Fair Value Measurement (Tables)

9 Months Ended

Sep. 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 September 30, 2014, December 31, 2013, and September 30, 2013:



			Fair Value by Hierarchy
(In thousands)	September 30, 2014		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,916	$	2,916	$	—	$	—
Non-marketable equity securities	2,500		—		—		2,500
U.S. States and political subdivisions	237,067		—		237,067		—
Residential mortgage-backed securities:
U.S. government agencies	996,387		—		996,387		—
Commercial mortgage-backed securities:
U.S. government agencies	84,764		—		84,764		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,600,317		—		1,600,317		—
Non-agency	7		—		1		6
Commercial collateralized mortgage-backed securities:
U.S. government agencies	194,017		—		194,017		—
Corporate debt securities	54,594		—		—		54,594
Asset-backed securities:
Collateralized loan obligations	290,421		—		—		290,421
Total available for sale securities	3,462,990		2,916		3,112,553		347,521
Residential loans held for sale	19,512		—		19,512		—
Derivative assets:
Interest rate swaps - nondesignated	40,937		—		40,937		—
Mortgage loan commitments	1,975		—		1,975		—
Foreign exchange	185		—		185		—
Total derivative assets	43,097		—		43,097		—
Total fair value of assets (a)	$	3,525,599	$	2,916	$	3,175,162	$	347,521
Derivative liabilities:
Interest rate swaps - fair value hedges	$	7,584	$	—	$	7,584	$	—
Interest rate swaps - nondesignated	40,937		—		40,937		—
Forward sales contracts	91		—		91		—
Foreign exchange	153		—		153		—
Equity swap	515		—		—		515
Total derivative liabilities	49,280		—		48,765		515
True-up liability	12,804		—		—		12,804
Total fair value of liabilities (a)	$	62,084	$	—	$	48,765	$	13,319
Nonrecurring fair value measurement
Mortgage servicing rights (b)	$	22,229	$	—	$	—	$	22,229
Impaired loans (c)	55,406		—		—		55,406
Other property (d)	14,896		—		—		14,896
Other real estate covered by loss share (e)	5,798		—		—		5,798
Total fair value	$	98,329	$	—	$	—	$	98,329

(a) - There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the three months ended September 30, 2014.

(b) - MSRs with a recorded investment of $22.2 million were reduced by a specific valuation allowance totaling $0.5 million to a reported carrying value of $21.7 million resulting in recognition of $0.1 million in recoveries included in loans sales and servicing income in the three months ended September 30, 2014.

(c) - Collateral dependent impaired loans with a recorded investment of $59.9 million were reduced by specific valuation allowance allocations totaling $4.5 million to a reported net carrying value of $55.4 million.

(d) - Amounts do not include assets held at cost at September 30, 2014. During the three months ended September 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 September 30, 2014. During the three months ended September 30, 2014, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses $0.1 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)	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	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 sale 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, 2 and 3 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 recovery of a previously recognized expense of $0.1 million 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 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, 2014 and 2013 are summarized as follows:



	Three Months Ended September 30,										Nine Months Ended September 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	$	350,733		$	12,581	$	212,512		$	10,937	$	347,610		$	11,463	$	49,661		$	12,259
Fair value of assets acquired	—			—		—			—		—			—		3,271			—
(Gains) losses included in earnings ^(a)	—			223		—			520		—			1,341		—			(802		)
Unrealized gains (losses) ^(b)	277			—		(1,704		)	—		3,298			—		(2,066		)	—
Purchases	—			—		111,941			—		—			—		271,857			—
Settlements	(3,489		)	—		13			—		(3,387		)	—		39			—
Balance at ending of period	$	347,521		$	12,804	$	322,762		$	11,457	$	347,521		$	12,804	$	322,762		$	11,457

^(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)	September 30, 2014		December 31, 2013		September 30, 2013
Aggregate fair value carrying amount	$	19,512	$	11,622	$	17,813
Aggregate unpaid principal / contractual balance	18,937		11,438		17,179
Carrying amount over aggregate unpaid principal ^(a)	$	575	$	184	$	634

^(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 September 30, 2014, December 31, 2013, and September 30, 2013 are shown in the tables below.



	September 30, 2014
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	485,328	$	485,328	$	485,328	$	—	$	—
Available-for-sale securities	3,462,990		3,462,990		2,916		3,112,553		347,521
Held-to-maturity securities	3,002,262		2,947,172		—		2,947,172		—
Other securities	148,421		148,421		—		148,421		—
Loans held for sale	19,512		19,512		—		19,512		—
Net originated loans	11,980,876		11,995,816		—		—		11,995,816
Net acquired loans	2,738,898		2,869,303		—		—		2,869,303
Net covered loans and loss share receivable	382,175		382,175		—		—		382,175
Accrued interest receivable	65,736		65,736		—		65,736		—
Derivatives	43,097		43,097		—		43,097		—
Financial liabilities:
Deposits	$	19,366,911	$	19,370,624	$	—	$	19,370,624	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,273,290		1,273,290		—		1,273,290		—
Wholesale borrowings	608,463		611,753		—		611,753		—
Long-term debt	249,933		259,051		—		259,051		—
Accrued interest payable	5,310		5,310		—		5,310		—
Derivatives	49,280		49,280		—		48,765		515



	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		—



	September 30, 2013
	Carrying Amount		Fair Value
(In thousands)	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	3,817,421		3,817,421		—		—		3,817,421
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		—

- 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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