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Fair Value Measurement (Tables)
6 Months Ended
Jun. 30, 2013
Fair Value Disclosures [Abstract]  
Recurring and Nonrecurring Fair Value Measurements
The following tables present the balance of assets and liabilities measured at fair value on a recurring and nonrecurring basis as of June 30, 2013, December 31, 2012 and June 30, 2012:
 
 
 
 Fair Value by Hierarchy
 
June 30, 2013
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Marketable equity securities
$
3,213

 
$
3,213

 
$

 
$

Non-marketable equity securities
3,281

 

 
10

 
3,271

U.S. States and political subdivisions
277,934

 

 
277,934

 

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,075,928

 

 
1,075,928

 

Commercial mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
56,497

 

 
56,497

 

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,566,728

 

 
1,566,728

 

Non-agency
10

 

 
2

 
8

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
106,568

 

 
106,568

 

Corporate debt securities
51,138

 

 

 
51,138

Asset-backed securities:
 
 
 
 
 
 
 
Collateralized loan obligations, non-agency issued
158,095

 

 

 
158,095

Total available for sale securities
3,299,392

 
3,213

 
3,083,667

 
212,512

Residential loans held for sale
22,855

 

 
22,855

 

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges

 

 

 

Interest rate swaps - nondesignated
47,804

 

 
47,804

 

Mortgage loan commitments
779

 

 
779

 

Forward sale contracts
4,458

 

 
4,458

 

Foreign exchange
117

 

 
117

 

Total derivative assets
53,158

 

 
53,158

 

       Total fair value of assets (a)
$
3,375,405

 
$
3,213

 
$
3,159,680

 
$
212,512

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
$
14,319

 
$

 
$
14,319

 
$

Interest rate swaps - nondesignated
47,804

 

 
47,804

 

Foreign exchange
94

 

 
94

 

Other

 

 

 

Total derivative liabilities
62,217

 

 
62,217

 

True-up liability
10,937

 

 

 
10,937

     Total fair value of liabilities (a)
$
73,154

 
$

 
$
62,217

 
$
10,937

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
22,529

 
$

 
$

 
$
22,529

Impaired loans (c)
52,606

 

 

 
52,606

Other property (d)
16,825

 

 

 
16,825

Other real estate covered by loss share (e)
18,338

 

 

 
18,338

Total fair value
$
110,298

 
$

 
$

 
$
110,298


(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the three months ended June 30, 2013.
(b) - MSRs with a recorded investment of $22.6 million were reduced by a specific valuation allowance totaling $0.5 million to a reported carrying value of $22.1 million resulting in recognition of $0.8 million in recoveries included in loans sales and servicing income in the three months ended June 30, 2013.
(c) - Collateral dependent impaired loans with a recorded investment of $58.1 million were reduced by specific valuation allowance allocations totaling $5.5 million to a reported net carrying value of $52.6 million.
(d) - Amounts do not include assets held at cost at June 30, 2013. During the three months ended June 30, 2013, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.3 million included in noninterest expense.
(e) - Amounts do not include assets held at cost at June 30, 2013. During the three months ended June 30, 2013, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses $0.6 million included in noninterest expense.

 
 
 
 Fair Value by Hierarchy
 
December 31, 2012
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Marketable equity securities
$
3,241

 
$
3,241

 
$

 
$

U.S. States and political subdivisions
268,204

 

 
268,204

 

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,107,063

 

 
1,107,063

 

Commercial mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
52,036

 

 
52,036

 

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,329,421

 

 
1,329,421

 

Non-agency
11

 

 
2

 
9

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
111,343

 

 
111,343

 

Corporate debt securities
49,652

 

 

 
49,652

Total available-for-sale securities
2,920,971

 
3,241

 
2,868,069

 
49,661

Residential loans held for sale
23,683

 

 
23,683

 

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges

 

 

 

Interest rate swaps - nondesignated
58,769

 

 
58,769

 

Mortgage loan commitments
4,400

 

 
4,400

 

Forward sale contracts

 

 

 

Foreign exchange
62

 

 
62

 

Total derivative assets
63,231

 

 
63,231

 

       Total fair value of assets (a)
$
3,007,885

 
$
3,241

 
$
2,954,983

 
$
49,661

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
$
19,080

 
$

 
$
19,080

 
$

Interest rate swaps - nondesignated
58,769

 

 
58,769

 

Forward sale contracts
62

 

 
62

 

Foreign exchange
57

 

 
57

 

Other

 

 

 

Total derivative liabilities
77,968

 

 
77,968

 

True-up liability
12,259

 

 

 
12,259

     Total fair value of liabilities (a)
$
90,227

 
$

 
$
77,968

 
$
12,259

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
18,833

 
$

 
$

 
$
18,833

Impaired loans (c)
54,491

 

 

 
54,491

Other property (d)
7,540

 

 

 
7,540

Other real estate covered by loss share (e)
12,631

 

 

 
12,631

Total fair value
$
93,495

 
$

 
$

 
$
93,495

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the year ended December 31, 2012.  
(b) - MSRs with a recorded investment of $21.3 million were reduced by a specific valuation allowance totaling $2.6 million to a reported carrying value of $18.8 million resulting in the recognition of an impairment charge of $1.0 million in the year ended December 31, 2012.
(c) - Collateral dependent impaired loans with a recorded investment of $57.8 million were reduced by specific valuation allowance allocations totaling $3.3 million to a reported net carrying value of $54.5 million.
(d) Amounts do not include assets held at cost at December 31, 2012. During the year ended December 31, 2012, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $2.2 million included in noninterest expense.
(e) Amounts do not include assets held at cost at December 31, 2012. During the year ended December 31, 2012, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.7 million included in noninterest expense.

 
 
 
 Fair Value by Hierarchy
 
June 30, 2012
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Marketable equity securities
$
3,340

 
$
3,340

 
$

 
$

U.S. government agency debentures
35,297

 

 
35,297

 

U.S. States and political subdivisions
265,124

 

 
265,124

 

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,382,813

 

 
1,382,813

 

Commercial mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
38,428

 

 
38,428

 

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
1,277,378

 

 
1,277,378

 

Non-agency
13

 

 
2

 
11

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
68,545

 

 
68,545

 

Corporate debt securities
145,427

 

 
97,342

 
48,085

Total available-for-sale securities
3,216,365

 
3,340

 
3,164,929

 
48,096

Residential loans held for sale
19,018

 

 
19,018

 

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges

 

 

 

Interest rate swaps - nondesignated
61,319

 

 
61,319

 

Mortgage loan commitments
5,248

 

 
5,248

 

Forward sale contracts

 

 

 

Foreign exchange
52

 

 
52

 

Total derivative assets
66,619

 

 
66,619

 

       Total fair value of assets (a)
$
3,302,002

 
$
3,340

 
$
3,250,566

 
$
48,096

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
23,229

 

 
23,229

 

Interest rate swaps - nondesignated
61,319

 

 
61,319

 

Forward sale contracts
1,201

 

 
1,201

 

Foreign exchange
54

 

 
54

 

Other

 

 

 

Total derivative liabilities
85,803

 

 
85,803

 

True-up liability
11,820

 

 

 
11,820

     Total fair value of liabilities (a)
$
97,623

 
$

 
$
85,803

 
$
11,820

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (b)
$
17,913

 
$

 
$

 
$
17,913

Impaired loans (c)
73,110

 

 

 
73,110

Other property (d)
10,839

 

 

 
10,839

Other real estate covered by loss share (e)
51,557

 

 

 
51,557

Total fair value
$
153,419

 
$

 
$

 
$
153,419


(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the three months ended June 30, 2012.
(b) - Mortgage servicing rights with a recorded investment of $21.3 million were reduced by a specific valuation allowance totaling $3.5 million to a reported carrying value of $17.8 million resulting in recognition of a recovery of $1.3 million in the three months ended June 30, 2012.
(c) - Collateral dependent impaired loans with a recorded investment of $82.2 million were reduced by specific valuation allowance allocations totaling $9.1 million to a reported net carrying value of $73.1 million.
(d) - Amounts do not include assets held at cost at June 30, 2012. During the three months ended June 30, 2012, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.4 million included in noninterest expense.
(e) - Amounts do not include assets held at cost at June 30, 2012. During the three months ended June 30, 2012, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.7 million included in noninterest expense.

Summary of changes in Level 3 assets and liabilities measured at fair value
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2013 and 2012 are summarized as follows:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2013
 
June 30, 2012
 
June 30, 2013
 
June 30, 2012
 
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
$
51,234

 
$
12,783

 
$
88,487

 
$
11,725

 
$
49,661

 
$
12,259

 
$
87,539

 
$
11,551

Fair value of assets acquired
3,271

 

 

 

 
3,271

 

 

 

(Gains) losses included in earnings (a)

 
(1,846
)
 

 
95

 

 
(1,322
)
 

 
269

Unrealized gains (losses) (b)
(1,923
)
 

 
1,323

 

 
(363
)
 

 
3,742

 

Purchases
159,916

 

 

 

 
159,916

 

 

 

Sales

 

 
(40,520
)
 

 

 

 
(40,520
)
 

Settlements
14

 

 
(1,194
)
 

 
27

 

 
(2,665
)
 

Net transfers into (out of) Level 3

 

 

 

 

 

 

 

Balance at ending of period
$
212,512

 
$
10,937

 
$
48,096

 
$
11,820

 
$
212,512

 
$
10,937

 
$
48,096

 
$
11,820

(a) Reported in other expense
(b) Reported in other comprehensive income (loss)

Summary of Change in fair value carrying amount of residential mortgages
Interest income on loans held for sale is accrued on the principal outstanding primarily using the “simple-interest” method. None of these loans were 90 days or more past due, nor were any on nonaccrual as of June 30, 2013, December 31, 2012 and June 30, 2012. The aggregate fair value, contractual balance and gain or loss on loans held for sale was as follows:
 
 
June 30, 2013
 
December 31, 2012
 
June 30, 2012
Aggregate fair value carrying amount
 
$
22,855

 
$
23,683

 
$
19,018

Aggregate unpaid principal / contractual balance
 
23,220

 
22,765

 
18,267

Carrying amount over aggregate unpaid principal (a)
 
$
(365
)
 
$
918

 
$
751

(a) These changes are included in loan sales and servicing income in the Consolidated Statements of Comprehensive Income.

Fair Value of Financial Instruments
 
June 30, 2013
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
909,490

 
$
909,490

 
$

 
$
909,490

 
$

Available-for-sale securities
3,299,392

 
3,299,392

 
3,213

 
3,083,667

 
212,512

Held-to-maturity securities
2,551,860

 
2,487,071

 

 
2,487,071

 

Other securities
267,565

 
267,565

 

 
267,565

 

Loans held for sale
22,855

 
22,855

 

 
22,855

 

Net originated loans
9,033,980

 
8,984,845

 

 

 
8,984,845

Net acquired loans
4,258,892

 
4,258,892

 

 

 
4,258,892

Net covered loans and loss share receivable
711,367

 
711,367

 

 

 
711,367

Accrued interest receivable
48,635

 
48,635

 

 
48,635

 

       Derivatives
53,158

 
53,158

 

 
53,158

 

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
19,119,722

 
$
19,125,843

 
$

 
$
19,125,843

 
$

Federal funds purchased and securities sold under agreements to repurchase
844,871

 
844,871

 

 
844,871

 

Wholesale borrowings
201,337

 
205,210

 

 
205,210

 

Long-term debt
324,422

 
322,322

 

 
322,322

 

Accrued interest payable
9,066

 
9,066

 

 
9,066

 

Derivatives
62,217

 
62,217

 

 
62,217

 



 
December 31, 2012
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
258,014

 
$
258,014

 
$

 
$
258,014

 
$

Available-for-sale securities
2,920,971

 
2,920,971

 
3,241

 
2,868,069

 
49,661

Held-to-maturity securities
622,121

 
630,799

 

 
630,799

 

Other securities
140,717

 
140,717

 

 
140,717

 

Loans held for sale
23,683

 
23,683

 

 
23,683

 

Net originated loans
8,632,717

 
8,604,872

 

 

 
8,604,872

Net covered loans and loss share receivable
975,870

 
975,870

 

 

 
975,870

Accrued interest receivable
40,389

 
40,389

 

 
40,389

 

       Derivatives
63,231

 
63,231

 

 
63,231

 

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
11,759,425

 
$
11,765,873

 
$

 
$
11,765,873

 
$

Federal funds purchased and securities sold under agreements to repurchase
1,104,525

 
1,104,525

 

 
1,104,525

 

Wholesale borrowings
136,883

 
143,029

 

 
143,029

 

Accrued interest payable
2,515

 
2,515

 

 
2,515

 

Derivatives
77,968

 
77,968

 

 
77,968

 


 
June 30, 2012
 
Carrying
Amount
 
Fair Value
 
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
337,935

 
$
337,935

 
$

 
$
337,935

 
$

Available for sale securities
3,216,365

 
3,216,365

 
3,340

 
3,164,929

 
48,096

Held to maturity securities
352,221

 
355,120

 

 
355,120

 

Other securities
140,742

 
140,742

 

 
140,742

 

Loans held for sale
19,018

 
19,018

 

 
19,018

 

Net originated loans
7,996,079

 
7,677,176

 

 

 
7,677,176

Net covered loans and loss share receivable
1,229,282

 
1,229,282

 

 

 
1,229,282

Accrued interest receivable
43,727

 
43,727

 

 
43,727

 

Derivatives
66,619

 
66,619

 

 
66,619

 

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
11,615,841

 
$
11,625,406

 
$

 
$
11,625,406

 
$

Federal funds purchased and securities sold under agreements to repurchase
896,910

 
896,910

 

 
896,910

 

Wholesale borrowings
178,135

 
186,458

 

 
186,458

 

Accrued interest payable
3,266

 
3,266

 

 
3,266

 

Derivatives
85,803

 
85,803

 

 
85,803