Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair value, assets measured on recurring basis

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



	Fair Value Measurements as of
	March 31, 2018
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Residential MBS and CMOs:
Agency MBS	$	251,776	$	—	$	251,776	$	—
Agency CMOs	545,945		—		545,945		—
Private label CMOs	116,245		—		94,164		22,081
Municipal securities	1,403,586		—		1,403,586		—
Agency commercial MBS	1,089,494		—		1,089,494		—
U.S. Treasury securities	148,582		148,582		—		—
SBA securities	148,264		—		148,264		—
Asset-backed securities	79,734		—		43,316		36,418
Corporate debt securities	18,360		—		18,360		—
Total securities available-for-sale	3,801,986		148,582		3,594,905		58,499
Equity warrants	5,284		—		—		5,284
Other derivative assets	3,327		—		3,327		—
Equity investments with readily determinable fair values	5,028		5,028		—		—
Total recurring assets	$	3,815,625	$	153,610	$	3,598,232	$	63,783
Derivative liabilities	$	642	$	—	$	642	$	—



	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		—
SBA securities	160,334		—		160,334		—
Asset-backed securities	88,710		—		46,601		42,109
Corporate debt securities	19,295		—		19,295		—
Collateralized loan obligations	7,015		—		7,015		—
Equity investments	7,070		5,922		1,148		—
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	$	3,781,465	$	5,922	$	3,705,399	$	70,144
Derivative liabilities	$	1,379	$	—	$	1,379	$	—

Fair value, assets and liabilities measured on nonrecurring basis, valuation techniques

The following table presents information about 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:



	March 31, 2018
	Private Label CMOs		Asset-Backed Securities
		Weighted		Weighted
	Range	Average	Range	Average
Unobservable Inputs	of Inputs	Input	of Inputs	Input
Voluntary annual prepayment speeds	3.8% - 52.7%	8.3%	5% - 15%	14.0%
Annual default rates	0.1% - 16.5%	2.5%	1% - 2%	1.9%
Loss severity rates	3.2% - 105.7%	46.3%	10% - 60%	55.2%
Discount rates	2.0% - 10.3%	5.3%	3.2% - 4.3%	3.6%

Fair value, quantitative inputs and assumptions used to determine fair value

The following table presents information about 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:



	March 31, 2018
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	16.8%
Risk-free interest rate	2.4%
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 available-for-sale, asset-backed securities available-for-sale, and equity warrants measured at fair value on a recurring basis for the period indicated:



	Private			Asset-Backed			Equity
	Label CMOs			Securities			Warrants
	(In thousands)
Balance, December 31, 2017	$	22,874		$	42,109		$	5,161
Total included in earnings	165			(10		)	248
Total included in other comprehensive income	(141		)	(228		)	—
Issuances	—			—			206
Sales	—			—			(331		)
Transfer to Level 2	(13		)	—			—
Net settlements	(804		)	(5,453		)	—
Balance, March 31, 2018	$	22,081		$	36,418		$	5,284

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
	March 31, 2018
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	45,557	$	—	$	1,128	$	44,429
OREO	953		—		953		—
Total non-recurring	$	46,510	$	—	$	2,081	$	44,429



	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

Net losses (gains) on nonrecurring assets

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



	Three Months Ended
Losses on Assets	March 31,
Measured on a Non‑Recurring Basis	2018		2017
	(In thousands)
Impaired loans ⁽¹⁾	$	7,816	$	13,617
OREO	65		—
Total losses	$	7,881	$	13,617

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:

March 31, 2018

Valuation

Unobservable

Weighted

Asset

Fair Value

Technique

Inputs

Range

Average

(In thousands)

Impaired loans

32,638

Discounted cash flows

Discount rates

2.00% - 10.20%

7.33%

Impaired loans

11,791

Third party appraisals

No discounts

Total non-recurring Level 3

44,429

Fair value, by balance sheet grouping

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



	March 31, 2018
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	235,061	$	235,061	$	235,061	$	—	$	—
Interest‑earning deposits in financial institutions	312,735		312,735		312,735		—		—
Securities available‑for‑sale	3,801,986		3,801,986		148,582		3,594,905		58,499
Investment in FHLB stock	17,250		17,250		—		17,250		—
Loans and leases held for investment, net	16,321,010		16,247,325		—		1,128		16,246,197
Equity warrants	5,284		5,284		—		—		5,284
Other derivative assets	3,327		3,327		—		3,327		—
Equity investments with readily determinable fair values	5,028		5,028		5,028		—		—

Financial Liabilities:
Core deposits	15,661,529		15,661,529		—		15,661,529		—
Non-core non-maturity deposits	585,399		585,399		—		585,399		—
Time deposits	1,831,860		1,820,330		—		1,820,330		—
Borrowings	575,284		575,285		575,000		285		—
Subordinated debentures	452,223		435,985		—		435,985		—
Derivative liabilities	642		642		—		642		—



	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		—
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		467,342		467,000		342		—
Subordinated debentures	462,437		444,383		—		444,383		—
Derivative liabilities	1,379		1,379		—		1,379		—