Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Jan. 31, 2014 | Jun. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'EAST WEST BANCORP INC | ' | ' |
Entity Central Index Key | '0001069157 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $3,745,654,275 |
Entity Common Stock, Shares Outstanding | ' | 143,207,881 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $895,820 | $1,323,106 |
Short-term investments | 257,473 | 366,378 |
Securities purchased under resale agreements | 1,300,000 | 1,450,000 |
Investment securities available-for-sale, at fair value (with amortized cost of $2,786,490 at December 31, 2013 and $2,599,018 at December 31, 2012) | 2,733,797 | 2,607,029 |
Loans held for sale | 204,970 | 174,317 |
Loans receivable, excluding covered loans (net of allowance for loan losses of $241,930 at December 31, 2013 and $229,382 at December 31, 2012) | 15,412,715 | 11,710,190 |
Covered loans (net of allowance for loan losses of $7,745 at December 31, 2013 and $5,153 at December 31, 2012) | 2,187,898 | 2,935,595 |
Total loans receivable, net | 17,600,613 | 14,645,785 |
FDIC indemnification asset | 74,708 | 316,313 |
Other real estate owned, net | 18,900 | 32,911 |
Other real estate owned covered, net | 21,373 | 26,808 |
Total other real estate owned | 40,273 | 59,719 |
Investment in Federal Home Loan Bank stock, at cost | 62,330 | 107,275 |
Investment in Federal Reserve Bank stock, at cost | 48,333 | 48,003 |
Investment in affordable housing partnerships | 165,724 | 185,645 |
Premises and equipment, net | 177,710 | 107,517 |
Accrued interest receivable | 116,314 | 94,837 |
Due from customers on acceptances | 21,236 | 28,612 |
Premiums on deposits acquired, net | 46,920 | 56,285 |
Goodwill | 337,438 | 337,438 |
Cash surrender value of life insurance policies | 112,650 | 110,133 |
Other assets | 533,759 | 517,718 |
TOTAL | 24,730,068 | 22,536,110 |
Customer deposit accounts: | ' | ' |
Noninterest-bearing | 5,821,899 | 4,535,877 |
Interest-bearing | 14,591,019 | 13,773,477 |
Total deposits | 20,412,918 | 18,309,354 |
Federal Home Loan Bank advances | 315,092 | 312,975 |
Securities sold under repurchase agreements | 995,000 | 995,000 |
Other borrowings | ' | 20,000 |
Bank acceptances outstanding | 21,236 | 28,612 |
Long-term debt | 226,868 | 137,178 |
Accrued expenses and other liabilities | 394,729 | 350,869 |
Total liabilities | 22,365,843 | 20,153,988 |
COMMITMENTS AND CONTINGENCIES (Note 19) | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, $0.001 par value, 5,000,000 shares authorized; Series A, non-cumulative convertible, 200,000 shares issued; no shares outstanding as of December 31, 2013 and 85,710 shares outstanding in 2012. | ' | 83,027 |
Common stock, $0.001 par value, 200,000,000 shares authorized; 163,098,008 and 157,160,193 shares issued in 2013 and 2012, respectively; 137,630,896 and 140,294,092 shares outstanding in 2013 and 2012, respectively. | 163 | 157 |
Additional paid in capital | 1,571,670 | 1,464,739 |
Retained earnings | 1,360,130 | 1,151,828 |
Treasury stock, at cost - 25,467,112 shares in 2013 and 16,866,101 shares in 2012. | -537,279 | -322,298 |
Accumulated other comprehensive (loss) income, net of tax | -30,459 | 4,669 |
Total stockholders' equity | 2,364,225 | 2,382,122 |
TOTAL | $24,730,068 | $22,536,110 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
ASSETS | ' | ' |
Investment securities available-for-sale, amortized cost | $2,786,490 | $2,599,018 |
Loans receivable, excluding covered loans, allowance for loan losses | 241,930 | 229,382 |
Covered loans, allowance for loan losses | $7,745 | $5,153 |
STOCKHOLDERS' EQUITY | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 163,098,008 | 157,160,193 |
Common stock, shares outstanding | 137,630,896 | 140,294,092 |
Treasury stock, shares | 25,467,112 | 16,866,101 |
Preferred stock, Series A, non-cumulative convertible | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 200,000 | 200,000 |
Preferred stock, shares outstanding | 0 | 85,710 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
INTEREST AND DIVIDEND INCOME | ' | ' | ' | |
Loans receivable, including fees | $979,394 | $945,530 | $945,798 | |
Investment securities | 43,846 | 58,184 | 89,469 | |
Securities purchased under resale agreements | 21,236 | 20,392 | 19,216 | |
Investment in Federal Home Loan Bank stock | 3,982 | 1,808 | 550 | |
Investment in Federal Reserve Bank stock | 2,887 | 2,865 | 2,840 | |
Short-term investments | 17,340 | 22,316 | 22,575 | |
Total interest and dividend income | 1,068,685 | 1,051,095 | 1,080,448 | |
INTEREST EXPENSE | ' | ' | ' | |
Customer deposit accounts | 63,496 | 75,895 | 107,110 | |
Federal Home Loan Bank advances | 4,173 | 6,248 | 15,461 | |
Securities sold under repurchase agreements | 41,381 | 46,166 | 48,561 | |
Long-term debt | 3,442 | 3,855 | 5,832 | |
Other borrowings | ' | 4 | 458 | |
Total interest expense | 112,492 | 132,168 | 177,422 | |
Net interest income before provision for loan losses | 956,193 | 918,927 | 903,026 | |
Provision for loan losses, excluding covered loans | 18,336 | 60,168 | 92,584 | |
Provision for loan losses on covered loans | 4,028 | 5,016 | 2,422 | |
Net interest income after provision for loan losses | 933,829 | 853,743 | 808,020 | |
NONINTEREST (LOSS) INCOME | ' | ' | ' | |
Impairment loss on investment securities | ' | -5,165 | -5,736 | |
Less: Noncredit-related impairment loss recorded in other comprehensive income | ' | 5,066 | 5,103 | |
Net impairment loss on investment securities recognized in earnings | ' | -99 | -633 | |
Decrease in FDIC indemnification asset and receivable | -228,585 | -122,251 | -100,141 | |
Branch fees | 32,036 | 30,906 | 31,510 | |
Net gain on sales of investment securities | 12,089 | 757 | 9,703 | |
Letters of credit fees and commissions | 22,116 | 19,104 | 13,997 | |
Foreign exchange income | 12,658 | 7,166 | 9,143 | |
Ancillary loan fees | 9,368 | 8,831 | 8,350 | |
Income from life insurance policies | 3,778 | 4,015 | 4,031 | |
Net gain on sales of loans | 7,750 | 17,045 | 20,185 | |
Net gain on sale of fixed assets | 1,521 | 4,275 | 2,274 | |
Other operating income | 34,801 | 24,633 | 12,505 | |
Total noninterest (loss) income | -92,468 | -5,618 | 10,924 | |
NONINTEREST EXPENSE | ' | ' | ' | |
Compensation and employee benefits | 175,906 | 171,374 | 160,093 | |
Occupancy and equipment expense | 56,641 | 55,475 | 50,082 | |
Amortization of investments in affordable housing partnerships and other investments | 27,268 | 18,058 | 17,324 | |
Amortization of premiums on deposits acquired | 9,365 | 10,906 | 12,327 | |
Deposit insurance premiums and regulatory assessments | 16,550 | 14,130 | 20,531 | |
Loan related expenses | 12,520 | 14,987 | 19,379 | |
Other real estate owned (gain on sale) expense | -1,128 | 22,349 | 40,435 | |
Legal expense | 31,718 | 25,441 | 21,327 | |
Prepayment penalty for FHLB advances and other borrowings | ' | 6,860 | 12,281 | |
Data processing | 9,095 | 9,231 | 8,598 | |
Deposit-related expenses | 6,536 | 6,007 | 5,699 | |
Consulting expense | 6,446 | 7,984 | 7,151 | |
Other operating expenses | 64,594 | 59,731 | 60,383 | |
Total noninterest expense | 415,511 | 422,533 | 435,610 | |
INCOME BEFORE PROVISION FOR INCOME TAXES | 425,850 | 425,592 | 383,334 | |
PROVISION FOR INCOME TAXES | 130,805 | 143,942 | 138,100 | |
NET INCOME | 295,045 | 281,650 | 245,234 | |
PREFERRED STOCK DIVIDENDS | 3,428 | 6,857 | 6,857 | |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $291,617 | $274,793 | $238,377 | |
EARNINGS PER SHARE AVAILABLE TO COMMON STOCKHOLDERS | ' | ' | ' | |
BASIC (in dollars per share) | $2.11 | $1.92 | [1] | $1.62 |
DILUTED (in dollars per share) | $2.10 | $1.89 | [1] | $1.60 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ' | ' | ' | |
BASIC (in shares) | 137,342 | 141,457 | [1] | 147,093 |
DILUTED (in shares) | 139,574 | 147,175 | [1] | 153,467 |
DIVIDENDS DECLARED PER COMMON SHARE (in dollars per share) | $0.60 | $0.40 | $0.16 | |
[1] | On April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' |
Net income | $295,045 | $281,650 | $245,234 |
Unrealized (losses) gains on investment securities available-for-sale: | ' | ' | ' |
Unrealized holding (losses) gains arising during period | -28,169 | 42,868 | -12,333 |
Reclassification adjustment for net gains included in net income | -7,012 | -439 | -5,628 |
Noncredit-related impairment loss on securities | ' | -2,938 | -2,960 |
Foreign currency translation adjustments | ' | -900 | -764 |
Unrealized gains on other investments | 336 | 31 | 194 |
Reclassification adjustment for net gains included in net income | -283 | -13 | -35 |
Other comprehensive (loss) income | -35,128 | 38,609 | -21,526 |
COMPREHENSIVE INCOME | $259,917 | $320,259 | $223,708 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock | Additional Paid In Capital Preferred Stock | Common Stock | Additional Paid In Capital Common Stock | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss), Net of Tax | Preferred stock, Series A, non-cumulative convertible | Preferred stock, Series A, non-cumulative convertible |
In Thousands, unless otherwise specified | Additional Paid In Capital Preferred Stock | Additional Paid In Capital Common Stock | ||||||||
BALANCE at Dec. 31, 2010 | $2,113,931 | ' | $83,058 | $156 | $1,434,277 | $720,116 | ($111,262) | ($12,414) | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 245,234 | ' | ' | ' | ' | 245,234 | ' | ' | ' | ' |
Other comprehensive income (loss) | -21,526 | ' | ' | ' | ' | ' | ' | -21,526 | ' | ' |
Stock compensation costs | 13,543 | ' | ' | ' | 13,543 | ' | ' | ' | ' | ' |
Tax benefit from stock compensation plans, net | 717 | ' | ' | ' | 717 | ' | ' | ' | ' | ' |
Issuance of 323,737, 336,031, and 1,024,925 shares of common stock pursuant to various stock compensation plans and agreements for the year ended, December 31, 2013, 2012 and 2011, respectively | 5,206 | ' | ' | 1 | 5,205 | ' | ' | ' | ' | ' |
Conversion of 85,710 and 31 shares of Series A preferred stock into 5,594,080 and 2,014 shares of common stock for the year ended, December 31, 2013 and 2011 respectively | ' | ' | ' | ' | ' | ' | ' | ' | -31 | 31 |
Issuance of 19,998, 26,151 and 27,831 shares pursuant to Director retainer fee for the year ended, December 31, 2013, 2012, and 2011, respectively | 520 | ' | ' | ' | 520 | ' | ' | ' | ' | ' |
Cancellation of 65,686, 190,634 and 240,193 shares of common stock due to forfeitures of issued restricted stock for the year ended, December 31, 2013, 2012, and 2011, respectively | ' | ' | ' | ' | 4,090 | ' | -4,090 | ' | ' | ' |
508,518, 137,258 and 29,610 shares of restricted stock surrendered due to employee tax liability for the year ended, December 31, 2013, 2012 and 2011, respectively | -649 | ' | ' | ' | ' | ' | -649 | ' | ' | ' |
Preferred stock dividends | -6,857 | ' | ' | ' | ' | -6,857 | ' | ' | ' | ' |
Common stock dividends | -23,876 | ' | ' | ' | ' | -23,876 | ' | ' | ' | ' |
Repurchase of 1,517,555 common stock warrants | -14,500 | ' | ' | ' | -14,500 | ' | ' | ' | ' | ' |
BALANCE at Dec. 31, 2011 | 2,311,743 | ' | 83,027 | 157 | 1,443,883 | 934,617 | -116,001 | -33,940 | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 281,650 | ' | ' | ' | ' | 281,650 | ' | ' | ' | ' |
Other comprehensive income (loss) | 38,609 | ' | ' | ' | ' | ' | ' | 38,609 | ' | ' |
Stock compensation costs | 12,668 | ' | ' | ' | 12,668 | ' | ' | ' | ' | ' |
Tax benefit from stock compensation plans, net | 462 | ' | ' | ' | 462 | ' | ' | ' | ' | ' |
Issuance of 323,737, 336,031, and 1,024,925 shares of common stock pursuant to various stock compensation plans and agreements for the year ended, December 31, 2013, 2012 and 2011, respectively | 3,821 | ' | ' | ' | 3,821 | ' | ' | ' | ' | ' |
Issuance of 19,998, 26,151 and 27,831 shares pursuant to Director retainer fee for the year ended, December 31, 2013, 2012, and 2011, respectively | 570 | ' | ' | ' | 570 | ' | ' | ' | ' | ' |
Cancellation of 65,686, 190,634 and 240,193 shares of common stock due to forfeitures of issued restricted stock for the year ended, December 31, 2013, 2012, and 2011, respectively | ' | ' | ' | ' | 3,335 | ' | -3,335 | ' | ' | ' |
508,518, 137,258 and 29,610 shares of restricted stock surrendered due to employee tax liability for the year ended, December 31, 2013, 2012 and 2011, respectively | -3,012 | ' | ' | ' | ' | ' | -3,012 | ' | ' | ' |
Preferred stock dividends | -6,857 | ' | ' | ' | ' | -6,857 | ' | ' | ' | ' |
Common stock dividends | -57,582 | ' | ' | ' | ' | -57,582 | ' | ' | ' | ' |
Purchase of 8,026,807 and 9,068,105 shares of treasury stock pursuant to the Stock Repurchase Program year ended, December 31, 2013, and 2012, respectively | -199,950 | ' | ' | ' | ' | ' | -199,950 | ' | ' | ' |
BALANCE at Dec. 31, 2012 | 2,382,122 | ' | 83,027 | 157 | 1,464,739 | 1,151,828 | -322,298 | 4,669 | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | 295,045 | ' | ' | ' | ' | 295,045 | ' | ' | ' | ' |
Other comprehensive income (loss) | -35,128 | ' | ' | ' | ' | ' | ' | -35,128 | ' | ' |
Stock compensation costs | 13,548 | ' | ' | ' | 13,548 | ' | ' | ' | ' | ' |
Tax benefit from stock compensation plans, net | 5,522 | ' | ' | ' | 5,522 | ' | ' | ' | ' | ' |
Issuance of 323,737, 336,031, and 1,024,925 shares of common stock pursuant to various stock compensation plans and agreements for the year ended, December 31, 2013, 2012 and 2011, respectively | 3,054 | ' | ' | ' | 3,054 | ' | ' | ' | ' | ' |
Conversion of 85,710 and 31 shares of Series A preferred stock into 5,594,080 and 2,014 shares of common stock for the year ended, December 31, 2013 and 2011 respectively | ' | ' | ' | 6 | ' | ' | ' | ' | -83,027 | 83,021 |
Issuance of 19,998, 26,151 and 27,831 shares pursuant to Director retainer fee for the year ended, December 31, 2013, 2012, and 2011, respectively | 630 | ' | ' | ' | 630 | ' | ' | ' | ' | ' |
Cancellation of 65,686, 190,634 and 240,193 shares of common stock due to forfeitures of issued restricted stock for the year ended, December 31, 2013, 2012, and 2011, respectively | ' | ' | ' | ' | 1,156 | ' | -1,156 | ' | ' | ' |
508,518, 137,258 and 29,610 shares of restricted stock surrendered due to employee tax liability for the year ended, December 31, 2013, 2012 and 2011, respectively | -13,833 | ' | ' | ' | ' | ' | -13,833 | ' | ' | ' |
Preferred stock dividends | -3,428 | ' | ' | ' | ' | -3,428 | ' | ' | ' | ' |
Common stock dividends | -83,315 | ' | ' | ' | ' | -83,315 | ' | ' | ' | ' |
Purchase of 8,026,807 and 9,068,105 shares of treasury stock pursuant to the Stock Repurchase Program year ended, December 31, 2013, and 2012, respectively | -199,992 | ' | ' | ' | ' | ' | -199,992 | ' | ' | ' |
BALANCE at Dec. 31, 2013 | $2,364,225 | $0 | ' | $163 | $1,571,670 | $1,360,130 | ($537,279) | ($30,459) | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Issuance of shares of common stock pursuant to various stock compensation plans and agreements, shares | 323,737 | 336,031 | 1,024,925 |
Issuance of shares pursuant to Director retainer fee, shares | 19,998 | 26,151 | 27,831 |
Cancellation of common stock due to forfeitures of issued restricted stock, shares | 65,686 | 190,634 | 240,193 |
Restricted stock surrendered due to employee tax liability, shares | 508,518 | 137,258 | 29,610 |
Purchase of treasury stock pursuant to the Stock Repurchase Program, shares | 8,026,807 | 9,068,105 | ' |
Repurchase of common stock warrants | ' | ' | 1,517,555 |
Preferred stock, Series A, non-cumulative convertible | ' | ' | ' |
Conversion of Series preferred stock, shares | 85,710 | ' | 31 |
Converted shares of common stock, shares | 5,594,080 | ' | 2,014 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' |
Net income | $295,045 | $281,650 | $245,234 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 101,169 | 82,536 | 67,460 |
(Accretion) of discount and amortization of premiums, net | -245,665 | -233,607 | -210,868 |
Decrease in FDIC indemnification asset and receivable | 228,585 | 122,251 | 100,141 |
Stock compensation costs | 14,178 | 13,238 | 13,543 |
Deferred tax (benefit) expenses | -45,028 | -12,650 | 189,497 |
Tax benefit from stock plans | -5,522 | -462 | -717 |
Provision for loan losses | 22,364 | 65,184 | 95,006 |
Impairment on other real estate owned | 3,849 | 16,035 | 29,266 |
Net gain on sales of investment securities, loans and other assets | -30,224 | -28,165 | -30,998 |
Originations and purchases of loans held for sale | -99,688 | -103,059 | -72,761 |
Proceeds from sales of loans held for sale | 6,272 | 13,844 | 41,388 |
Prepayment penalty for Federal Home Loan Bank advances and other borrowings, net | ' | 6,860 | 12,281 |
Net proceeds from FDIC shared-loss agreements | 55,826 | 76,094 | 159,983 |
Net change in accrued interest receivable and other assets | 58,881 | -23,393 | -146,911 |
Net change in accrued expenses and other liabilities | 69,581 | 15,086 | -233,868 |
Other net operating activities | -3,778 | -3,916 | -2,359 |
Total adjustments | 130,800 | 5,876 | 10,083 |
Net cash provided by operating activities | 425,845 | 287,526 | 255,317 |
Net (increase) decrease in: | ' | ' | ' |
Loans | -2,458,694 | -337,685 | -934,773 |
Short-term investments | 108,905 | -304,544 | 81,726 |
Purchases of: | ' | ' | ' |
Securities purchased under resale agreements | -450,000 | -1,400,000 | -1,292,066 |
Investment securities available-for-sale | -1,316,764 | -1,835,823 | -2,713,546 |
Loans receivable | -680,821 | -461,878 | -675,298 |
Premises and equipment | -88,108 | -10,280 | -10,507 |
Investments in affordable housing partnerships and other investments | -42,149 | -57,831 | -36,642 |
Proceeds from sale of: | ' | ' | ' |
Investment securities available-for-sale | 663,569 | 1,230,134 | 702,616 |
Loans receivable | 259,117 | 76,832 | 188,407 |
Loans held for sale originated for investment | 111,054 | 338,046 | 611,291 |
Other real estate owned | 64,312 | 100,547 | 177,015 |
Premises and equipment | 6,061 | 18,914 | 9,227 |
Investments in affordable housing partnerships and other investments | ' | ' | 7,100 |
Other investments | ' | ' | 2,454 |
Repayments, maturities and redemptions of investment securities available-for-sale | 444,057 | 1,119,098 | 1,780,457 |
Paydowns, maturities and termination of securities purchased under resale agreements | 600,000 | 736,434 | 1,005,632 |
Redemption of Federal Home Loan Bank stock | 44,945 | 29,622 | 25,908 |
Other net investing activities | -330 | -491 | -227 |
Net cash used in investing activities | -2,734,846 | -758,905 | -1,071,226 |
Net increase (decrease) in: | ' | ' | ' |
Deposits | 2,103,564 | 856,352 | 1,812,375 |
Short-term borrowings | -20,000 | -5,208 | -63,337 |
Proceeds from: | ' | ' | ' |
Increase in long-term borrowings | 100,000 | ' | ' |
Issuance of common stock pursuant to various stock plans and agreements | 3,054 | 3,821 | 5,726 |
Payment for: | ' | ' | ' |
Repayment of FHLB advances | ' | -100,857 | -760,274 |
Modification of Federal Home Loan Bank advances | ' | -48,190 | ' |
Repayment of long-term debt | -10,310 | -75,000 | -23,918 |
Repayment of other borrowings | ' | ' | -11,250 |
Repurchase of common stock warrants | ' | ' | -14,500 |
Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan | -199,992 | -199,950 | ' |
Repurchase of vested shares due to employee tax liability | -13,833 | -3,012 | -649 |
Cash dividends | -86,290 | -64,218 | -30,679 |
Tax benefit from stock compensation plans | 5,522 | 462 | 717 |
Net cash provided by (used in) financing activities | 1,881,715 | 364,200 | 914,211 |
Effect of exchange rate changes on cash and cash equivalents | ' | -900 | -1,066 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | -427,286 | -108,079 | 97,236 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 1,323,106 | 1,431,185 | 1,333,949 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 895,820 | 1,323,106 | 1,431,185 |
Cash paid during the year for: | ' | ' | ' |
Interest | 112,169 | 136,760 | 175,772 |
Income tax payments, net of refunds | 142,980 | 183,398 | 326,725 |
Noncash investing and financing activities: | ' | ' | ' |
Transfers to other real estate owned | 43,989 | 81,605 | 175,551 |
Conversion of preferred stock to common stock | 83,027 | ' | 31 |
Loans to facilitate sales of other real estate owned | 139 | 6,380 | 8,882 |
Loans to facilitate sales of loans | ' | 1,018 | 27,149 |
Loans to facilitate sale of premises and equipment | ' | ' | 11,100 |
Loans transferred to loans held for sale, net | 97,065 | 144,131 | 644,915 |
Issuance of common stock to Board of Directors | $630 | $570 | $520 |
SUMMARY_OF_OPERATIONS_AND_SIGN
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |
Dec. 31, 2013 | ||
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | ' | |
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | ' | |
NOTE 1—SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | ||
OPERATIONS SUMMARY | ||
East West Bancorp, Inc. (referred to herein on an unconsolidated basis as “East West” and on a consolidated basis as the “Company” or “we”) is a registered bank holding company that offers a full range of banking services to individuals and small to mid-size businesses through its subsidiary bank, East West Bank and its subsidiaries (“East West Bank” or the “Bank”). The Bank is the Company’s principal asset. The Bank operates 94 banking locations throughout California, six branches in New York, four branches in Georgia, two branches in Massachusetts, one branch in Nevada, one branch in Texas, and four branches in Washington. In Greater China, the Bank’s presence includes three full-service branches in Hong Kong, in Shanghai, and in Shantou. The Bank also has three representative offices in China located in Beijing, Guangzhou and Shenzhen and one in Taipei, Taiwan. | ||
The Bank focuses on commercial lending, including commercial real estate loans, commercial business loans and trade finance loans. The Bank also provides financing for residential loans including single-family and multifamily loans. To a lesser extent, the Bank also makes construction development and consumer loans. Included in the Bank’s locations are twelve in-store branches located in 99 Ranch Market stores in Southern and Northern California. The Bank’s revenues are derived from providing financing for residential and commercial real estate and business customers, as well as investing activities. Funding for lending and investing activities is obtained through acceptance of customer deposits, Federal Home Loan Bank advances and other borrowing activities. | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Basis of Presentation — The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and general practices within the banking industry. The following is a summary of significant principles used in the preparation of the accompanying financial statements. In preparing the financial statements, management of the Company has made a number of estimates and assumptions pertaining to the reporting of assets and liabilities, including the fair value of assets acquired and liabilities assumed, the FDIC indemnification asset, valuation of OREO, the allowance for loan losses, the disclosure of contingent assets and liabilities and the disclosure of income and expenses for the periods presented in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. | ||
Principles of Consolidation — The consolidated financial statements include the accounts of East West Bancorp, Inc., and its wholly owned subsidiaries, East West Bank and East West Insurance Services, Inc. Intercompany transactions and accounts have been eliminated in consolidation. East West also has six wholly owned subsidiaries that are statutory business trusts (the “Trusts”). In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, the Trusts are not consolidated into the accounts of East West Bancorp, Inc. | ||
Fair Value — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, in many cases, may require us to make a number of significant judgments. Based on the observability of the inputs used in the valuation techniques, we classify our assets and liabilities measured and disclosed at fair value in accordance with a three-level hierarchy (e.g., Level 1, Level 2 and Level 3) established under ASC 820. In determining the fair value of financial instruments, we use market prices of the same or similar instruments whenever such prices are available. We do not use prices involving distressed sellers in determining fair value. If observable market prices are unavailable or impracticable to obtain, then fair value is estimated using modeling techniques such as discounted cash flow analyses. These modeling techniques incorporate our assessments regarding assumptions that market participants would use in pricing the asset or the liability, including assumptions about the risks inherent in a particular valuation technique and the risk of nonperformance. | ||
Securities Purchased Under Resale Agreements (“Resale Agreements”) — The Company purchases securities under resale agreements with terms that range from one day to several years. These agreements are collateralized by mortgage-backed securities and mortgage or commercial loans that are generally held by a third party custodian. The purchases are over-collateralized to ensure against unfavorable market price movements. In the event that the fair value of the securities decreases below the carrying amount of the related repurchase agreement, the counterparty is required to deliver an equivalent value of additional securities. The counterparties to these agreements are nationally recognized investment banking firms that meet credit eligibility criteria and with whom a master repurchase agreement has been duly executed. Resale agreements that are short-term in nature, or have terms of up to 90 days, are included in cash and cash equivalents. Resale agreements with terms greater than 90 days are separately categorized. | ||
Investment Securities — The Company classifies its investment securities according to their purpose and holding period. Investment securities available-for-sale are reported at estimated fair value, with unrealized gains and losses excluded from operations and reported as a separate component of accumulated other comprehensive income or loss, net of tax, in stockholders’ equity. | ||
The fair values of the investment securities are generally determined by independent external pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent external brokers. In obtaining such valuation information from third parties, the Company has evaluated the methodologies used to develop the resulting fair values. The Company performs a monthly analysis on the broker quotes and the third party pricing service quotes to ensure that the prices represent a reasonable estimate of the fair value. The procedures include, but are not limited to, initial and ongoing review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. The Company considers whether prices received from independent brokers represent a reasonable estimate of fair value through the use of observable market inputs including comparable trades, the yield curve, spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize proprietary models that include observable market based inputs. Additionally, the majority of these independent broker quotations are non-binding. | ||
The Company applies a modified valuation approach to certain investment securities for which it believes the current broker prices obtained are based on forced liquidation or distressed sale values in inactive markets. The fair value of each of these securities is individually determined based on a combination of the market approach, reflecting current broker prices, and the income approach, which is a discounted cash flow approach. In calculating the fair value derived from the income approach, the Company makes assumptions related to the implied rate of return, general change in market rates, estimated changes in credit quality and liquidity risk premium, specific non-performance and default experience in the collateral underlying the security; additionally, broker discount rates are taken into consideration in determining the discount rate. The values resulting from each approach (i.e. market and income approaches) are weighted to derive the final fair value of each security trading in an inactive market. | ||
Amortization of premiums and accretion of discounts on securities are recorded as yield adjustments on such securities using the effective interest method. The specific identification method is used for purposes of determining cost in computing realized gains and losses on investment securities sold. | ||
At each reporting date, the Company assesses whether there is an “other-than-temporary” impairment (“OTTI”) in its portfolio of investment securities. If we determine that a decline in fair value is other-than-temporary, an impairment loss is recognized in current earnings. When we have the intent and ability to hold debt securities and it is not more likely than not that we will be required to sell these securities with OTTI for a period necessary to recover the noncredit-related impairment losses, only the credit-related impairment losses are recognized in current earnings. In these instances, the noncredit-related impairment losses are charged to other comprehensive income. The Company examines all individual securities that are in an unrealized loss position at each reporting date for other-than-temporary impairment. Specific investment level factors that are examined to assess impairment include the nature of the investments, the severity and duration of the loss, the probability that the Company will be unable to collect all amounts due, an analysis of the issuers of the securities and whether there has been any cause for default on the securities, and any change in the rating of the securities by the various rating agencies. Additionally, management takes into consideration the Company’s financial resources as well as the Company’s overall ability and intent to hold the securities and not be required to sell the securities until their fair values recover. | ||
The Company considers all available information relevant to the collectability of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of future cash flows and making its other-than-temporary impairment assessment for its portfolio of trust preferred securities. The Company considers factors such as remaining payment terms of the security, prepayment speeds, expected defaults, the financial condition of the issuer(s), and the value of any underlying collateral. | ||
Loans Receivable — Loans receivable that the Company has the intent and ability to hold for the foreseeable future, or until maturity, are stated at their outstanding principal, reduced by an allowance for loan losses and net deferred loan fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Nonrefundable fees and direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The deferred net loan fees and costs are recognized in interest income as an adjustment to yield over the loan term using the effective interest method. Discounts or premiums on purchased loans are accreted or amortized to interest income using the effective interest method over the remaining period to contractual maturity adjusted for anticipated prepayments. Interest on loans is calculated using the simple-interest method on daily balances of the principal amounts outstanding. Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that full collection of principal or interest becomes uncertain, regardless of the length of past due status. Generally, loans are placed on nonaccrual status when they become 90 days past due. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. In general, subsequent payments received are applied to the outstanding principal balance of the loan. A loan is returned to accrual status when the borrower has demonstrated a satisfactory payment trend subject to management’s assessment of the borrower’s ability to repay the loan. | ||
Loans held for sale are carried at the lower of aggregate cost or fair value using the aggregate method. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sale of the related loans. A valuation allowance is established if the fair value of such loans is lower than their cost, with a corresponding charge to noninterest income. | ||
Troubled Debt Restructurings (“TDR”) — A loan is identified as a troubled debt restructure when a borrower is experiencing financial difficulties and for economic or legal reasons related to these difficulties the Company grants a concession to the borrower in the restructuring that it would not otherwise consider. The Company has granted a concession when, as a result of the restructuring to a troubled borrower, it does not expect to collect all amounts due, including principal and/or interest accrued at the original terms of the loan. The concessions may be granted in various forms, including a below-market change in the stated interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date, or a note split with principal forgiveness. A restructuring executed at an interest rate that is at market interest rates is not a TDR. All troubled debt restructurings are reviewed for impairment. For modifications where we forgive principal, the entire amount of such principal forgiveness is immediately charged off. Generally, a nonaccrual loan that is restructured remains on nonaccrual status for a period of six months to demonstrate that the borrower can perform under the restructured terms. However, the borrower’s performance prior to the restructuring, or other significant events at the time of restructuring may be considered in assessing whether the borrower can meet the new terms and may result in the loan remaining on accrual status or being returned to accrual status after a shorter performance period. If the borrower’s performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan. Loans classified as TDRs are reported as impaired loans. | ||
Allowance for Loan Losses — The allowance for loan losses is established as management’s estimate of probable losses inherent in the loan portfolio. The allowance is increased by the provision for loan losses and decreased by charge-offs when management believes the uncollectability of a loan is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based on management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available. Additionally, non-classified loans are also considered in the allowance for loan losses calculation and are factored in based on the historical loss experience adjusted for various qualitative factors. | ||
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all scheduled payments of principal or interest due according to the contractual terms of the loan agreement. Factors considered by management in determining and measuring loan impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for residential, commercial real estate, and commercial and industrial loans based on the loan’s observable market price or the fair value of the collateral, less costs to sell, if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan’s effective interest rate. If the measure of the impaired loan is less than the recorded investment in the loan and the loan is classified as nonperforming and uncollectible, the deficiency is charged off against the allowance for loan losses. In general, consumer loans consist of homogeneous smaller balance loans and are collectively evaluated for impairment. | ||
Acquired Loans — Acquired loans are valued as of acquisition date in accordance with ASC 805. Loans purchased with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under ASC 310-30. | ||
Under ASC 805 and ASC 310-30, loans are recorded at fair value at acquisition date, factoring in credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for loan losses is not carried over or recorded as of the acquisition date. In situations where loans have similar risk characteristics, loans are aggregated into pools to estimate cash flows under ASC 310-30. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. | ||
The cash flows expected over the life of the loan or pool are estimated using an internal cash flow model that projects cash flows and calculates the carrying value of the loan or pool, book yield, effective interest income and impairment, if any, based on loan or pool level events, respectively. Assumptions as to default rates, loss severity, loss curves and prepayment speeds are utilized to calculate the expected cash flows. | ||
At acquisition, the excess of the cash flows expected to be collected over the recorded investment is considered to be the accretable yield and is recognized as interest income over the life of the loan or pool. The excess of the contractual cash flows over the cash flows expected to be collected is considered to be the nonaccretable difference. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value that are significant and probable are adjusted through the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows over those expected at purchase date that are probable are recognized by recording an allowance for loan losses. Any disposals of loans, including sales of loans, payments in full or foreclosures result in the removal of the loan from the ASC 310-30 portfolio at the carrying amount. | ||
Covered Loans — Loans acquired in an FDIC-assisted acquisition that are subject to an FDIC shared-loss agreement are referred to as covered loans. Covered loans are reported exclusive of the expected cash flow reimbursements we expect to collect from the FDIC. All covered loans are accounted for under ASC 805 and ASC 310-30. | ||
FDIC Indemnification Asset — In conjunction with the FDIC-assisted acquisitions of Washington First International Bank and United Commercial Bank, the Bank entered into shared-loss agreements with the FDIC related to covered loans and covered other real estate owned (see “Covered Other Real Estate Owned” below). The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the shared-loss agreement. The Company has elected to account for amounts receivable under the shared-loss agreements as an indemnification asset in accordance with ASC 805. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC is accreted into noninterest income over the life of the FDIC indemnification asset. The FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans and covered other real estate owned. Any increases in cash flow of the covered loans over those expected will reduce the FDIC indemnification asset and any decreases in cash flow of the covered loans over those expected will increase the FDIC indemnification asset. Over the life of the FDIC indemnification asset, increases and decreases are recorded as adjustments to noninterest income. During the year, the bank lowered the credit discount on the UCB covered loan portfolio as the credit quality was performing better than originally estimated. By lowering the credit discount, interest income will increase over the life of the loans. Correspondingly, with the lowered credit discount, the expected reimbursement from the FDIC under the loss sharing agreement will decrease, resulting in amortization of the FDIC indemnification asset which is recorded as a charge to noninterest income. | ||
Other Real Estate Owned — Other real estate owned (“OREO”) represents properties acquired through foreclosure or through full or partial satisfaction of loans, is considered held for sale, and is recorded at the lower of cost or estimated fair value at the time of foreclosure. Loan balances in excess of the fair value of the real estate acquired at the date of foreclosure are charged against the allowance for loan losses. After foreclosure, the real estate is carried at the lower of carrying value or fair value less costs to sell. Subsequent declines in the fair value of OREO below the carrying value are recorded through the use of a valuation allowance by charges to noninterest expense. Any subsequent operating expenses or income of such properties are also charged to noninterest expense. If the OREO is sold within three months of foreclosure, the Company substitutes the value received in the sale (net of costs to sell) for the fair value (less costs to sell). Any adjustment made to the loss originally recognized at the time of foreclosure is then charged against or credited to the allowance for loan losses, if deemed material. Otherwise, any declines in value, after foreclosure, are recorded in non-interest expense as gains or losses from the sale or disposition of the real estate. Gain recognition upon disposition of a property is dependent on the sale having met certain criteria relating to the buyer’s initial investment in the property sold. | ||
Covered Other Real Estate Owned — All other real estate owned acquired in an FDIC-assisted acquisition that are subject to an FDIC shared-loss agreement are referred to as covered other real estate owned. Covered other real estate owned is reported exclusive of the expected cash flow reimbursements we expect to collect from the FDIC. Upon transferring covered loan collateral to covered other real estate owned status, acquisition date fair value discounts on the related loan are also transferred to covered other real estate owned. Fair value adjustments on covered other real estate owned result in a reduction of the covered other real estate carrying amount through expense and a corresponding increase of the FDIC reimbursement for 80% of the adjustment resulting in income. The net of that expense and income is the non-reimbursed portion or 20% of the estimated loss to the Bank which is the net amount charged against earnings. | ||
Investment in Affordable Housing Partnerships — The Company owns limited partnership interests in projects of affordable housing for lower income tenants. The investments in which the Company has a limited partnership interest that exceeds 5% are recorded using the equity method of accounting. The remaining investments are recorded using the cost method and are being amortized over the life of the related tax credits. The tax credits are being recognized in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investments are reviewed for impairment on an annual basis or on an interim basis if an event occurs that would trigger potential impairment. | ||
Goodwill and Other Intangible Assets — The Company has goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, as a result of various past acquisitions. Goodwill is not amortized and is reviewed for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. Premiums on deposits, which represent the intangible value of depositor relationships resulting from deposit liabilities assumed in acquisitions, are amortized over the projected useful lives of the deposits, which is typically 7 to 15 years. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment on goodwill and premiums on deposits is recognized by writing down the asset to the extent that the carrying value exceeds the estimated fair value. | ||
Investment in Federal Home Loan Bank Stock — As a member of the Federal Home Loan Bank (“FHLB”) of San Francisco, the Bank is required to own common stock in the FHLB of San Francisco based upon our balance of residential mortgage loans and outstanding FHLB advances. As a result of the acquisition of WFIB in 2010, the Bank also owns common stock in the FHLB of Seattle. FHLB stock is carried at cost and may be sold back to the FHLB at its carrying value. Cash dividends are accrued and reported as dividend income. | ||
Investment in Federal Reserve Bank Stock — As a member of the Federal Reserve Bank (“FRB”) of San Francisco, the Bank is required to maintain stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends are accrued and reported as dividend income. | ||
Premises and Equipment — The Company’s premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed based on the straight-line method over the estimated useful lives of the various classes of assets. The ranges of useful lives for the principal classes of assets are as follows: | ||
Buildings and building improvements | 25 years | |
Furniture, fixtures and equipment | 3 to 7 years | |
Leasehold improvements | Term of lease or useful life, whichever is shorter | |
The Company reviews its long-lived assets for impairment annually or when events or circumstances indicate that the carrying amount of these assets may not be recoverable. An asset is considered impaired when the expected undiscounted cash flows over the remaining useful life is less than the net book value. When impairment is indicated for an asset, the amount of impairment loss is the excess of the net book value over its fair value. | ||
Securities Sold Under Repurchase Agreements (“Repurchase Agreements”) — The Company sells securities under repurchase agreements. These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company may have to provide additional collateral to the counterparty, as necessary. | ||
Long-Term Debt — Long-term debt consists of junior subordinated debt and other long-term debt. The Company has six statutory business trusts whereby the Company is the owner of all the beneficial interests represented by the common securities of the Trusts, and third parties hold the fixed and variable rate capital securities of the Trusts. The purpose of issuing the capital securities was to provide the Company with a cost-effective means of obtaining Tier I capital for regulatory reporting purposes. However, these securities will be phased out of the Tier I capital beginning in 2013, fully phased out by 2016. | ||
The Trusts are not consolidated by the Company. Junior subordinated debt represents liabilities of the Company to the Trusts and is included in long-term debt on the accompanying consolidated balance sheets. | ||
Federal Funds Purchased — The Company utilizes federal funds purchased as part of its short-term financing strategy. Federal funds purchased are generally overnight borrowings and mature within one business day to six months from the transaction date. | ||
Income Taxes — Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. | ||
The Company examines its financial statements, its income tax provision, and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. In the event a tax position is not more likely than not to be sustained by the tax authorities, a reserve is established by management. The Company recognizes interest and penalties related to tax positions as part of its provision for income taxes. | ||
Stock-Based Compensation — The Company issues stock-based compensation to certain employees, officers, and directors and accounts for stock options using the fair value method, which generally results in compensation expense recognition. | ||
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company; (2) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and (3) the Company does not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) an agreement that provides the Company with both the unilateral ability to cause the holder to return specific assets and a more than trivial benefit attributable to that ability. The difference between the net proceeds received and the carrying amount of the financial assets being sold is recognized as a gain or loss on sale. | ||
Earnings Per Share (“EPS”) — The Company applies the two-class method of computing EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stock, which receive dividends as declared, qualify as participating securities. Restricted stock units issued by the Company are not considered participating securities, as they do not have dividend distribution rights during the vesting period. Diluted EPS is calculated on the basis of the weighted average number of shares outstanding during the period plus potential dilutive shares. | ||
Comprehensive Income — The term “comprehensive income” describes the total of all components of comprehensive income, including net income and other comprehensive income. “Other comprehensive income” refers to revenues, expenses, and gains and losses that are included in comprehensive income but are excluded from net income because they have been recorded directly in equity under the provisions of other Financial Accounting Standards Board statements. In accordance with the adoption of ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, the Company presents comprehensive income in the consolidated statements of comprehensive income, which was formerly presented in the consolidated statements of changes in stockholders’ equity. | ||
Derivative Financial Instruments — As part of the asset and liability management strategy, the Company uses derivative financial instruments to mitigate exposure to interest rate and foreign currency risks. All derivative instruments, including certain derivative instruments embedded in other contracts, are recognized on the consolidated balance sheet at fair value with the change in fair value reported in earnings. When master netting agreements exist, the Company nets counterparty positions with any cash collateral received or delivered. | ||
The Company’s interest rate swaps on certain certificates of deposit qualify for hedge accounting treatment under ASC 815, Derivatives and Hedging. The Company documents its hedge relationships, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction at the time the derivative contract is executed. This includes designating the derivative contract as a “fair value hedge” which is a hedge of a recognized asset or liability. All derivatives designated as fair value hedges are linked to specific hedged items or to groups of specific assets and liabilities on the balance sheet. Both at inception and quarterly thereafter, the Company assesses whether the derivatives used in hedging transactions are highly effective (as defined in the guidance) in offsetting changes in the fair value of the hedged item. Retroactive effectiveness is also assessed as well as the continued expectation that the hedge will remain effective prospectively. Any ineffective portion of the changes of fair value hedges is recognized immediately in interest expense in the consolidated statements of income. | ||
The Company discontinues hedge accounting prospectively when (i) a derivative is no longer highly effective in offsetting changes in the fair value, (ii) a derivative expires or is sold, terminated, or exercised, or (iii) the Company determines that designation of a derivative as a hedge is no longer appropriate. If a fair value hedge derivative instrument is terminated or the hedge designation removed, the previous adjustments to the carrying amount of the hedged liability would be subsequently accounted for in the same manner as other components of the carrying amount of that liability. For interest-bearing liabilities, such adjustments would be amortized into earnings over the remaining life of the respective liability. | ||
The Company also offers various derivative products to clients and enters into derivative transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting. The contracts are marked-to-market each reporting period with changes in fair value recorded in the consolidated statements of income. | ||
Reclassifications — Certain items in the consolidated balance sheet and the consolidated statements of income for the years ended December 31, 2012 and 2011 were reclassified to conform to the 2013 and 2012 presentation, respectively. These reclassifications did not affect previously reported net income. | ||
RECENT ACCOUNTING STANDARDS | ||
In October 2012, the FASB issued ASU 2012-06, Business Combinations (Topic 805): Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. ASU 2012-06 clarifies the applicable guidance for subsequently measuring an indemnification asset recognized as a result of a government-assisted acquisition of a financial institution. The standard instructs that when a reporting entity recognizes an indemnification asset, it should subsequently account for the change in the measurement of the indemnification asset on the same basis as the change in the assets subject to indemnification. Any amortization of changes in value should be limited to the contractual term of the indemnification agreement. The amended guidance is effective for interim and annual periods beginning on or after December 15, 2012. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements, as the Company had applied this methodology prior to the issuance of this ASU. | ||
In January 2013, the FASB issued ASU 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. ASU 2013-01 clarifies that the scope of ASU 2011-01 applies to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. The amended guidance is effective for interim and annual periods beginning on or after January 1, 2013. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. The Company did include additional disclosure in the notes to the consolidated financial statements to comply with the requirements of the ASU. | ||
In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 enhances the reporting of reclassifications out of accumulated other comprehensive income by requiring entities to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements. The amendments are effective for interim and annual periods beginning on or after December 15, 2012. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. The Company did include additional disclosure in the notes to the consolidated financial statements to comply with the requirements of the ASU. | ||
In July 2013, the FASB issued ASU 2013-10, Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes. ASU 2013-10 permits the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to interest rates on direct Treasury obligations of the U.S. government and the London Interbank Offered Rate (“LIBOR”). ASU 2013-10 is effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. | ||
In January 2014, the FASB issues ASU 2014-01, Investments—Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. ASU 2014-10 permits reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). ASU 2014-10 is effective for interim and annual periods beginning after December 15, 2014 and if elected, should be applied retrospectively to all periods presented. Early adoption is permitted. The Company is currently evaluating the impact on the Company’s consolidated financial statements. |
FAIR_VALUE
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NOTE 2—FAIR VALUE | |||||||||||||||||
Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market and income approaches. Based on these approaches, the Company utilizes certain assumptions that market participants would use in pricing the asset or liability. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy noted below. The hierarchy is based on the quality and reliability of the information used to determine fair values. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to data lacking transparency. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: | |||||||||||||||||
• Level 1 – Quoted prices for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Level 1 financial instruments typically include U.S. Treasury securities. | |||||||||||||||||
• Level 2 – 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 2 financial instruments typically include U.S. Government debt and agency mortgage-backed securities, municipal securities, corporate debt securities, single issuer trust preferred securities, foreign exchange options and interest rate swaps. | |||||||||||||||||
• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value is not solely based on observable market inputs and requires management judgment or estimation. This category typically includes pooled trust preferred securities, impaired loans, other real estate owned (“OREO”) and derivatives payable. | |||||||||||||||||
The Company records investment securities available-for-sale, derivative liabilities, foreign exchange options, interest rate swaps and short-term foreign exchange contracts at fair value on a recurring basis. Certain other assets such as impaired loans, other real estate owned, loans held for sale, goodwill, premiums on acquired deposits and other investments are recorded at fair value on a nonrecurring basis. Nonrecurring fair value measurements typically involve assets that are periodically evaluated for impairment and for which any impairment is recorded in the period in which the remeasurement is performed. | |||||||||||||||||
In determining the appropriate hierarchy levels, the Company performs a detailed analysis of assets and liabilities that are subject to fair value disclosure. The following tables present both financial and nonfinancial assets and liabilities that are measured at fair value on a recurring and nonrecurring basis. These assets and liabilities are reported on the consolidated balance sheets at their fair values as of December 31, 2013 and 2012. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. For assets measured on a recurring basis, there were no transfers in and out of Levels 1 and 3 or Levels 2 and 3 during 2013 and 2012. | |||||||||||||||||
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | |||||||||||||||||
as of December 31, 2013 | |||||||||||||||||
Quoted Prices in | Significant | ||||||||||||||||
Fair Value | Active Markets | Other | Significant | ||||||||||||||
Measurements | for Identical | Observable | Unobservable | ||||||||||||||
December 31, | Assets | Inputs | Inputs | ||||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(In thousands) | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury securities | $ | 491,632 | $ | 491,632 | $ | — | $ | — | |||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 394,323 | — | 394,323 | — | |||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | |||||||||||||||||
Commercial mortgage-backed securities | 178,870 | — | 178,870 | — | |||||||||||||
Residential mortgage-backed securities | 885,237 | — | 885,237 | — | |||||||||||||
Municipal securities | 280,979 | — | 280,979 | — | |||||||||||||
Other residential mortgage-backed securities: | |||||||||||||||||
Investment grade | 46,327 | — | 46,327 | — | |||||||||||||
Other commercial mortgage-backed securities: | |||||||||||||||||
Investment grade | 51,617 | — | 51,617 | — | |||||||||||||
Corporate debt securities: | |||||||||||||||||
Investment grade | 309,995 | — | 309,995 | — | |||||||||||||
Non-investment grade | 15,101 | — | 8,730 | 6,371 | |||||||||||||
Other securities | 79,716 | — | 79,716 | — | |||||||||||||
Total investment securities available-for-sale | $ | 2,733,797 | $ | 491,632 | $ | 2,235,794 | $ | 6,371 | |||||||||
Foreign exchange options | 6,290 | — | 6,290 | — | |||||||||||||
Interest rate swaps | 28,078 | — | 28,078 | — | |||||||||||||
Foreign exchange contracts | 6,181 | — | 6,181 | — | |||||||||||||
Derivatives liabilities | -50,262 | — | -46,607 | (3,655 | ) | ||||||||||||
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | |||||||||||||||||
as of December 31, 2012 | |||||||||||||||||
Quoted Prices in | Significant | ||||||||||||||||
Fair Value | Active Markets | Other | Significant | ||||||||||||||
Measurements | for Identical | Observable | Unobservable | ||||||||||||||
December 31, | Assets | Inputs | Inputs | ||||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(In thousands) | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury securities | $ | 460,677 | $ | 460,677 | $ | — | $ | — | |||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 197,855 | — | 197,855 | — | |||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | |||||||||||||||||
Commercial mortgage-backed securities | 180,665 | — | 180,665 | — | |||||||||||||
Residential mortgage-backed securities | 1,144,085 | — | 1,144,085 | — | |||||||||||||
Municipal securities | 167,093 | — | 167,093 | — | |||||||||||||
Other commercial mortgage-backed securities: | |||||||||||||||||
Investment grade | 17,084 | — | 17,084 | — | |||||||||||||
Corporate debt securities: | |||||||||||||||||
Investment grade | 411,983 | — | 411,983 | — | |||||||||||||
Non-investment grade | 17,417 | — | 12,617 | 4,800 | |||||||||||||
Other securities | 10,170 | — | 10,170 | — | |||||||||||||
Total investment securities available-for-sale | $ | 2,607,029 | $ | 460,677 | $ | 2,141,552 | $ | 4,800 | |||||||||
Foreign exchange options | $ | 5,011 | $ | — | $ | 5,011 | $ | — | |||||||||
Interest rate swaps | 36,943 | — | 36,943 | — | |||||||||||||
Short-term foreign exchange contracts | 896 | — | 896 | — | |||||||||||||
Derivatives liabilities | -42,060 | — | -39,008 | (3,052 | ) | ||||||||||||
Assets measured at fair value on a nonrecurring basis using significant unobservable inputs include certain impaired loans and OREO. The inputs and assumptions for nonrecurring Level 3 fair value measurements for impaired loans and OREO include adjustments to external and internal appraisals for change in the market, assumptions by appraiser embedded into appraisals, probability weighting of brokered price opinions, and management’s adjustments for other relevant factors and market trends. | |||||||||||||||||
Assets Measured at Fair Value on a Non-Recurring Basis | |||||||||||||||||
for the Twelve Months Ended December 31, 2013 | |||||||||||||||||
Quoted Prices in | Significant | Total Gains | |||||||||||||||
Fair Value | Active Markets | Other | Significant | (Losses) for the | |||||||||||||
Measurements | for Identical | Observable | Unobservable | Twelve Months Ended | |||||||||||||
December 31, | Assets | Inputs | Inputs | December 31, | |||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | 2013 | |||||||||||||
(In thousands) | |||||||||||||||||
Non-covered impaired loans: | |||||||||||||||||
Total residential | $ | 12,791 | $ | — | $ | — | $ | 12,791 | $ | (1,378 | ) | ||||||
Total commercial real estate | 29,559 | — | — | 29,559 | (4,250 | ) | |||||||||||
Total commercial and industrial | 15,120 | — | — | 15,120 | (13,135 | ) | |||||||||||
Total consumer | 281 | — | — | 281 | (112 | ) | |||||||||||
Total non-covered impaired loans | $ | 57,751 | $ | — | $ | — | $ | 57,751 | $ | (18,875 | ) | ||||||
Non-covered OREO | $ | 13,031 | $ | — | $ | — | $ | 13,031 | $ | (1,438 | ) | ||||||
Covered OREO (1) | $ | 17,284 | $ | — | $ | — | $ | 17,284 | $ | (3,376 | ) | ||||||
Assets Measured at Fair Value on a Non-Recurring Basis | |||||||||||||||||
for the Twelve Months Ended December 31, 2012 | |||||||||||||||||
Quoted Prices in | Significant | Total Gains | |||||||||||||||
Fair Value | Active Markets | Other | Significant | (Losses) for the | |||||||||||||
Measurements | for Identical | Observable | Unobservable | Twelve Months Ended | |||||||||||||
December 31, | Assets | Inputs | Inputs | December 31, | |||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | 2012 | |||||||||||||
(In thousands) | |||||||||||||||||
Non-covered impaired loans: | |||||||||||||||||
Total residential | $ | 23,043 | $ | — | $ | — | $ | 23,043 | $ | (4,803 | ) | ||||||
Total commercial real estate | 31,737 | — | — | 31,737 | (8,405 | ) | |||||||||||
Total commercial and industrial | 12,838 | — | — | 12,838 | (14,540 | ) | |||||||||||
Total consumer | 372 | — | — | 372 | (264 | ) | |||||||||||
Total non-covered impaired loans | $ | 67,990 | $ | — | $ | — | $ | 67,990 | $ | (28,012 | ) | ||||||
Non-covered OREO | $ | 2,065 | $ | — | $ | — | $ | 2,065 | $ | (5,122 | ) | ||||||
Covered OREO (1) | $ | 10,468 | $ | — | $ | — | $ | 10,468 | $ | (11,183 | ) | ||||||
Loans held for sale | $ | — | $ | — | $ | — | $ | — | $ | (4,730 | ) | ||||||
(1) Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company’s liability for losses is 20% of the $3.4 million in losses, or $675 thousand, and 20% of the $11.2 million in losses, or $2.2 million, for the year ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3. The following tables provide a reconciliation of the beginning and ending balances for major asset and liability categories measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2013 and 2012: | |||||||||||||||||
Investment Securities | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Corporate Debt | |||||||||||||||||
Securities | |||||||||||||||||
Non-Investment Grade | Derivatives Payable | ||||||||||||||||
(In thousands) | |||||||||||||||||
Beginning balance, January 1, 2013 | $ | 4,800 | $ | (3,052 | ) | ||||||||||||
Total gains or (losses): (1) | |||||||||||||||||
Included in earnings | — | (603 | ) | ||||||||||||||
Included in other comprehensive unrealized gain (2) | 1,653 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3) | |||||||||||||||||
Purchases | — | — | |||||||||||||||
Issuances | — | — | |||||||||||||||
Sales | — | — | |||||||||||||||
Settlements | -82 | — | |||||||||||||||
Transfer from investment grade to non-investment grade | — | — | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance, December 31, 2013 | $ | 6,371 | $ | (3,655 | ) | ||||||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at December 31, 2013 | $ | — | $ | 603 | |||||||||||||
Investment Securities | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Corporate Debt | |||||||||||||||||
Securities | |||||||||||||||||
Non-Investment Grade | Derivatives Payable | ||||||||||||||||
(In thousands) | |||||||||||||||||
Beginning balance, January 1, 2012 | $ | 2,235 | $ | (2,634 | ) | ||||||||||||
Total gains or (losses): (1) | |||||||||||||||||
Included in earnings | -99 | (418 | ) | ||||||||||||||
Included in other comprehensive unrealized gain (2) | 2,711 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3) | |||||||||||||||||
Purchases | — | — | |||||||||||||||
Issuances | — | — | |||||||||||||||
Sales | — | — | |||||||||||||||
Settlements | -47 | — | |||||||||||||||
Transfer from investment grade to non-investment grade | — | — | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance, December 31, 2012 | $ | 4,800 | $ | (3,052 | ) | ||||||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at December 31, 2012 | $ | 99 | $ | 418 | |||||||||||||
(1) Total gains or losses represent the total realized and unrealized gains and losses recorded for Level 3 assets and liabilities. Realized gains or losses are reported in the consolidated statements of income. | |||||||||||||||||
(2) Unrealized gains or losses on investment securities are reported in accumulated other comprehensive loss, net of tax in the consolidated statements of comprehensive income. | |||||||||||||||||
(3) Purchases, issuances, sales and settlements represent Level 3 assets and liabilities that were either purchased, issued, sold, or settled during the period. The amounts are recorded at their end of period fair values. | |||||||||||||||||
Valuation Methodologies | |||||||||||||||||
Investment Securities Available-for-Sale — The fair values of the investment securities are generally determined by independent external pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent external brokers. In obtaining such valuation information from third parties, the Company has reviewed the methodologies used to develop the resulting fair values. | |||||||||||||||||
The Company’s Level 3 available-for-sale securities include four pooled trust preferred securities. The fair values of these investment securities represent less than 1% of the total available-for-sale investment securities. The fair values of the pooled trust preferred securities have traditionally been based on the average of at least two quoted market prices obtained from independent external brokers since broker quotes in an active market are given the highest priority. As a result of the continued illiquidity in the pooled trust preferred securities market, it is the Company’s view that current broker prices (which are typically non-binding) on certain pooled trust preferred securities are based on forced liquidation or distressed sale values in very inactive markets that are not representative of the fair value of these securities. As such, the Company considered what weight, if any, to place on transactions that are not orderly when estimating fair value. | |||||||||||||||||
For the pooled trust preferred securities, the fair value was derived based on discounted cash flow analyses (the income method) prepared by management. In order to determine the appropriate discount rate used in calculating fair values derived from the income method for the pooled trust preferred securities, the Company has made assumptions using an exit price approach related to the implied rate of return which have been adjusted for general changes in market rates, estimated changes in credit risk and liquidity risk premium, specific nonperformance, and default experience in the collateral underlying the securities. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for credit risk and liquidity risk. The actual Level 3 unobservable assumption rates used as of December 31, 2013 include: a constant prepayment rate of 0% for year 1-5 and 1% thereafter, a constant default rate of 1.2% for year 1-5 and 0.75% thereafter, and a recovery assumption of 0% for existing deferrals/defaults and 15% for future deferrals with a recovery lag of 60 months. Losses arising during the period, if any, are recognized in noninterest income. | |||||||||||||||||
Derivative Liabilities — The Company’s derivative liabilities include derivatives payable that fall within Level 3 and all other derivative liabilities which fall within Level 2. The derivatives payable are recorded in conjunction with certain certificates of deposit (“host instrument”). These CDs pay interest based on changes in the Chinese currency Renminbi (“RMB”), and are included in interest-bearing deposits on the consolidated balance sheets. The fair value of these embedded derivatives is based on the income approach. The payable is divided by the portion under FDIC insurance coverage and the non-insured portion. For the FDIC insured portion the Company applied a risk premium comparable to an agency security risk premium. For the non-insured portion, the Company considered its own credit risk in determining the valuation by applying a risk premium based on our institutional credit rating, which resulted in an adjustment of $1.6 million to the valuation of the derivative liabilities for the year ended December 31, 2013. Significant increases (decreases), if any, of those inputs in isolation would result in a significantly lower (higher) fair value measurement. The valuation of the derivatives payable falls within Level 3 of the fair value hierarchy since the significant inputs used in deriving the fair value of these derivative contracts are not directly observable. The actual Level 3 unobservable input used as of December 31, 2013 was a credit risk adjustment with a range of 0.68% to 0.73%. The Level 2 derivative liabilities are mostly comprised of the offsetting interest rate swaps with other counterparties. Refer to “Interest Rate Swaps” within this footnote for complete discussion. | |||||||||||||||||
Foreign Exchange Options — The Company has entered into foreign exchange option contracts with major investment firms. The settlement amount is determined based upon the performance of the Chinese currency RMB relative to the U.S. Dollar (“USD”) over the 5-year term of the contract. The performance amount is computed based on the average quarterly value of the RMB per the USD as compared to the initial value. The fair value of the derivative contract is provided by third parties and is determined based on the change in the RMB and the volatility of the option over the life of the agreement. The option value is derived based on the volatility of the option, interest rate, currency rate and time remaining to maturity. The Company’s consideration of the counterparty’s credit risk resulted in a nominal adjustment to the valuation of the foreign exchange options for the year ended December 31, 2013. The valuation of the option contract falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of this derivative contract. | |||||||||||||||||
Interest Rate Swaps — The Company has entered into pay-fixed, receive-variable swap contracts with institutional counterparties to hedge against interest rate swap products offered to bank customers. This product allows borrowers to lock in attractive intermediate and long-term interest rates by entering into a pay-fixed, receive-variable swap contract with the Company, resulting in the customer obtaining a synthetic fixed rate loan. The Company has also entered into pay-variable, receive-fixed swap contracts with institutional counterparties to hedge against certificates of deposit issued. This product allows the Company to lock in attractive floating rate funding. The fair value of the interest rate swap contracts is based on a discounted cash flow approach. The Company’s consideration of the counterparty’s credit risk resulted in a $272 thousand adjustment to the valuation of the interest rate swaps for the year ended December 31, 2013. The valuation of the interest rate swap falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of this derivative contract. | |||||||||||||||||
Foreign Exchange Contracts — The Company entered into short-term foreign exchange contracts to purchase/sell foreign currencies at set rates in the future. These contracts economically hedge against foreign exchange rate fluctuations. The Company enters into contracts with institutional counterparties to hedge against foreign exchange products offered to bank customers. These products allow customers to hedge the foreign exchange risk of their deposits and loans denominated in foreign currencies. The Company does not assume any foreign exchange rate risk as the contract with the customer and the contract with the institutional party mirror each other. The fair value is determined at each reporting period based on the change in the foreign exchange rate. Given the short-term nature of the contracts, the counterparties’ credit risks are considered nominal and resulted in no adjustments to the valuation of the short-term foreign exchange contracts for the year ended December 31, 2013. The valuation of the contract falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of this derivative contract. | |||||||||||||||||
The Company also entered into long-term foreign exchange contracts to purchase/sell foreign currencies at set rates in the future. The fair value is determined at each reporting period based on the change in the foreign exchange rate. The Company’s consideration of the counterparty’s credit risk resulted in a nominal adjustment to the valuation of the long-term foreign exchange contract for the year ended December 31, 2013. The valuation of the contract falls within Level 2 of the fair value hierarchy due to the observable nature of the inputs used in deriving the fair value of this derivative contract. | |||||||||||||||||
Impaired Loans — We evaluate loan impairment according to the provisions of ASC 310-10-35, Receivables-Overall-Subsequent Measurement. Under ASC 310-10-35, loans are considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement, including scheduled interest payments. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent, less costs to sell. If the measure of the impaired loan is less than the recorded investment in the loan and the loan is classified as nonperforming and uncollectible, the deficiency is charged-off against the allowance for loan losses. Also, in accordance with ASC 310-10-35, loans that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the general valuation allowance for loan losses required for the period. | |||||||||||||||||
The Company’s impaired loans are generally measured using the fair value of the underlying collateral, which is determined based on the most recent valuation information received. Appraisals are obtained from third party appraisers and reviewed by management. Similarly, evaluations are obtained from third-parties or prepared internally and are also reviewed by management. Updated appraisals and evaluations are obtained on a regular basis or as necessary. Further, on a quarterly basis, all appraisals and evaluations of nonperforming assets are reviewed to assess the current carrying value and to ensure that the current carrying value is appropriate. In calculating the discount to be applied to an appraisal or evaluation, if necessary, the Company considers the location of collateral, the property type, and third party comparable sales. If it is assessed by management that the current value is not appropriate, adjustments to the carrying value will be calculated and a charge-off or a specific valuation allowance may be recorded to reduce the loan to the appropriate adjusted carrying value. The fair values may be adjusted as needed based on factors such as the Company’s historical knowledge and changes in market conditions from the time of valuation. Impaired loans are classified as Level 3 assets in the fair value hierarchy. | |||||||||||||||||
Other Real Estate Owned — The Company’s OREO represents properties acquired through foreclosure or through full or partial satisfaction of loans receivable are recorded at estimated fair value less cost to sell at the time of foreclosure and at the lower of cost or estimated fair value less cost to sell subsequent to acquisition. The fair values of OREO properties are based on third party appraisals, broker price opinions or accepted written offers. These valuations are reviewed and approved by the Company’s appraisal department, credit review department, or OREO department. Updated appraisals and evaluations are obtained on a regular basis or at least annually. Further, on a quarterly basis, all appraisals and evaluations of nonperforming assets are reviewed to assess the current carrying value and to ensure that the current carrying value is appropriate. In calculating the discount to be applied to an appraisal or evaluation, if necessary, the Company considers the location of collateral, the property type, and third party comparable sales. If it is assessed by management that the current value is not appropriate, adjustments to the carrying value will be calculated and a charge-off may be taken to reduce the OREO to the appropriate adjusted carrying value. The fair values may be adjusted as needed based on factors such as the Company’s historical knowledge and changes in market conditions from the time of valuation. OREO properties are classified as Level 3 assets in the fair value hierarchy. | |||||||||||||||||
Loans Held for Sale — The Company’s loans held for sale are carried at the lower of cost or fair value. These loans are currently comprised of mostly student loans. For these loans, the fair value of loans held for sale is derived from current market prices and comparative current sales. For the remainder of the loans held for sale, which fall within Level 2, the fair value is derived from third party sale analysis, existing sale agreements, or appraisal reports on the loans’ underlying collateral. As such, the Company records any fair value adjustments on a nonrecurring basis. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The carrying amounts and fair values of the Company’s financial instruments at December 31, 2013 and 2012 were as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Carrying | Carrying | ||||||||||||||||
Amount or | Amount or | ||||||||||||||||
Notional | Estimated | Notional | Estimated | ||||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 895,820 | $ | 895,820 | $ | 1,323,106 | $ | 1,323,106 | |||||||||
Short-term investments | 257,473 | 257,473 | 366,378 | 366,378 | |||||||||||||
Securities purchased under resale agreements | 1,300,000 | 1,279,406 | 1,450,000 | 1,442,302 | |||||||||||||
Investment securities available-for-sale | 2,733,797 | 2,733,797 | 2,607,029 | 2,607,029 | |||||||||||||
Loans held for sale | 204,970 | 212,469 | 174,317 | 180,349 | |||||||||||||
Loans receivable, net | 17,600,613 | 16,741,674 | 14,645,785 | 14,743,218 | |||||||||||||
Investment in Federal Home Loan Bank stock | 62,330 | 62,330 | 107,275 | 107,275 | |||||||||||||
Investment in Federal Reserve Bank stock | 48,333 | 48,333 | 48,003 | 48,003 | |||||||||||||
Accrued interest receivable | 116,314 | 116,314 | 94,837 | 94,837 | |||||||||||||
Foreign exchange options | 85,614 | 6,290 | 85,614 | 5,011 | |||||||||||||
Interest rate swaps | 1,915,474 | 28,078 | 1,190,793 | 36,943 | |||||||||||||
Foreign exchange contracts | 440,848 | 6,181 | 112,459 | 896 | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 14,588,570 | 14,588,570 | 12,187,740 | 12,187,740 | |||||||||||||
Time deposits | 5,824,348 | 5,791,659 | 6,121,614 | 6,115,530 | |||||||||||||
Federal Home Loan Bank advances | 315,092 | 308,521 | 312,975 | 333,060 | |||||||||||||
Securities sold under repurchase agreements | 995,000 | 1,134,774 | 995,000 | 1,173,830 | |||||||||||||
Other borrowings | — | — | 20,000 | 20,000 | |||||||||||||
Accrued interest payable | 11,178 | 11,178 | 10,855 | 10,855 | |||||||||||||
Long-term debt | 226,868 | 184,415 | 137,178 | 83,762 | |||||||||||||
Derivatives liabilities | 2,308,612 | 50,262 | 1,392,494 | 42,060 | |||||||||||||
The following table shows the level in the fair value hierarchy for the estimated fair values of only financial instruments that are not already on the consolidated balance sheets at fair value at December 31, 2013 and 2012. | |||||||||||||||||
December 31, 2013 | |||||||||||||||||
Estimated | |||||||||||||||||
Fair Value | |||||||||||||||||
Measurements | Level 1 | Level 2 | Level 3 | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 895,820 | $ | 895,820 | $ | — | $ | — | |||||||||
Short-term investments | 257,473 | — | 257,473 | — | |||||||||||||
Securities purchased under resale agreements | 1,279,406 | — | 1,279,406 | — | |||||||||||||
Loans held for sale | 212,469 | — | 212,469 | — | |||||||||||||
Loans receivable, net | 16,741,674 | — | — | 16,741,674 | |||||||||||||
Investment in Federal Home Loan Bank stock | 62,330 | — | 62,330 | — | |||||||||||||
Investment in Federal Reserve Bank stock | 48,333 | — | 48,333 | — | |||||||||||||
Accrued interest receivable | 116,314 | — | 116,314 | — | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 14,588,570 | — | 14,588,570 | — | |||||||||||||
Time deposits | 5,791,659 | — | — | 5,791,659 | |||||||||||||
Federal Home Loan Bank advances | 308,521 | — | 308,521 | — | |||||||||||||
Securities sold under repurchase agreements | 1,134,774 | — | 1,134,774 | — | |||||||||||||
Other borrowings | — | — | — | — | |||||||||||||
Accrued interest payable | 11,178 | — | 11,178 | — | |||||||||||||
Long-term debt | 184,415 | — | 184,415 | — | |||||||||||||
December 31, 2012 | |||||||||||||||||
Estimated | |||||||||||||||||
Fair Value | |||||||||||||||||
Measurements | Level 1 | Level 2 | Level 3 | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,323,106 | $ | 1,323,106 | $ | — | $ | — | |||||||||
Short-term investments | 366,378 | — | 366,378 | — | |||||||||||||
Securities purchased under resale agreements | 1,442,302 | — | 1,442,302 | — | |||||||||||||
Loans held for sale | 180,349 | — | 180,349 | — | |||||||||||||
Loans receivable, net | 14,743,218 | — | — | 14,743,218 | |||||||||||||
Investment in Federal Home Loan Bank stock | 107,275 | — | 107,275 | — | |||||||||||||
Investment in Federal Reserve Bank stock | 48,003 | — | 48,003 | — | |||||||||||||
Accrued interest receivable | 94,837 | — | 94,837 | — | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 12,187,740 | — | 12,187,740 | — | |||||||||||||
Time deposits | 6,115,530 | — | — | 6,115,530 | |||||||||||||
Federal Home Loan Bank advances | 333,060 | — | 333,060 | — | |||||||||||||
Securities sold under repurchase agreements | 1,173,830 | — | 1,173,830 | — | |||||||||||||
Other borrowings | 20,000 | — | 20,000 | — | |||||||||||||
Accrued interest payable | 10,855 | — | 10,855 | — | |||||||||||||
Long-term debt | 83,762 | — | 83,762 | — | |||||||||||||
The methods and assumptions used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value are explained below: | |||||||||||||||||
Cash and Cash Equivalents — The carrying amounts approximate fair values due to the short-term nature of these instruments. Due to the short-term nature, the estimated fair value is considered to be within Level 1 of the fair value hierarchy. | |||||||||||||||||
Short-Term Investments — The fair values of short-term investments generally approximate their book values due to their short maturities. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Securities Purchased Under Resale Agreements — Securities purchased under resale agreements with original maturities of 90 days or less are included in cash and cash equivalents. The fair value of securities purchased under resale agreements with original maturities of more than 90 days is estimated by discounting the cash flows based on expected maturities or repricing dates utilizing estimated market discount rates. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Investment Securities Available-for-Sale — The fair values of the investment securities are generally determined by independent external pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent external brokers. In obtaining such valuation information from third parties, the Company has reviewed the methodologies used to develop the resulting fair values. For pooled trust preferred securities, fair values are based on discounted cash flow analyses. Due to the unobservable inputs used within the discounted cash flow analysis, the estimate for pooled trust preferred securities is considered to be within Level 3 of the fair value hierarchy. The remainder of the portfolio is classified within Level 1 and Level 2, as discussed earlier in this footnote. | |||||||||||||||||
Loans Held for Sale — The fair value of loans held for sale is derived from current market prices and comparative current sales or from third party sale analysis, existing sale agreements, or appraisal reports on the loans’ underlying collateral, as applicable. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Loans Receivable, net (includes covered and non-covered loans) — The fair value of loans is determined based on a discounted cash flow approach considered for an entry price value. The discount rate is derived from the associated yield curve plus spreads, and reflects the offering rates in the market for loans with similar financial characteristics. No adjustments have been made for changes in credit within any of the loan portfolios. It is management’s opinion that the allowance for loan losses pertaining to performing and nonperforming loans results in a fair valuation of credit for such loans. Due to the unobservable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 3 of the fair value hierarchy. | |||||||||||||||||
Investment in Federal Home Loan Bank Stock and Federal Reserve Bank Stock — The carrying amount approximates fair value, as the stock may be sold back to the Federal Home Loan Bank and the Federal Reserve Bank at carrying value. The valuation of these investments is considered to be within Level 2 of the fair value hierarchy, as the restrictions and value of the investments are the same for all financial institutions which are required to hold these investments. | |||||||||||||||||
Other Borrowings — The carrying amounts approximate fair values due to the short-term nature of these instruments, as such, due to the observable nature of the inputs used in deriving the estimated fair value, these instruments are considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Accrued Interest Receivable — The carrying amounts approximate fair values due to the short-term nature of these instruments, as such, due to the observable nature of the inputs used in deriving the estimated fair value, these instruments are considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Foreign Exchange Options — The fair value of the derivative contracts is provided by third parties and is determined based on the change in the RMB and the volatility of the option over the life of the agreement. The option value is derived based on the volatility of the option, interest rate, and time remaining to maturity. We also considered the counterparty’s credit risk in determining the fair value. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Interest Rate Swaps — The fair value of the interest rate swap contracts is provided by a third party and is determined based on a discounted cash flow approach. The Company also considered the counterparty’s credit risk in determining the fair value. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Foreign Exchange Contracts — The fair value of foreign exchange contracts is determined based on the change in foreign exchange rate. We also considered the counterparty’s credit risk in determining the fair value. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Customer Deposit Accounts — The carrying amounts approximate fair value for demand and interest checking deposits, savings deposits, and certain money market accounts as the amounts are payable on demand at the reporting date. Due to the observable nature of the inputs used in deriving the estimated fair value these instruments are considered to be within Level 2 of the fair value hierarchy. For time deposits, the cash flows are based on the contractual runoff and are discounted by the Bank’s current offering rates, plus spread. Due to the unobservable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 3 of the fair value hierarchy. | |||||||||||||||||
Federal Home Loan Bank Advances — The fair value of FHLB advances is estimated based on the discounted value of contractual cash flows, using rates currently offered by the FHLB of San Francisco for advances with similar remaining maturities at each reporting date. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Securities Sold Under Repurchase Agreements — For securities sold under repurchase agreements with original maturities of 90 days or less, the carrying amounts approximate fair values due to the short-term nature of these instruments. Most of the securities sold under repurchase agreements are long-term in nature and the fair values of securities sold under repurchase agreements are calculated by discounting future cash flows based on expected maturities or repricing dates, utilizing estimated market discount rates and taking into consideration the call features of each instrument. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Accrued Interest Payable — The carrying amounts approximate fair values due to the short-term nature of these instruments, as such, due to the observable nature of the inputs used in deriving the estimated fair value, these instruments are considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Long-Term Debt — The fair values of long-term debt are estimated by discounting the cash flows through maturity based on current market rates the Bank would pay for new issuances. Due to the observable nature of the inputs used in deriving the estimated fair value of these instruments, the estimate is considered to be within Level 2 of the fair value hierarchy. | |||||||||||||||||
Derivatives Liabilities — The Company’s derivative liabilities include “derivatives payable” and all other derivative liabilities. The Company’s derivatives payable are recorded in conjunction with certain certificates of deposit (“host instrument”). These CDs pay interest based on changes in RMB. The fair value of derivatives payable is estimated using the income approach. Additionally, we considered our own credit risk in determining the valuation. The other derivative liabilities are mostly comprised of the off-setting interest rate swaps. The fair value of the interest rate swap contracts is provided by a third party and is determined based on a discounted cash flow approach. The Company also considered the counterparty’s credit risk in determining the fair value. Due to the observable nature of the inputs used in deriving the estimated fair value of the interest rate swaps within derivative liabilities, the estimate is considered to be within Level 2 of the fair value hierarchy. Due to the unobservable nature of the inputs used in deriving the estimated fair value of derivatives payable within derivative liabilities, this estimate is considered to be within Level 3 of the fair value hierarchy. | |||||||||||||||||
The fair value estimates presented herein are based on pertinent information available to management as of each reporting date. Although we are not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and therefore, current estimates of fair value may differ significantly from the amounts presented herein. | |||||||||||||||||
CASH_AND_CASH_EQUIVALENTS_AND_
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | ' | |||||||
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | ' | |||||||
NOTE 3—CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | ||||||||
Cash and cash equivalents include cash, amounts due from banks, money-market funds, and other short-term investments with original maturities up to 90 days. Short-term investments include short-term bank placements and overnight securities purchased under resale agreements, recorded at cost, which approximates market. | ||||||||
The composition of cash and cash equivalents at December 31, 2013 and 2012 is presented as follows: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||
Cash and amounts due from banks | $ | 693,387 | $ | 933,050 | ||||
Cash equivalents: | ||||||||
Money market funds | 605 | 3,526 | ||||||
Other short-term investments | 201,828 | 386,530 | ||||||
Total cash and cash equivalents | $ | 895,820 | $ | 1,323,106 | ||||
Short-term investments include interest-bearing deposits in other banks and other short-term investments with original maturities of greater than 90 days and less than one year. | ||||||||
The following table provides information on short-term investments as of and for the period ended December 31, 2013 and 2012. | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||
Balance at end of year | $ | 257,473 | $ | 366,378 | ||||
Average balance outstanding during the year | 334,049 | 242,937 | ||||||
Maximum balance outstanding at any month-end | 384,375 | 367,283 | ||||||
Weighted average interest rate at end of year | 3.23% | 2.64% | ||||||
SECURITIES_PURCHASED_UNDER_RES
SECURITIES PURCHASED UNDER RESALE AGREEMENTS | 12 Months Ended |
Dec. 31, 2013 | |
SECURITIES PURCHASED UNDER RESALE AGREEMENTS | ' |
SECURITIES PURCHASED UNDER RESALE AGREEMENTS | ' |
NOTE 4—SECURITIES PURCHASED UNDER RESALE AGREEMENTS | |
Securities purchased under resale agreements (“resale agreements”) decreased to $1.30 billion as of December 31, 2013, compared with $1.45 billion at December 31, 2012. The decrease as of December 31, 2013 reflects pay downs and maturities of resale agreements of $600.0 million, offset by additions of $450.0 million entered into during 2013. | |
Resale agreements are recorded at the amounts at which the securities were acquired. The Company’s policy is to obtain possession of securities purchased under resale agreements that are equal to or greater than the principal amount loaned. The market value of the underlying securities, which collateralize the related receivable on resale agreements, is monitored, including accrued interest. Additional collateral may be requested from the counterparty when determined to be appropriate. | |
Total interest income on resale agreements amounted to $21.2 million, $20.4 million, and $19.2 million, for the years ended December 31, 2013, 2012 and 2011, respectively. | |
INVESTMENT_SECURITIES
INVESTMENT SECURITIES | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
INVESTMENT SECURITIES | ' | |||||||||||||||||||||||
INVESTMENT SECURITIES | ' | |||||||||||||||||||||||
NOTE 5—INVESTMENT SECURITIES | ||||||||||||||||||||||||
An analysis of the investment securities available-for-sale portfolio is presented as follows: | ||||||||||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 495,053 | $ | 201 | $ | -3,622 | $ | 491,632 | ||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 406,807 | 242 | -12,726 | 394,323 | ||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 182,257 | 1,062 | -4,449 | 178,870 | ||||||||||||||||||||
Residential mortgage-backed securities | 892,435 | 7,729 | -14,927 | 885,237 | ||||||||||||||||||||
Municipal securities | 297,390 | 1,122 | -17,533 | 280,979 | ||||||||||||||||||||
Other residential mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 48,129 | — | -1,802 | 46,327 | ||||||||||||||||||||
Other commercial mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 51,000 | 617 | — | 51,617 | ||||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 312,726 | 613 | -3,344 | 309,995 | ||||||||||||||||||||
Non-investment grade (1) | 20,668 | 62 | -5,629 | 15,101 | ||||||||||||||||||||
Other securities | 80,025 | 555 | -864 | 79,716 | ||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,786,490 | $ | 12,203 | $ | -64,896 | $ | 2,733,797 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 459,613 | $ | 1,135 | $ | -71 | $ | 460,677 | ||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 197,264 | 673 | -82 | 197,855 | ||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 174,036 | 6,665 | -36 | 180,665 | ||||||||||||||||||||
Residential mortgage-backed securities | 1,123,880 | 20,883 | -678 | 1,144,085 | ||||||||||||||||||||
Municipal securities | 163,333 | 4,491 | -731 | 167,093 | ||||||||||||||||||||
Other commercial mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 16,999 | 85 | — | 17,084 | ||||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 429,318 | 237 | -17,572 | 411,983 | ||||||||||||||||||||
Non-investment grade (1) | 24,620 | 355 | -7,558 | 17,417 | ||||||||||||||||||||
Other securities | 9,955 | 215 | — | 10,170 | ||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,599,018 | $ | 34,739 | $ | -26,728 | $ | 2,607,029 | ||||||||||||||||
(1) For 2013, the Company did not record any OTTI. For 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. | ||||||||||||||||||||||||
The Company did not have any investment securities held-to-maturity as of December 31, 2013 and 2012. | ||||||||||||||||||||||||
The fair values of the investment securities are generally determined by independent external pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent external brokers. The Company performs a monthly analysis on the pricing service quotes and the broker quotes received from third parties to ensure that the prices represent a reasonable estimate of fair value. The procedures include, but are not limited to, initial and ongoing review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. The Company assesses whether the prices received from independent brokers represent a reasonable estimate of fair value through the use of observable market inputs including comparable trades, the yield curve, spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon available market data, the price received from third parties is adjusted accordingly. | ||||||||||||||||||||||||
Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations that utilize inputs that may be difficult to corroborate with observable market based data. Additionally, the majority of these independent broker quotations are non-binding. | ||||||||||||||||||||||||
As a result of the ongoing financial crisis in the U.S. and global markets, the market for the pooled trust preferred securities has been distressed since mid-2007. It is the Company’s view that current broker prices (which are typically non-binding) on these securities are based on forced liquidation or distressed sale values in very inactive markets that are not representative of the fair value of these securities. As such, the Company considered what weight, if any, to place on transactions that are not orderly when estimating fair value. For the pooled trust preferred securities the Company determined their fair values using the methodologies set forth in Note 2 to the Company’s consolidated financial statements presented elsewhere in this report. | ||||||||||||||||||||||||
The following table shows the Company’s rollforward of the amount related to OTTI credit losses for the years ended December 31, 2013 and 2012: | ||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 115,511 | $ | 115,412 | ||||||||||||||||||||
Addition of other-than-temporary impairment that was not previously recognized | — | — | ||||||||||||||||||||||
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized | — | 99 | ||||||||||||||||||||||
Reduction for securities sold | — | — | ||||||||||||||||||||||
Ending balance | $ | 115,511 | $ | 115,511 | ||||||||||||||||||||
For the year ended December 31, 2013, the Company recorded $13.9 million of gross gains and $1.8 million of gross losses resulting in a net income statement impact of $12.1 million of gain on sale of investment securities. As compared to December 31, 2012, the Company recorded $28.2 million of gross gains and $27.4 million of gross losses resulting in a net income statement impact of $757 thousand of gain on sale of investment securities. For the year ended December 31, 2011, the Company recorded $18.1 million of gross gains and $8.4 million of gross losses resulting in a net income statement impact of $9.7 million of gain on sale of investment securities. The tax expense on the sale of investment securities available-for-sale amounted to $5.1 million, $318 thousand and $4.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. Total net proceeds for these sales were $663.6 million, $1.23 billion and $702.6 million for 2013, 2012 and 2011, respectively. | ||||||||||||||||||||||||
The following tables show the Company’s investment portfolio’s gross unrealized losses and related fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, for the years ended December 31, 2013 and 2012: | ||||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 337,248 | $ | -3,622 | $ | — | $ | — | $ | 337,248 | $ | -3,622 | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 387,097 | -12,726 | — | — | 387,097 | -12,726 | ||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 114,754 | -3,280 | 16,065 | -1,169 | 130,819 | -4,449 | ||||||||||||||||||
Residential mortgage-backed securities | 502,285 | -10,570 | 92,540 | -4,357 | 594,825 | -14,927 | ||||||||||||||||||
Municipal securities | 173,782 | -10,765 | 47,892 | -6,768 | 221,674 | -17,533 | ||||||||||||||||||
Other residential mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 46,328 | -1,802 | — | — | 46,328 | -1,802 | ||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 193,482 | -1,538 | 79,442 | -1,806 | 272,924 | -3,344 | ||||||||||||||||||
Non-investment grade | — | — | 14,422 | -5,629 | 14,422 | -5,629 | ||||||||||||||||||
Other securities | 48,098 | -864 | — | — | 48,098 | -864 | ||||||||||||||||||
Total investment securities available-for-sale | $ | 1,803,074 | $ | -45,167 | $ | 250,361 | $ | -19,729 | $ | 2,053,435 | $ | -64,896 | ||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 95,232 | $ | -71 | $ | — | $ | — | $ | 95,232 | $ | -71 | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 24,912 | -82 | — | — | 24,912 | -82 | ||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 10,013 | -36 | — | — | 10,013 | -36 | ||||||||||||||||||
Residential mortgage-backed securities | 215,826 | -678 | — | — | 215,826 | -678 | ||||||||||||||||||
Municipal securities | 48,363 | -731 | — | — | 48,363 | -731 | ||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 225,819 | -5,391 | 182,697 | -12,181 | 408,516 | -17,572 | ||||||||||||||||||
Non-investment grade | — | — | 12,574 | -7,558 | 12,574 | -7,558 | ||||||||||||||||||
Other securities | — | — | — | — | — | — | ||||||||||||||||||
Total investment securities available-for-sale | $ | 620,165 | $ | -6,989 | $ | 195,271 | $ | -19,739 | $ | 815,436 | $ | -26,728 | ||||||||||||
Unrealized Losses | ||||||||||||||||||||||||
The majority of the unrealized losses related to securities that have been in a continuous loss position for less than twelve months are related to agency, municipal and residential agency mortgage-backed securities. As of December 31, 2013, the Company had $394.3 million in agency securities, $281.0 million in municipal securities and $885.2 million in residential agency mortgage-backed securities, representing approximately 14%, 10% and 32% of the total investment securities available-for-sale portfolio, respectively. | ||||||||||||||||||||||||
As of December 31, 2013, there were 65 individual securities that have been in a continuous unrealized loss position for twelve months or more. The majority of the $19.7 million unrealized losses were composed of 32 municipal securities with unrealized losses of $6.8 million, 5 positions in trust preferred securities with unrealized losses of $5.6 million, and 21 residential agency mortgage-backed securities with unrealized losses of $4.4 million. The remaining 7 securities or $2.9 million in unrealized losses were comprised of investment grade corporate debt and commercial agency mortgage-backed securities. | ||||||||||||||||||||||||
As of December 31, 2013 there were also 239 securities, not including the 65 securities above, which have been in a continuous unrealized loss position for less than twelve months. The majority of the $45.2 million unrealized losses were composed of 16 agency securities with $12.7 million in unrealized losses, 94 municipal securities with $10.8 million in unrealized losses, and 55 residential agency mortgage-backed securities with $10.6 million unrealized losses. The remaining 74 securities or $11.1 million in unrealized losses were comprised of U.S. Treasury securities, commercial agency mortgage-backed securities, other residential mortgage-backed securities, investment grade corporate debt and other securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated and as long-term rates increased. The Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the investments before recovery of their current amortized cost basis. As such, the Company does not deem these securities, to be other-than-temporarily impaired as of December 31, 2013. | ||||||||||||||||||||||||
As of December 31, 2012, there were 13 individual securities that have been in a continuous unrealized loss position for twelve months or more. These securities are comprised of 5 positions in trust preferred securities with a total fair value of $12.6 million and 8 investment grade debt securities with a fair value of $182.7 million. As of December 31, 2012 there were also 77 securities, not including the 13 securities above, which have been in a continuous unrealized loss position for less than twelve months. The securities in an unrealized loss position for less than twelve months include 26 residential agency mortgage-backed securities, 29 municipal securities, 11 investment grade corporate debt securities, 9 U.S. Treasury securities, 1 government agency security, and 1 commercial mortgage-backed security. The unrealized losses on these securities are primarily attributed to the market impact to the sovereign debt crisis in Europe. The company does not have direct holdings of European sovereign debt. However, the Company is indirectly affected through the overall impact to the market and especially to corporate debt securities pricing. The issuers of these securities have not, to our knowledge, established any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated. The Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the investments before recovery of their current amortized cost basis. As such, the Company does not deem these securities, other than those previously stated, to be other-than-temporarily impaired as of December 31, 2012. | ||||||||||||||||||||||||
Corporate Debt Securities | ||||||||||||||||||||||||
As of December 31, 2013, the majority of the unrealized losses related to securities that have been in a continuous loss position of twelve months or longer are due to 5 positions in trust preferred debt securities, 32 municipal securities and 21 residential agency mortgage-backed securities. As of December 31, 2013, these trust preferred securities had an estimated fair value of $14.4 million, representing approximately 1% of the total investment securities available-for-sale portfolio. As of December 31, 2013, these non-investment grade debt instruments had gross unrealized losses amounting to $5.6 million, or 28% of the total amortized cost basis of these securities. We did not record an impairment loss on our portfolio of pooled trust preferred securities during 2013. | ||||||||||||||||||||||||
During 2012 and 2011, the Company recorded $99 thousand and $633 thousand, respectively, in noncredit-related impairment losses on the five positions in trust preferred securities due to rating downgrades caused by increases in market spreads, concerns regarding the housing market and lack of liquidity in the market. | ||||||||||||||||||||||||
Investment Securities Maturities | ||||||||||||||||||||||||
The scheduled maturities of investment securities at December 31, 2013 are presented as follows: | ||||||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Due within one year | $ | 417,774 | $ | 401,970 | ||||||||||||||||||||
Due after one year through five years | 547,189 | 542,293 | ||||||||||||||||||||||
Due after five years through ten years | 750,811 | 732,404 | ||||||||||||||||||||||
Due after ten years | 1,070,716 | 1,057,130 | ||||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,786,490 | $ | 2,733,797 | ||||||||||||||||||||
Actual maturities of mortgage-backed securities can differ from contractual maturities because borrowers have the right to prepay obligations. In addition, such factors as prepayments and interest rates may affect the yields on the carrying values of mortgage-backed securities. | ||||||||||||||||||||||||
At December 31, 2013 and 2012, investment securities available-for-sale with a par value of $1.97 billion and $1.78 billion, respectively, were pledged to secure public deposits, FHLB advances, repurchase agreements, Federal Reserve Bank’s discount window, or for other purposes required or permitted by law. |
DERIVATIVE_FINANCIAL_INSTRUMEN
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING | ' | ||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING | ' | ||||||||||||||||||||||
NOTE 6— DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING | |||||||||||||||||||||||
The following table summarizes the fair value and balance sheet classification of derivative instruments as of December 31, 2013 and 2012. The notional amount of the contract is not recorded on the consolidated balance sheets, but is used as the basis for determining the amount of interest payments to be exchanged between the counterparties. If the counterparty fails to perform, the Company’s counterparty credit risk is equal to the amount reported as a derivative asset. The valuation methodology of derivative instruments is disclosed in Note 2 to the Company’s consolidated financial statements presented elsewhere in this report. | |||||||||||||||||||||||
Fair Values of Derivative Instruments | |||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Notional | Derivative | Derivative | Notional | Derivative | Derivative | ||||||||||||||||||
Amount | Assets (1) | Liabilities (1) | Amount | Assets (1) | Liabilities (1) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps on certificates of deposit—fair value | $ | 135,000 | $ | — | $ | 16,906 | $ | 50,000 | $ | — | $ | 1,521 | |||||||||||
Total derivatives designated as hedging instruments | $ | 135,000 | $ | — | $ | 16,906 | $ | 50,000 | $ | — | $ | 1,521 | |||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange options | $ | 85,614 | $ | 6,290 | $ | 3,655 | $ | 85,614 | $ | 5,011 | $ | 3,052 | |||||||||||
Interest rate swaps | 1,915,474 | 28,078 | 26,352 | 1,190,793 | 36,943 | 36,799 | |||||||||||||||||
Foreign exchange contracts | 440,848 | 6,181 | 3,349 | 112,459 | 896 | 688 | |||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 2,441,936 | $ | 40,549 | $ | 33,356 | $ | 1,388,866 | $ | 42,850 | $ | 40,539 | |||||||||||
(1) Derivative assets, which are a component of other assets, include the estimated settlement of the derivative asset position. Derivative liabilities, which are a component of other liabilities and deposits, include the estimated settlement of the derivative liability position. | |||||||||||||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||
Interest Rate Swaps on Certificates of Deposit — The Company is exposed to changes in the fair value of certain of its fixed rate certificates of deposit due to changes in the benchmark interest rate, LIBOR. In 2013, the Company entered into three receive-fixed, pay-variable interest rate swaps and two receive-fixed pay-variable interest rate swap steepeners, with major brokerage firms, with a total notional amount of $85.0 million. The interest rate swaps were entered into as a fair value hedge of three fixed rate certificates of deposit and two fixed/variable certificate of deposit, for a total amount of $85.0 million. During 2012, the Company entered into two receive-fixed, pay-variable interest rate swaps with a total notional amount of $50.0 million. The interest rate swaps were entered into, with major brokerage firms, as a fair value hedge of two fixed rate certificates of deposit, for a total amount of $50.0 million. The interest rate swaps and the associated certificates of deposits have the same maturity dates. Interest rate swaps designated as fair value hedges involve the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. | |||||||||||||||||||||||
As of December 31, 2013 and 2012 the total notional amount of the interest rate swaps on the certificates of deposit was $135.0 million and $50.0 million, respectively. The fair value of the interest rate swaps amounted to a $16.9 million and $1.5 million liability, respectively, as of December 31, 2013 and 2012. During the year ended December 31, 2013 and 2012, the Company recognized a net reduction of $632 thousand and $3.6 million, respectively, in expense related to hedge ineffectiveness. The Company also recognized a net reduction to interest expense of $2.1 million and $3.7 million, for the years ended December 31, 2013 and 2012, respectively, related to net settlements on the derivatives. | |||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||||||||||
Equity Swap Agreements — In December 2007, the Company entered into two equity swap agreements with a major investment brokerage firm to economically hedge against market fluctuations in a promotional equity index certificate of deposit product offered to bank customers which has a term of 5 years and pays interest based on the performance of the HSCEI. Under ASC 815, a certificate of deposit that pays interest based on changes in an equity index is a hybrid instrument with an embedded derivative (i.e. equity call option) that must be accounted for separately from the host contract (i.e. the certificate of deposit). In accordance with ASC 815, both the embedded equity call options on the certificates of deposit and the freestanding equity swap agreements are marked-to-market each reporting period with resulting changes in fair value recorded in the consolidated statements of income. These equity swap agreements matured during 2012. | |||||||||||||||||||||||
Foreign Exchange Options — During 2010, the Company entered into foreign exchange option contracts with major brokerage firms to economically hedge against currency exchange rate fluctuations in a certificate of deposit product available to bank customers. This product, which has a term of 5 years, pays interest based on the performance of the Chinese currency Renminbi (“RMB”) relative to the U.S. Dollar. Under ASC 815, a certificate of deposit that pays interest based on changes in currency exchange rates is a hybrid instrument with an embedded derivative that must be accounted for separately from the host contract (i.e. the certificate of deposit). In accordance with ASC 815, both the embedded derivative instruments and the freestanding foreign exchange option contracts are marked-to-market each reporting period with resulting changes in fair value reported in the consolidated statements of income. | |||||||||||||||||||||||
As of December 31, 2013 and 2012 the notional amount of the foreign exchange options totaled $85.6 million. The fair values of the foreign exchange options and embedded derivative liability for these contracts amounted to a $6.3 million asset and a $3.7 million liability as of December 31, 2013. The fair values of the foreign exchange options and embedded derivative liability for these contracts amounted to a $5.0 million asset and a $3.1 million liability as of December 31, 2012. The Company did not deliver collateral, in the form of securities to counterparty institutions as of December 31, 2013. The Company delivered collateral, in the form of securities to counterparty institutions, valued at $940 thousand, for foreign exchange option contracts that were in a net liability position as of December 31, 2012. | |||||||||||||||||||||||
Interest Rate Swaps — During 2010, the Company entered into pay-fixed, receive-variable swap contracts with institutional counterparties to economically hedge against interest rate swap products offered to bank customers. This product allows borrowers to lock in attractive intermediate and long-term interest rates by entering into a pay-fixed, receive-variable swap contract with the Company, resulting in the customer obtaining a synthetic fixed rate loan. The Company does not assume any interest rate risk since the swap agreements mirror each other. As of December 31, 2013 the total notional amount of the interest rate swaps, including mirror transactions, with the institutional counterparties and the bank customers totaled $1.92 billion asset and $1.92 billion liability. In comparison, as of December 31, 2012, the total notional amount of the interest rate swaps, including mirror transactions, with the institutional counterparties and the bank customers totaled $1.19 billion asset and $1.19 billion liability. The interest rate swap agreements are marked-to-market each reporting period with resulting changes in fair value reported in the consolidated statements of income. | |||||||||||||||||||||||
The fair values of the interest rate swap contracts with the institutional counterparties and the bank customers amounted to a $28.1 million asset and a $26.4 million liability, as of December 31, 2013. The fair values of the interest rate swap contracts with the institutional counterparty and the bank customers amounted to a $36.9 million asset and a $36.8 million liability, as of December 31, 2012. | |||||||||||||||||||||||
Foreign Exchange Contracts — The Company enters into short-term forward foreign exchange contracts on a regular basis to economically hedge against foreign exchange rate fluctuations. As of December 31, 2013 and 2012 the notional amount of the short-term foreign exchange contracts totaled $426.0 million and $112.5 million, respectively. The fair values of the short-term foreign exchange contracts amounted to a $6.0 million asset and a $3.2 million liability, as of December 31, 2013. The fair values of the short-term foreign exchange contracts amounted to an $896 thousand asset and a $688 thousand liability, as of December 31, 2012. The gross aggregate value of the short-term foreign exchange contracts by counterparty was an asset of $1.5 million as of December 31, 2013 and an asset of $495 thousand as of December 31, 2012. | |||||||||||||||||||||||
The Company also entered into long-term foreign exchange contracts to purchase/sell foreign currencies at set rates in the future. As of December 31, 2013 the notional amount of the long-term foreign exchange contracts totaled $14.8 million. The fair values of the long-term foreign exchange contracts amounted to a $200 thousand asset and a $183 thousand liability, as of December 31, 2013. | |||||||||||||||||||||||
The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of income for the year ended December 31, 2013, 2012 and 2011: | |||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||
Location in Consolidated | |||||||||||||||||||||||
Statements of Operations | 2013 | 2012 | 2011 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||
Interest rate swaps on certificates of deposit—fair value | Interest expense | $ | -9,255 | $ | -1,076 | $ | 2,930 | ||||||||||||||||
Total net (expense) income | $ | -9,255 | $ | -1,076 | $ | 2,930 | |||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Equity swap agreements | Noninterest expense | $ | — | $ | 2 | $ | 2 | ||||||||||||||||
Foreign exchange options | Noninterest income | 653 | 389 | -392 | |||||||||||||||||||
Foreign exchange options | Noninterest expense | 23 | 101 | 16 | |||||||||||||||||||
Interest rate swaps | Noninterest income | 1,582 | 592 | -447 | |||||||||||||||||||
Foreign exchange contracts | Noninterest income | 2,624 | -228 | 251 | |||||||||||||||||||
Total net income (expense) | $ | 4,882 | $ | 856 | $ | -570 | |||||||||||||||||
Credit Risk-Related Contingent Features — The Company has agreements with some of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. | |||||||||||||||||||||||
The Company also has agreements with some of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well/adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if the Company was issued a notice of prompt corrective action. | |||||||||||||||||||||||
Balance Sheet Offsetting — The Company has entered into agreements with all counterparty financial institutions, which include master netting agreements. However, the Company elects to account for all derivatives with counterparty institutions on a gross basis, excluding the foreign exchange options which are not under agreements that include master netting terms. The Company has also entered into securities purchased under resale agreements (“resale agreements”), and securities sold under agreements to repurchase (“repurchase agreements”) which have master netting agreements that allow for the netting of collateral positions. These repurchase and resale agreements of securities are not eligible for offset in the consolidated balance sheet. | |||||||||||||||||||||||
The following tables show the gross derivatives, resale agreements and repurchase agreements in the consolidated balance sheets and for each the respective collateral received or pledged in the form of other financial instruments, which are generally marketable securities. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability (after netting is applied); thus instances of overcollateralization are not shown. Most of the assets and liabilities in the following tables were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default. Collateral accepted or pledged in resale and repurchase agreements with other financial institutions also may be sold or re-pledged by the secured party, but is usually delivered to and held by third party trustees. | |||||||||||||||||||||||
The Company delivered collateral, in the form of securities to counterparty institutions, for derivatives that were in a net liability position as of December 31, 2013 and 2012 (refer to the table below). Under the Dodd-Frank legislation, as of June 10, 2013, the Company must clear all LIBOR interest rate swaps through a clearing house. As such the Company is required to pledge cash collateral for the margin. As of December 31, 2013 the Company posted $187 thousand of cash collateral. As of December 31, 2012, the Company did not receive or pledge cash collateral and there were no net asset positions with respect to collateral. | |||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Assets | Gross Amounts | Gross Amounts Offset | Net Amounts of Assets | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Received | |||||||||||||||||||
Assets | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 16,043 | $ | — | $ | 16,043 | $ | -11,363 | $ | -4,680 | $ | - | |||||||||||
Resale Agreements | $ | 1,400,000 | $ | — | $ | 1,400,000 | $ | -495,000 | $ | -905,000 | $ | - | |||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Liabilities | Gross Amounts | Gross Amounts Offset | Net Amounts of Liabilities | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Posted | |||||||||||||||||||
Liabilities | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 33,849 | $ | — | $ | 33,849 | $ | -11,363 | $ | -22,486 | $ | - | |||||||||||
Repurchase Agreements | $ | 995,000 | $ | — | $ | 995,000 | $ | -495,000 | $ | -500,000 | $ | - | |||||||||||
As of December 31, 2012 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Assets | Gross Amounts | Gross Amounts Offset | Net Amounts of Assets | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Received | |||||||||||||||||||
Assets | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 992 | $ | - | $ | 992 | $ | -366 | $ | -626 | $ | - | |||||||||||
Resale Agreements | $ | 1,750,000 | $ | - | $ | 1,750,000 | $ | -545,000 | $ | -1,205,000 | $ | - | |||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Liabilities | Gross Amounts | Gross Amounts Offset | Net Amounts of Liabilities | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Posted | |||||||||||||||||||
Liabilities | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 38,513 | $ | - | $ | 38,513 | $ | -366 | $ | -38,147 | $ | - | |||||||||||
Repurchase Agreements | $ | 995,000 | $ | - | $ | 995,000 | $ | -545,000 | $ | -450,000 | $ | - | |||||||||||
COVERED_ASSETS_AND_FDIC_INDEMN
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | ' | ||||||||||||||||
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | ' | ||||||||||||||||
NOTE 7— COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | |||||||||||||||||
Covered Assets | |||||||||||||||||
Covered assets consist of loans receivable and OREO that were acquired in the WFIB Acquisition on June 11, 2010 and in the UCB Acquisition on November 6, 2009 for which the Company entered into shared-loss agreements with the FDIC. The shared-loss agreements covered over 99% of the loans originated by WFIB and all of the loans originated by UCB, excluding the loans originated by UCB in China under its United Commercial Bank China (Limited) subsidiary. The Company shares in the losses, which began with the first dollar of loss incurred, on covered assets under the shared-loss agreements. | |||||||||||||||||
Pursuant to the terms of the shared-loss agreements, the FDIC is obligated to reimburse the Company 80% of eligible losses for both WFIB and UCB with respect to covered assets. For the UCB covered assets, the FDIC will reimburse the Company for 95% of eligible losses in excess of $2.05 billion. The Company has a corresponding obligation to reimburse the FDIC for 80% or 95%, as applicable, of eligible recoveries with respect to covered assets. The commercial loan shared-loss agreement and single-family residential mortgage loan shared-loss agreement are in effect for 5 years and 10 years, respectively, from the acquisition date and the loss recovery provisions of these agreements continue on and are in effect for 8 years and 10 years, respectively, from the acquisition date. | |||||||||||||||||
The commercial loan shared-loss agreements related to the UCB and WFIB acquisitions will terminate on November 6, 2014 and June 11, 2015, respectively. The single-family residential mortgage loan shared-loss agreements carry expiration dates of November 6, 2019 and June 11, 2020 for UCB and WFIB, respectively. Upon the completion of these agreements, any losses on loans left in the portfolio will belong solely to the Company. However, due to the performance of the covered loan portfolio, the Company does not expect the expiration of these agreements to have a material impact. | |||||||||||||||||
Forty-five days following the 10th anniversary of the respective acquisition date, the Company will be required to pay to the FDIC a calculated amount, based on the specific thresholds of losses not being reached. The calculation of this potential liability as stated in the shared-loss agreements is 50% of the excess, if any of (i) 20% of the Intrinsic Loss Estimate and (ii) the sum of (A) 25% of the asset discount plus (B) 25% of the Cumulative Shared-Loss Payments plus (C) the Cumulative Servicing Amount if net losses on covered loans subject to the stated threshold is not reached. As of December 31, 2013 and 2012, the Company’s recorded estimate in the balance sheet, for this liability to the FDIC for WFIB and UCB was $74.7 million and $27.7 million, respectively. | |||||||||||||||||
At each date of acquisition, we accounted for the loan portfolio acquired from the respective bank at fair value. This represents the discounted value of the expected cash flows from the portfolio. In estimating the nonaccretable difference, we (a) calculated the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (b) estimated the amount and timing of undiscounted expected principal and interest payments (the “undiscounted expected cash flows”). In the determination of contractual cash flows and cash flows expected to be collected, we assume no prepayment on the ASC 310-30 nonaccrual loan pools as we do not anticipate any significant prepayments on credit impaired loans. For the ASC 310-30 accrual loans for single-family, multifamily and commercial real estate, we used a third party vendor to obtain prepayment speeds in order to be consistent with market participant’s information. The third party vendor is recognized in the mortgage-industry for the delivery of prepayment and default models for the secondary market to identify loan level prepayment, delinquency, default, and loss propensities. The prepayment rates for the construction, land, and commercial and consumer pools have historically been low and so we applied the prepayment assumptions of our current portfolio using our internal modeling. The difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents our estimate of the credit losses expected and was considered in determining the fair value of the loans as of the acquisition date. The amount by which the undiscounted expected cash flows exceed the estimated fair value (the “accretable yield”) is accreted into interest income over the life of the loans. The Company has elected to account for all covered loans acquired in FDIC-assisted acquisitions under ASC 310-30. | |||||||||||||||||
The carrying amounts and the composition of the covered loans as of December 31, 2013 and 2012 are as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 290,095 | $ | 362,345 | |||||||||||||
Residential multifamily | 403,508 | 647,440 | |||||||||||||||
Commercial and industrial real estate | 1,103,530 | 1,348,556 | |||||||||||||||
Construction and land | 163,833 | 417,631 | |||||||||||||||
Total real estate loans | 1,960,966 | 2,775,972 | |||||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 426,621 | 587,333 | |||||||||||||||
Other consumer | 73,973 | 87,651 | |||||||||||||||
Total other loans | 500,594 | 674,984 | |||||||||||||||
Total principal balance | 2,461,560 | 3,450,956 | |||||||||||||||
Covered discount | -265,917 | -510,208 | |||||||||||||||
Net valuation of loans | 2,195,643 | 2,940,748 | |||||||||||||||
Allowance on covered loans | -7,745 | -5,153 | |||||||||||||||
Total covered loans, net | $ | 2,187,898 | $ | 2,935,595 | |||||||||||||
Credit Quality Indicators—The covered loans acquired are and will continue to be subject to the Bank’s internal and external credit review and monitoring. The same credit quality indicators are reviewed for the covered portfolio as the non-covered portfolio, to enable the monitoring of the borrower’s credit and the likelihood of repayment. | |||||||||||||||||
Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes review of all sources of repayment, the borrower’s current financial and liquidity status and all other relevant information. The Company utilizes an eight grade risk rating system, where a higher grade represents a higher level of credit risk. The eight grade risk rating system can be generally classified by the following categories: Pass or Watch, Special Mention, Substandard, Doubtful and Loss. The risk ratings reflect the relative strength of the sources of repayment. Refer to Note 8 for full discussion of risk ratings. | |||||||||||||||||
The Company reduced the nonaccretable difference due to the performance of the portfolio and expectation for the inherent losses in the portfolio subsequent to the initial valuations. By lowering the nonaccretable discount, the overall accretable yield will increase thus increasing the interest income recognized over the remaining life of the loans. This reduction was primarily calculated based on the risk ratings of the loans. | |||||||||||||||||
The Company acquired WFIB and UCB in 2010 and 2009, respectively. The majority of the covered loan portfolio accounted for under ASC 310-30, is still performing better than or as expected from the day one valuation. However, the Company has experienced some concentrated credit deterioration in certain loan pools. Thus, during 2013, due to the concentrated credit deterioration, within a few specific pools of loans, beyond the respective acquisition date fair value of these covered loans under ASC 310-30, a provision for credit losses was recorded through earnings. As of December 31, 2013, there was an allowance of $2.2 million for these loans under ASC 310-30 due to credit deterioration, which resulted from a provision of $2.2 million for the year ended December 31, 2013. This $2.2 million in allowance is allocated mainly to the portfolio’s commercial real estate segment. | |||||||||||||||||
As of the acquisition date, WFIB’s and UCB’s loan portfolios included unfunded commitments for commercial lines of credit, construction draws and other lending activity. The total commitment outstanding as of the acquisition date is covered under the shared-loss agreements. However, any additional advances on these loans subsequent to acquisition date are not accounted for under ASC 310-30. Included in the following credit quality table are $320.2 million and $431.7 million of additional advances under the shared-loss agreements which are not accounted for under ASC 310-30 for the years ended December 31, 2013, and 2012, respectively. The Bank has considered these additional advances on commitments covered under the shared-loss agreements in the allowance for loan losses calculation. At December 31, 2013, these additional advances are within our loan segments as follows: $230.6 million of commercial and industrial loans, $46.7 million of commercial real estate loans, $30.9 million of consumer loans and $12.0 million of residential loans. In comparison, at December 31, 2012, these additional advances were within our loan segments as follows: $302.3 million of commercial and industrial loans, $83.4 million of commercial real estate loans, $34.5 million of consumer loans and $11.5 million of residential loans. | |||||||||||||||||
During the year ended December 31, 2013, the Company recorded $1.4 million of charge-offs on covered loans outside of the scope of ASC 310-30. In comparison, during the year ended December 31, 2012, the Company recorded $6.5 million of charge-offs on covered loans outside of the scope of ASC 310-30. The provision on covered loans outside the scope of ASC 310-30 for the years ended December 31, 2013, 2012 and 2011 was $1.8 million, $5.0 million and $2.4 million, respectively. Refer to Note 8 for additional discussion of these covered charge-offs. As of December 31, 2013, $5.5 million, or 2.2%, of the total allowance is allocated to these additional advances on loans covered under the shared-loss agreements. This $5.5 million in allowance is allocated within our loan segments as follows: $1.8 million for commercial real estate loans, $3.2 million for commercial and industrial loans, $341 thousand for consumer loans and $176 thousand for residential loans. In comparison, as of December 31, 2012, $5.2 million or 2.2%, of the total allowance was allocated within our loan segments as follows: $2.5 million for commercial real estate loans, $2.4 million for commercial and industrial loans, $194 thousand for consumer loans and $87 thousand for residential loans. The $2.2 million in allowance for loans under ASC 310-30 discussed above and the $5.5 million in allowance for loans outside the scope of ASC 310-30 together comprise the total covered allowance of $7.7 million or 3.1% of total allowance as of December 31, 2013. | |||||||||||||||||
The tables below present the covered loan portfolio by credit quality indicator as of December 31, 2013 and 2012, respectively. | |||||||||||||||||
Special | |||||||||||||||||
Pass/Watch | Mention | Substandard | Doubtful | Total | |||||||||||||
(In thousands) | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 281,246 | $ | 733 | $ | 8,116 | $ | — | $ | 290,095 | |||||||
Residential multifamily | 373,024 | 785 | 29,699 | — | 403,508 | ||||||||||||
Commercial and industrial real estate | 857,376 | 27,851 | 211,835 | 6,468 | 1,103,530 | ||||||||||||
Construction and land | 41,847 | 9,472 | 111,616 | 898 | 163,833 | ||||||||||||
Total real estate loans | 1,553,493 | 38,841 | 361,266 | 7,366 | 1,960,966 | ||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 378,086 | 4,635 | 43,797 | 103 | 426,621 | ||||||||||||
Other consumer | 72,053 | 128 | 1,792 | — | 73,973 | ||||||||||||
Total other loans | 450,139 | 4,763 | 45,589 | 103 | 500,594 | ||||||||||||
Total principal balance | $ | 2,003,632 | $ | 43,604 | $ | 406,855 | $ | 7,469 | $ | 2,461,560 | |||||||
Special | |||||||||||||||||
Pass/Watch | Mention | Substandard | Doubtful | Total | |||||||||||||
(In thousands) | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 345,568 | $ | 982 | $ | 15,795 | $ | — | $ | 362,345 | |||||||
Residential multifamily | 571,061 | 8,074 | 68,305 | — | 647,440 | ||||||||||||
Commercial and industrial real estate | 963,069 | 10,777 | 367,869 | 6,841 | 1,348,556 | ||||||||||||
Construction and land | 170,548 | 15,135 | 230,776 | 1,172 | 417,631 | ||||||||||||
Total real estate loans | 2,050,246 | 34,968 | 682,745 | 8,013 | 2,775,972 | ||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 434,138 | 22,533 | 130,467 | 195 | 587,333 | ||||||||||||
Other consumer | 85,534 | 515 | 1,602 | — | 87,651 | ||||||||||||
Total other loans | 519,672 | 23,048 | 132,069 | 195 | 674,984 | ||||||||||||
Total principal balance | $ | 2,569,918 | $ | 58,016 | $ | 814,814 | $ | 8,208 | $ | 3,450,956 | |||||||
Credit Risk and Concentrations—At each respective acquisition date, the covered loans were grouped into pools of loans with similar characteristics and risk factors per ASC 310-30. The pools were first developed based on loan categories and performance status. As of December 31, 2013 UCB covered loans represent approximately 94% of total covered loans. For the UCB acquisition, the loans were further segregated among the former UCB domestic, Hong Kong, and China portfolios, representing the three general geographic regions. In addition, the Company evaluated the make-up of geographic regions within the construction, land, and multi-family loan portfolios and further segregated these pools into distressed and non-distressed regions based on our historical experience of real estate loans within the non-covered portfolio. As of the date of acquisition 64% of the UCB portfolio was located in California, 10% was located in Hong Kong and 11% was located in New York. This assessment was factored into the day one valuation and discount applied to the loans. As such, geographic concentration risk is considered in the covered loan discount. | |||||||||||||||||
At December 31, 2013 and 2012, $126.9 million and $204.3 million, respectively, of the ASC 310-30 credit impaired loans were considered to be nonaccrual loans in accordance with the contractual terms of the individual loans. | |||||||||||||||||
The following table sets forth information regarding covered nonperforming assets as of the dates indicated: | |||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Covered nonaccrual loans(1) (2) (3) | $ | 126,895 | $ | 204,310 | |||||||||||||
Covered loans past due 90 days or more but not on nonaccrual | — | — | |||||||||||||||
Total nonperforming loans | 126,895 | 204,310 | |||||||||||||||
Other real estate owned covered, net | 21,373 | 26,808 | |||||||||||||||
Total covered nonperforming assets | $ | 148,268 | $ | 231,118 | |||||||||||||
(1) Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC. | |||||||||||||||||
(2) Represents principal balance net of discount. | |||||||||||||||||
(3) Includes $17.7 million and $29.6 million of loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||
The following table shows covered TDR loan activity for the periods shown: | |||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 157,736 | $ | 146,709 | |||||||||||||
Additions | 35,865 | 72,917 | |||||||||||||||
Sales | — | — | |||||||||||||||
Transfers to OREO | — | -6,351 | |||||||||||||||
Charge-offs | -10,167 | -8,658 | |||||||||||||||
Paydowns/ Reductions | -67,427 | -46,881 | |||||||||||||||
Balance at end of period | $ | 116,007 | $ | 157,736 | |||||||||||||
As of December 31, 2013, we had covered OREO properties with a combined aggregate carrying value of $21.4 million. Approximately 31% and 31% of the carrying value of covered OREO properties as of December 31, 2013 were located in California and Massachusetts, respectively. In comparison, as of December 31, 2012, we had covered OREO properties with an aggregate carrying value of $26.8 million. During 2013, 26 properties with an aggregate carrying value of $31.2 million were added through foreclosure. The carrying value at December 31, 2013 is net of adjustments on covered OREO of $2.4 million. During 2013, we sold 46 covered OREO properties for total proceeds of $38.9 million resulting in a total net gain on sale of $4.7 million. | |||||||||||||||||
Changes in the accretable yield for the covered loans for the years ended December 31, 2013 and 2012 is as follows: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 556,986 | $ | 785,165 | |||||||||||||
Additions | — | — | |||||||||||||||
Accretion | -347,010 | -382,132 | |||||||||||||||
Changes in expected cash flows | 251,569 | 153,953 | |||||||||||||||
Balance at end of period | $ | 461,545 | $ | 556,986 | |||||||||||||
The excess of cash flows expected to be collected over the initial fair value of acquired loans is referred to as the accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. The accretable yield will change due to: | |||||||||||||||||
• estimate of the remaining life of acquired loans which may change the amount of future interest income; | |||||||||||||||||
• estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and | |||||||||||||||||
• indices for acquired loans with variable rates of interest. | |||||||||||||||||
During the year, the estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference) was reduced as the loss on certain loan pools was evaluated and determined to be lower than expected. As a result of the reduction in the nonaccretable yield, the accretable yield increased, as did the amortization of the FDIC indemnification asset. Consequently, $190.3 million was reclassified from non-accretable yield to accretable yield due to changes in loss rate assumptions during 2013. In comparison, $38.6 million was reclassified from non-accretable yield to accretable yield due to changes in loss rate assumptions during 2012. Due to the greater expected collectability on the remaining covered loans, the accrued liability to the FDIC also increased during 2013. | |||||||||||||||||
From December 31, 2012 to December 31, 2013, excluding scheduled principal payments, a total of $739.3 million of loans were removed from the covered loans accounted for under ASC 310-30 due to loans being paid in full, sold, transferred to covered OREO or charged-off. Interest income was adjusted by $168.1 million related to payoffs and removals offset by charge-offs. | |||||||||||||||||
From December 31, 2011 to December 31, 2012, excluding scheduled principal payments, a total of $924.7 million of loans were removed from the covered loans accounted for under ASC 310-30 due to loans being paid in full, sold, transferred to covered OREO or charged-off. Interest income was adjusted by $124.7 million related to payoffs and removals offset by charge-offs. | |||||||||||||||||
From December 31, 2010 to December 31, 2011, excluding scheduled principal payments, a total of $932.2 million of loans were removed from the covered loans accounted for under ASC 310-30 due to loans being paid in full, sold, transferred to covered OREO or charged-off. Interest income was adjusted by $102.1 million related to payoffs and removals offset by charge-offs. | |||||||||||||||||
FDIC Indemnification Asset | |||||||||||||||||
Due to reductions of the nonaccretable difference on the UCB covered loan portfolio, the expected reimbursement from the FDIC under the loss-sharing agreement decreased. As such, the Company is amortizing the difference between the recorded amount of the FDIC indemnification asset and the expected reimbursement from the FDIC over the life of the indemnification asset, in line with the improved accretable yield as discussed above. For the years ended December 31, 2013 and 2012, the Company recorded $99.1 million and $33.8 million, respectively, of amortization against non-interest income. For the years ended December 31, 2013 and 2012, the Company also recorded $95.5 million and $144.0 million, respectively, reduction to the FDIC indemnification asset resulting from paydowns, payoffs, loan sales, and charge-offs. Additionally, during 2013 and 2012, $47.0 million and $17.0 million, respectively, were recorded as the increase in the estimate of liability owed to the FDIC at the completion of the FDIC loss share agreements. | |||||||||||||||||
The table below shows FDIC indemnification asset activity for 2013 and 2012: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 316,313 | $ | 511,135 | |||||||||||||
(Amortization) Accretion | -99,055 | -33,815 | |||||||||||||||
Reductions(1) | -95,536 | -143,988 | |||||||||||||||
Estimate of FDIC repayment (2) | -47,014 | -17,019 | |||||||||||||||
Balance at end of period | $ | 74,708 | $ | 316,313 | |||||||||||||
(1) Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset. | |||||||||||||||||
(2) This represents the change in the calculated estimate the Company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses. | |||||||||||||||||
FDIC Receivable | |||||||||||||||||
As of December 31, 2013, the FDIC loss sharing receivable was $30.3 million as compared to $73.1 million as of December 31, 2012. This receivable represents 80% of reimbursable amounts from the FDIC, under the FDIC loss-sharing agreements that have not yet been received. These reimbursable amounts include net charge-offs, loan-related expenses and OREO-related expenses. Consequently, 100% of the loan-related and OREO expenses are recorded as noninterest expense, 80% of any reimbursable expense is recorded as noninterest income, netting to the 20% of actual expense paid by the Company. The FDIC also shares in 80% of recoveries received. Thus, the FDIC receivable is reduced when we receive payment from the FDIC as well as when recoveries occur. The FDIC loss-sharing receivable is included in other assets on the consolidated balance sheet. | |||||||||||||||||
The table below shows FDIC receivable activity for the periods shown: | |||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 73,091 | $ | 76,646 | |||||||||||||
Net addition due to eligible expense/loss | 12,996 | 72,539 | |||||||||||||||
Payment received from the FDIC | -55,826 | -76,094 | |||||||||||||||
Balance at end of period | $ | 30,261 | $ | 73,091 | |||||||||||||
NONCOVERED_LOANS_AND_ALLOWANCE
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | ' | ||||||||||||||||||||||||||
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | ' | ||||||||||||||||||||||||||
NOTE 8—NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||||||
The following is a summary of year-end loans receivable, excluding covered loans (“non-covered loans”): | |||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 3,192,875 | $ | 2,187,323 | |||||||||||||||||||||||
Multifamily | 992,434 | 900,708 | |||||||||||||||||||||||||
Total residential | 4,185,309 | 3,088,031 | |||||||||||||||||||||||||
Commercial Real Estate (“CRE”): | |||||||||||||||||||||||||||
Income producing | 4,301,030 | 3,644,035 | |||||||||||||||||||||||||
Construction | 140,186 | 121,589 | |||||||||||||||||||||||||
Land | 143,861 | 129,071 | |||||||||||||||||||||||||
Total CRE | 4,585,077 | 3,894,695 | |||||||||||||||||||||||||
Commercial and Industrial (“C&I”): | |||||||||||||||||||||||||||
Commercial business | 4,637,056 | 3,569,388 | |||||||||||||||||||||||||
Trade finance | 723,137 | 661,877 | |||||||||||||||||||||||||
Total C&I | 5,360,193 | 4,231,265 | |||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 679,220 | 475,799 | |||||||||||||||||||||||||
Other consumer | 868,518 | 269,083 | |||||||||||||||||||||||||
Total consumer | 1,547,738 | 744,882 | |||||||||||||||||||||||||
Total gross loans receivable, excluding covered loans | 15,678,317 | 11,958,873 | |||||||||||||||||||||||||
Unearned fees, premiums, and discounts, net | (23,672 | ) | (19,301 | ) | |||||||||||||||||||||||
Allowance for loan losses, excluding covered loans | (241,930 | ) | (229,382 | ) | |||||||||||||||||||||||
Loans receivable, excluding covered loans, net | $ | 15,412,715 | $ | 11,710,190 | |||||||||||||||||||||||
Accrued interest on covered and non-covered loans receivable amounted to $94.5 million and $76.8 million at December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||
At December 31, 2013 and 2012, covered and non-covered loans receivable totaling $10.57 billion and $8.88 billion, respectively, were pledged to secure borrowings from the FHLB and the Federal Reserve Bank. | |||||||||||||||||||||||||||
The Bank offers adjustable rate (“ARM”) first mortgage loans secured by one-to-four unit residential properties located in its primary lending areas. The Bank originated $1.62 billion and $735.3 million in new residential single-family loans during 2013 and 2012, respectively. | |||||||||||||||||||||||||||
The Bank also offers ARM residential multifamily loan programs. For the years ended December 31, 2013 and 2012, the Bank originated $247.1 million and $128.4 million, respectively, in multifamily residential loans. The Bank primarily offers ARM multifamily loan programs that have six-month, three-year, or five-year initial fixed periods and ARM single-family loan programs that have one-year or three-year initial fixed periods. The Bank originates single-family residential loans where the underwriting criteria are heavily based on a maximum loan to value ratio (generally of 60%) and no or limited verification or documentation of the borrower’s assets is obtained. The Bank considers all of the single-family and multifamily loans originated to be prime loans and the underwriting criteria include maximum loan-to-value ratios and minimum debt coverage ratios, as applicable. The Bank has single-family loans with interest-only features which represents approximately less than 1% of total single-family loans at both December 31, 2013 and December 31, 2012. Additionally, the Bank owns residential loans that were purchased several years ago that permit different repayment options. For these loans, there is the potential for negative amortization if the borrower so chooses. These residential loans that permit different repayment options represent approximately less than 1% of total residential loans at both December 31, 2013 and December 31, 2012. None of these loans were negatively amortizing as of December 31, 2013 and December 31, 2012. | |||||||||||||||||||||||||||
In addition to residential lending, the Bank’s lending activities also include commercial real estate, commercial and industrial, and consumer lending. Our CRE lending activities include loans to finance income-producing properties and also construction and land loans. Our C&I lending activities include commercial business financing for small and middle-market businesses in a wide spectrum of industries. Included in commercial business loans are loans for working capital, accounts receivable lines, inventory lines, small business administration loans and lease financing. We also offer a variety of international trade finance services and products, including letters of credit, revolving lines of credit, import loans, bankers’ acceptances, working capital lines, domestic purchase financing and pre-export financing. Consumer loans are primarily comprised of fully guaranteed student loans, home equity lines of credit, auto loans and the new insurance premium financing loans. | |||||||||||||||||||||||||||
All of the loans that the Bank originates are subject to its underwriting guidelines and loan origination standards. Management believes that the Bank’s underwriting criteria and procedures adequately consider the unique risks which may come from these products. The Bank conducts a variety of quality control procedures and periodic audits to ensure compliance with its origination standards, including criteria for lending and legal requirements. | |||||||||||||||||||||||||||
Credit Risk and Concentrations—The Company has a concentration of real estate loans in California. As of December 31, 2013, the Company had $4.59 billion in non-covered commercial real estate loans and $4.19 billion in non-covered residential loans, of which approximately 86% are secured by real properties located in California. Deterioration in the real estate market generally including residential and commercial real estate could result in additional loan charge-offs and provisions for loan losses in the future, which could have a material adverse effect on the Company’s financial condition, net income and capital. In addition, although most of the Company’s trade finance loans relate to trade with Asian countries, the majority of our loans are made to companies domiciled in the United States. A substantial portion of this business involves California based customers engaged in import activities as well as some export activities. We also offer export-import financing to various domestic and foreign customers. Certain trade finance loans may be guaranteed by the Export-Import Bank of the United States or the Export-Import Bank of China. | |||||||||||||||||||||||||||
Purchased Loans—During 2013, the Company purchased loans with an unpaid principal balance of $776.7 million and a carrying amount of $759.3 million. 63% of the purchased loans during the period are student loans, which are mostly guaranteed by the U.S. Department of Education and pose limited credit risk. 36% of the purchased loans are insurance premium financing loans, which are included in the commercial and consumer loan portfolios, as applicable. The remaining 1% are other loans. | |||||||||||||||||||||||||||
Loans Held for Sale—Loans held for sale totaled $205.0 million and $174.3 million as of December 31, 2013 and 2012, respectively. Loans held for sale are recorded at the lower of cost or fair value. Fair value, if lower than cost, is determined based on valuations obtained from market participants or the value of the underlying collateral. As of December 31, 2013, all of these loans were student loans, which are mostly guaranteed by the U.S. Department of Education. During 2013, in total, loans receivable of $97.1 million were reclassified to loans held for sale. Some of these loans were purchased by the Company with the intent to be held for investment; however, subsequent to their purchase, the Company’s intent for these loans changed and they were consequently reclassified to loans held for sale. The remainder of loans were immediately classified as loans held for sale. Proceeds from sales of loans held for sale were $117.3 million in 2013, resulting in net gains on sale of $4.0 million. In comparison, proceeds from sales of loans held for sale were $351.9 million and $652.7 million in 2012 and 2011, respectively, resulting in net gains on sale of $14.6 million and $14.5 million, respectively. | |||||||||||||||||||||||||||
Credit Quality Indicators—Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes review of all sources of repayment, the borrower’s current payment performance/delinquency, the borrower’s current financial and liquidity status, and all other relevant information. For single family residential loans payment performance/delinquency is the driving indicator for the risk ratings. However, the risk ratings remain the overall credit quality indicator for the Company as well as the credit quality indicator utilized for estimating the appropriate allowance for loan losses. The Company utilizes an eight grade risk rating system, where a higher grade represents a higher level of credit risk. The eight grade risk rating system can be generally classified by the following categories: Pass or Watch, Special Mention, Substandard, Doubtful and Loss. The risk ratings reflect the relative strength of the sources of repayment. | |||||||||||||||||||||||||||
Pass or Watch loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. These borrowers may have some credit risk that requires monitoring, but full repayment is expected. Special Mention loans are considered to have potential weaknesses that warrant closer attention by management. Special Mention is considered a transitory grade. If any potential weaknesses are resolved, the loan is upgraded to a Pass or Watch grade. If negative trends in the borrower’s financial status or other information is presented that indicates the repayment sources may become inadequate, the loan is downgraded to a Substandard grade. Substandard loans are considered to have well-defined weaknesses that jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss if the deficiencies are not corrected. Additionally, when management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan is still classified as Substandard. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are considered to be uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted due to changes in borrower status and likelihood of loan repayment. The tables below present the non-covered loan portfolio by credit quality indicator as of December 31, 2013 and 2012. As of December 31, 2013, non-covered loans graded Substandard have decreased by $29.3 million, or 6% from December 31, 2012. There were no Doubtful or Loss grade loans as of December 31, 2013 and 2012. | |||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||
Pass/Watch | Mention | Substandard | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 3,167,337 | $ | 8,331 | $ | 17,207 | $ | 3,192,875 | |||||||||||||||||||
Multifamily | 923,697 | 1,634 | 67,103 | 992,434 | |||||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 4,032,269 | 56,752 | 212,009 | 4,301,030 | |||||||||||||||||||||||
Construction | 127,138 | 6,160 | 6,888 | 140,186 | |||||||||||||||||||||||
Land | 116,000 | 9,304 | 18,557 | 143,861 | |||||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 4,400,847 | 92,315 | 143,894 | 4,637,056 | |||||||||||||||||||||||
Trade finance | 681,345 | 22,099 | 19,693 | 723,137 | |||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 677,094 | 445 | 1,681 | 679,220 | |||||||||||||||||||||||
Other consumer | 865,752 | 244 | 2,522 | 868,518 | |||||||||||||||||||||||
Total | $ | 14,991,479 | $ | 197,284 | $ | 489,554 | $ | 15,678,317 | |||||||||||||||||||
Special | |||||||||||||||||||||||||||
Pass/Watch | Mention | Substandard | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 2,163,918 | $ | 5,131 | $ | 18,274 | $ | 2,187,323 | |||||||||||||||||||
Multifamily | 781,552 | 13,510 | 105,646 | 900,708 | |||||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 3,416,142 | 42,222 | 185,671 | 3,644,035 | |||||||||||||||||||||||
Construction | 63,008 | 16,885 | 41,696 | 121,589 | |||||||||||||||||||||||
Land | 79,085 | 13,232 | 36,754 | 129,071 | |||||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,380,212 | 69,687 | 119,489 | 3,569,388 | |||||||||||||||||||||||
Trade finance | 632,617 | 24,778 | 4,482 | 661,877 | |||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 475,799 | — | — | 475,799 | |||||||||||||||||||||||
Other consumer | 261,136 | 1,115 | 6,832 | 269,083 | |||||||||||||||||||||||
Total | $ | 11,253,469 | $ | 186,560 | $ | 518,844 | $ | 11,958,873 | |||||||||||||||||||
Nonaccrual and Past Due Loans—Loans are tracked by the number of days borrower payments are past due. The tables below present an aging analysis of nonaccrual loans, past due non-covered loans and loans held for sale, segregated by class of loans, as of December 31, 2013 and 2012: | |||||||||||||||||||||||||||
Accruing | Accruing | Total | Nonaccrual | Nonaccrual | Total | ||||||||||||||||||||||
Loans | Loans | Accruing | Loans Less | Loans | Nonaccrual | Current | |||||||||||||||||||||
30-59 Days | 60-89 Days | Past Due | Than 90 Days | 90 or More | Past Due | Accruing | |||||||||||||||||||||
Past Due | Past Due | Loans | Past Due | Days Past Due | Loans | Loans | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 4,694 | $ | 922 | $ | 5,616 | $ | — | $ | 11,218 | $ | 11,218 | $ | 3,176,041 | $ | 3,192,875 | |||||||||||
Multifamily | 8,580 | 531 | 9,111 | 19,661 | 7,972 | 27,633 | 955,690 | 992,434 | |||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 12,746 | 1,798 | 14,544 | 13,924 | 22,549 | 36,473 | 4,250,013 | 4,301,030 | |||||||||||||||||||
Construction | — | — | — | — | 6,888 | 6,888 | 133,298 | 140,186 | |||||||||||||||||||
Land | — | — | — | 265 | 3,223 | 3,488 | 140,373 | 143,861 | |||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,428 | 6,259 | 9,687 | 6,437 | 15,486 | 21,923 | 4,605,446 | 4,637,056 | |||||||||||||||||||
Trade finance | — | — | — | — | 909 | 909 | 722,228 | 723,137 | |||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 541 | 445 | 986 | — | 1,681 | 1,681 | 676,553 | 679,220 | |||||||||||||||||||
Other consumer | 293 | 1 | 294 | 175 | 1,263 | 1,438 | 866,786 | 868,518 | |||||||||||||||||||
Loans held for sale | — | — | — | — | — | — | 204,970 | 204,970 | |||||||||||||||||||
Total | $ | 30,282 | $ | 9,956 | $ | 40,238 | $ | 40,462 | $ | 71,189 | $ | 111,651 | $ | 15,731,398 | 15,883,287 | ||||||||||||
Unearned fees, premiums and discounts, net | -23,672 | ||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ | 15,859,615 | |||||||||||||||||||||||||
Accruing | Accruing | Total | Nonaccrual | Nonaccrual | Total | ||||||||||||||||||||||
Loans | Loans | Accruing | Loans Less | Loans | Nonaccrual | Current | |||||||||||||||||||||
30-59 Days | 60-89 Days | Past Due | Than 90 Days | 90 or More | Past Due | Accruing | |||||||||||||||||||||
Past Due | Past Due | Loans | Past Due | Days Past Due | Loans | Loans | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 4,820 | $ | 2,244 | $ | 7,064 | $ | 1,301 | $ | 9,809 | $ | 11,110 | $ | 2,169,149 | $ | 2,187,323 | |||||||||||
Multifamily | 7,127 | 924 | 8,051 | 6,788 | 11,052 | 17,840 | 874,817 | 900,708 | |||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 18,118 | 4,731 | 22,849 | 9,485 | 8,354 | 17,839 | 3,603,347 | 3,644,035 | |||||||||||||||||||
Construction | — | — | — | — | 27,039 | 27,039 | 94,550 | 121,589 | |||||||||||||||||||
Land | — | — | — | 637 | 3,984 | 4,621 | 124,450 | 129,071 | |||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,293 | 316 | 3,609 | 8,068 | 14,740 | 22,808 | 3,542,971 | 3,569,388 | |||||||||||||||||||
Trade finance | 500 | — | 500 | 429 | 2,003 | 2,432 | 658,945 | 661,877 | |||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 71 | — | 71 | — | — | — | 475,728 | 475,799 | |||||||||||||||||||
Other consumer | 485 | 968 | 1,453 | 499 | 3,921 | 4,420 | 263,210 | 269,083 | |||||||||||||||||||
Loans held for sale | — | — | — | — | — | — | 174,317 | 174,317 | |||||||||||||||||||
Total | $ | 34,414 | $ | 9,183 | $ | 43,597 | $ | 27,207 | $ | 80,902 | $ | 108,109 | $ | 11,981,484 | 12,133,190 | ||||||||||||
Unearned fees, premiums and discounts, net | -19,301 | ||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ | 12,113,889 | |||||||||||||||||||||||||
Generally, loans 90 or more days past due are placed on nonaccrual status, at which point interest accrual is discontinued and all unpaid accrued interest is reversed against interest income. Additionally, loans that are not 90 or more days past due but have identified deficiencies, including delinquent TDR loans, are also placed on nonaccrual status. Nonaccrual loans totaled $111.7 million and $108.1 million at December 31, 2013 and 2012, respectively. Loans not 90 or more days past due totaled $40.5 million and $27.2 million as of December 31, 2013 and 2012, respectively, and were included in non-covered nonaccrual loans. | |||||||||||||||||||||||||||
The following is a summary of interest income foregone on nonaccrual loans: | |||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Interest income that would have been recognized had nonaccrual loans performed in accordance with their original terms | $ | 7,410 | $ | 7,206 | $ | 9,384 | |||||||||||||||||||||
Less: Interest income recognized on nonaccrual loans on a cash basis | -2,319 | -2,269 | -3,519 | ||||||||||||||||||||||||
Interest income foregone on nonaccrual loans | $ | 5,091 | $ | 4,937 | $ | 5,865 | |||||||||||||||||||||
Troubled debt restructurings — A troubled debt restructuring (“TDR”) is a modification of the terms of a loan when the lender, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower. The concessions may be granted in various forms, including a below-market change in the stated interest rate, reduction in the loan balance or accrued interest, extension of the maturity date with a stated interest rate lower than the current market rate or note splits referred to as A/B notes. In A/B note restructurings, the original note is bifurcated into two notes where the A note represents the portion of the original loan which allows for acceptable loan-to-value and debt coverage on the collateral and is expected to be collected in full and the B note represents the portion of the original loan where there is a shortfall in value and is fully charged-off. The A/B note balance is comprised of the A note balances only. A notes are not disclosed as TDRs in subsequent years after the year of restructuring if the restructuring agreement specifies an interest rate equal to or greater than the rate that the Bank was willing to accept at the time of the restructuring for a new loan with comparable risk and the loan is not impaired based on the terms specified by the restructuring agreement. | |||||||||||||||||||||||||||
TDRs may be designated as performing or nonperforming. A TDR may be designated as performing if the loan has demonstrated sustained performance under the modified terms. The period of sustained performance may include the periods prior to modification if prior performance met or exceeded the modified terms. For nonperforming restructured loans, the loan will remain on nonaccrual status until the borrower demonstrates a sustained period of performance, generally six consecutive months of payments. The Company had $71.8 million and $94.6 million in total performing restructured loans as of December 31, 2013 and 2012, respectively. Nonperforming restructured loans were $11.1 million and $10.0 million at December 31, 2013 and 2012, respectively. Included as TDRs were $4.3 million and $34.8 million of performing A/B notes as of December 31, 2013 and 2012, respectively. All TDRs are included in the balance of impaired loans. | |||||||||||||||||||||||||||
The following table provides information on loans modified as of December 31, 2013 and 2012 that were modified as TDRs during the year ended December 31, 2013 and 2012: | |||||||||||||||||||||||||||
Loans Modified as TDRs During the | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Pre-Modification | Post-Modification | ||||||||||||||||||||||||||
Number | Outstanding | Outstanding | |||||||||||||||||||||||||
of | Recorded | Recorded | Financial | ||||||||||||||||||||||||
Contracts | Investment | Investment (1) | Impact (2) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Multifamily | 1 | $ | 1,093 | $ | 1,071 | $ | — | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 6 | $ | 26,021 | $ | 17,456 | $ | 219 | ||||||||||||||||||||
Construction | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Land | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 6 | $ | 16,220 | $ | 15,624 | $ | 4,274 | ||||||||||||||||||||
Trade finance | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Other consumer | 1 | $ | 651 | $ | 639 | $ | — | ||||||||||||||||||||
Loans Modified as TDRs During the | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Pre-Modification | Post-Modification | ||||||||||||||||||||||||||
Number | Outstanding | Outstanding | |||||||||||||||||||||||||
of | Recorded | Recorded | Financial | ||||||||||||||||||||||||
Contracts | Investment | Investment (1) | Impact (2) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | 12 | $ | 6,227 | $ | 5,556 | $ | 938 | ||||||||||||||||||||
Multifamily | 16 | $ | 28,736 | $ | 28,153 | $ | 3,344 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 8 | $ | 10,118 | $ | 8,162 | $ | 1,169 | ||||||||||||||||||||
Construction | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Land | 3 | $ | 1,610 | $ | 1,059 | $ | 395 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 14 | $ | 5,101 | $ | 4,374 | $ | 560 | ||||||||||||||||||||
Trade finance | 2 | $ | 2,510 | $ | 579 | $ | 1,506 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Other consumer | 1 | $ | 108 | $ | 108 | $ | — | ||||||||||||||||||||
(1) Includes subsequent payments after modification and reflects the balance as of December 31, 2013 and 2012. | |||||||||||||||||||||||||||
(2) The financial impact includes chargeoffs and specific reserves at modification date. | |||||||||||||||||||||||||||
Potential TDRs are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty in order to maximize the Bank’s recovery. As of December 31, 2013, modifications of residential TDRs, including single and multi-family loans, primarily included A/B note splits, which result in a partial charge-off or loss for the Bank at the modification date. Residential TDRs modified using A/B note splits totaled $1.1 million, as of December 31, 2013. Commercial real estate TDRs, including income producing, construction and land loans, were primarily modified through, A/B note splits, forbearance of payments and principal and/or interest deferment for a total of $17.5 million, as of December 31, 2013. As of December 31, 2013, modifications of commercial and industrial TDRs, including commercial business and trade finance loans, were restructured through extensions and principal and interest reduction with an impact of both a reduction of interest collected over the life of the loan and/or an extended time period for collection of principal and interest, for a total of $15.6 million as of December 31, 2013. Consumer TDRs, including student loans and other consumer loans, were restructured through maturity extensions, for a total of $639 thousand, as of December 31, 2013. | |||||||||||||||||||||||||||
As of December 31, 2012, modifications of residential TDRs, including single and multi-family loans, primarily included principal and/or interest deferments, rate reductions, extensions, other principal adjustments and/or A/B note splits. A/B note splits result in a partial charge-off or loss for the bank at the modification date. Residential TDRs modified using principal and/or interest deferment and/or rate reductions totaled $12.7 million as of December 31, 2012. Residential TDRs modified using extensions, A/B note splits and/or other principal adjustments totaled $21.0 million as of December 31, 2012. Commercial real estate TDRs, including income producing, construction and land loans, were primarily modified through A/B note splits, principal reductions, extensions, and/or non-market interest rate changes with an impact of a partial charge-off or loss for the bank and reduction of interest collected over the life of the loan. Commercial real estate TDRs modified through A/B note splits, principal reductions, extensions and/or non-market interest changes totaled $9.2 million as of December 31, 2012. Commercial and industrial TDRs, including commercial business and trade finance loans, were restructured in various ways, including forbearance payments, principal reductions, principal and/or interest deferment and/or maturity extensions with an impact of both a reduction of interest collected over the life of the loan and/or an extended time period for collection of principal and interest, for a total of $5.0 million as of December 31, 2012. Consumer TDRs, including home equity lines of credit and other consumer loans, were restructured through principal deferments. Consumer TDRs modified through principal deferment totaled $108 thousand as of December 31, 2012. | |||||||||||||||||||||||||||
Performing TDRs at December 31, 2013 were comprised of $17.4 million in residential loans, $37.6 million in commercial real estate loans, $16.7 million in commercial and industrial loans and $108 thousand in consumer loans. Nonperforming TDRs at December 31, 2013 were comprised of $3.6 million in residential loans, $3.4 million in commercial real estate loans, $3.5 million in commercial and industrial loans and $639 thousand in consumer loans. In comparison, performing TDRs at December 31, 2012 were comprised of $43.5 million in residential loans, $47.4 million in commercial real estate loans, $3.6 million in commercial and industrial loans and $108 thousand in consumer loans. Nonperforming TDRs at December 31, 2012 were comprised of $5.1 million in residential loans, $1.9 million in commercial real estate loans and $3.0 million in commercial and industrial loans. | |||||||||||||||||||||||||||
Subsequent to restructuring, a TDR that becomes delinquent, generally beyond 90 days is considered to have defaulted. The following table provides information for loans modified as TDRs within the previous 12 months that have subsequently defaulted as of December 31, 2013 and 2012 for the years ended December 31, 2013 and 2012, respectively. | |||||||||||||||||||||||||||
Loans Modified as TDRs that Subsequently Defaulted | |||||||||||||||||||||||||||
During the Year Ended December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
Number of | Recorded | Number of | Recorded | ||||||||||||||||||||||||
Contracts | Investment | Contracts | Investment (1) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | — | $ | — | 2 | $ | 2,830 | |||||||||||||||||||||
Multifamily | — | $ | — | 1 | $ | 378 | |||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | — | $ | — | 1 | $ | 271 | |||||||||||||||||||||
Construction | — | $ | — | — | $ | — | |||||||||||||||||||||
Land | — | $ | — | — | $ | — | |||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 1 | $ | 570 | 2 | $ | 33 | |||||||||||||||||||||
Trade finance | — | $ | — | — | $ | — | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | — | $ | — | |||||||||||||||||||||
Other consumer | 1 | $ | 639 | — | $ | — | |||||||||||||||||||||
(1) Included in the year ended December 31, 2012 table is $271 thousand of recorded investment which has been transferred to REO and is not included in the total loans receivable balance as of December 31, 2012. | |||||||||||||||||||||||||||
All TDRs are included in the impaired loan quarterly valuation allowance process. See the sections below Impaired Loans and Allowance for Loan Losses for the complete discussion. All portfolio segments of TDRs are reviewed for necessary specific reserves in the same manner as impaired loans of the same portfolio segment which have not been identified as TDRs. The modification of the terms of each TDR is considered in the current impairment analysis of the respective TDR. For all portfolio segments of delinquent TDRs, when the restructured loan is uncollectible and less than the recorded investment in the loan, the deficiency is charged-off against the allowance for loan losses. If the loan is a performing TDR, the deficiency is included in the specific allowance, as appropriate. As of December 31, 2013 and 2012, the allowance for loan losses associated with TDRs was $13.0 million and $8.7 million for performing TDRs and $836 thousand and $203 thousand for nonperforming TDRs, respectively. | |||||||||||||||||||||||||||
Impaired Loans — A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all scheduled payments of principal or interest due according to the original contractual terms of the loan agreement. Impaired loans include non-covered loans held for investment on nonaccrual status, regardless of the collateral coverage, and loans modified in a TDR. | |||||||||||||||||||||||||||
The Bank’s loans are grouped into heterogeneous and homogeneous (mostly consumer loans) categories. Classified loans (graded Substandard or Doubtful) in the heterogeneous category are selected and evaluated for impairment on an individual basis. The Bank considers loans individually reviewed to be impaired if, based on current information and events, it is probable the Bank will not be able to collect all amounts due according to the original contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as an expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent, less costs to sell. When the value of an impaired loan is less than the recorded investment in the loan and the loan is classified as nonperforming and uncollectible, the deficiency is charged-off against the allowance for loan losses. | |||||||||||||||||||||||||||
At December 31, 2013 and 2012, impaired non-covered loans totaled $183.5 million and $200.5 million, respectively. Impaired non-covered loans as of December 31, 2013 and 2012 are set forth in the following tables. The interest income recognized on impaired loans, excluding performing TDRs, is recognized on a cash basis when received. | |||||||||||||||||||||||||||
Recorded | Recorded | ||||||||||||||||||||||||||
Unpaid | Investment | Investment | Total | Average | Interest | ||||||||||||||||||||||
Principal | With No | With | Recorded | Related | Recorded | Income | |||||||||||||||||||||
Balance | Allowance | Allowance | Investment (2) | Allowance | Investment | Recognized (1) | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
As of and for the year ended December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 15,814 | $ | 13,585 | $ | 1,588 | $ | 15,173 | $ | 207 | $ | 15,322 | $ | 222 | |||||||||||||
Multifamily | 43,821 | 30,899 | 10,215 | 41,114 | 1,339 | 35,799 | 543 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 73,777 | 39,745 | 25,523 | 65,268 | 5,976 | 71,856 | 872 | ||||||||||||||||||||
Construction | 6,888 | 6,888 | — | 6,888 | — | 6,888 | 61 | ||||||||||||||||||||
Land | 17,390 | 4,372 | 7,908 | 12,280 | 2,082 | 12,453 | 42 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 48,482 | 10,850 | 27,487 | 38,337 | 13,787 | 38,294 | 520 | ||||||||||||||||||||
Trade finance | 2,771 | 438 | 752 | 1,190 | 752 | 1,603 | 42 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 1,749 | 1,681 | — | 1,681 | — | 1,664 | 1 | ||||||||||||||||||||
Other consumer | 1,945 | 1,546 | — | 1,546 | — | 1,561 | 16 | ||||||||||||||||||||
Total | $ | 212,637 | $ | 110,004 | $ | 73,473 | $ | 183,477 | $ | 24,143 | $ | 185,440 | $ | 2,319 | |||||||||||||
Recorded | Recorded | ||||||||||||||||||||||||||
Unpaid | Investment | Investment | Total | Average | Interest | ||||||||||||||||||||||
Principal | With No | With | Recorded | Related | Recorded | Income | |||||||||||||||||||||
Balance | Allowance | Allowance | Investment (2) | Allowance | Investment | Recognized (1) | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
As of and for the year ended December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 19,318 | $ | 15,610 | $ | 2,598 | $ | 18,208 | $ | 721 | $ | 19,094 | $ | 88 | |||||||||||||
Multifamily | 57,464 | 45,511 | 8,756 | 54,267 | 2,410 | 54,707 | 403 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 59,574 | 47,019 | 7,656 | 54,675 | 2,559 | 57,854 | 304 | ||||||||||||||||||||
Construction | 30,815 | 25,530 | 1,509 | 27,039 | 142 | 22,696 | 723 | ||||||||||||||||||||
Land | 20,317 | 6,132 | 8,995 | 15,127 | 2,860 | 17,769 | 76 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 38,630 | 20,235 | 3,835 | 24,070 | 2,835 | 33,343 | 614 | ||||||||||||||||||||
Trade finance | 4,124 | 2,582 | — | 2,582 | — | 3,863 | 48 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | — | — | — | — | — | — | ||||||||||||||||||||
Other consumer | 4,798 | 4,528 | — | 4,528 | — | 4,631 | 13 | ||||||||||||||||||||
Total | $ | 235,040 | $ | 167,147 | $ | 33,349 | $ | 200,496 | $ | 11,527 | $ | 213,957 | $ | 2,269 | |||||||||||||
(1) Excludes interest from performing TDRs. | |||||||||||||||||||||||||||
(2) Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||||||||||||
Allowance for Loan Losses | |||||||||||||||||||||||||||
The allowance consists of specific reserves and a general reserve. The Bank’s loans fall into heterogeneous and homogeneous (mostly consumer loans) categories. Impaired loans are subject to specific reserves. Loans in the homogeneous category, as well as non-impaired loans in the heterogeneous category, are evaluated as part of the general reserve. The general reserve is calculated by utilizing both quantitative and qualitative factors. There are different qualitative risks for the loans in each portfolio segment. As of December 31, 2013, the Residential and CRE segments’ predominant risk characteristic is the collateral and the geographic location of the property collateralizing the loan. The risk is qualitatively assessed based on the change in the real estate market in those geographic areas. The C&I segment’s predominant risk characteristics are the global cash flows of the borrowers and guarantors, if any, and economic and market conditions. Consumer loans, excluding the student loan portfolio guaranteed by the U.S. Department of Education, are largely comprised of home equity lines of credit, for which the predominant risk characteristic is the real estate collateral securing the loan. | |||||||||||||||||||||||||||
Our methodology to determine the overall appropriateness of the allowance is based on a classification migration model and qualitative considerations. The migration analysis examines pools of loans having similar characteristics and analyzes their loss rates over a historical period. We utilize historical loss factors derived from trends and losses associated with each pool over a specified period of time. Based on this process, we assign loss factors to each loan grade within each pool of loans. Loss rates derived by the migration model are based predominantly on historical loss trends that may not be entirely indicative of the actual or inherent loss potential. As such, we utilize qualitative and environmental factors as adjusting mechanisms to supplement the historical results of the classification migration model. Qualitative considerations include, but are not limited to, prevailing economic or market conditions, relative risk profiles of various loan segments, volume concentrations, growth trends, delinquency and nonaccrual status, problem loan trends, and geographic concentrations. Qualitative and environmental factors are reflected as percentage adjustments and are added to the historical loss rates derived from the classified asset migration model to determine the appropriate allowance for each loan pool. | |||||||||||||||||||||||||||
Covered Loans— The Company acquired UCB and WFIB in 2009 and 2010, respectively. The majority of the covered loan portfolio accounted for under ASC 310-30, is still performing better than or as expected from the day one valuation. However, the company has experienced some concentrated credit deterioration in certain pools. Thus, during 2013, due to the concentrated credit deterioration beyond the respective acquisition date fair value of these covered loans under ASC 310-30, a provision for credit losses has been recorded through earnings. As of December 31, 2013, there was an allowance of $2.2 million for these loans under ASC 310-30 due to credit deterioration, which resulted from a provision of $2.2 million for the year ended December 31, 2013. This $2.2 million of allowance for loan losses is allocated mainly to the portfolio’s commercial real estate segment. | |||||||||||||||||||||||||||
As of the respective acquisition dates, WFIB’s and UCB’s loan portfolios included unfunded commitments for commercial lines of credit, construction draws and other lending activity. The total commitment outstanding as of the respective acquisition dates is covered under the shared-loss agreements. However, any additional advances on these loans subsequent to acquisition date are not accounted for under ASC 310-30. As additional advances on these commitments have occurred, the Bank has considered these amounts in the allowance for loan losses calculation. As of December 31, 2013 and 2012, $7.7 million, or 3.1%, and $5.2 million, or 2.2%, respectively, of the total allowance is allocated to the allowance for loan losses on covered loans. The covered loans acquired are, and will continue to be, subject to the Bank’s internal and external credit review and monitoring. The $2.2 million allowance for loans under ASC 310-30 discussed above and the $5.5 million in allowance for loans outside the scope of ASC 310-30 amount to $7.7 million or 3.1% of total allowance as of December 31, 2013. | |||||||||||||||||||||||||||
During 2013, the Company recorded $1.4 million of charge-offs on covered loans outside of the scope of ASC 310-30 mainly in the commercial and industrial and commercial real estate loan segment. The resulting provision on covered loans for 2013 was $1.8 million. The charge-offs are within our loan segments as follows: $1.0 million of commercial and industrial loans and $380 thousand of commercial real estate loans. As these loans are covered under loss-sharing agreements with the FDIC, the Company recorded income of $1.1 million or 80% of the charge-off amount of $1.4 million in noninterest income as a net increase in the FDIC receivable, resulting in a net impact to earnings for the year of $287 thousand. In comparison, the Company recorded $6.5 million of charge-offs on several covered loans outside of the scope of ASC 310-30 during 2012. The resulting provision on covered loans for 2012 was $5.0 million. The charge-offs are within our loan segments as follows: $5.0 million of commercial and industrial loans and $1.5 million of commercial real estate loans. The $6.5 million of net charge-offs was mainly related to three specific covered loans. As these loans are covered under loss-sharing agreements with the FDIC, the Company recorded income of $5.2 million or 80% of the charge-off amount of $6.5 million in noninterest income as a net increase in the FDIC receivable, resulting in a net impact to earnings for the year of $1.3 million. | |||||||||||||||||||||||||||
The Company recorded $22.4 million in total loan loss provisions during 2013, as compared to $65.2 million and $95.0 million during 2012 and 2011, respectively. When determined uncollectible, it is the Company’s policy to promptly charge-off the amount of impairment on a loan which represents the difference between the outstanding loan balance and the fair value of the collateral. Recoveries are recorded when payment is received on loans that were previously charged-off through the allowance for loan losses. During 2013, the Company recorded $5.1 million in total net charge-offs in comparison to $48.7 million during 2012. The following table details activity in the allowance for loan losses, for both non-covered and covered loans, by portfolio segment for the year ended December 31, 2013 and 2012. Allocation of a portion of the allowance to one segment of the loan portfolio does not preclude its availability to absorb losses in other segments. | |||||||||||||||||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses (1) | Loan Losses | Unallocated | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Beginning balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
Provision for loan losses | 1,918 | -6,615 | 12,821 | 8,055 | 1,759 | 2,269 | 2,157 | 22,364 | |||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit | — | — | — | — | — | — | -2,157 | -2,157 | |||||||||||||||||||
Charge-offs | -3,197 | -3,357 | -7,405 | -2,385 | -1,436 | — | — | -17,780 | |||||||||||||||||||
Recoveries | 2,647 | 4,793 | 4,392 | 881 | — | — | — | 12,713 | |||||||||||||||||||
Net (charge-offs)/recoveries | -550 | 1,436 | -3,013 | -1,504 | -1,436 | — | — | -5,067 | |||||||||||||||||||
Ending balance | $ | 50,717 | $ | 64,677 | $ | 115,184 | $ | 11,352 | $ | 5,476 | $ | 2,269 | $ | — | $ | 249,675 | |||||||||||
Ending balance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 1,546 | $ | 8,058 | $ | 14,539 | $ | — | $ | — | $ | — | $ | — | $ | 24,143 | |||||||||||
Loans collectively evaluated for impairment | 49,171 | 56,619 | 100,645 | 11,352 | 5,476 | — | — | 223,263 | |||||||||||||||||||
Covered loans acquired with deteriorated credit quality (2) | — | — | — | — | — | 2,269 | — | 2,269 | |||||||||||||||||||
Ending balance | $ | 50,717 | $ | 64,677 | $ | 115,184 | $ | 11,352 | $ | 5,476 | $ | 2,269 | $ | — | $ | 249,675 | |||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses (1) | Loan Losses | Unallocated | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Beginning balance | $ | 52,180 | $ | 66,457 | $ | 87,020 | $ | 4,219 | $ | 6,647 | $ | — | $ | — | $ | 216,523 | |||||||||||
Provision for loan losses | 3,255 | 20,977 | 35,204 | 2,295 | 5,016 | — | -1,563 | 65,184 | |||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit | — | — | — | — | — | — | 1,563 | 1,563 | |||||||||||||||||||
Charge-offs | -7,700 | -27,060 | -21,818 | -1,824 | -6,510 | — | — | -64,912 | |||||||||||||||||||
Recoveries | 1,614 | 9,482 | 4,970 | 111 | — | — | — | 16,177 | |||||||||||||||||||
Net charge-offs | -6,086 | -17,578 | -16,848 | -1,713 | -6,510 | — | — | -48,735 | |||||||||||||||||||
Ending balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
Ending balance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 3,131 | $ | 5,561 | $ | 2,835 | $ | — | $ | — | $ | — | $ | — | $ | 11,527 | |||||||||||
Loans collectively evaluated for impairment | 46,218 | 64,295 | 102,541 | 4,801 | 5,153 | — | — | 223,008 | |||||||||||||||||||
Covered loans acquired with deteriorated credit quality (2) | — | — | — | — | — | — | — | — | |||||||||||||||||||
Ending balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
(1) This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses. | |||||||||||||||||||||||||||
(2) The Company has elected to account for covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30, excluding any additional advances subsequent to acquisition date. | |||||||||||||||||||||||||||
The Company’s recorded investment in total loans receivable as of December 31, 2013 and 2012 related to each balance in the allowance for loan losses by portfolio segment and disaggregated on the basis of the Company’s impairment methodology is as follows: | |||||||||||||||||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses | Loan Losses | Total | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 56,287 | $ | 84,436 | $ | 39,527 | $ | 3,227 | $ | — | $ | — | $ | 183,477 | |||||||||||||
Covered loans individually evaluated for impairment(2) | — | — | — | — | 2,824 | — | 2,824 | ||||||||||||||||||||
Loans collectively evaluated for impairment | 4,129,022 | 4,500,641 | 5,320,666 | 1,544,511 | 317,361 | — | 15,812,201 | ||||||||||||||||||||
Covered loans acquired with deteriorated credit quality(1) | 681,608 | 1,140,432 | 146,538 | 43,136 | — | 129,661 | 2,141,375 | ||||||||||||||||||||
Ending balance | $ | 4,866,917 | $ | 5,725,509 | $ | 5,506,731 | $ | 1,590,874 | $ | 320,185 | $ | 129,661 | $ | 18,139,877 | |||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses | Loan Losses | Total | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 72,475 | $ | 96,841 | $ | 26,652 | $ | 4,528 | $ | — | $ | — | $ | 200,496 | |||||||||||||
Covered loans individually evaluated for impairment(2) | — | — | — | — | 5,237 | — | 5,237 | ||||||||||||||||||||
Loans collectively evaluated for impairment | 3,015,556 | 3,797,854 | 4,204,613 | 740,354 | 426,448 | — | 12,184,825 | ||||||||||||||||||||
Covered loans acquired with deteriorated credit quality(1) | 976,969 | 1,727,159 | 261,622 | 53,521 | — | — | 3,019,271 | ||||||||||||||||||||
Ending balance | $ | 4,065,000 | $ | 5,621,854 | $ | 4,492,887 | $ | 798,403 | $ | 431,685 | $ | — | $ | 15,409,829 | |||||||||||||
(1) The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The total principal balance is presented and excludes the purchase discount and any additional advances subsequent to acquisition date. | |||||||||||||||||||||||||||
(2) Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||||||||||||
Allowance for Unfunded Loan Commitments, Off-Balance Sheet Credit Exposures and Recourse Provisions—The allowance for unfunded loan commitments, off-balance sheet credit exposures and recourse provisions is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to these unfunded credit facilities. The determination of the adequacy of the allowance is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. As of December 31, 2013 and 2012, the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions amounted to $11.3 million and $9.4 million, respectively. The increase to this allowance during the year was reflective of additional reserve allocated for unfunded construction loan commitments. Net adjustments to the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provisions are included in the provision for loan losses. | |||||||||||||||||||||||||||
Loans serviced for others amounted to $1.35 billion and $1.65 billion at December 31, 2013 and 2012, respectively. These represent loans that have either been sold or securitized for which the Bank continues to provide servicing and has limited recourse. The majority of these loans are residential and CRE at December 31, 2013 and 2012. Of the total allowance for unfunded loan commitments, off-balance sheet credit exposures and recourse provisions, $3.2 million and $4.8 million pertain to these loans as of December 31, 2013 and 2012, respectively. These loans are maintained off-balance sheet and are not included in the loans receivable balance. | |||||||||||||||||||||||||||
NONCOVERED_OTHER_REAL_ESTATE_O
NON-COVERED OTHER REAL ESTATE OWNED | 12 Months Ended |
Dec. 31, 2013 | |
NON-COVERED OTHER REAL ESTATE OWNED | ' |
NON-COVERED OTHER REAL ESTATE OWNED | ' |
NOTE 9—NON-COVERED OTHER REAL ESTATE OWNED | |
As of December 31, 2013 and 2012, the Company had OREO properties with a combined carrying value of $18.9 million and $32.9 million, respectively. Approximately 30% and 68% of the carrying value of OREO properties as of December 31, 2013 were located in California and Nevada, respectively. During 2013, the Company foreclosed on properties with an aggregate carrying value of $9.4 million as of the foreclosure date. Additionally, the Company recorded $1.4 million in write-downs. During this period, the Company also sold 35 OREO properties for total proceeds of $25.5 million resulting in a total net gain on sale of $3.5 million. In comparison, during 2012, the Company foreclosed on properties with an aggregate carrying value of $40.6 million as of the foreclosure date. Additionally, the Company recorded $5.1 million in write-downs. During this period, the Company also sold 47 OREO properties for total proceeds of $34.1 million resulting in a total net gain on sale of $232 thousand and recoveries totaling $2.0 million. During the year ended December 31, 2011, the Company sold 51 OREO properties for total proceeds of $26.6 million for a net loss on sale of $151 thousand and charges against the allowance for loan losses totaling $780 thousand. | |
AFFORDABLE_HOUSING_PARTNERSHIP
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | ' | |||||||||||
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | ' | |||||||||||
NOTE 10—AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | ||||||||||||
The Company invests in certain limited partnerships that are formed to develop and operate apartment complexes designed as high-quality affordable housing for lower income tenants throughout the United States. The Company’s ownership amount in each limited partnership varies. Each of the partnerships must meet the regulatory requirements for affordable housing for a minimum 15-year compliance period to fully utilize the tax credits. The Company is not the primary beneficiary and, therefore, not required to consolidate these entities. Depending on the ownership percentage and the influence the Company has on the limited partnership, the Company uses either the equity method or cost method of accounting. If the partnerships cease to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken may be subject to recapture with interest. The balance of the investments in these entities was $165.7 million and $185.6 million at December 31, 2013 and 2012, respectively. | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Amount | Count | Amount | Count | |||||||||
(Dollars in thousands) | ||||||||||||
Tax credit partnerships: | ||||||||||||
Equity method | $ | 129,631 | 35 | $ | 142,507 | 35 | ||||||
Cost method | 35,145 | 13 | 42,591 | 16 | ||||||||
Total tax credit partnerships | 164,776 | 48 | 185,098 | 51 | ||||||||
Tax exempt bonds | 948 | 547 | ||||||||||
Grand total | $ | 165,724 | $ | 185,645 | ||||||||
The Company also invests in certain limited partnerships that qualify for Community Reinvestment Act (CRA) credits or that qualify for other types of tax credits. The Community Reinvestment Act encourages banks to meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes. The balance of CRA and other investments was $69.2 million and $45.9 million at December 31, 2013 and 2012, respectively, and is included in other assets in the consolidated balance sheets. | ||||||||||||
The Company finances the purchase of certain real estate tax credits generated by partnerships which own multiple properties currently under construction. These transactions were financed with non-recourse commitments which are collateralized by the Company’s partnership interests in the real estate investment tax credits. The Company’s unfunded commitments related to the affordable housing and other investments are payable on demand. Total unfunded commitments for these investments were $73.1 million and $84.6 million at December 31, 2013 and 2012, respectively, and are recorded in accrued expenses and other liabilities in the consolidated balance sheets. | ||||||||||||
The Company’s usage of federal tax credits approximated $34.2 million, $18.7 million and $11.1 million during 2013, 2012 and 2011, respectively. The Company’s remaining tax credits approximated $165.7 million at December 31, 2013. Affordable housing and other investments amortization amounted to $27.3 million, $18.1 million and $17.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. During 2013 and 2012, the Company had no impairment or sales of affordable housing and other investments. | ||||||||||||
PREMISES_AND_EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREMISES AND EQUIPMENT | ' | |||||||
PREMISES AND EQUIPMENT | ' | |||||||
NOTE 11—PREMISES AND EQUIPMENT | ||||||||
Premises and equipment consists of the following: | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Land | $ | 15,074 | $ | 15,545 | ||||
Office buildings | 157,166 | 82,418 | ||||||
Leasehold improvements | 26,195 | 29,635 | ||||||
Furniture, fixtures and equipment | 49,043 | 44,122 | ||||||
Total cost | 247,478 | 171,720 | ||||||
Accumulated depreciation and amortization | -69,768 | -64,203 | ||||||
Net book value | $ | 177,710 | $ | 107,517 | ||||
Depreciation expense on premises and equipment was $13.4 million, $13.2 million and $12.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. | ||||||||
The net increase in premises and equipment of $70.2 million during the year ended December 31, 2013 was primarily due to the purchase of the Company’s corporate office located in Pasadena, California. | ||||||||
Capitalized assets are depreciated or amortized on a straight-line basis in accordance with the estimated useful life for each fixed asset class. The estimated useful life for furniture and fixtures is seven years, office equipment is for five years, and twenty-five years for buildings and improvements. Leasehold improvements are amortized over the shorter of term of the lease or useful life. | ||||||||
GOODWILL_AND_OTHER_INTANGIBLE_
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
NOTE 12—GOODWILL AND OTHER INTANGIBLE ASSETS | ||||||||
Goodwill | ||||||||
The carrying amount of goodwill remained at $337.4 million as of December 31, 2013 and 2012. Goodwill is tested for impairment on an annual basis as of December 31, or more frequently as events occur, or as current circumstances and conditions warrant. The Company records impairment write-downs as charges to noninterest expense and adjustments to the carrying value of goodwill. Subsequent reversals of goodwill impairment are prohibited. | ||||||||
As of December 31, 2013, the Company’s market capitalization based on total outstanding common shares was $4.81 billion and its total stockholders’ equity was $2.36 billion. The Company performed its annual impairment test as of December 31, 2013 to determine whether and to what extent, if any, recorded goodwill was impaired. The analysis compared the fair value of each of the reporting units, including goodwill, to the respective carrying amounts. If the carrying amount of the reporting unit, including goodwill exceeds the fair value of that reporting unit, then further testing for goodwill impairment is performed. | ||||||||
The Company has identified three business divisions that meet the criteria of an operating segment in accordance with generally accepted accounting principles. The Company’s three operating segments are Retail Banking, Commercial Banking, and Other. The Company determined that there were no additional reporting units below each operating segment and therefore the reporting units are equivalent to the operating segments. For complete discussion and disclosure see Note 24 to the Company’s consolidated financial statements presented elsewhere in this report. | ||||||||
In order to determine the fair value of the reporting units, a combined income and market approach was used. Under the income approach, the Company provided a net income projection for the next 3 years plus a terminal growth rate that was used to calculate the discounted cash flows and the present value of the reporting units. Under the market approach, the fair value was calculated using the current fair values of comparable peer banks of similar size, geographic footprint and focus. The market capitalizations and multiples of these peer banks were used to calculate the market price of the Company and each reporting unit. The fair value was also subject to a control premium adjustment, which is the cost savings that a purchaser of the reporting units could achieve by eliminating duplicative costs. Under the combined income and market approaches, the value from each approach was appropriately weighted to determine the fair value. As a result of this analysis, the Company determined that there was no goodwill impairment at December 31, 2013 as the fair values of all reporting units exceeded the current carrying amounts of the goodwill. No assurance can be given that goodwill will not be written down in future periods. | ||||||||
The changes in the carrying amount of goodwill for the years ended December 31, 2013 and 2012 are summarized in the following table: | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Balance, beginning of year | $ | 337,438 | $ | 337,438 | ||||
Additions to goodwill | — | — | ||||||
Impairment write-down | — | — | ||||||
Purchase accounting adjustments | — | — | ||||||
Balance, end of year | $ | 337,438 | $ | 337,438 | ||||
Premiums on Acquired Deposits | ||||||||
The Company also has premiums on acquired deposits which represent the intangible value of depositor relationships resulting from deposit liabilities assumed in various acquisitions. These intangibles are tested for impairment on an annual basis, or more frequently as events occur, or as current circumstances and conditions warrant. As of December 31, 2013 and 2012, the gross carrying amount of premiums on acquired deposits remained at $100.2 million, and the related accumulated amortization totaled $53.3 million and $43.9 million, respectively. | ||||||||
The Company amortizes premiums on acquired deposits based on the projected useful lives of the related deposits. Amortization expense of premiums on acquired deposits was $9.4 million, $10.9 million and $12.3 million for the years ended December 31, 2013, 2012 and 2011, respectively. The Company did not record any impairment write-downs on deposit premiums during 2013, 2012 and 2011. | ||||||||
The following table provides the estimated future amortization expense of premiums on acquired deposits for the succeeding five years as follows: | ||||||||
Estimate For The Year Ending December 31, | Amount | |||||||
(In thousands) | ||||||||
2014 | $ | 8,454 | ||||||
2015 | 7,543 | |||||||
2016 | 6,634 | |||||||
2017 | 5,722 | |||||||
2018 | 4,908 | |||||||
Thereafter | 13,659 | |||||||
Total | $ | 46,920 | ||||||
CUSTOMER_DEPOSIT_ACCOUNTS
CUSTOMER DEPOSIT ACCOUNTS | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
CUSTOMER DEPOSIT ACCOUNTS | ' | ||||||||||
CUSTOMER DEPOSIT ACCOUNTS | ' | ||||||||||
NOTE 13—CUSTOMER DEPOSIT ACCOUNTS | |||||||||||
Customer deposit account balances are summarized as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
(In thousands) | |||||||||||
Noninterest-bearing demand | $ | 5,821,899 | $ | 4,535,877 | |||||||
Interest-bearing checking | 1,749,479 | 1,230,372 | |||||||||
Money market accounts | 5,383,759 | 5,000,309 | |||||||||
Savings deposits | 1,633,433 | 1,421,182 | |||||||||
Total core deposits | 14,588,570 | 12,187,740 | |||||||||
Time deposits: | |||||||||||
Less than $100,000 | 1,678,850 | 1,884,577 | |||||||||
$100,000 or greater | 4,145,498 | 4,237,037 | |||||||||
Total time deposits | 5,824,348 | 6,121,614 | |||||||||
Total deposits | $ | 20,412,918 | $ | 18,309,354 | |||||||
The $4.15 billion and $4.24 billion balance of time deposits $100 thousand or greater at December 31, 2013 and 2012, includes $169.7 million and $319.3 million respectively, of deposits held by the Company’s foreign branch located in Hong Kong. | |||||||||||
At December 31, 2013, the scheduled maturities of time deposits are as follows: | |||||||||||
$100,000 or | Less Than | ||||||||||
Greater | $100,000 | Total | |||||||||
(In thousands) | |||||||||||
2014 | $ | 3,178,469 | $ | 1,413,205 | $ | 4,591,674 | |||||
2015 | 370,754 | 176,714 | 547,468 | ||||||||
2016 | 129,854 | 21,728 | 151,582 | ||||||||
2017 | 183,622 | 36,468 | 220,090 | ||||||||
2018 | 165,284 | 30,731 | 196,015 | ||||||||
Thereafter | 117,515 | 4 | 117,519 | ||||||||
Total | $ | 4,145,498 | $ | 1,678,850 | $ | 5,824,348 | |||||
Accrued interest payable totaled $5.2 million and $4.7 million at December 31, 2013 and 2012, respectively. Interest expense on customer deposits by account type is summarized as follows: | |||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(In thousands) | |||||||||||
Interest-bearing checking | $ | 3,556 | $ | 3,163 | $ | 3,009 | |||||
Money market accounts | 15,019 | 16,984 | 20,610 | ||||||||
Savings deposits | 2,961 | 2,795 | 2,988 | ||||||||
Time deposits: | |||||||||||
Less than $100,000 | 15,485 | 20,655 | 29,329 | ||||||||
$100,000 or greater | 26,475 | 32,298 | 51,174 | ||||||||
Total | $ | 63,496 | $ | 75,895 | $ | 107,110 | |||||
As of December 31, 2013, time deposits within the Certificate of Deposit Account Registry Service (“CDARS”) program decreased to $203.3 million, compared to $260.5 million at December 31, 2012. The CDARS program allows customers with deposits in excess of FDIC-insured limits to obtain full coverage on time deposits through a network of banks within the CDARS program. Additionally, the Company is partnered with another financial institution and offers a retail sweep product for non-time deposit accounts to provide added deposit insurance coverage for deposits in excess of FDIC-insured limits. Deposits gathered through these programs are considered brokered deposits under current regulatory reporting guidelines. | |||||||||||
FEDERAL_FUNDS_PURCHASED
FEDERAL FUNDS PURCHASED | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
FEDERAL FUNDS PURCHASED | ' | ||||||||||
FEDERAL FUNDS PURCHASED | ' | ||||||||||
NOTE 14—FEDERAL FUNDS PURCHASED | |||||||||||
Federal funds purchased generally mature within one business day to six months from the transaction date. Federal funds purchased are included in other borrowings. | |||||||||||
The following table provides information on Federal funds purchased for the periods indicated: | |||||||||||
As of and for the Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(Dollars in thousands) | |||||||||||
Balance at end of year | $ | — | $ | — | $ | — | |||||
Average balance outstanding during the year | $ | 155 | $ | 2,227 | $ | 3,496 | |||||
Maximum balance outstanding at any month-end | $ | — | $ | 60,000 | $ | 100,000 | |||||
Weighted average interest rate during the year | —% | 0.09% | 0.10% | ||||||||
Weighted average interest rate at end of year | —% | —% | —% | ||||||||
As a means of augmenting its liquidity, the Company has established Federal funds lines with several correspondent banks. The Company’s available borrowing capacity from Federal funds line facilities amounted to $656.0 million and $588.0 million as of December 31, 2013 and 2012, respectively. | |||||||||||
FEDERAL_HOME_LOAN_BANK_ADVANCE
FEDERAL HOME LOAN BANK ADVANCES | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
FEDERAL HOME LOAN BANK ADVANCES | ' | |||||||||||
FEDERAL HOME LOAN BANK ADVANCES | ' | |||||||||||
NOTE 15—FEDERAL HOME LOAN BANK ADVANCES | ||||||||||||
Federal Home Loan Bank (“FHLB”) advances and their related weighted average interest rates are summarized as follows: | ||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||
Amount | Rate | Amount | Rate | |||||||||
Year of Maturity | (Dollars in thousands) | |||||||||||
2014 | $ | — | —% | $ | — | —% | ||||||
2015 | — | —% | — | —% | ||||||||
2016 | — | —% | — | —% | ||||||||
2017 | — | —% | — | —% | ||||||||
After 2017 | 315,092 | 0.61% | 312,975 | 0.63% | ||||||||
Total | $ | 315,092 | 0.61% | $ | 312,975 | 0.63% | ||||||
Total outstanding FHLB advances amounted to $315.1 million and $313.0 million at December 31, 2013 and 2012, respectively. There were no outstanding overnight borrowings at December 31, 2013 and 2012. During the year, the Company did not restructure any FHLB advances. In comparison, the Company restructured FHLB advances of $375.0 million during 2012, reducing the contractual average effective rates on these borrowings. As a result of the modification the Company incurred a $48.2 million modification cost which has been deferred and is being treated as a discount on the corresponding debt. All advances as of December 31, 2013 and December 31, 2012 are secured by real estate loans. | ||||||||||||
The Company’s available borrowing capacity from unused FHLB advances totaled $3.70 billion and $3.25 billion at December 31, 2013 and 2012, respectively. The Company’s available borrowing capacity from FHLB advances is derived from its outstanding FHLB advances and from its portfolio of loans that are pledged to the FHLB. There was no prepayment of FHLB advances during 2013. In comparison, the Company prepaid $93.0 million of FHLB advances, with a related $6.8 million in prepayment penalties during 2012. Also, at December 31, 2013 and 2012, the Company had additional available borrowing capacity of $1.42 billion and $1.31 billion, respectively, from the Federal Reserve Bank’s discount window derived from its portfolio of loans that are pledged to the Federal Reserve Bank. | ||||||||||||
SECURITIES_SOLD_UNDER_REPURCHA
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS | ' | ||||||||||||
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS | ' | ||||||||||||
NOTE 16—SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS | |||||||||||||
Securities sold under repurchase agreements remained at $995.0 million as of December 31, 2013 and 2012, respectively. As of December 31, 2013, the Company did not modify any long-term repurchase agreements. In comparison, the Company modified $200.0 million and $150.0 million of long-term repurchase agreements during the first and fourth quarter of 2012, extending the term and reducing the rate of these agreements by 86 basis points and 195 basis points, respectively. As of December 31, 2013, all repurchase agreements are long-term with interest rates that are largely fixed, ranging from 2.49% to 5.01%. The counterparties have the right to a quarterly call for many of the repurchase agreements. | |||||||||||||
Long-term repurchase agreements are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The collateral for these agreements consist of U.S. Government agency and U.S. Government sponsored enterprise debt and mortgage-backed securities. The Company may have to provide additional collateral for the repurchase agreements, as necessary. | |||||||||||||
The following table provides information on securities sold under repurchase agreements as of December 31, 2013 and 2012: | |||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||
Amount | Rate | Amount | Rate | ||||||||||
Year of Maturity | (Dollars in thousands) | ||||||||||||
2015 | $ | 245,000 | 4.49% | $ | 245,000 | 4.49% | |||||||
2016 | 250,000 | 5.01% | 350,000 | 4.96% | |||||||||
2017 | 50,000 | 4.15% | 50,000 | 4.15% | |||||||||
2022 | 350,000 | 3.51% | 350,000 | 3.53% | |||||||||
2023 | 100,000 | 2.49% | — | — | |||||||||
Total | $ | 995,000 | 4.06% | $ | 995,000 | 4.30% | |||||||
Total interest expense recorded on repurchase agreements amounted to $41.4 million, $46.2 million and $48.6 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||
The Company also has master repurchase agreements with other major brokerage companies. The Company’s available borrowing capacity from repurchase agreements totaled $811.1 million and $1.19 billion at December 31, 2013 and 2012, respectively. | |||||||||||||
In 2013, there were no other borrowings. In comparison, other borrowings totaled $20.0 million as of December 31, 2012. The $20.0 million borrowing was a short-term borrowing in the Company’s Hong Kong office with a maturity of two days and an annual rate of 0.25%. | |||||||||||||
CAPITAL_RESOURCES_AND_OTHER_LO
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | ' | |||||||||||
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | ' | |||||||||||
NOTE 17—CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | ||||||||||||
Junior Subordinated Debt—As of December 31, 2013, the Company has six statutory business trusts for the purpose of issuing junior subordinated debt to third party investors. Junior subordinated debt is recorded as a component of long-term debt and includes the value of the common stock issued by the Trusts to the Company in conjunction with these transactions. The common stock is recorded in other assets for the amount issued in connection with these junior subordinated debt issuances. Junior subordinated debt outstanding, issued by the Trusts to the Company, totaled $123.0 million at December 31, 2013, compared to $133.0 million at December 31, 2012. The junior subordinated debt of one statutory business trust was called during 2013 in order to reduce higher interest-bearing debt and the phase-out of trust preferred securities as Tier I regulatory capital. The related common stock outstanding, issued by the Trust to the Company amounted to $3.9 million and $4.2 million at December 31, 2013 and 2012, respectively. | ||||||||||||
The proceeds from these issuances represent liabilities of the Company to the Trusts and are reported in the consolidated balance sheets as a component of long-term debt. Interest payments on these securities are made either quarterly or semi-annually and are deductible for tax purposes. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, bank holding companies with more than $15 billion in total consolidated assets are no longer able to include trust preferred securities as Tier I regulatory capital which commenced in 2013 with phase-out complete by 2016. The junior subordinated debt is being phased out 25% each year, over the four year period, from Tier I capital into Tier II capital for regulatory purposes. This junior subordinated debt was issued in connection with our various pooled trust preferred securities offerings. | ||||||||||||
The table below summarizes pertinent information related to outstanding junior subordinated debt issued by each Trust as of December 31, 2013 and 2012: | ||||||||||||
Rate at | Balance at | |||||||||||
Stated | December 31, | December 31, | ||||||||||
Trust Name | Maturity Date (1) | Interest Rate | 2013 | 2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||||||
East West Capital Statutory Trust III | December 2033 | 3-month Libor + 2.85% | — | — | 10,000 | |||||||
East West Capital Trust IV | July 2034 | 3-month Libor + 2.55% | 2.79% | 10,000 | 10,000 | |||||||
East West Capital Trust V | November 2034 | 3-month Libor + 1.80% | 2.04% | 15,000 | 15,000 | |||||||
East West Capital Trust VI | September 2035 | 3-month Libor + 1.50% | 1.74% | 20,000 | 20,000 | |||||||
East West Capital Trust VII | June 2036 | 3-month Libor + 1.35% | 1.59% | 30,000 | 30,000 | |||||||
East West Capital Trust VIII | June 2037 | 3-month Libor + 1.40% | 1.64% | 18,000 | 18,000 | |||||||
East West Capital Trust IX | September 2037 | 3-month Libor + 1.90% | 2.14% | 30,000 | 30,000 | |||||||
$123,000 | $133,000 | |||||||||||
(1) All of the above debt instruments are subject to various call options. | ||||||||||||
Other Long-Term Debt—During the third quarter of 2013, the Company entered into a three-year term loan agreement for $100.0 million. The three-year term loan will mature on July 1, 2016 and is payable in quarterly installments commencing on March 31, 2014. The interest rate is 1.75% at December 31, 2013, which is based on the three-month LIBOR plus 150 basis points. As of December 31, 2013, the Company advanced the full $100.0 million. The term loan agreement is included in long-term debt in the consolidated balance sheets. | ||||||||||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
INCOME TAXES | ' | |||||||||||||||||||||||||
INCOME TAXES | ' | |||||||||||||||||||||||||
NOTE 18—INCOME TAXES | ||||||||||||||||||||||||||
The provision for income taxes was $130.8 million in 2013, representing an effective tax rate of 30.7%, compared to $143.9 million, representing an effective tax rate of 33.8% and $138.1 million, representing an effective tax rate of 36.0% for 2012 and 2011, respectively. Included in the income tax recognized during 2013 is $35.0 million in tax credits generated from our investments in affordable housing partnerships and other investments and other federal tax credits. In comparison, included in the income tax recognized during 2012 and 2011 are $18.7 million and $11.1 million, respectively, in tax credits generated from our investments in affordable housing partnerships and other investments. | ||||||||||||||||||||||||||
Management regularly reviews the Company’s tax positions and deferred tax assets. Factors considered in this analysis include future reversals of existing temporary differences, future taxable income exclusive of reversing differences, taxable income in prior carryback years, and tax planning strategies. The Company accounts for income taxes using the asset and liability approach, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities at enacted rates expected to be in effect when such amounts are realized and settled. Based on the available evidence, Management has concluded that it is more likely than not that all of the benefit of the deferred tax assets will be realized, with the exception of the deferred tax assets related to certain state net operating loss carryforwards and certain foreign losses. Accordingly, a valuation allowance has been recorded for these amounts. | ||||||||||||||||||||||||||
As of December 31, 2013, the Company had a net deferred tax asset of $255.5 million. | ||||||||||||||||||||||||||
The provision for income taxes consists of the following components: | ||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Current income tax expense (benefit): | ||||||||||||||||||||||||||
Federal | $ | 131,236 | $ | 148,572 | $ | -86,157 | ||||||||||||||||||||
State | 44,389 | 2,316 | 34,760 | |||||||||||||||||||||||
Foreign | 208 | 5,704 | — | |||||||||||||||||||||||
Total current income tax expense (benefit) | 175,833 | 156,592 | -51,397 | |||||||||||||||||||||||
Deferred income tax (benefit) expense: | ||||||||||||||||||||||||||
Federal | -32,963 | -38,749 | 193,834 | |||||||||||||||||||||||
State | -13,677 | 26,099 | -7,706 | |||||||||||||||||||||||
Foreign | 1,612 | — | 3,369 | |||||||||||||||||||||||
Total deferred income tax (benefit) expense | -45,028 | -12,650 | 189,497 | |||||||||||||||||||||||
Provision for income taxes | $ | 130,805 | $ | 143,942 | $ | 138,100 | ||||||||||||||||||||
The difference between the effective tax rate implicit in the consolidated financial statements and the statutory federal income tax rate can be attributed to the following: | ||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
Federal income tax provision at statutory rate | 35.00% | 35.00% | 35.00% | |||||||||||||||||||||||
State franchise taxes, net of federal tax effect | 4.7 | 4.3 | 4.3 | |||||||||||||||||||||||
Tax credits | -8.4 | -5.3 | -2.7 | |||||||||||||||||||||||
Other, net | -0.6 | -0.2 | -0.6 | |||||||||||||||||||||||
Effective income tax rate | 30.70% | 33.80% | 36.00% | |||||||||||||||||||||||
The Company recognizes investment tax credits from low income housing and other investments in the year the credit arises under the flow-through method of accounting. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) are presented below: | ||||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Federal | State | Foreign | Total | Federal | State | Foreign | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Deferred tax liabilities: | ||||||||||||||||||||||||||
Core deposit intangibles | $ | -16,422 | $ | -4,642 | $ | — | $ | -21,064 | $ | -15,755 | $ | -4,635 | $ | 133 | $ | -20,257 | ||||||||||
Affordable housing partnerships and other investments | -14,158 | -1,730 | — | -15,888 | -16,221 | -4,337 | — | -20,558 | ||||||||||||||||||
Fixed assets | -15,594 | -3,879 | — | -19,473 | -17,201 | -4,289 | — | -21,490 | ||||||||||||||||||
FHLB stock | -11,337 | -3,224 | — | -14,561 | -17,670 | -9,140 | — | -26,810 | ||||||||||||||||||
Deferred loan fees | -1,976 | -557 | — | -2,533 | -2,523 | -719 | — | -3,242 | ||||||||||||||||||
Purchased loan discounts | -98 | -28 | — | -126 | -126 | -36 | — | -162 | ||||||||||||||||||
State taxes | -1,079 | — | — | -1,079 | -7,894 | — | — | -7,894 | ||||||||||||||||||
Mortgage servicing assets | — | — | — | — | -1,812 | -517 | — | -2,329 | ||||||||||||||||||
Section 597 gain | -48,370 | -1,317 | — | -49,687 | -94,231 | -2,684 | — | -96,915 | ||||||||||||||||||
FDIC receivable | -245,907 | -6,695 | — | -252,602 | -318,741 | -9,405 | — | -328,146 | ||||||||||||||||||
Acquired debt | -10,812 | -1,042 | — | -11,854 | -10,812 | -1,061 | -300 | -12,173 | ||||||||||||||||||
Other, net | -6,805 | 923 | — | -5,882 | -604 | 627 | — | 23 | ||||||||||||||||||
Total gross deferred tax (liabilities) | -372,558 | -22,191 | — | -394,749 | -503,590 | -36,196 | -167 | -539,953 | ||||||||||||||||||
Deferred tax assets: | ||||||||||||||||||||||||||
Allowance for loan losses and REO reserves | 93,018 | 23,046 | — | 116,064 | 93,924 | 23,281 | -5,220 | 111,985 | ||||||||||||||||||
Deferred compensation | 13,322 | 3,824 | — | 17,146 | 18,213 | 5,262 | — | 23,475 | ||||||||||||||||||
Mortgage servicing assets | 287 | 81 | — | 368 | — | — | — | — | ||||||||||||||||||
Purchased loan premium | 424 | 120 | — | 544 | 485 | 139 | — | 624 | ||||||||||||||||||
Unrealized loss on securities | 62,535 | 19,177 | — | 81,712 | 47,567 | 12,816 | — | 60,383 | ||||||||||||||||||
Net operating loss carryforwards | — | 993 | — | 993 | — | 698 | — | 698 | ||||||||||||||||||
Acquired loans and REOs | 366,290 | 26,959 | 959 | 394,208 | 478,825 | 29,796 | 7,957 | 516,578 | ||||||||||||||||||
Other, net | 30,768 | 8,716 | 97 | 39,581 | 9,021 | 3,177 | 97 | 12,295 | ||||||||||||||||||
Total gross deferred tax assets | 566,644 | 82,916 | 1,056 | 650,616 | 648,035 | 75,169 | 2,834 | 726,038 | ||||||||||||||||||
Valuation allowance | — | -337 | — | -337 | — | -372 | — | -372 | ||||||||||||||||||
Net deferred tax assets | $ | 194,086 | $ | 60,388 | $ | 1,056 | $ | 255,530 | $ | 144,445 | $ | 38,601 | $ | 2,667 | $ | 185,713 | ||||||||||
Management believes that it is more likely than not that all of the deferred tax assets recorded at December 31, 2013 will be realized (except to the extent of the recorded valuation allowance) because it expects to have sufficient taxable income in future years to fully realize them. A valuation allowance has been provided for the state net operating losses (“NOLs”) (for states other than California, Georgia, Massachusetts and New York) since management believes that these NOLs may not be fully utilized. At December 31, 2013, the Bank had state net operating loss carryforwards of approximately $6.0 million. | ||||||||||||||||||||||||||
The following table summarizes the activity related to our unrecognized tax benefits: | ||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Balance, beginning of year | $ | 3,457 | $ | 3,332 | ||||||||||||||||||||||
Additions for tax positions of prior years | 232 | — | ||||||||||||||||||||||||
Reductions for tax positions of prior years | — | — | ||||||||||||||||||||||||
Additions for tax positions of current year | 988 | 1,060 | ||||||||||||||||||||||||
Settlements | — | -935 | ||||||||||||||||||||||||
Balance, end of year | $ | 4,677 | $ | 3,457 | ||||||||||||||||||||||
For the years ended December 31, 2013 and 2012, the Company increased the unrecognized tax benefits reserve by $1.2 million and $1.1 million, respectively, for the California enterprise zone net interest deduction. There were no reductions in unrecognized tax benefits for 2013. As of December 31, 2013 and 2012, the liability for uncertain tax positions was $6.3 million and $6.1 million, respectively. Also, for the years ended December 31, 2013 and 2012, the total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $3.0 million and $2.2 million, respectively. | ||||||||||||||||||||||||||
During 2013, the Company closed the Internal Revenue Service (“IRS”) examination of the 2011 tax year with no material changes. In 2012, the Company executed a Memorandum of Understanding (“MOU”) with the IRS for the 2012 tax year to voluntarily participate in the IRS Compliance Assurance Process (“CAP”) where the IRS will assist the Company in identifying and resolving any tax issues that may arise throughout the 2012 tax year. The objective of the CAP is to resolve issues in a timely and contemporaneous manner and eliminate the need for a lengthy post-filing examination. The 2012 tax return filed in September 2013 received a full acceptance of all tax matters from the IRS. The Company has entered a MOU with the IRS for the 2013 and 2014 tax years. For federal tax purposes, tax years from 2010 and beyond remain open. For California franchise tax purposes, tax years from 2003 and beyond remain open. The states of Alabama, Florida, New York, Ohio and Texas have initiated audits of East West Bank’s corporate income tax returns through the 2012 tax year. The Company does not believe that the outcome of unresolved issues or claims in any tax jurisdiction is likely to be material to the Company’s financial position, cash flows or results of operations. The Company further believes that adequate provisions have been made for all income tax uncertainties. The Company does not anticipate that the total amount of unrecognized tax benefits will significantly change during the year ending December 31, 2014. | ||||||||||||||||||||||||||
The Company recognizes interest and penalties, if applicable, related to the underpayment of income taxes as a component of income tax expense in the consolidated statement of operations. The Company accrued interest and penalties of ($744) thousand, $1.2 million and $287 thousand for its unrecognized tax positions as of December 31, 2013, 2012 and 2011, respectively. Total interest and penalties accrued as of December 31, 2013 and 2012 were $1.6 million and $2.7 million, respectively. | ||||||||||||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
NOTE 19—COMMITMENTS AND CONTINGENCIES | |||||
Credit Extensions—In the normal course of business, the Company has various outstanding commitments to extend credit that are not reflected in the accompanying consolidated financial statements. While the Company does not anticipate losses as a result of these transactions, commitments to extend credit are included in determining the appropriate level of the allowance for unfunded commitments and credit exposures. | |||||
Loan commitments are agreements to lend to a customer provided there is no violation of any condition established in the agreement. Commitments generally have fixed expiration dates or other termination clauses. Because many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future funding requirements. As of December 31, 2013 and 2012, undisbursed loan commitments amounted to $4.02 billion and $2.61 billion, respectively. Substantially all commitments are for loans to be held for investment. | |||||
Commercial letters of credit are issued to facilitate domestic and foreign trade transactions while standby letters of credit are issued to make payments on behalf of customers when certain specified future events occur. As of December 31, 2013 and 2012, commercial and standby letters of credit totaled $1.16 billion and $988.7 million, respectively. The Bank issues standby letters of credit (“SBLCs”) and financial guarantees to support the obligations of its customers to beneficiaries. Based on historical trends, the probability that it will have to make payments under standby letters of credit is low. Additionally, in many cases, the Bank holds collateral in various forms against these standby letters of credit. As part of its risk management activities, the Bank monitors the creditworthiness of the customer as well as its SBLC exposure; however, if the customer fails to perform the specified obligation to the beneficiary, the beneficiary may draw upon the standby letters of credit by presenting documents that are in compliance with the letter of credit terms. In that event, the Bank either repays the money borrowed or advanced, makes payment on account of the indebtedness of the customer or makes payment on account of the default by the customer in the performance of an obligation, to the beneficiary up to the full notional amount of the standby letters of credit. The customer is obligated to reimburse the Bank for any such payment. If the customer fails to pay, the Bank would, as applicable, liquidate collateral and/or set off accounts. | |||||
Credit card lines are unsecured commitments that are not legally binding. Management reviews credit card lines at least annually and, upon evaluation of the customers’ creditworthiness, the Bank has the right to terminate or change certain terms of the credit card lines. | |||||
The Bank uses the same credit policies in making commitments and conditional obligations as in extending loan facilities to customers. It evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. | |||||
As of December 31, 2013 and 2012, the allowance for unfunded loan commitments, off-balance sheet credit exposures, and recourse provision amounted to $11.3 million and $9.4 million, respectively. These amounts are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. | |||||
Guarantees — From time to time, the Company sells or securitizes loans with recourse in the ordinary course of business. For loans that have been sold or securitized with recourse, the recourse component is considered a guarantee. When the Company sells or securitizes a loan with recourse, it commits to stand ready to perform if the loan defaults, and to make payments to remedy the default. As of December 31, 2013, total loans sold or securitized with recourse amounted to $338.8 million and were comprised of $42.2 million in single-family loans with full recourse and $296.6 million in multifamily loans with limited recourse. In comparison, total loans sold or securitized with recourse amounted to $461.8 million at December 31, 2012, comprised of $48.4 million in single-family loans with full recourse and $413.4 million in multifamily loans with limited recourse. In conjunction with the UCB Purchase and Assumption Agreement, East West Bank assumed all servicing agreements the prior UCB had entered into. The recourse provision on multifamily loans varies by loan sale and is limited to 4% of the top loss on the underlying loans. The Company’s recourse reserve related to loan sales and securitizations totaled $3.2 million and $4.8 million as of December 31, 2013 and 2012, respectively, and is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. The Company continues to experience minimal losses from the single-family and multifamily loan portfolios. | |||||
The Company also sells or securitizes loans without recourse that may have to be subsequently repurchased if a defect that occurred during the loan origination process results in a violation of a representation or warranty made in connection with the securitization or sale of the loan. When a loan sold or securitized to an investor without recourse fails to perform according to its contractual terms, the investor will typically review the loan file to determine whether defects in the origination process occurred and if such defects give rise to a violation of a representation or warranty made to the investor in connection with the sale or securitization. If such a defect is identified, the Company may be required to either repurchase the loan or indemnify the investor for losses sustained. If there are no such defects, the Company has no commitment to repurchase the loan. As of December 31, 2013 and 2012, the amount of loans sold without recourse totaled $818.2 million and $953.2 million, respectively. Total loans securitized without recourse amounted to $193.8 million and $235.8 million, respectively, at December 31, 2013 and 2012. The loans sold or securitized without recourse represent the unpaid principal balance of the Company’s loans serviced for others portfolio. | |||||
Lease Commitments—The Company conducts a portion of its operations utilizing leased premises and equipment under operating leases. Rental expense amounted to $26.2 million, $25.8 million and $22.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||
Future minimum rental payments under non-cancelable operating leases are estimated as follows: | |||||
Estimate For The Year Ending December 31, | Amount | ||||
(In thousands) | |||||
2014 | $ | 23,356 | |||
2015 | 19,492 | ||||
2016 | 14,566 | ||||
2017 | 10,891 | ||||
2018 | 8,096 | ||||
Thereafter | 21,400 | ||||
Total | $ | 97,801 | |||
Litigation—Neither the Company nor the Bank is involved in any material legal proceedings at December 31, 2013. Certain lawsuits and claims arising in the ordinary course of business have been filed or are pending against us or our affiliates. Where appropriate, we establish reserves in accordance with ASC 450, Contingencies. The outcome of litigation and other legal and regulatory matters is inherently uncertain, however, and it is possible that one or more of the legal or regulatory matters, if any, currently pending or threatened could have a material adverse effect on our liquidity, consolidated financial position, and/or results of operations. | |||||
Other Commitments—The Company has commitments to invest in affordable housing funds, and other investments qualifying for community reinvestment tax credits or other types of tax credits. These commitments are payable on demand. As of December 31, 2013 and 2012 these commitments were $73.1 million and $84.6 million, respectively. These commitments are recorded in accrued expenses and other liabilities in the consolidated balance sheet. | |||||
STOCK_COMPENSATION_PLANS
STOCK COMPENSATION PLANS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCK COMPENSATION PLANS | ' | |||||||||||||
STOCK COMPENSATION PLANS | ' | |||||||||||||
NOTE 20—STOCK COMPENSATION PLANS | ||||||||||||||
The Company issues stock options and restricted stock awards to employees under share-based compensation plans. During the years ended December 31, 2013, 2012 and 2011, total compensation expense related to stock options and restricted stock awards reduced income before taxes by $13.5 million, $12.7 million and $13.5 million, respectively, and reduced net income by $7.9 million, $7.3 million and $7.9 million, respectively. | ||||||||||||||
The Company received $1.7 million and $2.7 million as of December 31, 2013 and 2012, respectively, in cash proceeds from stock option exercises. The net tax benefit recognized in equity for stock compensation plans was $5.5 million for 2013 compared with $462 thousand for 2012. | ||||||||||||||
As of December 31, 2013, there are 4,160,200 shares available to be issued, subject to the Company’s current 1998 Stock Incentive Plan, as amended. | ||||||||||||||
Stock Options—The Company issues fixed stock options to certain employees, officers, and directors. Stock options are issued at the current market price on the date of grant with a three-year or four-year vesting period and contractual terms of 7 or 10 years. The Company issues new shares upon the exercise of stock options. | ||||||||||||||
A summary of activity for the Company’s stock options as of and for the year ended December 31, 2013 is presented below: | ||||||||||||||
Weighted | ||||||||||||||
Weighted | Average | Aggregate | ||||||||||||
Average | Remaining | Intrinsic | ||||||||||||
Exercise | Contractual | Value | ||||||||||||
Shares | Price | Term | (In thousands) | |||||||||||
Outstanding at beginning of year | 677,708 | $ | 28.41 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | -91,540 | 18.35 | ||||||||||||
Forfeited | -179,437 | 37.36 | ||||||||||||
Outstanding at end of year | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
Vested or expected to vest at year-end | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
Exercisable at year-end | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
A summary of changes in unvested stock options and related information for the year ended December 31, 2013 is presented below: | ||||||||||||||
Weighted | ||||||||||||||
Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Unvested Options | Shares | (per share) | ||||||||||||
Unvested at January 1, 2013 | 14,502 | $ | 3 | |||||||||||
Granted | — | — | ||||||||||||
Vested | -14,502 | 3 | ||||||||||||
Forfeited | — | — | ||||||||||||
Unvested at December 31, 2013 | — | $ | — | |||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013(5) | 2012(5) | 2011 | ||||||||||||
Expected term (1) | N/A | N/A | 4 years | |||||||||||
Expected volatility (2) | N/A | N/A | 78.10% | |||||||||||
Expected dividend yield (3) | N/A | N/A | 0.20% | |||||||||||
Risk-free interest rate (4) | N/A | N/A | 1.60% | |||||||||||
(1) The expected term (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees. | ||||||||||||||
(2) The expected volatility was based on historical volatility for a period equal to the stock option’s expected term. | ||||||||||||||
(3) The expected dividend yield is based on the Company’s prevailing dividend rate at the time of grant. | ||||||||||||||
(4) The risk-free rate is based on the U.S. Treasury strips in effect at the time of grant equal to the stock option’s expected term. | ||||||||||||||
(5) The Company did not issue any stock options during the years ended December 31, 2013 and December 31, 2012 | ||||||||||||||
The following table summarizes information about stock options outstanding as of December 31, 2013: | ||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted | Weighted | Weighted | ||||||||||||
Number of | Average | Average | Number of | Average | ||||||||||
Range of | Outstanding | Exercise | Remaining | Exercisable | Exercise | |||||||||
Exercise Prices | Options | Price | Contractual Life | Options | Price | |||||||||
$10.00 to $14.99 | 2,365 | $ | 14.95 | 2.02 years | 2,365 | $ | 14.95 | |||||||
$20.00 to $24.99 | 273,852 | 21.09 | 1.13 years | 273,852 | 21.09 | |||||||||
$35.00 to $39.99 | 130,514 | 38.76 | 0.16 years | 130,514 | 38.76 | |||||||||
$10.00 to $39.99 | 406,731 | $ | 26.72 | 0.83 years | 406,731 | $ | 26.72 | |||||||
During the years ended December 31, 2013, 2012 and 2011, information related to stock options are presented as follows: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Weighted average grant date fair value of stock options granted during the year(1) | N/A | N/A | $ | 13.21 | ||||||||||
Total intrinsic value of options exercised (in thousands) | $ | 926 | $ | 978 | $ | 2,650 | ||||||||
Total fair value of options vested (in thousands) | $ | 363 | $ | 3,717 | $ | 1,274 | ||||||||
(1) The Company did not issue any stock options during the years ended December 31, 2013 and December 31, 2012. | ||||||||||||||
As of December 31, 2013, all stock options are fully vested and all compensation cost related to stock options have been recognized. | ||||||||||||||
Restricted Stock Awards— In addition to stock options, the Company also grants restricted stock awards to directors, officers and employees. The restricted stock awards fully vest after one to five years of continued employment from the date of grant; some of the awards are also subject to achievement of certain established financial goals. The Company becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock when the restrictions are released and the shares are issued. Restricted stock awards are forfeited if officers and employees terminate employment prior to the lapsing of restrictions or if established financial goals are not achieved. The Company records forfeitures of issued restricted stock as treasury share repurchases. | ||||||||||||||
A summary of the activity for the Company’s time-based and performance-based restricted stock awards as of December 31, 2013, including changes during the year then ended, is presented below: | ||||||||||||||
2013 | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
Time-Based | Performance-Based | |||||||||||||
Weighted | Weighted | |||||||||||||
Average | Average | |||||||||||||
Shares | Price | Shares | Price | |||||||||||
Outstanding at beginning of year | 1,512,396 | $ | 16.3 | 694,838 | $ | 22.43 | ||||||||
Granted | 70,150 | 28.55 | 477,165 | 25.25 | ||||||||||
Vested | -1,073,512 | 16.38 | -171,648 | 22.59 | ||||||||||
Forfeited | -70,526 | 17.98 | -43,648 | 23.98 | ||||||||||
Outstanding at end of year | 438,508 | $ | 17.79 | 956,707 | $ | 23.74 | ||||||||
During 2013 there were no restricted stock granted to outside directors. | ||||||||||||||
Restricted stock awards are valued at the closing price of the Company’s stock on the date of award. The weighted average fair values of time-based restricted stock awards granted during the years ended December 31, 2013, 2012, and 2011 were $28.55, $21.66, and $19.17, respectively. The weighted average fair value of performance-based restricted stock awards granted during the year ended December 31, 2013, 2012 and 2011 were $25.25, $22.05 and $22.25. The total fair value of time-based restricted stock awards vested during 2013, 2012 and 2011 was $29.4 million, $3.5 million and $4.9 million, respectively. The total fair value of performance-based restricted stock award vested during 2013 and 2012 were $4.4 million and $4.7 million, respectively. There were no performance-based restricted stock awards vested during the year ended December 31, 2011. | ||||||||||||||
As of December 31, 2013, total unrecognized compensation cost related to time-based and performance-based restricted stock awards amounted to $3.8 million and $12.8 million, respectively. This cost is expected to be recognized over a weighted average period of 2.67 years and 1.81 years, respectively. | ||||||||||||||
Stock Purchase Plan—The Company adopted the 1998 Employee Stock Purchase Plan (the “Purchase Plan”) providing eligible employees of the Company and its subsidiaries participation in the ownership of the Company through the right to purchase shares of its common stock at a discount. The Purchase Plan allows employees to purchase shares at 90% of the per share market price at the date of exercise, with an annual common stock value purchase limitation of $25,000. As of December 31, 2013, the Purchase Plan qualifies as a non-compensatory plan under Section 423 of the Internal Revenue Code and, accordingly, no compensation expense is recognized under the Purchase Plan. | ||||||||||||||
The Purchase Plan covers a total of 2,000,000 shares of the Company’s common stock. During 2013 and 2012, 53,015 shares totaling $1.4 million and 59,142 shares totaling $1.2 million, respectively, were sold to employees under the Purchase Plan. | ||||||||||||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2013 | |
EMPLOYEE BENEFIT PLANS | ' |
EMPLOYEE BENEFIT PLANS | ' |
NOTE 21—EMPLOYEE BENEFIT PLANS | |
The Company sponsors a defined contribution plan for the benefit of its employees. The Company’s contributions to the plan are determined annually by the Board of Directors in accordance with plan requirements. For tax purposes, eligible participants may contribute up to the dollar limit imposed by the Internal Revenue Service. For plan years ended December 31, 2013, 2012 and 2011, the Company contributed $4.3 million, $3.5 million and $3.0 million, respectively. | |
During 2002, the Company adopted a Supplemental Executive Retirement Plan (“SERP”). The SERP meets the definition of a pension plan per ASC 715-30, Compensation—Retirement Benefits – Defined Benefit Plans—Pension, pursuant to which the Company will pay supplemental pension benefits to certain executive officers designated by the Board of Directors upon retirement based upon the officers’ years of service and compensation. For the years ended December 31, 2013, 2012, and 2011, $0.6 million, $0.8 million and $1.6 million, respectively, of benefits were accrued and expensed. The SERP is funded through life insurance contracts on the participating officers, though the plan does not require formal funding. At December 31, 2013 and 2012, the life insurance contracts related to the SERP had an aggregate cash surrender value of $45.5 million and $44.4 million, respectively. As of December 31, 2013 and 2012, the vested benefit obligation under the SERP was less than the cash surrender value of the life insurance contracts respectively. | |
STOCKHOLDERS_EQUITY_AND_EARNIN
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | ' | |||||||||||||
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | ' | |||||||||||||
NOTE 22—STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE | ||||||||||||||
Series A Preferred Stock Offering—In April 2008, the Company issued 200,000 shares of 8% Non-Cumulative Perpetual Convertible Preferred Stock, Series A (“Series A”), with a liquidation preference of $1,000 per share. The Company received $194.1 million of additional Tier 1 qualifying capital, after deducting stock issuance costs. On May 1, 2013, the Company exercised its mandatory conversion right related to all the outstanding shares of its Series A preferred stock. At the conversion date, the remaining 85,710 shares of outstanding Series A Preferred Stock were converted to 5,594,080 shares of common stock. | ||||||||||||||
Stock Repurchase Program—On January 23, 2013, the Company’s Board of Directors authorized a stock repurchase program to buy back up to $200.0 million of the Company’s common stock. During 2013, the company completed the authorized repurchase program, repurchasing 8,026,807 shares at a weighted average price of $24.89 per share and a total cost of $200.0 million. In comparison, the Company repurchased 9,068,105 shares at a weighted average price of $22.02 per share and a total cost of $199.9 during the year ended December 31, 2012. The Company did not repurchase any shares during the years ended December 31, 2011. | ||||||||||||||
Additionally, on July 17, 2013, the Company’s Board of Directors authorized a new stock repurchase program to buy back up to $100.0 million of its common stock. The Company did not repurchase any shares under this program during 2013. | ||||||||||||||
Quarterly Dividends—The Company’s Board of Directors declared and paid quarterly preferred stock cash dividends of $20.00 per share on its Series A preferred stock during 2013 and 2012. Cash dividends totaling $3.4 million and $6.9 million were paid to the Company’s Series A preferred stock shareholders during the years ended December 31, 2013 and 2012, respectively. The Series A preferred stock were converted into common stock on May 1, 2013. | ||||||||||||||
The Company also paid quarterly dividends on its common stock of $0.15 per share for each quarter of 2013. In comparison, the Company paid quarterly dividends on its common stock of $0.10 per share for each quarter of 2012. Total quarterly dividends amounting to $83.3 million and $57.6 million were paid to the Company’s common shareholders during the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||
Earnings Per Share (“EPS”) — The number of shares outstanding at December 31, 2013 was 137,630,896. The Company applies the two-class method of computing basic EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stocks, which receive dividends as declared, qualify as participating securities. Restricted stock units issued by the Company are not considered participating securities, as they do not have dividend distribution rights during the vesting period. Diluted EPS is calculated on the basis of the weighted average number of shares outstanding during the period plus potential dilutive shares. | ||||||||||||||
The following table sets forth earnings per share calculations for the year ended December 31, 2013, 2012 and 2011: | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 295,045 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -3,428 | |||||||||||||
Earnings allocated to participating securities | -1,692 | |||||||||||||
Basic EPS – income allocated to common stockholders (1) | $ | 289,925 | 137,342 | $ | 2.11 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 71 | ||||||||||||
Restricted stock units | 196 | 327 | ||||||||||||
Convertible preferred stock | 3,428 | 1,834 | ||||||||||||
Diluted EPS – income allocated to common stockholders (1) | $ | 293,549 | 139,574 | $ | 2.1 | |||||||||
Year Ended December 31, 2012 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 281,650 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -6,857 | |||||||||||||
Earnings allocated to participating securities | -3,279 | |||||||||||||
Basic EPS – income allocated to common stockholders (1) | $ | 271,514 | 141,457 | $ | 1.92 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 29 | ||||||||||||
Restricted stock units | 47 | 118 | ||||||||||||
Convertible preferred stock | 6,857 | 5,571 | ||||||||||||
Diluted EPS – income allocated to common stockholders (1) | $ | 278,418 | 147,175 | $ | 1.89 | |||||||||
Year Ended December 31, 2011 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 245,234 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -6,857 | |||||||||||||
Basic EPS – income available to common stockholders | $ | 238,377 | 147,093 | $ | 1.62 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 62 | ||||||||||||
Restricted stock awards | 115 | 718 | ||||||||||||
Convertible preferred stock | 6,857 | 5,571 | ||||||||||||
Stock warrants | — | 23 | ||||||||||||
Diluted EPS – income available to common stockholders | $ | 245,349 | 153,467 | $ | 1.6 | |||||||||
The following average outstanding stock options and restricted stock units for the years ended December 31, 2013, 2012 and 2011, respectively, were excluded from the computation of diluted EPS because including them would have had an antidilutive effect. | ||||||||||||||
For the Year Ended | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Stock options | 177 | 340 | 857 | |||||||||||
Restricted stock awards | 10 | -1 | 5 | -1 | 317 | |||||||||
(1) April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. | ||||||||||||||
Accumulated Other Comprehensive (Loss) Income — As of December 31, 2013, total accumulated other comprehensive loss was ($30.5) million which includes the following components: net unrealized loss on securities available for sale of ($30.5) million and unrealized gain on other asset investment of $79 thousand. As of December 31, 2012, total accumulated other comprehensive income was $4.7 million which includes the following components: net unrealized gain on securities available for sale of $4.6 million and unrealized gain on other asset investment of $26 thousand. As of December 31, 2011, total accumulated other comprehensive loss was ($33.9) million which includes the following components: net unrealized loss on securities available for sale of ($34.8) million, foreign exchange translation adjustment of $900 thousand and unrealized gain on other asset investment of $8 thousand. | ||||||||||||||
Activity in accumulated other comprehensive (loss) income, net of tax, for the years ended December 31, 2013, 2012, and 2011 was as follows: | ||||||||||||||
Unrealized gain (loss) on | ||||||||||||||
investment securities | Foreign currency | Unrealized gain (loss) on | ||||||||||||
available-for-sale | translation adjustments | other asset investment | Total | |||||||||||
(In thousands) | ||||||||||||||
Balance, December 31, 2010 | $ | -13,927 | $ | 1,664 | $ | -151 | $ | -12,414 | ||||||
Period Change | -20,921 | -764 | 159 | -21,526 | ||||||||||
Balance, December 31, 2011 | $ | -34,848 | $ | 900 | $ | 8 | $ | -33,940 | ||||||
Period Change | 39,491 | -900 | 18 | 38,609 | ||||||||||
Balance, December 31, 2012 | $ | 4,643 | $ | — | $ | 26 | $ | 4,669 | ||||||
Other comprehensive income before reclassifications | -28,169 | — | 336 | -27,833 | ||||||||||
Amounts reclassified from AOCI | -7,012 | — | -283 | -7,295 | ||||||||||
Net current period other comprehensive loss | -35,181 | — | 53 | -35,128 | ||||||||||
Balance, December 31, 2013 | $ | -30,538 | $ | — | $ | 79 | $ | -30,459 | ||||||
Reclassifications out of accumulated other comprehensive income for the year ended December 31, 2013, 2012, and 2011 was as follows: | ||||||||||||||
Amount Reclassified from | ||||||||||||||
Details about Accumulated Other | Accumulated Other | Affected Line Item in the Statement | ||||||||||||
Comprehensive Income Components | Comprehensive Income | Where Net Income is Presented | ||||||||||||
(In thousands) | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 12,089 | Net gain on sales of investment securities | |||||||||||
12,089 | ||||||||||||||
-5,077 | Tax expense | |||||||||||||
$ | 7,012 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 488 | Other operating income | |||||||||||
488 | ||||||||||||||
-205 | Tax expense | |||||||||||||
$ | 283 | Net of tax | ||||||||||||
Total reclassifications | $ | 7,295 | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 757 | Net gain on sales of investment securities | |||||||||||
757 | ||||||||||||||
-318 | Tax expense | |||||||||||||
$ | 439 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 23 | Other operating income | |||||||||||
23 | ||||||||||||||
-10 | Tax expense | |||||||||||||
$ | 13 | Net of tax | ||||||||||||
Total reclassifications | $ | 452 | ||||||||||||
Year Ended December 31, 2011 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 9,703 | Net gain on sales of investment securities | |||||||||||
9,703 | ||||||||||||||
-4,075 | Tax expense | |||||||||||||
$ | 5,628 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 61 | Other operating income | |||||||||||
61 | ||||||||||||||
-26 | Tax expense | |||||||||||||
$ | 35 | Net of tax | ||||||||||||
Total reclassifications | $ | 5,663 | ||||||||||||
The following table sets forth the tax effects allocated to each component of other comprehensive (loss) income for the years ended December 31, 2013, 2012, and 2011: | ||||||||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||
Unrealized gain on investment securities available-for-sale: | ||||||||||||||
Unrealized holding losses arising during period | $ | -48,567 | $ | 20,398 | $ | -28,169 | ||||||||
Less: reclassification adjustment for gains included in income | -12,089 | 5,077 | -7,012 | |||||||||||
Net unrealized loss | -60,656 | 25,475 | -35,181 | |||||||||||
Noncredit-related impairment loss on securities | — | — | — | |||||||||||
Unrealized gain on other asset investment | 579 | -243 | 336 | |||||||||||
Less: reclassification adjustment for gains included in income | -488 | 205 | -283 | |||||||||||
Other comprehensive loss | $ | -60,565 | $ | 25,437 | $ | -35,128 | ||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||
Unrealized gain on investment securities available-for-sale: | ||||||||||||||
Unrealized holding gains arising during period | $ | 73,910 | $ | -31,042 | $ | 42,868 | ||||||||
Less: reclassification adjustment for gains included in income | -757 | 318 | -439 | |||||||||||
Net unrealized gains | 73,153 | -30,724 | 42,429 | |||||||||||
Noncredit-related impairment loss on securities | -5,066 | 2,128 | -2,938 | |||||||||||
Foreign currency translation adjustments | -1,552 | 652 | -900 | |||||||||||
Unrealized gain on other asset investment | 53 | -22 | 31 | |||||||||||
Less: reclassification adjustment for gains included in income | -23 | 10 | -13 | |||||||||||
Other comprehensive income | $ | 66,565 | $ | -27,956 | $ | 38,609 | ||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2011 | ||||||||||||||
Unrealized loss on investment securities available-for-sale: | ||||||||||||||
Unrealized holding loss arising during period | $ | -21,264 | $ | 8,931 | $ | -12,333 | ||||||||
Less: reclassification adjustment for gains included in income | -9,703 | 4,075 | -5,628 | |||||||||||
Net unrealized loss | -30,967 | 13,006 | -17,961 | |||||||||||
Noncredit-related impairment loss on securities | -5,103 | 2,143 | -2,960 | |||||||||||
Foreign currency translation adjustments | -1,317 | 553 | -764 | |||||||||||
Unrealized gain on other asset investment | 334 | -140 | 194 | |||||||||||
Less: reclassification adjustment for gains included in income | -61 | 26 | -35 | |||||||||||
Other comprehensive loss | $ | -37,114 | $ | 15,588 | $ | -21,526 |
REGULATORY_REQUIREMENTS
REGULATORY REQUIREMENTS | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
REGULATORY REQUIREMENTS | ' | |||||||||||||||
REGULATORY REQUIREMENTS | ' | |||||||||||||||
NOTE 23—REGULATORY REQUIREMENTS | ||||||||||||||||
Risk-Based Capital—The Bank is a member bank of the Federal Reserve System and the FRB is the Bank’s primary regulator. The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. | ||||||||||||||||
As of December 31, 2013 and 2012, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain specific total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below. There are no conditions or events since December 31, 2013 which management believes have changed the category of the Bank. | ||||||||||||||||
The actual and required capital amounts and ratios at December 31, 2013 and 2012 are presented as follows: | ||||||||||||||||
To Be Well Capitalized | ||||||||||||||||
For Capital | Under Prompt Corrective | |||||||||||||||
Actual | Adequacy Purposes | Action Provisions | ||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
(Dollars in thousands) | ||||||||||||||||
As of December 31, 2013: | ||||||||||||||||
Total Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,395,109 | 13.50% | $ | 1,416,203 | 8.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,262,494 | 12.90% | $ | 1,407,944 | 8.00% | $ | 1,759,931 | 10.00% | |||||||
Tier I Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,102,476 | 11.90% | $ | 708,102 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,041,894 | 11.60% | $ | 703,972 | 4.00% | $ | 1,055,958 | 6.00% | |||||||
Tier I Capital (to Average Assets) | ||||||||||||||||
Consolidated Company | $ | 2,102,476 | 8.60% | $ | 976,596 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,041,894 | 8.40% | $ | 973,958 | 4.00% | $ | 1,217,448 | 5.00% | |||||||
As of December 31, 2012: | ||||||||||||||||
Total Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,296,253 | 16.10% | $ | 1,142,743 | 8.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,225,888 | 15.60% | $ | 1,142,215 | 8.00% | $ | 1,427,769 | 10.00% | |||||||
Tier I Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,116,757 | 14.80% | $ | 571,371 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,046,477 | 14.30% | $ | 571,107 | 4.00% | $ | 856,661 | 6.00% | |||||||
Tier I Capital (to Average Assets) | ||||||||||||||||
Consolidated Company | $ | 2,116,757 | 9.60% | $ | 880,526 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,046,477 | 9.30% | $ | 880,162 | 4.00% | $ | 1,100,202 | 5.00% | |||||||
Under the Dodd-Frank Act, bank holding companies with more than $15 billion in total consolidated assets are no longer able to include trust preferred securities as Tier I regulatory capital which commenced in 2013 with phase-out complete in 2016. As of December 31, 2013 and 2012, trust preferred securities comprised 4.4% and 6.3%, respectively, of the Company’s Tier I capital. | ||||||||||||||||
Reserve Requirement—The Bank is required to maintain a percentage of its deposits as reserves at the Federal Reserve Bank. The daily average reserve requirement was approximately $218.5 million and $228.7 million for December 31, 2013 and 2012, respectively. | ||||||||||||||||
SEGMENT_INFORMATION
SEGMENT INFORMATION | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
NOTE 24—SEGMENT INFORMATION | |||||||||||||
The Company utilizes an internal reporting system to measure the performance of various operating segments within the Bank and the Company overall. We have identified three operating segments for purposes of management reporting: 1) Retail Banking; 2) Commercial Banking; and 3) Other. These three business divisions meet the criteria of an operating segment: the segment engages in business activities from which it earns revenues and incurs expenses and whose operating results are regularly reviewed by the Company’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. | |||||||||||||
The Retail Banking segment focuses primarily on retail operations through the Bank’s branch network, as well as originating consumer loans. The Commercial Banking segment, which includes commercial real estate, primarily generates commercial loans through the efforts of the commercial lending offices located in the Bank’s northern and southern California production offices. Furthermore, the Company’s Commercial Banking segment also offers a wide variety of international finance and trade services and products. The remaining centralized functions, including treasury activities and eliminations of inter-segment amounts, have been aggregated and included in the Other segment, which provides broad administrative support to the two core segments. | |||||||||||||
The Company’s funds transfer pricing assumptions are intended to promote core deposit growth and to reflect the current risk profiles of various loan categories within the credit portfolio. Transfer pricing assumptions and methodologies are reviewed at least annually to ensure that the Company’s process is reflective of current market conditions. The transfer pricing process is formulated with the goal of incenting loan and deposit growth that is consistent with the Company’s overall growth objectives as well as provide a reasonable and consistent basis for the measurement of the Company’s business segments and product net interest margins. Changes to the Company’s transfer pricing and methodologies are approved by the Asset Liability Committee. | |||||||||||||
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Operating segment results are based on the Company’s internal management reporting process, which reflects assignments and allocations of capital, certain operating and administrative costs and the provision for loan losses. Net interest income is based on the Company’s internal funds transfer pricing system which assigns a cost of funds or a credit for funds to assets or liabilities based on their type, maturity or repricing characteristics. Noninterest income and noninterest expense, including depreciation and amortization, directly attributable to a segment are assigned to that business. Indirect costs, including overhead expense, are allocated to the segments based on several factors, including, but not limited to, full-time equivalent employees, loan volume and deposit volume. The provision for credit losses is allocated based on actual charge-offs for the period as well as average loan balances for each segment during the period. The Company evaluates overall performance based on profit or loss from operations before income taxes excluding nonrecurring gains and losses. | |||||||||||||
Changes in our management structure or reporting methodologies may result in changes in the measurement of operating segment results. Results for prior periods are generally restated for comparability for changes in management structure or reporting methodologies unless it is not deemed practicable to do so. | |||||||||||||
The following tables present the operating results and other key financial measures for the individual operating segments as of and for the years ended December 31, 2013, 2012, and 2011. | |||||||||||||
Year Ended December 31, 2013 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 374,818 | $ | 627,118 | $ | 66,749 | $ | 1,068,685 | |||||
Charge for funds used | -86,552 | -116,161 | -18,244 | -220,957 | |||||||||
Interest spread on funds used | 288,266 | 510,957 | 48,505 | 847,728 | |||||||||
Interest expense | -47,287 | -15,185 | -50,020 | -112,492 | |||||||||
Credit on funds provided | 173,194 | 29,262 | 18,501 | 220,957 | |||||||||
Interest spread on funds provided | 125,907 | 14,077 | -31,519 | 108,465 | |||||||||
Net interest income | $ | 414,173 | $ | 525,034 | $ | 16,986 | $ | 956,193 | |||||
Provision for loan losses | $ | 10,911 | $ | 11,453 | $ | — | $ | 22,364 | |||||
Depreciation, amortization and accretion (1) | 19,865 | 8,120 | 69,125 | 97,110 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 123,876 | 272,369 | 29,605 | 425,850 | |||||||||
Segment assets | 7,820,191 | 11,545,405 | 5,364,472 | 24,730,068 | |||||||||
Year Ended December 31, 2012 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 356,244 | $ | 617,041 | $ | 77,810 | $ | 1,051,095 | |||||
Charge for funds used | -85,811 | -118,688 | 44,407 | -160,092 | |||||||||
Interest spread on funds used | 270,433 | 498,353 | 122,217 | 891,003 | |||||||||
Interest expense | -57,401 | -23,226 | -51,541 | -132,168 | |||||||||
Credit on funds provided | 130,713 | 13,138 | 16,241 | 160,092 | |||||||||
Interest spread on funds provided | 73,312 | -10,088 | -35,300 | 27,924 | |||||||||
Net interest income | $ | 343,745 | $ | 488,265 | $ | 86,917 | $ | 918,927 | |||||
Provision for loan losses | $ | 28,729 | $ | 36,455 | $ | — | $ | 65,184 | |||||
Depreciation, amortization and accretion (1) | 12,869 | -13,277 | 44,159 | 43,751 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 74,836 | 266,168 | 84,588 | 425,592 | |||||||||
Segment assets | 6,552,217 | 10,421,160 | 5,562,733 | 22,536,110 | |||||||||
Year Ended December 31, 2011 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 358,853 | $ | 619,766 | $ | 101,829 | $ | 1,080,448 | |||||
Charge for funds used | -94,098 | -142,056 | 3,690 | -232,464 | |||||||||
Interest spread on funds used | 264,755 | 477,710 | 105,519 | 847,984 | |||||||||
Interest expense | -85,356 | -31,407 | -60,659 | -177,422 | |||||||||
Credit on funds provided | 202,080 | 13,863 | 16,521 | 232,464 | |||||||||
Interest spread on funds provided | 116,724 | -17,544 | -44,138 | 55,042 | |||||||||
Net interest income | $ | 381,479 | $ | 460,166 | $ | 61,381 | $ | 903,026 | |||||
Provision for loan losses | $ | 27,888 | $ | 67,118 | $ | — | $ | 95,006 | |||||
Depreciation, amortization and accretion (1) | 43,899 | 62,803 | 21,552 | 128,254 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 102,217 | 227,766 | 53,351 | 383,334 | |||||||||
Segment assets | 6,530,138 | 10,157,195 | 5,281,334 | 21,968,667 | |||||||||
(1) Includes amortization and accretion related to the FDIC indemnification asset. | |||||||||||||
PARENT_COMPANY_FINANCIAL_STATE
PARENT COMPANY FINANCIAL STATEMENTS | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
PARENT COMPANY FINANCIAL STATEMENTS | ' | |||||||||||||
PARENT COMPANY FINANCIAL STATEMENTS | ' | |||||||||||||
NOTE 25—PARENT COMPANY FINANCIAL STATEMENTS | ||||||||||||||
The financial information of East West Bancorp, Inc. as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011 are as follows: | ||||||||||||||
BALANCE SHEETS | ||||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 79,934 | $ | 64,489 | ||||||||||
Investment securities available-for-sale | 69,796 | — | ||||||||||||
Investment in subsidiaries | 2,400,937 | 2,450,058 | ||||||||||||
Other investments | 21,371 | 3,083 | ||||||||||||
Other assets | 37,037 | 5,122 | ||||||||||||
TOTAL | $ | 2,609,075 | $ | 2,522,752 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Long-term debt | $ | 226,868 | $ | 137,178 | ||||||||||
Other liabilities | 17,982 | 3,452 | ||||||||||||
Total liabilities | 244,850 | 140,630 | ||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||
Preferred stock (par value $0.001 per share) | ||||||||||||||
Authorized — 5,000,000 shares | ||||||||||||||
Issued — 200,000 shares in Series A, non-cumulative convertible preferred stock in 2013 and 2012 | ||||||||||||||
Outstanding — No shares as of December 31, 2013 and 85,710 shares in 2012 | — | 83,027 | ||||||||||||
Common stock (par value $0.001 per share) | ||||||||||||||
Authorized — 200,000,000 shares | ||||||||||||||
Issued — 163,098,008 shares in 2013 and 157,160,193 shares in 2012 | ||||||||||||||
Outstanding — 137,630,896 shares in 2013 and 140,294,092 shares in 2012 | 163 | 157 | ||||||||||||
Additional paid in capital | 1,571,670 | 1,464,739 | ||||||||||||
Retained earnings | 1,360,130 | 1,151,828 | ||||||||||||
Treasury stock, at cost — 25,467,112 shares in 2013 and 16,866,101 shares in 2012 | (537,279 | ) | (322,298 | ) | ||||||||||
Accumulated other comprehensive (loss) income, net of tax | (30,459 | ) | 4,669 | |||||||||||
Total stockholders’ equity | 2,364,225 | 2,382,122 | ||||||||||||
TOTAL | $ | 2,609,075 | $ | 2,522,752 | ||||||||||
STATEMENTS OF INCOME | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Dividends from subsidiaries | $ | 319,085 | $ | 324,094 | $ | 72,129 | ||||||||
Other income | 821 | 2 | 372 | |||||||||||
Total income | 319,906 | 324,096 | 72,501 | |||||||||||
Interest expense | 3,436 | 3,092 | 4,734 | |||||||||||
Compensation and net occupancy reimbursement to subsidiary | 3,662 | 2,573 | 2,537 | |||||||||||
Other expense | 12,677 | 1,309 | 2,339 | |||||||||||
Total expense | 19,775 | 6,974 | 9,610 | |||||||||||
Income before income taxes and equity in undistributed income of subsidiaries | 300,131 | 317,122 | 62,891 | |||||||||||
Income tax benefit | 22,885 | 2,892 | 3,830 | |||||||||||
Equity in undistributed (loss) income of subsidiaries | (27,971 | ) | (38,364 | ) | 178,513 | |||||||||
Net income | $ | 295,045 | $ | 281,650 | $ | 245,234 | ||||||||
STATEMENTS OF CASH FLOWS | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | 295,045 | $ | 281,650 | $ | 245,234 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Equity in undistributed (income) of subsidiaries | (291,659 | ) | (285,636 | ) | (250,513 | ) | ||||||||
Depreciation and amortization | 8,806 | 445 | 1,034 | |||||||||||
Prepayment penalty on other borrowings | — | — | 526 | |||||||||||
Stock compensation costs | — | — | 1,767 | |||||||||||
Gain on sale of other investments | (161 | ) | — | — | ||||||||||
Tax benefit from stock plans | (5,522 | ) | (462 | ) | (717 | ) | ||||||||
Net change in other assets | 293,153 | 322,361 | 73,797 | |||||||||||
Net change in other liabilities | (13,011 | ) | (259 | ) | (3,709 | ) | ||||||||
Net cash provided by operating activities | 286,651 | 318,099 | 67,419 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of: | ||||||||||||||
Investment securities available-for-sale | (69,986 | ) | — | — | ||||||||||
Proceeds from: | ||||||||||||||
Redemption of certificates of deposit | — | — | 198 | |||||||||||
Net cash (used in) provided by investing activities | (69,986 | ) | — | 198 | ||||||||||
Cash flows from financing activities: | ||||||||||||||
Payment for: | ||||||||||||||
Repayment of long-term debt | (10,310 | ) | — | (23,918 | ) | |||||||||
Repurchase of vested shares due to employee tax liability | (13,833 | ) | (3,012 | ) | (649 | ) | ||||||||
Cash dividends on preferred stock | (3,428 | ) | (6,857 | ) | (6,857 | ) | ||||||||
Cash dividends on common stock | (82,862 | ) | (57,361 | ) | (23,822 | ) | ||||||||
Repurchase of common stock warrants | — | — | (14,500 | ) | ||||||||||
Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan | (199,992 | ) | (199,950 | ) | — | |||||||||
Proceeds from: | ||||||||||||||
Increase in long-term borrowings | 100,000 | — | — | |||||||||||
Issuance of common stock pursuant to various stock plans and agreements | 3,683 | 3,821 | 5,726 | |||||||||||
Tax benefit from stock plans | 5,522 | 462 | 717 | |||||||||||
Net cash used in financing activities | (201,220 | ) | (262,897 | ) | (63,303 | ) | ||||||||
Net increase in cash and cash equivalents | 15,445 | 55,202 | 4,314 | |||||||||||
Cash and cash equivalents, beginning of year | 64,489 | 9,287 | 4,973 | |||||||||||
Cash and cash equivalents, end of year | $ | 79,934 | $ | 64,489 | $ | 9,287 | ||||||||
Supplemental Cash Flow Information: | ||||||||||||||
Cash paid during the year for: | ||||||||||||||
Interest | $ | 3,292 | $ | 3,112 | $ | 5,167 | ||||||||
Noncash financing activities: | ||||||||||||||
Conversion of preferred stock to common stock | 83,027 | — | 31 | |||||||||||
Issuance of common stock to Board of Directors | 630 | 570 | 520 | |||||||||||
QUARTERLY_FINANCIAL_INFORMATIO
QUARTERLY FINANCIAL INFORMATION (unaudited) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
QUARTERLY FINANCIAL INFORMATION (unaudited) | ' | |||||||||||||||||
QUARTERLY FINANCIAL INFORMATION (unaudited) | ' | |||||||||||||||||
NOTE 26—QUARTERLY FINANCIAL INFORMATION (unaudited) | ||||||||||||||||||
Quarters Ended | ||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
2013 | ||||||||||||||||||
Interest and dividend income | $ | 293,203 | $ | 281,706 | $ | 255,353 | $ | 238,423 | ||||||||||
Interest expense | 28,195 | 27,456 | 27,709 | 29,132 | ||||||||||||||
Net interest income | 265,008 | 254,250 | 227,644 | 209,291 | ||||||||||||||
Provision for (reversal of) loan losses, excluding covered loans | 6,286 | 4,535 | 8,277 | (762 | ) | |||||||||||||
(Reversal of) provision for loan losses on covered loans | (820 | ) | (964 | ) | 723 | 5,089 | ||||||||||||
Net interest income after provision for loan losses | 259,542 | 250,679 | 218,644 | 204,964 | ||||||||||||||
Noninterest loss | (36,594 | ) | (41,421 | ) | (12,354 | ) | (2,099 | ) | ||||||||||
Noninterest expense | 124,384 | 100,352 | 94,420 | 96,355 | ||||||||||||||
Income before provision for income taxes | 98,564 | 108,906 | 111,870 | 106,510 | ||||||||||||||
Provision for income taxes | 22,782 | 35,749 | 37,855 | 34,419 | ||||||||||||||
Net income | $ | 75,782 | $ | 73,157 | $ | 74,015 | $ | 72,091 | ||||||||||
Preferred stock dividends | — | — | 1,714 | 1,714 | ||||||||||||||
Net income available to common stockholders | $ | 75,782 | $ | 73,157 | $ | 72,301 | $ | 70,377 | ||||||||||
Basic earnings per share | $ | 0.55 | $ | 0.53 | $ | 0.52 | $ | 0.51 | ||||||||||
Diluted earnings per share | $ | 0.55 | $ | 0.53 | $ | 0.52 | $ | 0.5 | ||||||||||
2012 | ||||||||||||||||||
Interest and dividend income | $ | 276,521 | $ | 254,162 | $ | 266,362 | $ | 254,050 | ||||||||||
Interest expense | 31,577 | 32,254 | 33,205 | 35,132 | ||||||||||||||
Net interest income | 244,944 | 221,908 | 233,157 | 218,918 | ||||||||||||||
Provision for loan losses, excluding covered loans | 13,773 | 13,321 | 16,595 | 16,479 | ||||||||||||||
(Reversal of) provision for loan losses on covered loans | (689 | ) | 5,179 | (1,095 | ) | 1,621 | ||||||||||||
Net interest income after provision for loan losses | 231,860 | 203,408 | 217,657 | 200,818 | ||||||||||||||
Noninterest (loss) income | (18,454 | ) | 2,751 | (11,655 | ) | 21,740 | ||||||||||||
Noninterest expense | 105,206 | 100,956 | 101,608 | 114,763 | ||||||||||||||
Income before provision for income taxes | 108,200 | 105,203 | 104,394 | 107,795 | ||||||||||||||
Provision for income taxes | 36,300 | 34,093 | 33,837 | 39,712 | ||||||||||||||
Net income | $ | 71,900 | $ | 71,110 | $ | 70,557 | $ | 68,083 | ||||||||||
Preferred stock dividends | 1,715 | 1,714 | 1,714 | 1,714 | ||||||||||||||
Net income available to common stockholders | $ | 70,185 | $ | 69,396 | $ | 68,843 | $ | 66,369 | ||||||||||
Basic earnings per share | $ | 0.5 | $ | 0.49 | $ | 0.48 | $ | 0.46 | ||||||||||
Diluted earnings per share | $ | 0.49 | $ | 0.48 | $ | 0.47 | $ | 0.45 | ||||||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
NOTE 27—SUBSEQUENT EVENTS | |
On January 17, 2014, the Company announced it has completed the acquisition merger of MetroCorp. MetroCorp operates 18 branches under its two subsidiary banks, MetroBank and Metro United Bank. MetroBank operates 12 branches in Houston and Dallas, and Metro United Bank operates 6 branches in Los Angeles, San Francisco and San Diego. As of December 31, 2013, MetroCorp had total assets of $1.62 billion, total loans of $1.22 billion, total deposits of $1.34 billion and total equity of $179.2 million. | |
On January 22, 2014, the East West Board of Directors declared first quarter 2014 dividends on the Company’s common stock. The common stock dividend of $0.18 per share is payable on or about February 18, 2014 to shareholders of record on February 3, 2014. We have evaluated events and transactions occurring through the date of filing this report on Form 10-K. Such evaluation resulted in no adjustments to the accompanying financial statements. | |
SUMMARY_OF_OPERATIONS_AND_SIGN1
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2013 | ||
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | ' | |
Basis of Presentation | ' | |
Basis of Presentation — The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America and general practices within the banking industry. The following is a summary of significant principles used in the preparation of the accompanying financial statements. In preparing the financial statements, management of the Company has made a number of estimates and assumptions pertaining to the reporting of assets and liabilities, including the fair value of assets acquired and liabilities assumed, the FDIC indemnification asset, valuation of OREO, the allowance for loan losses, the disclosure of contingent assets and liabilities and the disclosure of income and expenses for the periods presented in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. | ||
Principles of Consolidation | ' | |
Principles of Consolidation — The consolidated financial statements include the accounts of East West Bancorp, Inc., and its wholly owned subsidiaries, East West Bank and East West Insurance Services, Inc. Intercompany transactions and accounts have been eliminated in consolidation. East West also has six wholly owned subsidiaries that are statutory business trusts (the “Trusts”). In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, the Trusts are not consolidated into the accounts of East West Bancorp, Inc. | ||
Fair Value | ' | |
Fair Value — Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and, in many cases, may require us to make a number of significant judgments. Based on the observability of the inputs used in the valuation techniques, we classify our assets and liabilities measured and disclosed at fair value in accordance with a three-level hierarchy (e.g., Level 1, Level 2 and Level 3) established under ASC 820. In determining the fair value of financial instruments, we use market prices of the same or similar instruments whenever such prices are available. We do not use prices involving distressed sellers in determining fair value. If observable market prices are unavailable or impracticable to obtain, then fair value is estimated using modeling techniques such as discounted cash flow analyses. These modeling techniques incorporate our assessments regarding assumptions that market participants would use in pricing the asset or the liability, including assumptions about the risks inherent in a particular valuation technique and the risk of nonperformance. | ||
Securities Purchased Under Resale Agreements ("Resale Agreements") | ' | |
Securities Purchased Under Resale Agreements (“Resale Agreements”) — The Company purchases securities under resale agreements with terms that range from one day to several years. These agreements are collateralized by mortgage-backed securities and mortgage or commercial loans that are generally held by a third party custodian. The purchases are over-collateralized to ensure against unfavorable market price movements. In the event that the fair value of the securities decreases below the carrying amount of the related repurchase agreement, the counterparty is required to deliver an equivalent value of additional securities. The counterparties to these agreements are nationally recognized investment banking firms that meet credit eligibility criteria and with whom a master repurchase agreement has been duly executed. Resale agreements that are short-term in nature, or have terms of up to 90 days, are included in cash and cash equivalents. Resale agreements with terms greater than 90 days are separately categorized. | ||
Investment Securities | ' | |
Investment Securities — The Company classifies its investment securities according to their purpose and holding period. Investment securities available-for-sale are reported at estimated fair value, with unrealized gains and losses excluded from operations and reported as a separate component of accumulated other comprehensive income or loss, net of tax, in stockholders’ equity. | ||
The fair values of the investment securities are generally determined by independent external pricing service providers who have experience in valuing these securities and by comparison to and/or average of quoted market prices obtained from independent external brokers. In obtaining such valuation information from third parties, the Company has evaluated the methodologies used to develop the resulting fair values. The Company performs a monthly analysis on the broker quotes and the third party pricing service quotes to ensure that the prices represent a reasonable estimate of the fair value. The procedures include, but are not limited to, initial and ongoing review of third party pricing methodologies, review of pricing trends, and monitoring of trading volumes. The Company considers whether prices received from independent brokers represent a reasonable estimate of fair value through the use of observable market inputs including comparable trades, the yield curve, spreads and, when available, market indices. As a result of this analysis, if the Company determines there is a more appropriate fair value based upon the available market data, the price received from the third party is adjusted accordingly. Prices from third party pricing services are often unavailable for securities that are rarely traded or are traded only in privately negotiated transactions. As a result, certain securities are priced via independent broker quotations which utilize proprietary models that include observable market based inputs. Additionally, the majority of these independent broker quotations are non-binding. | ||
The Company applies a modified valuation approach to certain investment securities for which it believes the current broker prices obtained are based on forced liquidation or distressed sale values in inactive markets. The fair value of each of these securities is individually determined based on a combination of the market approach, reflecting current broker prices, and the income approach, which is a discounted cash flow approach. In calculating the fair value derived from the income approach, the Company makes assumptions related to the implied rate of return, general change in market rates, estimated changes in credit quality and liquidity risk premium, specific non-performance and default experience in the collateral underlying the security; additionally, broker discount rates are taken into consideration in determining the discount rate. The values resulting from each approach (i.e. market and income approaches) are weighted to derive the final fair value of each security trading in an inactive market. | ||
Amortization of premiums and accretion of discounts on securities are recorded as yield adjustments on such securities using the effective interest method. The specific identification method is used for purposes of determining cost in computing realized gains and losses on investment securities sold. | ||
At each reporting date, the Company assesses whether there is an “other-than-temporary” impairment (“OTTI”) in its portfolio of investment securities. If we determine that a decline in fair value is other-than-temporary, an impairment loss is recognized in current earnings. When we have the intent and ability to hold debt securities and it is not more likely than not that we will be required to sell these securities with OTTI for a period necessary to recover the noncredit-related impairment losses, only the credit-related impairment losses are recognized in current earnings. In these instances, the noncredit-related impairment losses are charged to other comprehensive income. The Company examines all individual securities that are in an unrealized loss position at each reporting date for other-than-temporary impairment. Specific investment level factors that are examined to assess impairment include the nature of the investments, the severity and duration of the loss, the probability that the Company will be unable to collect all amounts due, an analysis of the issuers of the securities and whether there has been any cause for default on the securities, and any change in the rating of the securities by the various rating agencies. Additionally, management takes into consideration the Company’s financial resources as well as the Company’s overall ability and intent to hold the securities and not be required to sell the securities until their fair values recover. | ||
The Company considers all available information relevant to the collectability of the security, including information about past events, current conditions, and reasonable and supportable forecasts, when developing the estimate of future cash flows and making its other-than-temporary impairment assessment for its portfolio of trust preferred securities. The Company considers factors such as remaining payment terms of the security, prepayment speeds, expected defaults, the financial condition of the issuer(s), and the value of any underlying collateral | ||
Loans Receivable | ' | |
Loans Receivable — Loans receivable that the Company has the intent and ability to hold for the foreseeable future, or until maturity, are stated at their outstanding principal, reduced by an allowance for loan losses and net deferred loan fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Nonrefundable fees and direct costs associated with the origination or purchase of loans are deferred and netted against outstanding loan balances. The deferred net loan fees and costs are recognized in interest income as an adjustment to yield over the loan term using the effective interest method. Discounts or premiums on purchased loans are accreted or amortized to interest income using the effective interest method over the remaining period to contractual maturity adjusted for anticipated prepayments. Interest on loans is calculated using the simple-interest method on daily balances of the principal amounts outstanding. Accrual of interest is discontinued on a loan when management believes, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that full collection of principal or interest becomes uncertain, regardless of the length of past due status. Generally, loans are placed on nonaccrual status when they become 90 days past due. When interest accrual is discontinued, all unpaid accrued interest is reversed against interest income. In general, subsequent payments received are applied to the outstanding principal balance of the loan. A loan is returned to accrual status when the borrower has demonstrated a satisfactory payment trend subject to management’s assessment of the borrower’s ability to repay the loan. | ||
Loans held for sale are carried at the lower of aggregate cost or fair value using the aggregate method. Origination fees on loans held for sale, net of certain costs of processing and closing the loans, are deferred until the time of sale and are included in the computation of the gain or loss from the sale of the related loans. A valuation allowance is established if the fair value of such loans is lower than their cost, with a corresponding charge to noninterest income. | ||
Troubled Debt Restructurings ("TDR") | ' | |
Troubled Debt Restructurings (“TDR”) — A loan is identified as a troubled debt restructure when a borrower is experiencing financial difficulties and for economic or legal reasons related to these difficulties the Company grants a concession to the borrower in the restructuring that it would not otherwise consider. The Company has granted a concession when, as a result of the restructuring to a troubled borrower, it does not expect to collect all amounts due, including principal and/or interest accrued at the original terms of the loan. The concessions may be granted in various forms, including a below-market change in the stated interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date, or a note split with principal forgiveness. A restructuring executed at an interest rate that is at market interest rates is not a TDR. All troubled debt restructurings are reviewed for impairment. For modifications where we forgive principal, the entire amount of such principal forgiveness is immediately charged off. Generally, a nonaccrual loan that is restructured remains on nonaccrual status for a period of six months to demonstrate that the borrower can perform under the restructured terms. However, the borrower’s performance prior to the restructuring, or other significant events at the time of restructuring may be considered in assessing whether the borrower can meet the new terms and may result in the loan remaining on accrual status or being returned to accrual status after a shorter performance period. If the borrower’s performance under the new terms is not reasonably assured, the loan remains classified as a nonaccrual loan. Loans classified as TDRs are reported as impaired loans. | ||
Allowance for Loan Losses | ' | |
Allowance for Loan Losses — The allowance for loan losses is established as management’s estimate of probable losses inherent in the loan portfolio. The allowance is increased by the provision for loan losses and decreased by charge-offs when management believes the uncollectability of a loan is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for loan losses is evaluated on a regular basis by management and is based on management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to revision as more information becomes available. Additionally, non-classified loans are also considered in the allowance for loan losses calculation and are factored in based on the historical loss experience adjusted for various qualitative factors. | ||
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all scheduled payments of principal or interest due according to the contractual terms of the loan agreement. Factors considered by management in determining and measuring loan impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for residential, commercial real estate, and commercial and industrial loans based on the loan’s observable market price or the fair value of the collateral, less costs to sell, if the loan is collateral dependent, or the present value of expected future cash flows discounted at the loan’s effective interest rate. If the measure of the impaired loan is less than the recorded investment in the loan and the loan is classified as nonperforming and uncollectible, the deficiency is charged off against the allowance for loan losses. In general, consumer loans consist of homogeneous smaller balance loans and are collectively evaluated for impairment. | ||
Acquired Loans | ' | |
Acquired Loans — Acquired loans are valued as of acquisition date in accordance with ASC 805. Loans purchased with evidence of credit deterioration since origination for which it is probable that all contractually required payments will not be collected are accounted for under ASC 310-30. | ||
Under ASC 805 and ASC 310-30, loans are recorded at fair value at acquisition date, factoring in credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for loan losses is not carried over or recorded as of the acquisition date. In situations where loans have similar risk characteristics, loans are aggregated into pools to estimate cash flows under ASC 310-30. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. | ||
The cash flows expected over the life of the loan or pool are estimated using an internal cash flow model that projects cash flows and calculates the carrying value of the loan or pool, book yield, effective interest income and impairment, if any, based on loan or pool level events, respectively. Assumptions as to default rates, loss severity, loss curves and prepayment speeds are utilized to calculate the expected cash flows. | ||
At acquisition, the excess of the cash flows expected to be collected over the recorded investment is considered to be the accretable yield and is recognized as interest income over the life of the loan or pool. The excess of the contractual cash flows over the cash flows expected to be collected is considered to be the nonaccretable difference. Subsequent to the acquisition date, any increases in expected cash flows over those expected at purchase date in excess of fair value that are significant and probable are adjusted through the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows over those expected at purchase date that are probable are recognized by recording an allowance for loan losses. Any disposals of loans, including sales of loans, payments in full or foreclosures result in the removal of the loan from the ASC 310-30 portfolio at the carrying amount. | ||
Covered Loans | ' | |
Covered Loans — Loans acquired in an FDIC-assisted acquisition that are subject to an FDIC shared-loss agreement are referred to as covered loans. Covered loans are reported exclusive of the expected cash flow reimbursements we expect to collect from the FDIC. All covered loans are accounted for under ASC 805 and ASC 310-30. | ||
FDIC Indemnification Asset | ' | |
FDIC Indemnification Asset — In conjunction with the FDIC-assisted acquisitions of Washington First International Bank and United Commercial Bank, the Bank entered into shared-loss agreements with the FDIC related to covered loans and covered other real estate owned (see “Covered Other Real Estate Owned” below). The FDIC indemnification asset is initially recorded at fair value, based on the discounted value of expected future cash flows under the shared-loss agreement. The Company has elected to account for amounts receivable under the shared-loss agreements as an indemnification asset in accordance with ASC 805. The difference between the present value and the undiscounted cash flows the Company expects to collect from the FDIC is accreted into noninterest income over the life of the FDIC indemnification asset. The FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows based on recent performance and expectations for future performance of the covered portfolio. These adjustments are measured on the same basis as the related covered loans and covered other real estate owned. Any increases in cash flow of the covered loans over those expected will reduce the FDIC indemnification asset and any decreases in cash flow of the covered loans over those expected will increase the FDIC indemnification asset. Over the life of the FDIC indemnification asset, increases and decreases are recorded as adjustments to noninterest income. During the year, the bank lowered the credit discount on the UCB covered loan portfolio as the credit quality was performing better than originally estimated. By lowering the credit discount, interest income will increase over the life of the loans. Correspondingly, with the lowered credit discount, the expected reimbursement from the FDIC under the loss sharing agreement will decrease, resulting in amortization of the FDIC indemnification asset which is recorded as a charge to noninterest income. | ||
Other Real Estate Owned | ' | |
Other Real Estate Owned — Other real estate owned (“OREO”) represents properties acquired through foreclosure or through full or partial satisfaction of loans, is considered held for sale, and is recorded at the lower of cost or estimated fair value at the time of foreclosure. Loan balances in excess of the fair value of the real estate acquired at the date of foreclosure are charged against the allowance for loan losses. After foreclosure, the real estate is carried at the lower of carrying value or fair value less costs to sell. Subsequent declines in the fair value of OREO below the carrying value are recorded through the use of a valuation allowance by charges to noninterest expense. Any subsequent operating expenses or income of such properties are also charged to noninterest expense. If the OREO is sold within three months of foreclosure, the Company substitutes the value received in the sale (net of costs to sell) for the fair value (less costs to sell). Any adjustment made to the loss originally recognized at the time of foreclosure is then charged against or credited to the allowance for loan losses, if deemed material. Otherwise, any declines in value, after foreclosure, are recorded in non-interest expense as gains or losses from the sale or disposition of the real estate. Gain recognition upon disposition of a property is dependent on the sale having met certain criteria relating to the buyer’s initial investment in the property sold. | ||
Covered Other Real Estate Owned | ' | |
Covered Other Real Estate Owned — All other real estate owned acquired in an FDIC-assisted acquisition that are subject to an FDIC shared-loss agreement are referred to as covered other real estate owned. Covered other real estate owned is reported exclusive of the expected cash flow reimbursements we expect to collect from the FDIC. Upon transferring covered loan collateral to covered other real estate owned status, acquisition date fair value discounts on the related loan are also transferred to covered other real estate owned. Fair value adjustments on covered other real estate owned result in a reduction of the covered other real estate carrying amount through expense and a corresponding increase of the FDIC reimbursement for 80% of the adjustment resulting in income. The net of that expense and income is the non-reimbursed portion or 20% of the estimated loss to the Bank which is the net amount charged against earnings. | ||
Investment in Affordable Housing Partnerships | ' | |
Investment in Affordable Housing Partnerships — The Company owns limited partnership interests in projects of affordable housing for lower income tenants. The investments in which the Company has a limited partnership interest that exceeds 5% are recorded using the equity method of accounting. The remaining investments are recorded using the cost method and are being amortized over the life of the related tax credits. The tax credits are being recognized in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investments are reviewed for impairment on an annual basis or on an interim basis if an event occurs that would trigger potential impairment. | ||
Goodwill and Other Intangible Assets | ' | |
Goodwill and Other Intangible Assets — The Company has goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, as a result of various past acquisitions. Goodwill is not amortized and is reviewed for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value. Premiums on deposits, which represent the intangible value of depositor relationships resulting from deposit liabilities assumed in acquisitions, are amortized over the projected useful lives of the deposits, which is typically 7 to 15 years. Core deposit intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment on goodwill and premiums on deposits is recognized by writing down the asset to the extent that the carrying value exceeds the estimated fair value. | ||
Investment in Federal Home Loan Bank Stock | ' | |
Investment in Federal Home Loan Bank Stock — As a member of the Federal Home Loan Bank (“FHLB”) of San Francisco, the Bank is required to own common stock in the FHLB of San Francisco based upon our balance of residential mortgage loans and outstanding FHLB advances. As a result of the acquisition of WFIB in 2010, the Bank also owns common stock in the FHLB of Seattle. FHLB stock is carried at cost and may be sold back to the FHLB at its carrying value. Cash dividends are accrued and reported as dividend income. | ||
Investment in Federal Reserve Bank Stock | ' | |
Investment in Federal Reserve Bank Stock — As a member of the Federal Reserve Bank (“FRB”) of San Francisco, the Bank is required to maintain stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends are accrued and reported as dividend income. | ||
Premises and Equipment | ' | |
Premises and Equipment — The Company’s premises and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed based on the straight-line method over the estimated useful lives of the various classes of assets. The ranges of useful lives for the principal classes of assets are as follows: | ||
Buildings and building improvements | 25 years | |
Furniture, fixtures and equipment | 3 to 7 years | |
Leasehold improvements | Term of lease or useful life, whichever is shorter | |
The Company reviews its long-lived assets for impairment annually or when events or circumstances indicate that the carrying amount of these assets may not be recoverable. An asset is considered impaired when the expected undiscounted cash flows over the remaining useful life is less than the net book value. When impairment is indicated for an asset, the amount of impairment loss is the excess of the net book value over its fair value. | ||
Securities Sold Under Repurchase Agreements ("Repurchase Agreements") | ' | |
Securities Sold Under Repurchase Agreements (“Repurchase Agreements”) — The Company sells securities under repurchase agreements. These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company may have to provide additional collateral to the counterparty, as necessary. | ||
Long-Term Debt | ' | |
Long-Term Debt — Long-term debt consists of junior subordinated debt and other long-term debt. The Company has six statutory business trusts whereby the Company is the owner of all the beneficial interests represented by the common securities of the Trusts, and third parties hold the fixed and variable rate capital securities of the Trusts. The purpose of issuing the capital securities was to provide the Company with a cost-effective means of obtaining Tier I capital for regulatory reporting purposes. However, these securities will be phased out of the Tier I capital beginning in 2013, fully phased out by 2016. | ||
The Trusts are not consolidated by the Company. Junior subordinated debt represents liabilities of the Company to the Trusts and is included in long-term debt on the accompanying consolidated balance sheets. | ||
Federal Funds Purchased | ' | |
Federal Funds Purchased — The Company utilizes federal funds purchased as part of its short-term financing strategy. Federal funds purchased are generally overnight borrowings and mature within one business day to six months from the transaction date. | ||
Income Taxes | ' | |
Income Taxes — Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. | ||
The Company examines its financial statements, its income tax provision, and its federal and state income tax returns and analyzes its tax positions, including permanent and temporary differences, as well as the major components of income and expense to determine whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. In the event a tax position is not more likely than not to be sustained by the tax authorities, a reserve is established by management. The Company recognizes interest and penalties related to tax positions as part of its provision for income taxes. | ||
Stock Based Compensation | ' | |
Stock-Based Compensation — The Company issues stock-based compensation to certain employees, officers, and directors and accounts for stock options using the fair value method, which generally results in compensation expense recognition. | ||
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities | ' | |
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities — Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company; (2) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets; and (3) the Company does not maintain effective control over the transferred assets through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) an agreement that provides the Company with both the unilateral ability to cause the holder to return specific assets and a more than trivial benefit attributable to that ability. The difference between the net proceeds received and the carrying amount of the financial assets being sold is recognized as a gain or loss on sale. | ||
Earnings Per Share ("EPS") | ' | |
Earnings Per Share (“EPS”) — The Company applies the two-class method of computing EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company’s restricted stock, which receive dividends as declared, qualify as participating securities. Restricted stock units issued by the Company are not considered participating securities, as they do not have dividend distribution rights during the vesting period. Diluted EPS is calculated on the basis of the weighted average number of shares outstanding during the period plus potential dilutive shares. | ||
Comprehensive Income | ' | |
Comprehensive Income — The term “comprehensive income” describes the total of all components of comprehensive income, including net income and other comprehensive income. “Other comprehensive income” refers to revenues, expenses, and gains and losses that are included in comprehensive income but are excluded from net income because they have been recorded directly in equity under the provisions of other Financial Accounting Standards Board statements. In accordance with the adoption of ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, the Company presents comprehensive income in the consolidated statements of comprehensive income, which was formerly presented in the consolidated statements of changes in stockholders’ equity. | ||
Derivative Financial Instruments | ' | |
Derivative Financial Instruments — As part of the asset and liability management strategy, the Company uses derivative financial instruments to mitigate exposure to interest rate and foreign currency risks. All derivative instruments, including certain derivative instruments embedded in other contracts, are recognized on the consolidated balance sheet at fair value with the change in fair value reported in earnings. When master netting agreements exist, the Company nets counterparty positions with any cash collateral received or delivered. | ||
The Company’s interest rate swaps on certain certificates of deposit qualify for hedge accounting treatment under ASC 815, Derivatives and Hedging. The Company documents its hedge relationships, including identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction at the time the derivative contract is executed. This includes designating the derivative contract as a “fair value hedge” which is a hedge of a recognized asset or liability. All derivatives designated as fair value hedges are linked to specific hedged items or to groups of specific assets and liabilities on the balance sheet. Both at inception and quarterly thereafter, the Company assesses whether the derivatives used in hedging transactions are highly effective (as defined in the guidance) in offsetting changes in the fair value of the hedged item. Retroactive effectiveness is also assessed as well as the continued expectation that the hedge will remain effective prospectively. Any ineffective portion of the changes of fair value hedges is recognized immediately in interest expense in the consolidated statements of income. | ||
The Company discontinues hedge accounting prospectively when (i) a derivative is no longer highly effective in offsetting changes in the fair value, (ii) a derivative expires or is sold, terminated, or exercised, or (iii) the Company determines that designation of a derivative as a hedge is no longer appropriate. If a fair value hedge derivative instrument is terminated or the hedge designation removed, the previous adjustments to the carrying amount of the hedged liability would be subsequently accounted for in the same manner as other components of the carrying amount of that liability. For interest-bearing liabilities, such adjustments would be amortized into earnings over the remaining life of the respective liability. | ||
The Company also offers various derivative products to clients and enters into derivative transactions in due course. These transactions are not linked to specific Company assets or liabilities in the consolidated balance sheets or to forecasted transactions in a hedge relationship and, therefore, do not qualify for hedge accounting. The contracts are marked-to-market each reporting period with changes in fair value recorded in the consolidated statements of income. | ||
Reclassifications | ' | |
Reclassifications — Certain items in the consolidated balance sheet and the consolidated statements of income for the years ended December 31, 2012 and 2011 were reclassified to conform to the 2013 and 2012 presentation, respectively. These reclassifications did not affect previously reported net income. |
SUMMARY_OF_OPERATIONS_AND_SIGN2
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |
Dec. 31, 2013 | ||
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | ' | |
Schedule of useful lives for premises and equipment | ' | |
Buildings and building improvements | 25 years | |
Furniture, fixtures and equipment | 3 to 7 years | |
Leasehold improvements | Term of lease or useful life, whichever is shorter |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
FAIR VALUE | ' | ||||||||||||||||
Assets (Liabilities) Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | |||||||||||||||||
as of December 31, 2013 | |||||||||||||||||
Quoted Prices in | Significant | ||||||||||||||||
Fair Value | Active Markets | Other | Significant | ||||||||||||||
Measurements | for Identical | Observable | Unobservable | ||||||||||||||
December 31, | Assets | Inputs | Inputs | ||||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(In thousands) | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury securities | $ | 491,632 | $ | 491,632 | $ | — | $ | — | |||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 394,323 | — | 394,323 | — | |||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | |||||||||||||||||
Commercial mortgage-backed securities | 178,870 | — | 178,870 | — | |||||||||||||
Residential mortgage-backed securities | 885,237 | — | 885,237 | — | |||||||||||||
Municipal securities | 280,979 | — | 280,979 | — | |||||||||||||
Other residential mortgage-backed securities: | |||||||||||||||||
Investment grade | 46,327 | — | 46,327 | — | |||||||||||||
Other commercial mortgage-backed securities: | |||||||||||||||||
Investment grade | 51,617 | — | 51,617 | — | |||||||||||||
Corporate debt securities: | |||||||||||||||||
Investment grade | 309,995 | — | 309,995 | — | |||||||||||||
Non-investment grade | 15,101 | — | 8,730 | 6,371 | |||||||||||||
Other securities | 79,716 | — | 79,716 | — | |||||||||||||
Total investment securities available-for-sale | $ | 2,733,797 | $ | 491,632 | $ | 2,235,794 | $ | 6,371 | |||||||||
Foreign exchange options | 6,290 | — | 6,290 | — | |||||||||||||
Interest rate swaps | 28,078 | — | 28,078 | — | |||||||||||||
Foreign exchange contracts | 6,181 | — | 6,181 | — | |||||||||||||
Derivatives liabilities | -50,262 | — | -46,607 | (3,655 | ) | ||||||||||||
Assets (Liabilities) Measured at Fair Value on a Recurring Basis | |||||||||||||||||
as of December 31, 2012 | |||||||||||||||||
Quoted Prices in | Significant | ||||||||||||||||
Fair Value | Active Markets | Other | Significant | ||||||||||||||
Measurements | for Identical | Observable | Unobservable | ||||||||||||||
December 31, | Assets | Inputs | Inputs | ||||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
(In thousands) | |||||||||||||||||
Investment securities available-for-sale: | |||||||||||||||||
U.S. Treasury securities | $ | 460,677 | $ | 460,677 | $ | — | $ | — | |||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 197,855 | — | 197,855 | — | |||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | |||||||||||||||||
Commercial mortgage-backed securities | 180,665 | — | 180,665 | — | |||||||||||||
Residential mortgage-backed securities | 1,144,085 | — | 1,144,085 | — | |||||||||||||
Municipal securities | 167,093 | — | 167,093 | — | |||||||||||||
Other commercial mortgage-backed securities: | |||||||||||||||||
Investment grade | 17,084 | — | 17,084 | — | |||||||||||||
Corporate debt securities: | |||||||||||||||||
Investment grade | 411,983 | — | 411,983 | — | |||||||||||||
Non-investment grade | 17,417 | — | 12,617 | 4,800 | |||||||||||||
Other securities | 10,170 | — | 10,170 | — | |||||||||||||
Total investment securities available-for-sale | $ | 2,607,029 | $ | 460,677 | $ | 2,141,552 | $ | 4,800 | |||||||||
Foreign exchange options | $ | 5,011 | $ | — | $ | 5,011 | $ | — | |||||||||
Interest rate swaps | 36,943 | — | 36,943 | — | |||||||||||||
Short-term foreign exchange contracts | 896 | — | 896 | — | |||||||||||||
Derivatives liabilities | -42,060 | — | -39,008 | (3,052 | ) | ||||||||||||
Assets Measured at Fair Value on a Non-Recurring Basis | ' | ||||||||||||||||
Assets Measured at Fair Value on a Non-Recurring Basis | |||||||||||||||||
for the Twelve Months Ended December 31, 2013 | |||||||||||||||||
Quoted Prices in | Significant | Total Gains | |||||||||||||||
Fair Value | Active Markets | Other | Significant | (Losses) for the | |||||||||||||
Measurements | for Identical | Observable | Unobservable | Twelve Months Ended | |||||||||||||
December 31, | Assets | Inputs | Inputs | December 31, | |||||||||||||
2013 | (Level 1) | (Level 2) | (Level 3) | 2013 | |||||||||||||
(In thousands) | |||||||||||||||||
Non-covered impaired loans: | |||||||||||||||||
Total residential | $ | 12,791 | $ | — | $ | — | $ | 12,791 | $ | (1,378 | ) | ||||||
Total commercial real estate | 29,559 | — | — | 29,559 | (4,250 | ) | |||||||||||
Total commercial and industrial | 15,120 | — | — | 15,120 | (13,135 | ) | |||||||||||
Total consumer | 281 | — | — | 281 | (112 | ) | |||||||||||
Total non-covered impaired loans | $ | 57,751 | $ | — | $ | — | $ | 57,751 | $ | (18,875 | ) | ||||||
Non-covered OREO | $ | 13,031 | $ | — | $ | — | $ | 13,031 | $ | (1,438 | ) | ||||||
Covered OREO (1) | $ | 17,284 | $ | — | $ | — | $ | 17,284 | $ | (3,376 | ) | ||||||
Assets Measured at Fair Value on a Non-Recurring Basis | |||||||||||||||||
for the Twelve Months Ended December 31, 2012 | |||||||||||||||||
Quoted Prices in | Significant | Total Gains | |||||||||||||||
Fair Value | Active Markets | Other | Significant | (Losses) for the | |||||||||||||
Measurements | for Identical | Observable | Unobservable | Twelve Months Ended | |||||||||||||
December 31, | Assets | Inputs | Inputs | December 31, | |||||||||||||
2012 | (Level 1) | (Level 2) | (Level 3) | 2012 | |||||||||||||
(In thousands) | |||||||||||||||||
Non-covered impaired loans: | |||||||||||||||||
Total residential | $ | 23,043 | $ | — | $ | — | $ | 23,043 | $ | (4,803 | ) | ||||||
Total commercial real estate | 31,737 | — | — | 31,737 | (8,405 | ) | |||||||||||
Total commercial and industrial | 12,838 | — | — | 12,838 | (14,540 | ) | |||||||||||
Total consumer | 372 | — | — | 372 | (264 | ) | |||||||||||
Total non-covered impaired loans | $ | 67,990 | $ | — | $ | — | $ | 67,990 | $ | (28,012 | ) | ||||||
Non-covered OREO | $ | 2,065 | $ | — | $ | — | $ | 2,065 | $ | (5,122 | ) | ||||||
Covered OREO (1) | $ | 10,468 | $ | — | $ | — | $ | 10,468 | $ | (11,183 | ) | ||||||
Loans held for sale | $ | — | $ | — | $ | — | $ | — | $ | (4,730 | ) | ||||||
(1) Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company’s liability for losses is 20% of the $3.4 million in losses, or $675 thousand, and 20% of the $11.2 million in losses, or $2.2 million, for the year ended December 31, 2013 and 2012, respectively. | |||||||||||||||||
Reconciliation of assets and liabilities measured at fair value using significant unobservable inputs | ' | ||||||||||||||||
Investment Securities | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Corporate Debt | |||||||||||||||||
Securities | |||||||||||||||||
Non-Investment Grade | Derivatives Payable | ||||||||||||||||
(In thousands) | |||||||||||||||||
Beginning balance, January 1, 2013 | $ | 4,800 | $ | (3,052 | ) | ||||||||||||
Total gains or (losses): (1) | |||||||||||||||||
Included in earnings | — | (603 | ) | ||||||||||||||
Included in other comprehensive unrealized gain (2) | 1,653 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3) | |||||||||||||||||
Purchases | — | — | |||||||||||||||
Issuances | — | — | |||||||||||||||
Sales | — | — | |||||||||||||||
Settlements | -82 | — | |||||||||||||||
Transfer from investment grade to non-investment grade | — | — | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance, December 31, 2013 | $ | 6,371 | $ | (3,655 | ) | ||||||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at December 31, 2013 | $ | — | $ | 603 | |||||||||||||
Investment Securities | |||||||||||||||||
Available-for-Sale | |||||||||||||||||
Corporate Debt | |||||||||||||||||
Securities | |||||||||||||||||
Non-Investment Grade | Derivatives Payable | ||||||||||||||||
(In thousands) | |||||||||||||||||
Beginning balance, January 1, 2012 | $ | 2,235 | $ | (2,634 | ) | ||||||||||||
Total gains or (losses): (1) | |||||||||||||||||
Included in earnings | -99 | (418 | ) | ||||||||||||||
Included in other comprehensive unrealized gain (2) | 2,711 | — | |||||||||||||||
Purchases, issuances, sales, settlements (3) | |||||||||||||||||
Purchases | — | — | |||||||||||||||
Issuances | — | — | |||||||||||||||
Sales | — | — | |||||||||||||||
Settlements | -47 | — | |||||||||||||||
Transfer from investment grade to non-investment grade | — | — | |||||||||||||||
Transfers in and/or out of Level 3 | — | — | |||||||||||||||
Ending balance, December 31, 2012 | $ | 4,800 | $ | (3,052 | ) | ||||||||||||
Changes in unrealized losses included in earnings relating to assets and liabilities still held at December 31, 2012 | $ | 99 | $ | 418 | |||||||||||||
(1) Total gains or losses represent the total realized and unrealized gains and losses recorded for Level 3 assets and liabilities. Realized gains or losses are reported in the consolidated statements of income. | |||||||||||||||||
(2) Unrealized gains or losses on investment securities are reported in accumulated other comprehensive loss, net of tax in the consolidated statements of comprehensive income. | |||||||||||||||||
(3) Purchases, issuances, sales and settlements represent Level 3 assets and liabilities that were either purchased, issued, sold, or settled during the period. The amounts are recorded at their end of period fair values. | |||||||||||||||||
Carrying amounts and fair values of financial instruments | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Carrying | Carrying | ||||||||||||||||
Amount or | Amount or | ||||||||||||||||
Notional | Estimated | Notional | Estimated | ||||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 895,820 | $ | 895,820 | $ | 1,323,106 | $ | 1,323,106 | |||||||||
Short-term investments | 257,473 | 257,473 | 366,378 | 366,378 | |||||||||||||
Securities purchased under resale agreements | 1,300,000 | 1,279,406 | 1,450,000 | 1,442,302 | |||||||||||||
Investment securities available-for-sale | 2,733,797 | 2,733,797 | 2,607,029 | 2,607,029 | |||||||||||||
Loans held for sale | 204,970 | 212,469 | 174,317 | 180,349 | |||||||||||||
Loans receivable, net | 17,600,613 | 16,741,674 | 14,645,785 | 14,743,218 | |||||||||||||
Investment in Federal Home Loan Bank stock | 62,330 | 62,330 | 107,275 | 107,275 | |||||||||||||
Investment in Federal Reserve Bank stock | 48,333 | 48,333 | 48,003 | 48,003 | |||||||||||||
Accrued interest receivable | 116,314 | 116,314 | 94,837 | 94,837 | |||||||||||||
Foreign exchange options | 85,614 | 6,290 | 85,614 | 5,011 | |||||||||||||
Interest rate swaps | 1,915,474 | 28,078 | 1,190,793 | 36,943 | |||||||||||||
Foreign exchange contracts | 440,848 | 6,181 | 112,459 | 896 | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 14,588,570 | 14,588,570 | 12,187,740 | 12,187,740 | |||||||||||||
Time deposits | 5,824,348 | 5,791,659 | 6,121,614 | 6,115,530 | |||||||||||||
Federal Home Loan Bank advances | 315,092 | 308,521 | 312,975 | 333,060 | |||||||||||||
Securities sold under repurchase agreements | 995,000 | 1,134,774 | 995,000 | 1,173,830 | |||||||||||||
Other borrowings | — | — | 20,000 | 20,000 | |||||||||||||
Accrued interest payable | 11,178 | 11,178 | 10,855 | 10,855 | |||||||||||||
Long-term debt | 226,868 | 184,415 | 137,178 | 83,762 | |||||||||||||
Derivatives liabilities | 2,308,612 | 50,262 | 1,392,494 | 42,060 | |||||||||||||
Schedule fair value hierarchy for the estimated fair values of financial instruments | ' | ||||||||||||||||
December 31, 2013 | |||||||||||||||||
Estimated | |||||||||||||||||
Fair Value | |||||||||||||||||
Measurements | Level 1 | Level 2 | Level 3 | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 895,820 | $ | 895,820 | $ | — | $ | — | |||||||||
Short-term investments | 257,473 | — | 257,473 | — | |||||||||||||
Securities purchased under resale agreements | 1,279,406 | — | 1,279,406 | — | |||||||||||||
Loans held for sale | 212,469 | — | 212,469 | — | |||||||||||||
Loans receivable, net | 16,741,674 | — | — | 16,741,674 | |||||||||||||
Investment in Federal Home Loan Bank stock | 62,330 | — | 62,330 | — | |||||||||||||
Investment in Federal Reserve Bank stock | 48,333 | — | 48,333 | — | |||||||||||||
Accrued interest receivable | 116,314 | — | 116,314 | — | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 14,588,570 | — | 14,588,570 | — | |||||||||||||
Time deposits | 5,791,659 | — | — | 5,791,659 | |||||||||||||
Federal Home Loan Bank advances | 308,521 | — | 308,521 | — | |||||||||||||
Securities sold under repurchase agreements | 1,134,774 | — | 1,134,774 | — | |||||||||||||
Other borrowings | — | — | — | — | |||||||||||||
Accrued interest payable | 11,178 | — | 11,178 | — | |||||||||||||
Long-term debt | 184,415 | — | 184,415 | — | |||||||||||||
December 31, 2012 | |||||||||||||||||
Estimated | |||||||||||||||||
Fair Value | |||||||||||||||||
Measurements | Level 1 | Level 2 | Level 3 | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,323,106 | $ | 1,323,106 | $ | — | $ | — | |||||||||
Short-term investments | 366,378 | — | 366,378 | — | |||||||||||||
Securities purchased under resale agreements | 1,442,302 | — | 1,442,302 | — | |||||||||||||
Loans held for sale | 180,349 | — | 180,349 | — | |||||||||||||
Loans receivable, net | 14,743,218 | — | — | 14,743,218 | |||||||||||||
Investment in Federal Home Loan Bank stock | 107,275 | — | 107,275 | — | |||||||||||||
Investment in Federal Reserve Bank stock | 48,003 | — | 48,003 | — | |||||||||||||
Accrued interest receivable | 94,837 | — | 94,837 | — | |||||||||||||
Financial Liabilities: | |||||||||||||||||
Customer deposit accounts: | |||||||||||||||||
Demand, savings and money market deposits | 12,187,740 | — | 12,187,740 | — | |||||||||||||
Time deposits | 6,115,530 | — | — | 6,115,530 | |||||||||||||
Federal Home Loan Bank advances | 333,060 | — | 333,060 | — | |||||||||||||
Securities sold under repurchase agreements | 1,173,830 | — | 1,173,830 | — | |||||||||||||
Other borrowings | 20,000 | — | 20,000 | — | |||||||||||||
Accrued interest payable | 10,855 | — | 10,855 | — | |||||||||||||
Long-term debt | 83,762 | — | 83,762 | — | |||||||||||||
CASH_AND_CASH_EQUIVALENTS_AND_1
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | ' | |||||||
Composition of cash and cash equivalents | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||
Cash and amounts due from banks | $ | 693,387 | $ | 933,050 | ||||
Cash equivalents: | ||||||||
Money market funds | 605 | 3,526 | ||||||
Other short-term investments | 201,828 | 386,530 | ||||||
Total cash and cash equivalents | $ | 895,820 | $ | 1,323,106 | ||||
Schedule of short-term investments | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||
Balance at end of year | $ | 257,473 | $ | 366,378 | ||||
Average balance outstanding during the year | 334,049 | 242,937 | ||||||
Maximum balance outstanding at any month-end | 384,375 | 367,283 | ||||||
Weighted average interest rate at end of year | 3.23% | 2.64% | ||||||
INVESTMENT_SECURITIES_Tables
INVESTMENT SECURITIES (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
INVESTMENT SECURITIES | ' | |||||||||||||||||||||||
Investment securities available-for-sale portfolio | ' | |||||||||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 495,053 | $ | 201 | $ | -3,622 | $ | 491,632 | ||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 406,807 | 242 | -12,726 | 394,323 | ||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 182,257 | 1,062 | -4,449 | 178,870 | ||||||||||||||||||||
Residential mortgage-backed securities | 892,435 | 7,729 | -14,927 | 885,237 | ||||||||||||||||||||
Municipal securities | 297,390 | 1,122 | -17,533 | 280,979 | ||||||||||||||||||||
Other residential mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 48,129 | — | -1,802 | 46,327 | ||||||||||||||||||||
Other commercial mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 51,000 | 617 | — | 51,617 | ||||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 312,726 | 613 | -3,344 | 309,995 | ||||||||||||||||||||
Non-investment grade (1) | 20,668 | 62 | -5,629 | 15,101 | ||||||||||||||||||||
Other securities | 80,025 | 555 | -864 | 79,716 | ||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,786,490 | $ | 12,203 | $ | -64,896 | $ | 2,733,797 | ||||||||||||||||
Gross | Gross | Estimated | ||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 459,613 | $ | 1,135 | $ | -71 | $ | 460,677 | ||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 197,264 | 673 | -82 | 197,855 | ||||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 174,036 | 6,665 | -36 | 180,665 | ||||||||||||||||||||
Residential mortgage-backed securities | 1,123,880 | 20,883 | -678 | 1,144,085 | ||||||||||||||||||||
Municipal securities | 163,333 | 4,491 | -731 | 167,093 | ||||||||||||||||||||
Other commercial mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 16,999 | 85 | — | 17,084 | ||||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 429,318 | 237 | -17,572 | 411,983 | ||||||||||||||||||||
Non-investment grade (1) | 24,620 | 355 | -7,558 | 17,417 | ||||||||||||||||||||
Other securities | 9,955 | 215 | — | 10,170 | ||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,599,018 | $ | 34,739 | $ | -26,728 | $ | 2,607,029 | ||||||||||||||||
(1) For 2013, the Company did not record any OTTI. For 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. | ||||||||||||||||||||||||
Schedule of other than temporary impairment, credit losses recognized in earnings | ' | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Beginning balance | $ | 115,511 | $ | 115,412 | ||||||||||||||||||||
Addition of other-than-temporary impairment that was not previously recognized | — | — | ||||||||||||||||||||||
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized | — | 99 | ||||||||||||||||||||||
Reduction for securities sold | — | — | ||||||||||||||||||||||
Ending balance | $ | 115,511 | $ | 115,511 | ||||||||||||||||||||
Gross unrealized losses and related fair values of investment securities available-for-sale | ' | |||||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 337,248 | $ | -3,622 | $ | — | $ | — | $ | 337,248 | $ | -3,622 | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 387,097 | -12,726 | — | — | 387,097 | -12,726 | ||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 114,754 | -3,280 | 16,065 | -1,169 | 130,819 | -4,449 | ||||||||||||||||||
Residential mortgage-backed securities | 502,285 | -10,570 | 92,540 | -4,357 | 594,825 | -14,927 | ||||||||||||||||||
Municipal securities | 173,782 | -10,765 | 47,892 | -6,768 | 221,674 | -17,533 | ||||||||||||||||||
Other residential mortgage-backed securities: | ||||||||||||||||||||||||
Investment grade | 46,328 | -1,802 | — | — | 46,328 | -1,802 | ||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 193,482 | -1,538 | 79,442 | -1,806 | 272,924 | -3,344 | ||||||||||||||||||
Non-investment grade | — | — | 14,422 | -5,629 | 14,422 | -5,629 | ||||||||||||||||||
Other securities | 48,098 | -864 | — | — | 48,098 | -864 | ||||||||||||||||||
Total investment securities available-for-sale | $ | 1,803,074 | $ | -45,167 | $ | 250,361 | $ | -19,729 | $ | 2,053,435 | $ | -64,896 | ||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||
Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | |||||||||||||||||||
Value | Losses | Value | Losses | Value | Losses | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
As of December 31, 2012 | ||||||||||||||||||||||||
Investment securities available-for-sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 95,232 | $ | -71 | $ | — | $ | — | $ | 95,232 | $ | -71 | ||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | 24,912 | -82 | — | — | 24,912 | -82 | ||||||||||||||||||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities: | ||||||||||||||||||||||||
Commercial mortgage-backed securities | 10,013 | -36 | — | — | 10,013 | -36 | ||||||||||||||||||
Residential mortgage-backed securities | 215,826 | -678 | — | — | 215,826 | -678 | ||||||||||||||||||
Municipal securities | 48,363 | -731 | — | — | 48,363 | -731 | ||||||||||||||||||
Corporate debt securities: | ||||||||||||||||||||||||
Investment grade | 225,819 | -5,391 | 182,697 | -12,181 | 408,516 | -17,572 | ||||||||||||||||||
Non-investment grade | — | — | 12,574 | -7,558 | 12,574 | -7,558 | ||||||||||||||||||
Other securities | — | — | — | — | — | — | ||||||||||||||||||
Total investment securities available-for-sale | $ | 620,165 | $ | -6,989 | $ | 195,271 | $ | -19,739 | $ | 815,436 | $ | -26,728 | ||||||||||||
Schedule maturities of investment securities | ' | |||||||||||||||||||||||
The scheduled maturities of investment securities at December 31, 2013 are presented as follows: | ||||||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Due within one year | $ | 417,774 | $ | 401,970 | ||||||||||||||||||||
Due after one year through five years | 547,189 | 542,293 | ||||||||||||||||||||||
Due after five years through ten years | 750,811 | 732,404 | ||||||||||||||||||||||
Due after ten years | 1,070,716 | 1,057,130 | ||||||||||||||||||||||
Total investment securities available-for-sale | $ | 2,786,490 | $ | 2,733,797 |
DERIVATIVE_FINANCIAL_INSTRUMEN1
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING | ' | ||||||||||||||||||||||
Fair values of derivative instruments | ' | ||||||||||||||||||||||
Fair Values of Derivative Instruments | |||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||||
Notional | Derivative | Derivative | Notional | Derivative | Derivative | ||||||||||||||||||
Amount | Assets (1) | Liabilities (1) | Amount | Assets (1) | Liabilities (1) | ||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Interest rate swaps on certificates of deposit—fair value | $ | 135,000 | $ | — | $ | 16,906 | $ | 50,000 | $ | — | $ | 1,521 | |||||||||||
Total derivatives designated as hedging instruments | $ | 135,000 | $ | — | $ | 16,906 | $ | 50,000 | $ | — | $ | 1,521 | |||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange options | $ | 85,614 | $ | 6,290 | $ | 3,655 | $ | 85,614 | $ | 5,011 | $ | 3,052 | |||||||||||
Interest rate swaps | 1,915,474 | 28,078 | 26,352 | 1,190,793 | 36,943 | 36,799 | |||||||||||||||||
Foreign exchange contracts | 440,848 | 6,181 | 3,349 | 112,459 | 896 | 688 | |||||||||||||||||
Total derivatives not designated as hedging instruments | $ | 2,441,936 | $ | 40,549 | $ | 33,356 | $ | 1,388,866 | $ | 42,850 | $ | 40,539 | |||||||||||
(1) Derivative assets, which are a component of other assets, include the estimated settlement of the derivative asset position. Derivative liabilities, which are a component of other liabilities and deposits, include the estimated settlement of the derivative liability position. | |||||||||||||||||||||||
Gains (losses) on derivative instruments | ' | ||||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||||
Location in Consolidated | |||||||||||||||||||||||
Statements of Operations | 2013 | 2012 | 2011 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Derivatives designated as hedging instruments | |||||||||||||||||||||||
Interest rate swaps on certificates of deposit—fair value | Interest expense | $ | -9,255 | $ | -1,076 | $ | 2,930 | ||||||||||||||||
Total net (expense) income | $ | -9,255 | $ | -1,076 | $ | 2,930 | |||||||||||||||||
Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Equity swap agreements | Noninterest expense | $ | — | $ | 2 | $ | 2 | ||||||||||||||||
Foreign exchange options | Noninterest income | 653 | 389 | -392 | |||||||||||||||||||
Foreign exchange options | Noninterest expense | 23 | 101 | 16 | |||||||||||||||||||
Interest rate swaps | Noninterest income | 1,582 | 592 | -447 | |||||||||||||||||||
Foreign exchange contracts | Noninterest income | 2,624 | -228 | 251 | |||||||||||||||||||
Total net income (expense) | $ | 4,882 | $ | 856 | $ | -570 | |||||||||||||||||
Schedule of gross derivatives, resale agreements, repurchase agreements and the respective collateral received or pledged in the form of other financial instruments, which are generally marketable securities | ' | ||||||||||||||||||||||
As of December 31, 2013 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Assets | Gross Amounts | Gross Amounts Offset | Net Amounts of Assets | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Received | |||||||||||||||||||
Assets | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 16,043 | $ | — | $ | 16,043 | $ | -11,363 | $ | -4,680 | $ | - | |||||||||||
Resale Agreements | $ | 1,400,000 | $ | — | $ | 1,400,000 | $ | -495,000 | $ | -905,000 | $ | - | |||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Liabilities | Gross Amounts | Gross Amounts Offset | Net Amounts of Liabilities | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Posted | |||||||||||||||||||
Liabilities | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 33,849 | $ | — | $ | 33,849 | $ | -11,363 | $ | -22,486 | $ | - | |||||||||||
Repurchase Agreements | $ | 995,000 | $ | — | $ | 995,000 | $ | -495,000 | $ | -500,000 | $ | - | |||||||||||
As of December 31, 2012 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Assets | Gross Amounts | Gross Amounts Offset | Net Amounts of Assets | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Received | |||||||||||||||||||
Assets | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 992 | $ | - | $ | 992 | $ | -366 | $ | -626 | $ | - | |||||||||||
Resale Agreements | $ | 1,750,000 | $ | - | $ | 1,750,000 | $ | -545,000 | $ | -1,205,000 | $ | - | |||||||||||
Gross Amounts Not Offset in the | |||||||||||||||||||||||
Condensed Consolidated Balance | |||||||||||||||||||||||
Sheets | |||||||||||||||||||||||
Liabilities | Gross Amounts | Gross Amounts Offset | Net Amounts of Liabilities | Financial | Collateral | Net Amount | |||||||||||||||||
of Recognized | in the Condensed | Presented in the | Instruments | Posted | |||||||||||||||||||
Liabilities | Consolidated | Condensed Consolidated | |||||||||||||||||||||
Balance Sheets | Balance Sheets | ||||||||||||||||||||||
Derivatives | $ | 38,513 | $ | - | $ | 38,513 | $ | -366 | $ | -38,147 | $ | - | |||||||||||
Repurchase Agreements | $ | 995,000 | $ | - | $ | 995,000 | $ | -545,000 | $ | -450,000 | $ | - | |||||||||||
COVERED_ASSETS_AND_FDIC_INDEMN1
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET | ' | ||||||||||||||||
Carrying amounts and composition of covered loans | ' | ||||||||||||||||
December 31, | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 290,095 | $ | 362,345 | |||||||||||||
Residential multifamily | 403,508 | 647,440 | |||||||||||||||
Commercial and industrial real estate | 1,103,530 | 1,348,556 | |||||||||||||||
Construction and land | 163,833 | 417,631 | |||||||||||||||
Total real estate loans | 1,960,966 | 2,775,972 | |||||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 426,621 | 587,333 | |||||||||||||||
Other consumer | 73,973 | 87,651 | |||||||||||||||
Total other loans | 500,594 | 674,984 | |||||||||||||||
Total principal balance | 2,461,560 | 3,450,956 | |||||||||||||||
Covered discount | -265,917 | -510,208 | |||||||||||||||
Net valuation of loans | 2,195,643 | 2,940,748 | |||||||||||||||
Allowance on covered loans | -7,745 | -5,153 | |||||||||||||||
Total covered loans, net | $ | 2,187,898 | $ | 2,935,595 | |||||||||||||
Schedule of covered loan portfolio by credit quality indicator | ' | ||||||||||||||||
Special | |||||||||||||||||
Pass/Watch | Mention | Substandard | Doubtful | Total | |||||||||||||
(In thousands) | |||||||||||||||||
31-Dec-13 | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 281,246 | $ | 733 | $ | 8,116 | $ | — | $ | 290,095 | |||||||
Residential multifamily | 373,024 | 785 | 29,699 | — | 403,508 | ||||||||||||
Commercial and industrial real estate | 857,376 | 27,851 | 211,835 | 6,468 | 1,103,530 | ||||||||||||
Construction and land | 41,847 | 9,472 | 111,616 | 898 | 163,833 | ||||||||||||
Total real estate loans | 1,553,493 | 38,841 | 361,266 | 7,366 | 1,960,966 | ||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 378,086 | 4,635 | 43,797 | 103 | 426,621 | ||||||||||||
Other consumer | 72,053 | 128 | 1,792 | — | 73,973 | ||||||||||||
Total other loans | 450,139 | 4,763 | 45,589 | 103 | 500,594 | ||||||||||||
Total principal balance | $ | 2,003,632 | $ | 43,604 | $ | 406,855 | $ | 7,469 | $ | 2,461,560 | |||||||
Special | |||||||||||||||||
Pass/Watch | Mention | Substandard | Doubtful | Total | |||||||||||||
(In thousands) | |||||||||||||||||
31-Dec-12 | |||||||||||||||||
Real estate loans: | |||||||||||||||||
Residential single-family | $ | 345,568 | $ | 982 | $ | 15,795 | $ | — | $ | 362,345 | |||||||
Residential multifamily | 571,061 | 8,074 | 68,305 | — | 647,440 | ||||||||||||
Commercial and industrial real estate | 963,069 | 10,777 | 367,869 | 6,841 | 1,348,556 | ||||||||||||
Construction and land | 170,548 | 15,135 | 230,776 | 1,172 | 417,631 | ||||||||||||
Total real estate loans | 2,050,246 | 34,968 | 682,745 | 8,013 | 2,775,972 | ||||||||||||
Other loans: | |||||||||||||||||
Commercial business | 434,138 | 22,533 | 130,467 | 195 | 587,333 | ||||||||||||
Other consumer | 85,534 | 515 | 1,602 | — | 87,651 | ||||||||||||
Total other loans | 519,672 | 23,048 | 132,069 | 195 | 674,984 | ||||||||||||
Total principal balance | $ | 2,569,918 | $ | 58,016 | $ | 814,814 | $ | 8,208 | $ | 3,450,956 | |||||||
Covered nonperforming assets | ' | ||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Covered nonaccrual loans(1) (2) (3) | $ | 126,895 | $ | 204,310 | |||||||||||||
Covered loans past due 90 days or more but not on nonaccrual | — | — | |||||||||||||||
Total nonperforming loans | 126,895 | 204,310 | |||||||||||||||
Other real estate owned covered, net | 21,373 | 26,808 | |||||||||||||||
Total covered nonperforming assets | $ | 148,268 | $ | 231,118 | |||||||||||||
(1) Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC. | |||||||||||||||||
(2) Represents principal balance net of discount. | |||||||||||||||||
(3) Includes $17.7 million and $29.6 million of loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||
Schedule of covered TDR loan activity | ' | ||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 157,736 | $ | 146,709 | |||||||||||||
Additions | 35,865 | 72,917 | |||||||||||||||
Sales | — | — | |||||||||||||||
Transfers to OREO | — | -6,351 | |||||||||||||||
Charge-offs | -10,167 | -8,658 | |||||||||||||||
Paydowns/ Reductions | -67,427 | -46,881 | |||||||||||||||
Balance at end of period | $ | 116,007 | $ | 157,736 | |||||||||||||
Changes in the accretable yield for the covered loans | ' | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 556,986 | $ | 785,165 | |||||||||||||
Additions | — | — | |||||||||||||||
Accretion | -347,010 | -382,132 | |||||||||||||||
Changes in expected cash flows | 251,569 | 153,953 | |||||||||||||||
Balance at end of period | $ | 461,545 | $ | 556,986 | |||||||||||||
FDIC indemnification asset activity | ' | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 316,313 | $ | 511,135 | |||||||||||||
(Amortization) Accretion | -99,055 | -33,815 | |||||||||||||||
Reductions(1) | -95,536 | -143,988 | |||||||||||||||
Estimate of FDIC repayment (2) | -47,014 | -17,019 | |||||||||||||||
Balance at end of period | $ | 74,708 | $ | 316,313 | |||||||||||||
(1) Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset. | |||||||||||||||||
(2) This represents the change in the calculated estimate the Company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses. | |||||||||||||||||
Schedule of FDIC receivable activity | ' | ||||||||||||||||
Year Ending December 31 , | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Balance at beginning of period | $ | 73,091 | $ | 76,646 | |||||||||||||
Net addition due to eligible expense/loss | 12,996 | 72,539 | |||||||||||||||
Payment received from the FDIC | -55,826 | -76,094 | |||||||||||||||
Balance at end of period | $ | 30,261 | $ | 73,091 | |||||||||||||
NONCOVERED_LOANS_AND_ALLOWANCE1
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||||||||
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES | ' | ||||||||||||||||||||||||||
Summary of year-end loans receivable, excluding covered loans | ' | ||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 3,192,875 | $ | 2,187,323 | |||||||||||||||||||||||
Multifamily | 992,434 | 900,708 | |||||||||||||||||||||||||
Total residential | 4,185,309 | 3,088,031 | |||||||||||||||||||||||||
Commercial Real Estate (“CRE”): | |||||||||||||||||||||||||||
Income producing | 4,301,030 | 3,644,035 | |||||||||||||||||||||||||
Construction | 140,186 | 121,589 | |||||||||||||||||||||||||
Land | 143,861 | 129,071 | |||||||||||||||||||||||||
Total CRE | 4,585,077 | 3,894,695 | |||||||||||||||||||||||||
Commercial and Industrial (“C&I”): | |||||||||||||||||||||||||||
Commercial business | 4,637,056 | 3,569,388 | |||||||||||||||||||||||||
Trade finance | 723,137 | 661,877 | |||||||||||||||||||||||||
Total C&I | 5,360,193 | 4,231,265 | |||||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 679,220 | 475,799 | |||||||||||||||||||||||||
Other consumer | 868,518 | 269,083 | |||||||||||||||||||||||||
Total consumer | 1,547,738 | 744,882 | |||||||||||||||||||||||||
Total gross loans receivable, excluding covered loans | 15,678,317 | 11,958,873 | |||||||||||||||||||||||||
Unearned fees, premiums, and discounts, net | (23,672 | ) | (19,301 | ) | |||||||||||||||||||||||
Allowance for loan losses, excluding covered loans | (241,930 | ) | (229,382 | ) | |||||||||||||||||||||||
Loans receivable, excluding covered loans, net | $ | 15,412,715 | $ | 11,710,190 | |||||||||||||||||||||||
Summary of non-covered loans by credit quality | ' | ||||||||||||||||||||||||||
Special | |||||||||||||||||||||||||||
Pass/Watch | Mention | Substandard | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 3,167,337 | $ | 8,331 | $ | 17,207 | $ | 3,192,875 | |||||||||||||||||||
Multifamily | 923,697 | 1,634 | 67,103 | 992,434 | |||||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 4,032,269 | 56,752 | 212,009 | 4,301,030 | |||||||||||||||||||||||
Construction | 127,138 | 6,160 | 6,888 | 140,186 | |||||||||||||||||||||||
Land | 116,000 | 9,304 | 18,557 | 143,861 | |||||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 4,400,847 | 92,315 | 143,894 | 4,637,056 | |||||||||||||||||||||||
Trade finance | 681,345 | 22,099 | 19,693 | 723,137 | |||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 677,094 | 445 | 1,681 | 679,220 | |||||||||||||||||||||||
Other consumer | 865,752 | 244 | 2,522 | 868,518 | |||||||||||||||||||||||
Total | $ | 14,991,479 | $ | 197,284 | $ | 489,554 | $ | 15,678,317 | |||||||||||||||||||
Special | |||||||||||||||||||||||||||
Pass/Watch | Mention | Substandard | Total | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 2,163,918 | $ | 5,131 | $ | 18,274 | $ | 2,187,323 | |||||||||||||||||||
Multifamily | 781,552 | 13,510 | 105,646 | 900,708 | |||||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 3,416,142 | 42,222 | 185,671 | 3,644,035 | |||||||||||||||||||||||
Construction | 63,008 | 16,885 | 41,696 | 121,589 | |||||||||||||||||||||||
Land | 79,085 | 13,232 | 36,754 | 129,071 | |||||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,380,212 | 69,687 | 119,489 | 3,569,388 | |||||||||||||||||||||||
Trade finance | 632,617 | 24,778 | 4,482 | 661,877 | |||||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 475,799 | — | — | 475,799 | |||||||||||||||||||||||
Other consumer | 261,136 | 1,115 | 6,832 | 269,083 | |||||||||||||||||||||||
Total | $ | 11,253,469 | $ | 186,560 | $ | 518,844 | $ | 11,958,873 | |||||||||||||||||||
Aging analysis of nonaccrual loans, past due non-covered loans and loans held for sale | ' | ||||||||||||||||||||||||||
Accruing | Accruing | Total | Nonaccrual | Nonaccrual | Total | ||||||||||||||||||||||
Loans | Loans | Accruing | Loans Less | Loans | Nonaccrual | Current | |||||||||||||||||||||
30-59 Days | 60-89 Days | Past Due | Than 90 Days | 90 or More | Past Due | Accruing | |||||||||||||||||||||
Past Due | Past Due | Loans | Past Due | Days Past Due | Loans | Loans | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 4,694 | $ | 922 | $ | 5,616 | $ | — | $ | 11,218 | $ | 11,218 | $ | 3,176,041 | $ | 3,192,875 | |||||||||||
Multifamily | 8,580 | 531 | 9,111 | 19,661 | 7,972 | 27,633 | 955,690 | 992,434 | |||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 12,746 | 1,798 | 14,544 | 13,924 | 22,549 | 36,473 | 4,250,013 | 4,301,030 | |||||||||||||||||||
Construction | — | — | — | — | 6,888 | 6,888 | 133,298 | 140,186 | |||||||||||||||||||
Land | — | — | — | 265 | 3,223 | 3,488 | 140,373 | 143,861 | |||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,428 | 6,259 | 9,687 | 6,437 | 15,486 | 21,923 | 4,605,446 | 4,637,056 | |||||||||||||||||||
Trade finance | — | — | — | — | 909 | 909 | 722,228 | 723,137 | |||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 541 | 445 | 986 | — | 1,681 | 1,681 | 676,553 | 679,220 | |||||||||||||||||||
Other consumer | 293 | 1 | 294 | 175 | 1,263 | 1,438 | 866,786 | 868,518 | |||||||||||||||||||
Loans held for sale | — | — | — | — | — | — | 204,970 | 204,970 | |||||||||||||||||||
Total | $ | 30,282 | $ | 9,956 | $ | 40,238 | $ | 40,462 | $ | 71,189 | $ | 111,651 | $ | 15,731,398 | 15,883,287 | ||||||||||||
Unearned fees, premiums and discounts, net | -23,672 | ||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ | 15,859,615 | |||||||||||||||||||||||||
Accruing | Accruing | Total | Nonaccrual | Nonaccrual | Total | ||||||||||||||||||||||
Loans | Loans | Accruing | Loans Less | Loans | Nonaccrual | Current | |||||||||||||||||||||
30-59 Days | 60-89 Days | Past Due | Than 90 Days | 90 or More | Past Due | Accruing | |||||||||||||||||||||
Past Due | Past Due | Loans | Past Due | Days Past Due | Loans | Loans | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 4,820 | $ | 2,244 | $ | 7,064 | $ | 1,301 | $ | 9,809 | $ | 11,110 | $ | 2,169,149 | $ | 2,187,323 | |||||||||||
Multifamily | 7,127 | 924 | 8,051 | 6,788 | 11,052 | 17,840 | 874,817 | 900,708 | |||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 18,118 | 4,731 | 22,849 | 9,485 | 8,354 | 17,839 | 3,603,347 | 3,644,035 | |||||||||||||||||||
Construction | — | — | — | — | 27,039 | 27,039 | 94,550 | 121,589 | |||||||||||||||||||
Land | — | — | — | 637 | 3,984 | 4,621 | 124,450 | 129,071 | |||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 3,293 | 316 | 3,609 | 8,068 | 14,740 | 22,808 | 3,542,971 | 3,569,388 | |||||||||||||||||||
Trade finance | 500 | — | 500 | 429 | 2,003 | 2,432 | 658,945 | 661,877 | |||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 71 | — | 71 | — | — | — | 475,728 | 475,799 | |||||||||||||||||||
Other consumer | 485 | 968 | 1,453 | 499 | 3,921 | 4,420 | 263,210 | 269,083 | |||||||||||||||||||
Loans held for sale | — | — | — | — | — | — | 174,317 | 174,317 | |||||||||||||||||||
Total | $ | 34,414 | $ | 9,183 | $ | 43,597 | $ | 27,207 | $ | 80,902 | $ | 108,109 | $ | 11,981,484 | 12,133,190 | ||||||||||||
Unearned fees, premiums and discounts, net | -19,301 | ||||||||||||||||||||||||||
Total recorded investment in non-covered loans and loans held for sale | $ | 12,113,889 | |||||||||||||||||||||||||
Summary of interest income foregone on nonaccrual loans | ' | ||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Interest income that would have been recognized had nonaccrual loans performed in accordance with their original terms | $ | 7,410 | $ | 7,206 | $ | 9,384 | |||||||||||||||||||||
Less: Interest income recognized on nonaccrual loans on a cash basis | -2,319 | -2,269 | -3,519 | ||||||||||||||||||||||||
Interest income foregone on nonaccrual loans | $ | 5,091 | $ | 4,937 | $ | 5,865 | |||||||||||||||||||||
Loans modified as troubled debt restructurings | ' | ||||||||||||||||||||||||||
Loans Modified as TDRs During the | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Pre-Modification | Post-Modification | ||||||||||||||||||||||||||
Number | Outstanding | Outstanding | |||||||||||||||||||||||||
of | Recorded | Recorded | Financial | ||||||||||||||||||||||||
Contracts | Investment | Investment (1) | Impact (2) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Multifamily | 1 | $ | 1,093 | $ | 1,071 | $ | — | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 6 | $ | 26,021 | $ | 17,456 | $ | 219 | ||||||||||||||||||||
Construction | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Land | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 6 | $ | 16,220 | $ | 15,624 | $ | 4,274 | ||||||||||||||||||||
Trade finance | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Other consumer | 1 | $ | 651 | $ | 639 | $ | — | ||||||||||||||||||||
Loans Modified as TDRs During the | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Pre-Modification | Post-Modification | ||||||||||||||||||||||||||
Number | Outstanding | Outstanding | |||||||||||||||||||||||||
of | Recorded | Recorded | Financial | ||||||||||||||||||||||||
Contracts | Investment | Investment (1) | Impact (2) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | 12 | $ | 6,227 | $ | 5,556 | $ | 938 | ||||||||||||||||||||
Multifamily | 16 | $ | 28,736 | $ | 28,153 | $ | 3,344 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 8 | $ | 10,118 | $ | 8,162 | $ | 1,169 | ||||||||||||||||||||
Construction | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Land | 3 | $ | 1,610 | $ | 1,059 | $ | 395 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 14 | $ | 5,101 | $ | 4,374 | $ | 560 | ||||||||||||||||||||
Trade finance | 2 | $ | 2,510 | $ | 579 | $ | 1,506 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Other consumer | 1 | $ | 108 | $ | 108 | $ | — | ||||||||||||||||||||
(1) Includes subsequent payments after modification and reflects the balance as of December 31, 2013 and 2012. | |||||||||||||||||||||||||||
(2) The financial impact includes chargeoffs and specific reserves at modification date. | |||||||||||||||||||||||||||
Troubled debt restructurings that have subsequently defaulted | ' | ||||||||||||||||||||||||||
Loans Modified as TDRs that Subsequently Defaulted | |||||||||||||||||||||||||||
During the Year Ended December 31, | |||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||
Number of | Recorded | Number of | Recorded | ||||||||||||||||||||||||
Contracts | Investment | Contracts | Investment (1) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | — | $ | — | 2 | $ | 2,830 | |||||||||||||||||||||
Multifamily | — | $ | — | 1 | $ | 378 | |||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | — | $ | — | 1 | $ | 271 | |||||||||||||||||||||
Construction | — | $ | — | — | $ | — | |||||||||||||||||||||
Land | — | $ | — | — | $ | — | |||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 1 | $ | 570 | 2 | $ | 33 | |||||||||||||||||||||
Trade finance | — | $ | — | — | $ | — | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | $ | — | — | $ | — | |||||||||||||||||||||
Other consumer | 1 | $ | 639 | — | $ | — | |||||||||||||||||||||
(1) Included in the year ended December 31, 2012 table is $271 thousand of recorded investment which has been transferred to REO and is not included in the total loans receivable balance as of December 31, 2012. | |||||||||||||||||||||||||||
Summary of impaired non-covered loans, including interest income recognized | ' | ||||||||||||||||||||||||||
Recorded | Recorded | ||||||||||||||||||||||||||
Unpaid | Investment | Investment | Total | Average | Interest | ||||||||||||||||||||||
Principal | With No | With | Recorded | Related | Recorded | Income | |||||||||||||||||||||
Balance | Allowance | Allowance | Investment (2) | Allowance | Investment | Recognized (1) | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
As of and for the year ended December 31, 2013 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 15,814 | $ | 13,585 | $ | 1,588 | $ | 15,173 | $ | 207 | $ | 15,322 | $ | 222 | |||||||||||||
Multifamily | 43,821 | 30,899 | 10,215 | 41,114 | 1,339 | 35,799 | 543 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 73,777 | 39,745 | 25,523 | 65,268 | 5,976 | 71,856 | 872 | ||||||||||||||||||||
Construction | 6,888 | 6,888 | — | 6,888 | — | 6,888 | 61 | ||||||||||||||||||||
Land | 17,390 | 4,372 | 7,908 | 12,280 | 2,082 | 12,453 | 42 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 48,482 | 10,850 | 27,487 | 38,337 | 13,787 | 38,294 | 520 | ||||||||||||||||||||
Trade finance | 2,771 | 438 | 752 | 1,190 | 752 | 1,603 | 42 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | 1,749 | 1,681 | — | 1,681 | — | 1,664 | 1 | ||||||||||||||||||||
Other consumer | 1,945 | 1,546 | — | 1,546 | — | 1,561 | 16 | ||||||||||||||||||||
Total | $ | 212,637 | $ | 110,004 | $ | 73,473 | $ | 183,477 | $ | 24,143 | $ | 185,440 | $ | 2,319 | |||||||||||||
Recorded | Recorded | ||||||||||||||||||||||||||
Unpaid | Investment | Investment | Total | Average | Interest | ||||||||||||||||||||||
Principal | With No | With | Recorded | Related | Recorded | Income | |||||||||||||||||||||
Balance | Allowance | Allowance | Investment (2) | Allowance | Investment | Recognized (1) | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
As of and for the year ended December 31, 2012 | |||||||||||||||||||||||||||
Residential: | |||||||||||||||||||||||||||
Single-family | $ | 19,318 | $ | 15,610 | $ | 2,598 | $ | 18,208 | $ | 721 | $ | 19,094 | $ | 88 | |||||||||||||
Multifamily | 57,464 | 45,511 | 8,756 | 54,267 | 2,410 | 54,707 | 403 | ||||||||||||||||||||
CRE: | |||||||||||||||||||||||||||
Income producing | 59,574 | 47,019 | 7,656 | 54,675 | 2,559 | 57,854 | 304 | ||||||||||||||||||||
Construction | 30,815 | 25,530 | 1,509 | 27,039 | 142 | 22,696 | 723 | ||||||||||||||||||||
Land | 20,317 | 6,132 | 8,995 | 15,127 | 2,860 | 17,769 | 76 | ||||||||||||||||||||
C&I: | |||||||||||||||||||||||||||
Commercial business | 38,630 | 20,235 | 3,835 | 24,070 | 2,835 | 33,343 | 614 | ||||||||||||||||||||
Trade finance | 4,124 | 2,582 | — | 2,582 | — | 3,863 | 48 | ||||||||||||||||||||
Consumer: | |||||||||||||||||||||||||||
Student loans | — | — | — | — | — | — | — | ||||||||||||||||||||
Other consumer | 4,798 | 4,528 | — | 4,528 | — | 4,631 | 13 | ||||||||||||||||||||
Total | $ | 235,040 | $ | 167,147 | $ | 33,349 | $ | 200,496 | $ | 11,527 | $ | 213,957 | $ | 2,269 | |||||||||||||
(1) Excludes interest from performing TDRs. | |||||||||||||||||||||||||||
(2) Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||||||||||||
Detail of activity in allowance for loan losses, for both covered and non-covered loans, by portfolio segment | ' | ||||||||||||||||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses (1) | Loan Losses | Unallocated | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Beginning balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
Provision for loan losses | 1,918 | -6,615 | 12,821 | 8,055 | 1,759 | 2,269 | 2,157 | 22,364 | |||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit | — | — | — | — | — | — | -2,157 | -2,157 | |||||||||||||||||||
Charge-offs | -3,197 | -3,357 | -7,405 | -2,385 | -1,436 | — | — | -17,780 | |||||||||||||||||||
Recoveries | 2,647 | 4,793 | 4,392 | 881 | — | — | — | 12,713 | |||||||||||||||||||
Net (charge-offs)/recoveries | -550 | 1,436 | -3,013 | -1,504 | -1,436 | — | — | -5,067 | |||||||||||||||||||
Ending balance | $ | 50,717 | $ | 64,677 | $ | 115,184 | $ | 11,352 | $ | 5,476 | $ | 2,269 | $ | — | $ | 249,675 | |||||||||||
Ending balance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 1,546 | $ | 8,058 | $ | 14,539 | $ | — | $ | — | $ | — | $ | — | $ | 24,143 | |||||||||||
Loans collectively evaluated for impairment | 49,171 | 56,619 | 100,645 | 11,352 | 5,476 | — | — | 223,263 | |||||||||||||||||||
Covered loans acquired with deteriorated credit quality (2) | — | — | — | — | — | 2,269 | — | 2,269 | |||||||||||||||||||
Ending balance | $ | 50,717 | $ | 64,677 | $ | 115,184 | $ | 11,352 | $ | 5,476 | $ | 2,269 | $ | — | $ | 249,675 | |||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses (1) | Loan Losses | Unallocated | Total | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||||||||
Beginning balance | $ | 52,180 | $ | 66,457 | $ | 87,020 | $ | 4,219 | $ | 6,647 | $ | — | $ | — | $ | 216,523 | |||||||||||
Provision for loan losses | 3,255 | 20,977 | 35,204 | 2,295 | 5,016 | — | -1,563 | 65,184 | |||||||||||||||||||
Allowance for unfunded loan commitments and letters of credit | — | — | — | — | — | — | 1,563 | 1,563 | |||||||||||||||||||
Charge-offs | -7,700 | -27,060 | -21,818 | -1,824 | -6,510 | — | — | -64,912 | |||||||||||||||||||
Recoveries | 1,614 | 9,482 | 4,970 | 111 | — | — | — | 16,177 | |||||||||||||||||||
Net charge-offs | -6,086 | -17,578 | -16,848 | -1,713 | -6,510 | — | — | -48,735 | |||||||||||||||||||
Ending balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
Ending balance allocated to: | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 3,131 | $ | 5,561 | $ | 2,835 | $ | — | $ | — | $ | — | $ | — | $ | 11,527 | |||||||||||
Loans collectively evaluated for impairment | 46,218 | 64,295 | 102,541 | 4,801 | 5,153 | — | — | 223,008 | |||||||||||||||||||
Covered loans acquired with deteriorated credit quality (2) | — | — | — | — | — | — | — | — | |||||||||||||||||||
Ending balance | $ | 49,349 | $ | 69,856 | $ | 105,376 | $ | 4,801 | $ | 5,153 | $ | — | $ | — | $ | 234,535 | |||||||||||
(1) This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses. | |||||||||||||||||||||||||||
(2) The Company has elected to account for covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30, excluding any additional advances subsequent to acquisition date. | |||||||||||||||||||||||||||
Recorded investment in total loans receivable by portfolio segment, disaggregated by impairment methodology | ' | ||||||||||||||||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses | Loan Losses | Total | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 56,287 | $ | 84,436 | $ | 39,527 | $ | 3,227 | $ | — | $ | — | $ | 183,477 | |||||||||||||
Covered loans individually evaluated for impairment(2) | — | — | — | — | 2,824 | — | 2,824 | ||||||||||||||||||||
Loans collectively evaluated for impairment | 4,129,022 | 4,500,641 | 5,320,666 | 1,544,511 | 317,361 | — | 15,812,201 | ||||||||||||||||||||
Covered loans acquired with deteriorated credit quality(1) | 681,608 | 1,140,432 | 146,538 | 43,136 | — | 129,661 | 2,141,375 | ||||||||||||||||||||
Ending balance | $ | 4,866,917 | $ | 5,725,509 | $ | 5,506,731 | $ | 1,590,874 | $ | 320,185 | $ | 129,661 | $ | 18,139,877 | |||||||||||||
Covered Loans | Covered Loans | ||||||||||||||||||||||||||
under ASC 310-10 | under ASC 310-30 | ||||||||||||||||||||||||||
Subject to | Subject to | ||||||||||||||||||||||||||
Allowance for | Allowance for | ||||||||||||||||||||||||||
Residential | CRE | C&I | Consumer | Loan Losses | Loan Losses | Total | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
December 31, 2012 | |||||||||||||||||||||||||||
Loans individually evaluated for impairment | $ | 72,475 | $ | 96,841 | $ | 26,652 | $ | 4,528 | $ | — | $ | — | $ | 200,496 | |||||||||||||
Covered loans individually evaluated for impairment(2) | — | — | — | — | 5,237 | — | 5,237 | ||||||||||||||||||||
Loans collectively evaluated for impairment | 3,015,556 | 3,797,854 | 4,204,613 | 740,354 | 426,448 | — | 12,184,825 | ||||||||||||||||||||
Covered loans acquired with deteriorated credit quality(1) | 976,969 | 1,727,159 | 261,622 | 53,521 | — | — | 3,019,271 | ||||||||||||||||||||
Ending balance | $ | 4,065,000 | $ | 5,621,854 | $ | 4,492,887 | $ | 798,403 | $ | 431,685 | $ | — | $ | 15,409,829 | |||||||||||||
(1) The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The total principal balance is presented and excludes the purchase discount and any additional advances subsequent to acquisition date. | |||||||||||||||||||||||||||
(2) Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||||||||||||||||||||||||||
AFFORDABLE_HOUSING_PARTNERSHIP1
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | ' | |||||||||||
Schedule of tax credit partnerships and notes payable | ' | |||||||||||
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Amount | Count | Amount | Count | |||||||||
(Dollars in thousands) | ||||||||||||
Tax credit partnerships: | ||||||||||||
Equity method | $ | 129,631 | 35 | $ | 142,507 | 35 | ||||||
Cost method | 35,145 | 13 | 42,591 | 16 | ||||||||
Total tax credit partnerships | 164,776 | 48 | 185,098 | 51 | ||||||||
Tax exempt bonds | 948 | 547 | ||||||||||
Grand total | $ | 165,724 | $ | 185,645 | ||||||||
PREMISES_AND_EQUIPMENT_Tables
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREMISES AND EQUIPMENT | ' | |||||||
Schedule of premises and equipment | ' | |||||||
December 31, | ||||||||
2013 | 2012 | |||||||
(In thousands) | ||||||||
Land | $ | 15,074 | $ | 15,545 | ||||
Office buildings | 157,166 | 82,418 | ||||||
Leasehold improvements | 26,195 | 29,635 | ||||||
Furniture, fixtures and equipment | 49,043 | 44,122 | ||||||
Total cost | 247,478 | 171,720 | ||||||
Accumulated depreciation and amortization | -69,768 | -64,203 | ||||||
Net book value | $ | 177,710 | $ | 107,517 | ||||
GOODWILL_AND_OTHER_INTANGIBLE_1
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | |||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
Balance, beginning of year | $ | 337,438 | $ | 337,438 | ||||
Additions to goodwill | — | — | ||||||
Impairment write-down | — | — | ||||||
Purchase accounting adjustments | — | — | ||||||
Balance, end of year | $ | 337,438 | $ | 337,438 | ||||
Estimated future amortization expense of premiums on acquired deposits | ' | |||||||
Estimate For The Year Ending December 31, | Amount | |||||||
(In thousands) | ||||||||
2014 | $ | 8,454 | ||||||
2015 | 7,543 | |||||||
2016 | 6,634 | |||||||
2017 | 5,722 | |||||||
2018 | 4,908 | |||||||
Thereafter | 13,659 | |||||||
Total | $ | 46,920 | ||||||
CUSTOMER_DEPOSIT_ACCOUNTS_Tabl
CUSTOMER DEPOSIT ACCOUNTS (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
CUSTOMER DEPOSIT ACCOUNTS | ' | ||||||||||
Summary of customer deposit account balances | ' | ||||||||||
December 31, | |||||||||||
2013 | 2012 | ||||||||||
(In thousands) | |||||||||||
Noninterest-bearing demand | $ | 5,821,899 | $ | 4,535,877 | |||||||
Interest-bearing checking | 1,749,479 | 1,230,372 | |||||||||
Money market accounts | 5,383,759 | 5,000,309 | |||||||||
Savings deposits | 1,633,433 | 1,421,182 | |||||||||
Total core deposits | 14,588,570 | 12,187,740 | |||||||||
Time deposits: | |||||||||||
Less than $100,000 | 1,678,850 | 1,884,577 | |||||||||
$100,000 or greater | 4,145,498 | 4,237,037 | |||||||||
Total time deposits | 5,824,348 | 6,121,614 | |||||||||
Total deposits | $ | 20,412,918 | $ | 18,309,354 | |||||||
Scheduled maturities of time deposits | ' | ||||||||||
$100,000 or | Less Than | ||||||||||
Greater | $100,000 | Total | |||||||||
(In thousands) | |||||||||||
2014 | $ | 3,178,469 | $ | 1,413,205 | $ | 4,591,674 | |||||
2015 | 370,754 | 176,714 | 547,468 | ||||||||
2016 | 129,854 | 21,728 | 151,582 | ||||||||
2017 | 183,622 | 36,468 | 220,090 | ||||||||
2018 | 165,284 | 30,731 | 196,015 | ||||||||
Thereafter | 117,515 | 4 | 117,519 | ||||||||
Total | $ | 4,145,498 | $ | 1,678,850 | $ | 5,824,348 | |||||
Summary of interest expense on customer deposits by account type | ' | ||||||||||
December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(In thousands) | |||||||||||
Interest-bearing checking | $ | 3,556 | $ | 3,163 | $ | 3,009 | |||||
Money market accounts | 15,019 | 16,984 | 20,610 | ||||||||
Savings deposits | 2,961 | 2,795 | 2,988 | ||||||||
Time deposits: | |||||||||||
Less than $100,000 | 15,485 | 20,655 | 29,329 | ||||||||
$100,000 or greater | 26,475 | 32,298 | 51,174 | ||||||||
Total | $ | 63,496 | $ | 75,895 | $ | 107,110 | |||||
FEDERAL_FUNDS_PURCHASED_Tables
FEDERAL FUNDS PURCHASED (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
FEDERAL FUNDS PURCHASED | ' | ||||||||||
Information on Federal funds purchased | ' | ||||||||||
As of and for the Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
(Dollars in thousands) | |||||||||||
Balance at end of year | $ | — | $ | — | $ | — | |||||
Average balance outstanding during the year | $ | 155 | $ | 2,227 | $ | 3,496 | |||||
Maximum balance outstanding at any month-end | $ | — | $ | 60,000 | $ | 100,000 | |||||
Weighted average interest rate during the year | —% | 0.09% | 0.10% | ||||||||
Weighted average interest rate at end of year | —% | —% | —% | ||||||||
FEDERAL_HOME_LOAN_BANK_ADVANCE1
FEDERAL HOME LOAN BANK ADVANCES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
FEDERAL HOME LOAN BANK ADVANCES | ' | |||||||||||
Summary of FHLB advances and their related weighted average interest rates | ' | |||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||
Amount | Rate | Amount | Rate | |||||||||
Year of Maturity | (Dollars in thousands) | |||||||||||
2014 | $ | — | —% | $ | — | —% | ||||||
2015 | — | —% | — | —% | ||||||||
2016 | — | —% | — | —% | ||||||||
2017 | — | —% | — | —% | ||||||||
After 2017 | 315,092 | 0.61% | 312,975 | 0.63% | ||||||||
Total | $ | 315,092 | 0.61% | $ | 312,975 | 0.63% | ||||||
SECURITIES_SOLD_UNDER_REPURCHA1
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS | ' | ||||||||||||
Information on securities sold under repurchase agreements | ' | ||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||
Amount | Rate | Amount | Rate | ||||||||||
Year of Maturity | (Dollars in thousands) | ||||||||||||
2015 | $ | 245,000 | 4.49% | $ | 245,000 | 4.49% | |||||||
2016 | 250,000 | 5.01% | 350,000 | 4.96% | |||||||||
2017 | 50,000 | 4.15% | 50,000 | 4.15% | |||||||||
2022 | 350,000 | 3.51% | 350,000 | 3.53% | |||||||||
2023 | 100,000 | 2.49% | — | — | |||||||||
Total | $ | 995,000 | 4.06% | $ | 995,000 | 4.30% | |||||||
CAPITAL_RESOURCES_AND_OTHER_LO1
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | ' | |||||||||||
Summary of pertinent information related to outstanding junior subordinated debt issued by each Trust | ' | |||||||||||
Rate at | Balance at | |||||||||||
Stated | December 31, | December 31, | ||||||||||
Trust Name | Maturity Date (1) | Interest Rate | 2013 | 2013 | 2012 | |||||||
(Dollars in thousands) | ||||||||||||
East West Capital Statutory Trust III | December 2033 | 3-month Libor + 2.85% | — | — | 10,000 | |||||||
East West Capital Trust IV | July 2034 | 3-month Libor + 2.55% | 2.79% | 10,000 | 10,000 | |||||||
East West Capital Trust V | November 2034 | 3-month Libor + 1.80% | 2.04% | 15,000 | 15,000 | |||||||
East West Capital Trust VI | September 2035 | 3-month Libor + 1.50% | 1.74% | 20,000 | 20,000 | |||||||
East West Capital Trust VII | June 2036 | 3-month Libor + 1.35% | 1.59% | 30,000 | 30,000 | |||||||
East West Capital Trust VIII | June 2037 | 3-month Libor + 1.40% | 1.64% | 18,000 | 18,000 | |||||||
East West Capital Trust IX | September 2037 | 3-month Libor + 1.90% | 2.14% | 30,000 | 30,000 | |||||||
$123,000 | $133,000 | |||||||||||
(1) All of the above debt instruments are subject to various call options. | ||||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||
INCOME TAXES | ' | |||||||||||||||||||||||||
Components of provision for income taxes | ' | |||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Current income tax expense (benefit): | ||||||||||||||||||||||||||
Federal | $ | 131,236 | $ | 148,572 | $ | -86,157 | ||||||||||||||||||||
State | 44,389 | 2,316 | 34,760 | |||||||||||||||||||||||
Foreign | 208 | 5,704 | — | |||||||||||||||||||||||
Total current income tax expense (benefit) | 175,833 | 156,592 | -51,397 | |||||||||||||||||||||||
Deferred income tax (benefit) expense: | ||||||||||||||||||||||||||
Federal | -32,963 | -38,749 | 193,834 | |||||||||||||||||||||||
State | -13,677 | 26,099 | -7,706 | |||||||||||||||||||||||
Foreign | 1,612 | — | 3,369 | |||||||||||||||||||||||
Total deferred income tax (benefit) expense | -45,028 | -12,650 | 189,497 | |||||||||||||||||||||||
Provision for income taxes | $ | 130,805 | $ | 143,942 | $ | 138,100 | ||||||||||||||||||||
Difference between the effective tax rate implicit in the consolidated financial statements and the statutory federal income tax rate | ' | |||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||||||||
Federal income tax provision at statutory rate | 35.00% | 35.00% | 35.00% | |||||||||||||||||||||||
State franchise taxes, net of federal tax effect | 4.7 | 4.3 | 4.3 | |||||||||||||||||||||||
Tax credits | -8.4 | -5.3 | -2.7 | |||||||||||||||||||||||
Other, net | -0.6 | -0.2 | -0.6 | |||||||||||||||||||||||
Effective income tax rate | 30.70% | 33.80% | 36.00% | |||||||||||||||||||||||
Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) | ' | |||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
Federal | State | Foreign | Total | Federal | State | Foreign | Total | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Deferred tax liabilities: | ||||||||||||||||||||||||||
Core deposit intangibles | $ | -16,422 | $ | -4,642 | $ | — | $ | -21,064 | $ | -15,755 | $ | -4,635 | $ | 133 | $ | -20,257 | ||||||||||
Affordable housing partnerships and other investments | -14,158 | -1,730 | — | -15,888 | -16,221 | -4,337 | — | -20,558 | ||||||||||||||||||
Fixed assets | -15,594 | -3,879 | — | -19,473 | -17,201 | -4,289 | — | -21,490 | ||||||||||||||||||
FHLB stock | -11,337 | -3,224 | — | -14,561 | -17,670 | -9,140 | — | -26,810 | ||||||||||||||||||
Deferred loan fees | -1,976 | -557 | — | -2,533 | -2,523 | -719 | — | -3,242 | ||||||||||||||||||
Purchased loan discounts | -98 | -28 | — | -126 | -126 | -36 | — | -162 | ||||||||||||||||||
State taxes | -1,079 | — | — | -1,079 | -7,894 | — | — | -7,894 | ||||||||||||||||||
Mortgage servicing assets | — | — | — | — | -1,812 | -517 | — | -2,329 | ||||||||||||||||||
Section 597 gain | -48,370 | -1,317 | — | -49,687 | -94,231 | -2,684 | — | -96,915 | ||||||||||||||||||
FDIC receivable | -245,907 | -6,695 | — | -252,602 | -318,741 | -9,405 | — | -328,146 | ||||||||||||||||||
Acquired debt | -10,812 | -1,042 | — | -11,854 | -10,812 | -1,061 | -300 | -12,173 | ||||||||||||||||||
Other, net | -6,805 | 923 | — | -5,882 | -604 | 627 | — | 23 | ||||||||||||||||||
Total gross deferred tax (liabilities) | -372,558 | -22,191 | — | -394,749 | -503,590 | -36,196 | -167 | -539,953 | ||||||||||||||||||
Deferred tax assets: | ||||||||||||||||||||||||||
Allowance for loan losses and REO reserves | 93,018 | 23,046 | — | 116,064 | 93,924 | 23,281 | -5,220 | 111,985 | ||||||||||||||||||
Deferred compensation | 13,322 | 3,824 | — | 17,146 | 18,213 | 5,262 | — | 23,475 | ||||||||||||||||||
Mortgage servicing assets | 287 | 81 | — | 368 | — | — | — | — | ||||||||||||||||||
Purchased loan premium | 424 | 120 | — | 544 | 485 | 139 | — | 624 | ||||||||||||||||||
Unrealized loss on securities | 62,535 | 19,177 | — | 81,712 | 47,567 | 12,816 | — | 60,383 | ||||||||||||||||||
Net operating loss carryforwards | — | 993 | — | 993 | — | 698 | — | 698 | ||||||||||||||||||
Acquired loans and REOs | 366,290 | 26,959 | 959 | 394,208 | 478,825 | 29,796 | 7,957 | 516,578 | ||||||||||||||||||
Other, net | 30,768 | 8,716 | 97 | 39,581 | 9,021 | 3,177 | 97 | 12,295 | ||||||||||||||||||
Total gross deferred tax assets | 566,644 | 82,916 | 1,056 | 650,616 | 648,035 | 75,169 | 2,834 | 726,038 | ||||||||||||||||||
Valuation allowance | — | -337 | — | -337 | — | -372 | — | -372 | ||||||||||||||||||
Net deferred tax assets | $ | 194,086 | $ | 60,388 | $ | 1,056 | $ | 255,530 | $ | 144,445 | $ | 38,601 | $ | 2,667 | $ | 185,713 | ||||||||||
Summary of the activity related to unrecognized tax benefits | ' | |||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Balance, beginning of year | $ | 3,457 | $ | 3,332 | ||||||||||||||||||||||
Additions for tax positions of prior years | 232 | — | ||||||||||||||||||||||||
Reductions for tax positions of prior years | — | — | ||||||||||||||||||||||||
Additions for tax positions of current year | 988 | 1,060 | ||||||||||||||||||||||||
Settlements | — | -935 | ||||||||||||||||||||||||
Balance, end of year | $ | 4,677 | $ | 3,457 | ||||||||||||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
COMMITMENTS AND CONTINGENCIES | ' | ||||
Estimated future minimum rental payments under non-cancelable operating leases | ' | ||||
Estimate For The Year Ending December 31, | Amount | ||||
(In thousands) | |||||
2014 | $ | 23,356 | |||
2015 | 19,492 | ||||
2016 | 14,566 | ||||
2017 | 10,891 | ||||
2018 | 8,096 | ||||
Thereafter | 21,400 | ||||
Total | $ | 97,801 | |||
STOCK_COMPENSATION_PLANS_Table
STOCK COMPENSATION PLANS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCK COMPENSATION PLANS | ' | |||||||||||||
Schedule of share-based compensation, stock options, activity | ' | |||||||||||||
A summary of activity for the Company’s stock options as of and for the year ended December 31, 2013 is presented below: | ||||||||||||||
Weighted | ||||||||||||||
Weighted | Average | Aggregate | ||||||||||||
Average | Remaining | Intrinsic | ||||||||||||
Exercise | Contractual | Value | ||||||||||||
Shares | Price | Term | (In thousands) | |||||||||||
Outstanding at beginning of year | 677,708 | $ | 28.41 | |||||||||||
Granted | — | — | ||||||||||||
Exercised | -91,540 | 18.35 | ||||||||||||
Forfeited | -179,437 | 37.36 | ||||||||||||
Outstanding at end of year | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
Vested or expected to vest at year-end | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
Exercisable at year-end | 406,731 | $ | 26.72 | 0.83 years | $ | 3,848 | ||||||||
Schedule of non-vested stock options activity | ' | |||||||||||||
A summary of changes in unvested stock options and related information for the year ended December 31, 2013 is presented below: | ||||||||||||||
Weighted | ||||||||||||||
Average | ||||||||||||||
Grant Date | ||||||||||||||
Fair Value | ||||||||||||||
Unvested Options | Shares | (per share) | ||||||||||||
Unvested at January 1, 2013 | 14,502 | $ | 3 | |||||||||||
Granted | — | — | ||||||||||||
Vested | -14,502 | 3 | ||||||||||||
Forfeited | — | — | ||||||||||||
Unvested at December 31, 2013 | — | $ | — | |||||||||||
Schedule of share-based payment award, stock options, valuation assumptions | ' | |||||||||||||
Year Ended December 31, | ||||||||||||||
2013(5) | 2012(5) | 2011 | ||||||||||||
Expected term (1) | N/A | N/A | 4 years | |||||||||||
Expected volatility (2) | N/A | N/A | 78.10% | |||||||||||
Expected dividend yield (3) | N/A | N/A | 0.20% | |||||||||||
Risk-free interest rate (4) | N/A | N/A | 1.60% | |||||||||||
(1) The expected term (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees. | ||||||||||||||
(2) The expected volatility was based on historical volatility for a period equal to the stock option’s expected term. | ||||||||||||||
(3) The expected dividend yield is based on the Company’s prevailing dividend rate at the time of grant. | ||||||||||||||
(4) The risk-free rate is based on the U.S. Treasury strips in effect at the time of grant equal to the stock option’s expected term. | ||||||||||||||
(5) The Company did not issue any stock options during the years ended December 31, 2013 and December 31, 2012 | ||||||||||||||
Schedule summarizing information about stock options outstanding | ' | |||||||||||||
The following table summarizes information about stock options outstanding as of December 31, 2013: | ||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||
Weighted | Weighted | Weighted | ||||||||||||
Number of | Average | Average | Number of | Average | ||||||||||
Range of | Outstanding | Exercise | Remaining | Exercisable | Exercise | |||||||||
Exercise Prices | Options | Price | Contractual Life | Options | Price | |||||||||
$10.00 to $14.99 | 2,365 | $ | 14.95 | 2.02 years | 2,365 | $ | 14.95 | |||||||
$20.00 to $24.99 | 273,852 | 21.09 | 1.13 years | 273,852 | 21.09 | |||||||||
$35.00 to $39.99 | 130,514 | 38.76 | 0.16 years | 130,514 | 38.76 | |||||||||
$10.00 to $39.99 | 406,731 | $ | 26.72 | 0.83 years | 406,731 | $ | 26.72 | |||||||
Schedule of share-based compensation arrangement by share-based payment award, options, grants in period, grant date intrinsic value | ' | |||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Weighted average grant date fair value of stock options granted during the year(1) | N/A | N/A | $ | 13.21 | ||||||||||
Total intrinsic value of options exercised (in thousands) | $ | 926 | $ | 978 | $ | 2,650 | ||||||||
Total fair value of options vested (in thousands) | $ | 363 | $ | 3,717 | $ | 1,274 | ||||||||
(1) The Company did not issue any stock options during the years ended December 31, 2013 and December 31, 2012. | ||||||||||||||
Schedule of share-based compensation, time-based and performance-based restricted stock awards activity | ' | |||||||||||||
2013 | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
Time-Based | Performance-Based | |||||||||||||
Weighted | Weighted | |||||||||||||
Average | Average | |||||||||||||
Shares | Price | Shares | Price | |||||||||||
Outstanding at beginning of year | 1,512,396 | $ | 16.3 | 694,838 | $ | 22.43 | ||||||||
Granted | 70,150 | 28.55 | 477,165 | 25.25 | ||||||||||
Vested | -1,073,512 | 16.38 | -171,648 | 22.59 | ||||||||||
Forfeited | -70,526 | 17.98 | -43,648 | 23.98 | ||||||||||
Outstanding at end of year | 438,508 | $ | 17.79 | 956,707 | $ | 23.74 | ||||||||
STOCKHOLDERS_EQUITY_AND_EARNIN1
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | ' | |||||||||||||
Earnings per share calculations | ' | |||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 295,045 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -3,428 | |||||||||||||
Earnings allocated to participating securities | -1,692 | |||||||||||||
Basic EPS – income allocated to common stockholders (1) | $ | 289,925 | 137,342 | $ | 2.11 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 71 | ||||||||||||
Restricted stock units | 196 | 327 | ||||||||||||
Convertible preferred stock | 3,428 | 1,834 | ||||||||||||
Diluted EPS – income allocated to common stockholders (1) | $ | 293,549 | 139,574 | $ | 2.1 | |||||||||
Year Ended December 31, 2012 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 281,650 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -6,857 | |||||||||||||
Earnings allocated to participating securities | -3,279 | |||||||||||||
Basic EPS – income allocated to common stockholders (1) | $ | 271,514 | 141,457 | $ | 1.92 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 29 | ||||||||||||
Restricted stock units | 47 | 118 | ||||||||||||
Convertible preferred stock | 6,857 | 5,571 | ||||||||||||
Diluted EPS – income allocated to common stockholders (1) | $ | 278,418 | 147,175 | $ | 1.89 | |||||||||
Year Ended December 31, 2011 | ||||||||||||||
Net Income | Number of Shares | Per Share Amounts | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
Net income | $ | 245,234 | ||||||||||||
Less: | ||||||||||||||
Preferred stock dividends | -6,857 | |||||||||||||
Basic EPS – income available to common stockholders | $ | 238,377 | 147,093 | $ | 1.62 | |||||||||
Effect of dilutive securities: | ||||||||||||||
Stock options | — | 62 | ||||||||||||
Restricted stock awards | 115 | 718 | ||||||||||||
Convertible preferred stock | 6,857 | 5,571 | ||||||||||||
Stock warrants | — | 23 | ||||||||||||
Diluted EPS – income available to common stockholders | $ | 245,349 | 153,467 | $ | 1.6 | |||||||||
Shares excluded from the calculation of diluted EPS | ' | |||||||||||||
For the Year Ended | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Stock options | 177 | 340 | 857 | |||||||||||
Restricted stock awards | 10 | -1 | 5 | -1 | 317 | |||||||||
(1) April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. | ||||||||||||||
Accumulated other comprehensive (loss) income, net of tax | ' | |||||||||||||
Unrealized gain (loss) on | ||||||||||||||
investment securities | Foreign currency | Unrealized gain (loss) on | ||||||||||||
available-for-sale | translation adjustments | other asset investment | Total | |||||||||||
(In thousands) | ||||||||||||||
Balance, December 31, 2010 | $ | -13,927 | $ | 1,664 | $ | -151 | $ | -12,414 | ||||||
Period Change | -20,921 | -764 | 159 | -21,526 | ||||||||||
Balance, December 31, 2011 | $ | -34,848 | $ | 900 | $ | 8 | $ | -33,940 | ||||||
Period Change | 39,491 | -900 | 18 | 38,609 | ||||||||||
Balance, December 31, 2012 | $ | 4,643 | $ | — | $ | 26 | $ | 4,669 | ||||||
Other comprehensive income before reclassifications | -28,169 | — | 336 | -27,833 | ||||||||||
Amounts reclassified from AOCI | -7,012 | — | -283 | -7,295 | ||||||||||
Net current period other comprehensive loss | -35,181 | — | 53 | -35,128 | ||||||||||
Balance, December 31, 2013 | $ | -30,538 | $ | — | $ | 79 | $ | -30,459 | ||||||
Schedule of reclassifications out of accumulated other comprehensive income | ' | |||||||||||||
Amount Reclassified from | ||||||||||||||
Details about Accumulated Other | Accumulated Other | Affected Line Item in the Statement | ||||||||||||
Comprehensive Income Components | Comprehensive Income | Where Net Income is Presented | ||||||||||||
(In thousands) | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 12,089 | Net gain on sales of investment securities | |||||||||||
12,089 | ||||||||||||||
-5,077 | Tax expense | |||||||||||||
$ | 7,012 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 488 | Other operating income | |||||||||||
488 | ||||||||||||||
-205 | Tax expense | |||||||||||||
$ | 283 | Net of tax | ||||||||||||
Total reclassifications | $ | 7,295 | ||||||||||||
Year Ended December 31, 2012 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 757 | Net gain on sales of investment securities | |||||||||||
757 | ||||||||||||||
-318 | Tax expense | |||||||||||||
$ | 439 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 23 | Other operating income | |||||||||||
23 | ||||||||||||||
-10 | Tax expense | |||||||||||||
$ | 13 | Net of tax | ||||||||||||
Total reclassifications | $ | 452 | ||||||||||||
Year Ended December 31, 2011 | ||||||||||||||
Investment securities available for sale | ||||||||||||||
Realized net gains on sale of securities | $ | 9,703 | Net gain on sales of investment securities | |||||||||||
9,703 | ||||||||||||||
-4,075 | Tax expense | |||||||||||||
$ | 5,628 | Net of tax | ||||||||||||
Other investments | ||||||||||||||
Realized net gains on sale of other investments | $ | 61 | Other operating income | |||||||||||
61 | ||||||||||||||
-26 | Tax expense | |||||||||||||
$ | 35 | Net of tax | ||||||||||||
Total reclassifications | $ | 5,663 | ||||||||||||
Schedule of tax effect allocated to component of other comprehensive (loss) income | ' | |||||||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||
Unrealized gain on investment securities available-for-sale: | ||||||||||||||
Unrealized holding losses arising during period | $ | -48,567 | $ | 20,398 | $ | -28,169 | ||||||||
Less: reclassification adjustment for gains included in income | -12,089 | 5,077 | -7,012 | |||||||||||
Net unrealized loss | -60,656 | 25,475 | -35,181 | |||||||||||
Noncredit-related impairment loss on securities | — | — | — | |||||||||||
Unrealized gain on other asset investment | 579 | -243 | 336 | |||||||||||
Less: reclassification adjustment for gains included in income | -488 | 205 | -283 | |||||||||||
Other comprehensive loss | $ | -60,565 | $ | 25,437 | $ | -35,128 | ||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||
Unrealized gain on investment securities available-for-sale: | ||||||||||||||
Unrealized holding gains arising during period | $ | 73,910 | $ | -31,042 | $ | 42,868 | ||||||||
Less: reclassification adjustment for gains included in income | -757 | 318 | -439 | |||||||||||
Net unrealized gains | 73,153 | -30,724 | 42,429 | |||||||||||
Noncredit-related impairment loss on securities | -5,066 | 2,128 | -2,938 | |||||||||||
Foreign currency translation adjustments | -1,552 | 652 | -900 | |||||||||||
Unrealized gain on other asset investment | 53 | -22 | 31 | |||||||||||
Less: reclassification adjustment for gains included in income | -23 | 10 | -13 | |||||||||||
Other comprehensive income | $ | 66,565 | $ | -27,956 | $ | 38,609 | ||||||||
Tax | ||||||||||||||
Before-Tax | Expense | Net-of-Tax | ||||||||||||
Amount | or Benefit | Amount | ||||||||||||
(In thousands) | ||||||||||||||
For the year ended December 31, 2011 | ||||||||||||||
Unrealized loss on investment securities available-for-sale: | ||||||||||||||
Unrealized holding loss arising during period | $ | -21,264 | $ | 8,931 | $ | -12,333 | ||||||||
Less: reclassification adjustment for gains included in income | -9,703 | 4,075 | -5,628 | |||||||||||
Net unrealized loss | -30,967 | 13,006 | -17,961 | |||||||||||
Noncredit-related impairment loss on securities | -5,103 | 2,143 | -2,960 | |||||||||||
Foreign currency translation adjustments | -1,317 | 553 | -764 | |||||||||||
Unrealized gain on other asset investment | 334 | -140 | 194 | |||||||||||
Less: reclassification adjustment for gains included in income | -61 | 26 | -35 | |||||||||||
Other comprehensive loss | $ | -37,114 | $ | 15,588 | $ | -21,526 |
REGULATORY_REQUIREMENTS_Tables
REGULATORY REQUIREMENTS (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
REGULATORY REQUIREMENTS | ' | |||||||||||||||
Schedule of actual and required capital amounts and ratios | ' | |||||||||||||||
To Be Well Capitalized | ||||||||||||||||
For Capital | Under Prompt Corrective | |||||||||||||||
Actual | Adequacy Purposes | Action Provisions | ||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||
(Dollars in thousands) | ||||||||||||||||
As of December 31, 2013: | ||||||||||||||||
Total Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,395,109 | 13.50% | $ | 1,416,203 | 8.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,262,494 | 12.90% | $ | 1,407,944 | 8.00% | $ | 1,759,931 | 10.00% | |||||||
Tier I Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,102,476 | 11.90% | $ | 708,102 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,041,894 | 11.60% | $ | 703,972 | 4.00% | $ | 1,055,958 | 6.00% | |||||||
Tier I Capital (to Average Assets) | ||||||||||||||||
Consolidated Company | $ | 2,102,476 | 8.60% | $ | 976,596 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,041,894 | 8.40% | $ | 973,958 | 4.00% | $ | 1,217,448 | 5.00% | |||||||
As of December 31, 2012: | ||||||||||||||||
Total Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,296,253 | 16.10% | $ | 1,142,743 | 8.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,225,888 | 15.60% | $ | 1,142,215 | 8.00% | $ | 1,427,769 | 10.00% | |||||||
Tier I Capital (to Risk-Weighted Assets) | ||||||||||||||||
Consolidated Company | $ | 2,116,757 | 14.80% | $ | 571,371 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,046,477 | 14.30% | $ | 571,107 | 4.00% | $ | 856,661 | 6.00% | |||||||
Tier I Capital (to Average Assets) | ||||||||||||||||
Consolidated Company | $ | 2,116,757 | 9.60% | $ | 880,526 | 4.00% | N/A | N/A | ||||||||
East West Bank | $ | 2,046,477 | 9.30% | $ | 880,162 | 4.00% | $ | 1,100,202 | 5.00% | |||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
SEGMENT INFORMATION | ' | ||||||||||||
Operating results and key financial measures for operating segments | ' | ||||||||||||
Year Ended December 31, 2013 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 374,818 | $ | 627,118 | $ | 66,749 | $ | 1,068,685 | |||||
Charge for funds used | -86,552 | -116,161 | -18,244 | -220,957 | |||||||||
Interest spread on funds used | 288,266 | 510,957 | 48,505 | 847,728 | |||||||||
Interest expense | -47,287 | -15,185 | -50,020 | -112,492 | |||||||||
Credit on funds provided | 173,194 | 29,262 | 18,501 | 220,957 | |||||||||
Interest spread on funds provided | 125,907 | 14,077 | -31,519 | 108,465 | |||||||||
Net interest income | $ | 414,173 | $ | 525,034 | $ | 16,986 | $ | 956,193 | |||||
Provision for loan losses | $ | 10,911 | $ | 11,453 | $ | — | $ | 22,364 | |||||
Depreciation, amortization and accretion (1) | 19,865 | 8,120 | 69,125 | 97,110 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 123,876 | 272,369 | 29,605 | 425,850 | |||||||||
Segment assets | 7,820,191 | 11,545,405 | 5,364,472 | 24,730,068 | |||||||||
Year Ended December 31, 2012 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 356,244 | $ | 617,041 | $ | 77,810 | $ | 1,051,095 | |||||
Charge for funds used | -85,811 | -118,688 | 44,407 | -160,092 | |||||||||
Interest spread on funds used | 270,433 | 498,353 | 122,217 | 891,003 | |||||||||
Interest expense | -57,401 | -23,226 | -51,541 | -132,168 | |||||||||
Credit on funds provided | 130,713 | 13,138 | 16,241 | 160,092 | |||||||||
Interest spread on funds provided | 73,312 | -10,088 | -35,300 | 27,924 | |||||||||
Net interest income | $ | 343,745 | $ | 488,265 | $ | 86,917 | $ | 918,927 | |||||
Provision for loan losses | $ | 28,729 | $ | 36,455 | $ | — | $ | 65,184 | |||||
Depreciation, amortization and accretion (1) | 12,869 | -13,277 | 44,159 | 43,751 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 74,836 | 266,168 | 84,588 | 425,592 | |||||||||
Segment assets | 6,552,217 | 10,421,160 | 5,562,733 | 22,536,110 | |||||||||
Year Ended December 31, 2011 | |||||||||||||
Retail | Commercial | ||||||||||||
Banking | Banking | Other | Total | ||||||||||
(In thousands) | |||||||||||||
Interest income | $ | 358,853 | $ | 619,766 | $ | 101,829 | $ | 1,080,448 | |||||
Charge for funds used | -94,098 | -142,056 | 3,690 | -232,464 | |||||||||
Interest spread on funds used | 264,755 | 477,710 | 105,519 | 847,984 | |||||||||
Interest expense | -85,356 | -31,407 | -60,659 | -177,422 | |||||||||
Credit on funds provided | 202,080 | 13,863 | 16,521 | 232,464 | |||||||||
Interest spread on funds provided | 116,724 | -17,544 | -44,138 | 55,042 | |||||||||
Net interest income | $ | 381,479 | $ | 460,166 | $ | 61,381 | $ | 903,026 | |||||
Provision for loan losses | $ | 27,888 | $ | 67,118 | $ | — | $ | 95,006 | |||||
Depreciation, amortization and accretion (1) | 43,899 | 62,803 | 21,552 | 128,254 | |||||||||
Goodwill | 320,566 | 16,872 | — | 337,438 | |||||||||
Segment pre-tax profit | 102,217 | 227,766 | 53,351 | 383,334 | |||||||||
Segment assets | 6,530,138 | 10,157,195 | 5,281,334 | 21,968,667 | |||||||||
(1) Includes amortization and accretion related to the FDIC indemnification asset. | |||||||||||||
PARENT_COMPANY_FINANCIAL_STATE1
PARENT COMPANY FINANCIAL STATEMENTS (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
PARENT COMPANY FINANCIAL STATEMENTS | ' | |||||||||||||
Balance sheets | ' | |||||||||||||
December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(In thousands) | ||||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 79,934 | $ | 64,489 | ||||||||||
Investment securities available-for-sale | 69,796 | — | ||||||||||||
Investment in subsidiaries | 2,400,937 | 2,450,058 | ||||||||||||
Other investments | 21,371 | 3,083 | ||||||||||||
Other assets | 37,037 | 5,122 | ||||||||||||
TOTAL | $ | 2,609,075 | $ | 2,522,752 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Long-term debt | $ | 226,868 | $ | 137,178 | ||||||||||
Other liabilities | 17,982 | 3,452 | ||||||||||||
Total liabilities | 244,850 | 140,630 | ||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||
Preferred stock (par value $0.001 per share) | ||||||||||||||
Authorized — 5,000,000 shares | ||||||||||||||
Issued — 200,000 shares in Series A, non-cumulative convertible preferred stock in 2013 and 2012 | ||||||||||||||
Outstanding — No shares as of December 31, 2013 and 85,710 shares in 2012 | — | 83,027 | ||||||||||||
Common stock (par value $0.001 per share) | ||||||||||||||
Authorized — 200,000,000 shares | ||||||||||||||
Issued — 163,098,008 shares in 2013 and 157,160,193 shares in 2012 | ||||||||||||||
Outstanding — 137,630,896 shares in 2013 and 140,294,092 shares in 2012 | 163 | 157 | ||||||||||||
Additional paid in capital | 1,571,670 | 1,464,739 | ||||||||||||
Retained earnings | 1,360,130 | 1,151,828 | ||||||||||||
Treasury stock, at cost — 25,467,112 shares in 2013 and 16,866,101 shares in 2012 | (537,279 | ) | (322,298 | ) | ||||||||||
Accumulated other comprehensive (loss) income, net of tax | (30,459 | ) | 4,669 | |||||||||||
Total stockholders’ equity | 2,364,225 | 2,382,122 | ||||||||||||
TOTAL | $ | 2,609,075 | $ | 2,522,752 | ||||||||||
Statements of income | ' | |||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Dividends from subsidiaries | $ | 319,085 | $ | 324,094 | $ | 72,129 | ||||||||
Other income | 821 | 2 | 372 | |||||||||||
Total income | 319,906 | 324,096 | 72,501 | |||||||||||
Interest expense | 3,436 | 3,092 | 4,734 | |||||||||||
Compensation and net occupancy reimbursement to subsidiary | 3,662 | 2,573 | 2,537 | |||||||||||
Other expense | 12,677 | 1,309 | 2,339 | |||||||||||
Total expense | 19,775 | 6,974 | 9,610 | |||||||||||
Income before income taxes and equity in undistributed income of subsidiaries | 300,131 | 317,122 | 62,891 | |||||||||||
Income tax benefit | 22,885 | 2,892 | 3,830 | |||||||||||
Equity in undistributed (loss) income of subsidiaries | (27,971 | ) | (38,364 | ) | 178,513 | |||||||||
Net income | $ | 295,045 | $ | 281,650 | $ | 245,234 | ||||||||
Statements of cash flows | ' | |||||||||||||
Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
(In thousands) | ||||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | 295,045 | $ | 281,650 | $ | 245,234 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Equity in undistributed (income) of subsidiaries | (291,659 | ) | (285,636 | ) | (250,513 | ) | ||||||||
Depreciation and amortization | 8,806 | 445 | 1,034 | |||||||||||
Prepayment penalty on other borrowings | — | — | 526 | |||||||||||
Stock compensation costs | — | — | 1,767 | |||||||||||
Gain on sale of other investments | (161 | ) | — | — | ||||||||||
Tax benefit from stock plans | (5,522 | ) | (462 | ) | (717 | ) | ||||||||
Net change in other assets | 293,153 | 322,361 | 73,797 | |||||||||||
Net change in other liabilities | (13,011 | ) | (259 | ) | (3,709 | ) | ||||||||
Net cash provided by operating activities | 286,651 | 318,099 | 67,419 | |||||||||||
Cash flows from investing activities: | ||||||||||||||
Purchases of: | ||||||||||||||
Investment securities available-for-sale | (69,986 | ) | — | — | ||||||||||
Proceeds from: | ||||||||||||||
Redemption of certificates of deposit | — | — | 198 | |||||||||||
Net cash (used in) provided by investing activities | (69,986 | ) | — | 198 | ||||||||||
Cash flows from financing activities: | ||||||||||||||
Payment for: | ||||||||||||||
Repayment of long-term debt | (10,310 | ) | — | (23,918 | ) | |||||||||
Repurchase of vested shares due to employee tax liability | (13,833 | ) | (3,012 | ) | (649 | ) | ||||||||
Cash dividends on preferred stock | (3,428 | ) | (6,857 | ) | (6,857 | ) | ||||||||
Cash dividends on common stock | (82,862 | ) | (57,361 | ) | (23,822 | ) | ||||||||
Repurchase of common stock warrants | — | — | (14,500 | ) | ||||||||||
Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan | (199,992 | ) | (199,950 | ) | — | |||||||||
Proceeds from: | ||||||||||||||
Increase in long-term borrowings | 100,000 | — | — | |||||||||||
Issuance of common stock pursuant to various stock plans and agreements | 3,683 | 3,821 | 5,726 | |||||||||||
Tax benefit from stock plans | 5,522 | 462 | 717 | |||||||||||
Net cash used in financing activities | (201,220 | ) | (262,897 | ) | (63,303 | ) | ||||||||
Net increase in cash and cash equivalents | 15,445 | 55,202 | 4,314 | |||||||||||
Cash and cash equivalents, beginning of year | 64,489 | 9,287 | 4,973 | |||||||||||
Cash and cash equivalents, end of year | $ | 79,934 | $ | 64,489 | $ | 9,287 | ||||||||
Supplemental Cash Flow Information: | ||||||||||||||
Cash paid during the year for: | ||||||||||||||
Interest | $ | 3,292 | $ | 3,112 | $ | 5,167 | ||||||||
Noncash financing activities: | ||||||||||||||
Conversion of preferred stock to common stock | 83,027 | — | 31 | |||||||||||
Issuance of common stock to Board of Directors | 630 | 570 | 520 | |||||||||||
QUARTERLY_FINANCIAL_INFORMATIO1
QUARTERLY FINANCIAL INFORMATION (unaudited) (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
QUARTERLY FINANCIAL INFORMATION (unaudited) | ' | |||||||||||||||||
Schedule of quarterly financial information (unaudited) | ' | |||||||||||||||||
Quarters Ended | ||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | |||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
2013 | ||||||||||||||||||
Interest and dividend income | $ | 293,203 | $ | 281,706 | $ | 255,353 | $ | 238,423 | ||||||||||
Interest expense | 28,195 | 27,456 | 27,709 | 29,132 | ||||||||||||||
Net interest income | 265,008 | 254,250 | 227,644 | 209,291 | ||||||||||||||
Provision for (reversal of) loan losses, excluding covered loans | 6,286 | 4,535 | 8,277 | (762 | ) | |||||||||||||
(Reversal of) provision for loan losses on covered loans | (820 | ) | (964 | ) | 723 | 5,089 | ||||||||||||
Net interest income after provision for loan losses | 259,542 | 250,679 | 218,644 | 204,964 | ||||||||||||||
Noninterest loss | (36,594 | ) | (41,421 | ) | (12,354 | ) | (2,099 | ) | ||||||||||
Noninterest expense | 124,384 | 100,352 | 94,420 | 96,355 | ||||||||||||||
Income before provision for income taxes | 98,564 | 108,906 | 111,870 | 106,510 | ||||||||||||||
Provision for income taxes | 22,782 | 35,749 | 37,855 | 34,419 | ||||||||||||||
Net income | $ | 75,782 | $ | 73,157 | $ | 74,015 | $ | 72,091 | ||||||||||
Preferred stock dividends | — | — | 1,714 | 1,714 | ||||||||||||||
Net income available to common stockholders | $ | 75,782 | $ | 73,157 | $ | 72,301 | $ | 70,377 | ||||||||||
Basic earnings per share | $ | 0.55 | $ | 0.53 | $ | 0.52 | $ | 0.51 | ||||||||||
Diluted earnings per share | $ | 0.55 | $ | 0.53 | $ | 0.52 | $ | 0.5 | ||||||||||
2012 | ||||||||||||||||||
Interest and dividend income | $ | 276,521 | $ | 254,162 | $ | 266,362 | $ | 254,050 | ||||||||||
Interest expense | 31,577 | 32,254 | 33,205 | 35,132 | ||||||||||||||
Net interest income | 244,944 | 221,908 | 233,157 | 218,918 | ||||||||||||||
Provision for loan losses, excluding covered loans | 13,773 | 13,321 | 16,595 | 16,479 | ||||||||||||||
(Reversal of) provision for loan losses on covered loans | (689 | ) | 5,179 | (1,095 | ) | 1,621 | ||||||||||||
Net interest income after provision for loan losses | 231,860 | 203,408 | 217,657 | 200,818 | ||||||||||||||
Noninterest (loss) income | (18,454 | ) | 2,751 | (11,655 | ) | 21,740 | ||||||||||||
Noninterest expense | 105,206 | 100,956 | 101,608 | 114,763 | ||||||||||||||
Income before provision for income taxes | 108,200 | 105,203 | 104,394 | 107,795 | ||||||||||||||
Provision for income taxes | 36,300 | 34,093 | 33,837 | 39,712 | ||||||||||||||
Net income | $ | 71,900 | $ | 71,110 | $ | 70,557 | $ | 68,083 | ||||||||||
Preferred stock dividends | 1,715 | 1,714 | 1,714 | 1,714 | ||||||||||||||
Net income available to common stockholders | $ | 70,185 | $ | 69,396 | $ | 68,843 | $ | 66,369 | ||||||||||
Basic earnings per share | $ | 0.5 | $ | 0.49 | $ | 0.48 | $ | 0.46 | ||||||||||
Diluted earnings per share | $ | 0.49 | $ | 0.48 | $ | 0.47 | $ | 0.45 | ||||||||||
SUMMARY_OF_OPERATIONS_AND_SIGN3
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
trust | ||
Principles of Consolidation | ' | ' |
Number of wholly owned subsidiaries that are statutory business trusts | 6 | ' |
Securities purchased under resale agreements ("Resale Agreements") | ' | ' |
Resale agreement term, low end of range | '1 day | ' |
Maximum term of resale agreement to be classified as cash and cash equivalents | '90 days | ' |
Minimum term of resale agreement to be separately categorized | '90 days | ' |
Loans receivable | ' | ' |
Number of past due days for the loans receivable to be placed on nonaccrual status | '90 days | ' |
Troubled debt restructurings | ' | ' |
Period for which restructured loans remains on nonaccrual status, to demonstrate that the borrower can perform under the restructured terms | '6 months | ' |
Other real estate owned | ' | ' |
Maximum period of foreclosure within which sale of real estate owned will be recorded at fair value less cost of sales | '3 months | ' |
FDIC percentage of reimbursement under shared loss agreements | ' | ' |
FDIC percentage of reimbursement under shared loss agreements | 80.00% | ' |
Percentage of company's liability for losses under shared loss agreements | 20.00% | 20.00% |
Investment in affordable housing partnerships | ' | ' |
Minimum partnership interest required for equity method of accounting (as a percent) | 5.00% | ' |
California | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 94 | ' |
New York | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 6 | ' |
Georgia | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 4 | ' |
Massachusetts | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 2 | ' |
Nevada | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 1 | ' |
Texas | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 1 | ' |
Washington | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 4 | ' |
In-store | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 12 | ' |
Greater China | ' | ' |
Operations summary | ' | ' |
Number of banking locations | 3 | ' |
Number of representative offices | 3 | ' |
Taiwan | ' | ' |
Operations summary | ' | ' |
Number of representative offices | 1 | ' |
SUMMARY_OF_OPERATIONS_AND_SIGN4
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details 2) (Premium on deposits) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum | ' |
Goodwill and other intangible assets | ' |
Projected useful life | '7 years |
Maximum | ' |
Goodwill and other intangible assets | ' |
Projected useful life | '15 years |
SUMMARY_OF_OPERATIONS_AND_SIGN5
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 12 Months Ended |
Dec. 31, 2013 | |
Building and Building Improvements | ' |
Premises and equipment | ' |
Estimated useful life | '25 years |
Furniture, fixtures and equipment | Minimum | ' |
Premises and equipment | ' |
Estimated useful life | '3 years |
Furniture, fixtures and equipment | Maximum | ' |
Premises and equipment | ' |
Estimated useful life | '7 years |
SUMMARY_OF_OPERATIONS_AND_SIGN6
SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended |
Dec. 31, 2013 | |
Long-Term Debt | ' |
Number of statutory business trusts | 6 |
Minimum | ' |
Information on Federal funds purchased | ' |
Federal funds maturity period | '1 day |
Maximum | ' |
Information on Federal funds purchased | ' |
Federal funds maturity period | '6 months |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | $2,733,797 | $2,607,029 | ||
U.S. Treasury securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 491,632 | 460,677 | ||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 394,323 | 197,855 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 178,870 | 180,665 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 885,237 | 1,144,085 | ||
Municipal securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 280,979 | 167,093 | ||
Other residential mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 46,327 | ' | ||
Other commercial mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 51,617 | 17,084 | ||
Corporate debt securities | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 309,995 | 411,983 | ||
Corporate debt securities | Non-investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 15,101 | [1] | 17,417 | [1] |
Other securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 79,716 | 10,170 | ||
Fair Value Measurements | ' | ' | ||
Derivative | ' | ' | ||
Derivatives liabilities | 0 | -42,060 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 2,733,797 | 2,607,029 | ||
Derivative | ' | ' | ||
Derivatives liabilities | -50,262 | -42,060 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Foreign exchange options | ' | ' | ||
Derivative | ' | ' | ||
Derivative assets | 6,290 | 5,011 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Interest rate swaps | ' | ' | ||
Derivative | ' | ' | ||
Derivative assets | 28,078 | 36,943 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Foreign exchange contracts | ' | ' | ||
Derivative | ' | ' | ||
Foreign exchange contracts | 6,181 | 896 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | U.S. Treasury securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 491,632 | 460,677 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | U.S. Government agency and U.S. Government sponsored enterprise debt securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 394,323 | 197,855 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 178,870 | 180,665 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 885,237 | 1,144,085 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Municipal securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 280,979 | 167,093 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Other residential mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 46,327 | ' | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Other commercial mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 51,617 | 17,084 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Corporate debt securities | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 309,995 | 411,983 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Corporate debt securities | Non-investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 15,101 | 17,417 | ||
Fair Value, Measurements, Recurring | Fair Value Measurements | Other securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 79,716 | 10,170 | ||
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 491,632 | 460,677 | ||
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 491,632 | 460,677 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 2,235,794 | 2,141,552 | ||
Derivative | ' | ' | ||
Derivatives liabilities | -46,607 | -39,008 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Foreign exchange options | ' | ' | ||
Derivative | ' | ' | ||
Derivative assets | 6,290 | 5,011 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Interest rate swaps | ' | ' | ||
Derivative | ' | ' | ||
Derivative assets | 28,078 | 36,943 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Foreign exchange contracts | ' | ' | ||
Derivative | ' | ' | ||
Foreign exchange contracts | 6,181 | 896 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government agency and U.S. Government sponsored enterprise debt securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 394,323 | 197,855 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 178,870 | 180,665 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 885,237 | 1,144,085 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Municipal securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 280,979 | 167,093 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Other residential mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 46,327 | ' | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Other commercial mortgage-backed securities: | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 51,617 | 17,084 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 309,995 | 411,983 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | Non-investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 8,730 | 12,617 | ||
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Other securities | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 79,716 | 10,170 | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | 6,371 | 4,800 | ||
Derivative | ' | ' | ||
Derivatives liabilities | -3,655 | -3,052 | ||
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | Non-investment grade | ' | ' | ||
Investment securities available-for-sale | ' | ' | ||
Total investment securities available-for-sale | $6,371 | $4,800 | ||
[1] | For 2013, the Company did not record any OTTI. For 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. |
FAIR_VALUE_Details_2
FAIR VALUE (Details 2) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Covered OREO | ' | ' | ||
FDIC percentage of reimbursement under shared loss agreements | 80.00% | ' | ||
Percentage of company's liability for losses under shared loss agreements | 20.00% | 20.00% | ||
Company's liability for losses under shared loss agreements | $675,000 | $2,200,000 | ||
Total eligible losses subject to shared loss agreements | 3,400,000 | 11,200,000 | ||
Fair Value, Measurements, Non-Recurring | Fair Value Measurements | ' | ' | ||
Non-covered impaired loans | ' | ' | ||
Total residential | 12,791,000 | 23,043,000 | ||
Total commercial real estate | 29,559,000 | 31,737,000 | ||
Total commercial and industrial | 15,120,000 | 12,838,000 | ||
Total consumer | 281,000 | 372,000 | ||
Total non-covered impaired loans | 57,751,000 | 67,990,000 | ||
Non-covered OREO | 13,031,000 | 2,065,000 | ||
Covered OREO | 17,284,000 | [1] | 10,468,000 | [1] |
Fair Value, Measurements, Non-Recurring | Significant Unobservable Inputs (Level 3) | ' | ' | ||
Non-covered impaired loans | ' | ' | ||
Total residential | 12,791,000 | 23,043,000 | ||
Total commercial real estate | 29,559,000 | 31,737,000 | ||
Total commercial and industrial | 15,120,000 | 12,838,000 | ||
Total consumer | 281,000 | 372,000 | ||
Total non-covered impaired loans | 57,751,000 | 67,990,000 | ||
Non-covered OREO | 13,031,000 | 2,065,000 | ||
Covered OREO | 17,284,000 | [1] | 10,468,000 | [1] |
Fair Value, Measurements, Non-Recurring | Total Gains (Losses) | ' | ' | ||
Non-covered impaired loans | ' | ' | ||
Total residential | -1,378,000 | -4,803,000 | ||
Total commercial real estate | -4,250,000 | -8,405,000 | ||
Total commercial and industrial | -13,135,000 | -14,540,000 | ||
Total consumer | -112,000 | -264,000 | ||
Total non-covered impaired loans | -18,875,000 | -28,012,000 | ||
Non-covered OREO | -1,438,000 | -5,122,000 | ||
Covered OREO | -3,376,000 | [1] | -11,183,000 | [1] |
Loans Held for Sale | ' | ($4,730,000) | ||
[1] | Covered OREO results from the WFIB and UCB FDIC-assisted acquisitions for which the Company entered into shared-loss agreements with the FDIC whereby the FDIC will reimburse the Company for 80% of eligible losses. As such, the Company's liability for losses is 20% of the $3.4 million in losses, or $675 thousand, and 20% of the $11.2 million in losses, or $2.2 million, for the year ended December 31, 2013 and 2012, respectively. |
FAIR_VALUE_Details_3
FAIR VALUE (Details 3) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Derivative Payable | ' | ' | ||
Reconciliation of the beginning and ending balances for major liability categories measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ' | ' | ||
Beginning balance | ($3,052) | ($2,634) | ||
Total gains or (losses): | ' | ' | ||
Included in earnings | -603 | [1] | -418 | [1] |
Ending balance | -3,655 | -3,052 | ||
Changes in unrealized (gains) losses included in earnings relating to assets and liabilities still held at end of period | 603 | 418 | ||
Corporate debt securities | Non-investment grade | ' | ' | ||
Reconciliation of the beginning and ending balances for major asset categories measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ' | ' | ||
Beginning balance | 4,800 | 2,235 | ||
Total gains or (losses): | ' | ' | ||
Included in earnings | ' | -99 | [1] | |
Included in other comprehensive unrealized gain | 1,653 | [1],[2] | 2,711 | [1],[2] |
Settlements | -82 | [3] | -47 | [3] |
Ending balance | 6,371 | 4,800 | ||
Total gains or (losses): | ' | ' | ||
Changes in unrealized (gains) losses included in earnings relating to assets and liabilities still held at end of period | ' | $99 | ||
[1] | Total gains or losses represent the total realized and unrealized gains and losses recorded for Level 3 assets and liabilities. Realized gains or losses are reported in the consolidated statements of income. | |||
[2] | Unrealized gains or losses on investment securities are reported in accumulated other comprehensive loss, net of tax in the consolidated statements of comprehensive income. | |||
[3] | Purchases, issuances, sales and settlements represent Level 3 assets and liabilities that were either purchased, issued, sold, or settled during the period. The amounts are recorded at their end of period fair values. |
FAIR_VALUE_Details_4
FAIR VALUE (Details 4) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Discount cash flow | Derivative Payable | Low end of range | ' |
Quantitative unobservable assumptions | ' |
Credit Risk Adjustment | 0.68% |
Discount cash flow | Derivative Payable | High end of range | ' |
Quantitative unobservable assumptions | ' |
Credit Risk Adjustment | 0.73% |
Income approach | Derivative Payable | ' |
Quantitative unobservable assumptions | ' |
Valuation adjustment | 1.6 |
Trust Preferred Securities | Discount cash flow | ' |
Quantitative unobservable assumptions | ' |
Constant prepayment rate for year 1-5 | 0.00% |
Constant prepayment rate, thereafter | 1.00% |
Constant default rate for year 1-5 | 1.20% |
Constant default rate, thereafter | 0.75% |
Recovery rate, existing deferral/defaults | 0.00% |
Recovery rate, future deferral | 15.00% |
Recovery period, future deferral | '60 months |
FAIR_VALUE_Details_5
FAIR VALUE (Details 5) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Valuation Methodologies | ' |
Number of trust preferred securities included in Level 3 available-for-sale securities | 4 |
Percentage of total available-for-sale securities represented by Level 3 available-for-sale securities, maximum | 1.00% |
Minimum number of quoted market prices traditionally used in determining fair value of level 3 available-for-sale securities | 2 |
Foreign exchange options | ' |
Valuation Methodologies | ' |
Term of contract | '5 years |
Interest rate swaps | ' |
Valuation Methodologies | ' |
Valuation adjustment due to counterparty credit risk | 272 |
FAIR_VALUE_Details_6
FAIR VALUE (Details 6) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Financial Assets: | ' | ' |
Investment securities available-for-sale | $2,733,797 | $2,607,029 |
Financial Liabilities: | ' | ' |
Other borrowings | ' | 20,000 |
Maximum term of maturity for securities purchased under resale agreements to be included in cash and cash equivalents | '90 days | ' |
Term of maturity that securities purchased under resale agreements must exceed to be included in certain fair value calculations | '90 days | ' |
Maximum term of maturity for carrying amount of securities sold under repurchase agreements to approximate fair value | '90 days | ' |
Carrying Amount or Notional Amount | ' | ' |
Financial Assets: | ' | ' |
Cash and cash equivalents | 895,820 | 1,323,106 |
Short-term investments | 257,473 | 366,378 |
Securities purchased under resale agreements | 1,300,000 | 1,450,000 |
Investment securities available-for-sale | 2,733,797 | 2,607,029 |
Loans held for sale | 204,970 | 174,317 |
Loans receivable, net | 17,600,613 | 14,645,785 |
Investment in Federal Home Loan Bank stock | 62,330 | 107,275 |
Investment in Federal Reserve Bank stock | 48,333 | 48,003 |
Accrued interest receivable | 116,314 | 94,837 |
Foreign exchange options | 85,614 | 85,614 |
Interest rate swaps | 1,915,474 | 1,190,793 |
Foreign exchange contracts | 440,848 | 112,459 |
Financial Liabilities: | ' | ' |
Demand, savings and money market deposits | 14,588,570 | 12,187,740 |
Time deposits | 5,824,348 | 6,121,614 |
Federal Home Loan Bank advances | 315,092 | 312,975 |
Securities sold under repurchase agreements | 995,000 | 995,000 |
Other borrowings | ' | 20,000 |
Accrued interest payable | 11,178 | 10,855 |
Long-term debt | 226,868 | 137,178 |
Derivatives liabilities | 2,308,612 | 1,392,494 |
Estimated Fair Value | ' | ' |
Financial Assets: | ' | ' |
Cash and cash equivalents | 895,820 | 1,323,106 |
Short-term investments | 257,473 | 366,378 |
Securities purchased under resale agreements | 1,279,406 | 1,442,302 |
Investment securities available-for-sale | 2,733,797 | 2,607,029 |
Loans held for sale | 212,469 | 180,349 |
Loans receivable, net | 16,741,674 | 14,743,218 |
Investment in Federal Home Loan Bank stock | 62,330 | 107,275 |
Investment in Federal Reserve Bank stock | 48,333 | 48,003 |
Accrued interest receivable | 116,314 | 94,837 |
Foreign exchange options | 6,290 | 5,011 |
Interest rate swaps | 28,078 | 36,943 |
Foreign exchange contracts | 6,181 | 896 |
Financial Liabilities: | ' | ' |
Demand, savings and money market deposits | 14,588,570 | 12,187,740 |
Time deposits | 5,791,659 | 6,115,530 |
Federal Home Loan Bank advances | 308,521 | 333,060 |
Securities sold under repurchase agreements | 1,134,774 | 1,173,830 |
Other borrowings | ' | 20,000 |
Accrued interest payable | 11,178 | 10,855 |
Long-term debt | 184,415 | 83,762 |
Derivatives liabilities | $50,262 | $42,060 |
FAIR_VALUE_Details_7
FAIR VALUE (Details 7) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Financial Liabilities: | ' | ' |
Other borrowings | ' | $20,000 |
Estimated Fair Value | ' | ' |
Financial Assets: | ' | ' |
Cash and cash equivalents | 895,820 | 1,323,106 |
Short-term investments | 257,473 | 366,378 |
Securities purchased under resale agreements | 1,279,406 | 1,442,302 |
Loans held for sale | 212,469 | 180,349 |
Loans receivable, net | 16,741,674 | 14,743,218 |
Investment in Federal Home Loan Bank stock | 62,330 | 107,275 |
Investment in Federal Reserve Bank stock | 48,333 | 48,003 |
Accrued interest receivable | 116,314 | 94,837 |
Financial Liabilities: | ' | ' |
Demand, savings and money market deposits | 14,588,570 | 12,187,740 |
Time deposits | 5,791,659 | 6,115,530 |
Federal Home Loan Bank advances | 308,521 | 333,060 |
Securities sold under repurchase agreements | 1,134,774 | 1,173,830 |
Other borrowings | ' | 20,000 |
Accrued interest payable | 11,178 | 10,855 |
Long-term debt | 184,415 | 83,762 |
Level 1 | ' | ' |
Financial Assets: | ' | ' |
Cash and cash equivalents | 895,820 | 1,323,106 |
Level 2 | ' | ' |
Financial Assets: | ' | ' |
Short-term investments | 257,473 | 366,378 |
Securities purchased under resale agreements | 1,279,406 | 1,442,302 |
Loans held for sale | 212,469 | 180,349 |
Investment in Federal Home Loan Bank stock | 62,330 | 107,275 |
Investment in Federal Reserve Bank stock | 48,333 | 48,003 |
Accrued interest receivable | 116,314 | 94,837 |
Financial Liabilities: | ' | ' |
Demand, savings and money market deposits | 14,588,570 | 12,187,740 |
Federal Home Loan Bank advances | 308,521 | 333,060 |
Securities sold under repurchase agreements | 1,134,774 | 1,173,830 |
Other borrowings | ' | 20,000 |
Accrued interest payable | 11,178 | 10,855 |
Long-term debt | 184,415 | 83,762 |
Level 3 | ' | ' |
Financial Assets: | ' | ' |
Loans receivable, net | 16,741,674 | 14,743,218 |
Financial Liabilities: | ' | ' |
Time deposits | $5,791,659 | $6,115,530 |
CASH_AND_CASH_EQUIVALENTS_AND_2
CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | ||||
Composition of cash and cash equivalents | ' | ' | ' | ' |
Cash and amounts due from banks | $693,387 | $933,050 | ' | ' |
Cash equivalents: | ' | ' | ' | ' |
Money market funds | 605 | 3,526 | ' | ' |
Other short-term investments | 201,828 | 386,530 | ' | ' |
Total cash and cash equivalents | 895,820 | 1,323,106 | 1,431,185 | 1,333,949 |
Short-term investments | ' | ' | ' | ' |
Balance at end of year | 257,473 | 366,378 | ' | ' |
Average balance outstanding during the year | 334,049 | 242,937 | ' | ' |
Maximum balance outstanding at any month-end | $384,375 | $367,283 | ' | ' |
Weighted average interest rate at end of year (as a percent) | 3.23% | 2.64% | ' | ' |
SECURITIES_PURCHASED_UNDER_RES1
SECURITIES PURCHASED UNDER RESALE AGREEMENTS (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
SECURITIES PURCHASED UNDER RESALE AGREEMENTS | ' | ' | ' |
Securities purchased under resale agreements | $1,300,000 | $1,450,000 | ' |
Paydowns and maturities of resale agreements | 600,000 | 736,434 | 1,005,632 |
Additions of resale agreements | 450,000 | 1,400,000 | 1,292,066 |
Total interest income on resale agreements | $21,236 | $20,392 | $19,216 |
INVESTMENT_SECURITIES_Details
INVESTMENT SECURITIES (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | |||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | $2,599,018,000 | ' | $2,786,490,000 | ||
Gross Unrealized Gains | 34,739,000 | ' | 12,203,000 | ||
Gross Unrealized Losses | -26,728,000 | ' | -64,896,000 | ||
Fair Value | 2,607,029,000 | ' | 2,733,797,000 | ||
Other than temporary impairment, pre-tax basis, credit portion recognized in earnings | 99,000 | 633,000 | ' | ||
Other than temporary impairment, pre-tax basis, non-credit portion recognized in other comprehensive income | 5,100,000 | ' | ' | ||
U.S. Treasury securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 459,613,000 | ' | 495,053,000 | ||
Gross Unrealized Gains | 1,135,000 | ' | 201,000 | ||
Gross Unrealized Losses | -71,000 | ' | -3,622,000 | ||
Fair Value | 460,677,000 | ' | 491,632,000 | ||
U.S. Government agency and U.S. Government sponsored enterprise debt securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 197,264,000 | ' | 406,807,000 | ||
Gross Unrealized Gains | 673,000 | ' | 242,000 | ||
Gross Unrealized Losses | -82,000 | ' | -12,726,000 | ||
Fair Value | 197,855,000 | ' | 394,323,000 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 174,036,000 | ' | 182,257,000 | ||
Gross Unrealized Gains | 6,665,000 | ' | 1,062,000 | ||
Gross Unrealized Losses | -36,000 | ' | -4,449,000 | ||
Fair Value | 180,665,000 | ' | 178,870,000 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 1,123,880,000 | ' | 892,435,000 | ||
Gross Unrealized Gains | 20,883,000 | ' | 7,729,000 | ||
Gross Unrealized Losses | -678,000 | ' | -14,927,000 | ||
Fair Value | 1,144,085,000 | ' | 885,237,000 | ||
Municipal securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 163,333,000 | ' | 297,390,000 | ||
Gross Unrealized Gains | 4,491,000 | ' | 1,122,000 | ||
Gross Unrealized Losses | -731,000 | ' | -17,533,000 | ||
Fair Value | 167,093,000 | ' | 280,979,000 | ||
Other residential mortgage-backed securities: | Investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | ' | ' | 48,129,000 | ||
Gross Unrealized Losses | ' | ' | -1,802,000 | ||
Fair Value | ' | ' | 46,327,000 | ||
Other commercial mortgage-backed securities: | Investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 16,999,000 | ' | 51,000,000 | ||
Gross Unrealized Gains | 85,000 | ' | 617,000 | ||
Fair Value | 17,084,000 | ' | 51,617,000 | ||
Corporate debt securities | Investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 429,318,000 | ' | 312,726,000 | ||
Gross Unrealized Gains | 237,000 | ' | 613,000 | ||
Gross Unrealized Losses | -17,572,000 | ' | -3,344,000 | ||
Fair Value | 411,983,000 | ' | 309,995,000 | ||
Corporate debt securities | Non-investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 24,620,000 | [1] | ' | 20,668,000 | [1] |
Gross Unrealized Gains | 355,000 | [1] | ' | 62,000 | [1] |
Gross Unrealized Losses | -7,558,000 | [1] | ' | -5,629,000 | [1] |
Fair Value | 17,417,000 | [1] | ' | 15,101,000 | [1] |
Other securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Investment securities available-for-sale, amortized cost | 9,955,000 | ' | 80,025,000 | ||
Gross Unrealized Gains | 215,000 | ' | 555,000 | ||
Gross Unrealized Losses | ' | ' | -864,000 | ||
Fair Value | $10,170,000 | ' | $79,716,000 | ||
[1] | For 2013, the Company did not record any OTTI. For 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. |
INVESTMENT_SECURITIES_Details_
INVESTMENT SECURITIES (Details 2) (Investment securities available for sale, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 |
Investment securities available for sale | ' | ' |
Other than Temporary Impairment, Credit Losses Recognized in Earnings | ' | ' |
Beginning balance | $115,412 | $115,511 |
Additional increases to the amount related to the credit loss for which an other-than-temporary impairment was previously recognized | 99 | ' |
Ending balance | $115,511 | $115,511 |
INVESTMENT_SECURITIES_Details_1
INVESTMENT SECURITIES (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
INVESTMENT SECURITIES | ' | ' | ' |
Gross gains on sale of investment securities | $13,900,000 | $28,200,000 | $18,100,000 |
Gross losses on sale of investment securities | 1,800,000 | 27,400,000 | 8,400,000 |
Net income statement impact of gain on sale of investment securities | 12,100,000 | 757,000 | 9,700,000 |
Tax expense on sale of investment securities | 5,100,000 | 318,000 | 4,100,000 |
Net proceeds for sales of investment securities | $663,600,000 | $1,230,000,000 | $702,600,000 |
INVESTMENT_SECURITIES_Details_2
INVESTMENT SECURITIES (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | $1,803,074 | $620,165 |
Continuous unrealized loss position less than 12 months, unrealized losses | -45,167 | -6,989 |
Continuous unrealized loss position 12 months or more, fair value | 250,361 | 195,271 |
Continuous unrealized loss position 12 months or more, unrealized losses | -19,729 | -19,739 |
Continuous unrealized loss position total, fair value | 2,053,435 | 815,436 |
Continuous unrealized loss position total, unrealized losses | -64,896 | -26,728 |
U.S. Treasury securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 337,248 | 95,232 |
Continuous unrealized loss position less than 12 months, unrealized losses | -3,622 | -71 |
Continuous unrealized loss position total, fair value | 337,248 | 95,232 |
Continuous unrealized loss position total, unrealized losses | -3,622 | -71 |
U.S. Government agency and U.S. Government sponsored enterprise debt securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 387,097 | 24,912 |
Continuous unrealized loss position less than 12 months, unrealized losses | -12,726 | -82 |
Continuous unrealized loss position total, fair value | 387,097 | 24,912 |
Continuous unrealized loss position total, unrealized losses | -12,726 | -82 |
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 114,754 | 10,013 |
Continuous unrealized loss position less than 12 months, unrealized losses | -3,280 | -36 |
Continuous unrealized loss position 12 months or more, fair value | 16,065 | ' |
Continuous unrealized loss position 12 months or more, unrealized losses | -1,169 | ' |
Continuous unrealized loss position total, fair value | 130,819 | 10,013 |
Continuous unrealized loss position total, unrealized losses | -4,449 | -36 |
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 502,285 | 215,826 |
Continuous unrealized loss position less than 12 months, unrealized losses | -10,570 | -678 |
Continuous unrealized loss position 12 months or more, fair value | 92,540 | ' |
Continuous unrealized loss position 12 months or more, unrealized losses | -4,357 | ' |
Continuous unrealized loss position total, fair value | 594,825 | 215,826 |
Continuous unrealized loss position total, unrealized losses | -14,927 | -678 |
Municipal securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 173,782 | 48,363 |
Continuous unrealized loss position less than 12 months, unrealized losses | -10,765 | -731 |
Continuous unrealized loss position 12 months or more, fair value | 47,892 | ' |
Continuous unrealized loss position 12 months or more, unrealized losses | -6,768 | ' |
Continuous unrealized loss position total, fair value | 221,674 | 48,363 |
Continuous unrealized loss position total, unrealized losses | -17,533 | -731 |
Other residential mortgage-backed securities: | Investment grade | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 46,328 | ' |
Continuous unrealized loss position less than 12 months, unrealized losses | -1,802 | ' |
Continuous unrealized loss position total, fair value | 46,328 | ' |
Continuous unrealized loss position total, unrealized losses | -1,802 | ' |
Corporate debt securities | Investment grade | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 193,482 | 225,819 |
Continuous unrealized loss position less than 12 months, unrealized losses | -1,538 | -5,391 |
Continuous unrealized loss position 12 months or more, fair value | 79,442 | 182,697 |
Continuous unrealized loss position 12 months or more, unrealized losses | -1,806 | -12,181 |
Continuous unrealized loss position total, fair value | 272,924 | 408,516 |
Continuous unrealized loss position total, unrealized losses | -3,344 | -17,572 |
Corporate debt securities | Non-investment grade | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position 12 months or more, fair value | 14,422 | 12,574 |
Continuous unrealized loss position 12 months or more, unrealized losses | -5,629 | -7,558 |
Continuous unrealized loss position total, fair value | 14,422 | 12,574 |
Continuous unrealized loss position total, unrealized losses | -5,629 | -7,558 |
Other securities | ' | ' |
Continuous unrealized loss position, fair values of investment securities available-for-sale | ' | ' |
Continuous unrealized loss position less than 12 months, fair value | 48,098 | ' |
Continuous unrealized loss position less than 12 months, unrealized losses | -864 | ' |
Continuous unrealized loss position total, fair value | 48,098 | ' |
Continuous unrealized loss position total, unrealized losses | ($864) | ' |
INVESTMENT_SECURITIES_Details_3
INVESTMENT SECURITIES (Details 5) (USD $) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | ||
item | item | item | |||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | $2,607,029 | ' | $2,733,797 | ||
Number of securities in a continuous unrealized loss position for more than twelve months | 13 | ' | 65 | ||
Unrealized losses in loss position for twelve months or more | -19,739 | ' | -19,729 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 77 | ' | 239 | ||
Unrealized losses in loss position for less than twelve months | -6,989 | ' | -45,167 | ||
Continuous unrealized loss position 12 months or more, fair value | 195,271 | ' | 250,361 | ||
Municipal securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 167,093 | ' | 280,979 | ||
Total investment securities available-for-sale portfolio (as a percent) | ' | ' | 10.00% | ||
Number of securities in a continuous unrealized loss position for more than twelve months | ' | ' | 32 | ||
Unrealized losses in loss position for twelve months or more | ' | ' | -6,768 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 29 | ' | 94 | ||
Unrealized losses in loss position for less than twelve months | -731 | ' | -10,765 | ||
Continuous unrealized loss position 12 months or more, fair value | ' | ' | 47,892 | ||
Trust Preferred Securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Number of securities in a continuous unrealized loss position for more than twelve months | ' | ' | 5 | ||
Unrealized losses in loss position for twelve months or more | ' | ' | -5,600 | ||
Noncredit-related impairment losses | 99 | 633 | ' | ||
Number of securities for which noncredit-related impairment losses have been recorded during the period | 5 | 5 | ' | ||
Trust Preferred Securities | Non-investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Total investment securities available-for-sale portfolio (as a percent) | ' | ' | 1.00% | ||
Number of securities in a continuous unrealized loss position for more than twelve months | 5 | ' | ' | ||
Continuous unrealized loss position 12 months or more, fair value | 12,600 | ' | 14,400 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Residential mortgage-backed securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 1,144,085 | ' | 885,237 | ||
Total investment securities available-for-sale portfolio (as a percent) | ' | ' | 32.00% | ||
Number of securities in a continuous unrealized loss position for more than twelve months | ' | ' | 21 | ||
Unrealized losses in loss position for twelve months or more | ' | ' | -4,357 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 26 | ' | 55 | ||
Unrealized losses in loss position for less than twelve months | -678 | ' | -10,570 | ||
Continuous unrealized loss position 12 months or more, fair value | ' | ' | 92,540 | ||
Investment Grade Corporate debt and commercial agency mortgage-backed securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Number of securities in a continuous unrealized loss position for more than twelve months | ' | ' | 7 | ||
Unrealized losses in loss position for twelve months or more | ' | ' | -2,900 | ||
US Government Agencies and Government Sponsored Enterprise Debt Securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | ' | ' | 394,300 | ||
Total investment securities available-for-sale portfolio (as a percent) | ' | ' | 14.00% | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 1 | ' | 16 | ||
Unrealized losses in loss position for less than twelve months | ' | ' | -12,700 | ||
Other securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 10,170 | ' | 79,716 | ||
Unrealized losses in loss position for less than twelve months | ' | ' | -864 | ||
Other securities | All other | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | ' | ' | 74 | ||
Unrealized losses in loss position for less than twelve months | ' | ' | -11,100 | ||
Corporate debt securities | Investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 411,983 | ' | 309,995 | ||
Number of securities in a continuous unrealized loss position for more than twelve months | 8 | ' | ' | ||
Unrealized losses in loss position for twelve months or more | -12,181 | ' | -1,806 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 11 | ' | ' | ||
Unrealized losses in loss position for less than twelve months | -5,391 | ' | -1,538 | ||
Continuous unrealized loss position 12 months or more, fair value | 182,697 | ' | 79,442 | ||
Corporate debt securities | Non-investment grade | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 17,417 | [1] | ' | 15,101 | [1] |
Unrealized losses in loss position for twelve months or more | -7,558 | ' | -5,629 | ||
Continuous unrealized loss position 12 months or more, fair value | 12,574 | ' | 14,422 | ||
Percentage of total amortized cost basis of these securities | ' | ' | 28.00% | ||
U.S. Treasury securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 460,677 | ' | 491,632 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 9 | ' | ' | ||
Unrealized losses in loss position for less than twelve months | -71 | ' | -3,622 | ||
U.S. Government agency and U.S. Government sponsored enterprise mortgage-backed securities - Commercial mortgage-backed securities | ' | ' | ' | ||
Schedule of Available-for-sale Securities | ' | ' | ' | ||
Fair value of available for sale securities | 180,665 | ' | 178,870 | ||
Unrealized losses in loss position for twelve months or more | ' | ' | -1,169 | ||
Number of individual securities with a continuous unrealized loss position less than 12 months | 1 | ' | ' | ||
Unrealized losses in loss position for less than twelve months | -36 | ' | -3,280 | ||
Continuous unrealized loss position 12 months or more, fair value | ' | ' | $16,065 | ||
[1] | For 2013, the Company did not record any OTTI. For 2012, the Company recorded $99 thousand, on a pre-tax basis, of the credit portion of OTTI through earnings and $5.1 million of the non-credit portion of OTTI for pooled trust preferred securities in other comprehensive income. |
INVESTMENT_SECURITIES_Details_4
INVESTMENT SECURITIES (Details 6) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Scheduled maturities of investment securities available-for sale, amortized cost basis | ' | ' |
Due within one year | $417,774,000 | ' |
Due after one year through five years | 547,189,000 | ' |
Due after five years through ten years | 750,811,000 | ' |
Due after ten years | 1,070,716,000 | ' |
Total investment securities available-for-sale | 2,786,490,000 | ' |
Scheduled maturities of investment securities available-for sale, estimated fair value | ' | ' |
Due within one year | 401,970,000 | ' |
Due after one year through five years | 542,293,000 | ' |
Due after five years through ten years | 732,404,000 | ' |
Due after ten years | 1,057,130,000 | ' |
Total investment securities available-for-sale | 2,733,797,000 | ' |
Par value of securities pledged to secure public deposits | $1,970,000,000 | $1,780,000,000 |
DERIVATIVE_FINANCIAL_INSTRUMEN2
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Designated as Hedging Instrument | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | $135,000 | $50,000 | ||
Derivative liabilities | 16,906 | [1] | 1,521 | [1] |
Designated as Hedging Instrument | Interest rate swaps | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | 135,000 | 50,000 | ||
Derivative liabilities | 16,906 | [1] | 1,521 | [1] |
Not Designated as Hedging Instrument | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | 2,441,936 | 1,388,866 | ||
Derivative assets | 40,549 | [1] | 42,850 | [1] |
Derivative liabilities | 33,356 | [1] | 40,539 | [1] |
Not Designated as Hedging Instrument | Foreign exchange options | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | 85,614 | 85,614 | ||
Derivative assets | 6,290 | [1] | 5,011 | [1] |
Derivative liabilities | 3,655 | [1] | 3,052 | [1] |
Not Designated as Hedging Instrument | Interest rate swaps | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | 1,915,474 | 1,190,793 | ||
Derivative assets | 28,078 | [1] | 36,943 | [1] |
Derivative liabilities | 26,352 | [1] | 36,799 | [1] |
Not Designated as Hedging Instrument | Foreign exchange contracts | ' | ' | ||
Fair Values of Derivative Instruments | ' | ' | ||
Notional amount | 440,848 | 112,459 | ||
Derivative assets | 6,181 | [1] | 896 | [1] |
Derivative liabilities | $3,349 | [1] | $688 | [1] |
[1] | Derivative assets, which are a component of other assets, include the estimated settlement of the derivative asset position. Derivative liabilities, which are a component of other liabilities and deposits, include the estimated settlement of the derivative liability position. |
DERIVATIVE_FINANCIAL_INSTRUMEN3
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING (Details 2) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2007 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | |
Counterparties assets | Counterparties assets | Receive-fixed, Pay-variable Interest Rate Swaps | Receive-fixed, Pay-variable Interest Rate Swaps | Receive-fixed pay-variable interest rate swap - steepeners | Equity swap agreements | Equity swap agreements | Foreign exchange options | Foreign exchange options | Interest rate swaps | Interest rate swaps | Short-term foreign exchange contracts | Short-term foreign exchange contracts | Short-term foreign exchange contracts | Short-term foreign exchange contracts | Long-term foreign exchange contracts | |||
item | item | item | item | Counterparties assets | Counterparties assets | |||||||||||||
Derivative | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of instruments entered into during the period | ' | ' | ' | ' | 3 | 2 | 2 | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of hedged certificates of deposit | ' | ' | ' | ' | 3 | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $426,000,000 | $112,500,000 | ' | ' | $14,800,000 |
Total notional amount of hedged interest rate swaps entered into during the period | 85,000,000 | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total certificates of deposit hedged by total derivatives entered into during the period | 85,000,000 | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net reduction recognized in expense related to hedge ineffectiveness | 632,000 | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net reduction to interest expense related to net settlements of derivatives | 2,100,000 | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of contract | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' |
Collateral delivered by the entity in the form of securities to counterparty institutions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 940,000 | ' | ' | ' | ' | ' | ' | ' |
Notional amount of derivative assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,920,000,000 | 1,190,000,000 | ' | ' | ' | ' | ' |
Notional amount of derivative liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,920,000,000 | 1,190,000,000 | ' | ' | ' | ' | ' |
Fair value of derivative asset | ' | ' | 16,043,000 | 992,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | 896,000 | 1,500,000 | 495,000 | 200,000 |
Fair value of derivative liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,200,000 | $688,000 | ' | ' | $183,000 |
DERIVATIVE_FINANCIAL_INSTRUMEN4
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Cash collateral posted | $187 | ' | ' |
Designated as Hedging Instrument | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | -9,255 | -1,076 | 2,930 |
Designated as Hedging Instrument | Interest rate swaps | Interest Expense | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | -9,255 | -1,076 | 2,930 |
Not Designated as Hedging Instrument | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | 4,882 | 856 | -570 |
Not Designated as Hedging Instrument | Equity swap agreements | Noninterest Expense | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | ' | 2 | 2 |
Not Designated as Hedging Instrument | Foreign exchange options | Noninterest Income | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | 653 | 389 | -392 |
Not Designated as Hedging Instrument | Foreign exchange options | Noninterest Expense | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | 23 | 101 | 16 |
Not Designated as Hedging Instrument | Interest rate swaps | Noninterest Income | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | 1,582 | 592 | -447 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Noninterest Income | ' | ' | ' |
Derivative Instruments, Gain (Loss) | ' | ' | ' |
Net (losses) gains on derivative instruments | $2,624 | ($228) | $251 |
DERIVATIVE_FINANCIAL_INSTRUMEN5
DERIVATIVE FINANCIAL INSTRUMENTS AND BALANCE SHEET OFFSETTING (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Liabilities, Repurchase Agreements | ' | ' |
Gross Amounts of Recognized Liabilities | $995,000 | $995,000 |
Net Amounts of Liabilities Presented | 995,000 | 995,000 |
Counterparties assets | ' | ' |
Assets, Derivatives | ' | ' |
Gross Amounts of Recognized Assets | 16,043 | 992 |
Net Amounts of Assets Presented | 16,043 | 992 |
Gross Amounts Not Offset | ' | ' |
Financial Instruments | -11,363 | -366 |
Collateral Received | -4,680 | -626 |
Assets, Resale Agreements | ' | ' |
Gross Amounts of Recognized Assets | 1,400,000 | 1,750,000 |
Net Amounts of Assets Presented | 1,400,000 | 1,750,000 |
Gross Amounts Not Offset | ' | ' |
Financial Instruments | -495,000 | -545,000 |
Collateral Received | -905,000 | -1,205,000 |
Counterparties liabilities | ' | ' |
Liabilities, Derivatives | ' | ' |
Gross Amounts of Recognized Liabilities | 33,849 | 38,513 |
Net Amounts of Liabilities Presented | 33,849 | 38,513 |
Gross Amounts Not Offset | ' | ' |
Financial Instruments | -11,363 | -366 |
Collateral Posted | -22,486 | -38,147 |
Liabilities, Repurchase Agreements | ' | ' |
Gross Amounts of Recognized Liabilities | 995,000 | 995,000 |
Net Amounts of Liabilities Presented | 995,000 | 995,000 |
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | ' | ' |
Financial Instruments | -495,000 | -545,000 |
Collateral Posted | ($500,000) | ($450,000) |
COVERED_ASSETS_AND_FDIC_INDEMN2
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage of eligible losses for which the FDIC is obligated to reimburse the Company | 80.00% | ' |
Number of days following the 10th anniversary of the acquisition date upon which the Company will be required to pay a calculated amount to the FDIC | '45 days | ' |
Percentage of excess resulting from the calculation of liability to the FDIC | 50.00% | ' |
Percentage of the Intrinsic Loss Estimate used in the calculation of the liability to the FDIC | 20.00% | ' |
Percentage of the asset discount used in the calculation of the liability to the FDIC | 25.00% | ' |
Percentage of the Cumulative Shared-Loss Payments used in the calculation of the liability to the FDIC | 25.00% | ' |
Estimated liability that will be due to the FDIC based on specific thresholds of losses not being reached | $74,700,000 | $27,700,000 |
Commercial | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Term of loan shared-loss agreement | '5 years | ' |
Term of loss recovery provisions for loans | '8 years | ' |
Residential Single-family | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Term of loan shared-loss agreement | '10 years | ' |
Term of loss recovery provisions for loans | '10 years | ' |
Washington First International Bank | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage of eligible losses for which the FDIC is obligated to reimburse the Company | 80.00% | ' |
Washington First International Bank | Minimum | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage of loans receivable acquired covered by shared-loss agreements | 99.00% | ' |
United Commercial Bank | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage of eligible losses for which the FDIC is obligated to reimburse the Company | 80.00% | ' |
Percentage of eligible losses in excess of a specified amount for which the FDIC is obligated to reimburse the Company | 95.00% | ' |
Amount of eligible losses over which the FDIC is obligated to reimburse a higher percentage | $2,050,000,000 | ' |
United Commercial Bank | Minimum | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage obligation to reimburse the FDIC for eligible recoveries related to covered assets | 80.00% | ' |
United Commercial Bank | Maximum | ' | ' |
Schedule Of Covered Assets - disclosures | ' | ' |
Percentage obligation to reimburse the FDIC for eligible recoveries related to covered assets | 95.00% | ' |
COVERED_ASSETS_AND_FDIC_INDEMN3
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | $2,461,560 | $3,450,956 |
Covered discount | -265,917 | -510,208 |
Net valuation of loans | 2,195,643 | 2,940,748 |
Allowance on covered loans | -7,745 | -5,153 |
Total covered loans, net | 2,187,898 | 2,935,595 |
Real Estate Loans | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 1,960,966 | 2,775,972 |
Real Estate Loans | Residential Single-family | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 290,095 | 362,345 |
Real Estate Loans | Residential Multifamily | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 403,508 | 647,440 |
Real Estate Loans | Commercial and Industrial Real Estate | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 1,103,530 | 1,348,556 |
Real Estate Loans | Construction and Land | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 163,833 | 417,631 |
Other Loans | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 500,594 | 674,984 |
Other Loans | Commercial Business | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 426,621 | 587,333 |
Other Loans | Other Consumer | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | $73,973 | $87,651 |
COVERED_ASSETS_AND_FDIC_INDEMN4
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | $7,745,000 | ' | ' | ' | $5,153,000 | ' | ' | ' | $7,745,000 | $5,153,000 | ' |
Provision for covered loans | -820,000 | -964,000 | 723,000 | 5,089,000 | -689,000 | 5,179,000 | -1,095,000 | 1,621,000 | 4,028,000 | 5,016,000 | 2,422,000 |
Percentage of allowance allocated to covered loans | 3.10% | ' | ' | ' | ' | ' | ' | ' | 3.10% | ' | ' |
Covered loans accounted for under ASC 310-30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Provision for covered loans | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Covered loans accounted for under ASC 310-30 | Commercial Real Estate ("CRE") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Specific covered loans outside of the scope of ASC 310-30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | 5,500,000 | ' | ' |
Provision for covered loans | ' | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | 5,000,000 | 2,400,000 |
Additional advances under shared-loss agreements | 320,200,000 | ' | ' | ' | 431,700,000 | ' | ' | ' | 320,200,000 | 431,700,000 | ' |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | 6,500,000 | ' |
Allowance allocated to additional advances | 5,500,000 | ' | ' | ' | 5,200,000 | ' | ' | ' | 5,500,000 | 5,200,000 | ' |
Percentage of allowance allocated to covered loans | 2.20% | ' | ' | ' | 2.20% | ' | ' | ' | 2.20% | 2.20% | ' |
Specific covered loans outside of the scope of ASC 310-30 | Commercial and Industrial ("C&I") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional advances under shared-loss agreements | 230,600,000 | ' | ' | ' | 302,300,000 | ' | ' | ' | 230,600,000 | 302,300,000 | ' |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 5,000,000 | ' |
Allowance allocated to additional advances | 3,200,000 | ' | ' | ' | 2,400,000 | ' | ' | ' | 3,200,000 | 2,400,000 | ' |
Specific covered loans outside of the scope of ASC 310-30 | Commercial Real Estate ("CRE") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional advances under shared-loss agreements | 46,700,000 | ' | ' | ' | 83,400,000 | ' | ' | ' | 46,700,000 | 83,400,000 | ' |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 380,000 | 1,500,000 | ' |
Allowance allocated to additional advances | 1,800,000 | ' | ' | ' | 2,500,000 | ' | ' | ' | 1,800,000 | 2,500,000 | ' |
Specific covered loans outside of the scope of ASC 310-30 | Consumer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional advances under shared-loss agreements | 30,900,000 | ' | ' | ' | 34,500,000 | ' | ' | ' | 30,900,000 | 34,500,000 | ' |
Allowance allocated to additional advances | 341,000 | ' | ' | ' | 194,000 | ' | ' | ' | 341,000 | 194,000 | ' |
Specific covered loans outside of the scope of ASC 310-30 | Residential | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional advances under shared-loss agreements | 12,000,000 | ' | ' | ' | 11,500,000 | ' | ' | ' | 12,000,000 | 11,500,000 | ' |
Allowance allocated to additional advances | $176,000 | ' | ' | ' | $87,000 | ' | ' | ' | $176,000 | $87,000 | ' |
COVERED_ASSETS_AND_FDIC_INDEMN5
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details 4) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | $2,461,560 | $3,450,956 |
Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 2,003,632 | 2,569,918 |
Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 43,604 | 58,016 |
Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 406,855 | 814,814 |
Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 7,469 | 8,208 |
Real Estate Loans | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 1,960,966 | 2,775,972 |
Real Estate Loans | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 1,553,493 | 2,050,246 |
Real Estate Loans | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 38,841 | 34,968 |
Real Estate Loans | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 361,266 | 682,745 |
Real Estate Loans | Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 7,366 | 8,013 |
Real Estate Loans | Residential Single-family | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 290,095 | 362,345 |
Real Estate Loans | Residential Single-family | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 281,246 | 345,568 |
Real Estate Loans | Residential Single-family | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 733 | 982 |
Real Estate Loans | Residential Single-family | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 8,116 | 15,795 |
Real Estate Loans | Residential Multifamily | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 403,508 | 647,440 |
Real Estate Loans | Residential Multifamily | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 373,024 | 571,061 |
Real Estate Loans | Residential Multifamily | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 785 | 8,074 |
Real Estate Loans | Residential Multifamily | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 29,699 | 68,305 |
Real Estate Loans | Commercial and Industrial Real Estate | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 1,103,530 | 1,348,556 |
Real Estate Loans | Commercial and Industrial Real Estate | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 857,376 | 963,069 |
Real Estate Loans | Commercial and Industrial Real Estate | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 27,851 | 10,777 |
Real Estate Loans | Commercial and Industrial Real Estate | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 211,835 | 367,869 |
Real Estate Loans | Commercial and Industrial Real Estate | Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 6,468 | 6,841 |
Real Estate Loans | Construction and Land | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 163,833 | 417,631 |
Real Estate Loans | Construction and Land | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 41,847 | 170,548 |
Real Estate Loans | Construction and Land | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 9,472 | 15,135 |
Real Estate Loans | Construction and Land | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 111,616 | 230,776 |
Real Estate Loans | Construction and Land | Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 898 | 1,172 |
Other Loans | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 500,594 | 674,984 |
Other Loans | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 450,139 | 519,672 |
Other Loans | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 4,763 | 23,048 |
Other Loans | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 45,589 | 132,069 |
Other Loans | Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 103 | 195 |
Other Loans | Commercial Business | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 426,621 | 587,333 |
Other Loans | Commercial Business | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 378,086 | 434,138 |
Other Loans | Commercial Business | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 4,635 | 22,533 |
Other Loans | Commercial Business | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 43,797 | 130,467 |
Other Loans | Commercial Business | Doubtful | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 103 | 195 |
Other Loans | Other Consumer | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 73,973 | 87,651 |
Other Loans | Other Consumer | Pass/Watch | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 72,053 | 85,534 |
Other Loans | Other Consumer | Special Mention | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | 128 | 515 |
Other Loans | Other Consumer | Substandard | ' | ' |
Carrying Amounts And Composition Of Covered Loans | ' | ' |
Total principal balance | $1,792 | $1,602 |
COVERED_ASSETS_AND_FDIC_INDEMN6
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details 5) (USD $) | 12 Months Ended | ||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Covered Nonperforming Assets | ' | ' | ' | ||
Covered nonaccrual loans | $126,895,000 | [1],[2],[3] | $204,310,000 | [1],[2],[3] | ' |
Total nonperforming loans | 126,895,000 | 204,310,000 | ' | ||
Other real estate owned covered, net | 21,373,000 | 26,808,000 | ' | ||
Total covered nonperforming assets | 148,268,000 | 231,118,000 | ' | ||
Percentage of any reimbursable expense recorded as interest income under ASC 310-30 | 80.00% | ' | ' | ||
Covered TDR activity | ' | ' | ' | ||
Balance at beginning of period | 157,736,000 | 146,709,000 | ' | ||
Additions | 35,865,000 | 72,917,000 | ' | ||
Transfers to OREO | ' | -6,351,000 | ' | ||
Charge-offs | -10,167,000 | -8,658,000 | ' | ||
Paydowns/ Reductions | -67,427,000 | -46,881,000 | ' | ||
Balance at end of period | 116,007,000 | 157,736,000 | 146,709,000 | ||
Changes in the accretable yield for the covered loans | ' | ' | ' | ||
Balance at beginning of period | 556,986,000 | 785,165,000 | ' | ||
Accretion | -347,010,000 | -382,132,000 | ' | ||
Changes in expected cash flows | 251,569,000 | 153,953,000 | ' | ||
Balance at end of period | 461,545,000 | 556,986,000 | 785,165,000 | ||
Covered assets - other disclosures | ' | ' | ' | ||
Amount reclassified from nonaccretable yield to accretable yield due to changes in loss rate assumptions | 190,300,000 | 38,600,000 | ' | ||
Amount of loans removed from the covered loans accounted for under ASC 310-30, excluding scheduled principal payments | 739,300,000 | 924,700,000 | 932,200,000 | ||
Loan discount related to payoffs and removals of loans | 168,100,000 | 124,700,000 | 102,100,000 | ||
Covered loans accounted for under ASC 310-10 | ' | ' | ' | ||
Covered Nonperforming Assets | ' | ' | ' | ||
Covered nonaccrual loans | 17,700,000 | 29,600,000 | ' | ||
Covered OREO Properties | ' | ' | ' | ||
Covered Nonperforming Assets | ' | ' | ' | ||
Aggregate carrying value of covered OREO properties | 21,400,000 | 26,800,000 | ' | ||
Number of covered OREO properties added during the period | 26 | ' | ' | ||
Aggregate carrying value of covered OREO properties added during the period | 31,200,000 | ' | ' | ||
Net adjustments included in aggregate carrying value on covered OREO properties | 2,400,000 | ' | ' | ||
Number of covered OREO properties sold during the period | 46 | ' | ' | ||
Total proceeds value of covered OREO properties sold during the period | 38,900,000 | ' | ' | ||
Total net gains (losses) on covered OREO properties sold during the period | $4,700,000 | ' | ' | ||
Covered OREO Properties | Geographic Concentration | California | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 31.00% | ' | ' | ||
Covered OREO Properties | Geographic Concentration | Massachusetts | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 31.00% | ' | ' | ||
United Commercial Bank (UCB) | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 94.00% | ' | ' | ||
Number of general geographic regions | 3 | ' | ' | ||
United Commercial Bank (UCB) | Geographic Concentration | California | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 64.00% | ' | ' | ||
United Commercial Bank (UCB) | Geographic Concentration | New York | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 11.00% | ' | ' | ||
United Commercial Bank (UCB) | Geographic Concentration | Hong Kong | ' | ' | ' | ||
Credit Risk and Concentrations | ' | ' | ' | ||
Percent of total | 10.00% | ' | ' | ||
[1] | Includes $17.7 million and $29.6 million of loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | ||||
[2] | Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC. | ||||
[3] | Represents principal balance net of discount. |
COVERED_ASSETS_AND_FDIC_INDEMN7
COVERED ASSETS AND FDIC INDEMNIFICATION ASSET (Details 6) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
FDIC indemnification asset activity | ' | ' | ||
Balance at beginning of period | $316,313 | $511,135 | ||
(Amortization) Accretion | -99,055 | -33,815 | ||
Reductions | -95,536 | [1] | -143,988 | [1] |
Estimate of FDIC repayment | -47,014 | [2] | -17,019 | [2] |
Balance at end of period | 74,708 | 316,313 | ||
FDIC Receivable | ' | ' | ||
Percentage of eligible losses for which the FDIC is obligated to reimburse the Company | 80.00% | ' | ||
Percentage of reimbursable expenses that are loan-related and OREO expenses that are recorded as non-interest expense | 100.00% | ' | ||
Percentage of any reimbursable expense recorded as noninterest income | 80.00% | ' | ||
Percentage of actual expense paid by the Company | 20.00% | ' | ||
Percentage of Recoveries received | 80.00% | ' | ||
FDIC receivable activity | ' | ' | ||
Balance at beginning of period | 73,091 | 76,646 | ||
Net addition due to eligible expense/loss | 12,996 | 72,539 | ||
Payments received from the FDIC | -55,826 | -76,094 | ||
Balance at end of period | $30,261 | $73,091 | ||
[1] | Reductions relate to charge-offs, partial prepayments, loan payoffs and loan sales which result in a corresponding reduction of the indemnification asset. | |||
[2] | This represents the change in the calculated estimate the Company will be required to pay the FDIC at the end of the FDIC loss share agreements, due to lower thresholds of losses. |
NONCOVERED_LOANS_AND_ALLOWANCE2
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | $15,678,317 | $11,958,873 |
Unearned fees, premiums and discounts, net | -23,672 | -19,301 |
Allowance for non-covered loans receivable | -241,930 | -229,382 |
Non-covered loans receivable, excluding covered loans, net | 15,412,715 | 11,710,190 |
Residential | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,185,309 | 3,088,031 |
Residential | Single-family | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 3,192,875 | 2,187,323 |
Residential | Multifamily | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 992,434 | 900,708 |
Commercial Real Estate ("CRE") | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,585,077 | 3,894,695 |
Commercial Real Estate ("CRE") | Income producing | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,301,030 | 3,644,035 |
Commercial Real Estate ("CRE") | Construction | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 140,186 | 121,589 |
Commercial Real Estate ("CRE") | Land | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 143,861 | 129,071 |
Commercial and Industrial ("C&I") | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 5,360,193 | 4,231,265 |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,637,056 | 3,569,388 |
Commercial and Industrial ("C&I") | Trade finance | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 723,137 | 661,877 |
Consumer | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 1,547,738 | 744,882 |
Consumer | Student loans | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 679,220 | 475,799 |
Consumer | Other Consumer | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | $868,518 | $269,083 |
NONCOVERED_LOANS_AND_ALLOWANCE3
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | |
Non-Covered loans receivable disclosures | ' | ' |
Accrued interest on covered and non-covered loans receivable | $94,500,000 | $76,800,000 |
Covered and non-covered loans receivable pledged to secure borrowings from the FHLB and the Federal Reserve Bank | 10,570,000,000 | 8,880,000,000 |
Number of loans negatively amortizing | 0 | 0 |
Residential | Minimum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Number of units of residential property securing fixed and adjustable rate first mortgage loans | 1 | ' |
Residential | Maximum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Number of units of residential property securing fixed and adjustable rate first mortgage loans | 4 | ' |
Ratio of mortgage loans with variable payment option features to total mortgage loans within same portfolio category (as a percent) | 1.00% | 1.00% |
Residential | Single-family | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
New first mortgage loans originated | 1,620,000,000 | 735,300,000 |
Residential | Single-family | Minimum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Adjustable rate mortgage, term of initial fixed interest rates | '1 year | ' |
Residential | Single-family | Maximum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Adjustable rate mortgage, term of initial fixed interest rates | '3 years | ' |
Loans to value ratio (as a percent) | 60.00% | ' |
Ratio of mortgage loans with interest-only features to total mortgage loans within same portfolio category (as a percent) | 1.00% | 1.00% |
Residential | Multifamily | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
New first mortgage loans originated | $247,100,000 | $128,400,000 |
Residential | Multifamily | Minimum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Adjustable rate mortgage, term of initial fixed interest rates | '6 months | ' |
Residential | Multifamily | Midrange | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Adjustable rate mortgage, term of initial fixed interest rates | '3 years | ' |
Residential | Multifamily | Maximum | ' | ' |
Non-Covered loans receivable disclosures | ' | ' |
Adjustable rate mortgage, term of initial fixed interest rates | '5 years | ' |
NONCOVERED_LOANS_AND_ALLOWANCE4
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Credit Risk and Concentrations | ' | ' | ' |
Percentage of non-covered commercial real estate loans and non-covered residential loans secured by real properties located in California | 86.00% | ' | ' |
Loans receivable, excluding covered loans, gross | $15,678,317,000 | $11,958,873,000 | ' |
Purchased Loans | ' | ' | ' |
Loans purchased during the period | 776,700,000 | ' | ' |
Carrying amount of loans purchased during the period | 759,300,000 | ' | ' |
Percentage of purchased loans classified as student loans | 63.00% | ' | ' |
Percentage of purchased loans classified as premium financing loans | 36.00% | ' | ' |
Percentage of purchased loans classified as other loans | 1.00% | ' | ' |
Loans Held for Sale | ' | ' | ' |
Total loans held for sale | 204,970,000 | 174,317,000 | ' |
Proceeds from the sales of Loans held for sale, including loans reclassified to loans held for sale | 117,300,000 | 351,900,000 | 652,700,000 |
Net gain from sale of loans held for sale during the period | 4,000,000 | 14,600,000 | 14,500,000 |
Loans receivable reclassified to loans held for sale | 97,065,000 | 144,131,000 | 644,915,000 |
Residential | ' | ' | ' |
Credit Risk and Concentrations | ' | ' | ' |
Loans receivable, excluding covered loans, gross | 4,185,309,000 | 3,088,031,000 | ' |
Commercial Real Estate ("CRE") | ' | ' | ' |
Credit Risk and Concentrations | ' | ' | ' |
Loans receivable, excluding covered loans, gross | $4,585,077,000 | $3,894,695,000 | ' |
NONCOVERED_LOANS_AND_ALLOWANCE5
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 4) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
item | item | |
Credit Quality Indicators | ' | ' |
Number of grades in the risk rating system utilized by the company to rate credit risk of loans receivable | 8 | ' |
Increase (decrease) in non-covered loans graded Substandard | $29,300,000 | ' |
Percentage increase (decrease) in non-covered loans graded Substandard | 6.00% | ' |
Number of doubtful or loss grade loans | 0 | 0 |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 15,678,317,000 | 11,958,873,000 |
Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 14,991,479,000 | 11,253,469,000 |
Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 197,284,000 | 186,560,000 |
Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 489,554,000 | 518,844,000 |
Residential | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,185,309,000 | 3,088,031,000 |
Residential | Residential Single-family | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 3,192,875,000 | 2,187,323,000 |
Residential | Residential Single-family | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 3,167,337,000 | 2,163,918,000 |
Residential | Residential Single-family | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 8,331,000 | 5,131,000 |
Residential | Residential Single-family | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 17,207,000 | 18,274,000 |
Residential | Residential Multifamily | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 992,434,000 | 900,708,000 |
Residential | Residential Multifamily | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 923,697,000 | 781,552,000 |
Residential | Residential Multifamily | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 1,634,000 | 13,510,000 |
Residential | Residential Multifamily | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 67,103,000 | 105,646,000 |
Commercial Real Estate ("CRE") | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,585,077,000 | 3,894,695,000 |
Commercial Real Estate ("CRE") | Income producing | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,301,030,000 | 3,644,035,000 |
Commercial Real Estate ("CRE") | Income producing | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,032,269,000 | 3,416,142,000 |
Commercial Real Estate ("CRE") | Income producing | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 56,752,000 | 42,222,000 |
Commercial Real Estate ("CRE") | Income producing | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 212,009,000 | 185,671,000 |
Commercial Real Estate ("CRE") | Construction | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 140,186,000 | 121,589,000 |
Commercial Real Estate ("CRE") | Construction | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 127,138,000 | 63,008,000 |
Commercial Real Estate ("CRE") | Construction | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 6,160,000 | 16,885,000 |
Commercial Real Estate ("CRE") | Construction | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 6,888,000 | 41,696,000 |
Commercial Real Estate ("CRE") | Land | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 143,861,000 | 129,071,000 |
Commercial Real Estate ("CRE") | Land | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 116,000,000 | 79,085,000 |
Commercial Real Estate ("CRE") | Land | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 9,304,000 | 13,232,000 |
Commercial Real Estate ("CRE") | Land | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 18,557,000 | 36,754,000 |
Commercial and Industrial ("C&I") | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 5,360,193,000 | 4,231,265,000 |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,637,056,000 | 3,569,388,000 |
Commercial and Industrial ("C&I") | Commercial Business | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 4,400,847,000 | 3,380,212,000 |
Commercial and Industrial ("C&I") | Commercial Business | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 92,315,000 | 69,687,000 |
Commercial and Industrial ("C&I") | Commercial Business | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 143,894,000 | 119,489,000 |
Commercial and Industrial ("C&I") | Trade finance | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 723,137,000 | 661,877,000 |
Commercial and Industrial ("C&I") | Trade finance | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 681,345,000 | 632,617,000 |
Commercial and Industrial ("C&I") | Trade finance | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 22,099,000 | 24,778,000 |
Commercial and Industrial ("C&I") | Trade finance | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 19,693,000 | 4,482,000 |
Consumer | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 1,547,738,000 | 744,882,000 |
Consumer | Student loans | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 679,220,000 | 475,799,000 |
Consumer | Student loans | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 677,094,000 | 475,799,000 |
Consumer | Student loans | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 445,000 | ' |
Consumer | Student loans | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 1,681,000 | ' |
Consumer | Other Consumer | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 868,518,000 | 269,083,000 |
Consumer | Other Consumer | Pass/Watch | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 865,752,000 | 261,136,000 |
Consumer | Other Consumer | Special Mention | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | 244,000 | 1,115,000 |
Consumer | Other Consumer | Substandard | ' | ' |
Credit quality indicator disclosures | ' | ' |
Loans receivable, excluding covered loans, gross | $2,522,000 | $6,832,000 |
NONCOVERED_LOANS_AND_ALLOWANCE6
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | $30,282 | $34,414 | ' |
Accruing loans 60 - 89 days past due | 9,956 | 9,183 | ' |
Total accruing past due loans | 40,238 | 43,597 | ' |
Nonaccrual loans less than 90 days past due | 40,462 | 27,207 | ' |
Nonaccrual loans 90 or more days past due | 71,189 | 80,902 | ' |
Total nonaccrual past due loans | 111,651 | 108,109 | ' |
Current Accruing loans | 15,731,398 | 11,981,484 | ' |
Total non-covered loans and loans held for sale, gross | 15,883,287 | 12,133,190 | ' |
Unearned fees, premiums and discounts, net | -23,672 | -19,301 | ' |
Recorded investment in non-covered loans and loans held for sale | 15,859,615 | 12,113,889 | ' |
Interest Income Foregone on Nonaccrual Loans | ' | ' | ' |
Interest income that would have been recognized had nonaccrual loans performed in accordance with their original terms | 7,410 | 7,206 | 9,384 |
Less: Interest income recognized on nonaccrual loans on a cash basis | -2,319 | -2,269 | -3,519 |
Interest income foregone on nonaccrual loans | 5,091 | 4,937 | 5,865 |
Loans Held for Sale | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Current Accruing loans | 204,970 | 174,317 | ' |
Total non-covered loans and loans held for sale, gross | 204,970 | 174,317 | ' |
Residential | Single-family | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 4,694 | 4,820 | ' |
Accruing loans 60 - 89 days past due | 922 | 2,244 | ' |
Total accruing past due loans | 5,616 | 7,064 | ' |
Nonaccrual loans less than 90 days past due | ' | 1,301 | ' |
Nonaccrual loans 90 or more days past due | 11,218 | 9,809 | ' |
Total nonaccrual past due loans | 11,218 | 11,110 | ' |
Current Accruing loans | 3,176,041 | 2,169,149 | ' |
Total non-covered loans and loans held for sale, gross | 3,192,875 | 2,187,323 | ' |
Residential | Multifamily | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 8,580 | 7,127 | ' |
Accruing loans 60 - 89 days past due | 531 | 924 | ' |
Total accruing past due loans | 9,111 | 8,051 | ' |
Nonaccrual loans less than 90 days past due | 19,661 | 6,788 | ' |
Nonaccrual loans 90 or more days past due | 7,972 | 11,052 | ' |
Total nonaccrual past due loans | 27,633 | 17,840 | ' |
Current Accruing loans | 955,690 | 874,817 | ' |
Total non-covered loans and loans held for sale, gross | 992,434 | 900,708 | ' |
Commercial Real Estate ("CRE") | Income producing | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 12,746 | 18,118 | ' |
Accruing loans 60 - 89 days past due | 1,798 | 4,731 | ' |
Total accruing past due loans | 14,544 | 22,849 | ' |
Nonaccrual loans less than 90 days past due | 13,924 | 9,485 | ' |
Nonaccrual loans 90 or more days past due | 22,549 | 8,354 | ' |
Total nonaccrual past due loans | 36,473 | 17,839 | ' |
Current Accruing loans | 4,250,013 | 3,603,347 | ' |
Total non-covered loans and loans held for sale, gross | 4,301,030 | 3,644,035 | ' |
Commercial Real Estate ("CRE") | Construction | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Nonaccrual loans 90 or more days past due | 6,888 | 27,039 | ' |
Total nonaccrual past due loans | 6,888 | 27,039 | ' |
Current Accruing loans | 133,298 | 94,550 | ' |
Total non-covered loans and loans held for sale, gross | 140,186 | 121,589 | ' |
Commercial Real Estate ("CRE") | Land | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Nonaccrual loans less than 90 days past due | 265 | 637 | ' |
Nonaccrual loans 90 or more days past due | 3,223 | 3,984 | ' |
Total nonaccrual past due loans | 3,488 | 4,621 | ' |
Current Accruing loans | 140,373 | 124,450 | ' |
Total non-covered loans and loans held for sale, gross | 143,861 | 129,071 | ' |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 3,428 | 3,293 | ' |
Accruing loans 60 - 89 days past due | 6,259 | 316 | ' |
Total accruing past due loans | 9,687 | 3,609 | ' |
Nonaccrual loans less than 90 days past due | 6,437 | 8,068 | ' |
Nonaccrual loans 90 or more days past due | 15,486 | 14,740 | ' |
Total nonaccrual past due loans | 21,923 | 22,808 | ' |
Current Accruing loans | 4,605,446 | 3,542,971 | ' |
Total non-covered loans and loans held for sale, gross | 4,637,056 | 3,569,388 | ' |
Commercial and Industrial ("C&I") | Trade finance | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | ' | 500 | ' |
Total accruing past due loans | ' | 500 | ' |
Nonaccrual loans less than 90 days past due | ' | 429 | ' |
Nonaccrual loans 90 or more days past due | 909 | 2,003 | ' |
Total nonaccrual past due loans | 909 | 2,432 | ' |
Current Accruing loans | 722,228 | 658,945 | ' |
Total non-covered loans and loans held for sale, gross | 723,137 | 661,877 | ' |
Consumer | Student loans | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 541 | 71 | ' |
Accruing loans 60 - 89 days past due | 445 | ' | ' |
Total accruing past due loans | 986 | 71 | ' |
Nonaccrual loans 90 or more days past due | 1,681 | ' | ' |
Total nonaccrual past due loans | 1,681 | ' | ' |
Current Accruing loans | 676,553 | 475,728 | ' |
Total non-covered loans and loans held for sale, gross | 679,220 | 475,799 | ' |
Consumer | Other Consumer | ' | ' | ' |
Aging analysis of past Due non-covered loans and loans held for sale | ' | ' | ' |
Accruing loans 30 - 59 days past due | 293 | 485 | ' |
Accruing loans 60 - 89 days past due | 1 | 968 | ' |
Total accruing past due loans | 294 | 1,453 | ' |
Nonaccrual loans less than 90 days past due | 175 | 499 | ' |
Nonaccrual loans 90 or more days past due | 1,263 | 3,921 | ' |
Total nonaccrual past due loans | 1,438 | 4,420 | ' |
Current Accruing loans | 866,786 | 263,210 | ' |
Total non-covered loans and loans held for sale, gross | $868,518 | $269,083 | ' |
NONCOVERED_LOANS_AND_ALLOWANCE7
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 6) (USD $) | 12 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
item | Performing loan | Performing loan | Performing loan | Performing loan | Nonperforming loan | Nonperforming loan | |
A/B Note Splits | A/B Note Splits | ||||||
Restructured loans disclosures | ' | ' | ' | ' | ' | ' | ' |
Number of notes into which A/B notes are split | 2 | ' | ' | ' | ' | ' | ' |
Number of consecutive months of payments considered demonstration of sustained period of performance | '6 months | ' | ' | ' | ' | ' | ' |
Loan balance of restructured loans | ' | $71,800 | $94,600 | $4,300 | $34,800 | $11,100 | $10,000 |
NONCOVERED_LOANS_AND_ALLOWANCE8
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 7) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
contract | contract | |||
Residential | Residential Single-family | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | ' | 12 | ||
Pre-Modification Outstanding Recorded Balance | ' | $6,227 | ||
Post-Modification Outstanding Recorded Balance | ' | 5,556 | [1] | |
Financial Impact | ' | 938 | [2] | |
Residential | Residential Multifamily | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | 1 | 16 | ||
Pre-Modification Outstanding Recorded Balance | 1,093 | 28,736 | ||
Post-Modification Outstanding Recorded Balance | 1,071 | [1] | 28,153 | [1] |
Financial Impact | ' | 3,344 | [2] | |
Commercial Real Estate ("CRE") | Income producing | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | 6 | 8 | ||
Pre-Modification Outstanding Recorded Balance | 26,021 | 10,118 | ||
Post-Modification Outstanding Recorded Balance | 17,456 | [1] | 8,162 | [1] |
Financial Impact | 219 | [2] | 1,169 | [2] |
Commercial Real Estate ("CRE") | Land | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | ' | 3 | ||
Pre-Modification Outstanding Recorded Balance | ' | 1,610 | ||
Post-Modification Outstanding Recorded Balance | ' | 1,059 | [1] | |
Financial Impact | ' | 395 | [2] | |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | 6 | 14 | ||
Pre-Modification Outstanding Recorded Balance | 16,220 | 5,101 | ||
Post-Modification Outstanding Recorded Balance | 15,624 | [1] | 4,374 | [1] |
Financial Impact | 4,274 | [2] | 560 | [2] |
Commercial and Industrial ("C&I") | Trade finance | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | ' | 2 | ||
Pre-Modification Outstanding Recorded Balance | ' | 2,510 | ||
Post-Modification Outstanding Recorded Balance | ' | 579 | [1] | |
Financial Impact | ' | 1,506 | [2] | |
Consumer | Other Consumer | ' | ' | ||
Restructured loans disclosures | ' | ' | ||
Number of contracts modified as TDRs | 1 | 1 | ||
Pre-Modification Outstanding Recorded Balance | 651 | 108 | ||
Post-Modification Outstanding Recorded Balance | $639 | [1] | $108 | [1] |
[1] | Includes subsequent payments after modification and reflects the balance as of December 31, 2013 and 2012. | |||
[2] | The financial impact includes chargeoffs and specific reserves at modification date. |
NONCOVERED_LOANS_AND_ALLOWANCE9
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 8) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | $71,800 | $94,600 |
Nonperforming loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 11,100 | 10,000 |
A/B Note Splits | Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 4,300 | 34,800 |
Residential | Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 17,400 | 43,500 |
Residential | Nonperforming loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 3,600 | 5,100 |
Residential | A/B Note Splits | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 1,100 | 21,000 |
Residential | Modifications using principal deferment | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | ' | 12,700 |
Commercial Real Estate ("CRE") | Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 37,600 | 47,400 |
Commercial Real Estate ("CRE") | Nonperforming loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 3,400 | 1,900 |
Commercial Real Estate ("CRE") | Modifications using non-market interest rate changes, maturity extensions and/or AB note splits | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | ' | 9,200 |
Commercial Real Estate ("CRE") | Modifications using A/B note splits, principal reductions and/or non-market interest changes | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 17,500 | ' |
Commercial and Industrial ("C&I") | Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 16,700 | 3,600 |
Commercial and Industrial ("C&I") | Nonperforming loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 3,500 | 3,000 |
Commercial and Industrial ("C&I") | TDR (Types of Modifications) | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 15,600 | 5,000 |
Consumer | Performing loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 108 | 108 |
Consumer | Nonperforming loan | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | 639 | ' |
Consumer | Modifications using principal deferment | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | ' | 108 |
Consumer | Modifications using maturity extensions | ' | ' |
Troubled debt restructuring disclosures | ' | ' |
Loan balance of restructured loans | $639 | ' |
Recovered_Sheet1
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 9) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Period beyond which a TDR generally becomes delinquent | '90 days | ' | |
Recorded investments transferred to REO | ' | $271 | |
Residential | Residential Single-family | ' | ' | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Number of contracts modified as TDRs that subsequently defaulted | ' | 2 | |
Balance of loans modified as TDRs that subsequently defaulted | ' | 2,830 | [1] |
Residential | Residential Multifamily | ' | ' | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Number of contracts modified as TDRs that subsequently defaulted | ' | 1 | |
Balance of loans modified as TDRs that subsequently defaulted | ' | 378 | [1] |
Commercial Real Estate ("CRE") | Income producing | ' | ' | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Number of contracts modified as TDRs that subsequently defaulted | ' | 1 | |
Balance of loans modified as TDRs that subsequently defaulted | ' | 271 | [1] |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Number of contracts modified as TDRs that subsequently defaulted | 1 | 2 | |
Balance of loans modified as TDRs that subsequently defaulted | 570 | 33 | [1] |
Consumer | Other Consumer | ' | ' | |
Disclosures on loans modified as TDRs that subsequently defaulted | ' | ' | |
Number of contracts modified as TDRs that subsequently defaulted | 1 | ' | |
Balance of loans modified as TDRs that subsequently defaulted | 639 | ' | |
[1] | Included in the year ended December 31, 2012 table is $271 thousand of recorded investment which has been transferred to REO and is not included in the total loans receivable balance as of December 31, 2012. |
Recovered_Sheet2
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 10) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Performing loan | ' | ' |
Restructured loans disclosures | ' | ' |
Allowance for troubled debt restructurings loans receivable | $13,000 | $8,700 |
Nonperforming loan | ' | ' |
Restructured loans disclosures | ' | ' |
Allowance for troubled debt restructurings loans receivable | $836 | $203 |
Recovered_Sheet3
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 11) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | $212,637 | $235,040 | ||
Recorded Investment With No Allowance | 110,004 | 167,147 | ||
Recorded Investment With Allowance | 73,473 | 33,349 | ||
Recorded investment | 183,477 | [1] | 200,496 | [1] |
Related allowance | 24,143 | 11,527 | ||
Average recorded investment | 185,440 | 213,957 | ||
Interest income recognized (cash basis) | 2,319 | [2] | 2,269 | [2] |
Covered nonaccrual loans | 126,895 | [3],[4],[5] | 204,310 | [3],[4],[5] |
Covered loans accounted for under ASC 310-10 | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Covered nonaccrual loans | 17,700 | 29,600 | ||
Residential | Single-family | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 15,814 | 19,318 | ||
Recorded Investment With No Allowance | 13,585 | 15,610 | ||
Recorded Investment With Allowance | 1,588 | 2,598 | ||
Recorded investment | 15,173 | [1] | 18,208 | [1] |
Related allowance | 207 | 721 | ||
Average recorded investment | 15,322 | 19,094 | ||
Interest income recognized (cash basis) | 222 | [2] | 88 | [2] |
Residential | Multifamily | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 43,821 | 57,464 | ||
Recorded Investment With No Allowance | 30,899 | 45,511 | ||
Recorded Investment With Allowance | 10,215 | 8,756 | ||
Recorded investment | 41,114 | [1] | 54,267 | [1] |
Related allowance | 1,339 | 2,410 | ||
Average recorded investment | 35,799 | 54,707 | ||
Interest income recognized (cash basis) | 543 | [2] | 403 | [2] |
Commercial Real Estate ("CRE") | Income producing | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 73,777 | 59,574 | ||
Recorded Investment With No Allowance | 39,745 | 47,019 | ||
Recorded Investment With Allowance | 25,523 | 7,656 | ||
Recorded investment | 65,268 | [1] | 54,675 | [1] |
Related allowance | 5,976 | 2,559 | ||
Average recorded investment | 71,856 | 57,854 | ||
Interest income recognized (cash basis) | 872 | [2] | 304 | [2] |
Commercial Real Estate ("CRE") | Construction | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 6,888 | 30,815 | ||
Recorded Investment With No Allowance | 6,888 | 25,530 | ||
Recorded Investment With Allowance | ' | 1,509 | ||
Recorded investment | 6,888 | [1] | 27,039 | [1] |
Related allowance | ' | 142 | ||
Average recorded investment | 6,888 | 22,696 | ||
Interest income recognized (cash basis) | 61 | [2] | 723 | [2] |
Commercial Real Estate ("CRE") | Land | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 17,390 | 20,317 | ||
Recorded Investment With No Allowance | 4,372 | 6,132 | ||
Recorded Investment With Allowance | 7,908 | 8,995 | ||
Recorded investment | 12,280 | [1] | 15,127 | [1] |
Related allowance | 2,082 | 2,860 | ||
Average recorded investment | 12,453 | 17,769 | ||
Interest income recognized (cash basis) | 42 | [2] | 76 | [2] |
Commercial and Industrial ("C&I") | Commercial Business | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 48,482 | 38,630 | ||
Recorded Investment With No Allowance | 10,850 | 20,235 | ||
Recorded Investment With Allowance | 27,487 | 3,835 | ||
Recorded investment | 38,337 | [1] | 24,070 | [1] |
Related allowance | 13,787 | 2,835 | ||
Average recorded investment | 38,294 | 33,343 | ||
Interest income recognized (cash basis) | 520 | [2] | 614 | [2] |
Commercial and Industrial ("C&I") | Trade finance | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 2,771 | 4,124 | ||
Recorded Investment With No Allowance | 438 | 2,582 | ||
Recorded Investment With Allowance | 752 | ' | ||
Recorded investment | 1,190 | [1] | 2,582 | [1] |
Related allowance | 752 | ' | ||
Average recorded investment | 1,603 | 3,863 | ||
Interest income recognized (cash basis) | 42 | [2] | 48 | [2] |
Consumer | Student loans | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 1,749 | ' | ||
Recorded Investment With No Allowance | 1,681 | ' | ||
Recorded investment | 1,681 | [1] | ' | |
Average recorded investment | 1,664 | ' | ||
Interest income recognized (cash basis) | 1 | [2] | ' | |
Consumer | Other Consumer | ' | ' | ||
Impaired loans disclosures | ' | ' | ||
Unpaid principal balance | 1,945 | 4,798 | ||
Recorded Investment With No Allowance | 1,546 | 4,528 | ||
Recorded investment | 1,546 | [1] | 4,528 | [1] |
Average recorded investment | 1,561 | 4,631 | ||
Interest income recognized (cash basis) | $16 | [2] | $13 | [2] |
[1] | Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||
[2] | Excludes interest from performing TDRs. | |||
[3] | Includes $17.7 million and $29.6 million of loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||
[4] | Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC. | |||
[5] | Represents principal balance net of discount. |
Recovered_Sheet4
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 12) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | $7,745,000 | ' | ' | ' | $5,153,000 | ' | ' | ' | $7,745,000 | $5,153,000 | ' |
Percentage of allowance allocated to covered loans | 3.10% | ' | ' | ' | ' | ' | ' | ' | 3.10% | ' | ' |
Provision for covered loans | -820,000 | -964,000 | 723,000 | 5,089,000 | -689,000 | 5,179,000 | -1,095,000 | 1,621,000 | 4,028,000 | 5,016,000 | 2,422,000 |
Percentage of income from covered loans under loss-sharing agreements with the FDIC | 80.00% | ' | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' |
Covered loans accounted for under ASC 310-30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Provision for covered loans | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Covered loans accounted for under ASC 310-30 | Commercial Real Estate ("CRE") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' |
Specific covered loans outside of the scope of ASC 310-30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance on covered loans | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | 5,500,000 | ' | ' |
Allowance allocated to additional advances | 5,500,000 | ' | ' | ' | 5,200,000 | ' | ' | ' | 5,500,000 | 5,200,000 | ' |
Percentage of allowance allocated to covered loans | 2.20% | ' | ' | ' | 2.20% | ' | ' | ' | 2.20% | 2.20% | ' |
Provision for covered loans | ' | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | 5,000,000 | 2,400,000 |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | 6,500,000 | ' |
Income from covered loans under loss-sharing agreements with the FDIC | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | 5,200,000 | ' |
Percentage of income from covered loans under loss-sharing agreements with the FDIC | 80.00% | ' | ' | ' | 80.00% | ' | ' | ' | 80.00% | 80.00% | ' |
Net impact to earnings due to charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 287,000 | 1,300,000 | ' |
Specific covered loans outside of the scope of ASC 310-30 | Commercial Real Estate ("CRE") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance allocated to additional advances | 1,800,000 | ' | ' | ' | 2,500,000 | ' | ' | ' | 1,800,000 | 2,500,000 | ' |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | 380,000 | 1,500,000 | ' |
Specific covered loans outside of the scope of ASC 310-30 | Commercial and Industrial ("C&I") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance for loan losses disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allowance allocated to additional advances | 3,200,000 | ' | ' | ' | 2,400,000 | ' | ' | ' | 3,200,000 | 2,400,000 | ' |
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | $5,000,000 | ' |
Recovered_Sheet5
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 13) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | $234,535 | ' | ' | ' | $216,523 | $234,535 | $216,523 | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 22,364 | 65,184 | 95,006 | ||||||
Allowance for unfunded loan commitments and letters of credit | ' | ' | ' | ' | ' | ' | ' | ' | -2,157 | 1,563 | ' | ||||||
Charge-offs | -6,286 | -4,535 | -8,277 | 762 | -13,773 | -13,321 | -16,595 | -16,479 | -17,780 | -64,912 | ' | ||||||
Recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 12,713 | 16,177 | ' | ||||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | -5,067 | -48,735 | ' | ||||||
Ending balance | 249,675 | ' | ' | ' | 234,535 | ' | ' | ' | 249,675 | 234,535 | 216,523 | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans individually evaluated for impairment | 24,143 | ' | ' | ' | 11,527 | ' | ' | ' | 24,143 | 11,527 | ' | ||||||
Loans collectively evaluated for impairment | 223,263 | ' | ' | ' | 223,008 | ' | ' | ' | 223,263 | 223,008 | ' | ||||||
Covered loans acquired with deteriorated credit quality | 2,269 | [1] | ' | ' | ' | ' | ' | ' | ' | 2,269 | [1] | ' | ' | ||||
Ending balance | 249,675 | ' | ' | ' | 234,535 | ' | ' | ' | 249,675 | 234,535 | 216,523 | ||||||
Residential | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | 49,349 | ' | ' | ' | 52,180 | 49,349 | 52,180 | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 1,918 | 3,255 | ' | ||||||
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | -3,197 | -7,700 | ' | ||||||
Recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 2,647 | 1,614 | ' | ||||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | -550 | -6,086 | ' | ||||||
Ending balance | 50,717 | ' | ' | ' | 49,349 | ' | ' | ' | 50,717 | 49,349 | ' | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans individually evaluated for impairment | 1,546 | ' | ' | ' | 3,131 | ' | ' | ' | 1,546 | 3,131 | ' | ||||||
Loans collectively evaluated for impairment | 49,171 | ' | ' | ' | 46,218 | ' | ' | ' | 49,171 | 46,218 | ' | ||||||
Ending balance | 50,717 | ' | ' | ' | 49,349 | ' | ' | ' | 50,717 | 49,349 | ' | ||||||
Commercial Real Estate ("CRE") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | 69,856 | ' | ' | ' | 66,457 | 69,856 | 66,457 | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | -6,615 | 20,977 | ' | ||||||
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | -3,357 | -27,060 | ' | ||||||
Recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 4,793 | 9,482 | ' | ||||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 1,436 | -17,578 | ' | ||||||
Ending balance | 64,677 | ' | ' | ' | 69,856 | ' | ' | ' | 64,677 | 69,856 | ' | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans individually evaluated for impairment | 8,058 | ' | ' | ' | 5,561 | ' | ' | ' | 8,058 | 5,561 | ' | ||||||
Loans collectively evaluated for impairment | 56,619 | ' | ' | ' | 64,295 | ' | ' | ' | 56,619 | 64,295 | ' | ||||||
Ending balance | 64,677 | ' | ' | ' | 69,856 | ' | ' | ' | 64,677 | 69,856 | ' | ||||||
Commercial and Industrial ("C&I") | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | 105,376 | ' | ' | ' | 87,020 | 105,376 | 87,020 | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 12,821 | 35,204 | ' | ||||||
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | -7,405 | -21,818 | ' | ||||||
Recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 4,392 | 4,970 | ' | ||||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | -3,013 | -16,848 | ' | ||||||
Ending balance | 115,184 | ' | ' | ' | 105,376 | ' | ' | ' | 115,184 | 105,376 | ' | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans individually evaluated for impairment | 14,539 | ' | ' | ' | 2,835 | ' | ' | ' | 14,539 | 2,835 | ' | ||||||
Loans collectively evaluated for impairment | 100,645 | ' | ' | ' | 102,541 | ' | ' | ' | 100,645 | 102,541 | ' | ||||||
Ending balance | 115,184 | ' | ' | ' | 105,376 | ' | ' | ' | 115,184 | 105,376 | ' | ||||||
Consumer | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | 4,801 | ' | ' | ' | 4,219 | 4,801 | 4,219 | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 8,055 | 2,295 | ' | ||||||
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | -2,385 | -1,824 | ' | ||||||
Recoveries | ' | ' | ' | ' | ' | ' | ' | ' | 881 | 111 | ' | ||||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | -1,504 | -1,713 | ' | ||||||
Ending balance | 11,352 | ' | ' | ' | 4,801 | ' | ' | ' | 11,352 | 4,801 | ' | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans collectively evaluated for impairment | 11,352 | ' | ' | ' | 4,801 | ' | ' | ' | 11,352 | 4,801 | ' | ||||||
Ending balance | 11,352 | ' | ' | ' | 4,801 | ' | ' | ' | 11,352 | 4,801 | ' | ||||||
Covered Loans under ASC 310-10 Subject to Allowance for Loan Losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Beginning balance | ' | ' | ' | 5,153 | [2] | ' | ' | ' | 6,647 | [2] | 5,153 | [2] | 6,647 | [2] | ' | ||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 1,759 | [2] | 5,016 | [2] | ' | ||||
Charge-offs | ' | ' | ' | ' | ' | ' | ' | ' | -1,436 | [2] | -6,510 | [2] | ' | ||||
Net (charge-offs)/recoveries | ' | ' | ' | ' | ' | ' | ' | ' | -1,436 | [2] | -6,510 | [2] | ' | ||||
Ending balance | 5,476 | [2] | ' | ' | ' | 5,153 | [2] | ' | ' | ' | 5,476 | [2] | 5,153 | [2] | ' | ||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Loans collectively evaluated for impairment | 5,476 | [2] | ' | ' | ' | 5,153 | [2] | ' | ' | ' | 5,476 | [2] | 5,153 | [2] | ' | ||
Ending balance | 5,476 | [2] | ' | ' | ' | 5,153 | [2] | ' | ' | ' | 5,476 | [2] | 5,153 | [2] | ' | ||
Covered Loans under ASC 310-30 Subject to Allowance for Loan Losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 2,269 | ' | ' | ||||||
Ending balance | 2,269 | ' | ' | ' | ' | ' | ' | ' | 2,269 | ' | ' | ||||||
Ending balance allocated to: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Covered loans acquired with deteriorated credit quality | 2,269 | [1] | ' | ' | ' | ' | ' | ' | ' | 2,269 | [1] | ' | ' | ||||
Ending balance | 2,269 | ' | ' | ' | ' | ' | ' | ' | 2,269 | ' | ' | ||||||
Unallocated | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Financing Receivable Allowance for Credit Losses Roll Forward | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 2,157 | -1,563 | ' | ||||||
Allowance for unfunded loan commitments and letters of credit | ' | ' | ' | ' | ' | ' | ' | ' | ($2,157) | $1,563 | ' | ||||||
[1] | The Company has elected to account for covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30, excluding any additional advances subsequent to acquisition date. | ||||||||||||||||
[2] | This allowance is related to drawdowns on commitments that were in existence as of the acquisition dates of WFIB and UCB and, therefore, are covered under the shared-loss agreements with the FDIC. Allowance on these subsequent drawdowns is accounted for as part of the allowance for loan losses. |
Recovered_Sheet6
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 14) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Loans individually evaluated for impairment | $183,477 | $200,496 | ||
Covered loans individually evaluated for impairment | 2,824 | [1] | 5,237 | [1] |
Loans collectively evaluated for impairment | 15,812,201 | 12,184,825 | ||
Covered loans acquired with deteriorated credit quality | 2,141,375 | [2] | 3,019,271 | [2] |
Ending balance | 18,139,877 | 15,409,829 | ||
Covered nonaccrual loans | 126,895 | [3],[4],[5] | 204,310 | [3],[4],[5] |
Covered loans accounted for under ASC 310-10 | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Covered nonaccrual loans | 17,700 | 29,600 | ||
Residential | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Loans individually evaluated for impairment | 56,287 | 72,475 | ||
Loans collectively evaluated for impairment | 4,129,022 | 3,015,556 | ||
Covered loans acquired with deteriorated credit quality | 681,608 | [2] | 976,969 | [2] |
Ending balance | 4,866,917 | 4,065,000 | ||
Commercial Real Estate ("CRE") | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Loans individually evaluated for impairment | 84,436 | 96,841 | ||
Loans collectively evaluated for impairment | 4,500,641 | 3,797,854 | ||
Covered loans acquired with deteriorated credit quality | 1,140,432 | [2] | 1,727,159 | [2] |
Ending balance | 5,725,509 | 5,621,854 | ||
Commercial and Industrial ("C&I") | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Loans individually evaluated for impairment | 39,527 | 26,652 | ||
Loans collectively evaluated for impairment | 5,320,666 | 4,204,613 | ||
Covered loans acquired with deteriorated credit quality | 146,538 | [2] | 261,622 | [2] |
Ending balance | 5,506,731 | 4,492,887 | ||
Consumer | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Loans individually evaluated for impairment | 3,227 | 4,528 | ||
Loans collectively evaluated for impairment | 1,544,511 | 740,354 | ||
Covered loans acquired with deteriorated credit quality | 43,136 | [2] | 53,521 | [2] |
Ending balance | 1,590,874 | 798,403 | ||
Covered Loans under ASC 310-10 Subject to Allowance for Loan Losses | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Covered loans individually evaluated for impairment | 2,824 | [1] | 5,237 | [1] |
Loans collectively evaluated for impairment | 317,361 | 426,448 | ||
Ending balance | 320,185 | 431,685 | ||
Covered Loans under ASC 310-30 Subject to Allowance for Loan Losses | ' | ' | ||
Recorded investment in total loans receivable related to each balance in the allowance for loan losses | ' | ' | ||
Covered loans acquired with deteriorated credit quality | 129,661 | [2] | ' | |
Ending balance | $129,661 | ' | ||
[1] | Excludes $17.7 million and $29.6 million of covered non-accrual loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||
[2] | The Company has elected to account for all covered loans acquired in the FDIC-assisted acquisitions under ASC 310-30. The total principal balance is presented and excludes the purchase discount and any additional advances subsequent to acquisition date. | |||
[3] | Includes $17.7 million and $29.6 million of loans at December 31, 2013 and 2012, respectively, accounted for under ASC 310-10, of which some loans have additional partial balances accounted for under ASC 310-30. | |||
[4] | Covered nonaccrual loans include loans that meet the criteria for nonaccrual but have a yield accreted through interest income under ASC 310-30 and all losses on covered loans are 80% reimbursed by the FDIC. | |||
[5] | Represents principal balance net of discount. |
Recovered_Sheet7
NON-COVERED LOANS AND ALLOWANCE FOR LOAN LOSSES (Details 15) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Unfunded Loan Commitments, Off-Balance Sheet Credit Exposures and Recourse Provisions | ' | ' |
Allowance for unfunded loan commitments, off-balance sheet credit exposures and recourse provision | $11,300,000 | $9,400,000 |
Off-balance sheet loans serviced for others | 1,350,000,000 | 1,650,000,000 |
Portion of allowance for unfunded loan commitments, off-balance sheet credit exposures and recourse provisions related to off-balance sheet loans sold and securitized | $3,200,000 | $4,800,000 |
NONCOVERED_OTHER_REAL_ESTATE_O1
NON-COVERED OTHER REAL ESTATE OWNED (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | item | item | |
Schedule of Non-Covered Other Real Estate Owned | ' | ' | ' |
Carrying value of OREO properties | $18,900,000 | $32,911,000 | ' |
Aggregate carrying value as of the foreclosure date | 9,400,000 | 40,600,000 | ' |
Write-downs recorded related to foreclosed assets | 1,400,000 | 5,100,000 | ' |
Number of OREO properties sold | 35 | 47 | 51 |
Proceeds from sale of OREO properties | 25,500,000 | 34,100,000 | 26,600,000 |
Net gain (loss) on sale of OREO properties | 3,500,000 | 232,000 | -151,000 |
Recoveries from sale of OREO properties | ' | 2,000,000 | ' |
Charges against the allowance for loan losses | ' | ' | $780,000 |
Non-Covered Other Real Estate Owned Properties | Geographic Concentration | California | ' | ' | ' |
Schedule of Non-Covered Other Real Estate Owned | ' | ' | ' |
Percent of total | 30.00% | ' | ' |
Non-Covered Other Real Estate Owned Properties | Geographic Concentration | Nevada | ' | ' | ' |
Schedule of Non-Covered Other Real Estate Owned | ' | ' | ' |
Percent of total | 68.00% | ' | ' |
AFFORDABLE_HOUSING_PARTNERSHIP2
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | item | ||
AFFORDABLE HOUSING PARTNERSHIPS AND OTHER INVESTMENTS | ' | ' | ' |
Minimum compliance period to fully utilize the tax credits | '15 years | ' | ' |
Investments in affordable housing partnerships | $165,700,000 | $185,600,000 | ' |
Tax credit partnerships, Amount | ' | ' | ' |
Equity method | 129,631,000 | 142,507,000 | ' |
Cost method | 35,145,000 | 42,591,000 | ' |
Total tax credit partnerships | 164,776,000 | 185,098,000 | ' |
Tax exempt bonds | 948,000 | 547,000 | ' |
Grand total | 165,724,000 | 185,645,000 | ' |
Tax credit partnerships, Count | ' | ' | ' |
Equity method (number of investments) | 35 | 35 | ' |
Cost method (number of investments) | 13 | 16 | ' |
Grand Total (number of investments) | 48 | 51 | ' |
Other investments in affordable housing partnerships | 69,200,000 | 45,900,000 | ' |
Total unfunded commitments for investments | 73,100,000 | 84,600,000 | ' |
Usage of federal tax credits | 34,200,000 | 18,700,000 | 11,100,000 |
Remaining tax credits | 165,700,000 | ' | ' |
Investment amortization | 27,300,000 | 18,100,000 | 17,300,000 |
Impairment charge | 0 | 0 | ' |
Amount of investments sold | $0 | $0 | ' |
PREMISES_AND_EQUIPMENT_Details
PREMISES AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Premises and equipment disclosures | ' | ' | ' |
Premises and equipment, gross | $247,478,000 | $171,720,000 | ' |
Accumulated depreciation and amortization | -69,768,000 | -64,203,000 | ' |
Premises and equipment, net | 177,710,000 | 107,517,000 | ' |
Depreciation expense | 13,400,000 | 13,200,000 | 12,100,000 |
Net increase in premises and equipment | 70,200,000 | ' | ' |
Land | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Premises and equipment, gross | 15,074,000 | 15,545,000 | ' |
Office buildings | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Premises and equipment, gross | 157,166,000 | 82,418,000 | ' |
Leasehold improvements | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Premises and equipment, gross | 26,195,000 | 29,635,000 | ' |
Furniture, fixtures and equipment | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Premises and equipment, gross | $49,043,000 | $44,122,000 | ' |
Furniture and Fixtures | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Estimated useful life | '7 years | ' | ' |
Office Equipment | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Estimated useful life | '5 years | ' | ' |
Building and Building Improvements | ' | ' | ' |
Premises and equipment disclosures | ' | ' | ' |
Estimated useful life | '25 years | ' | ' |
GOODWILL_AND_OTHER_INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | Premiums on acquired deposits | Premiums on acquired deposits | Premiums on acquired deposits | ||||
GOODWILL AND OTHER INTANGIBLE ASSETS | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $337,438,000 | ' | $337,438,000 | ' | ' | ' | ' |
Market capitalization | 4,810,000,000 | ' | ' | ' | ' | ' | ' |
Total stockholders' equity | 2,364,225,000 | 2,382,122,000 | 2,311,743,000 | 2,113,931,000 | ' | ' | ' |
Number of business divisions | 3 | ' | ' | ' | ' | ' | ' |
Number of operating segments | 3 | ' | ' | ' | ' | ' | ' |
Period for which the company provided a net income projection under the income approach to determine the fair value of the reporting units | '3 years | ' | ' | ' | ' | ' | ' |
Goodwill impairment | 0 | ' | ' | ' | ' | ' | ' |
Changes in carrying amount of goodwill | ' | ' | ' | ' | ' | ' | ' |
Balance, beginning of year | 337,438,000 | ' | 337,438,000 | ' | ' | ' | ' |
Balance, end of year | 337,438,000 | ' | 337,438,000 | ' | ' | ' | ' |
Premiums on Acquired Deposits | ' | ' | ' | ' | ' | ' | ' |
Gross carrying amount of premiums on acquired deposits | ' | ' | ' | ' | 100,200,000 | 100,200,000 | ' |
Accumulated amortization for premiums on acquired deposits | ' | ' | ' | ' | 53,300,000 | 43,900,000 | ' |
Amortization expense of premiums on acquired deposits | ' | ' | ' | ' | 9,400,000 | 10,900,000 | 12,300,000 |
Estimated Future Amortization Expense of Premiums on Acquired Deposits | ' | ' | ' | ' | ' | ' | ' |
2014 | 8,454,000 | ' | ' | ' | ' | ' | ' |
2015 | 7,543,000 | ' | ' | ' | ' | ' | ' |
2016 | 6,634,000 | ' | ' | ' | ' | ' | ' |
2017 | 5,722,000 | ' | ' | ' | ' | ' | ' |
2018 | 4,908,000 | ' | ' | ' | ' | ' | ' |
Thereafter | 13,659,000 | ' | ' | ' | ' | ' | ' |
Total | $46,920,000 | ' | ' | ' | ' | ' | ' |
CUSTOMER_DEPOSIT_ACCOUNTS_Deta
CUSTOMER DEPOSIT ACCOUNTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Customer deposit account balances | ' | ' |
Noninterest-bearing demand | $5,821,899,000 | $4,535,877,000 |
Interest-bearing checking | 1,749,479,000 | 1,230,372,000 |
Money market accounts | 5,383,759,000 | 5,000,309,000 |
Savings deposits | 1,633,433,000 | 1,421,182,000 |
Total core deposits | 14,588,570,000 | 12,187,740,000 |
Time deposits: | ' | ' |
Less than $100,000 | 1,678,850,000 | 1,884,577,000 |
$100,000 or greater | 4,145,498,000 | 4,237,037,000 |
Total time deposits | 5,824,348,000 | 6,121,614,000 |
Total deposits | 20,412,918,000 | 18,309,354,000 |
Time deposits $100 thousand or greater held by the Company's foreign branch located in Hong Kong | $169,700,000 | $319,300,000 |
CUSTOMER_DEPOSIT_ACCOUNTS_Deta1
CUSTOMER DEPOSIT ACCOUNTS (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Scheduled maturities of time deposits, $100,000 or Greater | ' | ' |
2014 | $3,178,469 | ' |
2015 | 370,754 | ' |
2016 | 129,854 | ' |
2017 | 183,622 | ' |
2018 | 165,284 | ' |
Thereafter | 117,515 | ' |
Total | 4,145,498 | 4,237,037 |
Scheduled maturities of time deposits, Less than $100,000 | ' | ' |
2014 | 1,413,205 | ' |
2015 | 176,714 | ' |
2016 | 21,728 | ' |
2017 | 36,468 | ' |
2018 | 30,731 | ' |
Thereafter | 4 | ' |
Total | 1,678,850 | 1,884,577 |
Total | ' | ' |
2014 | 4,591,674 | ' |
2015 | 547,468 | ' |
2016 | 151,582 | ' |
2017 | 220,090 | ' |
2018 | 196,015 | ' |
Thereafter | 117,519 | ' |
Total time deposits | $5,824,348 | $6,121,614 |
CUSTOMER_DEPOSIT_ACCOUNTS_Deta2
CUSTOMER DEPOSIT ACCOUNTS (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
CUSTOMER DEPOSIT ACCOUNTS | ' | ' | ' |
Accrued interest payable | $5,200,000 | $4,700,000 | ' |
Interest expense on customer deposits by account type | ' | ' | ' |
Interest-bearing checking | 3,556,000 | 3,163,000 | 3,009,000 |
Money market accounts | 15,019,000 | 16,984,000 | 20,610,000 |
Savings deposits | 2,961,000 | 2,795,000 | 2,988,000 |
Time deposits: | ' | ' | ' |
Less than $100,000 | 15,485,000 | 20,655,000 | 29,329,000 |
$100,000 or greater | 26,475,000 | 32,298,000 | 51,174,000 |
Total | 63,496,000 | 75,895,000 | 107,110,000 |
Time deposits within the Certificate of Deposit Account Registry Service (CDARS) program | $203,300,000 | $260,500,000 | ' |
FEDERAL_FUNDS_PURCHASED_Detail
FEDERAL FUNDS PURCHASED (Details) (Federal funds purchased, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Information on Federal funds purchased | ' | ' | ' |
Average balance outstanding during the year | $155,000 | $2,227,000 | $3,496,000 |
Maximum balance outstanding at any month-end | ' | 60,000,000 | 100,000,000 |
Weighted average interest rate during the year (as a percent) | ' | 0.09% | 0.10% |
Available borrowing capacity from Federal funds line facilities | $656,000,000 | $588,000,000 | ' |
Minimum | ' | ' | ' |
Information on Federal funds purchased | ' | ' | ' |
Maturity period | '1 day | ' | ' |
Maximum | ' | ' | ' |
Information on Federal funds purchased | ' | ' | ' |
Maturity period | '6 months | ' | ' |
FEDERAL_HOME_LOAN_BANK_ADVANCE2
FEDERAL HOME LOAN BANK ADVANCES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Amount of FHLB advances | ' | ' |
After year four | $315,092 | $312,975 |
Total | $315,092 | $312,975 |
Weighted average interest rates | ' | ' |
After year four (as a percent) | 0.61% | 0.63% |
Total (as a percent) | 0.61% | 0.63% |
FEDERAL_HOME_LOAN_BANK_ADVANCE3
FEDERAL HOME LOAN BANK ADVANCES (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
FEDERAL HOME LOAN BANK ADVANCES | ' | ' |
Available borrowing capacity from unused FHLB advances | $3,700,000,000 | $3,250,000,000 |
Long-term FHLB advances prepaid | 0 | 93,000,000 |
Additional prepayment penalties | ' | 6,800,000 |
Additional available borrowing capacity from the Federal Reserve Bank's discount window | 1,420,000,000 | 1,310,000,000 |
Outstanding overnight FHLB borrowings | 0 | 0 |
FHLB advances | ' | 375,000,000 |
Modification Cost | ' | $48,190,000 |
SECURITIES_SOLD_UNDER_REPURCHA2
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND OTHER BORROWINGS (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2012 | |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | $995,000,000 | $995,000,000 | ' | ' |
Other disclosures | ' | ' | ' | ' |
Total interest expense recorded on repurchase agreements | 41,381,000 | 46,166,000 | 48,561,000 | ' |
Other borrowings | ' | 20,000,000 | ' | ' |
Securities Sold Under Repurchase Agreements | ' | ' | ' | ' |
Securities sold under repurchase agreements and other borrowings | ' | ' | ' | ' |
Amount of long-term repurchase agreements modified | ' | 150,000,000 | ' | 200,000,000 |
Reduction in interest rates on long-term repurchase agreements modified (as a percent) | ' | 1.95% | ' | 0.86% |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 995,000,000 | 995,000,000 | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 4.06% | 4.30% | ' | ' |
Other disclosures | ' | ' | ' | ' |
Total interest expense recorded on repurchase agreements | 41,400,000 | 46,200,000 | 48,600,000 | ' |
Available borrowing capacity from repurchase agreements | 811,100,000 | 1,190,000,000 | ' | ' |
Securities Sold Under Repurchase Agreements | Minimum | ' | ' | ' | ' |
Securities sold under repurchase agreements and other borrowings | ' | ' | ' | ' |
Interest rates on long-term repurchase agreements (as a percent) | 2.49% | ' | ' | ' |
Securities Sold Under Repurchase Agreements | Maximum | ' | ' | ' | ' |
Securities sold under repurchase agreements and other borrowings | ' | ' | ' | ' |
Interest rates on long-term repurchase agreements (as a percent) | 5.01% | ' | ' | ' |
Securities Sold Under Repurchase Agreements | Maturities in Year Three | ' | ' | ' | ' |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 245,000,000 | 245,000,000 | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 4.49% | 4.49% | ' | ' |
Securities Sold Under Repurchase Agreements | Maturities in Year Four | ' | ' | ' | ' |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 250,000,000 | 350,000,000 | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 5.01% | 4.96% | ' | ' |
Securities Sold Under Repurchase Agreements | Maturities in Year Five | ' | ' | ' | ' |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 50,000,000 | 50,000,000 | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 4.15% | 4.15% | ' | ' |
Securities Sold Under Repurchase Agreements | Maturities in year ten | ' | ' | ' | ' |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 350,000,000 | 350,000,000 | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 3.51% | 3.53% | ' | ' |
Securities Sold Under Repurchase Agreements | Maturities in year Eleven | ' | ' | ' | ' |
Amount of securities sold under repurchase agreements | ' | ' | ' | ' |
Total | 100,000,000 | ' | ' | ' |
Interest rate on securities sold under repurchase agreements | ' | ' | ' | ' |
Total (as a percent) | 2.49% | ' | ' | ' |
Short term borrowings | ' | ' | ' | ' |
Other disclosures | ' | ' | ' | ' |
Other borrowings | $0 | $20,000,000 | ' | ' |
Maturity period of debt | ' | '2 days | ' | ' |
Annual interest rate (as a percent) | ' | 0.25% | ' | ' |
CAPITAL_RESOURCES_AND_OTHER_LO2
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT (Details) (USD $) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2013 | |
item | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Junior Subordinated Debt | Term loan | Term loan | ||
East West Capital Statutory Trust III | East West Capital Statutory Trust III | East West Capital Trust IV | East West Capital Trust IV | East West Capital Trust V | East West Capital Trust V | East West Capital Trust VI | East West Capital Trust VI | East West Capital Trust VII | East West Capital Trust VII | East West Capital Trust VIII | East West Capital Trust VIII | East West Capital Trust IX | East West Capital Trust IX | ||||||
CAPITAL RESOURCES AND OTHER LONG-TERM DEBT | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of statutory business trusts formed for the purpose of issuing junior subordinated debt to third party investors | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of junior subordinated debts called during the period | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued by the Trust of the Company | $3,900,000 | $4,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum total consolidated assets for exclusion of trust preferred securities as Tier I regulatory capital | 15,000,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capital Resources | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, phased out (as a percent) | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, phased out period | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stated Interest Rate, base | ' | ' | ' | '3-month Libor | ' | '3-month Libor | ' | '3-month Libor | ' | '3-month Libor | ' | '3-month Libor | ' | '3-month Libor | ' | '3-month Libor | ' | ' | 'three-month LIBOR |
Stated Interest Rate, basis spread (as a percent) | ' | ' | ' | 2.85% | ' | 2.55% | ' | 1.80% | ' | 1.50% | ' | 1.35% | ' | 1.40% | ' | 1.90% | ' | ' | 1.50% |
Interest rate as of reporting date (as a percent) | ' | ' | ' | ' | ' | 2.79% | ' | 2.04% | ' | 1.74% | ' | 1.59% | ' | 1.64% | ' | 2.14% | ' | ' | 1.75% |
Balance at the end of the period | 123,000,000 | 133,000,000 | ' | ' | 10,000,000 | 10,000,000 | 10,000,000 | 15,000,000 | 15,000,000 | 20,000,000 | 20,000,000 | 30,000,000 | 30,000,000 | 18,000,000 | 18,000,000 | 30,000,000 | 30,000,000 | ' | ' |
Issue of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' |
Maturity period of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' |
Amount advanced | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $100,000,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
INCOME TAXES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net deferred tax assets | $255,530,000 | ' | ' | ' | $185,713,000 | ' | ' | ' | $255,530,000 | $185,713,000 | ' |
Tax credits generated from investments in affordable housing partnerships and other investments | ' | ' | ' | ' | ' | ' | ' | ' | 34,200,000 | 18,700,000 | 11,100,000 |
Tax credits generated from investments in affordable housing partnerships and other investments and other federal tax credits | 35,000,000 | ' | ' | ' | ' | ' | ' | ' | 35,000,000 | ' | ' |
Current income tax expense (benefit): | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | ' | ' | ' | ' | 131,236,000 | 148,572,000 | -86,157,000 |
State | ' | ' | ' | ' | ' | ' | ' | ' | 44,389,000 | 2,316,000 | 34,760,000 |
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 208,000 | 5,704,000 | ' |
Total current income tax expense (benefit) | ' | ' | ' | ' | ' | ' | ' | ' | 175,833,000 | 156,592,000 | -51,397,000 |
Deferred income tax (benefit) expense: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal | ' | ' | ' | ' | ' | ' | ' | ' | -32,963,000 | -38,749,000 | 193,834,000 |
State | ' | ' | ' | ' | ' | ' | ' | ' | -13,677,000 | 26,099,000 | -7,706,000 |
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 1,612,000 | ' | 3,369,000 |
Total deferred income tax (benefit) expense | ' | ' | ' | ' | ' | ' | ' | ' | -45,028,000 | -12,650,000 | 189,497,000 |
Provision for income taxes | $22,782,000 | $35,749,000 | $37,855,000 | $34,419,000 | $36,300,000 | $34,093,000 | $33,837,000 | $39,712,000 | $130,805,000 | $143,942,000 | $138,100,000 |
Difference between the effective tax rate implicit in the consolidated financial statements and the statutory federal income tax rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Federal income tax provision at statutory rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | 35.00% | 35.00% |
State franchise taxes, net of federal tax effect (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 4.70% | 4.30% | 4.30% |
Tax credits (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | -8.40% | -5.30% | -2.70% |
Other, net (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | -0.60% | -0.20% | -0.60% |
Effective income tax rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 30.70% | 33.80% | 36.00% |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax liabilities: | ' | ' |
Core deposit intangibles | ($21,064) | ($20,257) |
Affordable housing partnerships and other investments | -15,888 | -20,558 |
Fixed assets | -19,473 | -21,490 |
FHLB stock | -14,561 | -26,810 |
Deferred loan fees | -2,533 | -3,242 |
Purchased loan discounts | -126 | -162 |
State taxes | -1,079 | -7,894 |
Mortgage servicing assets | ' | -2,329 |
Section 597 gain | -49,687 | -96,915 |
FDIC receivable | -252,602 | -328,146 |
Acquired debt | -11,854 | -12,173 |
Other, net | -5,882 | 23 |
Total gross deferred tax (liabilities) | -394,749 | -539,953 |
Deferred tax assets: | ' | ' |
Allowance for loan losses and REO reserves | 116,064 | 111,985 |
Deferred compensation | 17,146 | 23,475 |
Mortgage servicing assets | 368 | ' |
Purchased loan premium | 544 | 624 |
Unrealized loss on securities | 81,712 | 60,383 |
Net operating loss carryforwards | 993 | 698 |
Acquired loans and REOs | 394,208 | 516,578 |
Other, net | 39,581 | 12,295 |
Total gross deferred tax assets | 650,616 | 726,038 |
Valuation allowance | -337 | -372 |
Net deferred tax (liabilities) assets | 255,530 | 185,713 |
Federal | ' | ' |
Deferred tax liabilities: | ' | ' |
Core deposit intangibles | -16,422 | -15,755 |
Affordable housing partnerships and other investments | -14,158 | -16,221 |
Fixed assets | -15,594 | -17,201 |
FHLB stock | -11,337 | -17,670 |
Deferred loan fees | -1,976 | -2,523 |
Purchased loan discounts | -98 | -126 |
State taxes | -1,079 | -7,894 |
Mortgage servicing assets | ' | -1,812 |
Section 597 gain | -48,370 | -94,231 |
FDIC receivable | -245,907 | -318,741 |
Acquired debt | -10,812 | -10,812 |
Other, net | -6,805 | -604 |
Total gross deferred tax (liabilities) | -372,558 | -503,590 |
Deferred tax assets: | ' | ' |
Allowance for loan losses and REO reserves | 93,018 | 93,924 |
Deferred compensation | 13,322 | 18,213 |
Mortgage servicing assets | 287 | ' |
Purchased loan premium | 424 | 485 |
Unrealized loss on securities | 62,535 | 47,567 |
Acquired loans and REOs | 366,290 | 478,825 |
Other, net | 30,768 | 9,021 |
Total gross deferred tax assets | 566,644 | 648,035 |
Net deferred tax (liabilities) assets | 194,086 | 144,445 |
State | ' | ' |
Deferred tax liabilities: | ' | ' |
Core deposit intangibles | -4,642 | -4,635 |
Affordable housing partnerships and other investments | -1,730 | -4,337 |
Fixed assets | -3,879 | -4,289 |
FHLB stock | -3,224 | -9,140 |
Deferred loan fees | -557 | -719 |
Purchased loan discounts | -28 | -36 |
Mortgage servicing assets | ' | -517 |
Section 597 gain | -1,317 | -2,684 |
FDIC receivable | -6,695 | -9,405 |
Acquired debt | -1,042 | -1,061 |
Other, net | 923 | 627 |
Total gross deferred tax (liabilities) | -22,191 | -36,196 |
Deferred tax assets: | ' | ' |
Allowance for loan losses and REO reserves | 23,046 | 23,281 |
Deferred compensation | 3,824 | 5,262 |
Mortgage servicing assets | 81 | ' |
Purchased loan premium | 120 | 139 |
Unrealized loss on securities | 19,177 | 12,816 |
Net operating loss carryforwards | 993 | 698 |
Acquired loans and REOs | 26,959 | 29,796 |
Other, net | 8,716 | 3,177 |
Total gross deferred tax assets | 82,916 | 75,169 |
Valuation allowance | -337 | -372 |
Net deferred tax (liabilities) assets | 60,388 | 38,601 |
Foreign | ' | ' |
Deferred tax liabilities: | ' | ' |
Core deposit intangibles | ' | 133 |
Acquired debt | ' | -300 |
Total gross deferred tax (liabilities) | ' | -167 |
Deferred tax assets: | ' | ' |
Allowance for loan losses and REO reserves | ' | -5,220 |
Acquired loans and REOs | 959 | 7,957 |
Other, net | 97 | 97 |
Total gross deferred tax assets | 1,056 | 2,834 |
Net deferred tax (liabilities) assets | $1,056 | $2,667 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Activity related to unrecognized tax benefits | ' | ' | ' |
Balance, beginning of year | $3,457,000 | $3,332,000 | ' |
Additions for tax positions of prior years | 232,000 | ' | ' |
Additions for tax positions of current year | 988,000 | 1,060,000 | ' |
Reductions in unrecognized tax benefits | 0 | ' | ' |
Settlements | ' | -935,000 | ' |
Balance, end of year | 4,677,000 | 3,457,000 | ' |
Increase in unrecognized tax benefits reserve for the California enterprise zone net interest deduction | 1,200,000 | 1,100,000 | ' |
ASC 740-10 liability | 6,300,000 | 6,100,000 | ' |
Total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate | 3,000,000 | 2,200,000 | ' |
Accrued interest and penalties expense for unrecognized tax positions | -744,000 | 1,200,000 | 287,000 |
Total interest and penalties accrued | 1,600,000 | 2,700,000 | ' |
Reduction in unrecognized tax benefits reserve for California enterprise zone, net interest deduction | ' | 0 | ' |
State | ' | ' | ' |
Operating loss carryforwards | ' | ' | ' |
Net operating loss carryforwards | $6,000,000 | ' | ' |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Credit Extensions | ' | ' |
Allowance for unfunded loan commitments, off-balance sheet credit exposures and recourse provision | $11,300,000 | $9,400,000 |
Undisbursed Loan Commitments | ' | ' |
Credit Extensions | ' | ' |
Loan | 4,020,000,000 | 2,610,000,000 |
Commercial and Standby Letters of Credit | ' | ' |
Credit Extensions | ' | ' |
Commercial and standby letters of credit issued | $1,160,000,000 | $988,700,000 |
COMMITMENTS_AND_CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Guarantees | ' | ' |
Recourse reserve related to loan sales and securitizations totaled | $3.20 | $4.80 |
Other Commitments | ' | ' |
Other Commitments | 73.1 | 84.6 |
Loans Sold or Securitized with Recourse | ' | ' |
Guarantees | ' | ' |
Principal amount of single-family loans with full recourse sold or securitized | 42.2 | 48.4 |
Principal amount of multifamily loans with limited recourse sold or securitized | 296.6 | 413.4 |
Principal amount of loans sold or securitized | 338.8 | 461.8 |
Recourse provision limitation, maximum percentage of the top loss on the multifamily loans | 4.00% | 4.00% |
Recourse reserve related to loan sales and securitizations totaled | 3.2 | 4.8 |
Commitment to repurchase the loan | 0 | ' |
Loans Sold without Recourse | ' | ' |
Guarantees | ' | ' |
Principal amount of loans sold or securitized | 818.2 | 953.2 |
Loans Securitized without Recourse | ' | ' |
Guarantees | ' | ' |
Principal amount of loans sold or securitized | $193.80 | $235.80 |
COMMITMENTS_AND_CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Lease Commitments | ' | ' | ' |
Rental expense | $26,200,000 | $25,800,000 | $22,800,000 |
Estimated future minimum rental payments under non-cancelable operating leases | ' | ' | ' |
2014 | 23,356,000 | ' | ' |
2015 | 19,492,000 | ' | ' |
2016 | 14,566,000 | ' | ' |
2017 | 10,891,000 | ' | ' |
2018 | 8,096,000 | ' | ' |
Thereafter | 21,400,000 | ' | ' |
Total | $97,801,000 | ' | ' |
STOCK_COMPENSATION_PLANS_Detai
STOCK COMPENSATION PLANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
STOCK COMPENSATION PLANS | ' | ' | ' |
Total compensation expense related to stock options and restricted stock awards, before taxes | $13,500,000 | $12,700,000 | $13,500,000 |
Total compensation expense related to stock options and restricted stock awards, net income | 7,900,000 | 7,300,000 | 7,900,000 |
Net tax benefit recognized in equity for stock compensation plans | 5,522,000 | 462,000 | 717,000 |
Incentive shares available to be issued | 4,160,200 | ' | ' |
Stock Options | ' | ' | ' |
Summary of Stock-based Compensation Plans | ' | ' | ' |
Cash proceeds from stock option exercises | $1,700,000 | $2,700,000 | ' |
STOCK_COMPENSATION_PLANS_Detai1
STOCK COMPENSATION PLANS (Details 2) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Stock purchase plan | ' | ' | ' | |
Compensation expense recognized | $13,500,000 | $12,700,000 | $13,500,000 | |
Stock Options | ' | ' | ' | |
Summary of stock option activity | ' | ' | ' | |
Outstanding at beginning of year (in shares) | 677,708 | ' | ' | |
Exercised (in shares) | -91,540 | ' | ' | |
Forfeited (in shares) | -179,437 | ' | ' | |
Outstanding at end of year (in shares) | 406,731 | 677,708 | ' | |
Vested or expected to vest at year-end (in shares) | 406,731 | ' | ' | |
Exercisable at year-end (in shares) | 406,731 | ' | ' | |
Outstanding at beginning of year, weighted average exercise price (in dollars per share) | $28.41 | ' | ' | |
Exercised, weighted average exercise price (in dollars per share) | $18.35 | ' | ' | |
Forfeited, weighted average exercise price (in dollars per share) | $37.36 | ' | ' | |
Outstanding at end of year, weighted average exercise price (in dollars per share) | $26.72 | $28.41 | ' | |
Vested or expected to vest at year-end, weighted average exercise price (in dollars per share) | $26.72 | ' | ' | |
Exercisable at year-end, weighted average exercise price (in dollars per share) | $26.72 | ' | ' | |
Outstanding at end of year, weighted average remaining term | '9 months 29 days | ' | ' | |
Vested or expected to vest at year-end, weighted average remaining term | '9 months 29 days | ' | ' | |
Exercisable at year-end, weighted average remaining term | '9 months 29 days | ' | ' | |
Outstanding at end of year, aggregate intrinsic value | 3,848,000 | ' | ' | |
Vested or expected to vest at year-end, aggregate intrinsic value | 3,848,000 | ' | ' | |
Exercisable at year-end, aggregate intrinsic value | 3,848,000 | ' | ' | |
Summary of unvested stock option activity | ' | ' | ' | |
Unvested options at beginning of year (in shares) | 14,502 | ' | ' | |
Vested (in shares) | -14,502 | ' | ' | |
Unvested options at ending of year (in shares) | ' | 14,502 | ' | |
Unvested options at beginning of year, weighted average grant date fair value (in dollars per share) | $3 | ' | ' | |
Vested, weighted average grant date fair value (in dollars per share) | $3 | ' | ' | |
Unvested options at ending of year, weighted average grant date fair value (in dollars per share) | ' | $3 | ' | |
Fair value assumptions under the Black-Scholes option pricing model | ' | ' | ' | |
Fair value assumptions, method used | 'Black-Scholes option-pricing model | ' | 'Black-Scholes option-pricing model | |
Expected term | ' | ' | '4 years | [1] |
Expected volatility (as a percent) | ' | ' | 78.10% | [2] |
Expected dividend yield (as a percent) | ' | ' | 0.20% | [3] |
Risk-free interest rate (as a percent) | ' | ' | 1.60% | [4] |
Share based compensation plan, additional disclosures | ' | ' | ' | |
Weighted average grant date fair value of stock options granted during the year (in dollars per share) | ' | ' | $13.21 | [5] |
Total intrinsic value of options exercised | 926,000 | 978,000 | 2,650,000 | |
Total fair value of options vested | 363,000 | 3,717,000 | 1,274,000 | |
Stock Options | Minimum | ' | ' | ' | |
Stock Options | ' | ' | ' | |
Vesting period | '3 years | ' | ' | |
Contractual term of stock option grants | '7 years | ' | ' | |
Stock Options | Maximum | ' | ' | ' | |
Stock Options | ' | ' | ' | |
Vesting period | '4 years | ' | ' | |
Contractual term of stock option grants | '10 years | ' | ' | |
Stock Purchase Plan | ' | ' | ' | |
Stock purchase plan | ' | ' | ' | |
Purchase price of shares in terms compared to market price per share (as a percent) | 90.00% | ' | ' | |
Value of shares sold to employees under purchase plan | 25,000 | ' | ' | |
Compensation expense recognized | 0 | ' | ' | |
Common stock, shares authorized (in shares) | 2,000,000 | ' | ' | |
Shares sold to employees under purchase plan (in shares) | 53,015 | 59,142 | ' | |
Stock Issued During Period, Value, Employee Stock Purchase Plan | $1,400,000 | $1,200,000 | ' | |
[1] | The expected term (estimated period of time outstanding) of stock options granted was estimated using the historical exercise behavior of employees. | |||
[2] | The expected volatility was based on historical volatility for a period equal to the stock option's expected term. | |||
[3] | The expected dividend yield is based on the Company's prevailing dividend rate at the time of grant. | |||
[4] | The risk-free rate is based on the U.S. Treasury strips in effect at the time of grant equal to the stock option's expected term. | |||
[5] | The Company did not issue any stock options during the years ended December 31, 2013 and December 31, 2012. |
STOCK_COMPENSATION_PLANS_Detai2
STOCK COMPENSATION PLANS (Details 3) (USD $) | 12 Months Ended |
Dec. 31, 2013 | |
Range of exercise price per share from $10.00 to $14.99 | ' |
Stock options outstanding | ' |
Range of exercise prices, low end of the range (in dollars per share) | $10 |
Range of exercise prices, high end of the range (in dollars per share) | $14.99 |
Options Outstanding | ' |
Number of Outstanding Options (in shares) | 2,365 |
Weighted Average Exercise Price (in dollars per share) | $14.95 |
Weighted Average Remaining Contractual Life | '2 years 7 days |
Options Exercisable | ' |
Number of Exercisable Options (in shares) | 2,365 |
Weighted Average Exercise Price (in dollars per share) | $14.95 |
Range of exercise price per share from $20.00 to $24.99 | ' |
Stock options outstanding | ' |
Range of exercise prices, low end of the range (in dollars per share) | $20 |
Range of exercise prices, high end of the range (in dollars per share) | $24.99 |
Options Outstanding | ' |
Number of Outstanding Options (in shares) | 273,852 |
Weighted Average Exercise Price (in dollars per share) | $21.09 |
Weighted Average Remaining Contractual Life | '1 year 1 month 17 days |
Options Exercisable | ' |
Number of Exercisable Options (in shares) | 273,852 |
Weighted Average Exercise Price (in dollars per share) | $21.09 |
Range of exercise price per share from $35.00 to $39.99 | ' |
Stock options outstanding | ' |
Range of exercise prices, low end of the range (in dollars per share) | $35 |
Range of exercise prices, high end of the range (in dollars per share) | $39.99 |
Options Outstanding | ' |
Number of Outstanding Options (in shares) | 130,514 |
Weighted Average Exercise Price (in dollars per share) | $38.76 |
Weighted Average Remaining Contractual Life | '1 month 28 days |
Options Exercisable | ' |
Number of Exercisable Options (in shares) | 130,514 |
Weighted Average Exercise Price (in dollars per share) | $38.76 |
Range of exercise price per share from $10.00 to $39.99 | ' |
Stock options outstanding | ' |
Range of exercise prices, low end of the range (in dollars per share) | $10 |
Range of exercise prices, high end of the range (in dollars per share) | $39.99 |
Options Outstanding | ' |
Number of Outstanding Options (in shares) | 406,731 |
Weighted Average Exercise Price (in dollars per share) | $26.72 |
Weighted Average Remaining Contractual Life | '9 months 29 days |
Options Exercisable | ' |
Number of Exercisable Options (in shares) | 406,731 |
Weighted Average Exercise Price (in dollars per share) | $26.72 |
STOCK_COMPENSATION_PLANS_Detai3
STOCK COMPENSATION PLANS (Details 4) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted Stock Awards | Minimum | ' | ' | ' |
Summary of Stock-based Compensation Plans | ' | ' | ' |
Vesting period | '1 year | ' | ' |
Restricted Stock Awards | Maximum | ' | ' | ' |
Summary of Stock-based Compensation Plans | ' | ' | ' |
Vesting period | '5 years | ' | ' |
Restricted Stock Awards | Outside Director | ' | ' | ' |
Summary of restricted stock awards activity | ' | ' | ' |
Granted (in shares) | 0 | ' | ' |
Time-based restricted stock awards | ' | ' | ' |
Summary of restricted stock awards activity | ' | ' | ' |
Outstanding unvested at beginning of year (in shares) | 1,512,396 | ' | ' |
Granted (in shares) | 70,150 | ' | ' |
Vested (in shares) | -1,073,512 | ' | ' |
Forfeited (in shares) | -70,526 | ' | ' |
Outstanding unvested at end of year (in shares) | 438,508 | 1,512,396 | ' |
Outstanding unvested at beginning of year, weighted average price (in dollars per share) | $16.30 | ' | ' |
Granted, weighted average price (in dollars per share) | $28.55 | $21.66 | $19.17 |
Vested, weighted average price (in dollars per share) | $16.38 | ' | ' |
Forfeited, weighted average price (in dollars per share) | $17.98 | ' | ' |
Outstanding unvested at end of year, weighted average price (in dollars per share) | $17.79 | $16.30 | ' |
Total fair value of restricted stock awards vested | $29.40 | $3.50 | $4.90 |
Total unrecognized stock compensation expense | 3.8 | ' | ' |
Weighted average period to recognize unrecognized compensation cost | '2 years 8 months 1 day | ' | ' |
Performance-based restricted stock awards | ' | ' | ' |
Summary of restricted stock awards activity | ' | ' | ' |
Outstanding unvested at beginning of year (in shares) | 694,838 | ' | ' |
Granted (in shares) | 477,165 | ' | ' |
Vested (in shares) | -171,648 | ' | ' |
Forfeited (in shares) | -43,648 | ' | ' |
Outstanding unvested at end of year (in shares) | 956,707 | 694,838 | ' |
Outstanding unvested at beginning of year, weighted average price (in dollars per share) | $22.43 | ' | ' |
Granted, weighted average price (in dollars per share) | $25.25 | $22.05 | $22.25 |
Vested, weighted average price (in dollars per share) | $22.59 | ' | ' |
Forfeited, weighted average price (in dollars per share) | $23.98 | ' | ' |
Outstanding unvested at end of year, weighted average price (in dollars per share) | $23.74 | $22.43 | ' |
Total fair value of restricted stock awards vested | 4.4 | 4.7 | 0 |
Total unrecognized stock compensation expense | $12.80 | ' | ' |
Weighted average period to recognize unrecognized compensation cost | '1 year 9 months 22 days | ' | ' |
EMPLOYEE_BENEFIT_PLANS_Details
EMPLOYEE BENEFIT PLANS (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Defined Benefit Plans | ' | ' | ' |
Employer's contribution | $4,300,000 | $3,500,000 | $3,000,000 |
Surrender value related to life insurance contracts | 112,650,000 | 110,133,000 | ' |
Supplemental Executive Retirement Plan (SERP) | ' | ' | ' |
Defined Benefit Plans | ' | ' | ' |
Benefits accrued | 600,000 | 800,000 | 1,600,000 |
Surrender value related to life insurance contracts | $45,500,000 | $44,400,000 | ' |
STOCKHOLDERS_EQUITY_AND_EARNIN2
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 1-May-13 | Apr. 30, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 17, 2013 | Jan. 23, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Series A Non-Cumulative Perpetual Convertible Preferred Stock | Series A Non-Cumulative Perpetual Convertible Preferred Stock | Series A Non-Cumulative Perpetual Convertible Preferred Stock | Series A Non-Cumulative Perpetual Convertible Preferred Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | Common Stock | ||||
Class of Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued during the period | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock dividend rate (as a percent) | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock liquidation preference (in dollars per share) | ' | ' | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of convertible preferred stock | ' | ' | ' | ' | $194,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred shares converted | ' | ' | ' | 85,710 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued on conversion of convertible preferred stock | ' | ' | ' | 5,594,080 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of stock repurchase approved by the Board of Directors | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase of treasury stock pursuant to the Stock Repurchase Program, shares | 8,026,807 | 9,068,105 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average price of shares repurchased (in dollars per share) | $24.89 | $22.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost of repurchase of treasury shares | 200,000,000 | 199,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Quarterly Dividends | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend per share (in dollars per share) | ' | ' | ' | ' | ' | $20 | $20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock cash dividends paid | ' | ' | ' | ' | ' | 3,400,000 | 6,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend per share (in dollars per share) | $0.60 | $0.40 | $0.16 | ' | ' | ' | ' | ' | ' | $0.15 | $0.15 | $0.15 | $0.15 | $0.10 | $0.10 | $0.10 | $0.10 | ' | ' |
Common stock cash dividends paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $83,300,000 | $57,600,000 |
STOCKHOLDERS_EQUITY_AND_EARNIN3
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Common stock, shares outstanding | 137,630,896 | ' | ' | ' | 140,294,092 | ' | ' | ' | 137,630,896 | 140,294,092 | ' | |
Earnings per share calculations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | $295,045 | $281,650 | $245,234 | |
Less: Preferred stock dividends | ' | ' | -1,714 | -1,714 | -1,715 | -1,714 | -1,714 | -1,714 | -3,428 | -6,857 | -6,857 | |
Less: Earnings allocated to participating securities | ' | ' | ' | ' | ' | ' | ' | ' | -1,692 | -3,279 | ' | |
Basic EPS - income allocated to common stockholders | ' | ' | ' | ' | ' | ' | ' | ' | 289,925 | 271,514 | [1] | 238,377 |
Effect of dilutive securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Restricted stock units | ' | ' | ' | ' | ' | ' | ' | ' | 196 | 47 | 115 | |
Convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | 3,428 | 6,857 | 6,857 | |
Diluted EPS - income allocated to common stockholders | ' | ' | ' | ' | ' | ' | ' | ' | $293,549 | $278,418 | [1] | $245,349 |
Number of Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 137,342,000 | 141,457,000 | [1] | 147,093,000 |
Effect of dilutive securities on weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Stock options (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 71,000 | 29,000 | 62,000 | |
Restricted stock units (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 327,000 | 118,000 | 718,000 | |
Convertible preferred stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 1,834,000 | 5,571,000 | 5,571,000 | |
Stock warrants (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000 | |
Total weighted average diluted shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 139,574,000 | 147,175,000 | [1] | 153,467,000 |
Per Share Amounts | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Basic EPS - income allocated to common stockholders (in dollars per share) | $0.55 | $0.53 | $0.52 | $0.51 | $0.50 | $0.49 | $0.48 | $0.46 | $2.11 | $1.92 | [1] | $1.62 |
Diluted EPS - Income available to common stockholders (in dollars per share) | $0.55 | $0.53 | $0.52 | $0.50 | $0.49 | $0.48 | $0.47 | $0.45 | $2.10 | $1.89 | [1] | $1.60 |
[1] | On April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. |
STOCKHOLDERS_EQUITY_AND_EARNIN4
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details 3) | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Stock options | ' | ' | ' | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ' | ' | ||
Excluded from the computation of diluted EPS (in shares) | 177 | 340 | 857 | ||
Restricted Stock awards | ' | ' | ' | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ' | ' | ||
Excluded from the computation of diluted EPS (in shares) | 10 | [1] | 5 | [1] | 317 |
[1] | On April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. |
STOCKHOLDERS_EQUITY_AND_EARNIN5
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details 4) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement | ' | ' | ' |
Balance at beginning of period | $4,669 | ($33,940) | ($12,414) |
Period Change | ' | 38,609 | -21,526 |
Other comprehensive income before reclassifications | -27,833 | ' | ' |
Amount reclassified from AOCI | -7,295 | ' | ' |
Net current period other comprehensive loss | -35,128 | ' | ' |
Balance at end of period | -30,459 | 4,669 | -33,940 |
Unrealized gain (loss) on investment securities available-for-sale | ' | ' | ' |
Statement | ' | ' | ' |
Balance at beginning of period | 4,643 | -34,848 | -13,927 |
Period Change | ' | 39,491 | -20,921 |
Other comprehensive income before reclassifications | -28,169 | ' | ' |
Amount reclassified from AOCI | -7,012 | ' | ' |
Net current period other comprehensive loss | -35,181 | ' | ' |
Balance at end of period | -30,538 | 4,643 | -34,848 |
Foreign currency translation adjustments | ' | ' | ' |
Statement | ' | ' | ' |
Balance at beginning of period | ' | 900 | 1,664 |
Period Change | ' | -900 | -764 |
Balance at end of period | ' | ' | 900 |
Unrealized gain (loss) on other asset investment | ' | ' | ' |
Statement | ' | ' | ' |
Balance at beginning of period | 26 | 8 | -151 |
Period Change | ' | 18 | 159 |
Other comprehensive income before reclassifications | 336 | ' | ' |
Amount reclassified from AOCI | -283 | ' | ' |
Net current period other comprehensive loss | 53 | ' | ' |
Balance at end of period | $79 | $26 | $8 |
STOCKHOLDERS_EQUITY_AND_EARNIN6
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net gain on sales of investment securities | ' | ' | ' | ' | ' | ' | ' | ' | $12,089 | $757 | $9,703 |
Other operating income | ' | ' | ' | ' | ' | ' | ' | ' | 34,801 | 24,633 | 12,505 |
Total before tax | 98,564 | 108,906 | 111,870 | 106,510 | 108,200 | 105,203 | 104,394 | 107,795 | 425,850 | 425,592 | 383,334 |
Tax expense | -22,782 | -35,749 | -37,855 | -34,419 | -36,300 | -34,093 | -33,837 | -39,712 | -130,805 | -143,942 | -138,100 |
NET INCOME | 75,782 | 73,157 | 74,015 | 72,091 | 71,900 | 71,110 | 70,557 | 68,083 | 295,045 | 281,650 | 245,234 |
Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
NET INCOME | ' | ' | ' | ' | ' | ' | ' | ' | 7,295 | 452 | 5,663 |
Investment securities available for sale | Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total before tax | ' | ' | ' | ' | ' | ' | ' | ' | 12,089 | 757 | 9,703 |
Tax expense | ' | ' | ' | ' | ' | ' | ' | ' | -5,077 | -318 | -4,075 |
NET INCOME | ' | ' | ' | ' | ' | ' | ' | ' | 7,012 | 439 | 5,628 |
Investment securities available for sale | Realized net gains on sale of securities | Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net gain on sales of investment securities | ' | ' | ' | ' | ' | ' | ' | ' | 12,089 | 757 | 9,703 |
Other investments | Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total before tax | ' | ' | ' | ' | ' | ' | ' | ' | 488 | 23 | 61 |
Tax expense | ' | ' | ' | ' | ' | ' | ' | ' | -205 | -10 | -26 |
NET INCOME | ' | ' | ' | ' | ' | ' | ' | ' | 283 | 13 | 35 |
Other investments | Realized net gain on sale of other investments | Amount Reclassified from Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassifications out of accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other operating income | ' | ' | ' | ' | ' | ' | ' | ' | $488 | $23 | $61 |
STOCKHOLDERS_EQUITY_AND_EARNIN7
STOCKHOLDERS' EQUITY AND EARNINGS PER SHARE (Details 6) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Unrealized gain (loss) on investment securities available-for-sale: | ' | ' | ' |
Unrealized gains (losses) on holding gains (losses) arising during period, before-tax amount | ($48,567) | $73,910 | ($21,264) |
Less: reclassification adjustment for losses/(gains) included in income, before-tax amount | -12,089 | -757 | -9,703 |
Net unrealized gain (loss), before-tax amount | -60,656 | 73,153 | -30,967 |
Non credit-related impairment loss on securities, before-tax amount | ' | -5,066 | -5,103 |
Foreign currency translation adjustments, before-tax amount | ' | -1,552 | -1,317 |
Unrealized gain on other asset investment, before-tax amount | 579 | 53 | 334 |
Less: reclassification adjustment for gains included in income, before-tax amount | -488 | -23 | -61 |
Other comprehensive income (loss), before-tax amount | -60,565 | 66,565 | -37,114 |
Unrealized gain (loss) on investment securities available-for-sale: | ' | ' | ' |
Unrealized gains (losses) on holding gains (losses) arising during period, tax (expense) or benefit | 20,398 | -31,042 | 8,931 |
Less: reclassification adjustment for losses/(gains) included in income, tax (expense) or benefit | 5,077 | 318 | 4,075 |
Net unrealized gain (loss), tax (expense) or benefit | 25,475 | -30,724 | 13,006 |
Non credit-related impairment loss on securities, tax effect | ' | 2,128 | 2,143 |
Foreign currency translation adjustments, tax (expense) or benefit | ' | 652 | 553 |
Unrealized gain on other asset investment, tax (expense) or benefit | -243 | -22 | -140 |
Less: reclassification adjustment for gains included in income, tax (expense) or benefit | 205 | 10 | 26 |
Other comprehensive income (loss), tax (expense) or benefit | 25,437 | -27,956 | 15,588 |
Unrealized gain (loss) on investment securities available-for-sale: | ' | ' | ' |
Unrealized gains (losses) on holding gains (losses) arising during period, net of tax amount | -28,169 | 42,868 | -12,333 |
Less: reclassification adjustment for losses/(gains) included in income | -7,012 | -439 | -5,628 |
Net unrealized gain (loss), net of tax amount | -35,181 | 42,429 | -17,961 |
Non credit-related impairment loss on securities, net of tax amount | ' | -2,938 | -2,960 |
Foreign currency translation adjustments, net of tax amount | ' | -900 | -764 |
Unrealized gain on other asset investment, net of tax amount | 336 | 31 | 194 |
Less: reclassification adjustment for gains included in income, net of tax amount | -283 | -13 | -35 |
Other comprehensive (loss) income | ($35,128) | $38,609 | ($21,526) |
REGULATORY_REQUIREMENTS_Detail
REGULATORY REQUIREMENTS (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Actual | ' | ' |
Total Capital (to Risk-Weighted Assets), Amount | $2,395,109,000 | $2,296,253,000 |
Tier I Capital (to Risk-Weighted Assets), Amount | 2,102,476,000 | 2,116,757,000 |
Tier I Capital (to Average Assets), Amount | 2,102,476,000 | 2,116,757,000 |
Total Capital (to Risk-Weighted Assets), Ratio (as a percent) | 13.50% | 16.10% |
Tier I Capital (to Risk-Weighted Assets), Ratio (as a percent) | 11.90% | 14.80% |
Tier I Capital (to Average Assets), Ratio (as a percent) | 8.60% | 9.60% |
For Capital Adequacy Purposes | ' | ' |
Total Capital (to Risk-Weighted Assets), Amount | 1,416,203,000 | 1,142,743,000 |
Tier I Capital (to Risk-Weighted Assets), Amount | 708,102,000 | 571,371,000 |
Tier I Capital (to Average Assets), Amount | 976,596,000 | 880,526,000 |
Total Capital (to Risk-Weighted Assets), Ratio (as a percent) | 8.00% | 8.00% |
Tier I Capital (to Risk-Weighted Assets), Ratio (as a percent) | 4.00% | 4.00% |
Tier I Capital (to Average Assets), Ratio (as a percent) | 4.00% | 4.00% |
Regulatory Requirements - Additional Disclosure | ' | ' |
Minimum total consolidated assets for exclusion of trust preferred securities as Tier I regulatory capital | 15,000,000,000 | ' |
Trust preferred securities as a percentage of the Company's Tier I capital | 4.40% | 6.30% |
East West Bank | ' | ' |
Actual | ' | ' |
Total Capital (to Risk-Weighted Assets), Amount | 2,262,494,000 | 2,225,888,000 |
Tier I Capital (to Risk-Weighted Assets), Amount | 2,041,894,000 | 2,046,477,000 |
Tier I Capital (to Average Assets), Amount | 2,041,894,000 | 2,046,477,000 |
Total Capital (to Risk-Weighted Assets), Ratio (as a percent) | 12.90% | 15.60% |
Tier I Capital (to Risk-Weighted Assets), Ratio (as a percent) | 11.60% | 14.30% |
Tier I Capital (to Average Assets), Ratio (as a percent) | 8.40% | 9.30% |
For Capital Adequacy Purposes | ' | ' |
Total Capital (to Risk-Weighted Assets), Amount | 1,407,944,000 | 1,142,215,000 |
Tier I Capital (to Risk-Weighted Assets), Amount | 703,972,000 | 571,107,000 |
Tier I Capital (to Average Assets), Amount | 973,958,000 | 880,162,000 |
Total Capital (to Risk-Weighted Assets), Ratio (as a percent) | 8.00% | 8.00% |
Tier I Capital (to Risk-Weighted Assets), Ratio (as a percent) | 4.00% | 4.00% |
Tier I Capital (to Average Assets), Ratio (as a percent) | 4.00% | 4.00% |
To Be Well Capitalized Under Prompt Corrective Action Provisions | ' | ' |
Total Capital (to Risk-Weighted Assets), Amount | 1,759,931,000 | 1,427,769,000 |
Tier I Capital (to Risk-Weighted Assets), Amount | 1,055,958,000 | 856,661,000 |
Tier I Capital (to Average Assets), Amount | 1,217,448,000 | 1,100,202,000 |
Total Capital (to Risk-Weighted Assets), Ratio (as a percent) | 10.00% | 10.00% |
Tier I Capital (to Risk-Weighted Assets), Ratio (as a percent) | 6.00% | 6.00% |
Tier I Capital (to Average Assets), Ratio (as a percent) | 5.00% | 5.00% |
Reserve Requirement | ' | ' |
Daily average reserve requirement | $218,500,000 | $228,700,000 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2013 | |
item | |
SEGMENT INFORMATION | ' |
Number of operating segments | 3 |
Number of segment whom broad administrative support are provided | 2 |
Number of business divisions | 3 |
SEGMENT_INFORMATION_Details_2
SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Segment Reporting Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest income | $293,203 | $281,706 | $255,353 | $238,423 | $276,521 | $254,162 | $266,362 | $254,050 | $1,068,685 | $1,051,095 | $1,080,448 | |||
Charge for funds used | ' | ' | ' | ' | ' | ' | ' | ' | -220,957 | -160,092 | -232,464 | |||
Interest spread on funds used | ' | ' | ' | ' | ' | ' | ' | ' | 847,728 | 891,003 | 847,984 | |||
Interest expense | -28,195 | -27,456 | -27,709 | -29,132 | -31,577 | -32,254 | -33,205 | -35,132 | -112,492 | -132,168 | -177,422 | |||
Credit on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 220,957 | 160,092 | 232,464 | |||
Interest spread on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 108,465 | 27,924 | 55,042 | |||
Net interest income | 265,008 | 254,250 | 227,644 | 209,291 | 244,944 | 221,908 | 233,157 | 218,918 | 956,193 | 918,927 | 903,026 | |||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 22,364 | 65,184 | 95,006 | |||
Depreciation, amortization and accretion | ' | ' | ' | ' | ' | ' | ' | ' | 97,110 | [1] | 43,751 | [1] | 128,254 | [1] |
Goodwill | 337,438 | ' | ' | ' | 337,438 | ' | ' | ' | 337,438 | 337,438 | 337,438 | |||
Segment pre-tax profit | 98,564 | 108,906 | 111,870 | 106,510 | 108,200 | 105,203 | 104,394 | 107,795 | 425,850 | 425,592 | 383,334 | |||
Segment assets | 24,730,068 | ' | ' | ' | 22,536,110 | ' | ' | ' | 24,730,068 | 22,536,110 | 21,968,667 | |||
Retail Banking | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 374,818 | 356,244 | 358,853 | |||
Charge for funds used | ' | ' | ' | ' | ' | ' | ' | ' | -86,552 | -85,811 | -94,098 | |||
Interest spread on funds used | ' | ' | ' | ' | ' | ' | ' | ' | 288,266 | 270,433 | 264,755 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -47,287 | -57,401 | -85,356 | |||
Credit on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 173,194 | 130,713 | 202,080 | |||
Interest spread on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 125,907 | 73,312 | 116,724 | |||
Net interest income | ' | ' | ' | ' | ' | ' | ' | ' | 414,173 | 343,745 | 381,479 | |||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 10,911 | 28,729 | 27,888 | |||
Depreciation, amortization and accretion | ' | ' | ' | ' | ' | ' | ' | ' | 19,865 | [1] | 12,869 | [1] | 43,899 | [1] |
Goodwill | 320,566 | ' | ' | ' | 320,566 | ' | ' | ' | 320,566 | 320,566 | 320,566 | |||
Segment pre-tax profit | ' | ' | ' | ' | ' | ' | ' | ' | 123,876 | 74,836 | 102,217 | |||
Segment assets | 7,820,191 | ' | ' | ' | 6,552,217 | ' | ' | ' | 7,820,191 | 6,552,217 | 6,530,138 | |||
Commercial Banking | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 627,118 | 617,041 | 619,766 | |||
Charge for funds used | ' | ' | ' | ' | ' | ' | ' | ' | -116,161 | -118,688 | -142,056 | |||
Interest spread on funds used | ' | ' | ' | ' | ' | ' | ' | ' | 510,957 | 498,353 | 477,710 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -15,185 | -23,226 | -31,407 | |||
Credit on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 29,262 | 13,138 | 13,863 | |||
Interest spread on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 14,077 | -10,088 | -17,544 | |||
Net interest income | ' | ' | ' | ' | ' | ' | ' | ' | 525,034 | 488,265 | 460,166 | |||
Provision for loan losses | ' | ' | ' | ' | ' | ' | ' | ' | 11,453 | 36,455 | 67,118 | |||
Depreciation, amortization and accretion | ' | ' | ' | ' | ' | ' | ' | ' | 8,120 | [1] | -13,277 | [1] | 62,803 | [1] |
Goodwill | 16,872 | ' | ' | ' | 16,872 | ' | ' | ' | 16,872 | 16,872 | 16,872 | |||
Segment pre-tax profit | ' | ' | ' | ' | ' | ' | ' | ' | 272,369 | 266,168 | 227,766 | |||
Segment assets | 11,545,405 | ' | ' | ' | 10,421,160 | ' | ' | ' | 11,545,405 | 10,421,160 | 10,157,195 | |||
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Segment Reporting Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Interest income | ' | ' | ' | ' | ' | ' | ' | ' | 66,749 | 77,810 | 101,829 | |||
Charge for funds used | ' | ' | ' | ' | ' | ' | ' | ' | -18,244 | 44,407 | 3,690 | |||
Interest spread on funds used | ' | ' | ' | ' | ' | ' | ' | ' | 48,505 | 122,217 | 105,519 | |||
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | -50,020 | -51,541 | -60,659 | |||
Credit on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | 18,501 | 16,241 | 16,521 | |||
Interest spread on funds provided | ' | ' | ' | ' | ' | ' | ' | ' | -31,519 | -35,300 | -44,138 | |||
Net interest income | ' | ' | ' | ' | ' | ' | ' | ' | 16,986 | 86,917 | 61,381 | |||
Depreciation, amortization and accretion | ' | ' | ' | ' | ' | ' | ' | ' | 69,125 | [1] | 44,159 | [1] | 21,552 | [1] |
Segment pre-tax profit | ' | ' | ' | ' | ' | ' | ' | ' | 29,605 | 84,588 | 53,351 | |||
Segment assets | $5,364,472 | ' | ' | ' | $5,562,733 | ' | ' | ' | $5,364,472 | $5,562,733 | $5,281,334 | |||
[1] | Includes amortization and accretion related to the FDIC indemnification asset. |
PARENT_COMPANY_FINANCIAL_STATE2
PARENT COMPANY FINANCIAL STATEMENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, except Share data, unless otherwise specified | ||||
ASSETS | ' | ' | ' | ' |
Cash and cash equivalents | $895,820 | $1,323,106 | $1,431,185 | $1,333,949 |
Investment securities available-for-sale | 2,733,797 | 2,607,029 | ' | ' |
Other assets | 533,759 | 517,718 | ' | ' |
TOTAL | 24,730,068 | 22,536,110 | 21,968,667 | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Long-term debt | 226,868 | 137,178 | ' | ' |
Total liabilities | 22,365,843 | 20,153,988 | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Preferred stock, $0.001 par value, 5,000,000 shares authorized; Series A, non-cumulative convertible, 200,000 shares issued; no shares outstanding as of December 31, 2013 and 85,710 shares outstanding in 2012. | ' | 83,027 | ' | ' |
Common stock, $0.001 par value, 200,000,000 shares authorized; 163,098,008 and 157,160,193 shares issued in 2013 and 2012, respectively; 137,630,896 and 140,294,092 shares outstanding in 2013 and 2012, respectively. | 163 | 157 | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 200,000,000 | 200,000,000 | ' | ' |
Common stock, shares issued | 163,098,008 | 157,160,193 | ' | ' |
Common stock, shares outstanding | 137,630,896 | 140,294,092 | ' | ' |
Additional paid in capital | 1,571,670 | 1,464,739 | ' | ' |
Retained earnings | 1,360,130 | 1,151,828 | ' | ' |
Treasury stock, at cost - 25,467,112 shares in 2013 and 16,866,101 shares in 2012. | -537,279 | -322,298 | ' | ' |
Treasury stock, shares | 25,467,112 | 16,866,101 | ' | ' |
Accumulated other comprehensive (loss) income, net of tax | -30,459 | 4,669 | -33,940 | -12,414 |
Total stockholders' equity | 2,364,225 | 2,382,122 | 2,311,743 | 2,113,931 |
TOTAL | 24,730,068 | 22,536,110 | ' | ' |
Preferred stock, Series A, non-cumulative convertible | ' | ' | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ' | ' |
Preferred stock, shares issued | 200,000 | 200,000 | ' | ' |
Preferred stock, shares outstanding | 0 | 85,710 | ' | ' |
East West Bancorp, Inc. | ' | ' | ' | ' |
ASSETS | ' | ' | ' | ' |
Cash and cash equivalents | 79,934 | 64,489 | 9,287 | 4,973 |
Investment securities available-for-sale | 69,796 | ' | ' | ' |
Investment in subsidiaries | 2,400,937 | 2,450,058 | ' | ' |
Other investments | 21,371 | 3,083 | ' | ' |
Other assets | 37,037 | 5,122 | ' | ' |
TOTAL | 2,609,075 | 2,522,752 | ' | ' |
LIABILITIES AND STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Long-term debt | 226,868 | 137,178 | ' | ' |
Other liabilities | 17,982 | 3,452 | ' | ' |
Total liabilities | 244,850 | 140,630 | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Common stock, $0.001 par value, 200,000,000 shares authorized; 163,098,008 and 157,160,193 shares issued in 2013 and 2012, respectively; 137,630,896 and 140,294,092 shares outstanding in 2013 and 2012, respectively. | 163 | 157 | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' |
Common stock, shares authorized | 200,000,000 | 200,000,000 | ' | ' |
Common stock, shares issued | 163,098,008 | 157,160,193 | ' | ' |
Common stock, shares outstanding | 137,630,896 | 140,294,092 | ' | ' |
Additional paid in capital | 1,571,670 | 1,464,739 | ' | ' |
Retained earnings | 1,360,130 | 1,151,828 | ' | ' |
Treasury stock, at cost - 25,467,112 shares in 2013 and 16,866,101 shares in 2012. | -537,279 | -322,298 | ' | ' |
Treasury stock, shares | 25,467,112 | 16,866,101 | ' | ' |
Accumulated other comprehensive (loss) income, net of tax | -30,459 | 4,669 | ' | ' |
Total stockholders' equity | 2,364,225 | 2,382,122 | ' | ' |
TOTAL | 2,609,075 | 2,522,752 | ' | ' |
East West Bancorp, Inc. | Preferred stock, Series A, non-cumulative convertible | ' | ' | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' | ' | ' |
Preferred stock, $0.001 par value, 5,000,000 shares authorized; Series A, non-cumulative convertible, 200,000 shares issued; no shares outstanding as of December 31, 2013 and 85,710 shares outstanding in 2012. | ' | $83,027 | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 | ' | ' |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ' | ' |
Preferred stock, shares issued | 200,000 | 200,000 | ' | ' |
Preferred stock, shares outstanding | 0 | 85,710 | ' | ' |
PARENT_COMPANY_FINANCIAL_STATE3
PARENT COMPANY FINANCIAL STATEMENTS (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense | $28,195 | $27,456 | $27,709 | $29,132 | $31,577 | $32,254 | $33,205 | $35,132 | $112,492 | $132,168 | $177,422 |
Compensation and net occupancy reimbursement to subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | 56,641 | 55,475 | 50,082 |
Other expense | ' | ' | ' | ' | ' | ' | ' | ' | 64,594 | 59,731 | 60,383 |
Income before provision for income taxes | 98,564 | 108,906 | 111,870 | 106,510 | 108,200 | 105,203 | 104,394 | 107,795 | 425,850 | 425,592 | 383,334 |
Income tax benefit | -22,782 | -35,749 | -37,855 | -34,419 | -36,300 | -34,093 | -33,837 | -39,712 | -130,805 | -143,942 | -138,100 |
NET INCOME | 75,782 | 73,157 | 74,015 | 72,091 | 71,900 | 71,110 | 70,557 | 68,083 | 295,045 | 281,650 | 245,234 |
East West Bancorp, Inc. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statement of income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends from subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | 319,085 | 324,094 | 72,129 |
Other income | ' | ' | ' | ' | ' | ' | ' | ' | 821 | 2 | 372 |
Total income | ' | ' | ' | ' | ' | ' | ' | ' | 319,906 | 324,096 | 72,501 |
Interest expense | ' | ' | ' | ' | ' | ' | ' | ' | 3,436 | 3,092 | 4,734 |
Compensation and net occupancy reimbursement to subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | 3,662 | 2,573 | 2,537 |
Other expense | ' | ' | ' | ' | ' | ' | ' | ' | 12,677 | 1,309 | 2,339 |
Total expense | ' | ' | ' | ' | ' | ' | ' | ' | 19,775 | 6,974 | 9,610 |
Income before provision for income taxes | ' | ' | ' | ' | ' | ' | ' | ' | 300,131 | 317,122 | 62,891 |
Income tax benefit | ' | ' | ' | ' | ' | ' | ' | ' | 22,885 | 2,892 | 3,830 |
Equity in undistributed (loss) income of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | -27,971 | -38,364 | 178,513 |
NET INCOME | ' | ' | ' | ' | ' | ' | ' | ' | $295,045 | $281,650 | $245,234 |
PARENT_COMPANY_FINANCIAL_STATE4
PARENT COMPANY FINANCIAL STATEMENTS (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | $75,782 | $73,157 | $74,015 | $72,091 | $71,900 | $71,110 | $70,557 | $68,083 | $295,045 | $281,650 | $245,234 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 101,169 | 82,536 | 67,460 |
Stock compensation costs | ' | ' | ' | ' | ' | ' | ' | ' | 14,178 | 13,238 | 13,543 |
Tax benefit from stock plans | ' | ' | ' | ' | ' | ' | ' | ' | -5,522 | -462 | -717 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 425,845 | 287,526 | 255,317 |
Purchases of: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment securities available-for-sale | ' | ' | ' | ' | ' | ' | ' | ' | -1,316,764 | -1,835,823 | -2,713,546 |
Proceeds from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | -2,734,846 | -758,905 | -1,071,226 |
Payment for: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | -10,310 | -75,000 | -23,918 |
Repurchase of vested shares due to employee tax liability | ' | ' | ' | ' | ' | ' | ' | ' | -13,833 | -3,012 | -649 |
Repurchase of common stock warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14,500 |
Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan | ' | ' | ' | ' | ' | ' | ' | ' | -199,992 | -199,950 | ' |
Proceeds from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock pursuant to various stock plans and agreements | ' | ' | ' | ' | ' | ' | ' | ' | 3,054 | 3,821 | 5,726 |
Tax benefit from stock plans | ' | ' | ' | ' | ' | ' | ' | ' | 5,522 | 462 | 717 |
Net cash provided by (used in) financing activities | ' | ' | ' | ' | ' | ' | ' | ' | 1,881,715 | 364,200 | 914,211 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ' | ' | ' | ' | ' | ' | ' | ' | -427,286 | -108,079 | 97,236 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | ' | ' | ' | 1,323,106 | ' | ' | ' | 1,431,185 | 1,323,106 | 1,431,185 | 1,333,949 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 895,820 | ' | ' | ' | 1,323,106 | ' | ' | ' | 895,820 | 1,323,106 | 1,431,185 |
Cash paid during the year for: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 112,169 | 136,760 | 175,772 |
Noncash investing and financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock | ' | ' | ' | ' | ' | ' | ' | ' | 83,027 | ' | 31 |
East West Bancorp, Inc. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income | ' | ' | ' | ' | ' | ' | ' | ' | 295,045 | 281,650 | 245,234 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity in undistributed (income) of subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | -291,659 | -285,636 | -250,513 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 8,806 | 445 | 1,034 |
Prepayment penalty on other borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 526 |
Stock compensation costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,767 |
Gain on sale of other investments | ' | ' | ' | ' | ' | ' | ' | ' | -161 | ' | ' |
Tax benefit from stock plans | ' | ' | ' | ' | ' | ' | ' | ' | -5,522 | -462 | -717 |
Net change in other assets | ' | ' | ' | ' | ' | ' | ' | ' | 293,153 | 322,361 | 73,797 |
Net change in other liabilities | ' | ' | ' | ' | ' | ' | ' | ' | -13,011 | -259 | -3,709 |
Net cash provided by operating activities | ' | ' | ' | ' | ' | ' | ' | ' | 286,651 | 318,099 | 67,419 |
Purchases of: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investment securities available-for-sale | ' | ' | ' | ' | ' | ' | ' | ' | -69,986 | ' | ' |
Proceeds from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption of certificates of deposit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 198 |
Net cash used in investing activities | ' | ' | ' | ' | ' | ' | ' | ' | -69,986 | ' | 198 |
Payment for: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayment of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | -10,310 | ' | -23,918 |
Repurchase of vested shares due to employee tax liability | ' | ' | ' | ' | ' | ' | ' | ' | -13,833 | -3,012 | -649 |
Cash dividends on preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | -3,428 | -6,857 | -6,857 |
Cash dividends on common stock | ' | ' | ' | ' | ' | ' | ' | ' | -82,862 | -57,361 | -23,822 |
Repurchase of common stock warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -14,500 |
Repurchase of shares of treasury stock pursuant to the Stock Repurchase Plan | ' | ' | ' | ' | ' | ' | ' | ' | -199,992 | -199,950 | ' |
Proceeds from: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in long-term borrowings | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' |
Issuance of common stock pursuant to various stock plans and agreements | ' | ' | ' | ' | ' | ' | ' | ' | 3,683 | 3,821 | 5,726 |
Tax benefit from stock plans | ' | ' | ' | ' | ' | ' | ' | ' | 5,522 | 462 | 717 |
Net cash provided by (used in) financing activities | ' | ' | ' | ' | ' | ' | ' | ' | -201,220 | -262,897 | -63,303 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | ' | ' | ' | ' | ' | ' | ' | ' | 15,445 | 55,202 | 4,314 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | ' | ' | ' | 64,489 | ' | ' | ' | 9,287 | 64,489 | 9,287 | 4,973 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 79,934 | ' | ' | ' | 64,489 | ' | ' | ' | 79,934 | 64,489 | 9,287 |
Cash paid during the year for: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest | ' | ' | ' | ' | ' | ' | ' | ' | 3,292 | 3,112 | 5,167 |
Noncash investing and financing activities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of preferred stock to common stock | ' | ' | ' | ' | ' | ' | ' | ' | 83,027 | ' | 31 |
Issuance of common stock to Board of Directors | ' | ' | ' | ' | ' | ' | ' | ' | $630 | $570 | $520 |
QUARTERLY_FINANCIAL_INFORMATIO2
QUARTERLY FINANCIAL INFORMATION (unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
QUARTERLY FINANCIAL INFORMATION (unaudited) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Interest and dividend income | $293,203 | $281,706 | $255,353 | $238,423 | $276,521 | $254,162 | $266,362 | $254,050 | $1,068,685 | $1,051,095 | $1,080,448 | |
Interest expense | 28,195 | 27,456 | 27,709 | 29,132 | 31,577 | 32,254 | 33,205 | 35,132 | 112,492 | 132,168 | 177,422 | |
Net interest income | 265,008 | 254,250 | 227,644 | 209,291 | 244,944 | 221,908 | 233,157 | 218,918 | 956,193 | 918,927 | 903,026 | |
Provision for (reversal of) loan losses, excluding covered loans | 6,286 | 4,535 | 8,277 | -762 | 13,773 | 13,321 | 16,595 | 16,479 | 17,780 | 64,912 | ' | |
Provision for loan losses on covered loans | -820 | -964 | 723 | 5,089 | -689 | 5,179 | -1,095 | 1,621 | 4,028 | 5,016 | 2,422 | |
Net interest income after provision for loan losses | 259,542 | 250,679 | 218,644 | 204,964 | 231,860 | 203,408 | 217,657 | 200,818 | 933,829 | 853,743 | 808,020 | |
Noninterest (loss) income | -36,594 | -41,421 | -12,354 | -2,099 | -18,454 | 2,751 | -11,655 | 21,740 | -92,468 | -5,618 | 10,924 | |
Noninterest expense | 124,384 | 100,352 | 94,420 | 96,355 | 105,206 | 100,956 | 101,608 | 114,763 | 415,511 | 422,533 | 435,610 | |
Income before provision for income taxes | 98,564 | 108,906 | 111,870 | 106,510 | 108,200 | 105,203 | 104,394 | 107,795 | 425,850 | 425,592 | 383,334 | |
Provision for income taxes | 22,782 | 35,749 | 37,855 | 34,419 | 36,300 | 34,093 | 33,837 | 39,712 | 130,805 | 143,942 | 138,100 | |
Net income | 75,782 | 73,157 | 74,015 | 72,091 | 71,900 | 71,110 | 70,557 | 68,083 | 295,045 | 281,650 | 245,234 | |
Preferred stock dividends | ' | ' | 1,714 | 1,714 | 1,715 | 1,714 | 1,714 | 1,714 | 3,428 | 6,857 | 6,857 | |
Net income available to common stockholders | $75,782 | $73,157 | $72,301 | $70,377 | $70,185 | $69,396 | $68,843 | $66,369 | $291,617 | $274,793 | $238,377 | |
Basic earnings per share | $0.55 | $0.53 | $0.52 | $0.51 | $0.50 | $0.49 | $0.48 | $0.46 | $2.11 | $1.92 | [1] | $1.62 |
Diluted earnings per share | $0.55 | $0.53 | $0.52 | $0.50 | $0.49 | $0.48 | $0.47 | $0.45 | $2.10 | $1.89 | [1] | $1.60 |
[1] | On April 1, 2012, the Company revised its calculation of earnings per share to account for participating securities under the two-class method. This revision to the earnings per share calculation does not have an impact to previous periods as the amounts are immaterial. |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 22, 2014 |
In Thousands, except Per Share data, unless otherwise specified | MetroCorp | MetroBank | Metro United Bank | Subsequent event | ||||
item | item | item | Dividend declared | |||||
Common stock | ||||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' | ' |
Number of branches | ' | ' | ' | ' | 18 | 12 | 6 | ' |
Number of subsidiaries | ' | ' | ' | ' | 2 | ' | ' | ' |
Total assets | $24,730,068 | $22,536,110 | $21,968,667 | ' | $1,620,000 | ' | ' | ' |
Total loans | 15,859,615 | 12,113,889 | ' | ' | 1,220,000 | ' | ' | ' |
Total deposits | 20,412,918 | 18,309,354 | ' | ' | 1,340,000 | ' | ' | ' |
Total equity | $2,364,225 | $2,382,122 | $2,311,743 | $2,113,931 | $179,200 | ' | ' | ' |
Dividend payable (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.18 |