Delaware (State or other jurisdiction of incorporation or organization) | 95-4703316 (I.R.S. Employer Identification No.) | |
135 North Los Robles Ave., 7th Floor, Pasadena, California (Address of principal executive offices) | 91101 (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Page | |||
• | the Company’s ability to compete effectively against other financial institutions in its banking markets; |
• | changes in the commercial and consumer real estate markets; |
• | changes in the Company’s costs of operation, compliance and expansion; |
• | changes in the U.S. economy, including inflation, employment levels, rate of growth and general business conditions; |
• | changes in government interest rate policies; |
• | changes in laws or the regulatory environment including regulatory reform initiatives and policies of the U.S. Department of Treasury, the Board of Governors of the Federal Reserve Board System, the Federal Deposit Insurance Corporation (“FDIC”), the U.S. Securities and Exchange Commission (“SEC”), the Consumer Financial Protection Bureau and the California Department of Business Oversight — Division of Financial Institutions; |
• | changes in the economy of and monetary policy in the People’s Republic of China; |
• | changes in income tax laws and regulations; |
• | changes in accounting standards as may be required by the Financial Accounting Standards Board (“FASB”) or other regulatory agencies and their impact on critical accounting policies and assumptions; |
• | changes in the equity and debt securities markets; |
• | future credit quality and performance, including the Company’s expectations regarding future credit losses and allowance levels; |
• | fluctuations of the Company’s stock price; |
• | fluctuations in foreign currency exchange rates; |
• | success and timing of the Company’s business strategies; |
• | ability of the Company to adopt and successfully integrate new technologies into its business in a strategic manner; |
• | impact of reputational risk from negative publicity, fines and penalties and other negative consequences from regulatory violations and legal actions; |
• | impact of potential federal tax increases and spending cuts; |
• | impact of adverse judgments or settlements in litigation; |
• | impact of regulatory enforcement actions; |
• | changes in the Company’s ability to receive dividends from its subsidiaries; |
• | impact of political developments, wars or other hostilities that may disrupt or increase volatility in securities or otherwise affect economic conditions; |
• | impact of natural or man-made disasters or calamities or conflicts; |
• | continuing consolidation in the financial services industry; |
• | the Company’s capital requirements and its ability to generate capital internally or raise capital on favorable terms; |
• | impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the Company’s business, business practices and cost of operations; |
• | impact of adverse changes to the Company’s credit ratings from the major credit rating agencies; |
• | impact of failure in, or breach of, the Company’s operational or security systems or infrastructure, or those of third parties with whom the Company does business, including as a result of cyber attacks; and other similar matters which could result in, among other things, confidential and/or proprietary information being disclosed or misused; |
• | adequacy of the Company’s risk management framework, disclosure controls and procedures and internal control over financial reporting; |
• | the effect of the current low interest rate environment or changes in interest rates on the Company’s net interest income and net interest margin; |
• | the effect of changes in the level of checking or savings account deposits on the Company’s funding costs and net interest margin; and |
• | a recurrence of significant turbulence or disruption in the capital or financial markets, which could result in, among other things, a reduction in the availability of funding or increased funding costs, reduced investor demand for mortgage loans and declines in asset values and/or recognition of other-than-temporary impairment (“OTTI”) on securities held in the Company’s available-for-sale investment securities portfolio. |
September 30, 2016 | December 31, 2015 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 1,666,832 | $ | 1,360,887 | ||||
Short-term investments | 307,473 | 299,916 | ||||||
Securities purchased under resale agreements (“resale agreements”) | 1,500,000 | 1,600,000 | ||||||
Available-for-sale investment securities, at fair value | 3,236,624 | 3,773,226 | ||||||
Held-to-maturity investment security, at cost (fair value of $154,296 in 2016) | 154,461 | — | ||||||
Loans held-for-sale | 47,719 | 31,958 | ||||||
Loans held-for-investment (net of allowance for loan losses of $255,812 in 2016 and $264,959 in 2015) | 24,476,150 | 23,378,789 | ||||||
Investment in Federal Home Loan Bank (“FHLB”) stock, at cost | 17,250 | 28,770 | ||||||
Investment in Federal Reserve Bank stock, at cost | 55,355 | 54,932 | ||||||
Investments in qualified affordable housing partnerships, net | 173,045 | 193,978 | ||||||
Premises and equipment (net of accumulated depreciation of $110,668 in 2016 and $100,060 in 2015) | 162,482 | 166,993 | ||||||
Goodwill | 469,433 | 469,433 | ||||||
Other assets | 988,451 | 992,040 | ||||||
TOTAL | $ | 33,255,275 | $ | 32,350,922 | ||||
LIABILITIES | ||||||||
Customer deposits: | ||||||||
Noninterest-bearing | $ | 9,524,021 | $ | 8,656,805 | ||||
Interest-bearing | 19,068,420 | 18,819,176 | ||||||
Total deposits | 28,592,441 | 27,475,981 | ||||||
Short-term borrowings | 36,992 | — | ||||||
FHLB advances | 321,084 | 1,019,424 | ||||||
Securities sold under repurchase agreements (“repurchase agreements”) | 200,000 | — | ||||||
Long-term debt | 191,265 | 206,084 | ||||||
Accrued expenses and other liabilities | 535,439 | 526,483 | ||||||
Total liabilities | 29,877,221 | 29,227,972 | ||||||
COMMITMENTS AND CONTINGENCIES (Note 10) | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, $0.001 par value, 200,000,000 shares authorized; 164,567,479 and 164,246,517 shares issued in 2016 and 2015, respectively. | 164 | 164 | ||||||
Additional paid-in capital | 1,718,249 | 1,701,295 | ||||||
Retained earnings | 2,106,121 | 1,872,594 | ||||||
Treasury stock at cost — 20,434,175 shares in 2016 and 20,337,284 shares in 2015. | (439,306 | ) | (436,162 | ) | ||||
Accumulated other comprehensive loss (“AOCI”), net of tax | (7,174 | ) | (14,941 | ) | ||||
Total stockholders’ equity | 3,378,054 | 3,122,950 | ||||||
TOTAL | $ | 33,255,275 | $ | 32,350,922 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
INTEREST AND DIVIDEND INCOME | ||||||||||||||||
Loans receivable, including fees | $ | 255,316 | $ | 244,372 | $ | 763,189 | $ | 719,987 | ||||||||
Investment securities | 13,388 | 10,279 | 37,433 | 29,947 | ||||||||||||
Resale agreements | 7,834 | 4,411 | 22,479 | 13,940 | ||||||||||||
Investment in FHLB and Federal Reserve Bank stock | 611 | 1,380 | 2,008 | 4,922 | ||||||||||||
Due from banks and short-term investments | 3,168 | 4,190 | 10,245 | 14,542 | ||||||||||||
Total interest and dividend income | 280,317 | 264,632 | 835,354 | 783,338 | ||||||||||||
INTEREST EXPENSE | ||||||||||||||||
Customer deposits | 21,049 | 18,519 | 60,708 | 53,677 | ||||||||||||
Short-term borrowings | 212 | 35 | 390 | 53 | ||||||||||||
FHLB advances | 1,361 | 1,074 | 4,153 | 3,156 | ||||||||||||
Repurchase agreements | 2,319 | 3,555 | 6,441 | 19,494 | ||||||||||||
Long-term debt | 1,228 | 1,160 | 3,726 | 3,460 | ||||||||||||
Total interest expense | 26,169 | 24,343 | 75,418 | 79,840 | ||||||||||||
Net interest income before provision for credit losses | 254,148 | 240,289 | 759,936 | 703,498 | ||||||||||||
Provision for credit losses | 9,525 | 7,736 | 17,018 | 16,217 | ||||||||||||
Net interest income after provision for credit losses | 244,623 | 232,553 | 742,918 | 687,281 | ||||||||||||
NONINTEREST INCOME | ||||||||||||||||
Branch fees | 10,408 | 9,982 | 30,983 | 29,157 | ||||||||||||
Letters of credit fees and foreign exchange income | 10,908 | 7,468 | 31,404 | 24,999 | ||||||||||||
Ancillary loan fees | 6,135 | 4,839 | 13,997 | 10,307 | ||||||||||||
Wealth management fees | 4,033 | 4,374 | 9,862 | 14,310 | ||||||||||||
Derivative commission income | 5,375 | 4,274 | 12,005 | 12,037 | ||||||||||||
Net gains on sales of loans | 2,158 | 4,888 | 6,967 | 19,719 | ||||||||||||
Net gains on sales of available-for-sale investment securities | 1,790 | 17,036 | 8,468 | 26,994 | ||||||||||||
Changes in FDIC indemnification asset and receivable/payable | — | (3,883 | ) | — | (18,973 | ) | ||||||||||
Other fees and operating income | 8,534 | 5,203 | 20,432 | 20,350 | ||||||||||||
Total noninterest income | 49,341 | 54,181 | 134,118 | 138,900 | ||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||
Compensation and employee benefits | 75,042 | 66,185 | 220,166 | 193,298 | ||||||||||||
Occupancy and equipment expense | 15,456 | 15,362 | 45,619 | 45,990 | ||||||||||||
Amortization of tax credit and other investments | 32,618 | 12,269 | 60,779 | 21,565 | ||||||||||||
Amortization of premiums on deposits acquired | 2,023 | 2,310 | 6,177 | 7,038 | ||||||||||||
Deposit insurance premiums and regulatory assessments | 6,450 | 4,726 | 17,341 | 13,723 | ||||||||||||
Other real estate owned (“OREO”) (income) expense | (67 | ) | (1,374 | ) | 1,484 | (7,481 | ) | |||||||||
Legal expense | 5,361 | 2,099 | 12,714 | 13,103 | ||||||||||||
Data processing | 2,729 | 2,602 | 8,712 | 7,596 | ||||||||||||
Consulting expense | 4,594 | 4,983 | 19,027 | 9,596 | ||||||||||||
Deposit related expenses | 3,082 | 2,538 | 7,675 | 7,402 | ||||||||||||
Computer software expense | 3,331 | 2,355 | 9,267 | 6,404 | ||||||||||||
Repurchase agreements’ extinguishment costs | — | 15,193 | — | 21,818 | ||||||||||||
Other operating expense | 19,881 | 18,497 | 57,024 | 55,893 | ||||||||||||
Total noninterest expense | 170,500 | 147,745 | 465,985 | 395,945 | ||||||||||||
INCOME BEFORE INCOME TAXES | 123,464 | 138,989 | 411,051 | 430,236 | ||||||||||||
INCOME TAX EXPENSE | 13,321 | 44,892 | 90,108 | 137,364 | ||||||||||||
NET INCOME | $ | 110,143 | $ | 94,097 | $ | 320,943 | $ | 292,872 | ||||||||
EARNINGS PER SHARE (“EPS”) | ||||||||||||||||
BASIC | $ | 0.76 | $ | 0.65 | $ | 2.23 | $ | 2.04 | ||||||||
DILUTED | $ | 0.76 | $ | 0.65 | $ | 2.21 | $ | 2.03 | ||||||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||||||||||||||
BASIC | 144,122 | 143,861 | 144,061 | 143,788 | ||||||||||||
DILUTED | 145,238 | 144,590 | 145,086 | 144,468 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.20 | $ | 0.20 | $ | 0.60 | $ | 0.60 | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 110,143 | $ | 94,097 | $ | 320,943 | $ | 292,872 | ||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||
Net change in unrealized (losses) gains on available-for-sale investment securities | (4,907 | ) | 3,246 | 12,993 | 4,439 | |||||||||||
Foreign currency translation adjustments | (555 | ) | (6,846 | ) | (5,226 | ) | (6,846 | ) | ||||||||
Other comprehensive (loss) income | (5,462 | ) | (3,600 | ) | 7,767 | (2,407 | ) | |||||||||
COMPREHENSIVE INCOME | $ | 104,681 | $ | 90,497 | $ | 328,710 | $ | 290,465 | ||||||||
Common Stock and Additional Paid-in Capital | Retained Earnings | Treasury Stock | AOCI, net of tax | Total Stockholders’ Equity | |||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||
BALANCE, JANUARY 1, 2015 | 143,582,229 | $ | 1,677,931 | $ | 1,604,141 | $ | (430,198 | ) | $ | 4,237 | $ | 2,856,111 | |||||||||||
Net income | — | — | 292,872 | — | — | 292,872 | |||||||||||||||||
Other comprehensive loss | — | — | — | — | (2,407 | ) | (2,407 | ) | |||||||||||||||
Stock compensation costs | — | 11,702 | — | — | — | 11,702 | |||||||||||||||||
Tax benefit from stock compensation plans, net | — | 3,227 | — | — | — | 3,227 | |||||||||||||||||
Net activity of common stock pursuant to various stock compensation plans and agreements | 287,725 | 2,569 | — | (5,859 | ) | — | (3,290 | ) | |||||||||||||||
Common stock dividends | — | — | (87,100 | ) | — | — | (87,100 | ) | |||||||||||||||
BALANCE, SEPTEMBER 30, 2015 | 143,869,954 | $ | 1,695,429 | $ | 1,809,913 | $ | (436,057 | ) | $ | 1,830 | $ | 3,071,115 | |||||||||||
BALANCE, JANUARY 1, 2016 | 143,909,233 | $ | 1,701,459 | $ | 1,872,594 | $ | (436,162 | ) | $ | (14,941 | ) | $ | 3,122,950 | ||||||||||
Net income | — | — | 320,943 | — | — | 320,943 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 7,767 | 7,767 | |||||||||||||||||
Stock compensation costs | — | 13,973 | — | — | — | 13,973 | |||||||||||||||||
Tax benefit from stock compensation plans, net | — | 1,019 | — | — | — | 1,019 | |||||||||||||||||
Net activity of common stock pursuant to various stock compensation plans and agreements | 224,071 | 1,962 | — | (3,144 | ) | — | (1,182 | ) | |||||||||||||||
Common stock dividends | — | — | (87,416 | ) | — | — | (87,416 | ) | |||||||||||||||
BALANCE, SEPTEMBER 30, 2016 | 144,133,304 | $ | 1,718,413 | $ | 2,106,121 | $ | (439,306 | ) | $ | (7,174 | ) | $ | 3,378,054 | ||||||||||
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 320,943 | $ | 292,872 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 98,561 | 52,810 | ||||||
Accretion of discount and amortization of premiums, net | (37,881 | ) | (47,890 | ) | ||||
Changes in FDIC indemnification asset and receivable/payable | — | 18,973 | ||||||
Stock compensation costs | 13,973 | 11,702 | ||||||
Deferred tax expenses | 3,730 | 118,079 | ||||||
Tax benefit from stock compensation plans, net | (1,019 | ) | (3,227 | ) | ||||
Provision for credit losses | 17,018 | 16,217 | ||||||
Net gains on sales of loans | (6,967 | ) | (19,719 | ) | ||||
Net gains on sales of available-for-sale investment securities | (8,468 | ) | (26,994 | ) | ||||
Net gains on sales of premises and equipment and OREO | (3,300 | ) | (13,350 | ) | ||||
Originations and purchases of loans held-for-sale | (10,901 | ) | (623 | ) | ||||
Proceeds from sales and paydowns/payoffs in loans held-for-sale | 15,065 | 2,232 | ||||||
Repurchase agreements’ extinguishment costs | — | 21,818 | ||||||
Net payments to FDIC shared-loss agreements | — | (12,038 | ) | |||||
Net change in accrued interest receivable and other assets | (1,570 | ) | (28,957 | ) | ||||
Net change in accrued expenses and other liabilities | 19,217 | 39,157 | ||||||
Other net operating activities | (797 | ) | 525 | |||||
Total adjustments | 96,661 | 128,715 | ||||||
Net cash provided by operating activities | 417,604 | 421,587 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Net (increase) decrease in: | ||||||||
Loans held-for-investment | (317,142 | ) | (1,873,612 | ) | ||||
Short-term investments | (13,469 | ) | 75,940 | |||||
Investments in qualified affordable housing partnerships, tax credit and other investments | (57,742 | ) | (48,204 | ) | ||||
Purchases of: | ||||||||
Resale agreements | (1,150,000 | ) | (1,645,000 | ) | ||||
Available-for-sale investment securities | (1,330,724 | ) | (2,190,503 | ) | ||||
Loans held-for-investment (including loan participations) | (1,497,218 | ) | (572,558 | ) | ||||
Proceeds from sales of: | ||||||||
Available-for-sale investment securities | 1,008,256 | 1,328,487 | ||||||
Loans held-for-investment (including loan participations) | 545,256 | 1,271,128 | ||||||
OREO | 3,271 | 33,921 | ||||||
Paydowns and maturities of resale agreements | 1,450,000 | 1,370,000 | ||||||
Repayments, maturities and redemptions of available-for-sale investment securities | 870,965 | 558,669 | ||||||
Other net investing activities | 15,278 | 14,736 | ||||||
Net cash used in investing activities | (473,269 | ) | (1,676,996 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Net increase in: | ||||||||
Deposits | 1,130,022 | 2,765,985 | ||||||
Short-term borrowings | 37,699 | 3,271 | ||||||
Proceeds from: | ||||||||
Issuance of common stock pursuant to various stock compensation plans and agreements | 1,962 | 1,769 | ||||||
Payments for: | ||||||||
Repayment of FHLB advances | (700,000 | ) | — | |||||
Repayment of long-term debt | (15,000 | ) | (15,000 | ) | ||||
Extinguishment of repurchase agreements | — | (566,818 | ) | |||||
Repurchase of vested shares due to employee tax liability | (3,144 | ) | (5,859 | ) | ||||
Cash dividends | (86,984 | ) | (86,850 | ) | ||||
Tax benefit from stock compensation plans, net | 1,019 | 3,227 | ||||||
Net cash provided by financing activities | 365,574 | 2,099,725 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (3,964 | ) | (8,498 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 305,945 | 835,818 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,360,887 | 1,039,885 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 1,666,832 | $ | 1,875,703 | ||||
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
Cash paid (received) during the period for: | ||||||||
Interest | $ | 76,750 | $ | 81,739 | ||||
Income tax payments/(refunds), net | $ | 20,652 | $ | (20,367 | ) | |||
Noncash investing and financing activities: | ||||||||
Loans held-for-investment transferred to loans held-for-sale, net | $ | 720,670 | $ | 1,556,456 | ||||
Transfers to OREO | $ | 6,086 | $ | 8,059 | ||||
Loans to facilitate sale of OREO | $ | — | $ | 1,750 | ||||
Held-to-maturity investment security retained from securitization of loans | $ | 160,135 | $ | — | ||||
Dividends payable | $ | 432 | $ | 250 | ||||
• | Level 1 | — | Valuation is based on quoted prices for identical instruments traded in active markets. |
• | Level 2 | — | Valuation is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable and can be corroborated by market data. |
• | Level 3 | — | Valuation is based on significant unobservable inputs for determining the fair value of assets or liabilities. These significant unobservable inputs reflect assumptions that market participants may use in pricing the assets or liabilities. |
Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of September 30, 2016 | ||||||||||||||||
($ in thousands) | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U.S. Treasury securities | $ | 456,448 | $ | 456,448 | $ | — | $ | — | ||||||||
U.S. government agency and U.S. government sponsored enterprise debt securities | 383,331 | — | 383,331 | — | ||||||||||||
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: | ||||||||||||||||
Commercial mortgage-backed securities | 326,818 | — | 326,818 | — | ||||||||||||
Residential mortgage-backed securities | 1,194,838 | — | 1,194,838 | — | ||||||||||||
Municipal securities | 152,293 | — | 152,293 | — | ||||||||||||
Non-agency residential mortgage-backed securities: | ||||||||||||||||
Investment grade | 52,957 | — | 52,957 | — | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Investment grade | 281,987 | — | 281,987 | — | ||||||||||||
Non-investment grade | 8,778 | — | 8,778 | — | ||||||||||||
Foreign bonds: | ||||||||||||||||
Investment grade | 337,434 | — | 337,434 | — | ||||||||||||
Other securities | 41,740 | 31,939 | 9,801 | — | ||||||||||||
Total available-for-sale investment securities | $ | 3,236,624 | $ | 488,387 | $ | 2,748,237 | $ | — | ||||||||
Derivative assets: | ||||||||||||||||
Interest rate swaps and options | $ | 144,293 | $ | — | $ | 144,293 | $ | — | ||||||||
Foreign exchange contracts | $ | 6,065 | $ | — | $ | 6,065 | $ | — | ||||||||
Derivative liabilities: | ||||||||||||||||
Interest rate swaps on certificates of deposit | $ | (2,137 | ) | $ | — | $ | (2,137 | ) | $ | — | ||||||
Foreign currency forward contracts | $ | (78 | ) | $ | — | $ | (78 | ) | $ | — | ||||||
Interest rate swaps and options | $ | (146,623 | ) | $ | — | $ | (146,623 | ) | $ | — | ||||||
Foreign exchange contracts | $ | (3,334 | ) | $ | — | $ | (3,334 | ) | $ | — | ||||||
Credit risk participation agreements (“RPAs”) | $ | (8 | ) | $ | — | $ | (8 | ) | $ | — | ||||||
Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of December 31, 2015 | ||||||||||||||||
($ in thousands) | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Available-for-sale investment securities: | ||||||||||||||||
U.S. Treasury securities | $ | 998,515 | $ | 998,515 | $ | — | $ | — | ||||||||
U.S. government agency and U.S. government sponsored enterprise debt securities | 768,849 | — | 768,849 | — | ||||||||||||
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: | ||||||||||||||||
Commercial mortgage-backed securities | 351,662 | — | 351,662 | — | ||||||||||||
Residential mortgage-backed securities | 997,396 | — | 997,396 | — | ||||||||||||
Municipal securities | 175,649 | — | 175,649 | — | ||||||||||||
Non-agency residential mortgage-backed securities: | ||||||||||||||||
Investment grade | 62,393 | — | 62,393 | — | ||||||||||||
Corporate debt securities: | ||||||||||||||||
Investment grade | 279,432 | — | 279,432 | — | ||||||||||||
Non-investment grade | 9,642 | — | 9,642 | — | ||||||||||||
Foreign bonds: | ||||||||||||||||
Investment grade | 89,795 | 4,514 | 85,281 | — | ||||||||||||
Other securities | 39,893 | 31,121 | 8,772 | — | ||||||||||||
Total available-for-sale investment securities | $ | 3,773,226 | $ | 1,034,150 | $ | 2,739,076 | $ | — | ||||||||
Derivative assets: | ||||||||||||||||
Foreign currency forward contracts | $ | 2,365 | $ | — | $ | 2,365 | $ | — | ||||||||
Interest rate swaps and options | $ | 67,215 | $ | — | $ | 67,215 | $ | — | ||||||||
Foreign exchange contracts | $ | 10,254 | $ | — | $ | 10,254 | $ | — | ||||||||
Derivative liabilities: | ||||||||||||||||
Interest rate swaps on certificates of deposit | $ | (5,213 | ) | $ | — | $ | (5,213 | ) | $ | — | ||||||
Interest rate swaps and options | $ | (67,325 | ) | $ | — | $ | (67,325 | ) | $ | — | ||||||
Foreign exchange contracts | $ | (9,350 | ) | $ | — | $ | (9,350 | ) | $ | — | ||||||
RPAs | $ | (4 | ) | $ | — | $ | (4 | ) | $ | — | ||||||
($ in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2015 | 2015 | |||||||||||||||
Corporate Debt Securities: Non-Investment Grade | Embedded Derivative Liabilities | Corporate Debt Securities: Non-Investment Grade | Embedded Derivative Liabilities | |||||||||||||
Beginning balance | $ | — | $ | — | $ | 6,528 | $ | (3,392 | ) | |||||||
Total gains (losses) for the period: | ||||||||||||||||
Included in earnings (1) | — | — | 960 | (20 | ) | |||||||||||
Included in other comprehensive income (2) | — | — | 922 | — | ||||||||||||
Sales and settlements: | ||||||||||||||||
Sales | — | — | (7,219 | ) | — | |||||||||||
Settlements | — | — | (98 | ) | 3,412 | |||||||||||
Transfers in and/or out of Level 3 | — | — | (1,093 | ) | — | |||||||||||
Ending balance | $ | — | $ | — | $ | — | $ | — | ||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities held for the period | $ | — | $ | — | $ | — | $ | — | ||||||||
(1) | Net gains or losses (realized and unrealized) of corporate debt securities and embedded derivative liabilities are included in Net gains on sales of available-for-sale investment securities and Other operating expense, respectively, on the Consolidated Statements of Income. |
(2) | Unrealized gains or losses on available-for-sale investment securities are reported in Other comprehensive income, net of tax, on the Consolidated Statements of Comprehensive Income. |
Assets Measured at Fair Value on a Nonrecurring Basis as of September 30, 2016 | ||||||||||||||||
($ in thousands) | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Non-PCI impaired loans: | ||||||||||||||||
Commercial real estate (“CRE”) | $ | 20,904 | $ | — | $ | — | $ | 20,904 | ||||||||
Commercial and industrial (“C&I”) | 58,854 | — | — | 58,854 | ||||||||||||
Residential | 2,305 | — | — | 2,305 | ||||||||||||
Consumer | 594 | — | — | 594 | ||||||||||||
Total non-PCI impaired loans | $ | 82,657 | $ | — | $ | — | $ | 82,657 | ||||||||
OREO | $ | 2,760 | $ | — | $ | — | $ | 2,760 | ||||||||
Loans held-for-sale | $ | 26,931 | $ | — | $ | 26,931 | $ | — | ||||||||
Assets Measured at Fair Value on a Nonrecurring Basis as of December 31, 2015 | ||||||||||||||||
($ in thousands) | Fair Value Measurements | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Non-PCI impaired loans: | ||||||||||||||||
CRE | $ | 17,252 | $ | — | $ | — | $ | 17,252 | ||||||||
C&I | 35,558 | — | — | 35,558 | ||||||||||||
Residential | 16,472 | — | — | 16,472 | ||||||||||||
Consumer | 1,180 | — | — | 1,180 | ||||||||||||
Total non-PCI impaired loans | $ | 70,462 | $ | — | $ | — | $ | 70,462 | ||||||||
OREO | $ | 4,929 | $ | — | $ | — | $ | 4,929 | ||||||||
Loans held-for-sale | $ | 29,238 | $ | — | $ | 29,238 | $ | — | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
($ in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Non-PCI impaired loans: | ||||||||||||||||
CRE | $ | (282 | ) | $ | 101 | $ | 1,741 | $ | (845 | ) | ||||||
C&I | 77 | (707 | ) | (5,497 | ) | (9,806 | ) | |||||||||
Residential | (14 | ) | (314 | ) | (14 | ) | (565 | ) | ||||||||
Consumer | — | (59 | ) | 17 | (59 | ) | ||||||||||
Total non-PCI impaired loans | $ | (219 | ) | $ | (979 | ) | $ | (3,753 | ) | $ | (11,275 | ) | ||||
OREO | $ | (41 | ) | $ | (1,556 | ) | $ | (994 | ) | $ | (1,739 | ) | ||||
Loans held-for-sale | $ | — | $ | — | $ | (2,351 | ) | $ | (517 | ) | ||||||
($ in thousands) | Fair Value Measurements (Level 3) | Valuation Technique(s) | Unobservable Input(s) | Range of Inputs | Weighted Average | |||||||
September 30, 2016 | ||||||||||||
Non-PCI impaired loans | $ | 55,097 | Discounted cash flow | Discount rate | 0% — 45% | 4% | ||||||
$ | 27,560 | Market comparables | Discount rate (1) | 0% — 100% | 2% | |||||||
OREO | $ | 2,760 | Appraisal | Selling cost | 8% | 8% | ||||||
December 31, 2015 | ||||||||||||
Non-PCI impaired loans | $ | 27,522 | Discounted cash flow | Discount rate | 0% — 87% | 30% | ||||||
$ | 42,940 | Market comparables | Discount rate (1) | 0% — 100% | 17% | |||||||
OREO | $ | 4,929 | Appraisal | Selling cost | 8% | 8% | ||||||
(1) | Discount rate is adjusted for factors such as liquidation cost of collateral and selling cost. |
($ in thousands) | September 30, 2016 | |||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Estimated Fair Value | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 1,666,832 | $ | 1,666,832 | $ | — | $ | — | $ | 1,666,832 | ||||||||||
Short-term investments | $ | 307,473 | $ | — | $ | 307,473 | $ | — | $ | 307,473 | ||||||||||
Resale agreements (1) | $ | 1,500,000 | $ | — | $ | 1,496,965 | $ | — | $ | 1,496,965 | ||||||||||
Held-to-maturity investment security | $ | 154,461 | $ | — | $ | — | $ | 154,296 | $ | 154,296 | ||||||||||
Loans held-for-sale | $ | 47,719 | $ | — | $ | 47,719 | $ | — | $ | 47,719 | ||||||||||
Loans held-for-investment, net | $ | 24,476,150 | $ | — | $ | — | $ | 24,349,603 | $ | 24,349,603 | ||||||||||
Investment in FHLB stock | $ | 17,250 | $ | — | $ | 17,250 | $ | — | $ | 17,250 | ||||||||||
Investment in Federal Reserve Bank stock | $ | 55,355 | $ | — | $ | 55,355 | $ | — | $ | 55,355 | ||||||||||
Accrued interest receivable | $ | 88,343 | $ | — | $ | 88,343 | $ | — | $ | 88,343 | ||||||||||
Financial liabilities: | ||||||||||||||||||||
Customer deposits: | ||||||||||||||||||||
Demand, interest checking, savings and money market deposits | $ | 22,994,054 | $ | — | $ | 22,994,054 | $ | — | $ | 22,994,054 | ||||||||||
Time deposits | $ | 5,598,387 | $ | — | $ | 5,603,591 | $ | — | $ | 5,603,591 | ||||||||||
Short-term borrowings | $ | 36,992 | $ | — | $ | 36,992 | $ | — | $ | 36,992 | ||||||||||
FHLB advances | $ | 321,084 | $ | — | $ | 333,437 | $ | — | $ | 333,437 | ||||||||||
Repurchase agreements (1) | $ | 200,000 | $ | — | $ | 263,948 | $ | — | $ | 263,948 | ||||||||||
Long-term debt | $ | 191,265 | $ | — | $ | 195,801 | $ | — | $ | 195,801 | ||||||||||
Accrued interest payable | $ | 7,516 | $ | — | $ | 7,516 | $ | — | $ | 7,516 | ||||||||||
(1) | Resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. As of September 30, 2016, $250.0 million out of $450.0 million of repurchase agreements was eligible for netting against resale agreements. |
($ in thousands) | December 31, 2015 | |||||||||||||||||||
Carrying Amount | Level 1 | Level 2 | Level 3 | Estimated Fair Value | ||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents |