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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Summary of assets measured at fair value on a recurring basis

For assets and liabilities measured 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
June 30, 2019
Investment securities – carried at fair value:
Government and government-sponsored enterprises	$	—	$	295,726	$	—	$	295,726
State and political subdivisions	—		444,085		—		444,085
Residential mortgage-backed securities	—		353,622		—		353,622
Collateralized mortgage obligations	—		1,939,695		—		1,939,695
Corporate bonds	—		289,312		—		289,312
Trust preferred securities	—		47,432		—		47,432
Total investment securities – carried at fair value	—		3,369,872		—		3,369,872
Loans held-for-sale	—		33,019		—		33,019
Loan servicing rights	—		—		60,658		60,658
Derivative assets:
Customer-initiated derivatives	—		69,024		—		69,024
Interest rate lock commitments	—		2,687		—		2,687
Power Equity CD	—		751		—		751
Risk management derivatives	—		606		—		606
Total derivatives	—		73,068		—		73,068
Total assets at fair value	$	—	$	3,475,959	$	60,658	$	3,536,617
Derivative liabilities:
Customer-initiated derivatives	—		70,707		—		70,707
Forward contracts related to mortgage loans to be delivered for sale	—		661		—		661
Power Equity CD	—		751		—		751
Risk management derivatives	—		25,060		—		25,060
Total derivatives	—		97,179		—		97,179
Total liabilities at fair value	$	—	$	97,179	$	—	$	97,179



(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

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

The following table summarizes the changes in Level 3 assets measured at fair value on a recurring basis.



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
(Dollars in thousands)	Loan servicing rights
Balance, beginning of period	$	64,701		$	68,837		$	71,013		$	63,841
Gains (losses):
Recorded in earnings (realized):
Recorded in "Net gain on sale of loans and other mortgage banking revenue"	(6,152		)	(757		)	(14,597		)	2,272
New originations	2,109			2,284			4,242			4,251
Balance, end of period	$	60,658		$	70,364		$	60,658		$	70,364

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

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



(Dollars in thousands)	June 30, 2019		December 31, 2018
Aggregate fair value	$	33,019	$	85,030
Contractual balance	31,799		82,080
Unrealized gain	1,220		2,950

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

The total amount of gains from loans held-for-sale included in the Consolidated Statements of Income was as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2019		2018		2019			2018
Interest income⁽¹⁾	$	336	$	445	$	969		$	821
Change in fair value⁽²⁾	345		484		(1,730		)	(216		)
Net gain on sales of loans⁽²⁾	5,388		4,023		11,538			5,531
Total included in earnings	$	6,069	$	4,952	$	10,777		$	6,136


⁽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

Summary of assets measured at fair value on a nonrecurring basis

For assets measured at fair 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)
June 30, 2019
Impaired loans	$	76,186
Other real estate and repossessed assets	3,463
Total	$	79,649
December 31, 2018
Impaired loans	$	63,247
Other real estate and repossessed assets	883
Total	$	64,130

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

The following table presents 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 June 30, 2019		Valuation Technique	Significant Unobservable Inputs	Range
Impaired loans	$	76,186	Appraisal of collateral	Discount for type of collateral and age of appraisal	20%-30%
Other real estate and repossessed assets	3,463		Appraisal of property	Discount for type of property and age of appraisal	20%-30%

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

A summary of carrying amounts 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.



	Level in Fair Value Measurement Hierarchy	June 30, 2019				December 31, 2018
(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	$	565,546	$	575,042	$	623,599	$	618,232
Held-to-maturity	Level 3	500		460		500		440
Net loans⁽¹⁾	Level 3	15,745,936		15,717,256		15,159,795		14,907,789
Financial liabilities:
Time deposits	Level 2	$	4,360,014	$	4,354,554	$	4,074,248	$	4,041,212
Collateralized customer deposits	Level 2	291,671		291,513		382,687		382,370
Short-term borrowings	Level 2	2,615,000		2,614,777		2,035,000		2,034,719
Long-term borrowings	Level 2	426,069		431,043		426,002		423,258

⁽¹⁾

Included $76.2 million and $63.2 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2019 and December 31, 2018, respectively.