Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present the balances of assets and liabilities measured at fair value on a recurring basis for the periods presented:



	December 31, 2012
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	219,487	$	—	$	219,487	$	—
U.S. Government agencies	990,039		—		990,039		—
Municipal	110,471		—		79,701		30,770
Corporate notes and other	154,806		—		154,806		—
Mortgage-backed	271,574		—		271,574		—
Equity securities	49,699		—		27,530		22,169
Trading account securities	583		—		583		—
Mortgage loans held-for-sale	385,033		—		385,033		—
Mortgage servicing rights	6,750		—		—		6,750
Nonqualified deferred compensations assets	5,532		—		5,532		—
Derivative assets	53,906		—		53,906		—
Total	$	2,247,880	$	—	$	2,188,191	$	59,689
Derivative liabilities	$	57,751	$	—	$	57,751	$	—

	December 31, 2011
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Available-for-sale securities
U.S. Treasury	$	16,173	$	—	$	16,173	$	—
U.S. Government agencies	765,916		—		765,916		—
Municipal	60,098		—		35,887		24,211
Corporate notes and other	169,936		—		169,936		—
Mortgage-backed	248,551		—		248,551		—
Equity securities	31,123		—		12,152		18,971
Trading account securities	2,490		—		2,490		—
Mortgage loans held-for-sale	306,838		—		306,838		—
Mortgage servicing rights	6,700		—		—		6,700
Nonqualified deferred compensations assets	4,299		—		4,299		—
Derivative assets	38,607		—		38,607		—
Total	$	1,650,731	$	—	$	1,600,849	$	49,882
Derivative liabilities	$	50,081	$	—	$	50,081	$	—

Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis

The changes in Level 3 assets measured at fair value on a recurring basis during the year ended December 31, 2012 are summarized as follows:



				Equity securities		Mortgage servicing rights
(Dollars in thousands)	Municipal			Equity securities		Mortgage servicing rights
Balance at January 1, 2012	$	24,211		$	18,971	$	6,700
Total net gains (losses) included in:
Net income ⁽¹⁾	—			—		50
Other comprehensive income	27			3,198		—
Purchases	20,967			—		—
Issuances	—			—		—
Sales	—			—		—
Settlements	(12,033		)	—		—
Net transfers out of Level 3 ⁽²⁾	(2,402		)	—		—
Balance at December 31, 2012	$	30,770		$	22,169	$	6,750


(1)	Changes in the balance of mortgage servicing rights are recorded as a component of mortgage banking revenue in non-interest income.


(2)	During the first quarter of 2012, one municipal security was transferred out of Level 3 into Level 2 as observable market information was available that market participants would use in pricing these securities. Transfers out of Level 3 are recognized at the end of the reporting period.

The changes in Level 3 assets measured at fair value on a recurring basis during the year ended December 31, 2011 are summarized as follows:



(Dollars in thousands)	Municipal			Corporate notes and other debt			Mortgage- backed			Equity securities			Trading Account Securities			Mortgage servicing rights
Balance at January 1, 2011	$	16,416		$	9,841		$	2,460		$	28,672		$	4,372		$	8,762
Total net gains (losses) included in:
Net income ⁽¹⁾	—			(274		)	(53		)	—			—			(2,062		)
Other comprehensive income	77			—			—			(6,101		)	—			—
Purchases	26,425			7,246			1,126			1,800			—			—
Issuances	—			—			—			—			—			—
Sales	(19,469		)	—			—			—			(4,372		)	—
Settlements	(1,230		)	(333		)	(116		)	—			—			—
Net transfers into (out of) Level 3 ⁽²⁾	1,992			(16,480		)	(3,417		)	(5,400		)	—			—
Balance at December 31, 2011	$	24,211		$	—		$	—		$	18,971		$	—		$	6,700


(1)	Income for Corporate notes and other debt and mortgage-backed are recognized as a component of interest income on securities. Additionally, changes in the balance of mortgage servicing rights are recorded as a component of mortgage banking revenue in non-interest income.

(2)

The transfer of available for sale securities into Level 3 is the result of the use of significant inputs that are unobservable in the market due to limited activity or a less liquid market. Transfers out of Level 3 result from the availability and use of observable market information that market participants would use in pricing these securities. Transfers into/out of Level 3 are recognized at the end of the reporting period.

Summary of Assets Measured at Fair Value on a Nonrecurring Basis

For assets measured at fair value on a nonrecurring basis that were still held in the balance sheet at the end of the period, the following table provides the carrying value of the related individual assets or portfolios at December 31, 2012.



	December 31, 2012								Twelve Months Ended December 31, 2012 Fair Value Losses (Gains) Recognized
(Dollars in thousands)	Total		Level 1		Level 2		Level 3
Impaired loans	$	98,426	$	—	$	—	$	98,426	$	30,143
Other real estate owned	62,891		—		—		62,891		24,573
Mortgage loans held-for-sale, at lower of cost or market	27,167		—		27,167		—		—
Total	$	188,484	$	—	$	27,167	$	161,317	$	54,716

Schedule of Valuation Techniques and Significant Unobservable Inputs Used to Measure Both Recurring and Nonrecurring

The valuation techniques and significant unobservable inputs used to measure both recurring and non-recurring Level 3 fair value measurements at December 31, 2012 were as follows:

(Dollars in thousands)

Fair Value

Valuation Methodology

Significant Unobservable Input

Range

of Inputs

Weighted

Average

of Inputs

Impact to valuation

from an increased or

higher input value

Measured at fair value on a recurring basis:

Municipal Securities

30,770

Bond pricing

Equivalent rating

BBB-AAA

N/A

Increase

Other Equity Securities

22,169

Discounted cash flows

Discount rate

1.85%-2.43%

2.09%

Decrease

Mortgage Servicing Rights

6,750

Discounted cash flows

Discount rate

10%-13.5%

10.21%

Decrease

Constant prepayment rate (CPR)

19%-24%

20.72%

Decrease

Measured at fair value on a non-recurring basis:

Impaired loans—collateral based

98,426

Appraisal value

N/A

Other real estate owned

62,891

Appraisal value

Property specific impairment adjustment

0%-49%

6.58%

Decrease

Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments

The Company is required under applicable accounting guidance to report the fair value of all financial instruments on the consolidated statements of condition, including those financial instruments carried at cost. The carrying amounts and estimated fair values of the Company’s financial instruments as of the dates shown:



	December 31, 2012				December 31, 2011
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Assets:
Cash and cash equivalents	$	315,028	$	315,028	$	169,704	$	169,704
Interest bearing deposits with banks	1,035,743		1,035,743		749,287		749,287
Available-for-sale securities	1,796,076		1,796,076		1,291,797		1,291,797
Trading account securities	583		583		2,490		2,490
Brokerage customer receivables	24,864		24,864		27,925		27,925
Federal Home Loan Bank and Federal Reserve Bank stock, at cost	79,564		79,564		100,434		100,434
Mortgage loans held-for-sale, at fair value	385,033		385,033		306,838		306,838
Mortgage loans held-for-sale, at lower of cost or market	27,167		27,568		13,686		13,897
Total loans	12,389,030		13,053,101		11,172,745		11,590,729
Mortgage servicing rights	6,750		6,750		6,700		6,700
Nonqualified deferred compensation assets	5,532		5,532		4,299		4,299
Derivative assets	53,906		53,906		38,607		38,607
FDIC indemnification asset	208,160		208,160		344,251		344,251
Accrued interest receivable and other	157,157		157,157		147,207		147,207
Total financial assets	$	16,484,593	$	17,149,065	$	14,375,970	$	14,794,165
Financial Liabilities
Non-maturity deposits	$	9,447,633	9,447,633		$	7,424,367	$	7,424,367
Deposits with stated maturities	4,980,911		5,013,757		4,882,900		4,917,740
Notes payable	2,093		2,093		52,822		52,822
Federal Home Loan Bank advances	414,122		425,431		474,481		507,368
Subordinated notes	15,000		15,000		35,000		35,000
Other borrowings	274,411		274,411		443,753		443,753
Secured borrowings owed to securitization investors	—		—		600,000		603,294
Junior subordinated debentures	249,493		250,428		249,493		185,199
Derivative liabilities	57,751		57,751		50,081		50,081
Accrued interest payable and other	11,589		11,589		12,952		12,952
Total financial liabilities	$	15,453,003	$	15,498,093	$	14,225,849	$	14,232,576

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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- Definition

The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis.

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