FAIR VALUE MEASUREMENT AND FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of assets (liabilities) measured at fair value on a recurring basis

The following tables present financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015:




	Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of September 30, 2016
($ in thousands)	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale investment securities:
U.S. Treasury securities	$	456,448		$	456,448	$	—		$	—
U.S. government agency and U.S. government sponsored enterprise debt securities	383,331			—		383,331			—
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities	326,818			—		326,818			—
Residential mortgage-backed securities	1,194,838			—		1,194,838			—
Municipal securities	152,293			—		152,293			—
Non-agency residential mortgage-backed securities:
Investment grade	52,957			—		52,957			—
Corporate debt securities:
Investment grade	281,987			—		281,987			—
Non-investment grade	8,778			—		8,778			—
Foreign bonds:
Investment grade	337,434			—		337,434			—
Other securities	41,740			31,939		9,801			—
Total available-for-sale investment securities	$	3,236,624		$	488,387	$	2,748,237		$	—

Derivative assets:
Interest rate swaps and options	$	144,293		$	—	$	144,293		$	—
Foreign exchange contracts	$	6,065		$	—	$	6,065		$	—

Derivative liabilities:
Interest rate swaps on certificates of deposit	$	(2,137	)	$	—	$	(2,137	)	$	—
Foreign currency forward contracts	$	(78	)	$	—	$	(78	)	$	—
Interest rate swaps and options	$	(146,623	)	$	—	$	(146,623	)	$	—
Foreign exchange contracts	$	(3,334	)	$	—	$	(3,334	)	$	—
Credit risk participation agreements (“RPAs”)	$	(8	)	$	—	$	(8	)	$	—




	Assets (Liabilities) Measured at Fair Value on a Recurring Basis as of December 31, 2015
($ in thousands)	Fair Value Measurements			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Available-for-sale investment securities:
U.S. Treasury securities	$	998,515		$	998,515	$	—		$	—
U.S. government agency and U.S. government sponsored enterprise debt securities	768,849			—		768,849			—
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
Commercial mortgage-backed securities	351,662			—		351,662			—
Residential mortgage-backed securities	997,396			—		997,396			—
Municipal securities	175,649			—		175,649			—
Non-agency residential mortgage-backed securities:
Investment grade	62,393			—		62,393			—
Corporate debt securities:
Investment grade	279,432			—		279,432			—
Non-investment grade	9,642			—		9,642			—
Foreign bonds:
Investment grade	89,795			4,514		85,281			—
Other securities	39,893			31,121		8,772			—
Total available-for-sale investment securities	$	3,773,226		$	1,034,150	$	2,739,076		$	—

Derivative assets:
Foreign currency forward contracts	$	2,365		$	—	$	2,365		$	—
Interest rate swaps and options	$	67,215		$	—	$	67,215		$	—
Foreign exchange contracts	$	10,254		$	—	$	10,254		$	—

Derivative liabilities:
Interest rate swaps on certificates of deposit	$	(5,213	)	$	—	$	(5,213	)	$	—
Interest rate swaps and options	$	(67,325	)	$	—	$	(67,325	)	$	—
Foreign exchange contracts	$	(9,350	)	$	—	$	(9,350	)	$	—
RPAs	$	(4	)	$	—	$	(4	)	$	—

Reconciliation of major asset and liability categories measured at fair value on a recurring basis using significant unobservable inputs (level3)

The following table presents 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 three and nine months ended September 30, 2015:




($ in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
	2015				2015
	Corporate Debt Securities: Non-Investment Grade		Embedded Derivative Liabilities		Corporate Debt Securities: Non-Investment Grade			Embedded Derivative Liabilities
Beginning balance	$	—	$	—	$	6,528		$	(3,392	)
Total gains (losses) for the period:
Included in earnings ⁽¹⁾	—		—		960			(20		)
Included in other comprehensive income ⁽²⁾	—		—		922			—
Sales and settlements:
Sales	—		—		(7,219		)	—
Settlements	—		—		(98		)	3,412
Transfers in and/or out of Level 3	—		—		(1,093		)	—
Ending balance	$	—	$	—	$	—		$	—
Changes in unrealized losses included in earnings relating to assets and liabilities held for the period	$	—	$	—	$	—		$	—


(1)	Net gains or losses (realized and unrealized) of corporate debt securities and embedded derivative liabilities are included in Net gains on sales of available-for-sale investment securities and Other operating expense, respectively, on the Consolidated Statements of Income.


(2)	Unrealized gains or losses on available-for-sale investment securities are reported in Other comprehensive income, net of tax, on the Consolidated Statements of Comprehensive Income.

Schedule of assets measured at fair value on a nonrecurring basis

The following tables present the carrying amounts of assets included in the Consolidated Balance Sheets that had fair value changes during the year-to-date period measured on a nonrecurring basis:




	Assets Measured at Fair Value on a Nonrecurring Basis as of September 30, 2016
($ in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non-PCI impaired loans:
Commercial real estate (“CRE”)	$	20,904	$	—	$	—	$	20,904
Commercial and industrial (“C&I”)	58,854		—		—		58,854
Residential	2,305		—		—		2,305
Consumer	594		—		—		594
Total non-PCI impaired loans	$	82,657	$	—	$	—	$	82,657
OREO	$	2,760	$	—	$	—	$	2,760
Loans held-for-sale	$	26,931	$	—	$	26,931	$	—




	Assets Measured at Fair Value on a Nonrecurring Basis as of December 31, 2015
($ in thousands)	Fair Value Measurements		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Non-PCI impaired loans:
CRE	$	17,252	$	—	$	—	$	17,252
C&I	35,558		—		—		35,558
Residential	16,472		—		—		16,472
Consumer	1,180		—		—		1,180
Total non-PCI impaired loans	$	70,462	$	—	$	—	$	70,462
OREO	$	4,929	$	—	$	—	$	4,929
Loans held-for-sale	$	29,238	$	—	$	29,238	$	—

Schedule of fair value adjustments of assets measured on a nonrecurring basis recognized

The following table presents fair value adjustments of assets measured on a nonrecurring basis recognized during the three and nine months ended and which were included in the Consolidated Balance Sheets as of September 30, 2016 and 2015:




	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2016			2015			2016			2015
Non-PCI impaired loans:
CRE	$	(282	)	$	101		$	1,741		$	(845	)
C&I	77			(707		)	(5,497		)	(9,806		)
Residential	(14		)	(314		)	(14		)	(565		)
Consumer	—			(59		)	17			(59		)
Total non-PCI impaired loans	$	(219	)	$	(979	)	$	(3,753	)	$	(11,275	)
OREO	$	(41	)	$	(1,556	)	$	(994	)	$	(1,739	)
Loans held-for-sale	$	—		$	—		$	(2,351	)	$	(517	)

Schedule of the carrying and fair values per the fair value hierarchy of certain financial instruments

The following tables present the carrying and fair values per the fair value hierarchy of certain financial instruments, excluding those measured at fair value on a recurring basis, as of September 30, 2016 and December 31, 2015:




($ in thousands)	September 30, 2016
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	1,666,832	$	1,666,832	$	—	$	—	$	1,666,832
Short-term investments	$	307,473	$	—	$	307,473	$	—	$	307,473
Resale agreements ⁽¹⁾	$	1,500,000	$	—	$	1,496,965	$	—	$	1,496,965
Held-to-maturity investment security	$	154,461	$	—	$	—	$	154,296	$	154,296
Loans held-for-sale	$	47,719	$	—	$	47,719	$	—	$	47,719
Loans held-for-investment, net	$	24,476,150	$	—	$	—	$	24,349,603	$	24,349,603
Investment in FHLB stock	$	17,250	$	—	$	17,250	$	—	$	17,250
Investment in Federal Reserve Bank stock	$	55,355	$	—	$	55,355	$	—	$	55,355
Accrued interest receivable	$	88,343	$	—	$	88,343	$	—	$	88,343
Financial liabilities:
Customer deposits:
Demand, interest checking, savings and money market deposits	$	22,994,054	$	—	$	22,994,054	$	—	$	22,994,054
Time deposits	$	5,598,387	$	—	$	5,603,591	$	—	$	5,603,591
Short-term borrowings	$	36,992	$	—	$	36,992	$	—	$	36,992
FHLB advances	$	321,084	$	—	$	333,437	$	—	$	333,437
Repurchase agreements ⁽¹⁾	$	200,000	$	—	$	263,948	$	—	$	263,948
Long-term debt	$	191,265	$	—	$	195,801	$	—	$	195,801
Accrued interest payable	$	7,516	$	—	$	7,516	$	—	$	7,516


(1)	Resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. As of September 30, 2016, $250.0 million out of $450.0 million of repurchase agreements was eligible for netting against resale agreements.




($ in thousands)	December 31, 2015
($ in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	1,360,887	$	1,360,887	$	—	$	—	$	1,360,887
Short-term investments	$	299,916	$	—	$	299,916	$	—	$	299,916
Resale agreements ⁽¹⁾	$	1,600,000	$	—	$	1,533,961	$	—	$	1,533,961
Loans held-for-sale	$	31,958	$	—	$	31,958	$	—	$	31,958
Loans held-for-investment, net	$	23,378,789	$	—	$	—	$	23,000,817	$	23,000,817
Investment in FHLB stock	$	28,770	$	—	$	28,770	$	—	$	28,770
Investment in Federal Reserve Bank stock	$	54,932	$	—	$	54,932	$	—	$	54,932
Accrued interest receivable	$	89,243	$	—	$	89,243	$	—	$	89,243
Financial liabilities:
Customer deposits:
Demand, interest checking, savings and money market deposits	$	20,859,086	$	—	$	20,859,086	$	—	$	20,859,086
Time deposits	$	6,616,895	$	—	$	6,606,942	$	—	$	6,606,942
FHLB advances	$	1,019,424	$	—	$	1,032,000	$	—	$	1,032,000
Long-term debt	$	206,084	$	—	$	186,593	$	—	$	186,593
Accrued interest payable	$	8,848	$	—	$	8,848	$	—	$	8,848


(1)	Resale and repurchase agreements are reported net pursuant to ASC 210-20-45, Balance Sheet Offsetting. As of December 31, 2015, the carrying amount of $450.0 million of repurchase agreements was eligible for netting against resale agreements, resulting in no repurchase agreements’ balances reported.

Fair Value, Measurements, Nonrecurring

Quantitative information

Schedule of quantitative information about significant unobservable inputs used in the valuation of assets classified as Level 3

The following table presents quantitative information about significant unobservable inputs used in the valuation of assets measured on a nonrecurring basis classified as Level 3 as of September 30, 2016 and December 31, 2015:




($ in thousands)	Fair Value Measurements (Level 3)		Valuation Technique(s)	Unobservable Input(s)	Range of Inputs	Weighted Average
September 30, 2016
Non-PCI impaired loans	$	55,097	Discounted cash flow	Discount rate	0% — 45%	4%
	$	27,560	Market comparables	Discount rate ⁽¹⁾	0% — 100%	2%
OREO	$	2,760	Appraisal	Selling cost	8%	8%
December 31, 2015
Non-PCI impaired loans	$	27,522	Discounted cash flow	Discount rate	0% — 87%	30%
	$	42,940	Market comparables	Discount rate ⁽¹⁾	0% — 100%	17%
OREO	$	4,929	Appraisal	Selling cost	8%	8%


(1)	Discount rate is adjusted for factors such as liquidation cost of collateral and selling cost.