XML 37 R28.htm IDEA: XBRL DOCUMENT v3.19.3
Fair Value Measurement (Tables)
 9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value, by Balance Sheet Grouping
The following table presents estimated fair values of the Company's financial instruments as of September 30, 2019 and December 31, 2018, whether or not recognized or recorded at fair value in the Condensed Consolidated Balance Sheets:  
(in thousands)September 30, 2019December 31, 2018
 LevelCarrying ValueFair ValueCarrying ValueFair Value
FINANCIAL ASSETS:    
Cash and cash equivalents1  $1,191,444  $1,191,444  $622,637  $622,637  
Equity and other investment securities1,2  64,764  64,764  61,841  61,841  
Investment securities available for sale2  2,842,076  2,842,076  2,977,108  2,977,108  
Investment securities held to maturity3  3,320  4,338  3,606  4,644  
Loans held for sale, at fair value2  355,022  355,022  166,461  166,461  
Loans and leases, net
3  21,364,506  21,566,083  20,277,795  20,117,939  
Restricted equity securities1  54,463  54,463  40,268  40,268  
Residential mortgage servicing rights2,3  151,383  151,383  169,025  169,025  
Bank owned life insurance1  318,533  318,533  313,626  313,626  
Derivatives2,3  200,412  200,412  49,484  49,484  
Visa Inc. Class B common stock (1)
3  —  —  —  99,353  
FINANCIAL LIABILITIES:    
Deposits1,2  $22,434,734  $22,457,847  $21,137,486  $21,116,852  
Securities sold under agreements to repurchase2  296,717  296,717  297,151  297,151  
Borrowings2  1,106,674  1,105,167  751,788  738,107  
Junior subordinated debentures, at fair value3  267,798  267,798  300,870  300,870  
Junior subordinated debentures, at amortized cost3  88,553  69,511  88,724  76,569  
Derivatives2  6,285  6,285  15,982  15,982  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following tables present information about the Company's assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018: 
(in thousands) 
September 30, 2019
DescriptionTotalLevel 1Level 2Level 3
FINANCIAL ASSETS:
Equity and other investment securities    
Investments in mutual funds and other securities$52,218  $52,218  $—  $—  
Equity securities held in rabbi trusts12,102  12,102  —  —  
Other investments securities (1)
444  —  444  —  
Investment securities available for sale    
U.S. Treasury and agencies587,200  —  587,200  —  
Obligations of states and political subdivisions269,030  —  269,030  —  
Residential mortgage-backed securities and collateralized mortgage obligations1,985,846  —  1,985,846  —  
Loans held for sale, at fair value355,022  —  355,022  —  
Residential mortgage servicing rights, at fair value (2)
151,383  —  36,191  115,192  
Derivatives    
Interest rate lock commitments9,070  —  —  9,070  
Interest rate forward sales commitments801  —  801  —  
Interest rate swaps189,366  —  189,366  —  
Foreign currency derivative1,175  —  1,175  —  
Total assets measured at fair value$3,613,657  $64,320  $3,425,075  $124,262  
FINANCIAL LIABILITIES:
Junior subordinated debentures, at fair value$267,798  $—  $—  $267,798  
Derivatives    
Interest rate forward sales commitments1,260  —  1,260  —  
Interest rate swaps4,010  —  4,010  —  
Foreign currency derivative1,015  —  1,015  —  
Total liabilities measured at fair value$274,083  $—  $6,285  $267,798  

(1) Other investment securities includes securities held by Umpqua Investments as trading debt securities.
(2) For more discussion of the portion of MSR at fair value transferred to level 2, refer to Note 12, Subsequent Event.
(in thousands) December 31, 2018
DescriptionTotalLevel 1Level 2Level 3
FINANCIAL ASSETS:
Equity and other investment securities    
Investments in mutual funds and other securities$50,475  $50,475  $—  $—  
Equity securities held in rabbi trusts
10,918  10,918  —  —  
  Other investments securities (1)
448  —  448  —  
Investment securities available for sale
U.S. Treasury and agencies39,656  —  39,656  —  
Obligations of states and political subdivisions309,171  —  309,171  —  
Residential mortgage-backed securities and collateralized mortgage obligations2,628,281  —  2,628,281  —  
Loans held for sale, at fair value166,461  —  166,461  —  
Residential mortgage servicing rights, at fair value169,025  —  —  169,025  
Derivatives    
Interest rate lock commitments6,757  —  —  6,757  
Interest rate forward sales commitments1  —  1  —  
Interest rate swaps42,276  —  42,276  —  
Foreign currency derivative450  —  450  —  
Total assets measured at fair value$3,423,919  $61,393  $3,186,744  $175,782  
FINANCIAL LIABILITIES:
Junior subordinated debentures, at fair value$300,870  $—  $—  $300,870  
Derivatives    
Interest rate forward sales commitments2,963  —  2,963  —  
Interest rate swaps12,746  —  12,746  —  
Foreign currency derivative273  —  273  —  
Total liabilities measured at fair value$316,852  $—  $15,982  $300,870  
(1) Other investment securities includes securities held by Umpqua Investments as trading debt securities.
Fair Value Measurement Inputs and Valuation Techniques
The following table provides a description of the valuation technique, significant unobservable inputs, and qualitative information about the unobservable inputs for the Company's assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at September 30, 2019: 
Financial InstrumentValuation TechniqueUnobservable InputWeighted Average
Residential mortgage servicing rightsDiscounted cash flow  
  Constant prepayment rate13.35%  
  Discount rate9.75%  
Interest rate lock commitmentsInternal pricing model
Pull-through rate87.56%  
Junior subordinated debenturesDiscounted cash flow  
  Credit spread5.27%  
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation
The following tables provide a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the three and nine months ended September 30, 2019 and 2018: 

(in thousands)Three Months EndedThree Months Ended
September 30, 2019September 30, 2018
Residential mortgage servicing rights  Interest rate lock commitments, net  Junior subordinated debentures, at fair value  Residential mortgage servicing rights  Interest rate lock commitments, net  Junior subordinated debentures, at fair value  
Beginning Balance$139,780  $8,149  $277,028  $166,217  $6,782  $280,669  
Transfer out of Level 3(36,191) —  —  —  —  —  
Change included in earnings4,210  1,456  4,495  199  (284) 4,486  
Change in fair values included in comprehensive income/loss—  —  (8,450) —  —  2,409  
Purchases and issuances7,393  9,027  —  8,622  4,679  —  
Sales and settlements—  (9,562) (5,275) —  (6,018) (4,718) 
Ending Balance$115,192  $9,070  $267,798  $175,038  $5,159  $282,846  
Net change in unrealized gains or (losses) relating to items held at end of period$11,045  $9,070  $(3,955) $6,206  $5,159  $6,895  
Nine Months EndedNine Months Ended
September 30, 2019September 30, 2018
Residential mortgage servicing rights  Interest rate lock commitments, net  Junior subordinated debentures, at fair value  Residential mortgage servicing rights  Interest rate lock commitments, net  Junior subordinated debentures, at fair value  
Beginning Balance$169,025  $6,757  $300,870  $153,151  $4,752  $277,155  
Transfer out of Level 3(36,191) —  —  —  —  —  
Change included in earnings(34,414) 4,455  13,952  (125) (1,288) 12,544  
Change in fair values included in comprehensive income/loss—  —  (32,254) —  —  5,605  
Purchases and issuances16,772  21,318  —  22,012  19,211  —  
Sales and settlements—  (23,460) (14,770) —  (17,516) (12,458) 
Ending Balance$115,192  $9,070  $267,798  $175,038  $5,159  $282,846  
Net change in unrealized gains or (losses) relating to items held at end of period$(14,243) $9,070  $(18,302) $17,983  $5,159  $18,149  
Changes in residential mortgage servicing rights carried at fair value are recorded in residential mortgage banking revenue within non-interest income. Gains (losses) on interest rate lock commitments carried at fair value are recorded in residential mortgage banking revenue within non-interest income. The contractual interest expense on the junior subordinated debentures is recorded on an accrual basis as interest on junior subordinated debentures within interest expense. Settlements related to the junior subordinated debentures represent the payment of accrued interest that is embedded in the fair value of these liabilities.
Fair Value Measurements, Nonrecurring
The following tables present information about the Company's assets and liabilities measured at fair value on a nonrecurring basis for which a nonrecurring change in fair value has been recorded during the reporting period.  The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were made, and not necessarily the fair value as of the dates reported upon. 
(in thousands)September 30, 2019
 TotalLevel 1Level 2Level 3
Loans and leases$25,000  $—  $—  $25,000  
Other real estate owned2,390  —  —  2,390  
 $27,390  $—  $—  $27,390  

(in thousands) 
December 31, 2018
 TotalLevel 1Level 2Level 3
Loans and leases$98,696  $—  $—  $98,696  
Other real estate owned7,532  —  —  7,532  
 $106,228  $—  $—  $106,228  
Fair Value, Measured on Recurring Basis, Gain (Loss) Included in Earnings
The following table presents the losses resulting from nonrecurring fair value adjustments for the three and nine months ended September 30, 2019 and 2018:  
 (in thousands)
Three Months EndedNine Months Ended
 September 30, 2019September 30, 2018September 30, 2019September 30, 2018
Loans and leases$20,435  $14,436  $51,212  $42,158  
Other real estate owned279  —  3,013  66  
Total loss from nonrecurring measurements$20,714  $14,436  $54,225  $42,224  
Fair Value Option, Disclosures
The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale accounted for under the fair value option as of September 30, 2019 and December 31, 2018:

(in thousands)September 30, 2019December 31, 2018
Fair Value Aggregate Unpaid Principal BalanceFair Value Less Aggregate Unpaid Principal BalanceFair ValueAggregate Unpaid Principal BalanceFair Value Less Aggregate Unpaid Principal Balance
  Loans held for sale$355,022  $343,073  $11,949  $166,461  $160,270  $6,191