Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2013

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 September 30, 2013, December 31, 2012 and September 30, 2012:



			Fair Value by Hierarchy
	September 30, 2013		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	3,096	$	3,096	$	—	$	—
Non-marketable equity securities	3,281		—		10		3,271
U.S. States and political subdivisions	272,224		—		272,224		—
Residential mortgage-backed securities:
U.S. government agencies	999,375		—		999,375		—
Commercial mortgage-backed securities:
U.S. government agencies	55,932		—		55,932		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,505,706		—		1,505,706		—
Non-agency	9		—		—		9
Commercial collateralized mortgage-backed securities:
U.S. government agencies	97,154		—		97,154		—
Corporate debt securities	50,850		—		—		50,850
Asset-backed securities:
Collateralized loan obligations, non-agency issued	268,632		—		—		268,632
Total available for sale securities	3,256,259		3,096		2,930,401		322,762
Residential loans held for sale	17,813		—		17,813		—
Derivative assets:
Interest rate swaps - nondesignated	51,044		—		51,044		—
Mortgage loan commitments	2,729		—		2,729		—
Foreign exchange	66		—		66		—
Total derivative assets	53,839		—		53,839		—
Total fair value of assets (a)	$	3,327,911	$	3,096	$	3,002,053	$	322,762
Derivative liabilities:
Interest rate swaps - fair value hedges	$	13,289	$	—	$	13,289	$	—
Interest rate swaps - nondesignated	51,044		—		51,044		—
Forward sales contracts	1,081		—		1,081		—
Foreign exchange	92		—		92		—
Total derivative liabilities	65,506		—		65,506		—
True-up liability	11,457		—		—		11,457
Total fair value of liabilities (a)	$	76,963	$	—	$	65,506	$	11,457
Nonrecurring fair value measurement
Mortgage servicing rights (b)	$	22,616	$	—	$	—	$	22,616
Impaired loans (c)	48,129		—		—		48,129
Other property (d)	13,413		—		—		13,413
Other real estate covered by loss share (e)	8,475		—		—		8,475
Total fair value	$	92,633	$	—	$	—	$	92,633

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the three months ended September 30, 2013.

(b) - MSRs with a recorded investment of $22.9 million were reduced by a specific valuation allowance totaling $0.6 million to a reported carrying value of $22.4 million resulting in recognition of $0.1 million in recoveries included in loans sales and servicing income in the three months ended September 30, 2013.

(c) - Collateral dependent impaired loans with a recorded investment of $51.3 million were reduced by specific valuation allowance allocations totaling $3.1 million to a reported net carrying value of $48.1 million.

(d) - Amounts do not include assets held at cost at September 30, 2013. During the three months ended September 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 September 30, 2013. During the three months ended September 30, 2013, 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, 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 - nondesignated	58,769		—		58,769		—
Mortgage loan commitments	4,400		—		4,400		—
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		—
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
	September 30, 2012		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	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 - nondesignated	62,796		—		62,796		—
Mortgage loan commitments	7,394		—		7,394		—
Foreign exchange	80		—		80		—
Total derivative assets	70,270		—		70,270		—
Total fair value of assets (a)	$	2,999,803	$	3,245	$	2,949,054	$	47,504
Derivative liabilities:
Interest rate swaps - fair value hedges	22,071		—		22,071		—
Interest rate swaps - nondesignated	62,796		—		62,796		—
Forward sale contracts	2,223		—		2,223		—
Foreign exchange	71		—		71		—
Total derivative liabilities	87,161		—		87,161		—
True-up liability	12,642		—		—		12,642
Total fair value of liabilities (a)	$	99,803	$	—	$	87,161	$	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 three months ended September 30, 2012.

(b) - Mortgage servicing rights 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 $17.2 million resulting in recognition of a recovery of $0.6 million in the three months 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 three months 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 three months ended September 30, 2012, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.2 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 nine months ended September 30, 2013 and 2012 are summarized as follows:



	Three Months Ended September 30,										Nine Months Ended September 30,
	2013					2012					2013						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	$	212,512		$	10,937	$	48,096		$	11,820	$	49,661		$	12,259		$	87,539		$	11,551
Fair value of assets acquired	—			—							3,271			—			—			—
(Gains) losses included in earnings (a)	—			520		—			822		—			—			—			1,091
Unrealized gains (losses) (b)	(1,704		)			(605		)	—		(2,066		)	(802		)	3,137			—
Purchases	111,940			—		—			—		271,856			—			—			—
Sales	—			—		—			—		—			—			(40,520		)	—
Settlements	13			—		13			—		39			—			(2,652		)	—
Net transfers into (out of) Level 3	—			—		—			—		—			—			—			—
Balance at ending of period	$	322,761		$	11,457	$	47,504		$	12,642	$	322,761		$	11,457		$	47,504		$	12,642

(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 September 30, 2013, December 31, 2012 and September 30, 2012. The aggregate fair value, contractual balance and gain or loss on loans held for sale was as follows:



	September 30, 2013		December 31, 2012		September 30, 2012
Aggregate fair value carrying amount	$	17,813	$	23,683	$	17,540
Aggregate unpaid principal / contractual balance	17,179		22,765		16,635
Carrying amount over aggregate unpaid principal (a)	$	634	$	918	$	905

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

Fair Value of Financial Instruments



	September 30, 2013
	Carrying Amount		Fair Value
	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	1,247,267	$	1,247,267	$	1,247,267	$	—	$	—
Available-for-sale securities	3,256,259		3,256,259		3,096		2,930,401		322,762
Held-to-maturity securities	2,749,934		2,658,433		—		2,658,433		—
Other securities	270,369		270,369		—		270,369		—
Loans held for sale	17,813		17,813		—		17,813		—
Net originated loans	9,690,848		9,623,848		—		—		9,623,848
Net acquired loans	3,825,751		3,825,751		—		—		3,825,751
Net covered loans and loss share receivable	608,732		608,732		—		—		608,732
Accrued interest receivable	49,820		49,820		—		49,820		—
Derivatives	53,839		53,839		—		53,839		—
Financial liabilities:
Deposits	$	19,489,533	$	19,508,531	$	—	$	19,508,531	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,049,801		1,049,801		—		1,049,801		—
Wholesale borrowings	200,858		204,461		—		204,461		—
Long-term debt	324,425		321,255		—		321,255		—
Accrued interest payable	5,884		5,884		—		5,884		—
Derivatives	65,506		65,506		—		65,506		—



	December 31, 2012
	Carrying Amount		Fair Value
	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	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		—



	September 30, 2012
	Carrying Amount		Fair Value
	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	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 originated 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	70,270		70,270		—		70,270		—
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	87,161		87,161		—		87,161		—

- 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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- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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