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Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
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, 2019
Measured on a Recurring Basis
Total
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Securities available‑for‑sale:
 
 
 
 
 
 
 
Residential MBS and CMOs:
 
 
 
 
 
 
 
Agency MBS
$
343,176

 
$

 
$
343,176

 
$

Agency CMOs
717,776

 

 
717,776

 

Private label CMOs
123,247

 

 
116,211

 
7,036

Municipal securities
1,185,001

 

 
1,185,001

 

Agency commercial MBS
1,078,911

 

 
1,078,911

 

U.S. Treasury securities
290,717

 
290,717

 

 

Asset-backed securities
185,156

 

 
149,703

 
35,453

SBA securities
52,024

 

 
52,024

 

Corporate debt securities
18,700

 

 
18,700

 

Total securities available-for-sale
3,994,708

 
290,717

 
3,661,502

 
42,489

Equity warrants
4,438

 

 

 
4,438

Other derivative assets
2,493

 

 
2,493

 

Equity investments with readily determinable fair values
3,848

 
3,848

 

 

Total recurring assets
$
4,005,487

 
$
294,565

 
$
3,663,995

 
$
46,927

Derivative liabilities
$
633

 
$

 
$
633

 
$

 
Fair Value Measurements as of
 
December 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
$
281,088

 
$

 
$
281,088

 
$

Agency CMOs
632,850

 

 
632,850

 

Private label CMOs
101,205

 

 
93,917

 
7,288

Municipal securities
1,312,194

 

 
1,312,194

 

Agency commercial MBS
1,112,704

 

 
1,112,704

 

U.S. Treasury securities
403,405

 
403,405

 

 

Asset-backed securities
81,385

 

 
41,440

 
39,945

SBA securities
67,047

 

 
67,047

 

Corporate debt securities
17,553

 

 
17,553

 

Total securities available-for-sale
4,009,431

 
403,405

 
3,558,793

 
47,233

Equity warrants
4,793

 

 

 
4,793

Other derivative assets
3,292

 

 
3,292

 

Equity investments with readily determinable fair values
4,891

 
4,891

 

 

Total recurring assets
$
4,022,407

 
$
408,296

 
$
3,562,085

 
$
52,026

Derivative liabilities
$
142

 
$

 
$
142

 
$


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, 2019
 
Private Label CMOs
 
Asset-Backed Securities
 
 
 
Weighted
 
Input or
 
Weighted
 
Range
 
Average
 
Range
 
Average
Unobservable Inputs
of Inputs
 
Input
 
of Inputs
 
Input
Voluntary annual prepayment speeds
3.9% - 22.4%
 
10.8%
 
12.0% - 15.0%
 
13.8%
Annual default rates (1)
0.3% - 82.0%
 
1.8%
 
2.0%
 
2.0%
Loss severity rates (1)
5.6% - 159.5%
 
51.8%
 
60.0%
 
60.0%
Discount rates
2.5% - 9.6%
 
6.4%
 
3.2% - 5.2%
 
4.2%

____________________
(1)
The annual default rates and loss severity rates were the same for all of the asset-backed securities.


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, 2019
 
Equity Warrants
 
Weighted
 
Average
Unobservable Inputs
Input
Volatility
17.0%
Risk-free interest rate
2.2%
Remaining life assumption (in years)
3.45
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, 2018
$
7,288

 
$
39,945

 
$
4,793

Total included in earnings
137

 
(38
)
 
2,279

Total included in other comprehensive income
(84
)
 
62

 

Issuances

 

 
88

Sales and dispositions (1)

 

 
(2,659
)
Net settlements
(305
)
 
(4,516
)
 

Transfers to Level 1

 

 
(63
)
Balance, March 31, 2019
$
7,036

 
$
35,453

 
$
4,438

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, 2019
Measured on a Non‑Recurring Basis
Total
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Impaired loans
$
27,901

 
$

 
$
7,886

 
$
20,015

Loans held for sale
25,124

 

 
25,124

 

Total non-recurring
$
53,025

 
$

 
$
33,010

 
$
20,015

 
Fair Value Measurement as of
 
December 31, 2018
Measured on a Non‑Recurring Basis
Total
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Impaired loans
$
24,432

 
$

 
$
1,800

 
$
22,632

OREO
1,136

 

 
1,136

 

Total non-recurring
$
25,568

 
$

 
$
2,936

 
$
22,632

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
2019
 
2018
 
(In thousands)
Impaired loans
$
3,756

 
$
7,816

Loans held for sale
1,707

 

OREO

 
65

Total losses
$
5,463

 
$
7,881


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, 2019
 
 
 
 
Valuation
 
Unobservable
 
 
 
Weighted
Asset
 
Fair Value
 
Technique
 
Inputs
 
Range
 
Average
 
 
(In thousands)
 
 
 
 
 
 
 
 
Impaired loans
 
$
19,006

 
Discounted cash flows
 
Discount rates
 
3.75% - 8.00%
 
6.43%
Impaired loans
 
1,009

 
Third party appraisals
 
No discounts
 
 
 
 
Total non-recurring Level 3
 
$
20,015

 
 
 
 
 
 
 
 
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, 2019
 
Carrying
 
Estimated Fair Value
 
Amount
 
Total
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Financial Assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
224,758

 
$
224,758

 
$
224,758

 
$

 
$

Interest‑earning deposits in financial institutions
332,124

 
332,124

 
332,124

 

 

Securities available‑for‑sale
3,994,708

 
3,994,708

 
290,717

 
3,661,502

 
42,489

Investment in FHLB stock
29,430

 
29,430

 

 
29,430

 

Loans held for sale
25,124

 
25,124

 

 
25,124

 

Loans and leases held for investment, net
18,171,416

 
17,719,820

 

 
7,886

 
17,711,934

Equity warrants
4,438

 
4,438

 

 

 
4,438

Other derivative assets
2,493

 
2,493

 

 
2,493

 

Equity investments with readily determinable fair values
3,848

 
3,848

 
3,848

 

 

 
 
 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
 
 
Core deposits
16,127,638

 
16,127,638

 

 
16,127,638

 

Non-core non-maturity deposits
454,277

 
454,277

 

 
454,277

 

Time deposits
2,704,012

 
2,697,119

 

 
2,697,119

 

Borrowings
1,481,087

 
1,481,085

 
1,471,000

 
10,085

 

Subordinated debentures
454,458

 
438,207

 

 
438,207

 

Derivative liabilities
633

 
633

 

 
633

 


 
December 31, 2018
 
Carrying
 
Estimated Fair Value
 
Amount
 
Total
 
Level 1
 
Level 2
 
Level 3
 
(In thousands)
Financial Assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
175,830

 
$
175,830

 
$
175,830

 
$

 
$

Interest‑earning deposits in financial institutions
209,937

 
209,937

 
209,937

 

 

Securities available‑for‑sale
4,009,431

 
4,009,431

 
403,405

 
3,558,793

 
47,233

Investment in FHLB stock
32,103

 
32,103

 

 
32,103

 

Loans and leases held for investment, net
17,825,241

 
17,013,860

 

 
1,800

 
17,012,060

Equity warrants
4,793

 
4,793

 

 

 
4,793

Other derivative assets
3,292

 
3,292

 

 
3,292

 

Equity investments with readily determinable fair values
4,891

 
4,891

 
4,891

 

 

 
 
 
 
 
 
 
 
 
 
Financial Liabilities:
 
 
 
 
 
 
 
 
 
Core deposits
16,346,671

 
16,346,671

 

 
16,346,671

 

Non-core non-maturity deposits
518,192

 
518,192

 

 
518,192

 

Time deposits
2,005,638

 
2,017,137

 

 
2,017,137

 

Borrowings
1,371,114

 
1,371,114

 
1,371,000

 
114

 

Subordinated debentures
453,846

 
435,251

 

 
435,251

 

Derivative liabilities
142

 
142

 

 
142