) | (230,408,000) | 3,700,000 | 278,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Contracts | 0 | 0 | 2 | 2 | 5 | 1 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recorded Investment | $ 0 | $ 0 | $ 17,546,000 | $ 2,398,000 | $ 13,241,000 | $ 51,000 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
ASSETS | ||
Available-for-sale securities, amortized cost basis | $ 3,318,301 | $ 2,900,410 |
Allowance for loan losses | 211,738 | 230,408 |
Allowances for loan losses, covered loans | $ 6,434 | $ 4,225 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, Series A, Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, Series A, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, Series A, shares issued (in shares) | 200,000 | 200,000 |
Preferred stock, Series A, shares outstanding (in shares) | 85,710 | 85,741 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 156,370,318 | 155,743,241 |
Common stock, shares outstanding (in shares) | 148,961,927 | 148,542,940 |
Treasury stock (in shares) | 7,408,391 | 7,200,301 |
FAIR VALUE (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets (liabilities) measured at fair value on a recurring and nonrecurring Basis | The following tables present both financial and nonfinancial assets and liabilities that are measured at fair value on a recurring and nonrecurring basis. These assets and liabilities are reported on the condensed consolidated balance sheets at their fair values as of September 30, 2011 and December 31, 2010. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. There were no transfers in and out of Levels 1 and 2 during the first nine months of 2011. There were also no transfers in and out of Levels 1 and 3 or Levels 2 and 3 during the first nine months of 2011.
_____________________
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Reconciliation of assets and liabilities measured at fair value using significant unobservable inputs | The following tables provide a reconciliation of the beginning and ending balances for major asset and liability categories measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2011 and 2010:
_______________________
_______________________
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Carrying amounts and fair values of financial instruments | The carrying amounts and fair values of the Company's financial instruments as of September 30, 2011 and December 31, 2010 were as follows:
|
Document And Entity Information (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Oct. 31, 2011 | Jun. 30, 2010 | |
Entity Registrant Name | EAST WEST BANCORP INC | ||
Entity Central Index Key | 0001069157 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,234,825,997 | ||
Entity Common Stock, Shares Outstanding | 149,051,662 | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q3 | ||
Document Type | 10-Q | ||
Amendment Flag | false | ||
Document Period End Date | Sep. 30, 2011 |
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES, Credit Quality Indicator (Details) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Credit Quality Indicators [Abstract] | ||
Number of grades in the risk rating system utilized by the company to rate credit risk of loans receivable | 8 | |
Maximum term for a loan to stay graded as Special Mention (in months) | 6M | |
Decrease in non-covered loans graded Substandard and Doubtful | $ 133,500,000 | |
Percentage decrease in non-covered loans graded Substandard and Doubtful (in hundredths) | 19.00% | |
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 9,807,250,000 | 8,717,388,000 |
Residential [Member] | Single-family [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 1,483,509,000 | 1,076,281,000 |
Residential [Member] | Multifamily [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 811,509,000 | 789,631,000 |
Commercial Real Estate [Member] | Income Producing [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 3,175,101,000 | 3,054,197,000 |
Commercial Real Estate [Member] | Construction [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 134,865,000 | 202,385,000 |
Commercial Real Estate [Member] | Land CRE [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 117,471,000 | 146,499,000 |
Commercial and Industrial [Member] | Commercial Business [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 2,421,858,000 | 1,553,218,000 |
Commercial and Industrial [Member] | Trade Finance [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 447,734,000 | 296,430,000 |
Consumer [Member] | Student Loans [Member] | Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 243,292,000 | 490,314,000 |
Consumer [Member] | Pass/Watch [Member] | Other Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 255,864,000 | 238,964,000 |
Pass/Watch [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 9,091,203,000 | 7,847,919,000 |
Residential [Member] | Single-family [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 11,780,000 | 12,376,000 |
Residential [Member] | Multifamily [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 20,815,000 | 42,887,000 |
Commercial Real Estate [Member] | Income Producing [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 81,370,000 | 80,714,000 |
Commercial Real Estate [Member] | Construction [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Commercial Real Estate [Member] | Land CRE [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 7,998,000 | 4,656,000 |
Commercial and Industrial [Member] | Commercial Business [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 32,461,000 | 34,449,000 |
Commercial and Industrial [Member] | Trade Finance [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 6,210,000 | 4,069,000 |
Consumer [Member] | Student Loans [Member] | Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Consumer [Member] | Special Mention [Member] | Other Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 127,000 | 1,486,000 |
Special Mention [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 160,761,000 | 180,637,000 |
Residential [Member] | Single-family [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 22,665,000 | 30,367,000 |
Residential [Member] | Multifamily [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 110,104,000 | 142,227,000 |
Commercial Real Estate [Member] | Income Producing [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 202,530,000 | 258,073,000 |
Commercial Real Estate [Member] | Construction [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 58,123,000 | 75,662,000 |
Commercial Real Estate [Member] | Land CRE [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 53,683,000 | 84,552,000 |
Commercial and Industrial [Member] | Commercial Business [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 87,162,000 | 81,185,000 |
Commercial and Industrial [Member] | Trade Finance [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 15,895,000 | 8,158,000 |
Consumer [Member] | Student Loans [Member] | Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Consumer [Member] | Substandard [Member] | Other Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 4,292,000 | 2,762,000 |
Substandard [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 554,454,000 | 682,986,000 |
Residential [Member] | Single-family [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Residential [Member] | Multifamily [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Commercial Real Estate [Member] | Income Producing [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Commercial Real Estate [Member] | Construction [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Commercial Real Estate [Member] | Land CRE [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Commercial and Industrial [Member] | Commercial Business [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 832,000 | 5,846,000 |
Commercial and Industrial [Member] | Trade Finance [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Consumer [Member] | Student Loans [Member] | Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Consumer [Member] | Doubtful [Member] | Other Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 0 | 0 |
Doubtful [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 832,000 | 5,846,000 |
Residential [Member] | Single-family [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 1,517,954,000 | 1,119,024,000 |
Residential [Member] | Multifamily [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 942,428,000 | 974,745,000 |
Commercial Real Estate [Member] | Income Producing [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 3,459,001,000 | 3,392,984,000 |
Commercial Real Estate [Member] | Construction [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 192,988,000 | 278,047,000 |
Commercial Real Estate [Member] | Land CRE [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 179,152,000 | 235,707,000 |
Commercial and Industrial [Member] | Commercial Business [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 2,542,313,000 | 1,674,698,000 |
Commercial and Industrial [Member] | Trade Finance [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 469,839,000 | 308,657,000 |
Consumer [Member] | Student Loans [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | 243,292,000 | 490,314,000 |
Consumer [Member] | Other Consumer [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans receivable | $ 260,283,000 | $ 243,212,000 |
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair values of derivative instruments | The following table summarizes the fair value and balance sheet classification of derivative instruments as of September 30, 2011 and December 31, 2010. The notional amount of the contract is not recorded on the condensed consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. The valuation methodology of derivative instruments is disclosed in Note 3 to the Company's condensed consolidated financial statements presented elsewhere in this report.
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Gains (losses) on derivative instruments | The table below presents the effect of the Company's derivative financial instruments on the condensed consolidated statements of income for the three and nine months ended September 30, 2011 and 2010:
|
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | $ 9,807,250,000 | $ 8,717,388,000 | |
Unearned fees, premiums, and discounts, net | (16,746,000) | (56,781,000) | |
Allowance for non-covered loans receivable | (211,738,000) | (230,408,000) | |
Non-covered loans receivable, excluding covered loans, net | 9,578,766,000 | 8,430,199,000 | |
Accrued interest on covered and non-covered loans receivable | 66,000,000 | 65,600,000 | |
Covered and non-covered loans receivable pledged to secure borrowings from the FHLB and Federal Reserve Bank | 8,100,000,000 | 8,140,000,000 | |
Number of units of which residential property securing fixed and adjustable rate first mortgage loans consist, minimum | 1 | ||
Number of units of which residential property securing fixed and adjustable rate first mortgage loans consist, maximum | 4 | ||
Amount of new first mortgage loans originated on single-family residential properties | 585,000,000 | 299,300,000 | |
Amount of new first mortgage loans originated on multifamily residential properties | 34,100,000 | 19,100,000 | |
Adjustable rate mortgage, term of initial fixed interest rates, minimum (in months) | 6M | ||
Adjustable rate mortgage, term of initial fixed interest rates, midrange (in years) | 3Y | ||
Adjustable rate mortgage, term of initial fixed interest rates, maximum (in years) | 5Y | ||
Amount of single-family loans with interest-only features | 5,600,000 | 7,800,000 | |
Ratio of single-family mortgage loans with interest-only features to total single-family loans (in hundredths) | 1.00% | 1.00% | |
Amount of acquired residential mortgage loans with variable payment option features | 14,100,000 | 16,900,000 | |
Ratio of residential mortgage loans with variable payment option features to total residential mortgage loans (in hundredths) | 1.00% | 1.00% | |
Credit Risk and Concentrations [Abstract] | |||
Percentage of non-covered loans secured by real properties located in California (in hundredths) | 93.00% | ||
Purchased Loans [Abstract] | |||
Loans acquired during the period | 603,200,000 | ||
Carrying amount of student loans acquired during the period | 513,700,000 | ||
Loans Held for Sale [Abstract] | |||
Total loans held for sale | 251,920,000 | 220,055,000 | |
Percentage of loans held for sale that were student loans reclassified to loans held for sale during the period (in hundredths) | 87.00% | ||
Proceeds from sales of loans held for sale during the period | 637,500,000 | 167,600,000 | |
Net gain from sale of loans held for sale during the period | 14,500,000 | 2,800,000 | |
Residential [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 2,460,382,000 | 2,093,769,000 | |
Residential [Member] | Single-family [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 1,517,954,000 | 1,119,024,000 | |
Residential [Member] | Multifamily [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 942,428,000 | 974,745,000 | |
Commercial Real Estate [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 3,831,141,000 | 3,906,738,000 | |
Commercial Real Estate [Member] | Income Producing [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 3,459,001,000 | 3,392,984,000 | |
Commercial Real Estate [Member] | Construction [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 192,988,000 | 278,047,000 | |
Commercial Real Estate [Member] | Land CRE [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 179,152,000 | 235,707,000 | |
Commercial and Industrial [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 3,012,152,000 | 1,983,355,000 | |
Commercial and Industrial [Member] | Commercial Business [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 2,542,313,000 | 1,674,698,000 | |
Commercial and Industrial [Member] | Trade Finance [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 469,839,000 | 308,657,000 | |
Consumer [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 503,575,000 | 733,526,000 | |
Consumer [Member] | Student Loans [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | 260,283,000 | 490,314,000 | |
Consumer [Member] | Other Consumer [Member] | |||
Schedule of Non-Covered Loans Receivable [Line Items] | |||
Loans receivable, excluding covered loans, gross | $ 243,292,000 | $ 243,212,000 |
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INVESTMENT SECURITIES | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENT SECURITIES | NOTE 5 - INVESTMENT SECURITIES An analysis of the investment securities available-for-sale portfolio is presented as follows:
_______________________
The fair values of investment securities are generally determined by reference to the average of at least two quoted market prices obtained from independent external brokers or prices obtained from independent external pricing service providers who have experience in valuing these securities. The Company performs a monthly analysis on the broker quotes received from third parties to ensure that the prices represent a reasonable estimate of fair value. The procedures include, but are not limited to, initial and ongoing review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. The Company assesses that prices received from independent brokers represent a reasonable estimate of fair value through the use of internal and external cash flow models developed that are based on spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon available market data, the price received from third parties is adjusted accordingly. Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations that utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding. As a result of the global financial crisis and continued illiquidity in the U.S. markets, the market for the pooled trust preferred securities has been inactive since mid-2007. It is the Company's view that current broker prices (which are typically non-binding) on these securities are based on forced liquidation or distressed sale values in very inactive markets that are not representative of the fair value of these securities. As such, the Company considered what weight, if any, to place on transactions that are not orderly when estimating fair value. For the pooled trust preferred securities the Company determined their fair values using the methodologies set forth in Note 3 to the Company's condensed consolidated financial statements presented elsewhere in this report. The following table shows the Company's rollforward of the amount related to OTTI credit losses for the periods shown:
The following tables show the Company's investment portfolio's gross unrealized losses and related fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of September 30, 2011 and December 31, 2010:
Unrealized Losses The majority of the unrealized losses related to securities that have been in a continuous loss position for less than twelve months is related to investment grade corporate debt securities. As of September 30, 2011, the Company had $1.40 billion in investment grade corporate debt securities available-for-sale, representing 43% of the total investment securities available-for-sale portfolio. As of September 30, 2011, there were 17 individual securities that have been in a continuous unrealized loss position for twelve months or more. These securities are comprised of 5 trust preferred securities with a total fair value of $8.6 million and 12 investment grade corporate debt securities with a fair value of $247.0 million. As of September 30, 2011, there were also 157 securities, not including the 17 securities above, which have been in a continuous unrealized loss position for less than twelve months. The securities in an unrealized loss position for less than twelve months include 128 investment grade corporate debt securities, 14 residential mortgage-backed securities, 9 government agency securities, 4 municipal securities, 1 non-investment grade corporate debt security and 1 other security. The unrealized losses on these securities are primarily attributed to the sovereign debt crisis in Europe. The issuers of these securities have not, to our knowledge, established any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated. The Company does not intend to sell these securities and it is not more likely than not that the company will be required to sell these securities before recovery of their current amortized cost basis. As such, the Company does not deem these securities, other than those previously stated, to be other-than-temporarily impaired as of September 30, 2011. Corporate Debt Securities The unrealized losses related to securities that have been in a continuous loss position of twelve months or longer are related to 5 trust preferred debt securities and 12 investment grade corporate debt securities. As of September 30, 2011, these 5 trust preferred securities had an estimated fair value of $8.6 million, representing less than 1% of the total investment securities available-for-sale portfolio. As of September 30, 2011, these non-investment grade trust preferred debt securities had gross unrealized losses amounting to $11.6 million, or 57% of the total amortized cost basis of these securities, comprised of $6.5 million in unrealized losses on securities that are not other-than-temporarily impaired and $5.1 million in noncredit-related impairment losses on securities that are other-than-temporarily impaired as of September 30, 2011 pursuant to the provisions of ASC 320-10-65. We recorded an impairment loss of $464 thousand on our portfolio of pooled trust preferred securities during the first nine months of 2011 for additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized. The scheduled maturities of investment securities at September 30, 2011 are presented as follows:
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COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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COVERED ASSETS AND FDIC INDEMNIFICATION ASSET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying amounts and composition of covered loans | The carrying amounts and the composition of the covered loans as of September 30, 2011 and December 31, 2010 are as follows:
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Covered nonperforming assets, by credit quality indicators | The tables below present the covered loan portfolio by credit quality indicator as of September 30, 2011 and December 31, 2010.
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Covered nonperforming assets | The following table sets forth information regarding covered nonperforming assets as of the dates indicated:
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Changes in the accretable yield for the covered loans | Changes in the accretable yield for the covered loans are as follows for the periods shown:
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FDIC indemnification asset activity | The table below shows FDIC indemnification asset activity for the periods shown:
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DERIVATIVE FINANCIAL INSTRUMENTS, Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended |
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Sep. 30, 2011 | Sep. 30, 2011 | |
Derivative [Line Items] | ||
Termination value of derivatives in a net liability position | $ 14,500,000 | $ 14,500,000 |
Receive-fixed, Pay-variable Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ||
Number of instruments entered into during period | 2 | 2 |
Notional amount | 50,000,000 | 50,000,000 |
Net loss recognized in interest expense related to hedge ineffectiveness | 344,000 | 427,000 |
Net reduction to interest expense related to net settlements of derivatives | 819,000 | 1,300,000 |
Certificates of Deposit [Member] | ||
Derivative [Line Items] | ||
Number of instruments entered into during period | 2 | 2 |
Notional amount | 50,000,000 | 50,000,000 |
Equity Swap Agreements [Member] | ||
Derivative [Line Items] | ||
Number of instruments entered into during period | 2 | 2 |
Term of contract (in years) | 5Y | 5Y |
Foreign Exchange Contracts [Member] | ||
Derivative [Line Items] | ||
Term of contract (in years) | 5Y | 5Y |
Short-term Foreign Exchange [Member] | ||
Derivative [Line Items] | ||
Notional amount | $ 524,000,000 | $ 524,000,000 |
INVESTMENT SECURITIES, Available-For-Sale Portfolio (Details) (USD $) | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | ||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | $ 3,318,301,000 | $ 2,900,410,000 | |||
Gross Unrealized Gains | 49,457,000 | 24,383,000 | |||
Gross Unrealized Losses | (88,166,000) | (48,852,000) | |||
Fair Value | 3,279,592,000 | 2,875,941,000 | |||
Other than temporary impairment, pre-tax basis, credit portion recognized in earnings | 464,000 | 16,700,000 | |||
Other than temporary impairment, pre-tax basis, non-credit portion recognized in other comprehensive income | 5,100,000 | 15,400,000 | |||
US Treasury Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 19,881,000 | 19,847,000 | |||
Gross Unrealized Gains | 880,000 | 607,000 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | 20,761,000 | 20,454,000 | |||
US Government Agencies and Government Sponsored Enterprise Debt Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 641,698,000 | 1,349,289,000 | |||
Gross Unrealized Gains | 1,961,000 | 2,297,000 | |||
Gross Unrealized Losses | (708,000) | (18,121,000) | |||
Fair Value | 642,951,000 | 1,333,465,000 | |||
Commercial Mortgage Backed Securities Issued By US Government Agencies And Government Sponsored Enterprise [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 16,335,000 | 18,620,000 | |||
Gross Unrealized Gains | 488,000 | 512,000 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | 16,823,000 | 19,132,000 | |||
Residential Mortgage Backed Securities Issued By US Government Agencies And Government Sponsored Enterprise [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 1,058,168,000 | 295,140,000 | |||
Gross Unrealized Gains | 36,728,000 | 11,574,000 | |||
Gross Unrealized Losses | (1,067,000) | 0 | |||
Fair Value | 1,093,829,000 | 306,714,000 | |||
Municipal Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 74,557,000 | 0 | |||
Gross Unrealized Gains | 3,042,000 | 0 | |||
Gross Unrealized Losses | (133,000) | 0 | |||
Fair Value | 77,466,000 | 0 | |||
Other Residential Mortgage-Backed Securities [Member] | Investment Grade [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 0 | 0 | |||
Gross Unrealized Gains | 0 | 0 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | 0 | 0 | |||
Other Residential Mortgage-Backed Securities [Member] | Non-investment Grade [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 0 | 14,996,000 | |||
Gross Unrealized Gains | 0 | 0 | |||
Gross Unrealized Losses | 0 | (8,742,000) | |||
Fair Value | 0 | 6,254,000 | |||
Corporate Debt Securities [Member] | Investment Grade [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 1,471,569,000 | 1,056,537,000 | |||
Gross Unrealized Gains | 6,140,000 | 9,095,000 | |||
Gross Unrealized Losses | (74,277,000) | (8,765,000) | |||
Fair Value | 1,403,432,000 | 1,056,867,000 | |||
Corporate Debt Securities [Member] | Non-investment Grade [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 26,175,000 | [1] | 50,015,000 | ||
Gross Unrealized Gains | 0 | [1] | 31,000 | ||
Gross Unrealized Losses | (11,980,000) | [1] | (11,316,000) | ||
Fair Value | 14,195,000 | [1] | 38,730,000 | ||
Other Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Amortized Cost | 9,918,000 | 95,966,000 | |||
Gross Unrealized Gains | 218,000 | 267,000 | |||
Gross Unrealized Losses | (1,000) | (1,908,000) | |||
Fair Value | $ 10,135,000 | $ 94,325,000 | |||
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INVESTMENT SECURITIES (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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INVESTMENT SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities available-for-sale portfolio | An analysis of the investment securities available-for-sale portfolio is presented as follows:
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Schedule of other than temporary impairment, credit losses recognized in earnings | The following table shows the Company's rollforward of the amount related to OTTI credit losses for the periods shown:
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Gross unrealized losses and related fair values of investment securities available-for-sale | The following tables show the Company's investment portfolio's gross unrealized losses and related fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of September 30, 2011 and December 31, 2010:
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Scheduled maturities of investment securities available-for sale, fair value [Abstract] | The scheduled maturities of investment securities at September 30, 2011 are presented as follows:
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GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 10 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The carrying amount of goodwill remained at $337.4 million as of September 30, 2011 and December 31, 2010. Goodwill is tested for impairment on an annual basis as of December 31, or more frequently as events occur, or as current circumstances and conditions warrant. The Company records impairment write-downs as charges to noninterest expense and adjustments to the carrying value of goodwill. Subsequent reversals of goodwill impairment are prohibited. As of September 30, 2011, the Company's market capitalization based on total outstanding common and preferred shares was $2.44 billion and its total stockholders' equity was $2.26 billion. The Company performed its annual impairment test as of December 31, 2010 to determine whether and to what extent, if any, recorded goodwill was impaired. The analysis compared the fair value of each of the reporting units, including goodwill, to the respective carrying amounts. If the carrying amount of the reporting unit, including goodwill, exceeds the fair value of that reporting unit, then further testing for goodwill impairment is performed. Premiums on Acquired Deposits The Company also has premiums on acquired deposits, which represent the intangible value of depositor relationships resulting from deposit liabilities assumed in various acquisitions. These intangibles are tested for impairment on an annual basis, or more frequently as events occur, or as current circumstances and conditions warrant. As of September 30, 2011 and December 31, 2010, the gross carrying amount of premiums on acquired deposits totaled $117.6 million and $117.6 million, respectively, and the related accumulated amortization totaled $47.5 million and $38.1 million, respectively. The Company amortizes premiums on acquired deposits based on the projected useful lives of the related deposits. Amortization expense of premiums on acquired deposits was $3.1 million and $3.4 million for the three months ended September 30, 2011 and 2010, respectively, and $9.4 million and $10.0 million for the nine months ended September 30, 2011 and 2010, respectively. The following table provides the estimated future amortization expense of premiums on acquired deposits for the succeeding five years and thereafter:
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BASIS OF PRESENTATION | 9 Months Ended |
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Sep. 30, 2011 | |
BASIS OF PRESENTATION [Abstract] | |
BASIS OF PRESENTATION | NOTE 1 - BASIS OF PRESENTATION The condensed consolidated financial statements include the accounts of East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company”) and its wholly-owned subsidiaries, East West Bank and subsidiaries (“East West Bank” or the “Bank”) and East West Insurance Services, Inc. Intercompany transactions and accounts have been eliminated in consolidation. East West also has eight wholly-owned subsidiaries that are statutory business trusts (the “Trusts”). In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, the Trusts are not consolidated into the accounts of East West Bancorp, Inc. The interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments that, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the three months and nine months ended September 30, 2011 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. Events subsequent to the condensed consolidated balance sheet date have been evaluated through the date the financial statements are issued for inclusion in the accompanying financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. Certain prior year balances have been reclassified to conform to current year presentation. |
FAIR VALUE, Carrying Amounts And Fair Values Of Financial Instruments (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
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Customer deposit accounts [Abstract] | ||
Maximum term of maturity for securities purchased under resale agreements to be included in cash and cash equivalents (in days) | 90D | |
Term of maturity that securities purchased under resale agreements must exceed to be included in certain fair value calculations (in days) | 90D | |
Maximum term of maturity for carrying amount of securities sold under repurchase agreements to approximate fair value (in days) | 90D | |
Carrying Amount or Notional Amount [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | $ 1,105,888 | $ 1,333,949 |
Short-term investments | 66,009 | 143,560 |
Federal funds sold | 30,000 | 0 |
Securities purchased under resale agreements | 951,824 | 500,000 |
Investment securities available-for-sale | 3,279,592 | 2,875,941 |
Loans held for sale | 251,920 | 220,055 |
Loans receivable, net | 13,718,668 | 13,231,075 |
Investment in Federal Home Loan Bank stock | 143,381 | 162,805 |
Investment in Federal Reserve Bank stock | 47,384 | 47,285 |
Accrued interest receivable | 93,042 | 82,090 |
Equity swap agreements | 22,709 | 22,884 |
Foreign exchange options | 85,614 | 85,614 |
Interest rate swaps | 510,898 | 4,098 |
Customer deposit accounts [Abstract] | ||
Demand, savings and money market deposits | 9,824,307 | 8,875,806 |
Time deposits | 7,484,393 | 6,765,453 |
Federal funds purchased | 0 | 22 |
Federal Home Loan Bank advances | 457,075 | 1,214,148 |
Securities sold under repurchase agreements | 1,024,949 | 1,083,545 |
Notes payable | 85,014 | 49,690 |
Accrued interest payable | 16,352 | 13,797 |
Long-term debt | 214,178 | 235,570 |
Derivative liabilities | 486,235 | 79,640 |
Estimated Fair Value [Member] | ||
Financial Assets [Abstract] | ||
Cash and cash equivalents | 1,105,888 | 1,333,949 |
Short-term investments | 66,009 | 143,560 |
Federal funds sold | 30,000 | 0 |
Securities purchased under resale agreements | 982,118 | 505,826 |
Investment securities available-for-sale | 3,279,592 | 2,875,941 |
Loans held for sale | 257,631 | 225,221 |
Loans receivable, net | 13,284,682 | 13,043,932 |
Investment in Federal Home Loan Bank stock | 143,381 | 162,805 |
Investment in Federal Reserve Bank stock | 47,384 | 47,285 |
Accrued interest receivable | 93,042 | 82,090 |
Equity swap agreements | 200 | 206 |
Foreign exchange options | 4,392 | 5,084 |
Interest rate swaps | 17,791 | 13 |
Customer deposit accounts [Abstract] | ||
Demand, savings and money market deposits | 9,119,064 | 7,896,736 |
Time deposits | 7,519,569 | 6,762,892 |
Federal funds purchased | 0 | 22 |
Federal Home Loan Bank advances | 489,680 | 1,199,151 |
Securities sold under repurchase agreements | 1,077,835 | 1,296,522 |
Notes payable | 85,014 | 49,690 |
Accrued interest payable | 16,352 | 13,797 |
Long-term debt | 139,143 | 125,633 |
Derivative liabilities | $ 20,206 | $ 3,463 |
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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COVERED ASSETS AND FDIC INDEMNIFICATION ASSET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | NOTE 7 - COVERED ASSETS AND FDIC INDEMNIFICATION ASSET Covered Assets Covered assets consist of loans receivable and OREO that were acquired in the Washington First International Bank (“WFIB”) Acquisition on June 11, 2010 and in the United Commercial Bank (“UCB”) Acquisition on November 6, 2009 for which the Company entered into shared-loss agreements (the “shared-loss agreements”) with the FDIC. The shared-loss agreements covered over 99% of the loans originated by WFIB and all of the loans originated by UCB, excluding the loans originated by UCB in China under its United Commercial Bank China (Limited) subsidiary. The Company shares in the losses, which began with the first dollar of loss incurred, on covered assets under the shared-loss agreements. Pursuant to the terms of the shared-loss agreements, the FDIC is obligated to reimburse the Company 80% of eligible losses for both WFIB and UCB with respect to covered assets. For the UCB covered assets, the FDIC will reimburse the Company for 95% of eligible losses in excess of $2.05 billion. The Company has a corresponding obligation to reimburse the FDIC for 80% or 95%, as applicable, of eligible recoveries with respect to covered assets. The commercial loan shared-loss agreement and single-family residential mortgage loan shared-loss agreement are in effect for 5 years and 10 years, respectively, from the acquisition date and the loss recovery provisions are in effect for 8 years and 10 years, respectively, from the acquisition date. Forty-five days following the 10th anniversary of the respective acquisition date, the Company will be required to pay to the FDIC a calculated amount, based on the specific thresholds of losses not being reached. The calculation of this potential liability as stated in the shared-loss agreements is 50% of the excess, if any of (i) 20% of the Intrinsic Loss Estimate and (ii) the sum of (A) 25% of the asset discount plus (B) 25% of the Cumulative Shared-Loss Payments plus (C) the Cumulative Servicing Amount if net losses on covered loans subject to the stated threshold is not reached. As of September 30, 2011 and December 31, 2010, the Company's estimate for this liability for WFIB and UCB was $10.7 million and $7.1 million, respectively. At each date of acquisition, we accounted for the loan portfolio acquired from the respective bank at fair value. This represents the discounted value of the expected cash flows from the portfolio. In estimating the nonaccretable difference, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (b) estimated the amount and timing of undiscounted expected principal and interest payments (the “undiscounted expected cash flows”). In the determination of contractual cash flows and cash flows expected to be collected, we assume no prepayment on the ASC 310-30 nonaccrual loan pools as we do not anticipate any significant prepayments on credit impaired loans. For the ASC 310-30 accrual loans for single-family, multifamily and commercial real estate, we used a third party vendor to obtain prepayment speeds, in order to be consistent with market participant's information. The third party vendor is recognized in the mortgage-industry for the delivery of prepayment and default models for the secondary market to identify loan level prepayment, delinquency, default, and loss propensities. The prepayment rates for the construction, land, and commercial and consumer pools have historically been low and so we applied the prepayment assumptions of our current portfolio using our internal modeling. The difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected and was considered in determining the fair value of the loans as of the acquisition date. The amount by which the undiscounted expected cash flows exceed the estimated fair value (the “accretable yield”) is accreted into interest income over the life of the loans. The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The carrying amounts and the composition of the covered loans as of September 30, 2011 and December 31, 2010 are as follows:
Credit Quality Indicators-The covered loans acquired are and will continue to be subject to the Bank's internal and external credit review and monitoring. The covered loans have the same credit quality indicators as the non-covered loans, to enable the monitoring of the borrower's credit and the likelihood of repayment. Loans are risk rated based on analysis of the current state of the borrower's credit quality. The analysis of credit quality includes review of all sources of repayment, the borrower's current financial and liquidity status, and all other relevant information. The Company utilizes an eight grade risk rating system, where a higher grade represents a higher level of credit risk. The eight grade risk rating system can be generally classified by the following categories: Pass or Watch, Special Mention, Substandard, Doubtful, and Loss. The risk ratings reflect the relative strength of the sources of repayment. Refer to Note 8 for full discussion of risk ratings. After a year of historical performance of the covered loans acquired through the UCB acquisition, the Company reduced the nonaccretable difference due to the performance of the portfolio and expectation for the inherent losses in the portfolio in the fourth quarter of 2010. This reduction was primarily calculated based on the risk ratings of the loans. If credit deteriorates beyond the respective acquisition date fair value amount of the covered loans under ASC 310-30, such deterioration will be reserved for and a provision for credit losses will be charged to earnings with a partially offsetting noninterest income item reflected in the increase to the FDIC indemnification asset or receivable. As of September 30, 2011, there is no allowance for the covered loans accounted for under ASC 310-30 related to deterioration as the credit has not deteriorated beyond fair value at acquisition date. As of the acquisition date, WFIB's and UCB's loan portfolios included unfunded commitments for commercial lines of credit, construction draws and other lending activity. The total commitment outstanding as of the acquisition date is covered under the shared-loss agreements. However, any additional advances on these loans subsequent to acquisition date are not accounted for under ASC 310-30. Included in the table below are $586.6 million of additional advances under the shared-loss agreements which are not accounted for under ASC 310-30. The Bank has considered these additional advances on commitments covered under the shared-loss agreements in the allowance for loan losses calculation. These additional advances are within our loan segments as follows: $383.1 million of commercial and industrial loans, $164.5 million of commercial real estate loans, $29.2 million of consumer loans and $9.8 million of residential loans. As of September 30, 2011, $6.4 million, or 2.9%, of the total allowance is allocated to these additional advances on loans covered under the shared-loss agreements. This $6.4 million in allowance is allocated within our loan segments as follows: $3.8 million for commercial real estate loans, $2.4 million for commercial and industrial loans, $167 thousand for consumer loans and $74 thousand for residential loans. The tables below present the covered loan portfolio by credit quality indicator as of September 30, 2011 and December 31, 2010.
As of September 30, 2011 and December 31, 2010, $246.0 million and $379.8 million, respectively, of the ASC 310-30 credit impaired loans were considered to be nonaccrual loans. The following table sets forth information regarding covered nonperforming assets as of the dates indicated:
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As of September 30, 2011, we had 92 covered OREO properties with a combined aggregate carrying value of $87.3 million. Approximately 67% and 26% of covered OREO properties as of September 30, 2011 were located in California and Washington, respectively. As of December 31, 2010, we had 114 covered OREO properties with an aggregate carrying value of $123.9 million. During the first nine months of 2011, 103 properties with an aggregate carrying value of $102.6 million were added through foreclosure. The aggregate carrying value at September 30, 2011 includes $20.9 million in net write-downs on covered OREO. During the first nine months of 2011, we sold 125 covered OREO properties for total proceeds of $120.6 million resulting in a total combined net gain on sale of $2.3 million. Changes in the accretable yield for the covered loans are as follows for the periods shown:
The excess of cash flows expected to be collected over the initial fair value of acquired loans is referred to as the accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. The accretable yield will change due to:
After over a year of historical performance of the UCB portfolio, the Bank concluded that the credit quality is performing better than originally estimated. As such, the Bank reduced the nonaccretable discount on the UCB covered loan portfolio in December 2010. By lowering the nonaccretable discount, the overall accretable yield will increase thus increasing the interest income recognized over the remaining life of the loans. FDIC Indemnification Asset Due to the fourth quarter 2010 reduction of the nonaccretable difference on the UCB covered loan portfolio, the expected reimbursement from the FDIC under the loss-sharing agreement decreased. The Company is amortizing the difference between the recorded amount of the FDIC indemnification asset and the expected reimbursement from the FDIC over the life of the indemnification asset. The amortization is in line with the improved accretable yield as discussed above. As such, the Company now has net amortization of the FDIC indemnification asset against income. For the three and nine months ended September 30, 2011, the Company recorded $14.3 million and $48.0 million, respectively, of amortization against income, compared to $7.1 million and $29.2 million, respectively, of accretion for the three and nine months ended September 30, 2010. For the three and nine months ended September 30, 2011, the Company also recorded a $43.3 million and a $164.2 million, respectively, reduction to the FDIC indemnification asset resulting from paydowns, payoffs, loan sales and charge-offs. The table below shows FDIC indemnification asset activity for the periods shown:
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FDIC Receivable As of September 30, 2011, the FDIC loss-sharing receivable was $51.8 million as compared to $62.6 million as of December 31, 2010. This receivable represents 80% of reimbursable amounts from the FDIC that have not yet been received. These reimbursable amounts include net charge-offs, loan-related expenses and OREO-related expenses. 100% of the loan-related and OREO expenses are recorded as noninterest expense, 80% of any reimbursable expense is recorded as noninterest income, netting to the 20% of actual expense paid by the Company. The FDIC also shares in 80% of recoveries received. Thus, the FDIC receivable is reduced when we receive payment from the FDIC as well as when recoveries occur. The FDIC loss-sharing receivable is included in other assets on the Condensed Consolidated Balance Sheet. |
STOCKHOLDERS' EQUITY | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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STOCKHOLDERS' EQUITY [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | NOTE 12 - STOCKHOLDERS' EQUITY Series A Preferred Stock Offering-In April 2008, the Company issued 200,000 shares of 8% Non-Cumulative Perpetual Convertible Preferred Stock, Series A (“Series A”), with a liquidation preference of $1,000 per share. The Company received $194.1 million of additional Tier 1 qualifying capital, after deducting stock issuance costs. The holders of the Series A preferred stock have the right at any time to convert each share of Series A preferred shares into 64.9942 shares of the Company's common stock, plus cash in lieu of fractional shares. This represents an initial conversion price of approximately $15.39 per share of common stock or a 22.5% conversion premium based on the closing price of the Company's common stock on April 23, 2008 of $12.56 per share. On or after May 1, 2013, the Company will have the right, under certain circumstances, to cause the Series A preferred shares to be converted into shares of the Company's common stock. Dividends on the Series A preferred shares, if declared, will accrue and be payable quarterly in arrears at a rate per annum equal to 8% on the liquidation preference of $1,000 per share. The proceeds from this offering were used to augment the Company's liquidity and capital positions and reduce its borrowings. As of September 30, 2011, 85,710 shares were outstanding. Series B Preferred Stock Offering-On December 5, 2008, the Company issued 306,546 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series B (“Series B”), with a liquidation preference of $1,000 per share. The Company received $306.5 million of additional Tier 1 qualifying capital from the U.S. Treasury by participating in the U.S. Treasury's Capital Purchase Program (“TCPP”). On December 29, 2010, in accordance with approvals received from the U.S. Treasury and the Federal Reserve Board, the Company repurchased all shares of the Series B preferred stock and the related accrued and unpaid dividends by using $308.4 million of available cash, without raising any capital or debt. As a result, no shares of the Series B preferred stock remain outstanding. Series C Private Placement-On November 5, 2009, the Company entered into investment agreements with various investors, pursuant to which the investors purchased an aggregate of $500.0 million of our common stock and newly-issued shares of our Mandatorily Convertible Non-Voting Perpetual Preferred Stock, Series C (“Series C”), with a liquidation preference of $1,000 per share, in a private placement transaction which closed on November 6, 2009. In the private placement, we issued certain qualified institutional buyers and accredited investors, including some existing institutional stockholders, an aggregate of 335,047 shares of our Series C preferred stock and an aggregate of 18,247,012 shares of common stock. On March 25, 2010, at a special meeting of the stockholders, our stockholders voted to approve the issuance of 37,103,734 shares of our common stock upon conversion of the 335,047 shares of the Series C preferred stock. Subsequently, on March 30, 2010, each share of the Series C preferred stock was automatically converted into 110.74197 shares of common stock at a per common share conversion price of $9.03, as adjusted in accordance with the terms of the Series C preferred stock. As a result, no shares of the Series C preferred stock remain outstanding. Warrants – During 2008, in conjunction with the Series B preferred stock offering, the Company issued to the U.S. Treasury warrants with an initial price of $15.15 per share of common stock for which the warrants may be exercised, with an allocated fair value of $25.2 million. The warrants could be exercised at any time on or before December 5, 2018. On January 26, 2011 the Company repurchased the 1,517,555 warrants outstanding for $14.5 million. Stock Repurchase Program-During 2007, the Company's Board of Directors authorized a stock repurchase program to buy back up to $80.0 million of the Company's common stock. The Company did not repurchase any shares during the nine months ended September 30, 2011 and September 30, 2010. Quarterly Dividends-On July 20, 2011, the Company's Board of Directors declared third quarter preferred stock cash dividends of $20.00 per share on its Series A preferred stock payable on or about August 1, 2011 to shareholders of record on July 15, 2011. Total cash dividends paid in conjunction with the Company's Series A preferred stock amounted to $1.7 million and $5.1 million during the three and nine months ended September 30, 2011. On July 20, 2011, the Company's Board of Directors also declared quarterly common stock cash dividends of $0.05 per share payable on or about August 24, 2011 to shareholders of record on August 10, 2011. Cash dividends totaling $7.5 million and $16.4 million were paid to the Company's common shareholders during the three and nine months ended September 30, 2011. Earnings Per Share (“EPS”)-The number of shares outstanding at September 30, 2011 was 148,961,927. Basic EPS excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of shares outstanding during the period. Diluted EPS is calculated on the basis of the weighted average number of shares outstanding during the period plus restricted stock and shares issuable upon the assumed exercise of outstanding convertible preferred stock, stock options, and stock warrants, unless they have an antidilutive effect. The following table sets forth earnings per share calculations for the three and nine months ended September 30, 2011 and 2010:
The following outstanding convertible preferred stock, stock options, and restricted stock for the three and nine months ended September 30, 2011 and 2010, respectively, were excluded from the computation of diluted EPS because including them would have had an antidilutive effect.
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NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Non Covered Loans And Allowance For Loan Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 8 - NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES The following is a summary of loans receivable, excluding covered loans (“non-covered loans”) for the periods indicated:
Accrued interest on covered and non-covered loans receivable amounted to $66.0 million and $65.6 million at September 30, 2011 and December 31, 2010, respectively. At September 30, 2011 and December 31, 2010, covered and non-covered loans receivable totaling $8.10 billion and $8.14 billion, respectively, were pledged to secure borrowings from the FHLB and the Federal Reserve Bank. The Bank offers both fixed and adjustable rate (“ARM”) first mortgage loans secured by one-to-four unit residential properties located in its primary lending areas. The Bank originated $585.0 million and $299.3 million in new residential single-family loans during the nine months ended September 30, 2011 and 2010, respectively. The Bank also offers both fixed and ARM residential multifamily loan programs. For the nine months ended September 30, 2011 and 2010, the Bank originated $34.1 million and $19.1 million, respectively, in multifamily residential loans. The Bank primarily offers ARM multifamily loan programs that have six-month, three-year, or five-year initial fixed periods. The Bank considers all of the single-family and multifamily loans originated to be prime loans and the underwriting criteria include minimum FICO scores, maximum loan-to-value ratios and minimum debt coverage ratios, as applicable. The Bank does have single-family loans with interest-only features. Single-family loans with interest-only features totaled $5.6 million or less than 1% and $7.8 million or 1% of total single-family loans at September 30, 2011 and December 31, 2010, respectively. Additionally, the Bank owns residential loans that were purchased several years ago that permit different repayment options. For these loans, there is the potential for negative amortization if the borrower so chooses. These residential loans that permit different repayment options totaled $14.1 million, or 1%, and $16.9 million, or 1%, of total residential loans at September 30, 2011 and December 31, 2010, respectively. None of these loans were negatively amortizing as of September 30, 2011 and December 31, 2010. In addition to residential lending, the Bank's lending activities also include commercial real estate, commercial and industrial, and consumer lending. Our CRE lending activities include loans to finance income producing properties and also construction and land loans. Our C&I lending activities include commercial business financing for small and middle-market businesses in a wide spectrum of industries. Included in commercial business loans are loans for working capital, accounts receivable lines, inventory lines, small business administration loans, and lease financing. We also offer a variety of international trade finance services and products, including letters of credit, revolving lines of credit, import loans, bankers' acceptances, working capital lines, domestic purchase financing, and pre-export financing. Consumer loans are primarily comprised of fully guaranteed student loans, home equity lines of credit, and auto loans. All of the loans that the Bank originates are subject to its underwriting guidelines and loan origination standards. Management believes that the Bank's underwriting criteria and procedures adequately consider the unique risks which may come from these products. The Bank conducts a variety of quality control procedures and periodic audits to ensure compliance with its origination standards, including criteria for lending and legal requirements. Credit Risk and Concentrations-The real estate market in California, including the areas of Los Angeles, Riverside, San Bernardino, and Orange counties, where a majority of the Company's loan customers are based, has been negatively impacted over the past few years. As of September 30, 2011, the Company had $3.83 billion in non-covered commercial real estate loans and $2.46 billion in non-covered residential loans, of which approximately 93% are secured by real properties located in California. Potential further deterioration in the real estate market generally and residential building in particular could result in additional loan charge-offs and provisions for loan losses in the future, which could have a material adverse effect on the Company's financial condition, net income and capital. In addition, although most of the Company's trade finance activities are related to trade with Asian countries, the majority of our loans are made to companies domiciled in the United States. A substantial portion of this business involves California based customers engaged in import and export activities. We also offer export-import financing to various domestic and foreign customers; the export loans are guaranteed by the Export-Import Bank of the United States. Purchased Loans-During the first nine months of 2011, the Company purchased various portfolios with a carrying amount of $603.2 million, including guaranteed student loans with a carrying amount of $513.7 million. These student loans are guaranteed by the U.S. Department of Education and pose limited credit risk. Loans Held for Sale-Loans held for sale totaled $251.9 million and $220.1 million as of September 30, 2011 and December 31, 2010, respectively. Loans held for sale are recorded at the lower of cost or fair market value. Fair market value, if lower than cost, is determined based on valuations obtained from market participants or the value of the underlying collateral. As of September 30, 2011, approximately 87% of these loans were student loans. These loans were purchased by the Company with the intent to be held for investment; however, subsequent to their purchase, the Company's intent for these loans changed and they were consequently reclassified to loans held for sale. Proceeds from sales of loans held for sale were $637.5 million in the first nine months of 2011, resulting in net gains on sale of $14.5 million. Proceeds from sales of loans held for sale were $167.6 million in September 2010 with $2.8 million net gains on sale, for the nine months ended September 30, 2010. Credit Quality Indicators-Loans are risk rated based on analysis of the current state of the borrower's credit quality. The analysis of credit quality includes review of all sources of repayment, the borrower's current financial and liquidity status, and all other relevant information. The Company utilizes an eight grade risk rating system, where a higher grade represents a higher level of credit risk. The eight grade risk rating system can be generally classified by the following categories: Pass or Watch, Special Mention, Substandard, Doubtful, and Loss. The risk ratings reflect the relative strength of the sources of repayment. Pass or Watch loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. These borrowers may have some credit risk that requires monitoring, but full repayment is expected. Special Mention loans are considered to have potential weaknesses that warrant closer attention by management. Special Mention is considered a transitory grade and, generally, the Company does not grade a loan as Special Mention for longer than six months. If any potential weaknesses are resolved, the loan is upgraded to a Pass or Watch grade. If negative trends in the borrower's financial status or other information is presented that indicates the repayment sources may become inadequate, the loan is downgraded to a Substandard grade. Substandard loans are considered to have well-defined weaknesses that jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. Additionally, when management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan is still classified as Substandard. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are considered to be uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted due to changes in borrower status and likelihood of loan repayment. The tables below present the non-covered loan portfolio by credit quality indicator as of September 30, 2011 and December 31, 2010. As of September 30, 2011, non-covered loans graded Substandard and Doubtful have decreased by a net $133.5 million, or 19% from December 31, 2010. There were no Loss grade loans as of September 30, 2011 and December 31, 2010.
Nonaccrual and Past Due Loans-Loans are tracked by the number of days borrower payments are past due. The tables below present an aging analysis of nonaccrual loans, past due non-covered loans and loans held for sale, segregated by class of loans, as of September 30, 2011 and December 31, 2010:
Generally, loans 90 or more days past due are placed on nonaccrual status, at which point interest accrual is discontinued and all unpaid accrued interest is reversed against interest income. Additionally, loans that are not 90 or more days past due but have identified deficiencies, including delinquent TDR loans, are also placed on nonaccrual status. Nonaccrual loans totaled $147.7 million and $172.9 million at September 30, 2011 and December 31, 2010, respectively. Loans not 90 or more days past due totaled $29.9 million and $76.9 million as of September 30, 2011 and December 31, 2010, respectively, and were included in non-covered nonaccrual loans. The following is a summary of interest income foregone on nonaccrual loans:
Troubled debt restructurings-A troubled debt restructuring (“TDR”) is a modification of the terms of a loan when the lender, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower. The concessions may be granted in various forms, including a below-market change in the stated interest rate, reduction in the loan balance or accrued interest, extension of the maturity date with a stated interest rate lower than the current market rate or note splits referred to as A/B notes. In A/B note restructurings, the original note is bifurcated into two notes where the A note represents the portion of the original loan which allows for acceptable loan-to-value and debt coverage on the collateral and is expected to be collected in full and the B note represents the portion of the original loan where there is a shortfall in value and is fully charged-off. The A/B note balance is comprised of the A note balances only. A notes are not disclosed as TDRs in years after the restructuring if the restructuring agreement specifies an interest rate equal to or greater than the rate that the Bank was willing to accept at the time of the restructuring for a new loan with comparable risk and the loan is not impaired based on the terms specified by the restructuring agreement. TDRs may be designated as performing or nonperforming. A TDR may be designated as performing if the loan has demonstrated sustained performance under the modified terms. The period of sustained performance may include the periods prior to modification if prior performance met or exceeded the modified terms. For nonperforming restructured loans, the loan will remain on nonaccrual status until the borrower demonstrates a sustained period of performance, generally six consecutive months of payments. The Company had $81.0 million and $122.1 million in total performing restructured loans as of September 30, 2011 and December 31, 2010, respectively. Nonperforming restructured loans were $39.0 million and $42.1 million at September 30, 2011 and December 31, 2010, respectively. Included as TDRs were $24.3 million and $57.3 million of performing A/B notes as of September 30, 2011 and December 31, 2010, respectively. All TDRs are included in the balance of impaired loans. The following table provides information on loans modified as of September 30, 2011 that were modified as TDRs during the three and nine months ended September 30, 2011:
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Potential TDRs are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower's financial difficulty in order to maximize the bank's recovery. As of September 30, 2011, modifications of residential TDRs, including single and multi-family loans, primarily included non-market interest rate reductions, maturity extensions and A/B note splits. A/B note splits result in a partial chargeoff or loss for the bank at the modification date. For the nine months ended September 30, 2011 residential TDRs modified using non-market interest rate reductions, maturity extensions and/or A/B note splits totaled $6.5 million, as of September 30, 2011. Commercial real estate TDRs, including income producing, construction and land loans, were primarily modified through A/B note splits, maturity extensions, forbearance payments and/or non-market interest rate changes with an impact of a partial chargeoff or loss for the bank and reduction of interest collected over the life of the loan. Commercial real estate TDRs modified through A/B note splits and/or maturity extensions totaled $37.6 million as of September 30, 2011. Commercial real estate TDRs modified through forbearance payments and/or non-market interest changes totaled $21.5 million as of September 30, 2011. Commercial and industrial TDRs, including commercial business and trade finance loans, were restructured in various ways, including A/B note splits, non-market interest rate changes and/or maturity extensions with an impact of both a reduction of interest collected over the life of the loan and/or an extended time period for collection of principal and interest, for a total of $11.4 million as of September 30, 2011. Performing TDRs at September 30, 2011 were comprised of $20.6 million in residential loans, $49.3 million in commercial real estate loans and $11.2 million in commercial and industrial loans. Nonperforming TDRs at September 30, 2011 were comprised of $2.0 million in residential loans, $36.1 million in commercial real estate loans and $0.9 million in commercial and industrial loans. Subsequent to restructuring, a TDR that becomes delinquent, generally beyond 30 days for commercial and industrial, and commercial real estate and consumer loans, and beyond 90 days for residential loans, becomes nonaccrual and is considered to have defaulted. The following table provides information on TDRs that subsequently defaulted as of September 30, 2011 for the nine months ended September 30, 2011. There were no TDRs that subsequently defaulted during the three months ended September 30, 2011.
All TDRs are included in the impaired loan quarterly valuation allowance process. See the sections below Impaired Loans and Allowance for Loan Losses for the complete discussion. All portfolio segments of TDRs are reviewed for necessary specific reserves in the same manner as impaired loans of the same portfolio segment which have not been identified as TDRs. The modification of the terms of each TDR is considered in the current impairment analysis of the respective TDR. For all portfolio segments of delinquent TDRs and when the restructured loan is less than the recorded investment in the loan, the deficiency is charged-off against the allowance for loan losses. If the loan is a performing TDR the deficiency is included in the specific allowance, as appropriate. As of September 30, 2011, the allowance for loan losses associated with TDRs was $3.7 million for performing TDRs and $278 thousand for nonperforming TDRs. As a result of adopting the amendments in ASU 2011-02, the Company reassessed all restructurings that occurred on or after the beginning of the current fiscal year (January 1, 2011) for identification as TDRs. The Company identified as TDRs certain loan receivables for which the allowance for credit losses had previously been measured under the general allowance for credit losses methodology. Upon identifying those loan receivables as TDRs, the Company identified them as impaired under the guidance in Section 310-10-35. The amendments in ASU 2011-02 require prospective application of the impairment measurement guidance in Section 310-10-35 for those receivables newly identified as impaired. At the end of the first interim period of adoption (September 30, 2011), the recorded investment in receivables for which the allowance for credit losses was previously measured under the general allowance for credit losses methodology and are now impaired under Section 310-10-35 was $17.8 million, and the allowance for credit losses associated with those loan receivables, on the basis of a current evaluation of loss, was $2.2 million. Impaired Loans-A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all scheduled payments of principal or interest due according to the original contractual terms of the loan agreement. Impaired loans include noncovered loans held for investment on nonaccrual status, regardless of the collateral coverage, and loans modified in a TDR. The Bank's loans are grouped into heterogeneous and homogeneous (mostly consumer loans) categories. Classified loans (graded Substandard or Doubtful) in the heterogeneous category are selected and evaluated for impairment on an individual basis. The Bank considers loans individually reviewed to be impaired if, based on current information and events, it is probable the Bank will not be able to collect all amounts due according to the original contractual terms of the loan agreement. For loans determined to be impaired, the bank utilizes the most applicable asset valuation method for the loan from the following valuation methods: fair value of collateral less costs to sell, present value of expected future cash flows, or the loan's observable market price. When the value of an impaired loan is less than the recorded investment in the loan and the loan is classified as nonperforming, the deficiency is charged-off against the allowance for loan losses. At September 30, 2011 and December 31, 2010, impaired loans totaled $208.0 million and $281.0 million, respectively. Impaired non-covered loans as of September 30, 2011 and December 31, 2010 are set forth in the following tables. The interest income recognized on impaired loans, excluding performing TDRs, is recognized on a cash basis when received.
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Allowance for Loan Losses The allowance consists of specific reserves and a general reserve. The Bank's loans fall into heterogeneous and homogeneous (mostly consumer loans) categories. Impaired loans in the heterogeneous category are subject to specific reserves. Loans in the homogeneous category, as well as non-impaired loans in the heterogeneous category, are evaluated as part of the general reserve. The general reserve is calculated by utilizing both quantitative and qualitative factors. There are different qualitative risks for the loans in each portfolio segment. As of September 30, 2011, the Residential and CRE segments' predominant risk characteristic is the collateral and the geographic location of the property collateralizing the loan. The risk is qualitatively assessed based on the change in the real estate market in those geographic areas. The C&I segment's predominant risk characteristics are global cash flows of the guarantors and businesses we lend to and economic and market conditions. Consumer loans, excluding the student loan portfolio guaranteed by the U.S. Department of Education, are largely comprised of home equity lines of credit, for which the predominant risk characteristic is the real estate collateral securing the loan. Our methodology to determine the overall appropriateness of the allowance is based on a classification migration model and qualitative considerations. The migration analysis examines pools of loans having similar characteristics and analyzes their loss rates over a historical period. We utilize historical loss factors derived from trends and losses associated with each pool over a specified period of time. Based on this process, we assign loss factors to each loan grade within each pool of loans. Loss rates derived by the migration model are based predominantly on historical loss trends that may not be entirely indicative of the actual or inherent loss potential. As such, we utilize qualitative and environmental factors as adjusting mechanisms to supplement the historical results of the classification migration model. Qualitative considerations include, but are not limited to, prevailing economic or market conditions, relative risk profiles of various loan segments, volume concentrations, growth trends, delinquency and nonaccrual status, problem loan trends, and geographic concentrations. Qualitative and environmental factors are reflected as percentage adjustments and are added to the historical loss rates derived from the classified asset migration model to determine the appropriate allowance amount for each loan pool. Covered Loans-As of the respective acquisition dates, WFIB's and UCB's loan portfolios included unfunded commitments for commercial lines of credit, construction draws and other lending activity. The total commitment outstanding as of the respective acquisition dates is covered under the shared-loss agreements. However, any additional advances on these loans subsequent to acquisition date are not accounted for under ASC 310-30. As additional advances on these commitments have occurred, the Bank has considered these amounts in the allowance for loan losses calculation. As of September 30, 2011 and December 31, 2010, $6.4 million, or 2.9% and $4.2 million, or 1.8%, respectively, of the total allowance is allocated to the allowance for loan losses on covered loans. The covered loans acquired are, and will continue to be, subject to the Bank's internal and external credit review and monitoring. Credit deterioration, if any, beyond the respective acquisition date fair value amounts of the covered loans under ASC 310-30 will be separately measured and accounted for under ASC 310-30. If required, the establishment of an allowance for covered loans accounted for under ASC 310-30 will result in a charge to earnings with a partially offsetting noninterest income item reflected in the increase to the FDIC indemnification asset or receivable. As of September 30, 2011 and December 31, 2010, there is no allowance for the covered loans accounted for under ASC 310-30 due to deterioration of credit quality. The Company recorded $75.0 million in loan loss provisions for the nine months ended September 30, 2011, as compared to $170.3 million for the nine months ended September 30, 2010. It is the Company's policy to promptly charge-off the amount of impairment on a loan which represents the difference in the outstanding loan balance and the fair value of the collateral or discounted cash flow. Recoveries are recorded when payment is received on loans that were previously charged-off through the allowance for loan losses. For the nine months ended September 30, 2011, the Company recorded $90.2 million in net charge-offs in comparison to $164.2 million for the nine months ended September 30, 2010. The following tables detail activity in the allowance for loan losses, for both non-covered and covered loans, by portfolio segment for the three and nine months ended September 30, 2011 and the year ended December 31, 2010. Allocation of a portion of the allowance to one segment of the loan portfolio does not preclude its availability to absorb losses in other segments.
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The Company's recorded investment in total loans receivable as of September 30, 2011 and December 31, 2010 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company's impairment methodology is as follows:
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Allowance for Unfunded Loan Commitments, Off-Balance Sheet Credit Exposures and Recourse Provisions-The allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to these unfunded credit facilities. The determination of the adequacy of the allowance is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. As of September 30, 2011 and December 31, 2010, the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions amounted to $11.2 million and $10.0 million, respectively. Net adjustments to the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions are included in the provision for loan losses. Loans serviced for others amounted to $2.19 billion and $2.51 billion at September 30, 2011 and December 31, 2010, respectively. These represent loans that have either been sold or securitized for which the Bank continues to provide servicing or has limited recourse. The majority of these loans are residential and CRE at September 30, 2011 and December 31, 2010. Of the total allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions, $4.3 million and $4.7 million pertain to these loans as of September 30, 2011 and December 31, 2010, respectively. These loans are maintained off-balance sheet and are not included in the loans receivable balance. |
BASIS OF PRESENTATION (Details) | Sep. 30, 2011 |
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BASIS OF PRESENTATION [Abstract] | |
Number of wholly-owned subsidiaries that are statutory business trusts and are not consolidated | 8 |
DERIVATIVE FINANCIAL INSTRUMENTS | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 6 - DERIVATIVE FINANCIAL INSTRUMENTS The following table summarizes the fair value and balance sheet classification of derivative instruments as of September 30, 2011 and December 31, 2010. The notional amount of the contract is not recorded on the condensed consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. The valuation methodology of derivative instruments is disclosed in Note 3 to the Company's condensed consolidated financial statements presented elsewhere in this report.
Derivatives Designated as Hedging Instruments Interest Rate Swaps on Certificates of Deposit-The Company is exposed to changes in the fair value of certain of its fixed-rate certificates of deposit due to changes in the benchmark interest rate, LIBOR. During the second quarter of 2011, the Company entered into two $50.0 million receive-fixed, pay-variable interest rate swaps with major brokerage firms as fair value hedges of two $50.0 million fixed-rate certificates of deposit with the same maturity dates. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. As of September 30, 2011, the total notional amount of the interest rate swaps on the certificates of deposit was $100.0 million, and the fair value of the interest rate swaps amounted to a $1.7 million asset. During the three months and nine months ended September 30, 2011, the Company recognized a net loss of $344 thousand and $427 thousand in interest expense related to hedge ineffectiveness. The Company also recognized a net reduction to interest expense of $819 thousand and $1.3 million for the three months and nine months ended September 30, 2011 related to net settlements on the derivatives. Derivatives Not Designated as Hedging Instruments Equity Swap Agreements-In December 2007, the Company entered into two equity swap agreements with a major investment brokerage firm to economically hedge against market fluctuations in a promotional equity index certificate of deposit product offered to bank customers which has a term of 5 years and pays interest based on the performance of the HSCEI. Under ASC 815, a certificate of deposit that pays interest based on changes in an equity index is a hybrid instrument with an embedded derivative (i.e. equity call option) that must be accounted for separately from the host contract (i.e. the certificate of deposit). In accordance with ASC 815, both the embedded equity call options on the certificates of deposit and the freestanding equity swap agreements are marked-to-market each reporting period with resulting changes in fair value recorded in the condensed consolidated statements of income. As of September 30, 2011 and December 31, 2010, the notional amounts of the equity swap agreements totaled $22.7 million and $22.9 million, respectively. The fair values of the equity swap agreements and embedded derivative liability for these derivative contracts amounted to $200 thousand asset and $203 thousand liability, respectively, as of September 30, 2011, compared to $206 thousand asset and $210 thousand liability, respectively, as of December 31, 2010. Foreign Exchange Options-During 2010, the Company entered into foreign exchange option contracts with major brokerage firms to economically hedge against currency exchange rate fluctuations in a certificate of deposit product available to bank customers beginning in the first quarter of 2010. This product, which has a term of 5 years, pays interest based on the performance of the Chinese currency Renminbi (“RMB”) relative to the U.S. Dollar. Under ASC 815, a certificate of deposit that pays interest based on changes in currency exchange rates is a hybrid instrument with an embedded derivative that must be accounted for separately from the host contract (i.e. the certificate of deposit). In accordance with ASC 815, both the embedded derivative instruments and the freestanding foreign exchange option contracts are marked-to-market each reporting period with resulting changes in fair value reported in the condensed consolidated statements of income. As of September 30, 2011 and December 31, 2010 the notional amount of the foreign exchange options totaled $85.6 million and $85.6 million, respectively. The fair values of the foreign exchange options and embedded derivative liability for these contracts amounted to a $4.4 million asset and a $2.8 million liability, respectively, as of September 30, 2011. The fair values of the foreign exchange options and embedded derivative liability for these contracts amounted to a $5.1 million asset and $3.2 million liability, respectively, as of December 31, 2010. Interest Rate Swaps-Since the fourth quarter of 2010, the Company has entered into pay-fixed, receive-variable swap contracts with institutional counterparties to economically hedge against a newly launched interest rate swap product offered to bank customers. This product allows borrowers to lock in attractive intermediate and long-term interest rates by entering into a pay-fixed, receive-variable swap contract with the Company, resulting in the customer obtaining a synthetic fixed rate loan. The Company does not assume any interest rate risk since the swap agreements mirror each other. As of September 30, 2011 and December 31, 2010 the notional amount of the interest rate swaps with the institutional counterparties totaled $410.9 million and $4.1 million, respectively. The interest rate swap agreements are marked-to-market each reporting period with resulting changes in fair value reported in the condensed consolidated statements of income. The fair values of the interest rate swap contracts with the institutional counterparty and the bank customers amounted to a $16.1 million asset and $17.2 million liability, respectively, as of September 30, 2011. The fair values of the interest rate swap contracts with the institutional counterparty and the bank customers amounted to a $13 thousand asset and $14 thousand liability, respectively, as of December 31, 2010. Short-term Foreign Exchange Contracts-The Company also enters into short-term forward foreign exchange contracts on a regular basis to economically hedge against foreign exchange rate fluctuations. As of September 30, 2011, the notional amount of the foreign exchange contracts totaled $524.0 million. The fair values of the foreign exchange contracts were immaterial as of September 30, 2011. The table below presents the effect of the Company's derivative financial instruments on the condensed consolidated statements of income for the three and nine months ended September 30, 2011 and 2010:
Credit Risk-Related Contingent Features-The Company has agreements with some of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with some of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if the Company was issued a notice of prompt corrective action. As of September 30, 2011 the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $14.5 million. If the Company had breached any of these provisions at September 30, 2011, it could have been required to settle its obligations under the agreements at the termination value. |
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Allowance for Loan Losses) (Details) (USD $) In Thousands, unless otherwise specified | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |||||||||
Covered Loans [Abstract] | |||||||||||||
Percentage of total general reserve for allowance for loan losses allocated to covered loans (in hundredths) | 2.90% | 2.90% | 1.80% | ||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | $ 220,556 | $ 234,633 | $ 238,833 | $ 238,833 | |||||||||
Provision for loan losses | 22,000 | 38,648 | 75,006 | 170,325 | 200,159 | ||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | (1,245) | (1,833) | ||||||||||
Charge-offs | (27,575) | (100,705) | (225,203) | ||||||||||
Recoveries | 3,191 | 10,483 | 22,677 | ||||||||||
Net charge-offs | (24,384) | (90,222) | (202,526) | ||||||||||
Ending balance | 218,172 | 218,172 | 234,633 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 8,474 | 8,474 | 10,024 | ||||||||||
Loans collectively evaluated for impairment | 209,698 | 209,698 | 224,609 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | 218,172 | 218,172 | 234,633 | ||||||||||
Residential [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 44,630 | 49,491 | 38,025 | 38,025 | |||||||||
Provision for loan losses | 7,172 | 7,618 | 59,525 | ||||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | 0 | 0 | ||||||||||
Charge-offs | (3,835) | (9,388) | (49,685) | ||||||||||
Recoveries | 203 | 449 | 1,626 | ||||||||||
Net charge-offs | (3,632) | (8,939) | (48,059) | ||||||||||
Ending balance | 48,170 | 48,170 | 49,491 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 1,484 | 1,484 | 309 | ||||||||||
Loans collectively evaluated for impairment | 46,686 | 46,686 | 49,182 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | 48,170 | 48,170 | 49,491 | ||||||||||
Commercial Real Estate [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 85,686 | 117,752 | 147,591 | 147,591 | |||||||||
Provision for loan losses | 1,193 | 10,861 | 97,548 | ||||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | 0 | |||||||||||
Charge-offs | (15,863) | (60,248) | (137,460) | ||||||||||
Recoveries | 1,851 | 4,502 | 10,073 | ||||||||||
Net charge-offs | (14,012) | (55,746) | (127,387) | ||||||||||
Ending balance | 72,867 | 72,867 | 117,752 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 4,843 | 4,843 | 7,247 | ||||||||||
Loans collectively evaluated for impairment | 68,024 | 68,024 | 110,505 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | 72,867 | 72,867 | 117,752 | ||||||||||
Commercial and Industrial [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 79,985 | 59,737 | 50,487 | 50,487 | |||||||||
Provision for loan losses | 13,471 | 51,223 | 34,613 | ||||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | 0 | 0 | ||||||||||
Charge-offs | (7,602) | (29,410) | (35,479) | ||||||||||
Recoveries | 1,115 | 5,419 | 10,116 | ||||||||||
Net charge-offs | (6,487) | (23,991) | (25,363) | ||||||||||
Ending balance | 86,969 | 86,969 | 59,737 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 2,147 | 2,147 | 2,468 | ||||||||||
Loans collectively evaluated for impairment | 84,822 | 84,822 | 57,269 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | 86,969 | 86,969 | 59,737 | ||||||||||
Consumer [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 3,524 | 3,428 | 2,730 | 2,730 | |||||||||
Provision for loan losses | 461 | 1,850 | 2,415 | ||||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | 0 | 0 | ||||||||||
Charge-offs | (275) | (1,659) | (2,579) | ||||||||||
Recoveries | 22 | 113 | 862 | ||||||||||
Net charge-offs | (253) | (1,546) | (1,717) | ||||||||||
Ending balance | 3,732 | 3,732 | 3,428 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 0 | 0 | 0 | ||||||||||
Loans collectively evaluated for impairment | 3,732 | 3,732 | 3,428 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | 3,732 | 3,732 | 3,428 | ||||||||||
Covered Loans Subject to Allowance For Loan Losses [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 6,731 | [2] | 4,225 | [2] | 0 | [2] | 0 | [2] | |||||
Provision for loan losses | (297) | [2] | 2,209 | [2] | 4,225 | [2] | |||||||
Allowance for unfunded loan commitments and letters of credit | 0 | [2] | 0 | [2] | 0 | [2] | |||||||
Charge-offs | 0 | [2] | 0 | [2] | 0 | [2] | |||||||
Recoveries | 0 | [2] | 0 | [2] | 0 | [2] | |||||||
Net charge-offs | 0 | [2] | 0 | [2] | 0 | [2] | |||||||
Ending balance | 6,434 | [2] | 6,434 | [2] | 4,225 | [2] | |||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 0 | [2] | 0 | [2] | 0 | [2] | |||||||
Loans collectively evaluated for impairment | 6,434 | [2] | 6,434 | [2] | 4,225 | [2] | |||||||
Loans acquired with deteriorated credit quality | 0 | [1],[2] | 0 | [1],[2] | 0 | [1],[2] | |||||||
Ending balance | 6,434 | [2] | 6,434 | [2] | 4,225 | [2] | |||||||
Unallocated [Member] | |||||||||||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||||||||||
Beginning balance | 0 | 0 | 0 | 0 | |||||||||
Provision for loan losses | 0 | 1,245 | 1,833 | ||||||||||
Allowance for unfunded loan commitments and letters of credit | 0 | (1,245) | (1,833) | ||||||||||
Charge-offs | 0 | 0 | 0 | ||||||||||
Recoveries | 0 | 0 | 0 | ||||||||||
Net charge-offs | 0 | 0 | 0 | ||||||||||
Ending balance | 0 | 0 | 0 | ||||||||||
Ending balance allocated to: [Abstract] | |||||||||||||
Loans individually evaluated for impairment | 0 | 0 | 0 | ||||||||||
Loans collectively evaluated for impairment | 0 | 0 | 0 | ||||||||||
Loans acquired with deteriorated credit quality | 0 | [1] | 0 | [1] | 0 | [1] | |||||||
Ending balance | $ 0 | $ 0 | $ 0 | ||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (Unaudited) (Parenthetical) (USD $) In Thousands, except Share data | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Comprehensive income: | ||
Net unrealized gain on securities available-for-sale, tax expense | $ 3,913 | $ 6,057 |
Reclassification adjustment for net gain included in net income | 10,925 | 8,363 |
Noncredit-related impairment loss on securities, tax benefits | 2,139 | 2,366 |
Foreign currency translation adjustments, tax expense (benefits) | 424 | 480 |
Net unrealized loss on other asset investment, taxes benefits | $ 174 | |
Shares issued pursuant to various stock plans and agreements (in shares) | 597,232 | 1,216,392 |
Converted shares of common stock (in shares) | 2,014 | 37,103,734 |
Issuance of shares pursuant to Director retainer fee (in shares) | 27,831 | 17,910 |
Shares cancelled due to forfeitures of issued restricted stock (in shares) | 180,152 | 293,105 |
Shares of treasury stock purchased due to vesting of restricted stock (in shares) | 27,938 | 26,182 |
Common stock warrants repurchased (in shares) | 1,517,555 | |
Series A Preferred Stock [Member] | ||
Comprehensive income: | ||
Shares of preferred stock converted (in shares) | 31 | |
Series C Preferred Stock [Member] | ||
Comprehensive income: | ||
Shares of preferred stock converted (in shares) | 335,047 |
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
SIGNIFICANT ACCOUNTING POLICIES (Policies) [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 -SIGNIFICANT ACCOUNTING POLICIES Derivative Financial Instruments-As part of its asset and liability management strategy, the Company uses derivative financial instruments to mitigate exposure to interest rate and foreign currency risks. All derivative instruments, including certain derivative instruments embedded in other contracts, are recognized on the condensed consolidated balance sheet at fair value with the change in fair value reported in earnings. When master netting agreements exist, the Company nets counterparty positions with any cash collateral received or delivered. The Company's interest rate swaps on certain certificates of deposit qualify for hedge accounting treatment under ASC 815, Derivatives and Hedging. The Company documents its hedge relationships, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction at the time the derivative contract is executed. This includes designating the derivative contract as a "fair value hedge" which is a hedge of a recognized asset or liability. All derivatives designated as fair value hedges are linked to specific hedged items or to groups of specific assets and liabilities on the balance sheet. Both at inception and quarterly thereafter, the Company assesses whether the derivatives used in hedging transactions are highly effective (as defined in the guidance) in offsetting changes in the fair value of the hedged item. Retroactive effectiveness is also assessed as well as the continued expectation that the hedge will remain effective prospectively. Any ineffective portion of the changes of fair value hedges is recognized immediately in interest expense in the condensed consolidated statements of income. The Company discontinues hedge accounting prospectively when (i) a derivative is no longer highly effective in offsetting changes in the fair value, (ii) a derivative expires or is sold, terminated, or exercised, or (iii) the Company determines that designation of a derivative as a hedge is no longer appropriate. If a fair value hedge derivative instrument is terminated or the hedge designation removed, the previous adjustments to the carrying amount of the hedged liability would be subsequently accounted for in the same manner as other components of the carrying amount of that liability. For interest-bearing liabilities, such adjustments would be amortized into earnings over the remaining life of the respective liability. Troubled debt restructurings (“TDR”)- A loan is identified as a troubled debt restructure when a borrower is experiencing financial difficulties and for economic or legal reasons related to these difficulties the Company grants a concession to the borrower in the restructuring that it would not otherwise consider. The Company has granted a concession when, as a result of the restructuring, it does not expect to collect all amounts due, including principal and/or interest accrued at the original terms of the loan. The concessions may be granted in various forms, including a below-market change in the stated interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date, or a note split with principal forgiveness. A restructuring executed at an interest rate that is at or near market interest rates for nontroubled debt is not a TDR. All troubled debt restructurings are reviewed for potential impairment. For modifications where we forgive principal, the entire amount of such principal forgiveness is immediately charged off. Generally, a nonaccrual loan that is restructured remains on nonaccrual status for a period of six months to demonstrate that the borrower can perform under the restructured terms. However, the borrower's performance prior to the restructuring, or other significant events at the time of restructuring may be considered in assessing whether the borrower can meet the new terms and may result in the loan remaining on accrual status or being returned to accrual status after a shorter performance period. If the borrower's performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan. Loans classified as TDRs are reported as impaired loans. Recent Accounting Standards In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Improving Disclosures About Fair Value Measurements. ASU 2010-06 requires separate disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and reasons for the transfers and separate presentation of information about purchases, sales, issuances, and settlements in the reconciliation for Level 3 fair value measurements. Additionally, ASU 2010-06 clarifies existing disclosures regarding level of disaggregation and inputs and valuation techniques. The new disclosures and clarifications of existing disclosures under ASU 2010-06 are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements which are effective for fiscal years ending after December 15, 2010 and for interim periods within those fiscal years. The adoption of the disclosure requirements did not have a material effect on the Company's condensed consolidated financial statements. In December 2010, the FASB issued ASU 2010-28, Intangibles-Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts, which modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should also consider whether there are any adverse qualitative factors indicating that an impairment may exist. The amendments in ASU 2010-28 are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. Upon adoption of the amendments, any resulting goodwill impairment should be recorded as a cumulative-effect adjustment to beginning retained earnings in the period of adoption. Any goodwill impairments occurring after the initial adoption of the amendments should be included in earnings. The adoption of this guidance did not have a material effect on the Company's condensed consolidated financial statements. In December 2010, the FASB issued ASU 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations, which specifies that if a public entity presents comparative financials, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. ASU 2010-29 also expands the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments in ASU 2010-29 are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The adoption of the disclosure requirements did not have a material effect on the Company's condensed consolidated financial statements. In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310) A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring. ASU 2011-02 clarifies the guidance on the two conditions that must exist in evaluating whether a restructuring constitutes a troubled debt restructuring: that the restructuring constitutes a concession and that the debtor is experiencing financial difficulties. In addition, ASU 2011-02 clarifies that a creditor is precluded from using the effective interest rate test in the debtor's guidance on restructuring of payables (paragraph 470-60-55-10) when evaluating whether a restructuring constitutes a troubled debt restructuring. The amendments in ASU 2011-02 are effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. Additionally, ASU 2011-02 finalizes the effective date for the disclosures required by paragraphs 310-10-50-33 through 50-34, which were deferred by ASU 2011-01, for interim and annual periods beginning on or after June 15, 2011. The adoption of this guidance did not have a material effect on the Company's condensed consolidated financial statements. In April 2011, the FASB issued ASU 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements. ASU 2011-03 removes the transferor's ability criterion from the consideration of effective control for repos and other agreements that both entitle and obligate the transferor to repurchase or redeem financial assets before their maturity. The amendments in ASU 2011-03 remove from the assessment of effective control (1) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (2) the collateral maintenance implementation guidance related to that criterion. The FASB indicates that eliminating the transferor's ability criterion and related implementation guidance from an entity's assessment of effective control should improve the accounting for repos and other similar transactions. The amendments in ASU 2011-03 are effective for the first interim or annual period beginning on or after December 15, 2011 and are to be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements. In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. ASU 2011-04 addresses convergence between GAAP and International Financial Reporting Standards (“IFRS”) requirements for measurement of and disclosures about fair value. The amendments are not expected to have a significant impact on companies applying GAAP. Key provisions of the amendment include: a prohibition on grouping financial instruments for purposes of determining fair value, except when an entity manages market and credit risks on the basis of the entity's net exposure to the group; an extension of the prohibition against the use of a blockage factor to all fair value measurements (that prohibition currently applies only to financial instruments with quoted prices in active markets); and a requirement that for recurring Level 3 fair value measurements, entities disclose quantitative information about unobservable inputs, a description of the valuation process used and qualitative details about the sensitivity of the measurements. In addition, for items not carried at fair value but for which fair value is disclosed, entities will be required to disclose the level within the fair value hierarchy that applies to the fair value measurement disclosed. The amendments in ASU 2011-04 are effective during interim and annual periods beginning after December 15, 2011. Early adoption is not permitted. The Company does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements. In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. ASU 2011-05 will require companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements. It eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The standard does not change the items which must be reported in other comprehensive income, how such items are measured, or when they must be reclassified to net income. This standard is effective for interim and annual periods beginning after December 15, 2011. The Company does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements. In September 2011, the FASB issued ASU 2011-08, Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment. ASU 2011-08 gives both public and nonpublic companies the option to qualitatively determine whether they can bypass the two-step goodwill impairment test under ASC 350-20, Intangibles – Goodwill and Other: Goodwill. Under ASU 2011-08, if a company chooses to perform a qualitative assessment and determines that it is more likely than not (a more than 50 percent likelihood) that the fair value of a reporting unit is less than its carrying amount, it would then perform Step 1 of the annual goodwill impairment test in ASC 350-20 and, if necessary, proceed to Step 2. Otherwise, no further evaluation would be necessary. The amended guidance is effective for interim and annual periods beginning after December 15, 2011. Early adoption is permitted. The Company does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements. |
INVESTMENT SECURITIES, Investment Portfolio (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | $ 1,337,085 | $ 1,692,885 |
Continuous unrealized loss position less than 12 months, unrealized losses | (63,610) | (29,417) |
Continuous unrealized loss position 12 months or more, fair value | 255,636 | 16,180 |
Continuous unrealized loss position 12 months or more, unrealized losses | (24,556) | (19,435) |
Continuous unrealized loss position total, fair value | 1,592,721 | 1,709,065 |
Continuous unrealized loss position total, unrealized losses | (88,166) | (48,852) |
US Treasury Securities [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 0 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | 0 | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 0 | 0 |
Continuous unrealized loss position total, unrealized losses | 0 | 0 |
US Government Agencies and Government Sponsored Enterprise Debt Securities [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 177,715 | 935,654 |
Continuous unrealized loss position less than 12 months, unrealized losses | (708) | (18,121) |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 177,715 | 935,654 |
Continuous unrealized loss position total, unrealized losses | (708) | (18,121) |
Commercial Mortgage Backed Securities Issued By US Government Agencies And Government Sponsored Enterprise [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 0 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | 0 | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 0 | 0 |
Continuous unrealized loss position total, unrealized losses | 0 | 0 |
Residential Mortgage Backed Securities Issued By US Government Agencies And Government Sponsored Enterprise [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 195,248 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | (1,067) | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 195,248 | 0 |
Continuous unrealized loss position total, unrealized losses | (1,067) | 0 |
Municipal Securities [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 9,715 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | (133) | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 9,715 | 0 |
Continuous unrealized loss position total, unrealized losses | (133) | 0 |
Other Residential Mortgage-Backed Securities [Member] | Investment Grade [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 0 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | 0 | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 0 | 0 |
Continuous unrealized loss position total, unrealized losses | 0 | 0 |
Other Residential Mortgage-Backed Securities [Member] | Non-investment Grade [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 0 | 0 |
Continuous unrealized loss position less than 12 months, unrealized losses | 0 | 0 |
Continuous unrealized loss position 12 months or more, fair value | 0 | 6,254 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | (8,742) |
Continuous unrealized loss position total, fair value | 0 | 6,254 |
Continuous unrealized loss position total, unrealized losses | 0 | (8,742) |
Corporate Debt Securities [Member] | Investment Grade [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 944,337 | 656,434 |
Continuous unrealized loss position less than 12 months, unrealized losses | (61,314) | (8,765) |
Continuous unrealized loss position 12 months or more, fair value | 247,020 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | (12,963) | 0 |
Continuous unrealized loss position total, fair value | 1,191,357 | 656,434 |
Continuous unrealized loss position total, unrealized losses | (74,277) | (8,765) |
Corporate Debt Securities [Member] | Non-investment Grade [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 5,580 | 24,105 |
Continuous unrealized loss position less than 12 months, unrealized losses | (387) | (623) |
Continuous unrealized loss position 12 months or more, fair value | 8,616 | 9,926 |
Continuous unrealized loss position 12 months or more, unrealized losses | (11,593) | (10,693) |
Continuous unrealized loss position total, fair value | 14,196 | 34,031 |
Continuous unrealized loss position total, unrealized losses | (11,980) | (11,316) |
Other Securities [Member] | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale [Abstract] | ||
Continuous unrealized loss position less than 12 months, fair value | 4,490 | 76,692 |
Continuous unrealized loss position less than 12 months, unrealized losses | (1) | (1,908) |
Continuous unrealized loss position 12 months or more, fair value | 0 | 0 |
Continuous unrealized loss position 12 months or more, unrealized losses | 0 | 0 |
Continuous unrealized loss position total, fair value | 4,490 | 76,692 |
Continuous unrealized loss position total, unrealized losses | $ (1) | $ (1,908) |
BUSINESS SEGMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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BUSINESS SEGMENTS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating results and key financial measures for operating segments | The following tables present the operating results and other key financial measures for the individual operating segments for the three and nine months ended September 30, 2011 and 2010:
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STOCKHOLDERS' EQUITY (Details) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 1 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | Apr. 30, 2008
Series A Non-Cumulative Perpetual Convertible Preferred Stock [Member] | Sep. 30, 2011
Series A Non-Cumulative Perpetual Convertible Preferred Stock [Member] | Jul. 20, 2011
Series A Non-Cumulative Perpetual Convertible Preferred Stock [Member] | Dec. 29, 2010
Series B Fixed Rate Cumulative Perpetual Preferred Stock [Member] | Dec. 05, 2008
Series B Fixed Rate Cumulative Perpetual Preferred Stock [Member] | Mar. 30, 2010
Series C Cumulative Convertible Preferred Stock [Member] | Nov. 05, 2009
Series C Cumulative Convertible Preferred Stock [Member] | Sep. 30, 2011
Common Stock [Member] | Sep. 30, 2011
Common Stock [Member] | Dec. 31, 2007
Common Stock [Member] | Jul. 20, 2011
Common Stock [Member] | Mar. 30, 2010
Common Stock [Member] | Nov. 05, 2009
Common Stock [Member] | Sep. 30, 2011
Preferred Stock, Series A [Member] | Jan. 26, 2011
Warrants [Member] | Dec. 31, 2008
Warrants [Member] | |
Class of Stock [Line Items] | |||||||||||||||||||
Number of preferred shares issued (in shares) | 200,000 | 200,000 | 200,000 | 306,546 | 335,047 | ||||||||||||||
Preferred stock dividend rate (in hundredths) | 8.00% | ||||||||||||||||||
Preferred stock liquidation preference (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||||
Proceeds from issuance of convertible preferred stock | $ 194,100,000 | ||||||||||||||||||
Number of common stock shares convertible from each share of convertible preferred stock (in shares) | 64.9942 | 110.74197 | |||||||||||||||||
Convertible preferred stock conversion price premium per share of common stock based on closing price of common stock (in dollars per share) | $ 15.39 | ||||||||||||||||||
Conversion premium of the convertible preferred stock based on the closing price of the common stock (in hundredths) | 22.50% | ||||||||||||||||||
Closing price of common stock at issuance of convertible preferred stock (in dollars per share) | $ 12.56 | ||||||||||||||||||
Preferred shares outstanding (in shares) | 85,710 | 85,741 | 85,710 | ||||||||||||||||
Proceeds from issuance of preferred stock issued to the U.S. Treasury | 306,500,000 | ||||||||||||||||||
Cash paid to repurchase preferred stock plus accrued and unpaid dividends | 308,400,000 | ||||||||||||||||||
Value of preferred stock issued | 83,027,000 | 83,058,000 | 500,000,000 | ||||||||||||||||
Number of shares of convertible preferred stock converted to common shares in the private placement (in shares) | 335,047 | ||||||||||||||||||
Number of shares of common stock issued in the private placement (in shares) | 18,247,012 | ||||||||||||||||||
Number of shares of common stock issued upon conversion of convertible preferred stock (in shares) | 37,103,734 | ||||||||||||||||||
Preferred stock to common stock conversion price (in dollars per share) | $ 9.03 | ||||||||||||||||||
Amount of stock repurchase approved by the Board of Directors | 80,000,000 | ||||||||||||||||||
Dividend declaration date | July 20, 2011 | July 20, 2011 | |||||||||||||||||
Dividend per share (in dollars per share) | $ 20.00 | $ 0.05 | |||||||||||||||||
Dividend payment date | August 1, 2011 | August 24, 2011 | |||||||||||||||||
Dividend record date | July 15, 2011 | August 10, 2011 | |||||||||||||||||
Preferred stock cash dividends paid | 1,700,000 | 5,100,000 | |||||||||||||||||
Common stock cash dividends paid | 7,500,000 | 16,400,000 | |||||||||||||||||
Common shares outstanding at end of period (in shares) | 148,961,927 | 148,542,940 | 148,961,927 | 148,961,927 | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||||||
Initial price per share of common stock for which the warrants may be exercised (in dollars per share) | $ 15.15 | ||||||||||||||||||
Allocated fair value of warrants | 25,200,000 | ||||||||||||||||||
Warrants repurchased (in shares) | 1,517,555 | ||||||||||||||||||
Cash paid to repurchase warrants | $ 14,500,000 | $ 0 | $ 14,500,000 |
STOCKHOLDERS' EQUITY, Shares Excluded From Calculation Of Diluted EPS (Details) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Series A Non-Cumulative Perpetual Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from the computation of diluted EPS (in shares) | 0 | 5,573 | 0 | 5,573 |
Stock Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from the computation of diluted EPS (in shares) | 936 | 1,087 | 851 | 1,083 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Excluded from the computation of diluted EPS (in shares) | 519 | 32 | 342 | 271 |
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Impaired Non-covered Loans) (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Dec. 31, 2010 | |||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | $ 288,043 | $ 288,043 | $ 317,828 | [1] | |||||
Recorded investment | 207,962 | 207,962 | 281,006 | [1] | |||||
Related allowance | 8,437 | 8,437 | 10,024 | [1] | |||||
Average recorded investment | 147,782 | 239,699 | 317,160 | [1] | |||||
Interest income recognized (cash basis) | 756 | 2,267 | [2] | 7,204 | [1],[2] | ||||
Residential [Member] | Single-family [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 11,678 | 11,678 | 19,769 | [1] | |||||
Recorded investment | 11,350 | 11,350 | 18,876 | [1] | |||||
Related allowance | 487 | 487 | 219 | [1] | |||||
Average recorded investment | 5,874 | 11,666 | 21,212 | [1] | |||||
Interest income recognized (cash basis) | 20 | 61 | [2] | 209 | [1],[2] | ||||
Residential [Member] | Single-family [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 10,064 | 10,064 | 18,521 | [1] | |||||
Residential [Member] | Multifamily [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 35,400 | 35,400 | 34,708 | [1] | |||||
Recorded investment | 33,376 | 33,376 | 32,643 | [1] | |||||
Related allowance | 997 | 997 | 90 | [1] | |||||
Average recorded investment | 19,236 | 35,074 | 39,350 | [1] | |||||
Interest income recognized (cash basis) | 94 | 283 | [2] | 540 | [1],[2] | ||||
Residential [Member] | Multifamily [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 28,767 | 28,767 | 32,012 | [1] | |||||
Residential [Member] | Multifamily [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 4,609 | 4,609 | 631 | [1] | |||||
Commercial Real Estate [Member] | Single-family [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 1,286 | 1,286 | 355 | [1] | |||||
Commercial Real Estate [Member] | Income Producing [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 89,316 | 89,316 | 95,899 | [1] | |||||
Recorded investment | 64,524 | 64,524 | 88,699 | [1] | |||||
Related allowance | 2,563 | 2,563 | 1,557 | [1] | |||||
Average recorded investment | 46,175 | 66,745 | 100,004 | [1] | |||||
Interest income recognized (cash basis) | 259 | 776 | [2] | 2,174 | [1],[2] | ||||
Commercial Real Estate [Member] | Income Producing [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 54,555 | 54,555 | 82,345 | [1] | |||||
Commercial Real Estate [Member] | Income Producing [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 9,969 | 9,969 | 6,354 | [1] | |||||
Commercial Real Estate [Member] | Construction [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 64,526 | 64,526 | 88,586 | [1] | |||||
Recorded investment | 35,660 | 35,660 | 84,225 | [1] | |||||
Related allowance | 595 | 595 | 1,366 | [1] | |||||
Average recorded investment | 38,219 | 51,520 | 95,324 | [1] | |||||
Interest income recognized (cash basis) | 183 | 550 | [2] | 1,728 | [1],[2] | ||||
Commercial Real Estate [Member] | Construction [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 35,065 | 35,065 | 81,789 | [1] | |||||
Commercial Real Estate [Member] | Construction [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 595 | 595 | 2,436 | [1] | |||||
Commercial Real Estate [Member] | Land CRE [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 44,832 | 44,832 | 39,937 | [1] | |||||
Recorded investment | 34,615 | 34,615 | 29,002 | [1] | |||||
Related allowance | 1,648 | 1,648 | 4,324 | [1] | |||||
Average recorded investment | 15,560 | 39,393 | 32,820 | [1] | |||||
Interest income recognized (cash basis) | 92 | 276 | [2] | 1,326 | [1],[2] | ||||
Commercial Real Estate [Member] | Land CRE [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 30,816 | 30,816 | 22,082 | [1] | |||||
Commercial Real Estate [Member] | Land CRE [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 3,799 | 3,799 | 6,920 | [1] | |||||
Commercial and Industrial [Member] | Commercial Business [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 34,074 | 34,074 | 37,668 | [1] | |||||
Recorded investment | 21,164 | 21,164 | 26,941 | [1] | |||||
Related allowance | 2,147 | 2,147 | 2,468 | [1] | |||||
Average recorded investment | 19,350 | 27,730 | 27,378 | [1] | |||||
Interest income recognized (cash basis) | 104 | 311 | [2] | 1,199 | [1],[2] | ||||
Commercial and Industrial [Member] | Commercial Business [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 17,802 | 17,802 | 23,044 | [1] | |||||
Commercial and Industrial [Member] | Commercial Business [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 3,362 | 3,362 | 3,897 | [1] | |||||
Commercial and Industrial [Member] | Trade Finance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 4,489 | 4,489 | 0 | [1] | |||||
Recorded investment | 4,421 | 4,421 | 0 | [1] | |||||
Related allowance | 0 | 0 | 0 | [1] | |||||
Average recorded investment | 339 | 4,472 | 0 | [1] | |||||
Interest income recognized (cash basis) | 1 | 2 | [2] | 0 | [1],[2] | ||||
Commercial and Industrial [Member] | Trade Finance [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 4,421 | 4,421 | 0 | [1] | |||||
Commercial and Industrial [Member] | Trade Finance [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 0 | 0 | 0 | [1] | |||||
Consumer [Member] | Student Loans [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 0 | 0 | 0 | [1] | |||||
Recorded investment | 0 | 0 | 0 | [1] | |||||
Related allowance | 0 | 0 | 0 | [1] | |||||
Average recorded investment | 0 | 0 | 0 | [1] | |||||
Interest income recognized (cash basis) | 0 | 0 | [2] | 0 | [1],[2] | ||||
Consumer [Member] | Student Loans [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 0 | 0 | 0 | [1] | |||||
Consumer [Member] | Student Loans [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 0 | 0 | 0 | [1] | |||||
Consumer [Member] | Other Consumer [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Unpaid principal balance | 3,728 | 3,728 | 1,261 | [1] | |||||
Recorded investment | 2,852 | 2,852 | 620 | [1] | |||||
Related allowance | 0 | 0 | 0 | [1] | |||||
Average recorded investment | 3,029 | 3,099 | 1,072 | [1] | |||||
Interest income recognized (cash basis) | 3 | 8 | [2] | 28 | [1],[2] | ||||
Consumer [Member] | Other Consumer [Member] | No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 2,852 | 2,852 | 620 | [1] | |||||
Consumer [Member] | Other Consumer [Member] | With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 0 | 0 | 0 | [1] | |||||
No Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | 184,342 | 184,342 | 260,413 | [1] | |||||
With Related Allowance [Member] | |||||||||
Financing Receivable, Impaired [Line Items] | |||||||||
Recorded investment | $ 23,620 | $ 23,620 | $ 20,593 | [1] | |||||
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FAIR VALUE | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | NOTE 3 - FAIR VALUE Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market and income approaches. Based on these approaches, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy noted below. The hierarchy is based on the quality and reliability of the information used to determine fair values. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to data lacking transparency. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
The Company records investment securities available-for-sale, equity swap agreements, derivative liabilities, foreign exchange options and interest rate swaps at fair value on a recurring basis. Certain other assets such as mortgage servicing assets, impaired loans, other real estate owned, loans held for sale, goodwill, premiums on acquired deposits and other investments are recorded at fair value on a nonrecurring basis. Nonrecurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the remeasurement is performed. In determining the appropriate hierarchy levels, the Company performs a detailed analysis of assets and liabilities that are subject to fair value disclosure. The following tables present both financial and nonfinancial assets and liabilities that are measured at fair value on a recurring and nonrecurring basis. These assets and liabilities are reported on the condensed consolidated balance sheets at their fair values as of September 30, 2011 and December 31, 2010. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. There were no transfers in and out of Levels 1 and 2 during the first nine months of 2011. There were also no transfers in and out of Levels 1 and 3 or Levels 2 and 3 during the first nine months of 2011.
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At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. The following tables provide a reconciliation of the beginning and ending balances for major asset and liability categories measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2011 and 2010:
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Valuation Methodologies Investment Securities Available-for-Sale-The fair values of available-for-sale investment securities are generally determined by prices obtained from independent external pricing service providers who have experience in valuing these securities or reference to the average of at least two quoted market prices obtained from independent external brokers. In obtaining such valuation information from third parties, the Company has reviewed the methodologies used to develop the resulting fair values. The Company's Level 3 available-for-sale securities include four pooled trust preferred securities. The fair values of these investment securities represent less than 1% of the total available-for-sale investment securities. The fair values of the pooled trust preferred securities have traditionally been based on the average of at least two quoted market prices obtained from independent external brokers since broker quotes in an active market are given the highest priority. However, as a result of the continued illiquidity in the pool trust preferred securities market, the market for these securities has been inactive since mid-2007. It is the Company's view that current broker prices (which are typically non-binding) on certain pooled trust preferred securities are based on forced liquidation or distressed sale values in very inactive markets that are not representative of the fair value of these securities. As such, the Company considered what weight, if any, to place on transactions that are not orderly when estimating fair value. For the pooled trust preferred securities, the fair value was derived based on discounted cash flow analyses (the income method) prepared by management. In order to determine the appropriate discount rate used in calculating fair values derived from the income method for the pooled trust preferred securities, the Company has made assumptions using an exit price approach related to the implied rate of return which have been adjusted for general changes in market rates, estimated changes in credit quality and liquidity risk premium, specific nonperformance, and default experience in the collateral underlying the securities. The losses recorded in the period are recognized in noninterest income. Equity Swap Agreements-The Company has entered into equity swap agreements to hedge against market fluctuations in a promotional equity index certificate of deposit product offered to bank customers. This deposit product, which has a term of 5 years, pays interest based on the performance of the Hang Seng China Enterprises Index (“HSCEI”). The fair value of these equity swap agreements is based on the income approach. The fair value is based on the change in the value of the HSCEI and the volatility of the call option over the life of the individual swap agreement. The option value is derived based on the volatility, the interest rate, and the time remaining to maturity of the call option. The Company's consideration of its counterparty's credit risk resulted in a nominal adjustment to the valuation of the equity swap agreements for the nine months ended September 30, 2011. The valuation of equity swap agreements falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of these derivative contracts. The fair value of the derivative contracts is provided by a third party that the Company places reliance on. Derivatives Liabilities-The Company's derivatives liabilities include derivatives payable that falls within Level 3 and all other derivative liabilities which fall within Level 2. The derivatives payable are recorded in conjunction with certain certificates of deposit (“host instrument”). These CD's pay interest based on changes in either the HSCEI or based on changes in the Chinese currency Renminbi (“RMB”), as designated, and are included in interest-bearing deposits on the condensed consolidated balance sheets. The fair value of these embedded derivatives is based on the income approach. The Company's consideration of its own credit risk resulted in a nominal adjustment to the valuation of the derivative liabilities for the nine months ended September 30, 2011. The valuation of the derivatives payable falls within Level 3 of the fair value hierarchy since the significant inputs used in deriving the fair value of these derivative contracts are not directly observable. The Level 2 derivative liabilities are mostly comprised of the off-setting interest rate swaps. Refer to “Interest Rate Swaps” within this footnote for complete discussion. Foreign Exchange Options-The Company has entered into foreign exchange option contracts with major investment firms. The settlement amount is determined based upon the performance of the Chinese currency RMB relative to the U.S. Dollar (“USD”) over the 5-year term of the contract. The performance amount is computed based on the average quarterly value of the RMB per the USD as compared to the initial value. The fair value of the derivative contract is provided by third parties and is determined based on the change in the RMB and the volatility of the option over the life of the agreement. The option value is derived based on the volatility of the option, interest rate, currency rate and time remaining to the maturity. The Company's consideration of the counterparty's credit risk resulted in a $0.3 million adjustment to the valuation of the foreign exchange options for the nine months ended September 30, 2011. The valuation of the option contract falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of this derivative contract. Interest Rate Swaps-The Company has entered into pay-fixed, receive-variable swap contracts with institutional counterparties to hedge against interest rate swap products offered to bank customers. This product allows borrowers to lock in attractive intermediate and long-term interest rates by entering into a pay-fixed, receive-variable swap contract with the Company, resulting in the customer obtaining a synthetic fixed rate loan. The Company has also entered into pay-variable, receive-fixed swap contracts with institutional counterparties to hedge against certificates of deposit issued. This product allows the Company to lock in attractive floating rate funding. The fair value of the interest rate swap contracts is based on a discounted cash flow approach. The Company's consideration of the counterparty's credit risk resulted in a $1.1 million adjustment as of September 30, 2011. The valuation of the interest swaps falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of the derivative contracts. Mortgage Servicing Assets (“MSAs”)-The Company records MSAs in conjunction with its loan sale and securitization activities since the servicing of the underlying loans is retained by the Bank. MSAs are initially measured at fair value using an income approach. The initial fair value of MSAs is determined based on the present value of estimated net future cash flows related to contractually-specified servicing fees. The valuation for MSAs falls within Level 3 of the fair value hierarchy since there are no quoted prices for MSAs and the significant inputs used to determine fair value are not directly observable. The valuation of MSAs is determined using a discounted cash flow approach utilizing the appropriate yield curve and several market-derived assumptions including prepayment speeds, servicing cost, delinquency and foreclosure costs and behavior, and float earnings rate. Net cash flows are present valued using a market-derived discount rate. The resulting fair value is then compared to recently observed bulk market transactions with similar characteristics. Impaired Loans-The Company's impaired loans are generally measured using the fair value of the underlying collateral, which is determined based on the most recent valuation information received. The fair values may be adjusted based on factors such as the Company's historical knowledge and changes in market conditions from the time of valuation. Impaired loans fall within Level 3 of the fair value hierarchy since they are measured at fair value based on the most recent valuation information received on the underlying collateral. Other Real Estate Owned-The Company's OREO represents properties acquired through foreclosure or through full or partial satisfaction of loans and are recorded at estimated fair value less cost to sell at the time of foreclosure and at the lower of cost or estimated fair value less cost to sell subsequent to acquisition. The fair values of OREO properties are based on third party appraisals, broker price opinions, or accepted written offers. These valuations are reviewed and approved by the Company's appraisal department, credit review department, or OREO department. OREO properties are classified as Level 2 assets in the fair value hierarchy. The non-covered OREO balance of $21.2 million and the covered OREO balance of $87.3 million are included in the condensed consolidated balance sheets as of September 30, 2011. Loans Held for Sale-The Company's loans held for sale are carried at the lower of cost or market value. These loans are currently comprised of mostly student loans. For those loans, the fair value of loans held for sale is derived from current market prices and comparative current sales. For the remainder of the loans held for sale, which fall within Level 3, the fair value is derived from third party sale analysis, existing sale agreements, or appraisal reports on the loans' underlying collateral. As such, the Company records any fair value adjustments on a nonrecurring basis. Fair Value of Financial Instruments The carrying amounts and fair values of the Company's financial instruments as of September 30, 2011 and December 31, 2010 were as follows:
The methods and assumptions used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value are explained below: Cash and Cash Equivalents-The carrying amounts approximate fair values due to the short-term nature of these instruments. Short-Term Investments-The fair values of short-term investments generally approximate their book values due to their short maturities. Securities Purchased Under Resale Agreements-Securities purchased under resale agreements with original maturities of 90 days or less are included in cash and cash equivalents. The fair value of securities purchased under resale agreements with original maturities of more than 90 days is estimated by discounting the cash flows based on expected maturities or repricing dates utilizing estimated market discount rates. Investment Securities Available-for-Sale-The fair values of the investment securities available-for-sale are generally determined by reference to the average of at least two quoted market prices obtained from independent external brokers or independent external pricing service providers who have experience in valuing these securities. In obtaining such valuation information from third parties, the Company has reviewed the methodologies used to develop the resulting fair values. For private-label mortgage-backed securities and pooled trust preferred securities, fair values are based on discounted cash flow analyses. Loans Held for Sale-The fair value of loans held for sale is derived from current market prices and comparative current sales. For loans held for sale, which fall within Level 3, the fair value is derived from third party sale analysis, existing sale agreements, or appraisal reports. Loans Receivable, net (includes covered and non-covered loans)-The fair value of loans is determined based on the discounted cash flow approach. The discount rate is derived from the associated yield curve plus spreads, and reflects the offering rates in the market for loans with similar financial characteristics. No adjustments have been made for changes in credit within the loan portfolio. It is management's opinion that the allowance for loan losses pertaining to performing and nonperforming loans results in a fair valuation of credit for such loans. Investment in Federal Home Loan Bank Stock and Federal Reserve Bank Stock-The carrying amount approximates fair value, as the stock may be sold back to the Federal Home Loan Bank and the Federal Reserve Bank at carrying value. Accrued Interest Receivable-The carrying amount of accrued interest receivable approximates fair value due to its short-term nature. Equity Swap Agreements-The fair value of the derivative contracts is provided by a third party and is determined based on the change in value of the HSCEI and the volatility of the call option over the life of the individual swap agreement. The option value is derived based on the volatility of the option, interest rate, and time remaining to maturity. We also considered the counterparty's credit risk in determining the fair value. Foreign Exchange Options-The fair value of the derivative contracts is provided by third parties and is determined based on the change in the RMB and the volatility of the option over the life of the agreement. The option value is derived based on the volatility of the option, interest rate, and time remaining to maturity. We also considered the counterparty's credit risk in determining the fair value. Interest Rate Swaps-The fair value of the interest rate swap contracts is provided by a third party and is determined based on a discounted cash flow approach. The Company also considered the counterparty's credit risk in determining the fair value. Customer Deposit Accounts-The fair value of customer deposit accounts is determined based on the discounted cash flow approach. The discount rate is derived from the associated yield curve, plus spread, if any. For core deposits (demand, savings, and money market deposits), the cash outflows are projected by the decay rate based on the Bank's core deposit premium study and are discounted using the London Interbank Offered Rate (“LIBOR”) yield curve. For time deposits, the cash flows are based on the contractual runoff and are discounted by the Bank's current offering rates, plus spread. Federal Funds Sold and Federal Funds Purchased-The carrying amounts approximate fair values due to the short-term nature of these instruments. Federal Home Loan Bank Advances-The fair value of Federal Home Loan Bank (“FHLB”) advances is estimated based on the discounted value of contractual cash flows, using rates currently offered by the FHLB of San Francisco for fixed-rate credit advances with similar remaining maturities at each reporting date. Securities Sold Under Repurchase Agreements-For securities sold under repurchase agreements with original maturities of 90 days or less, the carrying amounts approximate fair values due to the short-term nature of these instruments. At September 30, 2011 and December 31, 2010, most of the securities sold under repurchase agreements are long-term in nature and the fair values of securities sold under repurchase agreements are calculated by discounting future cash flows based on expected maturities or repricing dates, utilizing estimated market discount rates, and taking into consideration the call features of each instrument. Notes Payable-The carrying amount of notes payable approximates fair value as these notes are payable on demand. Accrued Interest Payable-The carrying amount of accrued interest payable approximates fair value due to its short-term nature. Long-Term Debt-The fair values of long-term debt are estimated by discounting the cash flows through maturity based on current market rates the Bank would pay for new issuances. Derivatives Liabilities-The Company's derivatives liabilities include “derivatives payable” and all other derivative liabilities. The Company's derivatives payable are recorded in conjunction with certain certificates of deposit (“host instrument”). These CD's pay interest based on changes in either the HSCEI or based on changes in the RMB, as designated. The fair value of derivatives payable is estimated using the income approach. Additionally, we considered our own credit risk in determining the valuation. The other derivative liabilities are mostly comprised of the off-setting interest rate swaps. The fair value of the interest rate swap contracts is provided by a third party and is determined based on a discounted cash flow approach. The Company also considered the counterparty's credit risk in determining the fair value. The fair value estimates presented herein are based on pertinent information available to management as of each reporting date. Although we are not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and therefore, current estimates of fair value may differ significantly from the amounts presented herein. |
DERIVATIVE FINANCIAL INSTRUMENTS, Fair Values Of Derivative Instruments (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | ||||
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Interest Rate Swaps [Member] | Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | $ 100,000 | $ 0 | ||||
Derivative Assets | 1,658 | [1] | 0 | [1] | ||
Derivative Liabilities | 0 | [1] | 0 | [1] | ||
Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | 100,000 | 0 | ||||
Derivative Assets | 1,658 | [1] | 0 | [1] | ||
Derivative Liabilities | 0 | [1] | 0 | [1] | ||
Foreign Exchange Options [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | 85,614 | 85,614 | ||||
Derivative Assets | 4,392 | [1] | 5,084 | [1] | ||
Derivative Liabilities | 2,766 | [1] | 3,239 | [1] | ||
Interest Rate Swaps [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | 410,898 | 4,098 | ||||
Derivative Assets | 16,133 | [1] | 13 | [1] | ||
Derivative Liabilities | 17,237 | [1] | 14 | [1] | ||
Equity Swap Agreements [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | 22,709 | 22,884 | ||||
Derivative Assets | 200 | [1] | 206 | [1] | ||
Derivative Liabilities | 203 | [1] | 210 | [1] | ||
Not Designated as Hedging Instrument [Member] | ||||||
Derivatives, Fair Value [Line Items] | ||||||
Notional Amount | 519,221 | 112,596 | ||||
Derivative Assets | 20,725 | [1] | 5,303 | [1] | ||
Derivative Liabilities | $ 20,206 | [1] | $ 3,463 | [1] | ||
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NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Non Covered Loans And Allowance For Loan Losses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of loans receivable, excluding covered loans | The following is a summary of loans receivable, excluding covered loans (“non-covered loans”) for the periods indicated:
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Summary of non-covered loans by credit quality | The tables below present the non-covered loan portfolio by credit quality indicator as of September 30, 2011 and December 31, 2010. As of September 30, 2011, non-covered loans graded Substandard and Doubtful have decreased by a net $133.5 million, or 19% from December 31, 2010. There were no Loss grade loans as of September 30, 2011 and December 31, 2010.
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Age analysis of nonaccrual and past due non-covered loans and loans held for sale | The tables below present an aging analysis of nonaccrual loans, past due non-covered loans and loans held for sale, segregated by class of loans, as of September 30, 2011 and December 31, 2010:
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Summary of interest income foregone on nonaccrual loans | The following is a summary of interest income foregone on nonaccrual loans:
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Loans modified as troubled debt restructurings | The following table provides information on loans modified as of September 30, 2011 that were modified as TDRs during the three and nine months ended September 30, 2011:
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Troubled debt restructurings that subsequently defaulted | The following table provides information on TDRs that subsequently defaulted as of September 30, 2011 for the nine months ended September 30, 2011. There were no TDRs that subsequently defaulted during the three months ended September 30, 2011.
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Summary of impaired non-covered loans, including interest income recognized | Impaired non-covered loans as of September 30, 2011 and December 31, 2010 are set forth in the following tables. The interest income recognized on impaired loans, excluding performing TDRs, is recognized on a cash basis when received.
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Detail of activity in allowance for loan losses, for both covered and non-covered loans, by portfolio segment | The following tables detail activity in the allowance for loan losses, for both non-covered and covered loans, by portfolio segment for the three and nine months ended September 30, 2011 and the year ended December 31, 2010. Allocation of a portion of the allowance to one segment of the loan portfolio does not preclude its availability to absorb losses in other segments.
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Recorded investment in total loans receivable by portfolio segment, disaggregated by impairment methodology | The Company's recorded investment in total loans receivable as of September 30, 2011 and December 31, 2010 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company's impairment methodology is as follows:
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