Fair Value Measurement (Tables)

3 Months Ended

Mar. 31, 2016

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, 2016, December 31, 2015, and March 31, 2015:



			Fair Value by Hierarchy
(In thousands)	March 31, 2016		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,873	$	2,873	$	—	$	—
U.S. government agency debentures	2,520		—		2,520		—
U.S. States and political subdivisions	173,141		—		173,141		—
Residential mortgage-backed securities:
U.S. government agencies	907,656		—		907,656		—
Commercial mortgage-backed securities:
U.S. government agencies	184,248		—		184,248		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	2,226,737		—		2,226,737		—
Non-agency	4		—		—		4
Commercial collateralized mortgage-backed securities:
U.S. government agencies	272,882		—		272,882		—
Corporate debt securities	48,756		—		—		48,756
Asset-backed securities:
Collateralized loan obligations	285,397		—		—		285,397
Total available for sale securities	4,104,214		2,873		3,767,184		334,157
Residential loans held for sale	5,249		—		5,249		—
Derivative assets:
Interest rate swaps - fair value hedges	22,718		—		22,718		—
Interest rate swaps - nondesignated	75,139		—		75,139		—
Mortgage loan commitments	240		—		240		—
Foreign exchange	452		—		452		—
Total derivative assets	98,549		—		98,549		—
Total fair value of assets ⁽¹⁾	$	4,208,012	$	2,873	$	3,870,982	$	334,157
Derivative liabilities:
Interest rate swaps - fair value hedges	$	3,238	$	—	$	3,238	$	—
Interest rate swaps - nondesignated	75,139		—		75,139		—
Forward sales contracts	82		—		82		—
Credit contracts	8		—		8		—
Foreign exchange	154		—		154		—
Total derivative liabilities	78,621		—		78,621		—
True-up liability	15,115		—		—		15,115
Total fair value of liabilities ⁽¹⁾	$	93,736	$	—	$	78,621	$	15,115
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	17,460	$	—	$	—	$	17,460
Impaired loans ⁽³⁾	86,315		—		—		86,315
Other property⁽⁴⁾	13,629		—		—		13,629
Total nonrecurring fair value	$	117,404	$	—	$	—	$	117,404

(1) There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the three months ended March 31, 2016.

(2) MSRs with a recorded investment of $18.1 million were reduced by a specific valuation allowance totaling $0.9 million to a reported carrying value of $17.3 million resulting in recognition of $0.5 million in expense included in loan sales and servicing income in the three months ended March 31, 2016.

(3) At March 31, 2016, collateral dependent impaired loans with a recorded investment of $94.1 million were reduced by specific valuation allowance allocations totaling $7.8 million to a reported net carrying value of $86.3 million.

(4) Amounts do not include assets held at cost at March 31, 2016. During the three months ended March 31, 2016, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $2.0 million included in noninterest expense.



			Fair Value by Hierarchy
(In thousands)	December 31, 2015		Level 1		Level 2		Level 3
Recurring fair value measurement
Available-for-sale securities:
Marketable equity securities	$	2,821	$	2,821	$	—	$	—
U.S treasury notes & bonds	5,000		—		5,000		—
U.S. government agency debentures	2,498		—		2,498		—
U.S. States and political subdivisions	192,795		—		192,795		—
Residential mortgage-backed securities:
U.S. government agencies	906,229		—		906,229		—
Commercial mortgage-backed securities:
U.S. government agencies	172,109		—		172,109		—
Residential collateralized mortgage-backed securities:
U.S. government agencies	2,128,320		—		2,128,320		—
Non-agency	4		—		—		4
Commercial collateralized mortgage-backed securities:
U.S. government agencies	216,319		—		216,319		—
Corporate debt securities	52,229		—		—		52,229
Asset-backed securities
Collateralized loan obligations	289,411		—		—		289,411
Total available-for-sale securities	3,967,735		2,821		3,623,270		341,644
Residential loans held for sale	5,472		—		5,472		—
Derivative assets:
Interest rate swaps - fair value hedges	8,739		—		8,739		—
Interest rate swaps - nondesignated	48,920		—		48,920		—
Mortgage loan commitments	149		—		149		—
Foreign exchange	299		—		299		—
Total derivative assets	58,107		—		58,107		—
Total fair value of assets ⁽¹⁾	$	4,031,314	$	2,821	$	3,686,849	$	341,644
Derivative liabilities:
Interest rate swaps - fair value hedges	$	3,536	$	—	$	3,536	$	—
Interest rate swaps - nondesignated	48,920		—		48,920		—
Forward sale contracts	5		—		5		—
Foreign exchange	284		—		284		—
Total derivative liabilities	52,745		—		52,745		—
True-up liability	14,750		—		—		14,750
Total fair value of liabilities ⁽¹⁾	$	67,495	$	—	$	52,745	$	14,750
Nonrecurring fair value measurement
Mortgage servicing rights ⁽²⁾	$	19,149	$	—	$	—	$	19,149
Impaired loans ⁽³⁾	71,428		—		—		71,428
Other property ⁽⁴⁾	18,576		—		—		18,576
Other real estate covered by loss share ⁽⁵⁾	365		—		—		365
Total nonrecurring fair value	$	109,518	$	—	$	—	$	109,518

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

(2) MSRs with a recorded investment of $18.9 million were reduced by a specific valuation allowance totaling $0.4 million to a reported carrying value of $18.5 million resulting in a recovery of previously recognized expense of $0.6 million in recoveries included in loans sales and servicing income in the year ended December 31, 2015.

(3)At December 31, 2015, collateral dependent impaired loans with a recorded investment of $84.3 million were reduced by specific valuation allowance allocations totaling $12.9 million to a reported net carrying value of $71.4 million.

(4) Amounts do not include assets held at cost at December 31, 2015. During the year ended December 31, 2015, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $4.5 million included in noninterest expense.

(5) Amounts do not include assets held at cost at December 31, 2015. During the year ended December 31, 2015, the re-measurement of covered foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.6 million included in noninterest expense.



			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. 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 sale contracts	68		—		68		—
Foreign exchange	169		—		169		—
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 and 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 recovery of a previously recognized expense of $0.2 million in the three months ended March 31, 2015.

(3) At March 31, 2015, 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 $0.3 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, 2016 and 2015 are summarized as follows:



	Three Months Ended March 31,
	2016					2015
(In thousands)	Available-for-sale securities			True-up liability		Available-for-sale securities		True-up liability
Balance at beginning of period	$	341,644		$	14,750	$	339,187	$	13,294
(Gains) losses included in earnings ⁽¹⁾	—			365		—		413
Unrealized gains (losses) ⁽²⁾	(7,556		)	—		6,682		—
Purchases	—			—		—		—
Sales	—			—
Settlements	69			—		362		—
Balance at ending of period	$	334,157		$	15,115	$	346,231	$	13,707

(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, 2016		December 31, 2015		March 31, 2015
Aggregate fair value carrying amount	$	5,249	$	5,472	$	3,568
Aggregate unpaid principal / contractual balance	5,084		5,320		3,400
Carrying amount over aggregate unpaid principal ⁽¹⁾	$	165	$	152	$	168

(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, 2016, December 31, 2015, and March 31, 2015 are shown in the tables below.



	March 31, 2016
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	759,897	$	759,897	$	759,897	$	—	$	—
Available-for-sale securities	4,104,214		4,104,214		2,873		3,767,184		334,157
Held-to-maturity securities	2,613,700		2,632,274		—		2,632,274		—
Other securities	148,159		148,159		—		148,159		—
Loans held for sale	5,249		5,249		—		5,249		—
Net originated loans	14,286,598		14,069,307		—		—		14,069,307
Net acquired loans	1,629,283		1,681,087		—		—		1,681,087
Net FDIC acquired loans and loss share receivable	157,632		157,632		—		—		157,632
Accrued interest receivable	70,280		70,280		—		70,280		—
Derivatives	98,549		98,549		—		98,549		—
Financial liabilities:
Deposits	$	21,101,366	$	21,109,594	$	—	$	21,109,594	$	—
Federal funds purchased and securities sold under agreements to repurchase	719,850		719,850		—		719,850		—
Wholesale borrowings	378,996		383,432		—		383,432		—
Long-term debt	519,249		504,468		—		504,468		—
Accrued interest payable	10,093		10,093		—		10,093		—
Derivatives	78,621		78,621		—		78,621		—



	December 31, 2015
	Carrying Amount		Fair Value
(In thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	463,817	$	463,817	$	463,817	$	—	$	—
Available-for-sale securities	3,967,735		3,967,735		2,821		3,623,270		341,644
Held-to-maturity securities	2,674,093		2,659,119		—		2,659,119		—
Other securities	148,172		148,172		—		148,172		—
Loans held for sale	5,472		5,472		—		5,472		—
Net originated loans	14,013,370		13,795,058		—		—		13,795,058
Net acquired loans	1,739,194		1,796,314		—		—		1,796,314
Net FDIC acquired loans and loss share receivable	170,690		170,690		—		—		170,690
Accrued interest receivable	67,887		67,887		—		67,887		—
Derivatives	58,107		58,107		—		58,107		—
Financial liabilities:
Deposits	$	20,108,003	$	20,116,298	$	—	$	20,116,298	$	—
Federal funds purchased and securities sold under agreements to repurchase	1,037,075		1,037,075		—		1,037,075		—
Wholesale borrowings	580,648		582,120		—		582,120		—
Long-term debt	505,173		503,675		—		503,675		—
Accrued interest payable	10,758		10,758		—		10,758		—
Derivatives	52,745		52,745		—		52,745		—



	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		—