Disclosures About Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Estimated Fair Values of Financial Instruments

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



					Fair Value Measurements at September 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	$	383,399	$	383,399	$	383,399	$	—	$	—
Investment securities, available for sale	418,945		418,945		17,863		401,082		—
Loans held for sale	1,730,002		1,730,501		—		1,680,010		50,491
Loans receivable, net of allowance for loan losses	4,735,279		4,737,189		—		—		4,737,189
FHLB, Federal Reserve Bank and other restricted stock	63,514		63,514		—		63,514		—
Derivatives	10,938		10,938		—		10,868		70
Liabilities:
Deposits	$	5,785,194	$	5,799,266	$	3,497,023	$	2,302,243	$	—
Federal funds purchased	50,000		50,000		50,000		—		—
FHLB advances	985,900		988,859		715,900		272,959		—
Other borrowings	88,250		93,222		68,285		24,937		—
Subordinated debt	110,000		111,100		—		111,100		—
Derivatives	16,951		16,951		—		16,951		—



					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		—
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 September 30, 2015 and December 31, 2014 were as follows:



	September 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	$	—	$	365,760	$	—	$	365,760
Corporate notes	—		35,322		—		35,322
Equity securities	17,863		—		—		17,863
Derivatives (1)	—		10,868		70		10,938
Loans held for sale – fair value option	—		1,680,010		—		1,680,010
Total assets - recurring fair value measurements	$	17,863	$	2,091,960	$	70	$	2,109,893
Liabilities
Derivatives (2)	$	—	$	16,951	$	—	$	16,951
Measured at Fair Value on a Nonrecurring Basis:
Assets
Impaired loans, net of specific reserves of $4,842	$	—	$	—	$	6,619	$	6,619
Other real estate owned	—		—		2,975		2,975
Total assets - nonrecurring fair value measurements	$	—	$	—	$	9,594	$	9,594



	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 nine months ended September 30, 2015 and 2014 are summarized as follows.



	Three Months Ended September 30,
	2015			2014
	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at July 1	$	71		$	54
Issuances	70			35
Settlements	(71		)	(54		)
Balance at September 30	$	70		$	35



	Nine Months Ended September 30,
	2015			2014
	Residential Mortgage Loan Commitments
(amounts in thousands)
Balance at January 1	$	43		$	240
Issuances	228			192
Settlements	(201		)	(397		)
Balance at September 30	$	70		$	35

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 September 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
September 30, 2015	Fair Value Estimate		Valuation Technique	Unobservable Input	Range (Weighted Average) (3)
(amounts in thousands)
Impaired loans	$	6,619	Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Other real estate owned	2,975		Collateral appraisal (1)	Liquidation expenses (2)	(8)%
Residential mortgage loan commitments	70		Adjusted market bid	Pull-through rate	92%



	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 generally discount appraisals.


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


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