FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2014

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

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


			Fair Value Measurements Level
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Value		(Level One)		(Level Two)		(Level Three)
	(In thousands)
March 31, 2014:
Assets
Available-for-sale securities:
SBA loan pools securities	$	1,702	$	—	$	1,702	$	—
U.S. government-sponsored entities and agency securities		1,958		—		1,958		—
Private label residential mortgage-backed securities		5,067		—		5,067		—
Agency mortgage-backed securities		98,798		—		98,798		—
Loans held for sale		169,197		—		169,197		—
Derivative assets ⁽¹⁾		4,469		—		4,469		—
Mortgage servicing rights ⁽²⁾		18,553		—		10,146		8,407
Liabilities
Derivative liabilities ⁽³⁾		64		—		64		—
December 31, 2013:
Assets
Available-for-sale securities:
SBA loan pools securities	$	1,736	$	—	$	1,736	$	—
U.S. government-sponsored entities and agency securities		1,920		—		1,920		—
Private label residential mortgage-backed securities		14,752		—		14,752		—
Agency mortgage-backed securities		151,614		—		151,614		—
Loans held for sale		192,613		—		192,613		—
Derivative assets ⁽¹⁾		5,493		—		5,493		—
Mortgage servicing rights ⁽²⁾		13,535		—		—		13,535
Liabilities
Derivative liabilities ⁽³⁾		—		—		—		—

⁽¹⁾

Included in other assets on the consolidated statements of financial condition

⁽²⁾

Included in servicing rights, net and servicing rights held for sale on the consolidated statements of financial condition

⁽³⁾

Included in accrued expenses and other liabilities on the consolidated statements of financial condition

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


			Fair Value Measurements Level
			Quoted Prices in		Significant
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
	Value		(Level One)		(Level Two)		(Level Three)
	(In thousands)
March 31, 2014:
Assets
Impaired loans:
Real estate 1-4 family first mortgage	$	10,160	$	—	$	3,094	$	7,066
Real estate mortgage		3,218		—		—		3,218
Multifamily		1,674		—		—		1,674
HELOC’s, home equity loans, and other consumer installment credit		212		—		212		—
Other real estate owned
Real estate 1-4 family first mortgage		150		—		150		—
December 31, 2013:
Assets
Impaired loans:
Real estate 1-4 family first mortgage	$	12,814	$	—	$	8,769	$	4,045
Real estate mortgage		3,868		—		105		3,763
Multifamily		1,972		—		—		1,972
HELOC’s, home equity loans, and other consumer installment credit		249		—		216		33
Commercial and industrial		33		—		—		33
SBA		10		—		—		10

Gains and (Losses) Recognized on Assets Measured at Fair Value on Non-Recurring Basis

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


	Three months ended
	March 31,
	2014			2013
	(In thousands)
Impaired loans:
Real estate 1-4 family first mortgage	$	(151	)	$	(124	)
Multifamily		—			(296	)
HELOC’s, home equity loans, and other consumer installment credit		(2	)		(2	)
Other real estate owned assets		—			35

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:


	Private label
	residential			Mortgage
	mortgage-backed			Servicing
	securities			Rights			Total
	(In thousands)
Balance of recurring Level 3 assets at December 31, 2013	$	—		$	13,535		$	13,535
Transfers out of Level 3 ⁽¹⁾		—			(9,185	)		(9,185	)
Total gains or losses (realized/unrealized):
Included in earnings—realized		—			—			—
Included in earnings—fair value adjustment		—			315			315
Included in other comprehensive income		—			—			—
Amortization of premium (discount)		—			—			—
Additions		—			4,326			4,326
Sales and settlements		—			(584	)		(584	)

Balance of recurring Level 3 assets at March 31, 2014	$	—		$	8,407		$	8,407

Balance of recurring Level 3 assets at December 31, 2012	$	2,214		$	1,739		$	3,953
Transfers out of Level 3 ⁽¹⁾		—			—			—
Total gains or losses (realized/unrealized):
Included in earnings—realized		—			—			—
Included in earnings—fair value adjustment		—			25			25
Included in other comprehensive income		(1	)		—			(1	)
Amortization of premium (discount)		—			—			—
Additions		—			910			910
Sales and settlements		(294	)		(95	)		(389	)

Balance of recurring Level 3 assets at March 31, 2013	$	1,919		$	2,579		$	4,498

(1)

The Company’s policy is to recognize transfers in and transfers out as of the actual date of the event or change in circumstances that cause the transfer.

Quantitative Information About Level 3 Fair Value Measurements

The following table presents quantitative information about Level 3 fair value measurements on a recurring basis as of the dates indicated:


	Fair Value		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
	($ in thousands)
March 31, 2014:
Mortgage servicing rights	$	8,407	Discounted cash flow	Discount rate	10.00% to 17.89% (10.81%)
				Prepayment rate	3.92% to 34.54% (13.17%)
December 31, 2013:
Mortgage servicing rights	$	13,535	Discounted cash flow	Discount rate	10.00% to 17.94% (10.26%)
				Prepayment rate	4.19% to 34.54% (9.85%)

Carrying Amounts and 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		Fair Value Measurements Level
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
March 31, 2014:
Financial assets
Cash and cash equivalents	$	333,639	$	333,639	$	—	$	—	$	333,639
Time deposits in financial institutions		1,745		1,745		—		—		1,745
Securities available-for-sale		107,525		—		107,525		—		107,525
FHLB and other bank stock		26,801		—		26,801		—		26,801
Loans held for sale		1,000,394		—		1,000,394		—		1,000,394
Loans and leases receivable, net of allowance		2,376,992		—		—		2,414,917		2,414,917
Accrued interest receivable		10,962		10,962		—		—		10,962
Derivative assets		4,469		—		4,469		—		4,469
Financial liabilities
Deposits		3,109,146		—		3,074,457		—		3,074,457
Advances from the FHLB		395,000		—		395,074		—		395,074
Federal funds purchased		70,000		70,000		—		—		70,000
Notes payable		82,416		86,615		—		—		86,615
Derivative liabilities		64		—		64		—		64
Accrued interest payable		1,628		1,628		—		—		1,628
December 31, 2013:
Financial assets
Cash and cash equivalents	$	110,118	$	110,118	$	—	$	—	$	110,118
Time deposits in financial institutions		1,846		1,846		—		—		1,846
Securities available-for-sale		170,022		—		170,022		—		170,022
FHLB and other bank stock		22,600		—		22,600		—		22,600
Loans held for sale		716,733		—		719,496		—		719,496
Loans and leases receivable, net of allowance		2,427,306		—		—		2,460,953		2,460,953
Accrued interest receivable		10,866		10,866		—		—		10,866
Derivative assets		5,493		—		5,493		—		5,493
Financial liabilities
Deposits		2,918,644		—		2,877,650		—		2,877,650
Advances from the FHLB		250,000		—		250,090		—		250,090
Notes payable		82,320		85,564		—		—		85,564
Derivative liabilities		—		—		—		—		—
Accrued interest payable		1,646		1,646		—		—		1,646

- 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.

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- 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.

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- 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.

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