FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Assets Measured on a 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 Measurement Level
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
September 30, 2014:
Assets
Available-for-sale securities:
SBA loan pools securities	$	1,693	$	—	$	1,693	$	—
U.S. government-sponsored entities and agency securities	1,980		—		1,980		—
Private label residential mortgage-backed securities	3,698		—		3,698		—
Agency mortgage-backed securities	303,014		—		303,014		—
Loans held for sale	252,390		—		252,390		—
Derivative assets ⁽¹⁾	6,955		—		6,955		—
Mortgage servicing rights ⁽²⁾	11,376		—		—		11,376
Liabilities
Derivative liabilities ⁽³⁾	596		—		596		—
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

Fair Value Liabilities Measured on a 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 Measurement Level
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
September 30, 2014:
Assets
Available-for-sale securities:
SBA loan pools securities	$	1,693	$	—	$	1,693	$	—
U.S. government-sponsored entities and agency securities	1,980		—		1,980		—
Private label residential mortgage-backed securities	3,698		—		3,698		—
Agency mortgage-backed securities	303,014		—		303,014		—
Loans held for sale	252,390		—		252,390		—
Derivative assets ⁽¹⁾	6,955		—		6,955		—
Mortgage servicing rights ⁽²⁾	11,376		—		—		11,376
Liabilities
Derivative liabilities ⁽³⁾	596		—		596		—
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

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									Nine Months Ended
	Private Label Residential Mortgage Backed Securities			Mortgage Servicing Rights			Total			Private Label Residential Mortgage Backed Securities			Mortgage Servicing Rights			Total
	(In thousands)
September 30, 2014:
Balance at beginning of period	$	—		$	9,816		$	9,816		$	—		$	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	—			110			110			—			(140		)	(140		)
Included in other comprehensive income	—			—			—			—			—			—
Amortization of premium (discount)	—			—			—			—			—			—
Additions	—			7,735			7,735			—			18,057			18,057
Sales and settlements	—			(6,285		)	(6,285		)	—			(10,891		)	(10,891		)
Balance at end of period	$	—		$	11,376		$	11,376		$	—		$	11,376		$	11,376
September 30, 2013:
Balance at beginning of period	$	1,706		$	4,620		$	6,326		$	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	—			(79		)	(79		)	—			251			251
Included in other comprehensive income	(3		)	—			(3		)	—			—			—
Amortization of premium (discount)	—			—			—			—			—			—
Additions	—			2,836			2,836			—			5,598			5,598
Sales and settlements	(1,703		)	(157		)	(1,860		)	(2,214		)	(368		)	(2,582		)
Balance at end of period	$	—		$	7,220		$	7,220		$	—		$	7,220		$	7,220


(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.

Fair Value, Assets Measured on Nonrecurring Basis, Schedule of Gain (Losses)

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 September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
	(In thousands)
Impaired loans:
Single family residential mortgage	$	(18	)	$	(884	)	$	(350	)	$	(1,195	)
Real estate mortgage	88			(117		)	88			(238		)
SBA	—			(1		)	—			(29		)
Other consumer	—			—			(2		)	(19		)
Commercial and industrial	—			(2		)	—			(2		)
Other real estate owned:
Single family residential	—			(7		)	—			(40		)
Multi-family	—			83			—			84
Land	—			(21		)	—			83

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

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 Measurement Level
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
September 30, 2014:
Assets
Impaired loans:
Single family residential mortgage	$	23,119	$	—	$	—	$	23,119
Commercial and industrial	7,333		—		—		7,333
Commercial real estate	3,572		—		—		3,572
Multi-family	1,622		—		—		1,622
Other consumer	1,382		—		—		1,382
SBA	6		—		—		6
Other real estate owned:
Single family residential	605		—		—		605
December 31, 2013:
Assets
Impaired loans:
Single family residential mortgage	$	12,814	$	—	$	8,769	$	4,045
Commercial real estate	3,868		—		105		3,763
Multi-family	1,972		—		—		1,972
Other consumer	249		—		216		33
Commercial and industrial	33		—		—		33
SBA	10		—		—		10

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)
September 30, 2014:	(In thousands)
Mortgage servicing rights	$	11,376	Discounted cash flow	Discount rate	10.00% to 21.22% (10.70%)
				Prepayment rate	4.71% to 34.76% (12.41%)
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%)
September 30, 2013
Mortgage servicing rights	$	7,220	Discounted cash flow	Discount rate	10.00% to 17.46% (10.33%)
				Prepayment rate	3.29% to 38.70% (10.89%)

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 Measurement Level
	Amount		Level 1		Level 2		Level 3		Total
	(In thousands)
September 30, 2014:
Financial assets
Cash and cash equivalents	$	184,985	$	184,985	$	—	$	—	$	184,985
Time deposits in financial institutions	1,900		1,900		—		—		1,900
Securities available-for-sale	310,385		—		310,385		—		310,385
FHLB and other bank stock	35,432		—		35,432		—		35,432
Loans held for sale	1,127,339		—		1,133,318		—		1,133,318
Loans and leases receivable, net of allowance	2,686,785		—		—		2,738,419		2,738,419
Accrued interest receivable	11,587		11,587		—		—		11,587
Derivative assets	6,955		—		6,955		—		6,955
Financial liabilities
Deposits	3,631,710		—		—		3,568,567		3,568,567
Advances from Federal Home Loan Bank	305,000		—		305,030		—		305,030
Notes payable	95,549		86,587		14,516		—		101,103
Derivative liabilities	596		—		596		—		596
Accrued interest payable	1,806		1,806		—		—		1,806
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 Federal Home Loan Bank	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 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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- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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