Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Balances of Assets and Liabilities Measured at Fair Value on a Recurring and Non-recurring Basis

The balances of assets measured at fair value on a non-recurring basis were as follows. There were no liabilities measured at fair value on a non-recurring basis at September 30, 2020 and December 31, 2019.



(In thousands)	Level 1		Level 2		Level 3		Total
At September 30, 2020
Loans and leases	$	—	$	—	$	261,885	$	261,885
Loan servicing rights	—		—		38,253		38,253
Other real estate owned	—		—		15,730		15,730
Repossessed and returned assets	—		10,077		—		10,077
Total non-recurring fair value measurements	$	—	$	10,077	$	315,868	$	325,945
At December 31, 2019
Loans and leases	$	—	$	—	$	141,199	$	141,199
Loan servicing rights	—		—		56,298		56,298
Other real estate owned	—		—		17,577		17,577
Repossessed and returned assets	—		6,968		—		6,968
Total non-recurring fair value measurements	$	—	$	6,968	$	215,074	$	222,042

The balances of assets and liabilities measured at fair value on a recurring basis were as follows:



	September 30, 2020
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities available-for-sale	$	—	$	7,445,696	$	467	$	7,446,163
Loans held-for-sale	—		460,172		—		460,172
Interest-only strips	—		—		9,555		9,555
Derivative assets:⁽¹⁾
Interest rate contracts	—		279,710		—		279,710
Risk participation agreements	—		163		—		163
Forward foreign exchange contracts	—		2,774		—		2,774
Interest rate lock commitments	—		18,596		—		18,596
Forward loan sales commitments	—		117		—		117
Power Equity CDs	—		442		—		442
Total derivative assets	—		301,802		—		301,802
Assets held in trust for deferred compensation plans	46,210		—		—		46,210
Total assets at fair value	$	46,210	$	8,207,670	$	10,022	$	8,263,902
Liabilities
Derivative liabilities:⁽¹⁾
Interest rate contracts	$	—	$	14,085	$	—	$	14,085
Risk participation agreements	—		171		—		171
Forward foreign exchange contracts	—		210		—		210
Interest rate lock commitments	—		4		—		4
Forward loan sales commitments	—		786		—		786
Power Equity CDs	—		443		—		443
Swap agreement	—		—		141		141
Total derivative liabilities	—		15,699		141		15,840
Liabilities held in trust for deferred compensation plans	46,210		—		—		46,210
Total liabilities at fair value	$	46,210	$	15,699	$	141	$	62,050


(1)	As permitted under GAAP, the Corporation has elected to net derivative assets and derivative liabilities when a legally enforceable master netting agreement exists as well as the related cash collateral received and paid. For purposes of this table, the derivative assets and derivative liabilities are presented gross of this netting adjustment.



	December 31, 2019
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Investment securities available-for-sale	$	—	$	6,719,568	$	433	$	6,720,001
Loans held-for-sale	—		91,202		—		91,202
Interest-only strips	—		—		12,813		12,813
Derivative assets:⁽¹⁾
Interest rate contracts	—		102,893		—		102,893
Risk participation agreements	—		202		—		202
Interest rate lock commitments	—		2,772		—		2,772
Forward loan sales commitments	—		41		—		41
Power Equity CDs	—		734		—		734
Total derivative assets	—		106,642		—		106,642
Forward loan sales commitments, non-derivative	—		46		—		46
Assets held in trust for deferred compensation plans	43,743		—		—		43,743
Total assets at fair value	$	43,743	$	6,917,458	$	13,246	$	6,974,447
Liabilities
Derivative liabilities:⁽¹⁾
Interest rate contracts	$	—	$	6,040	$	—	$	6,040
Risk participation agreements	—		354		—		354
Forward foreign exchange contracts	—		6,519		—		6,519
Interest rate lock commitments	—		20		—		20
Forward loan sales commitments	—		289		—		289
Power Equity CDs	—		734		—		734
Swap agreement	—		—		356		356
Total derivative liabilities	—		13,956		356		14,312
Liabilities held in trust for deferred compensation plans	43,743		—		—		43,743
Total liabilities at fair value	$	43,743	$	13,956	$	356	$	58,055


(1)	As permitted under GAAP, the Corporation has elected to net derivative assets and derivative liabilities when a legally enforceable master netting agreement exists as well as the related cash collateral received and paid. For purposes of this table, the derivative assets and derivative liabilities are presented gross of this netting adjustment.

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

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:



(In thousands)	Investment securities available-for-sale			Loans held-for-sale			Interest-only strips			Interest rate lock commitments			Swap agreement			Forward loan sales commitments
At or For the Three Months Ended September 30, 2020
Asset (liability) balance, beginning of period	$	441		$	—		$	11,811		$	—		$	(213	)	$	—
Total net gains (losses) included in:
Net income	1			—			277			—			—			—
Other comprehensive income (loss)	25			—			(1,211		)	—			—			—
Principal paydowns / settlements	—			—			(1,322		)	—			72			—
Asset (liability) balance, end of period	$	467		$	—		$	9,555		$	—		$	(141	)	$	—
Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	25		$	—		$	(1,211	)	$	—		$	—		$	—
At or For the Three Months Ended September 30, 2019
Asset (liability) balance, beginning of period	$	3		$	29,211		$	15,236		$	1,402		$	(435	)	$	(145	)
Transfers out of Level 3⁽¹⁾	—			(29,211		)	—			(1,402		)	—			145
Total net gains (losses) included in:
Net income	—			—			610			—			—			—
Other comprehensive income (loss)	(25		)	—			(65		)	—			—			—
Acquired	450			—			—			—			—			—
Originations	—			—			628			—			—			—
Principal paydowns / settlements	—			—			(2,332		)	—			79			—
Asset (liability) balance, end of period	$	428		$	—		$	14,077		$	—		$	(356	)	$	—
Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	(25	)	$	—		$	(65	)	$	—		$	—		$	—
At or For the Nine Months Ended September 30, 2020
Asset (liability) balance, beginning of period	$	433		$	—		$	12,813		$	—		$	(356	)	$	—
Total net gains (losses) included in:
Net income	3			—			763			—			(1		)	—
Other comprehensive income (loss)	31			—			430			—			—			—
Principal paydowns / settlements	—			—			(4,451		)	—			216			—
Asset (liability) balance, end of period	$	467		$	—		$	9,555		$	—		$	(141	)	$	—
Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	31		$	—		$	430		$	—		$	—		$	—
At or For the Nine Months Ended September 30, 2019
Asset (liability) balance, beginning of period	$	4		$	18,070		$	16,835		$	624		$	(583	)	$	(26	)
Total net gains (losses) included in:
Net income	—			534			1,975			778			—			(119		)
Other comprehensive income (loss)	(25		)	—			246			—			—			—
Acquired	450
Sales	—			(164,693		)	—			—			—			—
Originations	—			175,304			2,180			—			—			—
Principal paydowns / settlements	(1		)	(4		)	(7,159		)	—			227			—
Transfers out of Level 3⁽¹⁾	—			(29,211		)	—			(1,402		)	—			145
Asset (liability) balance, end of period	$	428		$	—		$	14,077		$	—		$	(356	)	$	—
Unrealized gains (losses) included in other comprehensive income for assets held at the end of the period	$	(25	)	$	—		$	246		$	—		$	—		$	—


(1)	Certain assets (liabilities) previously classified as Level 3 were transferred to Level 2 because current period prices are derived from Level 2 observable market data.

Schedule of Differences Between the Aggregate Fair Value and Aggregate Unpaid Principal Balance on Loans Held for Sale

The difference between the aggregate fair value and aggregate unpaid principal balance of these loans held-for-sale was as follows:



(In thousands)	September 30, 2020		December 31, 2019
Fair value carrying amount	$	460,172	$	91,202
Aggregate unpaid principal amount	436,216		88,192
Fair value carrying amount less aggregate unpaid principal	$	23,956	$	3,010

Fair Value of Assets and Liabilities, Including Hierarchy Level

The carrying amounts and estimated fair values of the financial instruments, excluding short-term financial assets and liabilities as their carrying amounts approximate fair value and financial instruments recorded at fair value on a recurring basis, are included below. This information represents only a portion of the Consolidated Statements of Financial Condition not recorded in their entirety on a recurring basis and not the estimated value of the Corporation as a whole. Non-financial instruments such as the intangible value of the Corporation's banking centers and core deposits, leasing operations, goodwill, premises and equipment and the future revenues from the Corporation's customers are not reflected in this disclosure. Therefore, this information is of limited use in assessing the value of the Corporation.



	At September 30, 2020
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	300,444	$	—	$	300,444	$	—	$	300,444
Investment securities held-to-maturity	170,309		—		176,649		3,715		180,364
Loans and leases held-for-sale	255		—		—		262		262
Net loans⁽¹⁾	31,140,162		—		—		31,323,032		31,323,032
Securitization receivable⁽²⁾	—		—		—		19,802		19,802
Deferred fees on commitments to extend credit⁽²⁾	21,222		—		21,222		—		21,222
Total financial instrument assets	$	31,632,392	$	—	$	498,315	$	31,346,811	$	31,845,126
Financial instrument liabilities
Certificates of deposits	$	6,334,760	$	—	$	6,355,057	$	—	$	6,355,057
Long-term borrowings	871,845		—		901,221		—		901,221
Total financial instrument liabilities	$	7,206,605	$	—	$	7,256,278	$	—	$	7,256,278


(1)	Expected credit losses are included in the carrying amount and estimated fair value.


(2)	Carrying amounts are included in other assets.


(3)	Carrying amounts are included in other liabilities.



	At December 31, 2019
	Carrying		Estimated Fair Value
(In thousands)	Amount		Level 1		Level 2		Level 3		Total
Financial instrument assets
FHLB and FRB stocks	$	442,440	$	—	$	442,440	$	—	$	442,440
Investment securities held-to-maturity	139,445		—		141,168		3,676		144,844
Loans held-for-sale	108,584		—		110,252		2,273		112,525
Net loans⁽¹⁾	31,699,285		—		—		31,804,513		31,804,513
Securitization receivable⁽²⁾	19,689		—		—		19,466		19,466
Deferred fees on commitments to extend credit⁽²⁾	19,300		—		19,300		—		19,300
Total financial instrument assets	$	32,428,743	$	—	$	713,160	$	31,829,928	$	32,543,088
Financial instrument liabilities
Certificates of deposits	$	7,455,556	$	—	$	7,460,577	$	—	$	7,460,577
Long-term borrowings	2,354,448		—		2,368,469		—		2,368,469
Deferred fees on standby letters of credit⁽³⁾	56		—		56		—		56
Total financial instrument liabilities	$	9,810,060	$	—	$	9,829,102	$	—	$	9,829,102


(1)	Expected credit losses are included in the carrying amount and estimated fair value.


(2)	Carrying amounts are included in other assets.

(3)

Carrying amounts are included in other liabilities.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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