Disclosures about Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Estimated Fair Values of Financial Instruments

The estimated fair values of the Bancorp’s financial instruments were as follows at March 31, 2015 and December 31, 2014.



					Fair Value Measurements at March 31, 2015
	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(amounts in thousands)
Assets:
Cash and cash equivalents	$	333,823	$	333,823	$	333,823	$	—	$	—
Investment securities, available for sale	396,194		396,194		22,305		373,889		—
Loans held for sale	1,758,084		1,758,695		—		1,676,891		81,804
Loans receivable, net of allowance for loan losses	4,304,285		4,311,848		—		—		4,311,848
FHLB, Federal Reserve Bank and other restricted stock	81,798		81,798		—		81,798		—
FDIC loss sharing receivable	3,427		3,427		—		—		3,427
Derivatives	8,810		8,810		—		8,723		87
Liabilities:
Deposits	$	4,893,321	$	4,905,100	$	3,059,457	$	1,845,643	$	—
FHLB advances	1,545,000		1,547,465		1,175,147		372,318		—
Other borrowings	88,250		92,928		67,678		25,250		—
Subordinated debt	110,000		113,025		—		113,025		—
Derivatives	12,938		12,938		—		12,938		—



					Fair Value Measurements at December 31, 2014
	Carrying Amount		Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(amounts in thousands)
Assets:
Cash and cash equivalents	$	371,023	$	371,023	$	371,023	$	—	$	—
Investment securities, available for sale	416,685		416,685		24,270		392,415		—
Loans held for sale	1,435,459		1,436,460		—		1,335,668		100,792
Loans receivable, net of allowance for loan losses	4,281,241		4,285,537		—		—		4,285,537
FHLB, Federal Reserve Bank and other stock	82,002		82,002		—		82,002		—
FDIC loss sharing receivable	2,320		2,320		—		—		2,320
Derivatives	7,552		7,552		—		7,509		43
Liabilities:
Deposits	$	4,532,538	$	4,540,507	$	2,820,875	$	1,719,632	$	—
FHLB advances	1,618,000		1,619,858		1,298,000		321,858		—
Other borrowings	88,250		92,069		66,944		25,125		—
Subordinated debt	110,000		111,925		—		111,925		—
Derivatives	9,716		9,716		—		9,716		—

Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis

For financial assets and liabilities measured at fair value on a recurring and nonrecurring basis, the fair value measurements by level within the fair value hierarchy used at March 31, 2015 and December 31, 2014 were as follows:



	March 31, 2015
	Fair Value Measurements at the End of the Reporting Period Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
(amounts in thousands)
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale securities:
Mortgage-backed securities	$	—	$	358,717	$	—	$	358,717
Corporate notes	—		15,172		—		15,172
Equity securities	22,305		—		—		22,305
Derivatives (1)	—		8,723		87		8,810
Loans held for sale – fair value option	—		1,676,891		—		1,676,891
Total assets - recurring fair value measurements	$	22,305	$	2,059,503	$	87	$	2,081,895
Liabilities
Derivatives (2)	$	—	$	12,938	$	—	$	12,938
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $3,369	$	—	$	—	$	4,943	$	4,943
Other real estate owned	—		—		546		546
Total assets - nonrecurring fair value measurements	$	—	$	—	$	5,489	$	5,489



	December 31, 2014
	Fair Value Measurements at the End of the Reporting Period Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
(amounts in thousands)
Measured at Fair Value on a Recurring Basis:
Assets
Available-for-sale securities:
Mortgage-backed securities	$	—	$	377,311	$	—	$	377,311
Corporate notes	—		15,104		—		15,104
Equity securities	24,270		—		—		24,270
Derivatives (1)	—		7,509		43		$	7,552
Loans held for sale – fair value option	—		1,335,668		—		1,335,668
Total assets - recurring fair value measurements	$	24,270	$	1,735,592	$	43	$	1,759,905
Liabilities
Derivatives (2)	—		$	9,716	—		$	9,716
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $1,342	$	—	$	—	$	2,380	$	2,380
Other real estate owned	—		—		9,149		9,149
Total assets - nonrecurring fair value measurements	$	—	$	—	$	11,529	$	11,529


(1)	Included in Other Assets


(2)	Included in Other Liabilities

Statement of Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis for the three months ended March 31, 2015 and 2014 are summarized as follows.



Three Months Ended March 31, 2015	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at January 1, 2015	$	43
Issuances	87
Settlements	(43		)
Balance at March 31, 2015	$	87



Three Months Ended March 31, 2014	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at January 1, 2014	$	240
Issuances	103
Settlements	(240		)
Balance at March 31, 2014	$	103

The Bancorp’s policy is to recognize transfers between fair value levels when events or circumstances warrant transfers. There were no transfers between levels during the first three months of 2015 nor 2014.

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on Recurring and Nonrecurring Basis

The following table summarizes financial assets and financial liabilities measured at fair value as of March 31, 2015 and December 31, 2014 on a recurring and nonrecurring basis for which the Bancorp utilized Level 3 inputs to measure fair value.



	Quantitative Information about Level 3 Fair Value Measurements
March 31, 2015	Fair Value Estimate		Valuation Technique	Unobservable Input	Range (Weighted Average) (3)
(amounts in thousands)
Impaired loans	$	4,943	Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Other real estate owned	546		Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Residential mortgage loan commitments	87		Adjusted market bid	Pull-through rate	80%



	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2014	Fair Value Estimate		Valuation Technique	Unobservable Input	Range (Weighted Average) (3)
(amounts in thousands)
Impaired loans	$	2,380	Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Other real estate owned	9,149		Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Residential mortgage loan commitments	43		Adjusted market bid	Pull-through rate	80%


(1)	Obtained from approved independent appraisers. Appraisals are current and in compliance with credit policy. The Bancorp does not discount appraisals.


(2)	Fair value is adjusted for costs to sell.


(3)	Presented as a percentage of the value determined by appraisal.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

+ References+ Details