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Fair Value Measurement (Tables)
 3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value Measurement Methodologies [Table Text Block]
The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions, and classification of the Company’s assets and liabilities.
Asset/Liability class
  
Valuation methodology, inputs and assumptions
  
Classification
Cash and cash equivalents
  
Carrying value is a reasonable estimate of fair value based on the short-term nature of the instruments.
  
Estimated fair value classified as Level 1.
Investment securities
 
 
 
 
Investment securities available for sale
  
Observable market prices of identical or similar securities are used where available.
 
If market prices are not readily available, value is based on discounted cash flows using the following significant inputs:
 
•      Expected prepayment speeds
 
•      Estimated credit losses
 
•      Market liquidity adjustments
  
Level 2 recurring fair value measurement
Investment securities held to maturity
 
Observable market prices of identical or similar securities are used where available.
 
If market prices are not readily available, value is based on discounted cash flows using the following significant inputs:
 
•      Expected prepayment speeds
 
•      Estimated credit losses
 
•      Market liquidity adjustments
 
Carried at amortized cost.
 
Estimated fair value classified as Level 2.
Loans held for sale
  
 
  
 
Single family loans, excluding loans transferred from held for investment
  
Fair value is based on observable market data, including:
 
•       Quoted market prices, where available
 
•       Dealer quotes for similar loans
 
•       Forward sale commitments
  
Level 2 recurring fair value measurement
 
 
When not derived from observable market inputs, fair value is based on discounted cash flows, which considers the following inputs:
•       Current lending rates for new loans
  
•       Expected prepayment speeds
 
•       Estimated credit losses
•       Market liquidity adjustments
 
Estimated fair value classified as Level 3.
Loans originated as held for investment and transferred to held for sale
 
Fair value is based on discounted cash flows, which considers the following inputs:
 
•       Current lending rates for new loans
 
•       Expected prepayment speeds
 
•       Estimated credit losses
•       Market liquidity adjustments
 
Carried at lower of amortized cost or fair value.
 
Estimated fair value classified as Level 3.
Multifamily loans (DUS)
  
The sale price is set at the time the loan commitment is made, and as such subsequent changes in market conditions have a very limited effect, if any, on the value of these loans carried on the consolidated statements of financial condition, which are typically sold within 30 days of origination.
  
Carried at lower of amortized cost or fair value.
 
Estimated fair value classified as Level 2.

 






Asset/Liability class
  
Valuation methodology, inputs and assumptions
  
Classification
Loans held for investment
  
 
  
 
Loans held for investment, excluding collateral dependent loans and loans transferred from held for sale
  
Fair value is based on discounted cash flows, which considers the following inputs:
 
•       Current lending rates for new loans
 
•       Expected prepayment speeds
 
•       Estimated credit losses
•       Market liquidity adjustments

  
For the carrying value of loans see Note 1–Summary of Significant Accounting Policies of the 2015 Annual Report on Form 10-K.



Estimated fair value classified as Level 3.
Loans held for investment, collateral dependent
  
Fair value is based on appraised value of collateral, which considers sales comparison and income approach methodologies. Adjustments are made for various factors, which may include:

          •      Adjustments for variations in specific property qualities such as location, physical dissimilarities, market conditions at the time of sale, income producing characteristics and other factors
•      Adjustments to obtain “upon completion” and “upon stabilization” values (e.g., property hold discounts where the highest and best use would require development of a property over time)
•      Bulk discounts applied for sales costs, holding costs and profit for tract development and certain other properties
  
Carried at lower of amortized cost or fair value of collateral, less the estimated cost to sell.
 
Classified as a Level 3 nonrecurring fair value measurement in periods where carrying value is adjusted to reflect the fair value of collateral.
Loans held for investment transferred from loans held for sale
 
Fair value is based on discounted cash flows, which considers the following inputs:
 
•       Current lending rates for new loans
 
•       Expected prepayment speeds
 
•       Estimated credit losses
•       Market liquidity adjustments
  
Level 3 recurring fair value measurement
Mortgage servicing rights
  
 
  
 
Single family MSRs
  
For information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 7, Mortgage Banking Operations.
  
Level 3 recurring fair value measurement
Multifamily MSRs
  
Fair value is based on discounted estimated future servicing fees and other revenue, less estimated costs to service the loans.
  
Carried at lower of amortized cost or fair value
 
Estimated fair value classified as Level 3.
Derivatives
  
 
  
 
Interest rate swaps
Interest rate swaptions
Forward sale commitments
 
Fair value is based on quoted prices for identical or similar instruments, when available.
 
When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs including:
 
•       Forward interest rates
 
•       Interest rate volatilities
 
Level 2 recurring fair value measurement
Interest rate lock and purchase loan commitments
 
The fair value considers several factors including:

•       Fair value of the underlying loan based on quoted prices in the secondary market, when available. 

•       Value of servicing

•       Fall-out factor
 
Level 3 recurring fair value measurement
Asset/Liability class
  
Valuation methodology, inputs and assumptions
  
Classification
Other real estate owned (“OREO”)
  
Fair value is based on appraised value of collateral, less the estimated cost to sell. See discussion of "loans held for investment, collateral dependent" above for further information on appraisals.
  
Carried at lower of amortized cost or fair value of collateral (Level 3), less the estimated cost to sell.
Federal Home Loan Bank stock
  
Carrying value approximates fair value as FHLB stock can only be purchased or redeemed at par value.
  
Carried at par value.
 
Estimated fair value classified as Level 2.
Deposits
  
 
  
 
Demand deposits
  
Fair value is estimated as the amount payable on demand at the reporting date.
  
Carried at historical cost.
 
Estimated fair value classified as Level 2.
Fixed-maturity certificates of deposit
  
Fair value is estimated using discounted cash flows based on market rates currently offered for deposits of similar remaining time to maturity.
  
Carried at historical cost.
 
Estimated fair value classified as Level 2.
Federal Home Loan Bank advances
  
Fair value is estimated using discounted cash flows based on rates currently available for advances with similar terms and remaining time to maturity.
  
Carried at historical cost.
 
Estimated fair value classified as Level 2.
Long-term debt
  
Fair value is estimated using discounted cash flows based on current lending rates for similar long-term debt instruments with similar terms and remaining time to maturity.
  
Carried at historical cost.
 
Estimated fair value classified as Level 2.
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table presents the levels of the fair value hierarchy for the Company’s assets and liabilities measured at fair value on a recurring basis.
 
(in thousands)
Fair Value at March 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Investment securities available for sale
 
 
 
 
 
 
 
Mortgage backed securities:
 
 
 
 
 
 
 
Residential
$
82,395

 
$
—

 
$
82,395

 
$
—

Commercial
24,630

 
—

 
24,630

 
—

Municipal bonds
228,924

 
—

 
228,924

 
—

Collateralized mortgage obligations:
 
 
 
 
 
 
 
Residential
112,176

 
—

 
112,176

 
—

Commercial
83,822

 
—

 
83,822

 
—

Corporate debt securities
80,852

 
—

 
80,852

 
—

U.S. Treasury securities
41,026

 
—

 
41,026

 
—

Single family mortgage servicing rights
133,449

 
—

 
—

 
133,449

Single family loans held for sale
687,656

 
—

 
642,098

 
45,558

Single family loans held for investment
18,327

 
—

 
—

 
18,327

Derivatives
 
 
 
 
 
 
 
Forward sale commitments
5,384

 
—

 
5,384

 
—

Interest rate swaptions
14

 
—

 
14

 
—

Interest rate lock and purchase loan commitments
28,497

 
—

 
—

 
28,497

Interest rate swaps
42,367

 
—

 
42,367

 
—

Total assets
$
1,569,519

 
$
—

 
$
1,343,688

 
$
225,831

Liabilities:
 
 
 
 
 
 
 
Derivatives
 
 
 
 
 
 
 
Forward sale commitments
$
8,399

 
$
—

 
$
8,399

 
$
—

Interest rate lock and purchase loan commitments
15

 
—

 
—

 
15

Interest rate swaps
13,403

 
—

 
13,403

 
—

Total liabilities
$
21,817

 
$
—

 
$
21,802

 
$
15



(in thousands)
Fair Value at December 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
Investment securities available for sale
 
 
 
 
 
 
 
Mortgage backed securities:
 
 
 
 
 
 
 
Residential
$
68,101

 
$
—

 
$
68,101

 
$
—

Commercial
17,851

 
—

 
17,851

 
—

Municipal bonds
171,869

 
—

 
171,869

 
—

Collateralized mortgage obligations:
 
 
 
 
 
 
 
Residential
84,497

 
—

 
84,497

 
—

Commercial
79,133

 
—

 
79,133

 
—

Corporate debt securities
78,736

 
—

 
78,736

 
—

U.S. Treasury securities
40,964

 
—

 
40,964

 
—

Single family mortgage servicing rights
156,604

 
—

 
—

 
156,604

Single family loans held for sale
632,273

 
—

 
582,951

 
49,322

Single family loans held for investment
21,544

 
—

 
—

 
21,544

Derivatives
 
 
 
 
 
 
 
Forward sale commitments
1,884

 
—

 
1,884

 
—

Interest rate swaptions
—

 
—

 
—

 
—

Interest rate lock and purchase loan commitments
17,719

 
—

 
—

 
17,719

Interest rate swaps
8,670

 
—

 
8,670

 
—

Total assets
$
1,379,845

 
$
—

 
$
1,134,656

 
$
245,189

Liabilities:
 
 
 
 
 
 
 
Derivatives
 
 
 
 
 
 
 
Forward sale commitments
$
1,496

 
$
—

 
$
1,496

 
$
—

Interest rate lock and purchase loan commitments
8

 
—

 
—

 
8

Interest rate swaps
4,007

 
—

 
4,007

 
—

Total liabilities
$
5,511

 
$
—

 
$
5,503

 
$
8
Fair Value Inputs, Assets, Quantitative Information [Table Text Block]
The following information presents significant Level 3 unobservable inputs used to measure fair value of single family loans held for investment where fair value option was elected.

(dollars in thousands)
At March 31, 2016
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment, fair value option
$
18,327

 
Income approach
 
Implied spread to benchmark interest rate curve
 
4.22%
 
4.66%
 
4.40%

(dollars in thousands)
At December 31, 2015
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for investment, fair value option
$
21,544

 
Income approach
 
Implied spread to benchmark interest rate curve
 
3.26%
 
4.35%
 
4.01%


The following information presents significant Level 3 unobservable inputs used to measure fair value of single family loans held for sale where fair value option was elected.

(dollars in thousands)
At March 31, 2016
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale, fair value option
$
45,558

 
Income approach
 
Implied spread to benchmark interest rate curve
 
4.07%
 
5.96%
 
4.45%
 
 
 
 
 
Market price movement from comparable bond
 
—%
 
0.55%
 
0.38%


(dollars in thousands)
At December 31, 2015
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale, fair value option
$
49,322

 
Income approach
 
Implied spread to benchmark interest rate curve
 
2.68%
 
7.62%
 
3.91%
 
 
 
 
 
Market price movement from comparable bond
 
(0.43)%
 
(0.06)%
 
(0.27)%
The following information presents significant Level 3 unobservable inputs used to measure fair value of interest rate lock and purchase loan commitments.

(dollars in thousands)
At March 31, 2016
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate lock and purchase loan commitments, net
$
28,482

 
Income approach
 
Fall out factor
 
0.80%
 
64.62%
 
13.19%
 
 
 
 
 
Value of servicing
 
0.42%
 
2.05%
 
0.87%

(dollars in thousands)
At December 31, 2015
Fair Value
 
Valuation
Technique
 
Significant Unobservable
Input
 
Low
 
High
 
Weighted Average
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate lock and purchase loan commitments, net
$
17,711

 
Income approach
 
Fall out factor
 
0.60%
 
61.16%
 
15.80%
 
 
 
 
 
Value of servicing
 
0.53%
 
1.71%
 
0.80%
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents fair value changes and activity for Level 3 interest rate lock and purchase loan commitments.
 
Three Months Ended March 31,
(in thousands)
2016
 
2015
 
 
 
 
Beginning balance, net
$
17,711

 
$
11,933

Total realized/unrealized gains(1)
44,528

 
55,986

Settlements
(33,757
)
 
(41,900
)
Ending balance, net
$
28,482

 
$
26,019


(1)
All realized and unrealized gains and losses are recognized in earnings as net gain from mortgage loan origination and sale activities on the consolidated statements of operations. There were net unrealized gains (losses) of $28.5 million and $26.0 million for the three months ended March 31, 2016 and 2015, respectively, recognized on interest rate lock and purchase loan commitments outstanding at March 31, 2016 and 2015, respectively.
Fair Value Measurements on Nonrecurring Basis (Table Text Block)
The following tables present assets that had changes in their recorded fair value during the three months ended March 31, 2016 and 2015 and still held at the end of the respective reporting period.

 
Three Months Ended March 31, 2016
(in thousands)
Fair Value of Assets Held at March 31, 2016
 
Level 1
 
Level 2
 
Level 3
 
Total Gains (Losses)
 
 
 
 
 
 
 
 
 
 
Loans held for investment(1)
$
2,619

 
$
—

 
$
—

 
$
2,619

 
$
(34
)
Other real estate owned(2)
5,485

 
—

 
—

 
5,485

 
(391
)
Total
$
8,104

 
$
—

 
$
—

 
$
8,104

 
$
(425
)

 
Three Months Ended March 31, 2015
(in thousands)
Fair Value of Assets Held at March 31, 2015
 
Level 1
 
Level 2
 
Level 3
 
Total Gains (Losses)
 
 
 
 
 
 
 
 
 
 
Loans held for investment(1)
$
8,347

 
$
—

 
$
—

 
$
8,347

 
$
13

Other real estate owned(2)
195

 
—

 
—

 
195

 
(168
)
Total
$
8,542

 
$
—

 
$
—

 
$
8,542

 
$
(155
)
 
(1)
Represents the carrying value of loans for which adjustments are based on the fair value of the collateral.
(2)
Represents other real estate owned where an updated fair value of collateral is used to adjust the carrying amount subsequent to the initial classification as other real estate owned.
Fair Value, by Balance Sheet Grouping (Table Text Block)
The following presents the carrying value, estimated fair value and the levels of the fair value hierarchy for the Company’s financial instruments other than assets and liabilities measured at fair value on a recurring basis.
 
 
At March 31, 2016
(in thousands)
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
46,356

 
$
46,356

 
$
46,356

 
$
—

 
$
—

Investment securities held to maturity
33,256

 
31,763

 
—

 
31,763

 
—

Loans held for investment
3,505,224

 
3,546,034

 
—

 
—

 
3,546,034

Loans held for sale - transferred from held for investment
6,834

 
6,834

 
—

 
—

 
6,834

Loans held for sale – multifamily
2,202

 
2,202

 
—

 
2,202

 
—

Mortgage servicing rights – multifamily
15,402

 
17,198

 
—

 
—

 
17,198

Federal Home Loan Bank stock
40,548

 
40,548

 
—

 
40,548

 
—

Liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
3,823,027

 
$
3,805,945

 
$
—

 
$
3,805,945

 
$
—

Federal Home Loan Bank advances
883,574

 
887,529

 
—

 
887,529

 
—

Long-term debt
61,857

 
60,260

 
—

 
60,260

 
—


 
At December 31, 2015
(in thousands)
Carrying
Value
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
32,684

 
$
32,684

 
$
32,684

 
$
—

 
$
—

Investment securities held to maturity
31,013

 
31,387

 
—

 
31,387

 
—

Loans held for investment
3,171,176

 
3,255,740

 
—

 
—

 
3,255,740

Loans held for sale - transferred from held for investment
6,814

 
6,814

 
—

 
—

 
6,814

Loans held for sale – multifamily
11,076

 
11,076

 
—

 
11,076

 
—

Mortgage servicing rights – multifamily
14,651

 
16,412

 
—

 
—

 
16,412

Federal Home Loan Bank stock
44,342

 
44,342

 
—

 
44,342

 
—

Liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
3,231,953

 
$
3,229,670

 
$
—

 
$
3,229,670

 
$
—

Federal Home Loan Bank advances
1,018,159

 
1,021,344

 
—

 
1,021,344

 
—

Long-term debt
61,857

 
60,239

 
—

 
60,239

 
—