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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis Segregated by the Level of the Valuation Inputs Within the Fair Value Hierarchy Utilized to Measure Fair Value

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.


	September 30, 2020
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	9,525	$	9,525
Securities available for sale:
Municipal bonds and obligations	—		104,507		—		104,507
Agency collateralized mortgage obligations	—		741,469		—		741,469
Agency residential mortgage-backed securities	—		326,017		—		326,017
Agency commercial mortgage-backed securities	—		273,608		—		273,608
Corporate bonds	—		49,152		25,825		74,977

Other bonds and obligations	—		54,711		—		54,711
Marketable equity securities	31,321		672		—		31,993
Loans held for investment at fair value	—		—		2,774		2,774
Loans held for sale (1)	—		17,596		—		17,596
Derivative assets (1)	—		177,731		1,895		179,626
Capitalized servicing rights (1)	—		—		3,855		3,855
Derivative liabilities (1)	—		73,659		—		73,659

(1) Includes assets and liabilities classified as discontinued operations.


	December 31, 2019
	Level 1		Level 2		Level 3		Total
(In thousands)	Inputs		Inputs		Inputs		Fair Value
Trading security	$	—	$	—	$	10,769	$	10,769
Securities available for sale:
Municipal bonds and obligations	—		110,138		—		110,138
Agency collateralized mortgage obligations	—		748,812		—		748,812
Agency residential mortgage-backed securities	—		147,744		—		147,744
Agency commercial mortgage-backed securities	—		147,096		—		147,096
Corporate bonds	—		73,610		42,966		116,576

Other bonds and obligations	—		41,189		—		41,189
Marketable equity securities	40,499		1,057		—		41,556
Loans held for investment at fair value	—		—		—		—
Loans held for sale (1)	—		140,280		—		140,280
Derivative assets (1)	—		77,562		2,628		80,190
Capitalized servicing rights (1)	—		—		12,229		12,229
Derivative liabilities (1)	227		80,454		—		80,681

(1) Includes assets and liabilities classified as discontinued operations.

Schedule of Loans Held for Sale

Aggregate Fair Value

September 30, 2020

Aggregate

Less Aggregate

(In thousands)

Fair Value

Unpaid Principal

Loans held for investment at fair value

2,774

66,381

(63,607)

Loans Held for Sale. The Company elected the fair value option for all loans held for sale (HFS) originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.


					Aggregate Fair Value
September 30, 2020	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale - continuing operations	$	15,854	$	15,430	$	424
Loans held for sale - discontinued operations	1,742		1,811		(69)
Total loans held for sale	$	17,596	$	17,241	$	355


					Aggregate Fair Value
December 31, 2019	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for sale - continuing operations	$	7,625	$	7,485	$	140
Loans held for sale - discontinued operations	132,655		129,622		3,033
Total loans held for sale	$	140,280	$	137,107	$	3,173

Schedule of Changes in Level 3 Assets and Liabilities That Were Measured at Fair Value on a Recurring Basis

The table below presents the changes in Level 3 assets and liabilities that were measured at fair value on a recurring basis for the three and nine months ended September 30, 2020 and 2019.


	Assets (Liabilities)
			Securities		Loans						Capitalized
	Trading		Available		Held for		Commitments		Forward		Servicing
(In thousands)	Security		for Sale		Investment		to Lend (1)		Commitments (1)		Rights (1)
Three Months Ended September 30, 2020
June 30, 2020	$	9,519	$	25,600	$	3,140	$	1,149	$	447	$	4,828



Unrealized gain/(loss), net recognized in other non-interest income	190		—		1,189		—		(50)		—
Unrealized gain included in accumulated other comprehensive income	—		225		—		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		2,124		—		(973)
Paydown of asset	(184)		—		(1,555)		—		—		—

Transfers to held for sale loans	—		—		—		(1,775)		—		—
Additions to servicing rights	—		—		—		—		—		—
September 30, 2020	$	9,525	$	25,825	$	2,774	$	1,498	$	397	$	3,855


Nine Months Ended September 30, 2020
December 31, 2019	$	10,769	$	42,966	$	—	$	2,628	$	—	$	12,299
Adoption of ASC 326	—		—		7,660		—		—		—
Maturity of AFS security	—		(17,000)		—		—		—		—

Unrealized (loss)/gain, net recognized in other non-interest income	(698)		—		(2,523)		—		397		—
Unrealized (loss) included in accumulated other comprehensive income	—		(141)		—		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		15,877		—		(8,255)
Transfers to Level 2	—		—		—		—		—		—
Paydown of asset	(546)		—		(2,363)		—		—		—
Transfers to held for sale loans	—		—		0		(17,007)		—		—
Additions to servicing rights	—		—		0		—		—		(189)
September 30, 2020	$	9,525	$	25,825	$	2,774	$	1,498	$	397	$	3,855

Unrealized gain/(loss) relating to instruments still held at September 30, 2020	$	682	$	(643)	$	—	$	1,498	$	397	$	—



			Securities		Loans				Capitalized
	Trading		Available		Held for		Commitments		Servicing
(In thousands)	Security		for Sale		Investment		to Lend (1)		Rights (1)
Three Months Ended September 30, 2019
June 30, 2019	$	11,210	$	—	$	—	$	9,005	$	11,206

Unrealized gain, net recognized in other non-interest income	109		—		—		—		—

Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		19,915		(1,381)
Paydown of trading security	(174)		—		—		—		—

Transfers to held for sale loans	—		—		—		(21,836)		—
Additions to servicing rights	—		—		—		—		6,588
September 30, 2019	$	11,145	$	—	$	—	$	7,084	$	16,413

Nine Months Ended September 30, 2019
December 31, 2018	$	11,212	$	—	$	—	$	3,927	$	11,485

Unrealized gain, net recognized in other non-interest income	454		—		—		—		—
Unrealized gain/(loss), net recognized in discontinued operations	—		—		—		48,254		(4,495)

Paydown of trading security	(521)		—		—		—		—
Transfers to held for sale loans	—		—		—		(45,097)		—
Additions to servicing rights	—		$	—	—		—		9,423
September 30, 2018	$	11,145	$	—	$	—	$	7,084	$	16,413

Unrealized gains relating to instruments still held at September 30, 2019	$	1,576	$	—	$	—	$	7,084	$	—

(1) Classified as assets from discontinued operations on the consolidated balance sheets.

Schedule of Quantitative Information About the Significant Unobservable Inputs Within Level 3

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities is as follows:


	Fair Value				Significant Unobservable Input
(In thousands)	September 30, 2020		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	9,525	Discounted Cash Flow	Discount Rate	3.75		%
AFS Securities	25,825		Indication from Market Maker	Price	97% - 100%
Loan held for investment	2,774		Discounted Cash Flow	Discount Rate	30.00		%
				Collateral Value	$8.8 - $26.5
Commitments to lend (1)	1,498		Historical Trend	Closing Ratio	74.40		%
			Pricing Model	Origination Costs, per loan	$	3
Forward commitments (1)	397		Historical Trend	Closing Ratio	74.40		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized servicing rights (1)	3,855		Discounted cash flow	Constant Prepayment Rate (CPR)	25.35		%
				Discount Rate	10.00		%
Total	$	43,874

(1) Classified as assets from discontinued operations on the consolidated balance sheets.


	Fair Value				Significant Unobservable Input
(In thousands)	December 31, 2019		Valuation Techniques	Unobservable Inputs	Value
Assets (Liabilities)
Trading security	$	10,769	Discounted Cash Flow	Discount Rate	2.21		%
AFS Securities	42,966		Indication from Market Maker	Price	97% - 100%
Commitments to lend (1)	2,628		Historical Trend	Closing Ratio	77.81		%
			Pricing Model	Origination Costs, per loan	$	3


Capitalized servicing rights (1)	12,299		Discounted Cash Flow	Constant Prepayment Rate (CPR)	11.50		%
				Discount Rate	10.00		%
Total	$	68,662

(1) Classified as assets from discontinued operations on the consolidated balance sheets.

The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured at fair value on a non-recurring basis.


	September 30, 2020		December 31, 2019		Fair Value Measurement Date as of September 30, 2020
	Level 3		Level 3		Level 3
(In thousands)	Inputs		Inputs		Inputs
Assets
Individually evaluated loans	$	41,312	$	8,831	September 2020
Capitalized servicing rights	13,694		14,152		September 2020
Other real estate owned (1)	401		—		September 2020
Total	$	55,407	$	22,983

(1) Includes discontinued operations.

Summary of Applicable Non-Recurring Fair Value Measurements

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets is as follows:

Fair Value

(In thousands)

September 30, 2020

Valuation Techniques

Unobservable Inputs

Range (Weighted Average) (1)

Assets

Individually evaluated loans

41,312

Fair Value of Collateral

Discounted Cash Flow - Loss Severity

0.04% to 100.00% (48.31%)

Appraised Value

$0 to $10,972 ($8,258)

Capitalized servicing rights

13,694

Discounted Cash Flow

Constant Prepayment Rate (CPR)

14.98% to 22.05% (17.08%)

Discount Rate

8.25% to 11.00% (9.17%)

Other Real Estate Owned (2)

401

Fair Value of Collateral

Appraised Value

$94 - $361

Total

55,407

(1) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individuals properties.

(2) Includes discontinued operations.

Fair Value

(In thousands)

December 31, 2019

Valuation Techniques

Unobservable Inputs

Range (Weighted Average) (1)

Assets

Impaired Loans

8,831

Fair Value of Collateral

Discounted Cash Flow - loss severity

15.72% to 0.12% (4.50%)

Appraised Value

$8 to $1,548 ($736)

Capitalized servicing rights

14,152

Discounted Cash Flow

Constant Prepayment Rate (CPR)

9.44% to 14.12% (12.25%)

Discount Rate

10.00% to 13.50% (11.78%)

Other Real Estate Owned

—

Fair Value of Collateral

Appraised Value

—

Total

22,983

Summary of Estimated Fair Values, and Related Carrying Amounts, of Financial Instruments

The following tables summarize the estimated fair values (represents exit price), and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. Certain assets and liabilities in the following disclosures include balances classified as discontinued operations. See Note 2 - Discontinued Operations for more information on these assets and liabilities.


	September 30, 2020
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	935,292	$	935,292	$	935,292	$	—	$	—
Trading security	9,525		9,525		—		—		9,525
Marketable equity securities	31,993		31,993		31,321		672		—
Securities available for sale	1,575,289		1,575,289		—		1,549,464		25,825
Securities held to maturity	330,197		356,035		—		352,485		3,550
FHLB bank stock and restricted securities	40,520		N/A		N/A		N/A		N/A
Net loans	8,847,922		9,172,009		—		—		9,172,009
Loans held for sale (1)	17,596		17,596		—		17,596		—
Accrued interest receivable	48,467		48,467		—		48,467		—

Derivative assets (1)	179,626		179,626		—		177,731		1,895


Financial Liabilities
Total deposits	$	10,466,559	$	10,483,734	$	—	$	10,483,734	$	—
Short-term debt	110,000		110,214		—		110,214		—
Long-term Federal Home Loan Bank advances and other	495,483		500,933		—		500,933		—
Subordinated borrowings	97,223		94,287		—		94,287		—
Derivative liabilities (1)	73,659		73,659		—		73,659		—

(1) Includes assets and liabilities classified as discontinued operations.


	December 31, 2019
	Carrying		Fair
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	579,829	$	579,829	$	579,829	$	—	$	—
Trading security	10,769		10,769		—		—		10,769
Marketable equity securities	41,556		41,556		40,499		1,057		—
Securities available for sale and other	1,311,555		1,311,555		—		1,267,573		43,982
Securities held to maturity	357,979		373,277		—		355,513		17,764
FHLB bank stock and restricted securities	48,019		N/A		N/A		N/A		N/A
Net loans	9,438,853		9,653,550		—		—		9,653,550
Loans held for sale (1)	169,319		169,319		—		140,280		29,039
Accrued interest receivable	36,462		36,462		—		36,462		—

Derivative assets (1)	80,190		80,190		—		77,562		2,628


Financial Liabilities
Total deposits	$	10,335,977	$	10,338,993	$	—	$	10,338,993	$	—
Short-term debt	125,000		125,081		—		125,081		—
Long-term Federal Home Loan Bank advances	605,501		606,381		—		606,381		—
Subordinated borrowings	97,049		101,055		—		101,055		—
Derivative liabilities (1)	80,681		80,681		227		80,454		—

(1) Includes assets and liabilities classified as discontinued operations.