Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

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, 2017
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Residential MBS and CMOs:
Agency MBS	$	246,274	$	—	$	246,274	$	—
Agency CMOs	275,709		—		275,709		—
Private label CMOs	125,987		—		103,113		22,874
Municipal securities	1,680,068		—		1,680,068		—
Agency commercial MBS	1,163,969		—		1,163,969		—
Corporate debt securities	19,295		—		19,295		—
Collateralized loan obligations	7,015		—		7,015		—
SBA securities	160,334		—		160,334		—
Asset-backed and other securities	95,780		5,922		47,749		42,109
Total securities available-for-sale	3,774,431		5,922		3,703,526		64,983
Equity warrants	5,161		—		—		5,161
Other derivative assets	1,873		—		1,873		—
Total recurring assets	$	3,779,592	$	5,922	$	3,703,526	$	70,144
Derivative liabilities	$	1,379	$	—	$	1,379	$	—



	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
Equity warrants	5,497		—		—		5,497
Other derivative assets	694		—		694		—
Total recurring assets	$	3,230,021	$	2,080	$	3,157,169	$	70,772
Derivative liabilities	$	3,285	$	—	$	3,285	$	—

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

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 the date indicated:



	December 31, 2017
	Private Label CMOs		Asset-Backed Securities
		Weighted		Weighted
	Range of	Average	Range of	Average
Unobservable Inputs	Inputs	Input	Inputs	Input
Voluntary annual prepayment speeds	3.6% - 43.6%	8.6%	5% - 15%	13.8%
Annual default rates	0.1% - 15.3%	2.5%	1% - 2%	1.9%
Loss severity rates	4.0% - 102%	55.8%	10% - 60%	53.9%
Discount rates	1.8% - 10.3%	5.3%	3.2% - 4.3%	3.6%

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 the date indicated:



	December 31, 2017
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	16.7%
Risk-free interest rate	2.1%
Remaining life assumption (in years)	3.7

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	2017			2016			2015
	(In thousands)
Balance, beginning of year	$	56,902		$	81,241		$	33,947
Total included in earnings	2,256			1,636			1,104
Total unrealized loss in comprehensive income	(742		)	(1,648		)	(1,388		)
Sales	(4,732		)	—			—
Transfer from Level 2	574			—			—
Transfers to Level 2	(21,165		)	—			—
Net settlements	(10,219		)	(24,327		)	(3,881		)
Addition from the Square 1 acquisition	—			—			51,459
Balance, end of year	$	22,874		$	56,902		$	81,241

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, 2017 and 2016 and the period from the October 6, 2015 Square 1 acquisition date to December 31, 2015:



	Year Ended December 31,						Period Ended
Level 3 Equity Warrants	2017			2016			December 31, 2015
	(In thousands)
Balance, beginning of year or acquisition date	$	5,497		$	4,914		$	5,552
Total included in earnings	2,532			1,402			530
Sales	(3,093		)	(1,894		)	(1,529		)
Issuances	1,407			1,911			363
Transfers to Level 1 (securities available-for-sale)	(1,182		)	(836		)	(2		)
Balance, end of year	$	5,161		$	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, 2017
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired Non‑PCI loans	$	61,095	$	—	$	5,143	$	55,952
Loans held for sale	483,563		—		483,563		—
Total non-recurring	$	544,658	$	—	$	488,706	$	55,952



	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

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	2017		2016		2015
	(In thousands)
Impaired Non‑PCI loans	$	20,422	$	43,240	$	16,097
Loans held for sale	957		—		—
OREO	14		2,576		4,726
Investments carried at cost	—		10		17
Total net loss	$	21,393	$	45,826	$	20,840

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 the date indicated:



	December 31, 2017
			Valuation	Unobservable		Weighted
Asset	Fair Value		Technique	Inputs	Range	Average
	(In thousands)
Impaired Non-PCI loans	$	41,984	Discounted cash flows	Discount rates	2.00% - 10.20%	7.43%
	13,968		Third party appraisals	No discounts
Total non-recurring Level 3	$	55,952

Fair Value, by Balance Sheet Grouping



	December 31, 2017
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	233,215	$	233,215	$	233,215	$	—	$	—
Interest‑earning deposits in financial institutions	165,222		165,222		165,222		—		—
Securities available‑for‑sale	3,774,431		3,774,431		5,922		3,703,526		64,983
Investment in FHLB stock	20,790		20,790		—		20,790		—
Investments carried at cost	977		9,573		—		—		9,573
Loans held for sale	481,100		483,563		—		483,563		—
Loans and leases held for investment, net	16,833,287		17,023,098		—		5,143		17,017,955
Equity warrants	5,161		5,161		—		—		5,161
Other derivative assets	1,873		1,873		—		1,873		—

Financial Liabilities:
Core deposits	15,937,012		15,937,012		—		15,937,012		—
Non-core non-maturity deposits	863,202		863,202		—		863,202		—
Time deposits	2,065,322		2,055,104		—		2,055,104		—
Borrowings	467,342		467,343		467,000		343		—
Subordinated debentures	462,437		444,383		—		444,383		—
Derivative liabilities	1,379		1,379		—		1,379		—



	December 31, 2016
	Carrying		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 held for investment, net	15,298,716		15,494,808		—		1,661		15,493,147
Equity warrants	5,497		5,497		—		—		5,497
Other derivative assets	694		694		—		694		—

Financial Liabilities:
Core deposits	12,523,834		12,523,834		—		12,523,834		—
Non-core non-maturity deposits	1,174,487		1,174,487		—		1,174,487		—
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		—

- 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