Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015, December 31, 2014, and March 31, 2014:



			Fair Value by Hierarchy
(In thousands)	March 31, 2015		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,869	$	2,869	$	—	$	—
U.S. treasury notes & bonds	—		—		—		—
U.S. government agency debentures	2,513		—		2,513		—
U.S. States and political subdivisions	215,164		—		215,164		—
Residential mortgage-backed securities:
U.S. government agencies	947,303		—		947,303		—
Commercial mortgage-backed securities:
U.S. government agencies	140,359		—		140,359		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,892,560		—		1,892,560		—
Non-agency	6		—		1		5
Commercial collateralized mortgage-backed securities:
U.S. government agencies	244,059		—		244,059		—
Corporate debt securities	52,264		—		—		52,264
Asset-backed securities:
Collateralized loan obligations	293,962		—		—		293,962
Total available for sale securities	3,791,059		2,869		3,441,959		346,231
Residential loans held for sale	3,568		—		3,568		—
Derivative assets:
Interest rate swaps - fair value hedges	12,688		—		12,688		—
Interest rate swaps - nondesignated	59,147		—		59,147		—
Mortgage loan commitments	388		—		388		—
Foreign exchange	350		—		350		—
Total derivative assets	72,573		—		72,573		—
Total fair value of assets ⁽¹⁾	$	3,867,200	$	2,869	$	3,518,100	$	346,231
Derivative liabilities:
Interest rate swaps - fair value hedges	$	6,063	$	—	$	6,063	$	—
Interest rate swaps - nondesignated	59,147		—		59,147		—
Forward sales contracts	68		—		68		—
Foreign exchange	169		—		169		—
Equity swap	—		—		—		—
Total derivative liabilities	65,447		—		65,447		—
True-up liability	13,707		—		—		13,707
Total fair value of liabilities ⁽¹⁾	$	79,154	$	—	$	65,447	$	13,707
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	20,526	$	—	$	—	$	20,526
Impaired loans ⁽³⁾	63,839		—		—		63,839
Other property⁽⁴⁾	16,956		—		—		16,956
Other real estate covered by loss share ⁽⁵⁾	7,293		—		—		7,293
Total nonrecurring fair value	$	108,614	$	—	$	—	$	108,614

(1) There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the three months ended March 31, 2015.

(2) MSRs with a recorded investment of $21.5 million were reduced by a specific valuation allowance totaling $1.1 million to a reported carrying value of $20.4 million resulting in recognition of $0.2 million in expense included in loan sales and servicing income in the three months ended March 31, 2015.

(3) Collateral dependent impaired loans with a recorded investment of $75.6 million were reduced by specific valuation allowance allocations totaling $11.8 million to a reported net carrying value of $63.8 million.

(4) Amounts do not include assets held at cost at March 31, 2015. During the three months ended March 31, 2015, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.9 million included in noninterest expense.

(5) Amounts do not include assets held at cost at March 31, 2015. During the three months ended March 31, 2015, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.1 million included in noninterest expense.



			Fair Value by Hierarchy
(In thousands)	December 31, 2014		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,974	$	2,974	$	—	$	—
U.S. government agency debentures	2,482		—		2,482		—
U.S. States and political subdivisions	227,342		—		227,342		—
Residential mortgage-backed securities:
U.S. government agencies	970,998		—		970,998		—
Commercial mortgage-backed securities:
U.S. government agencies	103,403		—		103,403		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,676,567		—		1,676,567		—
Non-agency	7		—		1		6
Commercial collateralized mortgage-backed securities:
U.S. government agencies	222,334		—		222,334		—
Corporate debt securities	51,337		—		—		51,337
Asset-backed securities
Collateralized loan obligations	287,844		—		—		287,844
Total available-for-sale securities	3,545,288		2,974		3,203,127		339,187
Residential loans held for sale	13,428		—		13,428		—
Derivative assets:
Interest rate swaps - fair value hedges	5,256		—		5,256		—
Interest rate swaps - nondesignated	48,366		—		48,366		—
Mortgage loan commitments	1,408		—		1,408		—
Forward sale contracts	—		—		—		—
Foreign exchange	167		—		167		—
Total derivative assets	55,197		—		55,197		—
Total fair value of assets ⁽¹⁾	$	3,613,913	$	2,974	$	3,271,752	$	339,187
Derivative liabilities:
Interest rate swaps - fair value hedges	$	6,683	$	—	$	6,683	$	—
Interest rate swaps - nondesignated	48,366		—		48,366		—
Forward sale contracts	272		—		272		—
Foreign exchange	118		—		118		—
Total derivative liabilities	55,439		—		55,439		—
True-up liability	13,294		—		—		13,294
Total fair value of liabilities ⁽¹⁾	$	68,733	$	—	$	55,439	$	13,294
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	21,228	$	—	$	—	$	21,228
Impaired loans ⁽³⁾	56,041		—		—		56,041
Other property ⁽⁴⁾	12,510		—		—		12,510
Other real estate covered by loss share ⁽⁵⁾	3,614		—		—		3,614
Total nonrecurring fair value	$	93,393	$	—	$	—	$	93,393

(1) There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the year ended December 31, 2014.

(2) MSRs with a recorded investment of $22.0 million were reduced by a specific valuation allowance totaling $1.0 million to a reported carrying value of $21.1 million resulting in a recovery of previously recognized expense of $0.7 million in recoveries included in loans sales and servicing income in the year ended December 31, 2014.

(3)Collateral dependent impaired loans with a recorded investment of $60.3 million were reduced by specific valuation allowance allocations totaling $4.3 million to a reported net carrying value of $56.0 million.

(4) Amounts do not include assets held at cost at December 31, 2014. During the year ended December 31, 2014, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $2.6 million included in noninterest expense.

(5) Amounts do not include assets held at cost at December 31, 2014. During the year ended December 31, 2014, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $1.2 million included in noninterest expense.



			Fair Value by Hierarchy
(In thousands)	March 31, 2014		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	3,055	$	3,055	$	—	$	—
Non-marketable equity securities	3,281				10		3,271
U.S. States and political subdivisions	250,980		—		250,980		—
Residential mortgage-backed securities:
U.S. government agencies	1,023,994		—		1,023,994		—
Commercial mortgage-backed securities:
U.S. government agencies	85,133		—		85,133		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,548,104		—		1,548,104		—
Non-agency	8		—		1		7
Commercial collateralized mortgage-backed securities:
U.S. government agencies	172,469		—		172,469		—
Corporate debt securities	51,588		—		—		51,588
Asset-backed securities:
Collateralized loan obligations	294,559		—		—		294,559
Total available-for-sale securities	3,433,171		3,055		3,080,691		349,425
Residential loans held for sale	7,143		—		7,143		—
Derivative assets:
Interest rate swaps - fair value hedges	1		—		1		—
Interest rate swaps - nondesignated	44,672		—		44,672		—
Mortgage loan commitments	1,575		—		1,575		—
Forward sale contracts	167		—		167		—
Foreign exchange	52		—		52		—
Total derivative assets	46,467		—		46,467		—
Total fair value of assets ⁽¹⁾	$	3,486,781	$	3,055	$	3,134,301	$	349,425
Derivative liabilities:
Interest rate swaps - fair value hedges	10,392		—		10,392		—
Interest rate swaps - nondesignated	44,672		—		44,672		—
Foreign exchange	42		—		42		—
Total derivative liabilities	55,106		—		55,106		—
True-up liability	11,983		—		—		11,983
Total fair value of liabilities ⁽¹⁾	$	67,089	$	—	$	55,106	$	11,983
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	22,631	$	—	$	—	$	22,631
Impaired loans ⁽³⁾	58,296		—		—		58,296
Other property ⁽⁴⁾	11,568		—		—		11,568
Other real estate covered by loss share ⁽⁵⁾	19,708		—		—		19,708
Total nonrecurring fair value	$	112,203	$	—	$	—	$	112,203

(1) There were no transfers between levels 1, 2 and 3 of the fair value hierarchy during the three months ended March 31, 2014.

(2) MSRs with a recorded investment of $22.5 million were reduced by a specific valuation allowance totaling $0.4 million to a reported carrying value of $22.0 million resulting in recovery of a previously recognized expense of $0.1 million in the three months ended March 31, 2014.

(3) Collateral dependent impaired loans with a recorded investment of $65.3 million were reduced by specific valuation allowance allocations totaling $7.0 million to a reported net carrying value of $58.3 million.

(4) Amounts do not include assets held at cost at March 31, 2014. During the three months ended March 31, 2014, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.8 million included in noninterest expense.

(5) Amounts do not include assets held at cost at March 31, 2014. During the three months ended March 31, 2014, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.4 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 months ended March 31, 2015 and 2014 are summarized as follows:



	Three Months Ended March 31,
	2015				2014
(In thousands)	Available-for-sale securities		True-up liability		Available-for-sale securities		True-up liability
Balance at beginning of period	$	339,187	$	13,294	$	347,610	$	11,463
(Gains) losses included in earnings ⁽¹⁾	—		413		—		520
Unrealized gains (losses) ⁽²⁾	6,682		—		1,768		—
Purchases	—		—		—		—
Settlements	362		—		47		—
Balance at ending of period	$	346,231	$	13,707	$	349,425	$	11,983

(1)Reported in "Other expense"

(2) 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)	March 31, 2015		December 31, 2014		March 31, 2014
Aggregate fair value carrying amount	$	4,657	$	14,389	$	7,143
Aggregate unpaid principal / contractual balance	4,489		13,873		6,955
Carrying amount over aggregate unpaid principal ⁽¹⁾	$	168	$	516	$	188

(1) 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 March 31, 2015, December 31, 2014, and March 31, 2014 are shown in the tables below.



	March 31, 2015
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	532,425	$	532,425	$	532,425	$	—	$	—
Available-for-sale securities	3,791,059		3,791,059		2,869		3,441,959		346,231
Held-to-maturity securities	2,855,174		2,848,912		—		2,848,912		—
Other securities	148,475		148,475		—		148,475		—
Loans held for sale	3,568		3,568		—		3,568		—
Net originated loans	12,758,492		12,588,147		—		—		12,588,147
Net acquired loans	2,317,386		2,393,942		—		—		2,393,942
Net FDIC acquired loans and loss share receivable	268,459		268,459		—		—		268,459
Accrued interest receivable	69,086		69,086		—		69,086		—
Derivatives	72,573		72,573		—		72,573		—
Financial liabilities:
Deposits	$	19,925,595	$	19,932,571	$	—	$	19,932,571	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,113,371		1,113,371		—		1,113,371		—
Wholesale borrowings	316,628		320,180		—		320,180		—
Long-term debt	512,625		527,018		—		527,018		—
Accrued interest payable	9,620		9,620		—		9,620		—
Derivatives	65,447		65,447		—		65,447		—



	December 31, 2014
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	697,424	$	697,424	$	697,424	$	—	$	—
Available-for-sale securities	3,545,288		3,545,288		2,974		3,203,127		339,187
Held-to-maturity securities	2,903,609		2,875,920		—		2,875,920		—
Other securities	148,654		148,654		—		148,654		—
Loans held for sale	13,428		13,428		—		13,428		—
Net originated loans	12,398,116		12,235,530		—		—		12,235,530
Net acquired loans	2,471,723		2,564,842		—		—		2,564,842
Net FDIC acquired loans and loss share receivable	312,659		312,659		—		—		312,659
Accrued interest receivable	63,657		63,657		—		63,657		—
Derivatives	55,197		55,197		—		55,197		—
Financial liabilities:
Deposits	$	19,504,665	$	19,510,192	$	—	$	19,510,192	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,272,591		1,272,591		—		1,272,591		—
Wholesale borrowings	428,071		430,676		—		430,676		—
Long-term debt	505,192		516,476		—		516,476		—
Accrued interest payable	9,820		9,820		—		9,820		—
Derivatives	55,439		55,439		—		55,439		—



	March 31, 2014
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	959,285	$	959,285	$	959,285	$	—	$	—
Available for sale securities	3,433,171		3,433,171		3,055		3,080,691		349,425
Held to maturity securities	3,079,620		2,990,161		—		2,990,161		—
Other securities	148,446		148,446		—		148,446		—
Loans held for sale	7,143		7,143		—		7,143		—
Net originated loans	10,734,797		10,621,047		—		—		10,621,047
Net acquired loans	3,232,941		3,367,024		—		—		3,367,024
Net FDIC acquired loans and loss share receivable	495,815		495,815		—		—		495,815
Accrued interest receivable	64,555		64,555		—		64,555		—
Derivatives	46,467		46,467		—		46,467		—
Financial liabilities:
Deposits	$	19,811,674	$	19,810,963	$	—	$	19,810,963	$	—
Federal funds purchased and securities sold under agreements to repurchase	926,195		926,195		—		926,195		—
Wholesale borrowings	349,277		352,923		—		352,923		—
Long-term debt	324,430		330,337		—		330,337		—
Accrued interest payable	5,682		5,682		—		5,682		—
Derivatives	55,106		55,106		—		55,106		—

- 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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