Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2014

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, 2014, December 31, 2013, and June 30, 2013:



			Fair Value by Hierarchy
(In thousands)	June 30, 2014		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,935	$	2,935	$	—	$	—
Non-marketable equity securities	3,281		—		10		3,271
U.S. States and political subdivisions	240,805		—		240,805		—
Residential mortgage-backed securities:
U.S. government agencies	1,018,174		—		1,018,174		—
Commercial mortgage-backed securities:
U.S. government agencies	85,698		—		85,698		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,598,031		—		1,598,031		—
Non-agency	8		—		1		7
Commercial collateralized mortgage-backed securities:
U.S. government agencies	182,033		—		182,033		—
Corporate debt securities	53,490		—		—		53,490
Asset-backed securities:
Collateralized loan obligations	293,965		—		—		293,965
Total available for sale securities	3,478,420		2,935		3,124,752		350,733
Residential loans held for sale	21,632		—		21,632		—
Derivative assets:
Interest rate swaps - nondesignated	47,952		—		47,952		—
Mortgage loan commitments	2,491		—		2,491		—
Forward sale contracts	—		—		—		—
Foreign exchange	107		—		107		—
Total derivative assets	50,550		—		50,550		—
Total fair value of assets (a)	$	3,550,602	$	2,935	$	3,196,934	$	350,733
Derivative liabilities:
Interest rate swaps - fair value hedges	$	8,989	$	—	$	8,989	$	—
Interest rate swaps - nondesignated	47,952		—		47,952		—
Forward sales contracts	545		—		545		—
Foreign exchange	48		—		48		—
Credit contracts	10		—		10		—
Total derivative liabilities	57,544		—		57,544		—
True-up liability	12,581		—		—		12,581
Total fair value of liabilities (a)	$	70,125	$	—	$	57,544	$	12,581
Nonrecurring fair value measurement
Mortgage servicing rights (b)	$	21,987	$	—	$	—	$	21,987
Impaired loans (c)	56,006		—		—		56,006
Other property (d)	17,052		—		—		17,052
Other real estate covered by loss share (e)	22,782		—		—		22,782
Total fair value	$	117,827	$	—	$	—	$	117,827

(a) - There were no transfers between levels 1 and 2 of the fair value hierarchy during the three months ended June 30, 2014.

(b) - MSRs with a recorded investment of $22.2 million were reduced by a specific valuation allowance totaling $0.6 million to a reported carrying value of $21.6 million resulting in recognition of $0.1 million in expense included in loans sales and servicing income in the three months ended June 30, 2014.

(c) - Collateral dependent impaired loans with a recorded investment of $62.2 million were reduced by specific valuation allowance allocations totaling $6.2 million to a reported net carrying value of $56.0 million.

(d) - Amounts do not include assets held at cost at June 30, 2014. During the three months ended June 30, 2014, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.7 million included in noninterest expense.

(e) - Amounts do not include assets held at cost at June 30, 2014. During the three months ended June 30, 2014, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses $0.7 million included in noninterest expense.



			Fair Value by Hierarchy
(In thousands)	December 31, 2013		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	3,036	$	3,036	$	—	$	—
Nonmarketable equity securities	3,281		—		10		3,271
U.S. States and political subdivisions	262,367		—		262,367		—
Residential mortgage-backed securities:
U.S. government agencies	969,922		—		969,922		—
Commercial mortgage-backed securities:
U.S. government agencies	69,567		—		69,567		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,518,393		—		1,518,393		—
Non-agency	9		—		—		9
Commercial collateralized mortgage-backed securities:
U.S. government agencies	102,268		—		102,268		—
Corporate debt securities	50,644		—		—		50,644
Asset-backed securities
Collateralized loan obligations	293,687		—		—		293,687
Total available-for-sale securities	3,273,174		3,036		2,922,527		347,611
Residential loans held for sale	11,622		—		11,622		—
Derivative assets:
Interest rate swaps - nondesignated	46,577		—		46,577		—
Mortgage loan commitments	891		—		891		—
Forward sale contracts	384		—		384		—
Foreign exchange	50		—		50		—
Total derivative assets	47,902		—		47,902		—
Total fair value of assets (a)	$	3,332,698	$	3,036	$	2,982,051	$	347,611
Derivative liabilities:
Interest rate swaps - fair value hedges	$	11,574	$	—	$	11,574	$	—
Interest rate swaps - nondesignated	46,577		—		46,577		—
Foreign exchange	50		—		50		—
Total derivative liabilities	58,201		—		58,201		—
True-up liability	11,463		—		—		11,463
Total fair value of liabilities (a)	$	69,664	$	—	$	58,201	$	11,463
Nonrecurring fair value measurement
Mortgage servicing rights (b)	$	23,041	$	—	$	—	$	23,041
Impaired loans (c)	47,870		—		—		47,870
Other property (d)	10,018		—		—		10,018
Other real estate covered by loss share (e)	8,754		—		—		8,754
Total fair value	$	89,683	$	—	$	—	$	89,683

(a) - There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the year ended December 31, 2013.

(b) - MSRs with a recorded investment of $22.8 million were reduced by a specific valuation allowance totaling $0.3 million to a reported carrying value of $22.5 million resulting in a recovery of previously recognized expense of $2.3 million in recoveries included in loans sales and servicing income in the year ended ended December 31, 2013.

(c) - Collateral dependent impaired loans with a recorded investment of $52.6 million were reduced by specific valuation allowance allocations totaling $4.8 million to a reported net carrying value of $47.9 million.

(d) Amounts do not include assets held at cost at December 31, 2013. During the year ended December 31, 2013, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.4 million included in noninterest expense.

(e) Amounts do not include assets held at cost at December 31, 2013. During the year ended December 31, 2013, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.0 million included in noninterest expense.



			Fair Value by Hierarchy
(In thousands)	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	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 - 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		—
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 recovery of a previously recognized expense of $0.8 million 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 of $0.6 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, 2014 and 2013 are summarized as follows:



	Three Months Ended June 30,										Six Months Ended June 30,
	2014				2013						2014				2013
(In thousands)	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	$	349,425	$	11,983	$	51,234		$	12,783		$	347,610	$	11,463	$	49,661		$	12,259
Fair value of assets acquired	—		—		3,271			—			—		—		3,271			—
(Gains) losses included in earnings ^(a)	—		598		—			(1,846		)	—		1,118		—			(1,322		)
Unrealized gains (losses) ^(b)	1,253		—		(1,923		)	—			3,021		—		(363		)	—
Purchases	—		—		159,916			—			—		—		159,916			—
Settlements	55		—		14			—			102		—		27			—
Balance at ending of period	$	350,733	$	12,581	$	212,512		$	10,937		$	350,733	$	12,581	$	212,512		$	10,937

^(a)Reported in "Other expense"

^(b) Reported in "Other comprehensive income (loss)"

Summary of Change in fair value carrying amount of residential mortgages

The aggregate fair value, contractual balance and gain or loss on loans held for sale was as follows:



(In thousands)	June 30, 2014		December 31, 2013		June 30, 2013
Aggregate fair value carrying amount	$	21,632	$	11,622	$	22,855
Aggregate unpaid principal / contractual balance	20,886		11,438		23,220
Carrying amount over aggregate unpaid principal ^(a)	$	746	$	184	$	(365	)

^(a)These changes are included in "Loan sales and servicing income" in the Consolidated Statements of Income.

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 June 30, 2014, December 31, 2013, and June 30, 2013 are shown in the tables below.



	June 30, 2014
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	642,570	$	642,570	$	642,570	$	—	$	—
Available-for-sale securities	3,478,420		3,478,420		2,935		3,124,752		350,733
Held-to-maturity securities	3,052,118		3,001,866		—		3,001,866		—
Other securities	148,433		148,433		—		148,433		—
Loans held for sale	21,632		21,632		—		21,632		—
Net originated loans	11,375,243		11,458,318		—		—		11,458,318
Net acquired loans	3,018,810		3,166,228		—		—		3,166,228
Net covered loans and loss share receivable	433,538		433,538		—		—		433,538
Accrued interest receivable	63,172		63,172		—		63,172		—
Derivatives	50,550		50,550		—		50,550		—
Financial liabilities:
Deposits	$	19,298,396	$	19,300,842	$	—	$	19,300,842	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,218,855		1,218,855		—		1,218,855		—
Wholesale borrowings	649,021		652,615		—		652,615		—
Long-term debt	324,433		335,757		—		335,757		—
Accrued interest payable	8,311		8,311		—		8,311		—
Derivatives	57,544		57,544		—		57,544		—



	December 31, 2013
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	917,822	$	917,822	$	917,822	$	—	$	—
Available-for-sale securities	3,273,174		3,273,174		3,036		2,922,527		347,611
Held-to-maturity securities	2,935,688		2,824,240		—		2,824,240		—
Other securities	180,803		180,803		—		180,803		—
Loans held for sale	11,622		11,622		—		11,622		—
Net originated loans	10,116,903		10,017,722		—		—		10,017,722
Net acquired loans	3,494,874		3,627,275						3,627,275
Net covered loans and loss share receivable	547,943		547,943		—		—		547,943
Accrued interest receivable	52,929		52,929		—		52,929		—
Derivatives	47,902		47,902		—		47,902		—
Financial liabilities:
Deposits	$	19,533,601	$	19,532,368	$	—	$	19,532,368	$	—
Federal funds purchased and securities sold under agreements to repurchase	851,535		851,535		—		851,535		—
Wholesale borrowings	200,600		204,124		—		204,124		—
Long-term debt	324,428		319,711		—		319,711		—
Accrued interest payable	9,339		9,339		—		9,339		—
Derivatives	58,201		58,201		—		58,201		—



	June 30, 2013
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	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	4,250,362		4,250,362						4,250,362
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		—

- 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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