Fair Value Measurement (Tables)

9 Months Ended

Sep. 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 September 30, 2015, December 31, 2014, and September 30, 2014:



			Fair Value by Hierarchy
(In thousands)	September 30, 2015		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,781	$	2,781	$	—	$	—
U.S. treasury notes & bonds	5,005		—		5,005		—
U.S. government agency debentures	2,516		—		2,516		—
U.S. States and political subdivisions	200,810		—		200,810		—
Residential mortgage-backed securities:
U.S. government agencies	945,624		—		945,624		—
Commercial mortgage-backed securities:
U.S. government agencies	155,076		—		155,076		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	2,022,959		—		2,022,959		—
Non-agency	5		—		—		5
Commercial collateralized mortgage-backed securities:
U.S. government agencies	243,960		—		243,960		—
Corporate debt securities	54,537		—		—		54,537
Asset-backed securities:
Collateralized loan obligations	292,451		—		—		292,451
Total available for sale securities	3,925,724		2,781		3,575,950		346,993
Residential loans held for sale	7,781		—		7,781		—
Derivative assets:
Interest rate swaps - fair value hedges	12,610		—		12,610		—
Interest rate swaps - nondesignated	63,171		—		63,171		—
Mortgage loan commitments	279		—		279		—
Foreign exchange	136		—		136		—
Total derivative assets	76,196		—		76,196		—
Total fair value of assets ⁽¹⁾	$	4,009,701	$	2,781	$	3,659,927	$	346,993
Derivative liabilities:
Interest rate swaps - fair value hedges	$	4,578	$	—	$	4,578	$	—
Interest rate swaps - nondesignated	63,171		—		63,171		—
Forward sales contracts	75		—		75		—
Foreign exchange	112		—		112		—
Total derivative liabilities	67,936		—		67,936		—
True-up liability	13,572		—		—		13,572
Total fair value of liabilities ⁽¹⁾	$	81,508	$	—	$	67,936	$	13,572
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	19,556	$	—	$	—	$	19,556
Impaired loans ⁽³⁾	80,386		—		—		80,386
Other property⁽⁴⁾	16,050		—		—		16,050
Total nonrecurring fair value	$	115,992	$	—	$	—	$	115,992

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

(2) MSRs with a recorded investment of $19.8 million were reduced by a specific valuation allowance totaling $0.6 million to a reported carrying value of $19.2 million resulting in recognition of $0.1 million in expense included in loan sales and servicing income in the three months ended September 30, 2015.

(3) At September 30, 2015, collateral dependent impaired loans with a recorded investment of $89.8 million were reduced by specific valuation allowance allocations totaling $9.4 million to a reported net carrying value of $80.4 million.

(4) Amounts do not include assets held at cost at September 30, 2015. During the three months ended September 30, 2015, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.4 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	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)At December 31, 2014, 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)	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 - fair value hedges	—		—		—		—
Interest rate swaps - nondesignated	40,937		—		40,937		—
Mortgage loan commitments	1,975		—		1,975		—
Forward sale contracts	—		—		—		—
Foreign exchange	185		—		185		—
Total derivative assets	43,097		—		43,097		—
Total fair value of assets ⁽¹⁾	$	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 sale 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 ⁽¹⁾	$	62,084	$	—	$	48,765	$	13,319
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	22,229	$	—	$	—	$	22,229
Impaired loans ⁽³⁾	55,406		—		—		55,406
Other property ⁽⁴⁾	14,896		—		—		14,896
Other real estate covered by loss share ⁽⁵⁾	5,798		—		—		5,798
Total nonrecurring fair value	$	98,329	$	—	$	—	$	98,329

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

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

(3) At September 30, 2014, 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.

(4) 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.

(5) 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 of $0.1 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, 2015 and 2014 are summarized as follows:



	Three Months Ended September 30,										Nine Months Ended September 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	$	311,536		$	13,408	$	350,733		$	12,581	$	339,187		$	13,294	$	347,610		$	11,463
(Gains) losses included in earnings ⁽¹⁾	—			164		—			223		—			278		—			1,341
Unrealized gains (losses) ⁽²⁾	(3,627		)	—		277			—		8,070			—		3,298			—
Purchases	37,937			—		—			—		79,446			—		—			—
Sales	—			—		—			—		(71,832		)	—		—			—
Settlements	1,147			—		(3,489		)	—		(7,878		)	—		(3,387		)	—
Balance at ending of period	$	346,993		$	13,572	$	347,521		$	12,804	$	346,993		$	13,572	$	347,521		$	12,804

(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)	September 30, 2015		December 31, 2014		September 30, 2014
Aggregate fair value carrying amount	$	7,781	$	14,389	$	19,512
Aggregate unpaid principal / contractual balance	7,543		13,873		18,937
Carrying amount over aggregate unpaid principal ⁽¹⁾	$	238	$	516	$	575

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



	September 30, 2015
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	411,587	$	411,587	$	411,587	$	—	$	—
Available-for-sale securities	3,925,724		3,925,724		2,781		3,575,950		346,993
Held-to-maturity securities	2,728,638		2,728,911		—		2,728,911		—
Other securities	147,955		147,955		—		147,955		—
Loans held for sale	7,781		7,781		—		7,781		—
Net originated loans	13,544,270		13,344,826		—		—		13,344,826
Net acquired loans	1,910,765		1,979,065		—		—		1,979,065
Net FDIC acquired loans and loss share receivable	190,795		190,795		—		—		190,795
Accrued interest receivable	75,404		75,404		—		75,404		—
Derivatives	76,196		76,196		—		76,196		—
Financial liabilities:
Deposits	$	19,821,916	$	19,830,705	$	—	$	19,830,705	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,208,275		1,208,275		—		1,208,275		—
Wholesale borrowings	381,299		385,216		—		385,216		—
Long-term debt	508,947		514,640		—		514,640		—
Accrued interest payable	10,062		10,062		—		10,062		—
Derivatives	67,936		67,936		—		67,936		—



	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	14,389		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		—



	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 FDIC acquired 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