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FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

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
($ in thousands)		Carrying Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
September 30, 2018
Assets
Securities available-for-sale:
SBA loan pools securities		$	888			$	—			$	888			$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities		439,468				—				439,468				—
Non-agency residential mortgage-backed securities		451				—				451				—
Non-agency commercial mortgage-backed securities		132,704				—				132,704				—
Collateralized loan obligations		1,486,321				—				1,486,321				—
Loans held-for-sale, carried at fair value (1)		28,314				—				2,558				25,756
Mortgage servicing rights (2)		2,029				—				—				2,029
Derivative assets:
Interest rate swaps and caps (3)		2,099				—				2,099				—
Liabilities
Derivative liabilities:
Interest rate swaps and caps (4)		2,064				—				2,064				—
December 31, 2017
Assets
Securities available-for-sale:
SBA loan pools securities		$	1,058			$	—			$	1,058			$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities		476,929				—				476,929				—
Non-agency residential mortgage-backed securities		756				—				756				—
Non-agency commercial mortgage-backed securities		310,511				—				310,511				—
Collateralized loan obligations		1,702,318				—				1,702,318				—
Corporate debt securities		83,897				—				83,897				—
Loans held-for-sale, carried at fair value (5)		105,299				—				6,359				98,940
Mortgage servicing rights (2)		31,852				—				—				31,852
Derivative assets:
Interest rate swaps and caps (3)		1,005				—				1,005				—
Liabilities
Derivative liabilities:
Interest rate swaps and caps (4)		1,033				—				1,033				—

(1) Includes loans held-for-sale carried at fair value of $20.3 million ($2.6 million at Level 2 and $17.7 million at Level 3) of discontinued operations, which are included in Assets of Discontinued Operations in the Consolidated Statements of Financial Condition.

(2) Included in Servicing Rights, Net in the Consolidated Statements of Financial Condition.

(3) Included in Other Assets in the Consolidated Statements of Financial Condition.

(4) Included in Accrued Expenses and Other Liabilities in the Consolidated Statements of Financial Condition.

(5) Includes loans held-for-sale carried at fair value of $38.7 million ($6.4 million at Level 2 and $32.3 million at Level 3) of discontinued operations, which are included in Assets of Discontinued Operations in 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
($ in thousands)		Carrying Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
September 30, 2018
Assets
Securities available-for-sale:
SBA loan pools securities		$	888			$	—			$	888			$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities		439,468				—				439,468				—
Non-agency residential mortgage-backed securities		451				—				451				—
Non-agency commercial mortgage-backed securities		132,704				—				132,704				—
Collateralized loan obligations		1,486,321				—				1,486,321				—
Loans held-for-sale, carried at fair value (1)		28,314				—				2,558				25,756
Mortgage servicing rights (2)		2,029				—				—				2,029
Derivative assets:
Interest rate swaps and caps (3)		2,099				—				2,099				—
Liabilities
Derivative liabilities:
Interest rate swaps and caps (4)		2,064				—				2,064				—
December 31, 2017
Assets
Securities available-for-sale:
SBA loan pools securities		$	1,058			$	—			$	1,058			$	—
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities		476,929				—				476,929				—
Non-agency residential mortgage-backed securities		756				—				756				—
Non-agency commercial mortgage-backed securities		310,511				—				310,511				—
Collateralized loan obligations		1,702,318				—				1,702,318				—
Corporate debt securities		83,897				—				83,897				—
Loans held-for-sale, carried at fair value (5)		105,299				—				6,359				98,940
Mortgage servicing rights (2)		31,852				—				—				31,852
Derivative assets:
Interest rate swaps and caps (3)		1,005				—				1,005				—
Liabilities
Derivative liabilities:
Interest rate swaps and caps (4)		1,033				—				1,033				—

(1) Includes loans held-for-sale carried at fair value of $20.3 million ($2.6 million at Level 2 and $17.7 million at Level 3) of discontinued operations, which are included in Assets of Discontinued Operations in the Consolidated Statements of Financial Condition.

(2) Included in Servicing Rights, Net in the Consolidated Statements of Financial Condition.

(3) Included in Other Assets in the Consolidated Statements of Financial Condition.

(4) Included in Accrued Expenses and Other Liabilities in the Consolidated Statements of Financial Condition.

(5) Includes loans held-for-sale carried at fair value of $38.7 million ($6.4 million at Level 2 and $32.3 million at Level 3) of discontinued operations, which are included in Assets of Discontinued Operations in 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), on a consolidated operations basis, for the periods indicated:

		Three Months Ended September 30,								Nine Months Ended September 30,
($ in thousands)		2018				2017				2018				2017
Mortgage servicing rights
Balance at beginning of period (1)		$	2,062			$	42,109			$	31,852			$	76,121
Total gains or losses (realized/unrealized):
Included in earnings—fair value adjustment		33				(1,905		)		(1,057		)		(4,984		)
Additions		—				574				—				12,126
Sales, paydowns, and other (2)		(66		)		(2,063		)		(28,766		)		(44,548		)
Balance at end of period		$	2,029			$	38,715			$	2,029			$	38,715
Loans repurchased or subject to repurchase option from GNMA Loan Pools (3)
Balance at beginning of period		$	33,234			$	73,545			$	98,940			$	58,260
Total gains or losses (realized/unrealized):
Included in earnings—fair value adjustment		(22		)		(809		)		(276		)		(794		)
Additions		711				24,537				28,096				59,768
Sales, settlements, and other		(8,167		)		(12,909		)		(101,004		)		(32,870		)
Balance at end of period		$	25,756			$	84,364			$	25,756			$	84,364

(1) Includes MSRs of discontinued operations, which is included in Assets of Discontinued Operations in the Consolidated Statements of Financial Condition, of $37.7 million for the nine months ended September 30, 2017 in balance at beginning of period.

(2) Includes $37.8 million of MSRs sold as a part of discontinued operations for the nine months ended September 30, 2017.

(3) Includes loans repurchased from GNMA Loan Pools of discontinued operations, which is included in Assets of Discontinued Operations in the Consolidated Statements of Financial Condition, of $20.9 million and $52.1 million, respectively, for the three months ended September 30, 2018 and 2017 and $32.3 million and $58.3 million, respectively, for the nine months ended September 30, 2018 and 2017 in balance at beginning of period, and $17.7 million and $41.2 million, respectively, for the three and nine months ended September 30, 2018 and 2017 in balance at end of pe

Quantitative Information About Level 3 Fair Value Measurements

ly.

The following table presents, as of the dates indicated, quantitative information about Level 3 fair value measurements on a recurring basis, other than loans that become severely delinquent and are repurchased out of GNMA loan pools that were valued based on an estimate of the expected loss the Company will incur on these loans, which was included as Level 3 at September 30, 2018 and December 31, 2017:

($ in thousands)		Fair Value				Valuation Technique(s)		Unobservable Input(s)		Range (Weighted Average)
September 30, 2018
Mortgage servicing rights (1)		$	1,963			Discounted cash flow		Discount rate		13.00% to 13.00% (13.00%)
								Prepayment rate		12.35% to 66.34% (16.25%)
December 31, 2017
Mortgage servicing rights (1)		$	2,059			Discounted cash flow		Discount rate		13.00% to 13.00% (13.00%)
								Prepayment rate		10.04% to 49.97% (16.54%)

(1) Excludes MSRs held-for-sale of $66 thousand and $29.8 million, respectively, which were valued based on a market bid adjusted for expected obligations arising from standard representations and warranties at September 30, 2018 a

Fair value option of certain assets

gs. The following table presents changes in fair value related to subsequent changes in fair value included in earnings for these assets and liabilities measured at fair value for the periods indicat

MA but failed sale accounting treatment under GAAP due to the repurchase option.

The following table presents the fair value and aggregate principal balance of certain assets, on a consolidated operations basis, under the fair value option:

		September 30, 2018												December 31, 2017
($ in thousands)		Fair Value				Unpaid Principal Balance				Difference				Fair Value				Unpaid Principal Balance				Difference
Loans held-for-sale, carried at fair value in continuing operations:
Total loans		$	8,024			$	8,239			$	(215	)		$	66,603			$	67,415			$	(812	)
Non-accrual loans (1)		1,852				1,958				(106		)		60,999				61,900				(901		)
Loans held-for-sale, carried at fair value in discontinued operations:
Total loans		$	20,290			$	20,842			$	(552	)		$	38,696			$	39,541			$	(845	)
Non-accrual loans (2)		9,254				9,312				(58		)		24,073				24,297				(224		)

(1) Includes loans guaranteed by the U.S. government of $1.5 million and $54.2 million, respectively, at September 30, 2018 and December 31, 2017.

(2) Includes loans guaranteed by the U.S. government of $8.0 million and $20.7 million, respectively, at September 30, 2018 a

Schedule of Assets and Liabilities Measured on Non-recurring Basis

ns.

The following table presents the Company’s financial assets and liabilities measured at fair value on a non-recurring basis as of the dates indicat

Schedule of Gains and (Losses) Recognized on Assets Measured at Fair Value on Non-recurring Basis

d:

						Fair Value Measurement Level
($ in thousands)		Carrying Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
September 30, 2018
Assets
Loans held-for-sale:
Commercial and industrial		$	538			$	—			$	538			$	—
Impaired loans:
Commercial and industrial		502				—				—				502
Other consumer		3				—				—				3
SBA		76				—				—				76
December 31, 2017
Assets
Impaired loans:
SBA		$	174			—				—				$	174
Other real estate owned:
Single family residential		1,415				—				—				1,415

The following table presents the gains and (losses) recognized on assets measured at fair value on a non-recurring basis for the periods indicat

Carrying Amounts and Estimated Fair Values of Financial Instruments

nts

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities, on a consolidated operations basis, as of the dates indicated:

		Carrying Amount				Fair Value Measurement Level
($ in thousands)						Level 1				Level 2				Level 3				Total
September 30, 2018
Financial assets
Cash and cash equivalents		$	372,221			$	372,221			$	—			$	—			$	372,221
Securities available-for-sale		2,059,832				—				2,059,832				—				2,059,832
Federal Home Loan Bank and other bank stock		71,308				—				71,308				—				71,308
Loans held-for-sale (1)		29,672				—				3,916				25,756				29,672
Loans and leases receivable, net of ALLL(3)		7,195,511				—				—				7,082,175				7,082,175
Accrued interest receivable		38,951				38,951				—				—				38,951
Derivative assets		2,099				—				2,099				—				2,099
Financial liabilities
Deposits		7,401,742				—				—				7,200,816				7,200,816
Advances from Federal Home Loan Bank		1,640,000				—				1,636,772				—				1,636,772
Long term debt		173,096				—				177,048				—				177,048
Derivative liabilities		2,064				—				2,064				—				2,064
Accrued interest payable		13,226				13,226				—				—				13,226
December 31, 2017
Financial assets
Cash and cash equivalents		$	387,699			$	387,699			$	—			$	—			$	387,699
Securities available-for-sale		2,575,469				—				2,575,469				—				2,575,469
Federal Home Loan Bank and other bank stock		75,654				—				75,654				—				75,654
Loans held-for-sale (2)		105,765				—				6,866				98,940				105,806
Loans and leases receivable, net of ALLL(3)		6,610,074				—				—				6,601,767				6,601,767
Accrued interest receivable		35,355				35,355				—				—				35,355
Derivative assets		1,005				—				1,005				—				1,005
Financial liabilities
Deposits		7,292,903				—				—				7,063,613				7,063,613
Advances from Federal Home Loan Bank		1,695,000				—				1,695,039				—				1,695,039
Long term debt		172,941				—				180,560				—				180,560
Derivative liabilities		1,033				—				1,033				—				1,033
Accrued interest payable		7,321				7,321				—				—				7,321

(1) Includes loans held-for-sale carried at fair value of $20.3 million ($2.6 million at Level 2 and $17.7 million at Level 3) of discontinued operations.

(2) Includes loans held-for-sale carried at fair value of $38.7 million ($6.4 million at Level 2 and $32.3 million at Level 3) of discontinued operat

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