FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2015

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)
March 31, 2015
Assets
Available for sale securities:
SBA loan pools securities	$	1,635	$	—	$	1,635	$	—
U.S. government-sponsored entities and agency securities	2,001		—		2,001		—
Private label residential mortgage-backed securities	2,615		—		2,615		—
Agency mortgage-backed securities	387,335		—		387,335		—
Loans held for sale	355,746		—		355,746		—
Derivative assets ⁽¹⁾	13,555		—		13,555		—
Mortgage servicing rights ⁽²⁾	21,165		—		—		21,165
Liabilities
Derivative liabilities ⁽³⁾	4,552		—		4,552		—
December 31, 2014
Assets
Available for sale securities:
SBA loan pools securities	$	1,715	$	—	$	1,715	$	—
U.S. government-sponsored entities and agency securities	1,982		—		1,982		—
Private label residential mortgage-backed securities	3,168		—		3,168		—
Agency mortgage-backed securities	338,830		—		338,830		—
Loans held for sale	278,749		—		278,749		—
Derivative assets ⁽¹⁾	6,379		—		6,379		—
Mortgage servicing rights ⁽²⁾	19,082		—		—		19,082
Liabilities
Derivative liabilities ⁽³⁾	3,235		—		3,235		—


(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)
March 31, 2015
Assets
Available for sale securities:
SBA loan pools securities	$	1,635	$	—	$	1,635	$	—
U.S. government-sponsored entities and agency securities	2,001		—		2,001		—
Private label residential mortgage-backed securities	2,615		—		2,615		—
Agency mortgage-backed securities	387,335		—		387,335		—
Loans held for sale	355,746		—		355,746		—
Derivative assets ⁽¹⁾	13,555		—		13,555		—
Mortgage servicing rights ⁽²⁾	21,165		—		—		21,165
Liabilities
Derivative liabilities ⁽³⁾	4,552		—		4,552		—
December 31, 2014
Assets
Available for sale securities:
SBA loan pools securities	$	1,715	$	—	$	1,715	$	—
U.S. government-sponsored entities and agency securities	1,982		—		1,982		—
Private label residential mortgage-backed securities	3,168		—		3,168		—
Agency mortgage-backed securities	338,830		—		338,830		—
Loans held for sale	278,749		—		278,749		—
Derivative assets ⁽¹⁾	6,379		—		6,379		—
Mortgage servicing rights ⁽²⁾	19,082		—		—		19,082
Liabilities
Derivative liabilities ⁽³⁾	3,235		—		3,235		—


(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 March 31,
	2015			2014
	(In thousands)
Mortgage servicing rights
Balance at beginning of period	$	19,082		$	13,535
Transfers out of Level 3 ⁽¹⁾	—			(9,185		)
Total gains or losses (realized/unrealized):
Included in earnings—realized	—			—
Included in earnings—fair value adjustment	(528		)	315
Included in other comprehensive income	—			—
Amortization of premium (discount)	—			—
Additions	10,192			4,326
Sales and settlements	(7,581		)	(584		)
Balance at end of period	$	21,165		$	8,407


(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 (In thousands)		Valuation Technique(s)	Unobservable Input(s)	Range (Weighted Average)
March 31, 2015
Mortgage servicing rights	$	21,165	Discounted cash flow	Discount rate	9.00% to 13.20% (9.84%)
				Prepayment rate	5.15% to 34.28% (12.98%)
December 31, 2014
Mortgage servicing rights	$	13,135	Discounted cash flow	Discount rate	9.00% to 19.50% (10.09%)
				Prepayment rate	4.59% to 31.02% (13.22%)
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%)

Schedule of Assets and Liabilities Measured 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)
March 31, 2015
Assets
Impaired loans:
Single family residential mortgage	$	5,065	$	—	$	—	$	5,065
Commercial and industrial	4,134		—		—		4,134
Other real estate owned:
Single family residential	498		—		—		498
December 31, 2014
Assets
Impaired loans:
Single family residential mortgage	$	6,206	$	—	$	—	$	6,206
Commercial and industrial	4,313		—		—		4,313
SBA servicing rights	484		—		—		484
Other real estate owned:
Single family residential	423		—		—		423

Schedule of 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,
	2015			2014
	(In thousands)
Impaired loans:
Single family residential mortgage	$	—		$	(151	)
Other consumer	—			(2		)
Other real estate owned:
Single family residential	(5		)	—

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)
March 31, 2015
Financial assets
Cash and cash equivalents	$	265,402	$	265,402	$	—	$	—	$	265,402
Time deposits in financial institutions	1,900		1,900		—		—		1,900
Securities available for sale	393,586		—		393,586		—		393,586
FHLB and other bank stock	39,844		—		39,844		—		39,844
Loans held for sale	1,240,942		—		1,249,370		—		1,249,370
Loans and leases receivable, net of allowance	3,904,370		—		—		4,008,008		4,008,008
Accrued interest receivable	14,970		14,970		—		—		14,970
Derivative assets	13,555		—		13,555		—		13,555
Financial liabilities
Deposits	4,861,992		—		—		4,719,344		4,719,344
Advances from Federal Home Loan Bank	545,000		—		545,195		—		545,195
Other borrowings	15,000		—		15,000		—		15,000
Notes payable	92,668		86,750		12,102		—		98,852
Derivative liabilities	4,552		—		4,552		—		4,552
Accrued interest payable	2,016		2,016		—		—		2,016
December 31, 2014
Financial assets
Cash and cash equivalents	$	231,199	$	231,199	$	—	$	—	$	231,199
Time deposits in financial institutions	1,900		1,900		—		—		1,900
Securities available for sale	345,695		—		345,695		—		345,695
FHLB and other bank stock	42,241		—		42,241		—		42,241
Loans held for sale	1,187,090		—		1,195,834		—		1,195,834
Loans and leases receivable, net of allowance	3,919,642		—		—		4,045,465		4,045,465
Accrued interest receivable	15,113		15,113		—		—		15,113
Derivative assets	6,379		—		6,379		—		6,379
Financial liabilities
Deposits	4,671,831		—		—		4,575,264		4,575,264
Advances from Federal Home Loan Bank	633,000		—		633,083		—		633,083
Notes payable	93,569		87,428		13,360		—		100,788
Derivative liabilities	3,235		—		3,235		—		3,235
Accrued interest payable	2,044		2,044		—		—		2,044

- 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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