Disclosures about Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Estimated Fair Values of Financial Instruments

The estimated fair values of Customers' financial instruments were as follows at June 30, 2015 and December 31, 2014.



					Fair Value Measurements at June 30, 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	$	391,589	$	391,589	$	391,589	$	—	$	—
Investment securities, available for sale	373,953		373,953		20,274		353,679		—
Loans held for sale	2,030,348		2,030,954		—		1,949,572		81,382
Loans receivable, net of allowance for loan losses	4,487,334		4,489,039		—		—		4,489,039
FHLB, Federal Reserve Bank and other restricted stock	78,148		78,148		—		78,148		—
Derivatives	6,768		6,768		—		6,697		71
Liabilities:
Deposits	$	5,477,157	$	5,488,758	$	3,215,694	$	2,273,064	$	—
FHLB advances	1,388,000		1,390,872		1,018,153		372,719		—
Other borrowings	88,250		93,560		68,310		25,250		—
Subordinated debt	110,000		113,025		—		113,025		—
FDIC clawback liability, net of FDIC receivable	1,455		1,455		—		—		1,455
Derivatives	10,234		10,234		—		10,234		—



					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 June 30, 2015 and December 31, 2014 were as follows:



	June 30, 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	$	—	$	331,355	$	—	$	331,355
Corporate notes	—		22,324		—		22,324
Equity securities	20,274		—		—		20,274
Derivatives (1)	—		6,697		71		6,768
Loans held for sale – fair value option	—		1,949,572		—		1,949,572
Total assets - recurring fair value measurements	$	20,274	$	2,309,948	$	71	$	2,330,293
Liabilities
Derivatives (2)	$	—	$	10,234	$	—	$	10,234
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $8,680	$	—	$	—	$	7,625	$	7,625
Other real estate owned	—		—		4,597		4,597
Total assets - nonrecurring fair value measurements	$	—	$	—	$	12,222	$	12,222



	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 and six months ended June 30, 2015 and 2014 are summarized as follows.



	Three Months Ended June 30,
	2015			2014
	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at April 1	$	87		$	103
Issuances	71			54
Settlements	(87		)	(103		)
Balance at June 30	$	71		$	54



	Six Months Ended June 30,
	2015			2014
	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at January 1	$	43		$	240
Issuances	158			157
Settlements	(130		)	(343		)
Balance at June 30	$	71		$	54

Customers' policy is to recognize transfers between fair value levels when events or circumstances warrant transfers. There were no transfers between levels during the three and six months ended June 30, 2015 and 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 June 30, 2015 and December 31, 2014 on a recurring and nonrecurring basis for which Customers utilized Level 3 inputs to measure fair value.



	Quantitative Information about Level 3 Fair Value Measurements
June 30, 2015	Fair Value Estimate		Valuation Technique	Unobservable Input	Range (Weighted Average) (3)
(amounts in thousands)
Impaired loans	$	7,625	Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Other real estate owned	4,597		Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Residential mortgage loan commitments	71		Adjusted market bid	Pull-through rate	90%



	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 Bank does not discount appraisals.


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


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