DEBT AND SHAREHOLDERS’ EQUITY

Debt Redemptions

During the three and six months ended June 30, 2014, we redeemed $130 million and $255 million of long-term senior notes. For balances at June 30, 2014, during the remainder of 2014, long-term senior notes of $240.6 million mature in September 2014 and long-term senior notes of $44.3 million have optional early redemptions of $17.4 million in August 2014 and $26.9 million in November 2014. We have provided a notice of call for the notes in August 2014.

On May 15, 2014, we redeemed at maturity the entire 5.65% subordinated notes ($30.2 million par amount) and 5.65% convertible subordinated notes ($75.7 million par amount). For the remainder of 2014, subordinated debt of $75 million at June 30, 2014 matures in September 2014.

Accumulated Other Comprehensive Income

Changes in AOCI by component are as follows:



(In thousands)	Net unrealized gains (losses) on investment securities				Net unrealized gains (losses) on derivative instruments				Pension and post-retirement			Total
Six Months Ended June 30, 2014

Balance at December 31, 2013		$	(167,032	)		$	(217	)	$	(24,852	)	$	(192,101	)

Other comprehensive income before reclassifications, net of tax		81,671				1,519			—			83,190
Amounts reclassified from AOCI, net of tax		(27,368		)		(558		)	—			(27,926		)
Other comprehensive income		54,303				961			—			55,264
Balance at June 30, 2014		$	(112,729	)		$	744		$	(24,852	)	$	(136,837	)

Income tax expense included in other comprehensive income		$	43,595			$	638		$	—		$	44,233

Six Months Ended June 30, 2013

Balance at December 31, 2012		$	(397,616	)		$	1,794		$	(50,335	)	$	(446,157	)

Other comprehensive income (loss) before reclassifications, net of tax		65,212				(3		)	—			65,209
Amounts reclassified from AOCI, net of tax		7,818				(1,426		)	—			6,392
Other comprehensive income (loss)		73,030				(1,429		)	—			71,601
Balance at June 30, 2013		$	(324,586	)		$	365		$	(50,335	)	$	(374,556	)

Income tax expense (benefit) included in other comprehensive income (loss)		$	43,986			$	(959	)	$	—		$	43,027



	Amounts reclassified from AOCI ¹												Statement of income (SI) Balance sheet (BS)
(In thousands)	Three Months Ended June 30,						Six Months Ended June 30,
Details about AOCI components	2014			2013			2014			2013				Affected line item

Net realized gains (losses) on investment securities	$	5,026		$	(1,153	)	$	35,940		$	2,146		SI	Fixed income securities gains (losses), net
Income tax expense	1,922			(441		)	7,996			821
	3,104			(712		)	27,944			1,325

Net unrealized losses on investment securities	—			(4,217		)	(27		)	(13,932		)	SI	Net impairment losses on investment securities
Income tax benefit	—			(1,668		)	(10		)	(5,384		)
	—			(2,549		)	(17		)	(8,548		)
Accretion of securities with noncredit-related impairment losses not expected to be sold	(462		)	(637		)	(944		)	(981		)	BS	Investment securities, held-to-maturity
Deferred income taxes	189			251			385			386			BS	Other assets
	$	2,831		$	(3,647	)	$	27,368		$	(7,818	)

Net unrealized gains on derivative instruments	$	577		$	777		$	928		$	2,382		SI	Interest and fees on loans
Income tax expense	229			308			370			956
	$	348		$	469		$	558		$	1,426

¹ Negative reclassification amounts indicate decreases to earnings in the statement of income and increases to balance sheet assets. The opposite applies to positive reclassification amounts.

Basel III Capital Framework

The Federal Reserve has published final rules establishing a new capital framework for U.S. banking organizations. These new rules implement the Basel Committee’s December 2010 framework, commonly referred to as Basel III, which will become effective for the Company on January 1, 2015, with the fully phased-in requirements becoming effective in 2018.

Among other things, the new rules revise capital adequacy guidelines and the regulatory framework for prompt corrective action, and they modify specified quantitative measures of our assets, liabilities, and capital. The impact of these new rules will require the Company to maintain capital in excess of current “well-capitalized” regulatory standards, and in excess of historical levels.

Subsequent Event

On July 25, 2014, the Federal Reserve announced that it has not objected to the Company’s 2014 resubmitted Capital Plan. The post-stress Tier 1 common ratio was computed under the resubmitted plan at 5.1%, which exceeded the minimum 5.0% requirement. Our original 2014 Capital Plan did not meet this minimum requirement. The Company’s resubmitted Capital Plan included the issuance of $400 million of new common equity in the third quarter of 2014. However, we determined to increase this amount, and on July 28, 2014, we issued $525 million of common stock, which consisted of approximately 17.6 million shares at a price of $29.80 per share. Net of commissions and fees, this issuance added approximately $516 million to common stock in the third quarter of 2014. In addition, we granted the underwriters a 30-day option to purchase up to an additional 15% of the amount of common stock offered, or approximately $78.7 million of common stock. As of the date of this filing, the underwriters had not exercised this option.