Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 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 June 30, 2015, December 31, 2014, and June 30, 2014:



			Fair Value by Hierarchy
(In thousands)	June 30, 2015		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,824	$	2,824	$	—	$	—
U.S. treasury notes & bonds	5,005		—		5,005		—
U.S. government agency debentures	2,510		—		2,510		—
U.S. States and political subdivisions	207,617		—		207,617		—
Residential mortgage-backed securities:
U.S. government agencies	960,852		—		960,852		—
Commercial mortgage-backed securities:
U.S. government agencies	170,338		—		170,338		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	1,949,389		—		1,949,389		—
Non-agency	5		—		—		5
Commercial collateralized mortgage-backed securities:
U.S. government agencies	228,438		—		228,438		—
Corporate debt securities	53,450		—		—		53,450
Asset-backed securities:
Collateralized loan obligations	258,081		—		—		258,081
Total available for sale securities	3,838,509		2,824		3,524,149		311,536
Residential loans held for sale	8,302		—		8,302		—
Derivative assets:
Interest rate swaps - fair value hedges	1,153		—		1,153		—
Interest rate swaps - nondesignated	46,216		—		46,216		—
Mortgage loan commitments	342		—		342		—
Forward sale contracts	106		—		106		—
Foreign exchange	256		—		256		—
Total derivative assets	48,073		—		48,073		—
Total fair value of assets ⁽¹⁾	$	3,894,884	$	2,824	$	3,580,524	$	311,536
Derivative liabilities:
Interest rate swaps - fair value hedges	$	5,104	$	—	$	5,104	$	—
Interest rate swaps - nondesignated	46,216		—		46,216		—
Foreign exchange	177		—		177		—
Total derivative liabilities	51,497		—		51,497		—
True-up liability	13,408		—		—		13,408
Total fair value of liabilities ⁽¹⁾	$	64,905	$	—	$	51,497	$	13,408
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	20,809	$	—	$	—	$	20,809
Impaired loans ⁽³⁾	72,580		—		—		72,580
Other property⁽⁴⁾	33,078		—		—		33,078
Other real estate covered by loss share ⁽⁵⁾	4		—		—		4
Total nonrecurring fair value	$	126,471	$	—	$	—	$	126,471

(1) There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the three months ended June 30, 2015.

(2) MSRs with a recorded investment of $20.6 million were reduced by a specific valuation allowance totaling $0.5 million to a reported carrying value of $20.1 million resulting in recognition of $0.6 million in recoveries included in loan sales and servicing income in the three months ended June 30, 2015.

(3) Collateral dependent impaired loans with a recorded investment of $82.7 million were reduced by specific valuation allowance allocations totaling $10.2 million to a reported net carrying value of $72.6 million.

(4) Amounts do not include assets held at cost at June 30, 2015. During the three months ended June 30, 2015, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $2.1 million included in noninterest expense.

(5) Amounts do not include assets held at cost at June 30, 2015. During the three months ended June 30, 2015, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition was immaterial.



			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	14,389		—		14,389		—
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⁾	$	3,614,874	$	2,974	$	3,272,713	$	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)	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 - fair value hedges	—		—		—		—
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 ⁽¹⁾	$	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 sale 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 ⁽¹⁾	$	70,125	$	—	$	57,544	$	12,581
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	21,987	$	—	$	—	$	21,987
Impaired loans ⁽³⁾	56,006		—		—		56,006
Other property ⁽⁴⁾	17,052		—		—		17,052
Other real estate covered by loss share ⁽⁵⁾	22,782		—		—		22,782
Total nonrecurring fair value	$	117,827	$	—	$	—	$	117,827

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

(2) 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 recovery of a previously recognized expense of $0.1 million in the three months ended June 30, 2014.

(3) 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.

(4) 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.

(5) 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 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, 2015 and 2014 are summarized as follows:



	Three Months Ended June 30,										Six Months Ended June 30,
	2015						2014				2015					2014
(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	$	346,685		$	13,707		$	349,425	$	11,983	$	339,187		$	13,294	$	347,610	$	11,463
(Gains) losses included in earnings ⁽¹⁾	—			(299		)	—		598		—			114		—		1,118
Unrealized gains (losses) ⁽²⁾	4,561			—			1,253		—		11,697			—		3,021		—
Purchases	41,509			—			—		—		41,509			—		—		—
Sales	(71,832		)	—			—		—		(71,832		)	—		—		—
Settlements	(9,387		)	—			55		—		(9,025		)	—		102		—
Balance at ending of period	$	311,536		$	13,408		$	350,733	$	12,581	$	311,536		$	13,408	$	350,733	$	12,581

(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)	June 30, 2015		December 31, 2014		June 30, 2014
Aggregate fair value carrying amount	$	8,302	$	14,389	$	21,632
Aggregate unpaid principal / contractual balance	8,155		13,873		20,886
Carrying amount over aggregate unpaid principal ⁽¹⁾	$	147	$	516	$	746

(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 June 30, 2015, December 31, 2014, and June 30, 2014 are shown in the tables below.



	June 30, 2015
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	587,589	$	587,589	$	587,589	$	—	$	—
Available-for-sale securities	3,838,509		3,838,509		2,824		3,524,149		311,536
Held-to-maturity securities	2,787,513		2,760,120		—		2,760,120		—
Other securities	147,967		147,967		—		147,967		—
Loans held for sale	5,432		8,302		—		8,302		—
Net originated loans	13,254,230		13,077,485		—		—		13,077,485
Net acquired loans	2,090,734		2,167,304		—		—		2,167,304
Net FDIC acquired loans and loss share receivable	211,887		211,887		—		—		211,887
Accrued interest receivable	66,501		66,501		—		66,501		—
Derivatives	48,073		48,073		—		48,073		—
Financial liabilities:
Deposits	$	19,673,850	$	19,681,270	$	—	$	19,681,270	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,519,250		1,519,250		—		1,519,250		—
Wholesale borrowings	366,074		369,337		—		369,337		—
Long-term debt	497,393		509,900		—		509,900		—
Accrued interest payable	9,910		9,910		—		9,910		—
Derivatives	51,497		51,497		—		51,497		—



	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		14,389		—		14,389		—
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		—



	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 FDIC acquired 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		—