Investment Securities

The following tables provide the amortized cost and fair value for the major categories of held-to-maturity and available-for-sale securities. Held-to-maturity securities are carried at amortized cost, which reflects historical cost, adjusted for amortization of premiums and accretion of discounts. Available-for-sale securities are carried at fair value with net unrealized gains or losses reported on an after tax basis as a component of OCI in shareholders' equity.



		September 30, 2015
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. treasury notes & bonds	$	5,002	$	3	$	—		$	5,005
	U.S. government agency debentures	2,500		16		—			2,516
	U.S. states and political subdivisions	196,396		4,825		(411		)	200,810
	Residential mortgage-backed securities:
	U.S. government agencies	927,715		19,624		(1,715		)	945,624
	Commercial mortgage-backed securities:
	U.S. government agencies	153,834		1,722		(480		)	155,076
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	2,023,275		12,200		(12,516		)	2,022,959
	Non-agency	5		—		—			5
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	241,788		2,462		(290		)	243,960
	Asset-backed securities:
	Collateralized loan obligations	297,776		187		(5,512		)	292,451
	Corporate debt securities	61,695		—		(7,158		)	54,537
	Total debt securities	3,909,986		41,039		(28,082		)	3,922,943
Equity securities
	Marketable equity securities	2,781		—		—			2,781
	Total equity securities	2,781		—		—			2,781
	Total securities available-for-sale	$	3,912,767	$	41,039	$	(28,082	)	$	3,925,724
Securities held-to-maturity
Debt securities
	U.S. government agency debentures	$	25,000	$	—	$	(41	)	$	24,959
	U.S. states and political subdivisions	550,769		12,271		(977		)	562,063
	Residential mortgage-backed securities:
	U.S. government agencies	529,095		9,732		(1,249		)	537,578
	Commercial mortgage-backed securities:
	U.S. government agencies	64,605		1,162		(11		)	65,756
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,210,743		1,509		(22,432		)	1,189,820
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	259,888		2,005		(2,418		)	259,475
	Corporate debt securities	88,538		722		—			89,260
	Total securities held-to-maturity	$	2,728,638	$	27,401	$	(27,128	)	$	2,728,911



		December 31, 2014
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. government agency debentures	$	2,500	$	—	$	(18	)	$	2,482
	U.S. states and political subdivisions	221,052		6,756		(466		)	227,342
	Residential mortgage-backed securities:
	U.S. government agencies	951,839		22,377		(3,218		)	970,998
	Commercial mortgage-backed securities:
	U.S. government agencies	104,176		598		(1,371		)	103,403
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,698,015		4,777		(26,225		)	1,676,567
	Non-agency	7		—		—			7
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	222,876		863		(1,405		)	222,334
	Asset-backed securities:
	Collateralized loan obligations	297,446		11		(9,613		)	287,844
	Corporate debt securities	61,652		—		(10,315		)	51,337
	Total debt securities	3,559,563		35,382		(52,631		)	3,542,314
Equity securities
	Marketable equity securities	2,974		—		—			2,974
	Total equity securities	2,974		—		—			2,974
	Total securities available-for-sale	$	3,562,537	$	35,382	$	(52,631	)	$	3,545,288
Securities held-to-maturity
Debt securities
	U.S. treasury notes & bonds	$	5,000	$	—	$	—		$	5,000
	U.S. government agency debentures	25,000		—		(537		)	24,463
	U.S. states and political subdivisions	517,824		12,645		(191		)	530,278
	Residential mortgage-backed securities:
	U.S. government agencies	580,727		7,495		(3,045		)	585,177
	Commercial mortgage-backed securities:
	U.S. government agencies	58,143		281		(329		)	58,095
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,368,534		718		(38,875		)	1,330,377
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	257,642		557		(6,768		)	251,431
	Corporate debt securities	90,739		412		(52		)	91,099
	Total securities held-to-maturity	$	2,903,609	$	22,108	$	(49,797	)	$	2,875,920



		September 30, 2014
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	229,528	$	8,146	$	(607	)	$	237,067
	Residential mortgage-backed securities:
	U.S. government agencies	983,038		20,395		(7,046		)	996,387
	Commercial mortgage-backed securities:
	U.S. government agencies	86,485		167		(1,888		)	84,764
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,635,780		3,512		(38,975		)	1,600,317
	Non-agency	7		—		—			7
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	195,512		298		(1,793		)	194,017
	Asset-backed securities:
	Collateralized loan obligations	297,389		289		(7,257		)	290,421
	Corporate debt securities	61,638		—		(7,044		)	54,594
	Total debt securities	3,489,377		32,807		(64,610		)	3,457,574
Equity Securities
	Marketable equity securities	2,916		—		—			2,916
	Non-marketable equity securities	2,500		—		—			2,500
	Total equity securities	5,416		—		—			5,416
	Total securities available-for-sale	$	3,494,793	$	32,807	$	(64,610	)	$	3,462,990
Securities held-to-maturity
Debt securities
	U.S. treasury notes & bonds	$	5,000	$	3	$	—		$	5,003
	U.S. government agency debentures	25,000		—		(756		)	24,244
	U.S states and political subdivisions	539,014		12,256		(452		)	550,818
	Residential mortgage-backed securities:
	U.S. government agencies	602,220		4,608		(5,992		)	600,836
	Commercial mortgage-backed securities:
	U.S. government agencies	65,704		28		(676		)	65,056
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	1,415,421		66		(56,260		)	1,359,227
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	258,436		346		(8,570		)	250,212
	Corporate debt securities	91,467		489		(180		)	91,776
	Total securities held-to-maturity	$	3,002,262	$	17,796	$	(72,886	)	$	2,947,172

The Corporation's U.S. states and political subdivisions portfolio is composed of general obligation bonds issued by a highly diversified number of states, cities, counties, and school districts. The amortized cost and fair value of the Corporation's portfolio of general obligation bonds are summarized by U.S. state in the tables below. As illustrated in the tables below, the aggregate fair value of the Corporation's general obligation bonds was greater than $10.0 million in 11 of the 37 U.S. states in which it holds investments.



(Dollars in thousands)	September 30, 2015
U.S. State	# of Issuers	Average Issue Size, Fair Value		Amortized Cost		Fair Value
Ohio	125	$	1,118	$	137,443	$	139,700
Michigan	143	1,153		159,554		163,938
Illinois	60	1,806		106,332		108,389
Wisconsin	68	619		40,767		42,080
Texas	58	808		45,940		46,839
Pennsylvania	43	1,067		45,340		45,878
Minnesota	33	669		21,732		22,074
Washington	30	941		27,681		28,225
New Jersey	35	727		24,839		25,430
Missouri	15	1,083		15,930		16,251
New York	18	635		11,174		11,424
Other	112	651		71,974		72,857
Total general obligation bonds	740	$	977	$	708,706	$	723,085



(Dollars in thousands)	December 31, 2014
U.S. State	# of Issuers	Average Issue Size, Fair Value		Amortized Cost		Fair Value
Ohio	137	$	979	$	130,741	$	134,127
Michigan	169	842		138,325		142,292
Illinois	66	1,897		121,560		125,169
Wisconsin	77	841		62,543		64,776
Texas	64	801		50,307		51,293
Pennsylvania	45	1,000		44,443		45,006
Minnesota	42	674		27,740		28,326
Washington	30	952		27,987		28,558
New Jersey	37	746		26,755		27,612
Missouri	19	1,011		18,764		19,207
New York	19	628		11,659		11,929
Other	120	650		76,849		78,020
Total general obligation bonds	825	$	917	$	737,673	$	756,315



(Dollars in thousands)	September 30, 2014
U.S. State	# of Issuers	Average Issue Size, Fair Value		Amortized Cost		Fair Value
Ohio	149	$	1,066	$	155,088	$	158,825
Michigan	175	856		145,897		149,715
Illinois	72	1,618		113,017		116,517
Wisconsin	83	846		67,681		70,251
Texas	63	800		49,440		50,431
Pennsylvania	47	987		46,010		46,389
Minnesota	41	685		27,476		28,074
Washington	30	989		29,011		29,658
New Jersey	36	754		26,145		27,143
Missouri	19	1,019		18,814		19,357
New York	19	618		11,448		11,734
Other	122	641		76,879		78,034
Total general obligation bonds	856	$	918	$	766,906	$	786,128

The Corporation's investment policy states that municipal securities purchased are to be investment grade and allows for a 20% maximum portfolio concentration in municipal securities with a combined individual state to total municipal outstanding equal to or less than 25%. A municipal security is investment grade if (1) the security has a low risk of default by the obligor and (2) the full and timely payment of principal and interest is expected over the anticipated life of the instrument. The fact that a municipal security is rated by one nationally recognized credit rating agency is indicative, but not sufficient evidence, that a municipal security is investment grade. In all cases, the Corporation considers and documents within a security pre-purchase analysis factors such as capacity to pay, market and economic data, and such other factors as are available and relevant to the security or issuer. Factors to be considered in the ongoing monitoring of municipal securities and in the pre-purchase analysis include soundness of budgetary position and sources of revenue, financial strength, and stability of tax or enterprise revenues. The Corporation also considers spreads to U.S. Treasuries on comparable bonds of similar credit quality, in addition to the above analysis, to assess whether municipal securities are investment grade. The Corporation performs a risk analysis for any security that is downgraded below investment grade to determine if the security should be retained or sold. This risk analysis includes, but is not limited to, discussions with the Corporation's credit department as well as third-party municipal credit analysts and review of the nationally recognized credit rating agency's analysis describing the downgrade.

The Corporation's evaluation of its municipal bond portfolio at September 30, 2015 did not uncover any facts or circumstances resulting in significantly different credit ratings than those assigned by a nationally recognized credit rating agency.

FRB and FHLB stock constitutes the majority of other investments on the Consolidated Balance Sheets.



(In thousands)	September 30, 2015		December 31, 2014		September 30, 2014
FRB stock	$	55,853	$	55,681	$	55,435
FHLB stock	91,714		92,547		92,547
Other	388		426		439
Total other investments	$	147,955	$	148,654	$	148,421

FRB and FHLB stock is classified as a restricted investment, carried at cost and valued based on the ultimate recoverability of par value. Cash and stock dividends received on the stock are reported as interest income. There are no identified events or changes in circumstances that may have a significant adverse effect on these investments carried at cost.

Securities with a carrying value of $3.4 billion, $2.8 billion, and $3.3 billion at September 30, 2015, December 31, 2014, and September 30, 2014, respectively, were pledged to secure trust and public deposits and securities sold under agreements to repurchase and for other purposes required or permitted by law.

Realized Gains and Losses

The following table presents the gross realized gains and losses on the sales of those securities that have been included in earnings as a result of those sales. Gains or losses on the sales of available-for-sale securities are recognized upon sale and are determined using the specific identification method.



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2015			2014			2015			2014
Realized gains	$	48		$	45		$	1,112		$	345
Realized losses	(7		)	(31		)	(150		)	(195		)
Net securities (losses)/gains	$	41		$	14		$	962		$	150

Gross Unrealized Losses and Fair Value

The following table presents the gross unrealized losses and fair value of securities by length of time that individual securities had been in a continuous loss position by major categories of available-for-sale and held-to-maturity securities.



		September 30, 2015
		Less than 12 months						12 months or longer						Total
(Dollars in thousands)		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	11,972	$	(149	)	23	$	5,810	$	(262	)	9	$	17,782	$	(411	)
	Residential mortgage-backed securities:
	U.S. government agencies	153,059		(422		)	14	100,526		(1,293		)	8	253,585		(1,715		)
	Commercial mortgage-backed securities:
	U.S. government agencies	9,744		(46		)	1	12,676		(434		)	1	22,420		(480		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	122,235		(490		)	11	665,809		(12,026		)	52	788,044		(12,516		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	8,800		(12		)	1	60,177		(278		)	6	68,977		(290		)
	Asset-backed securities:
	Collateralized loan obligations	202,750		(3,434		)	28	71,904		(2,078		)	11	274,654		(5,512		)
	Corporate debt securities	—		—			0	54,537		(7,158		)	8	54,537		(7,158		)
	Total securities available-for-sale	$	508,560	$	(4,553	)	78	$	971,439	$	(23,529	)	95	$	1,479,999	$	(28,082	)
Securities held-to-maturity
Debt securities
	U.S. government agency debentures	$	—	$	—		0	$	24,959	$	(41	)	1	$	24,959	$	(41	)
	U.S. states and political subdivisions	53,159		(928		)	50	4,452		(49		)	6	57,611		(977		)
	Residential mortgage-backed securities:
	U.S. government agencies	12,516		(70		)	1	102,426		(1,179		)	6	114,942		(1,249		)
	Commercial mortgage-backed securities:
	U.S. government agencies	—		—			0	9,543		(11		)	1	9,543		(11		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	44,773		(207		)	3	995,866		(22,225		)	55	1,040,639		(22,432		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	—		—			0	128,520		(2,418		)	12	128,520		(2,418		)
	Total securities held-to-maturity	$	110,448	$	(1,205	)	54	$	1,265,766	$	(25,923	)	81	$	1,376,214	$	(27,128	)



		December 31, 2014
		Less than 12 months						12 months or longer						Total
(Dollars in thousands)		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. government agency debentures	$	2,482	$	(18	)	1	$	—	$	—		0	$	2,482	$	(18	)
	U.S. states and political subdivisions	5,637		(11		)	11	22,528		(455		)	36	28,165		(466		)
	Residential mortgage-backed securities:
	U.S. government agencies	50,126		(182		)	5	199,773		(3,036		)	14	249,899		(3,218		)
	Commercial mortgage-backed securities:
	U.S. government agencies	12,284		(55		)	2	45,485		(1,316		)	6	57,769		(1,371		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	243,970		(906		)	15	905,478		(25,319		)	64	1,149,448		(26,225		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	31,375		(229		)	4	67,169		(1,176		)	7	98,544		(1,405		)
	Asset-backed securities:
	Collateralized loan obligations	79,042		(1,406		)	15	193,687		(8,207		)	27	272,729		(9,613		)
	Corporate debt securities	—		—			0	51,338		(10,315		)	8	51,338		(10,315		)
	Total securities available-for-sale	$	424,916	$	(2,807	)	53	$	1,485,458	$	(49,824	)	162	$	1,910,374	$	(52,631	)
Securities held-to-maturity
Debt securities
	U.S. government agency debentures	$	—	$	—		0	$	24,463	$	(537	)	1	$	24,463	$	(537	)
	U.S. states and political subdivisions	9,085		(17		)	9	18,371		(174		)	21	27,456		(191		)
	Residential mortgage-backed securities:
	U.S. government agencies	—		—			0	185,361		(3,045		)	10	185,361		(3,045		)
	Commercial mortgage-backed securities:
	U.S. government agencies	9,950		(4		)	2	16,735		(325		)	2	26,685		(329		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	28,333		(149		)	3	1,161,297		(38,726		)	58	1,189,630		(38,875		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	41,474		(55		)	3	171,570		(6,713		)	16	213,044		(6,768		)
	Corporate debt securities	36,933		(52		)	13	—		—			—	36,933		(52		)
	Total securities held-to-maturity	$	125,775	$	(277	)	30	$	1,577,797	$	(49,520	)	108	$	1,703,572	$	(49,797	)



		September 30, 2014
		Less than 12 months						12 months or longer						Total
(Dollars in thousands)		Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses			Number Impaired Securities	Fair Value		Unrealized Losses
Securities available-for-sale
Debt securities
	U.S. states and political subdivisions	$	5,298	$	(10	)	5	$	22,729	$	(597	)	37	$	28,027	$	(607	)
	Residential mortgage-backed securities:
	U.S. government agencies	25,456		(86		)	2	248,946		(6,960		)	19	274,402		(7,046		)
	Commercial mortgage-backed securities:
	U.S. government agencies	9,095		(56		)	2	45,208		(1,832		)	6	54,303		(1,888		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	436,857		(3,528		)	29	890,497		(35,447		)	63	1,327,354		(38,975		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	61,703		(264		)	6	67,029		(1,529		)	7	128,732		(1,793		)
	Asset-backed securities:
	Collateralized loan obligations	100,337		(1,904		)	13	151,668		(5,353		)	23	252,005		(7,257		)
	Corporate debt securities	—		—			0	54,594		(7,044		)	8	54,594		(7,044		)
	Total securities available-for-sale	$	638,746	$	(5,848	)	57	$	1,480,671	$	(58,762	)	163	$	2,119,417	$	(64,610	)
Securities held-to-maturity
Debt securities
	U.S. government agency debentures	$	—	$	—		—	$	24,244	$	(756	)	1	$	24,244	$	(756	)
	U.S. states and political subdivisions	16,255		(78		)	20	29,783		(374		)	38	46,038		(452		)
	Residential mortgage-backed securities:
	U.S. government agencies	10,549		(64		)	1	188,704		(5,928		)	10	199,253		(5,992		)
	Commercial mortgage-backed securities:
	U.S. government agencies	26,346		(110		)	5	23,788		(566		)	3	50,134		(676		)
	Residential collateralized mortgage-backed securities:
	U.S. government agencies	121,516		(1,195		)	8	1,208,939		(55,065		)	60	1,330,455		(56,260		)
	Commercial collateralized mortgage-backed securities:
	U.S. government agencies	8,026		(30		)	1	182,299		(8,540		)	17	190,325		(8,570		)
	Corporate debt securities	46,907		(180		)	16	—		—			0	46,907		(180		)
	Total securities held-to-maturity	$	229,599	$	(1,657	)	51	$	1,657,757	$	(71,229	)	129	$	1,887,356	$	(72,886	)

At least quarterly, the Corporation conducts a comprehensive security-level impairment assessment on all securities in an unrealized loss position to determine if OTTI exists. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. An OTTI loss must be recognized for a debt security in an unrealized loss position if the Corporation intends to sell the security or it is more likely than not that the Corporation will be required to sell the security before recovery of its amortized cost basis. In this situation, the amount of loss recognized in income is equal to the difference between the fair value and the amortized cost basis of the security. Even if the Corporation does not expect to sell the security, the Corporation must evaluate the expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, only the amount of impairment associated with the credit loss is recognized in income. The portion of the unrealized loss relating to other factors, such as liquidity conditions in the market or changes in market interest rates, is recorded in OCI. Equity securities are also evaluated to determine whether the unrealized loss is expected to be recoverable based on whether evidence exists to support a realizable value equal to or greater than the amortized cost basis. If it is probable that the Corporation will not recover the amortized cost basis, taking into consideration the estimated recovery period and its ability to hold the equity security until recovery, OTTI is recognized.

The security-level assessment is performed on each security, regardless of the classification of the security as available-for-sale or held-to-maturity. The assessments are based on the nature of the securities, the financial condition of the issuer, the extent and duration of the securities, the extent and duration of the loss and whether Management intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost basis, which may be maturity. For those securities which the assessment shows the Corporation will recover the entire cost basis, Management does not intend to sell these securities and it is not more likely than not that the Corporation will be required to sell them before the anticipated recovery of the amortized cost basis, the gross unrealized losses are recognized in OCI, net of tax.

The investment securities portfolio was in a net unrealized gain position of $13.2 million at September 30, 2015, compared to a net unrealized loss position of $44.9 million at December 31, 2014 and a net unrealized loss position of $86.9 million at September 30, 2014. Gross unrealized losses were $55.2 million as of September 30, 2015, compared to $102.4 million at December 31, 2014, and $137.5 million at September 30, 2014. As of September 30, 2015, gross unrealized losses are concentrated within agency MBS, CLOs, and corporate debt securities. Securities classified as corporate debt would include eight, single issuer, trust preferred securities with stated maturities. Such investments are only 1% of the fair value of the available-for-sale investment portfolio. None of the corporate issuers have deferred paying dividends on their issued trust preferred shares in which the Corporation is invested. The fair values of these investments have been impacted by the market conditions which have caused risk premiums to increase, resulting in the decline in the fair value of the trust preferred securities.

Management believes the Corporation will fully recover the cost of these agency MBSs, CLOs, and corporate debt securities, and it does not intend to sell these securities and it is not more likely than not that it will be required to sell them before the anticipated recovery of the remaining amortized cost basis, which may be maturity. As a result, Management concluded that these securities were not other-than-temporarily impaired at September 30, 2015 and has recognized the total amount of the impairment in OCI, net of tax.

The new Volcker Rule, as originally adopted, may affect the Corporation's ability to hold CLOs. As of September 30, 2015, the Corporation holds $292.5 million of CLOs with a gross unrealized loss position of $5.5 million. Management believes that its holdings of CLOs are not ownership interests in covered funds prohibited by the Volcker Rule regulations and, therefore, expects to be able to hold these investments until their stated maturities. Management seeks to maintain a CLO portfolio consistent with the requirements of the Volcker Rule, and new CLO investments are being made in accordance with this strategy. As of September 30, 2015, the Corporation has purchased $38.0 million of newly issued CLO investments that Management believes to be exempt from the Volcker Rule as these CLOs are structured in a manner consistent with the loan securitization exclusion set forth in the Volcker Rule.

Contractual Maturity of Debt Securities

The following table shows the remaining contractual maturities and contractual yields of debt securities held-to-maturity and available-for-sale as of September 30, 2015. Estimated lives on MBSs may differ from contractual maturities as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.