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FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurement Methodologies

The following table summarizes the fair value measurement methodologies, including significant inputs and assumptions, and classification of the Company's assets and liabilities valued at fair value on a recurring basis.

Asset/Liability class

Valuation methodology, inputs and assumptions

Classification

Investment securities

Investment securities AFS

Observable market prices of identical or similar securities are used where available.

Level 2 recurring fair value measurement.

If market prices are not readily available, value is based on discounted cash flows using the following significant inputs:   •      Expected prepayment speeds  •      Estimated credit losses  •      Market liquidity adjustments

Level 3 recurring fair value measurement.

LHFS

Single family loans, excluding loans transferred from held for investment

Fair value is based on observable market data, including:   •       Quoted market prices, where available  •       Dealer quotes for similar loans  •       Forward sale commitments

Level 2 recurring fair value measurement.

When not derived from observable market inputs, fair value is based on discounted cash flows, which considers the following inputs: •       Benchmark yield curve   •       Estimated discount spread to the benchmark yield curve •       Expected prepayment speeds

Estimated fair value classified as Level 3.

Mortgage servicing rights

Single family MSRs

For information on how the Company measures the fair value of its single family MSRs, including key economic assumptions and the sensitivity of fair value to changes in those assumptions, see Note 9, Mortgage Banking Operations.

Level 3 recurring fair value measurement.

Derivatives

Futures

Fair value is based on closing exchange prices.

Level 1 recurring fair value measurement.

Interest rate swaps Interest rate swaptions Forward sale commitments

Fair value is based on quoted prices for identical or similar instruments when available. When quoted prices are not available, fair value is based on internally developed modeling techniques, which require the use of multiple observable market inputs, including:   •       Forward interest rates  •       Interest rate volatilities

Level 2 recurring fair value measurement.

Interest rate lock commitments

The fair value considers several factors including: •       Fair value of the underlying loan based on quoted prices in the secondary market, when available.  •       Value of servicing •       Fall-out factor

Level 3 recurring fair value measurement.

Schedule of Fair Value Hierarchy Measurement

The following tables present the levels of the fair value hierarchy for the Company's assets and liabilities measured at fair value on a recurring basis: 

			As of December 31, 2021
(in thousands)			Fair Value						Level 1						Level 2						Level 3
Assets:
Investment securities AFS
Mortgage backed securities:
Residential			$	32,963					$	—					$	30,556					$	2,407
Commercial			62,792						—						62,792						—
Collateralized mortgage obligations:
Residential			187,394						—						187,394						—
Commercial			136,659						—						136,659						—
Municipal bonds			539,923						—						539,923						—
Corporate debt securities			19,616						—						19,541						75
U.S. Treasury securities			23,175						—						23,175						—
Single family LHFS			128,041						—						128,041						—
Single family LHFI			7,287						—						—						7,287
Single family mortgage servicing rights			61,584						—						—						61,584
Derivatives
Futures			334						334						—						—
Forward sale commitments			723						—						723						—
Interest rate lock commitments			2,487						—						—						2,487
Interest rate swaps			4,381						—						4,381						—
Total assets			$	1,207,359					$	334					$	1,133,185					$	73,840
Liabilities:
Derivatives
Forward sale commitments			$	640					$	—					$	640					$	—
Interest rate lock commitments			3						—						—						3
Interest rate swaps			4,541						—						4,541						—
Total liabilities			$	5,184					$	—					$	5,181					$	3

			As of December 31, 2020
(in thousands)			Fair Value						Level 1						Level 2						Level 3
Assets:
Investment securities AFS
Mortgage backed securities:
Residential			$	51,046					$	—					$	48,417					$	2,629
Commercial			45,184						—						45,184						—
Collateralized mortgage obligations:
Residential			234,909						—						234,909						—
Commercial			159,183						—						159,183						—
Municipal bonds			564,703						—						564,703						—
Corporate debt securities			15,222						—						15,141						81
Agency debentures			1,846						—						1,846						—
Single family LHFS			194,643						—						194,643						—
Single family LHFI			7,108						—						—						7,108
Single family mortgage servicing rights			49,966						—						—						49,966
Derivatives
Forward sale commitments			1,035						—						1,035						—
Interest rate lock commitments			17,395						—						—						17,395
Interest rate swaps			17,459						—						17,459						—
Total assets			$	1,359,699					$	—					$	1,282,520					$	77,179
Liabilities:
Derivative
Futures			$	4					$	4					$	—					$	—
Forward sale commitments			3,714						—						3,714						—
Interest rate lock commitments			3						—						—						3
Interest rate swaps			20,511						—						20,511						—
Total liabilities			$	24,232					$	4					$	24,225					$	3

Fair Value Measurements Recurring and Nonrecurring Valuation Techniques

The following information presents significant Level 3 unobservable inputs used to measure fair value of certain assets:

(dollars in thousands)			Fair Value						Valuation Technique						Significant Unobservable Input						Low						High						Weighted Average
December 31, 2021
Investment securities AFS			$	2,482					Income approach						Implied spread to benchmark interest rate curve						2.00%						2.00%						2.00%
Single family LHFI			7,287						Income approach						Implied spread to benchmark interest rate curve						2.39%						7.96%						3.56%
Interest rate lock commitments, net			2,484						Income approach						Fall-out factor						0.15%						21.93%						8.44%
															Value of servicing						0.35%						1.46%						1.15%
December 31, 2020
Investment securities AFS			$	2,710					Income approach						Implied spread to benchmark interest rate curve						2.00%						2.00%						2.00%
Single family LHFI			7,108						Income approach						Implied spread to benchmark interest rate curve						3.96%						10.64%						6.23%
Interest rate lock commitments, net			17,392						Income approach						Fall-out factor						1.97%						38.38%						15.53%
															Value of servicing						0.41%						1.44%						0.97%

Schedule of Fair Value Changes and Activity for Level 3

The following table presents fair value changes and activity for certain Level 3 assets:

(in thousands)						Beginning balance						Additions						Transfers						Payoffs/Sales						Change in mark to market (1)						Ending balance
Year Ended December 31, 2021
Investment securities AFS						$	2,710					$	—					$	—					$	(192)					$	(36)					$	2,482
Single family LHFI						7,108						4,051						—						(4,279)						407						7,287
Year Ended December 31, 2020
Investment securities AFS						$	1,952					$	985					$	—					$	(435)					$	208					$	2,710
Single family LHFI						3,468						6,088						—						(2,409)						(39)						7,108

(1) Changes in fair value for singe family LHFI are recorded in other noninterest income on the consolidated income statement.

The following table presents fair value changes and activity for Level 3 interest rate lock and purchase loan commitments:

			Years Ended December 31,
(in thousands)			2021						2020
Beginning balance, net			$	17,392					$	2,223
Total realized/unrealized gains			11,888						55,911
Settlements			(26,796)						(40,742)
Ending balance, net			$	2,484					$	17,392

Fair Value Measurements on Nonrecurring Basis

The following tables present assets classified as Level 3 assets that had changes in their recorded fair value during 2021 and 2020 and what we still held at the end of the respective reporting period:

(in thousands)			Fair Value																								Total Gains (Losses)
As of or for the year ended December 31, 2021
LHFI (1)			$	1,214																							$	(43)
As of or for the year ended December 31, 2020
LHFI (1)			$	3,651																							$	(1,700)

(1) Represents the carrying value of loans for which adjustments are based on the fair value of the collateral.

Fair Value, by Balance Sheet Grouping

The following presents the carrying value, estimated fair value and the levels of the fair value hierarchy for the Company's financial instruments other than assets and liabilities measured at fair value on a recurring basis:

			At December 31, 2021
(in thousands)			Carrying Value						Fair Value						Level 1						Level 2						Level 3
Assets:
Cash and cash equivalents			$	65,214					$	65,214					$	65,214					$	—					$	—
Investment securities HTM			4,169						4,305						—						4,305						—
LHFI			5,488,439						5,588,719						—						—						5,588,719
LHFS – multifamily and SBA			48,090						48,425						—						48,425						—
Mortgage servicing rights – multifamily and SBA			39,415						43,199						—						—						43,199
Federal Home Loan Bank stock			10,361						10,361						—						10,361						—
Other assets - GNMA EBO loans			12,342						12,342						—						—						12,342
Liabilities:
Certificates of deposit			$	906,928					$	906,064					$	—					$	906,064					$	—
Borrowings			41,000						41,000						—						41,000						—
Long-term debt			126,026						116,845						—						116,845						—

			At December 31, 2020
(in thousands)			Carrying Value						Fair Value						Level 1						Level 2						Level 3
Assets:
Cash and cash equivalents			$	58,049					$	58,049					$	58,049					$	—					$	—
Investment securities HTM			4,271						4,507						—						4,507						—
LHFI			5,172,778						5,327,711						—						—						5,327,711
LHFS multifamily and other			167,289						167,289						—						167,289						—
Mortgage servicing rights – multifamily			35,774						38,423						—						—						38,423
Federal Home Loan Bank stock			20,319						20,319						—						20,319						—
Other assets - GNMA EBO loans			101,750						101,750						—						—						101,750
Liabilities:
Certificates of deposit			$	1,139,807					$	1,143,747					$	—					$	1,143,747					$	—
Borrowings			322,800						322,876						—						322,876						—
Long-term debt			125,838						116,893						—						116,893						—

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