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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

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
	June 30, 2019
Measured on a Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Securities available‑for‑sale:
Agency residential CMOs	$	1,150,474	$	—	$	1,150,474	$	—
Agency commercial MBS	1,058,846		—		1,058,846		—
Municipal securities	736,570		—		736,570		—
Agency residential MBS	351,360		—		351,360		—
Asset-backed securities	227,121		—		193,624		33,497
Private label residential CMOs	112,037		—		105,138		6,899
Collateralized loan obligations	93,802		—		93,802		—
SBA securities	51,812		—		51,812		—
Corporate debt securities	20,034		—		20,034		—
U.S. Treasury securities	5,188		5,188		—		—
Total securities available-for-sale	3,807,244		5,188		3,761,660		40,396
Equity warrants	3,931		—		—		3,931
Other derivative assets	1,459		—		1,459		—
Equity investments with readily determinable fair values	3,284		3,284		—		—
Total recurring assets	$	3,815,918	$	8,472	$	3,763,119	$	44,327
Derivative liabilities	$	317	$	—	$	317	$	—



	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:
Municipal securities	$	1,312,194	$	—	$	1,312,194	$	—
Agency commercial MBS	1,112,704		—		1,112,704		—
Agency residential CMOs	632,850		—		632,850		—
U.S. Treasury securities	403,405		403,405		—		—
Agency residential MBS	281,088		—		281,088		—
Private label residential CMOs	101,205		—		93,917		7,288
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:



	June 30, 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	3.6% - 100.0%	11.2%	12.0% - 15.0%	13.7%
Annual default rates ⁽¹⁾	0.4% - 82.0%	1.9%	2.0%	2.0%
Loss severity rates ⁽¹⁾	1.5% - 145.8%	57.8%	60.0%	60.0%
Discount rates	2.5% - 9.3%	6.4%	3.2% - 5.2%	4.3%

____________________


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

Fair value inputs, assets, quantitative information

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:



	June 30, 2019
	Equity Warrants
	Weighted
	Average
Unobservable Inputs	Input
Volatility	16.7%
Risk-free interest rate	1.7%
Remaining life assumption (in years)	3.36

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:

June 30, 2019

Valuation

Unobservable

Weighted

Asset

Fair Value

Technique

Inputs

Range

Average

(In thousands)

Impaired loans

17,073

Discounted cash flows

Discount rates

3.75% - 8.00%

6.48%

Impaired loans

6,444

Third party appraisals

No discounts

Total non-recurring Level 3

23,517

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	224			(56		)	3,493
Total included in other comprehensive income	(64		)	559			—
Issuances	—			—			161
Salesand dispositions ⁽¹⁾	—			—			(4,453		)
Net settlements	(549		)	(6,951		)	—
Transfers to Level 1	—			—			(63		)
Balance, June 30, 2019	$	6,899		$	33,497		$	3,931

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
	June 30, 2019
Measured on a Non‑Recurring Basis	Total		Level 1		Level 2		Level 3
	(In thousands)
Impaired loans	$	23,517	$	—	$	—	$	23,517
Total non-recurring	$	23,517	$	—	$	—	$	23,517



	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				Six Months Ended
Losses on Assets	June 30,				June 30,
Measured on a Non‑Recurring Basis	2019		2018		2019		2018
	(In thousands)
Impaired loans	$	1,842	$	12,076	$	3,038	$	15,994
OREO	—		—		—		65
Total losses	$	1,842	$	12,076	$	3,038	$	16,059

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:



	June 30, 2019
	Carrying		Estimated Fair Value
	Amount		Total		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets:
Cash and due from banks	$	185,075	$	185,075	$	185,075	$	—	$	—
Interest‑earning deposits in financial institutions	422,663		422,663		422,663		—		—
Securities available‑for‑sale	3,807,244		3,807,244		5,188		3,761,660		40,396
Investment in FHLB stock	43,146		43,146		—		43,146		—
Loans and leases held for investment, net	18,337,815		17,841,445		—		—		17,841,445
Equity warrants	3,931		3,931		—		—		3,931
Other derivative assets	1,459		1,459		—		1,459		—
Equity investments with readily determinable fair values	3,284		3,284		3,284		—		—

Financial Liabilities:
Core deposits	15,617,488		15,617,488		—		15,617,488		—
Non-core non-maturity deposits	436,833		436,833		—		436,833		—
Time deposits	2,751,435		2,749,828		—		2,749,828		—
Borrowings	1,913,059		1,913,059		1,903,000		10,059		—
Subordinated debentures	456,112		439,635		—		439,635		—
Derivative liabilities	317		317		—		317		—



	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		—