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Fair Value Measurement (Tables)
9 Months Ended
Sep. 30, 2012
Fair Value Disclosures [Abstract]  
Recurring Fair Value Measurements
The following tables presents the balances of assets and liabilities measured at fair value on a recurring and nonrecurring basis as of September 30, 2012, December 31, 2011 and September 30, 2011:
 
 
 
 Fair Value by Hierarchy
 
September 30, 2012
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Money market mutual funds
$
3,245

 
$
3,245

 
$
—

 
$
—

U.S. government agency debentures
35,137

 
—

 
35,137

 
—

U.S. States and political subdivisions
258,418

 
—

 
258,418

 
—

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,277,831

 
—

 
1,277,831

 
—

Commercial mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
15,667

 
—

 
15,667

 
—

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,205,525

 
—

 
1,205,525

 
—

Non-agency
12

 
—

 
1

 
11

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
68,665

 
—

 
68,665

 
—

Corporate debt securities
47,493

 
—

 
—

 
47,493

Total available-for-sale securities
2,911,993

 
3,245

 
2,861,244

 
47,504

Residential loans held for sale
17,540

 
—

 
17,540

 
—

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
—

 
—

 
—

 
—

Interest rate swaps - nondesignated
62,796

 
—

 
62,796

 
—

Mortgage loan commitments
7,394

 
—

 
7,394

 
—

Forward sale contracts
(2,223
)
 
—

 
(2,223
)
 
—

Foreign exchange
80

 
—

 
80

 
—

Total derivative assets
68,047

 
—

 
68,047

 
—

       Total fair value of assets (a)
$
2,997,580

 
$
3,245

 
$
2,946,831

 
$
47,504

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
22,071

 
—

 
22,071

 
—

Interest rate swaps - nondesignated
62,796

 
—

 
62,796

 
—

Foreign exchange
71

 
—

 
71

 
—

Total derivative liabilities
84,938

 
—

 
84,938

 
—

True-up liability
12,642

 
—

 
—

 
12,642

Total fair value of liabilities (a)
$
97,580

 
$
—

 
$
84,938

 
$
12,642

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
17,294

 
$
—

 
$
—

 
$
17,294

Impaired loans (c)
44,010

 
—

 
—

 
44,010

Other property (d)
6,333

 
—

 
—

 
6,333

Other real estate covered by loss share (e)
14,695

 
—

 
—

 
14,695

Total fair value
$
82,332

 
$
—

 
$
—

 
$
82,332

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the quarter ended September 30, 2012.
(b) - MSRs with a recorded investment of $21.3 million were reduced by a specific valuation allowance totaling $4.1 million to a reported carrying value of $17.3 million resulting in recognition of $0.6 million in expense included in loans sales and servicing income in the quarter ended September 30, 2012.
(c) - Collateral dependent impaired loans with a recorded investment of $52.5 million were reduced by specific valuation allowance allocations totaling $8.5 million to a reported net carrying value of $44.0 million.
(d) - Amounts do not include assets held at cost at September 30, 2012. During the quarter ended September 30, 2012, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.1 million included in noninterest expense.
(e) - Amounts do not include assets held at cost at September 30, 2012. During the quarter ended September 30, 2012, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses $0.2 million included in noninterest expense.
 
 
 
 Fair Value by Hierarchy
 
December 31, 2011
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Money market mutual funds
$
3,299

 
$
3,299

 
$
—

 
$
—

U.S. government agency debentures
123,069

 
—

 
123,069

 
—

U.S. States and political subdivisions
357,731

 
—

 
357,731

 
—

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,460,343

 
—

 
1,460,343

 
—

Residential collateralized mortgage-backed securities:


 


 


 


U.S. government agencies
1,137,835

 
—

 
1,137,835

 
—

Non-agency
43,307

 
—

 
2

 
43,305

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
129,127

 
—

 
129,127

 
—

Corporate debt securities
98,842

 
—

 
54,608

 
44,234

Total available-for-sale securities
3,353,553

 
3,299

 
3,262,715

 
87,539

Residential loans held for sale
30,077

 
—

 
30,077

 
—

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
—

 
—

 
—

 
—

Interest rate swaps - nondesignated
58,875

 
—

 
58,875

 
—

Mortgage loan commitments
4,959

 
—

 
4,959

 
—

Forward sale contracts
(1,798
)
 
—

 
(1,798
)
 
—

Foreign exchange
20

 
—

 
65

 
—

Total derivative assets
62,056

 
—

 
62,101

 
—

       Total fair value of assets (a)
$
3,445,686

 
$
3,299

 
$
3,354,893

 
$
87,539

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
25,889

 
—

 
25,889

 
—

Interest rate swaps - nondesignated
58,875

 
—

 
58,875

 
—

Foreign exchange
18

 
—

 
62

 
—

Other
1,324

 
—

 
1,324

 
—

Total derivative liabilities
86,106

 
—

 
86,150

 
—

True-up liability
11,551

 
—

 
—

 
11,551

Total fair value of liabilities (a)
$
97,657

 
$
—

 
$
86,150

 
$
11,551

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
17,749

 
$
—

 
$
—

 
$
17,749

Impaired loans (c)
56,739

 
—

 
—

 
56,739

Other property (d)
4,087

 
—

 
—

 
4,087

Other real estate covered by loss share (e)
18,707

 
—

 
—

 
18,707

Total fair value
$
97,282

 
$
—

 
$
—

 
$
97,282

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the quarter ended December 31, 2011.  
(b) - MSRs with a recorded investment of $21.2 million were reduced by a specific valuation allowance totaling $3.5 million to a reported carrying value of $17.6 million resulting in the recognition of an impairment charge of $3.5 million in the year ended December 31, 2011.
(c) - Collateral dependent impaired loans with a recorded investment of $64.5 million were reduced by specific valuation allowance allocations totaling $7.7 million to a reported net carrying value of $56.7 million.
(d) Amounts do not include assets held at cost at December 31, 2011. During the year ended December 31, 2011, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $5.4 million included in noninterest expense.
(e) Amounts do not include assets held at cost at December 31, 2011. During the year ended December 31, 2011, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $3.0 million included in noninterest expense.


 
 
 
 Fair Value by Hierarchy
 
September 30, 2011
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Money market mutual funds
$
3,715

 
$
3,715

 
$
—

 
$
—

U.S. government agency debentures
203,718

 
—

 
203,718

 
—

U.S. States and political subdivisions
314,441

 
—

 
314,441

 
—

Residential mortgage-backed securities:


 


 


 


U.S. government agencies
1,481,222

 
—

 
1,481,222

 
—

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,103,906

 
—

 
1,103,906

 
—

Non-agency
44,857

 
—

 
3

 
44,854

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
—

 
—

 
—

 
—

Corporate debt securities
46,187

 
—

 
—

 
46,187

Total available-for-sale securities
3,198,046

 
3,715

 
3,103,290

 
91,041

Residential loans held for sale
39,340

 
—

 
39,340

 
—

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
—

 
—

 
—

 
—

Interest rate swaps - nondesignated
61,299

 
—

 
61,299

 
—

Mortgage loan commitments
5,525

 
—

 
5,525

 
—

Forward sale contracts
(1,591
)
 
—

 
(1,591
)
 
—

Foreign exchange
85

 
—

 
85

 
—

Total derivative assets
65,318

 
—

 
65,318

 
—

       Total fair value of assets (a)
$
3,302,704

 
$
3,715

 
$
3,207,948

 
$
91,041

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
28,278

 
—

 
28,278

 
—

Interest rate swaps - nondesignated
61,299

 
—

 
61,299

 
—

Foreign exchange
80

 
—

 
80

 
—

Other
—

 
—

 
—

 
—

Total derivative liabilities
89,657

 
—

 
89,657

 
—

True-up liability
11,913

 
—

 
—

 
11,913

Total fair value of liabilities (a)
$
101,570

 
$
—

 
$
89,657

 
$
11,913

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
16,866

 
$
—

 
$
—

 
$
16,866

Impaired loans (c)
59,155

 
—

 
—

 
59,155

Other property (d)
8,648

 
—

 
—

 
8,648

Other real estate covered by loss share (e)
29,350

 
—

 
—

 
29,350

Total fair value
$
114,019

 
$
—

 
$
—

 
$
114,019

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the quarter ended September 30, 2011.
(b) - MSRs were recorded at carrying value of $16.8 million as of September 30, 2011.
(c) - Collateral dependent impaired loans with a recorded investment of $66.2 million were reduced by specific valuation allowance allocations totaling $7.1 million to a reported net carrying value of $59.2 million.
(d) - Amounts do not include assets held at cost at September 30, 2011. During the quarter ended September 30, 2011, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.0 million included in noninterest expense.
(e) Amounts do not include assets held at cost at September 30, 2011. During the quarter ended September 30, 2011, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.1 million included in noninterest expense.
Assets measured at fair value on a nonrecurring basis
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis are summarized follows:
 
Three months ended
 
Nine Months Ended
 
September 30, 2012
 
September 30, 2011
 
September 30, 2012
 
September 30, 2011
 
Available-for-sale securities
 
True-up liability
 
Available-for-sale securities
 
True-up liability
 
Available-for-sale securities
 
True-up liability
 
Available-for-sale securities
 
True-up liability
Balance at beginning of period
$
48,096

 
$
11,820

 
$
144,570

 
$
12,196

 
$
87,539

 
$
11,551

 
$
60,344

 
$
12,061

(Gains) losses included in earnings (a)
—

 
822

 
—

 
(283
)
 
—

 
1,091

 
—

 
(148
)
Unrealized gains (losses) (b)
(605
)
 
—

 
(4,549
)
 
—

 
3,137

 
—

 
(4,199
)
 
—

Purchases
—

 
—

 
—

 
—

 
—

 
—

 
83,876

 
—

Sales
—

 
—

 
(44,924
)
 
—

 
(40,520
)
 
—

 
(44,924
)
 
—

Settlements
13

 
—

 
(4,056
)
 
—

 
(2,652
)
 
—

 
(4,056
)
 
—

Net transfers into (out of) Level 3
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Balance at ending of period
$
47,504

 
$
12,642

 
$
91,041

 
$
11,913

 
$
47,504

 
$
12,642

 
$
91,041

 
$
11,913

(a) Reported in other
Fair Value of Financial Instruments
The carrying amount and estimated fair value of the Corporation’s financial instruments that are carried at either fair value or cost as of September 30, 2012, December 31, 2011 and September 30, 2011 are shown in the tables below.
 
September 30, 2012
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
238,417

 
$
238,417

 
$
—

 
$
238,417

 
$
—

Available for sale securities
2,911,993

 
2,911,993

 
3,245

 
2,861,244

 
47,504

Held to maturity securities
620,631

 
631,237

 
—

 
631,237

 
—

Other securities
140,730

 
140,730

 
—

 
140,730

 
—

Loans held for sale
17,540

 
17,540

 
—

 
17,540

 
—

Net noncovered loans
8,217,478

 
7,898,195

 
—

 
—

 
7,898,195

Net covered loans and loss share receivable
1,131,285

 
1,131,285

 
—

 
—

 
1,131,285

Accrued interest receivable
43,901

 
43,901

 
—

 
43,901

 
—

       Derivatives
68,047

 
68,047

 
—

 
68,047

 
—

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
11,532,426

 
$
11,540,681

 
$
—

 
$
11,540,681

 
$
—

Federal funds purchased and securities sold under agreements to repurchase
963,455

 
963,455

 
—

 
963,455

 
—

Wholesale borrowings
178,083

 
187,230

 
—

 
187,230

 
—

Accrued interest payable
2,798

 
2,798

 
—

 
2,798

 
—

Derivatives
84,938

 
84,938

 
—

 
84,938

 
—

 
December 31, 2011
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
377,319

 
$
377,319

 
$
—

 
$
377,319

 
$
—

Available for sale securities
3,353,553

 
3,353,553

 
3,299

 
3,262,715

 
87,539

Held to maturity securities
82,764

 
85,112

 
—

 
85,112

 
—

Other securities
140,726

 
140,726

 
—

 
140,726

 
—

Loans held for sale
30,077

 
30,077

 
—

 
30,077

 
—

Net noncovered loans
7,641,245

 
7,373,801

 
—

 
—

 
7,373,801

Net covered loans and loss share receivable
1,460,723

 
1,460,723

 
—

 
—

 
1,460,723

Accrued interest receivable
42,274

 
42,274

 
—

 
42,274

 
—

Derivatives
62,056

 
62,101

 
—

 
62,101

 
—

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
11,431,609

 
$
11,445,777

 
$
—

 
$
11,445,777

 
$
—

Federal funds purchased and securities sold under agreements to repurchase
866,265

 
866,265

 
—

 
866,265

 
—

Wholesale borrowings
203,462

 
211,623

 
—

 
211,623

 
—

Accrued interest payable
3,915

 
3,915

 
—

 
3,915

 
—

Derivatives
86,106

 
86,150

 
—

 
86,150

 
—


 
September 30, 2011
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
318,945

 
$
318,945

 
$
—

 
$
318,945

 
$
—

Available for sale securities
3,198,046

 
3,198,046

 
3,715

 
3,103,290

 
91,041

Held to maturity securities
92,214

 
94,921

 
—

 
94,921

 
—

Other securities
160,793

 
160,793

 
—

 
160,793

 
—

Loans held for sale
39,340

 
39,340

 
—

 
39,340

 
—

Net noncovered loans
7,522,385

 
7,148,775

 
—

 
—

 
7,148,775

Net covered loans and loss share receivable
1,612,615

 
1,612,615

 
—

 
—

 
1,612,615

Accrued interest receivable
41,199

 
41,199

 
—

 
41,199

 
—

Derivatives
65,318

 
65,318

 
—

 
65,318

 
—

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
11,396,121

 
$
11,412,576

 
$
—

 
$
11,412,576

 
$
—

Federal funds purchased and securities sold under agreements to repurchase
987,030

 
991,304

 
—

 
991,304

 
—

Wholesale borrowings
248,006

 
256,069

 
—

 
256,069

 
—

Accrued interest payable
4,627

 
4,627

 
—

 
4,627

 
—

Derivatives
89,657

 
89,657

 
—

 
89,657

 
—

Summary of Change in fair value carrying amount of residential mortgages
The aggregate fair value, contractual balance and gains on loans held for sale are as follows:
 
Quarter ended
 
Year ended
 
Quarter ended
 
September 30, 2012
 
December 31, 2011
 
September 30, 2011
Aggregate fair value
$
17,540

 
$
30,077

 
$
39,340

Contractual balance
16,635

 
28,948

 
37,786

Gain (a)
905

 
1,129

 
1,554

 
 
 
 
 
 
(a) Included in loan sales and servicing income.