FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Assets Measured on a Recurring Basis

The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:


			Fair Value Measurement Level
($ in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2020
Assets
Securities available-for-sale:
SBA loan pools securities	$	17,807	$	—	$	17,807	$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	107,431		—		107,431		—
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations	218,396		—		218,396		—
Municipal securities	69,233		—		69,233		—
Non-agency residential mortgage-backed securities	163		—		163		—

Collateralized loan obligations	685,931		—		685,931		—
Corporate debt securities	146,906		—		146,906		—
Loans held-for-sale, carried at fair value	1,849		—		466		1,383

Derivative assets:


Interest rate swaps and caps (1)	8,163		—		8,163		—
Foreign exchange contracts (1)	45		—		45		—
Liabilities
Derivative liabilities:


Interest rate swaps and caps (2)	8,749		—		8,749		—

Foreign exchange contracts (2)	14		—		14		—

December 31, 2019
Assets
Securities available-for-sale:

U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	$	36,456	$	—	$	36,456	$	—
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations	91,299		—		91,299		—
Municipal securities	52,689		—		52,689		—
Non-agency residential mortgage-backed securities	196		—		196		—

Collateralized loan obligations	718,361		—		718,361		—
Corporate debt securities	13,579		—		13,579		—
Loans held-for-sale, carried at fair value	22,642		—		3,409		19,233

Derivative assets:


Interest rate swaps and caps (1)	3,445		—		3,445		—
Foreign exchange contracts (1)	138		—		138		—
Liabilities
Derivative liabilities:


Interest rate swaps and caps (2)	3,717		—		3,717		—
Foreign exchange contracts (2)	136		—		136		—

(1)Included in other assets in the Consolidated Statements of Financial Condition.

(2)Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

Fair Value Liabilities Measured on a Recurring Basis

The following table presents our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:


			Fair Value Measurement Level
($ in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2020
Assets
Securities available-for-sale:
SBA loan pools securities	$	17,807	$	—	$	17,807	$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	107,431		—		107,431		—
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations	218,396		—		218,396		—
Municipal securities	69,233		—		69,233		—
Non-agency residential mortgage-backed securities	163		—		163		—

Collateralized loan obligations	685,931		—		685,931		—
Corporate debt securities	146,906		—		146,906		—
Loans held-for-sale, carried at fair value	1,849		—		466		1,383

Derivative assets:


Interest rate swaps and caps (1)	8,163		—		8,163		—
Foreign exchange contracts (1)	45		—		45		—
Liabilities
Derivative liabilities:


Interest rate swaps and caps (2)	8,749		—		8,749		—

Foreign exchange contracts (2)	14		—		14		—

December 31, 2019
Assets
Securities available-for-sale:

U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	$	36,456	$	—	$	36,456	$	—
U.S. government agency and U.S. government sponsored enterprise collateralized mortgage obligations	91,299		—		91,299		—
Municipal securities	52,689		—		52,689		—
Non-agency residential mortgage-backed securities	196		—		196		—

Collateralized loan obligations	718,361		—		718,361		—
Corporate debt securities	13,579		—		13,579		—
Loans held-for-sale, carried at fair value	22,642		—		3,409		19,233

Derivative assets:


Interest rate swaps and caps (1)	3,445		—		3,445		—
Foreign exchange contracts (1)	138		—		138		—
Liabilities
Derivative liabilities:


Interest rate swaps and caps (2)	3,717		—		3,717		—
Foreign exchange contracts (2)	136		—		136		—

(1)Included in other assets in the Consolidated Statements of Financial Condition.

(2)Included in accrued expenses and other liabilities in the Consolidated Statements of Financial Condition.

Reconciliation of Assets Measured at Fair Value on Recurring Basis

The following table presents a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019











Loans repurchased from GNMA Loan Pools
Balance at beginning of period	$	16,685	$	21,075	$	19,233	$	25,040

Total gains (losses) (realized/unrealized):

Included in earnings—fair value adjustment	18		2		(1,351)		(1)


Additions	—		406		—		406
Sales, settlements, and other	(15,320)		(978)		(16,499)		(4,940)
Balance at end of period	$	1,383	$	20,505	$	1,383	$	20,505

Fair value option of certain assets

The following table presents the fair value and aggregate principal balance of certain assets under the fair value option:


	September 30, 2020						December 31, 2019
($ in thousands)	Fair Value		Unpaid Principal Balance		Difference		Fair Value		Unpaid Principal Balance		Difference
Loans held-for-sale, carried at fair value:
Total loans	$	1,849	$	2,149	$	(300)	$	22,642	$	23,455	$	(813)
Nonaccrual loans (1)	651		750		(99)		8,125		8,370		(245)

(1) Includes loans guaranteed by the U.S. government of $0.2 million and $6.7 million at September 30, 2020 and December 31, 2019.

The following table presents changes in fair value related to initial measurement and subsequent changes in fair value included in earnings for these assets measured at fair value for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Net gains (losses) from fair value changes:
Fair value adjustment for loans held-for-sale	$	24	$	17	$	(1,537)	$	77

Schedule of Assets and Liabilities Measured on Non-recurring Basis

The following table presents our financial assets and liabilities measured at fair value on a non-recurring basis as of the dates indicated:


			Fair Value Measurement Level
($ in thousands)	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
September 30, 2020
Assets


Impaired loans:
Single family residential mortgage	$	1,881	$	—	$	—	$	1,881
Commercial and industrial	17,015		—		—		17,015



SBA	3,299		—		—		3,299





December 31, 2019
Assets
Impaired loans:
Single family residential mortgage	$	3,678	$	—	$	—	$	3,678



Commercial and industrial	15,409		—		—		15,409
SBA	1,711		—		—		1,711

Schedule of Gains and (Losses) Recognized on Assets Measured at Fair Value on Non-recurring Basis

The following table presents the losses recognized on assets measured at fair value on a non-recurring basis for the periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2020		2019		2020		2019
Impaired loans:
Single family residential mortgage	$	(191)	$	—	$	(722)	$	(490)
Commercial and industrial	(3,106)		—		(11,620)		—
SBA	(1,534)		—		(3,078)		(46)
Other consumer	—		—		(4)		(88)

Carrying Amounts and Estimated Fair Values of Financial Instruments

Estimated Fair Values of Financial Instruments

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities as of the dates indicated:


	Carrying Amount		Fair Value Measurement Level
($ in thousands)			Level 1		Level 2		Level 3		Total
September 30, 2020
Financial assets
Cash and cash equivalents	$	292,490	$	292,490	$	—	$	—	$	292,490

Securities available-for-sale	1,245,867		—		1,245,867		—		1,245,867

Federal Home Loan Bank and other bank stock	44,809		—		44,809		—		44,809
Loans held-for-sale, carried at fair value	1,849		—		466		1,383		1,849

Loans receivable, net of allowance for loan losses	5,587,075		—		—		5,716,880		5,716,880
Accrued interest receivable	32,416		32,416		—		—		32,416
Derivative assets	8,208		—		8,208		—		8,208
Financial liabilities
Deposits	6,032,266		—		—		6,035,348		6,035,348
Advances from Federal Home Loan Bank	559,482		—		608,081		—		608,081


Long-term debt	173,623		—		180,924		—		180,924
Derivative liabilities	8,763		—		8,763		—		8,763
Accrued interest payable	6,156		6,156		—		—		6,156

December 31, 2019
Financial assets
Cash and cash equivalents	$	373,472	$	373,472	$	—	$	—	$	373,472

Securities available-for-sale	912,580		—		912,580		—		912,580

Federal Home Loan Bank and other bank stock	59,420		—		59,420		—		59,420
Loans held-for-sale	22,642		—		3,409		19,233		22,642
Loans receivable, net of allowance for credit losses	5,894,236		—		—		5,894,732		5,894,732
Accrued interest receivable	24,523		24,523		—		—		24,523
Derivative assets	3,583		—		3,583		—		3,583
Financial liabilities
Deposits	5,427,167		—		—		5,430,536		5,430,536
Advances from Federal Home Loan Bank	1,195,000		—		1,222,709		—		1,222,709

Long-term debt	173,421		—		180,213		—		180,213
Derivative liabilities	3,853		—		3,853		—		3,853
Accrued interest payable	4,687		4,687		—		—		4,687