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DERIVATIVE INSTRUMENTS | 9 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company uses derivative instruments and other risk management techniques to reduce its exposure to adverse fluctuations in interest rates and foreign currency exchange rates in accordance with its risk management policies. Derivative Instruments Related to Mortgage Banking Activities: In connection with mortgage banking activities, if interest rates increase, the value of the Company’s loan commitments to borrowers and mortgage loans held-for-sale are adversely impacted. The Company attempts to economically hedge the risk of the overall change in the fair value of loan commitments to borrowers and mortgage loans held-for-sale with forward loan sale contracts and TBA mortgage-backed securities trades. Forward contracts on loan sale commitments, TBA mortgage-based securities trades, and loan commitments to borrowers are non-designated derivative instruments and the gains and losses resulting from these derivative instruments are included in Net Revenue on Mortgage Banking Activities in the Statement of Operations of discontinued operations. The fair value of resulting derivative assets and liabilities are included in Other Assets and Accrued Expenses and Other Liabilities, respectively, in the Statement of Financial Condition of discontinued operations. The net losses relating to these derivative instruments used for mortgage banking activities, which were included in Net Revenue on Mortgage Banking Activities in the Statement of Operations of discontinued operations, were $750 thousand and $4.7 million for the three months ended September 30, 2017 and 2016, respectively, and $12.4 million and $16.0 million for the nine months ended September 30, 2017 and 2016, respectively. At September 30, 2017, the Company had no outstanding derivative instruments related to mortgage banking activities. Interest Rate Swaps on Deposits and Other Borrowings: On September 30, 2013 and January 30, 2015, the Company entered into pay-fixed, receive-variable interest-rate swap contracts for the notional amounts of $50.0 million and $25.0 million, respectively, with maturity dates of September 27, 2018 and January 30, 2022, respectively. These swap contracts were entered into with institutional counterparties to hedge against variability in cash flows attributable to interest rate risk caused by changes in the LIBOR benchmark interest rate on the Company’s ongoing LIBOR based variable rate deposits and borrowings. During the year ended December 31, 2016, the Company terminated all of its interest rate swaps, which had an aggregate notional amount of $75.0 million. Interest Rate Swaps and Caps on Loans: The Company offers interest rate swap and cap products to certain loan customers to allow them to hedge the risk of rising interest rates on their variable rate loans. When such products are issued, the Company also enters into an offsetting swap with institutional counterparties to eliminate the interest rate risk. These back-to-back agreements are intended to offset each other and allow the Company to retain the credit risk of the transaction with its customer in exchange for a fee. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer plus the fee. These swaps and caps are not designated as hedging instruments and are recorded at fair value in Other Assets and Accrued Expenses and Other Liabilities in the Consolidated Statement of Financial Condition. The changes in fair value are recorded in Other Income in the Consolidated Statements of Operations. For the three and nine months ended September 30, 2017, changes in fair value recorded through Other Income in the Consolidated Statements of Operations were insignificant. Foreign Exchange Contracts: The Company offers short-term foreign exchange contracts to its customers to purchase and/or sell foreign currencies at set rates in the future. These products allow customers to hedge the foreign exchange rate risk of their deposits and loans denominated in foreign currencies. In conjunction with these products the Company also enters into offsetting contracts with institutional counterparties to hedge the Company’s foreign exchange rate risk. These back-to-back contracts allow the Company to offer its customers foreign exchange products while minimizing its exposure to foreign exchange rate fluctuations. These foreign exchange contracts are not designated as hedging instruments and are recorded at fair value in Other Assets and Accrued Expenses and Other Liabilities in the Consolidated Statement of Financial Condition. At September 30, 2017, the Company had no outstanding foreign exchange contracts. The following table presents the notional amount and fair value of derivative instruments included in the Consolidated Statements of Financial Condition as of the dates indicated. Note 3 contains further disclosures pertaining to the fair value of mortgage banking derivatives.
| September 30, 2017 |  | December 31, 2016
| Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
| (In thousands)
Included in assets: |  |  |  |  |  |  |
Interest rate lock commitments (1) | $ | — |  |  | $ | — |  |  | $ | 289,637 |  |  | $ | 8,317 |
Mandatory forward commitments (1) | — |  |  | — |  |  | 537,476 |  |  | 8,897 |
Interest rate swaps and cap on loans with correspondent bank | 69,090 |  |  | 1,112 |  |  | 46,346 |  |  | 707 |
Foreign exchange contracts | — |  |  | — |  |  | 4,236 |  |  | 47 |
Total included in assets | $ | 69,090 |  |  | $ | 1,112 |  |  | $ | 877,695 |  |  | $ | 17,968 |
Included in liabilities: |  |  |  |  |  |  |
Interest rate lock commitments (1) | $ | — |  |  | $ | — |  |  | $ | 22,945 |  |  | $ | 231 |
Mandatory forward commitments (1) | — |  |  | — |  |  | 265,322 |  |  | 1,212 |
Interest rate swaps and caps on loans with customers | 69,090 |  |  | 1,146 |  |  | 46,346 |  |  | 655 |
Foreign exchange contracts | — |  |  | — |  |  | 4,207 |  |  | 18 |
Total included in liabilities | $ | 69,090 |  |  | $ | 1,146 |  |  | $ | 338,820 |  |  | $ | 2,116 |
(1) Derivative instruments related to mortgage banking activities (discontinued operations). The Company has entered into agreements with counterparty financial institutions, which include master netting agreements that provide for the net settlement of all contracts with a single counterparty in the event of default. However, the Company elected to account for all derivatives with counterparty institutions on a gross basis. Due to clearinghouse rule changes, beginning January 1, 2017, variation margin payments are treated as settlements of derivative exposure rather than as collateral.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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