Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Summary of assets measured at fair value on a recurring basis

easured at fair value on a recurring basis, quantitative disclosures about the fair value measurements for each major category of assets and liabilities follow:



(Dollars in thousands)	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2018
Investment securities — carried at fair value:
Government and government-sponsored enterprises	$	—	$	351,700	$	—	$	351,700
State and political subdivisions	—		516,286		—		516,286
Residential mortgage-backed securities	—		213,428		—		213,428
Collateralized mortgage obligations	—		1,601,298		—		1,601,298
Corporate bonds	—		293,063		—		293,063
Trust preferred securities	—		46,057		—		46,057
Total investment securities — carried at fair value	—		3,021,832		—		3,021,832
Loans held-for-sale	—		85,030		—		85,030
Loan servicing rights	—		—		71,013		71,013
Derivative assets:
Customer-initiated derivatives	—		26,680		—		26,680
Interest rate lock commitments	—		1,049		—		1,049
Power Equity CD	—		718		—		718
Risk management derivatives	—		10,148		—		10,148
Total derivatives	—		38,595		—		38,595
Total assets at fair value	$	—	$	3,145,457	$	71,013	$	3,216,470
Derivative liabilities:
Customer-initiated derivatives	$	—	$	27,664	$	—	$	27,664
Forward contracts related to mortgage loans to be delivered for sale	—		719		—		719
Power Equity CD	—		718		—		718
Risk management derivatives	—		3,278		—		3,278
Total derivatives	—		32,379		—		32,379
Total liabilities at fair value	$	—	$	32,379	$	—	$	32,379



(Dollars in thousands)	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
December 31, 2017
Investment securities — carried at fair value:
Government and government-sponsored enterprises	$	—	$	202,916	$	—	$	202,916
State and political subdivisions	—		345,970		—		345,970
Residential mortgage-backed securities	—		150,131		—		150,131
Collateralized mortgage obligations	—		1,033,845		—		1,033,845
Corporate bonds	—		192,794		—		192,794
Trust preferred securities	—		36,066		—		36,066
Preferred stock	—		1,824		—		1,824
Total investment securities — carried at fair value	—		1,963,546		—		1,963,546
Loans held-for-sale	—		52,133		—		52,133
Loan servicing rights	—		—		63,841		63,841
Derivative assets:
Customer-initiated derivatives	—		9,376		—		9,376
Interest rate lock commitments	—		1,222		—		1,222
Power Equity CD	—		2,184		—		2,184
Risk management derivatives	—		5,899		—		5,899
Total derivatives	—		18,681		—		18,681
Total assets at fair value	$	—	$	2,034,360	$	63,841	$	2,098,201
Derivative liabilities:
Customer-initiated derivatives	—		10,139		—		10,139
Forward contracts related to mortgage loans to be delivered for sale	—		34		—		34
Power Equity CD	—		2,184		—		2,184
Total derivatives	—		12,357		—		12,357
Total liabilities at fair value	$	—	$	12,357	$	—	$	12,357

There were no transfers between levels within the fair value hierarchy during the years ended December 31, 2018 and 2017.

The following table summa

Summary of changes in Level 3 assets measured at fair value on a recurring basis

es the changes in Level 3 assets measured at fair value on a recurring basis.



	Year Ended December 31,
	2018			2017			2016
(Dollars in thousands)	Loan servicing rights
Balance, beginning of period	$	63,841		$	48,085		$	—
Additions due to acquisition	—			—			42,462
Transfer in based on new accounting policy election⁽¹⁾	—			15,891			—
Gains (losses):
Recorded in earnings (realized):
Recorded in "Net gain on sale of loans and other mortgage banking revenue"	(1,054		)	(8,880		)	4,593
New originations	8,226			8,745			1,030
Balance, end of period	$	71,013		$	63,841		$	48,085


⁽¹⁾	Refer to Note 1, Summary of Significant Accounting Policies, for further details.

The Corporation has elected

Schedule of aggregate fair value contractual balance and gain (loss) for loans held-for-sale

ntractual balance (including accrued interest), and gain or loss for loans held-for-sale carried at fair value option was as follows:



	December 31,
(Dollars in thousands)	2018		2017
Aggregate fair value	$	85,030	$	52,133
Contractual balance	82,080		50,597
Unrealized gain	2,950		1,536

The total amount of gains

Amount of gains (losses) from loans held for sale included in the Consolidated Statements of Income

om loans held-for-sale included in the Consolidated Statements of Income was as follows:



	Year Ended December 31,
(Dollars in thousands)	2018		2017		2016
Interest income⁽¹⁾	$	2,788	$	2,540	$	1,606
Change in fair value⁽²⁾	1,414		715		39
Net gain on sales of loans⁽²⁾	12,173		31,734		15,686
Total included in earnings	$	16,375	$	34,989	$	17,331


⁽¹⁾	Included in "Interest and fees on loans" in the Consolidated Statements of Income.


⁽²⁾	Included in "Net gain on sale of loans and other mortgage banking revenue" in the Consolidated Statements of Income.

Assets and Liabilities Reco

Summary of assets measured at fair value on a nonrecurring basis

value on a nonrecurring basis, quantitative disclosures about fair value measurements for each major category of assets follow:



(Dollars in thousands)	Significant Unobservable Inputs (Level 3)
December 31, 2018
Impaired loans	$	63,247
Other real estate and repossessed assets	883
Total	$	64,130
December 31, 2017
Impaired loans	$	70,619
Other real estate and repossessed assets	2,899
Total	$	73,518

There were no liabilities

Additional information about significant unobservable inputs used in the fair value measurement of financial assets

additional information about the significant unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized within the Level 3 of the fair value hierarchy:



(Dollars in thousands)	Fair Value at December 31, 2018		Valuation Technique	Significant Unobservable Inputs	Range
Impaired loans	$	63,247	Appraisal of collateral	Discount for type of collateral and age of appraisal	20%-30%
Other real estate and repossessed assets	883		Appraisal of property	Discount for type of property and age of appraisal	20%-30%

Disclosures About Fair Valu

Summary of carrying amounts and estimated fair values of the financial instruments

s and estimated fair values of the Corporation's financial instruments not recorded at fair value in their entirety on a recurring basis on the Consolidated Statements of Financial Position are disclosed in the table below:



		December 31,
	Level in Fair Value Measurement Hierarchy	2018				2017
(Dollars in thousands)	Level in Fair Value Measurement Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Investment securities:
Held-to-maturity	Level 2	$	623,599	$	618,232	$	676,593	$	662,516
Held-to-maturity	Level 3	500		440		500		390
Net loans⁽¹⁾	Level 3	15,159,795		14,907,789		14,063,380		14,114,545
Financial liabilities:
Time deposits	Level 2	$	4,074,248	$	4,041,212	$	3,217,207	$	3,225,847
Collateralized customer deposits	Level 2	382,687		382,370		415,236		415,236
Short-term borrowings	Level 2	2,035,000		2,034,719		2,000,000		1,999,137
Long-term borrowings	Level 2	426,002		423,258		372,882		367,984


⁽¹⁾	Included $63.2 million and $70.6 million of impaired loans recorded at fair value on a nonrecurring basis at December 31, 2018 and 2017, respectively.

The short-term nature of c