Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Assets and Liabilities Carried at Fair Value on Recurring Basis

The following tables present information on the assets measured and recorded at fair value on a recurring basis as of the dates indicated:



	Fair Value Measurements as of
	December 31, 2016
Measured on a Recurring Basis:	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Residential MBS and CMOs:
Agency MBS	$	502,443	$	—	$	502,443	$	—
Agency CMOs	146,289		—		146,289		—
Private label CMOs	125,469		—		68,567		56,902
Municipal securities	1,456,459		—		1,456,459		—
Agency commercial MBS	547,692		—		547,692		—
Corporate debt securities	47,509		—		47,509		—
Collateralized loan obligations	156,887		—		156,887		—
SBA securities	178,845		—		178,845		—
Asset-backed and other securities	62,237		2,080		51,784		8,373
Total securities available-for-sale	3,223,830		2,080		3,156,475		65,275
Derivative assets	694		—		694		—
Equity warrants	5,497		—		—		5,497
Total recurring assets	$	3,230,021	$	2,080	$	3,157,169	$	70,772
Derivative liabilities	$	3,285	$	—	$	3,285	$	—



	Fair Value Measurements as of
	December 31, 2015
Measured on a Recurring Basis:	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Residential MBS and CMOs:
Agency MBS	$	667,840	$	—	$	667,840	$	—
Agency CMOs	194,755		—		194,755		—
Private label CMOs	144,796		—		63,555		81,241
Municipal securities	1,547,331		—		1,547,331		—
Agency commercial MBS	391,441		—		391,441		—
Corporate debt securities	48,424		—		48,424		—
Collateralized loan obligations	132,189		—		132,189		—
SBA securities	211,157		—		211,157		—
US Treasury securities	69,380		69,380		—		—
Agency debt securities	36,913		—		36,913		—
Asset-backed and other securities	115,211		2,562		94,449		18,200
Total securities available-for-sale	3,559,437		71,942		3,388,054		99,441
Derivative assets	11,919		—		11,919		—
Equity warrants	4,914		—		—		4,914
Total recurring assets	$	3,576,270	$	71,942	$	3,399,973	$	104,355
Derivative liabilities	$	1,397	$	—	$	1,397	$	—

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table presents information about the quantitative inputs and assumptions used in the modified Black-Scholes option pricing model to determine the fair value for our Level 3 equity warrants measured at fair value on a recurring basis as of December 31, 2016:



	Equity Warrants
	Weighted
	Average
	Input
Unobservable Inputs:
Volatility	17.9%
Risk-free interest rate	1.6%
Remaining life assumption (in years)	3.8

The following table presents information about the quantitative inputs and assumptions used to determine the fair values provided by our third party pricing service for our Level 3 private label CMOs and asset-backed securities available-for-sale measured at fair value on a recurring basis as of December 31, 2016:



	Private Label CMOs		Asset-Backed Securities
		Weighted		Weighted
	Range of	Average	Range of	Average
	Inputs	Input	Inputs	Input
Unobservable Inputs:
Voluntary annual prepayment speeds	0.1% - 29.3%	11.7%	5% - 40%	15.1%
Annual default rates	0.1% - 15.4%	1.7%	1% - 5%	3.4%
Loss severity rates	0.1% - 96.5%	33.7%	10% - 91%	52.3%
Discount rates	0.9% - 24.0%	3.7%	2.2% - 8.5%	3.0%

Fair Value, Assets Measured on Recurring Basis, Significant Unobservable Inputs (Level 3) Reconciliation

The following table summarizes activity for our Level 3 private label CMOs measured at fair value on a recurring basis for the years indicated:



	Year Ended December 31,
Level 3 Private Label CMOs:	2016			2015			2014
	(In thousands)
Balance, beginning of year	$	81,241		$	33,947		$	37,904
Total included in earnings	1,636			1,104			1,627
Total unrealized loss in comprehensive income	(1,648		)	(1,388		)	(344		)
Net settlements	(24,327		)	(3,881		)	(5,240		)
Addition from the Square 1 acquisition	—			51,459			—
Balance, end of year	$	56,902		$	81,241		$	33,947

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

The following table summarizes activity for our Level 3 equity warrants measured at fair value on a recurring basis for the year ended December 31, 2016 and the period from the October 6, 2015 Square 1 acquisition date to December 31, 2015:



	Year Ended			Period Ended
Equity Warrants:	December 31, 2016			December 31, 2015
				(In thousands)
Balance, beginning of year or acquisition date	$	4,914		$	5,552
Total included in earnings	1,402			530
Sales	(1,894		)	(1,529		)
Issuances	1,911			363
Transfers to securities available-for-sale	(836		)	(2		)
Balance, end of year	$	5,497		$	4,914

Assets carried at fair value on a nonrecurring basis

The following tables present assets measured at fair value on a non‑recurring basis as of the dates indicated:



	Fair Value Measurement as of
	December 31, 2016
Measured on a Non‑Recurring Basis:	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired Non‑PCI loans	$	149,749	$	—	$	1,661	$	148,088
OREO	11,224		—		11,224		—
Investments carried at cost	242		—		—		242
Total non-recurring	$	161,215	$	—	$	12,885	$	148,330



	Fair Value Measurement as of
	December 31, 2015
Measured on a Non‑Recurring Basis:	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired Non‑PCI loans	$	40,817	$	—	$	9,367	$	31,450
OREO	14,101		—		14,101		—
Investments carried at cost	107		—		—		107
Total non-recurring	$	55,025	$	—	$	23,468	$	31,557

Net Losses (Gains) on Nonrecurring Assets [Table Text Block]

The following table presents losses recognized on assets measured on a nonrecurring basis for the years indicated:



	Year Ended December 31,
Loss on Assets Measured on a Non‑Recurring Basis:	2016		2015		2014
	(In thousands)
Impaired Non‑PCI loans	$	43,240	$	16,097	$	7,006
Other real estate owned	2,576		4,726		6,737
Investments carried at cost	10		17		141
Total net loss	$	45,826	$	20,840	$	13,884

Fair Value Inputs, Assets, Quantitative Information

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2016:



			Valuation	Unobservable		Weighted
Asset:	Fair Value		Technique	Inputs	Range	Average
	(In thousands)
Impaired Non-PCI loans	$	65,436	Discounted cash flows	Discount rates	0% - 8.75%	6.74%
	73,569		Third party appraisals	Discounts	9.00% - 22.00%	17.20%
	9,083		Third party appraisals	No discounts
Investments carried at cost	242		Market and income approach	Illiquidity discount	75%	75%
Total non-recurring Level 3	$	148,330

Fair Value, by Balance Sheet Grouping

The following tables present a summary of the carrying values and estimated fair values of certain financial instruments as of the dates indicated:



	December 31, 2016
	Carrying or
	Contract		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	337,965	$	337,965	$	337,965	$	—	$	—
Interest‑earning deposits in financial institutions	81,705		81,705		81,705		—		—
Securities available‑for‑sale	3,223,830		3,223,830		2,080		3,156,475		65,275
Investment in FHLB stock	21,870		21,870		—		21,870		—
Investments carried at cost	1,416		3,843		—		—		3,843
Loans and leases, net	15,298,716		15,494,808		—		1,661		15,493,147
Derivative assets	694		694		—		694		—
Equity warrants	5,497		5,497		—		—		5,497

Financial Liabilities:
Deposits:
Demand, interest checking, money market, and
savings deposits	13,698,321		13,698,321		—		13,698,321		—
Time deposits	2,172,290		2,166,187		—		2,166,187		—
Borrowings	905,812		905,838		591,000		314,838		—
Subordinated debentures	440,744		424,507		—		424,507		—
Derivative liabilities	3,285		3,285		—		3,285		—



	December 31, 2015
	Carrying or
	Contract		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	161,020	$	161,020	$	161,020	$	—	$	—
Interest‑earning deposits in financial institutions	235,466		235,466		235,466		—		—
Securities available‑for‑sale	3,559,437		3,559,437		71,942		3,388,054		99,441
Investment in FHLB stock	19,710		19,710		—		19,710		—
Investments carried at cost	2,267		6,789		—		—		6,789
Loans and leases, net	14,363,143		14,393,558		—		9,367		14,384,191
Derivative assets	11,919		11,919		—		11,919		—
Equity warrants	4,914		4,914		—		—		4,914

Financial Liabilities:
Deposits:
Demand, interest checking, money market, and
savings deposits	11,513,826		11,513,826		—		11,513,826		—
Time deposits	4,152,356		4,152,920		—		4,152,920		—
Borrowings	621,914		622,438		618,000		4,438		—
Subordinated debentures	436,000		419,762		—		419,762		—
Derivative liabilities	1,397		1,397		—		1,397		—

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details