XML 45 R32.htm IDEA: XBRL DOCUMENT v3.5.0.2
Fair Value Measurement (Tables)
6 Months Ended
Jun. 30, 2016
Fair Value Disclosures [Abstract]  
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, 2016, December 31, 2015, and June 30, 2015:
 
 
 
 Fair Value by Hierarchy
(In thousands)
June 30, 2016
 
 Level 1
 
 Level 2
 
 Level 3
Recurring fair value measurement
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Marketable equity securities
$
2,788

 
$
2,788

 
$

 
$

U.S. treasury notes & bonds
4,997

 

 
4,997

 

U.S. government agency debentures
2,528

 

 
2,528

 

U.S. States and political subdivisions
151,547

 

 
151,547

 

Residential mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
860,247

 

 
860,247

 

Commercial mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
202,048

 

 
202,048

 

Residential collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
2,353,018

 

 
2,353,018

 

Non-agency
3

 

 

 
3

Commercial collateralized mortgage-backed securities:
 
 
 
 
 
 
 
U.S. government agencies
398,611

 

 
398,611

 

Corporate debt securities
51,107

 

 

 
51,107

Asset-backed securities:
 
 
 
 
 
 
 
Collateralized loan obligations
291,794

 

 

 
291,794

        Total available for sale securities
4,318,688

 
2,788

 
3,972,996

 
342,904

Residential loans held for sale
3,962

 

 
3,962

 

Derivative assets:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
29,760

 

 
29,760

 

Interest rate swaps - nondesignated
87,575

 

 
87,575

 

Mortgage loan commitments
253

 

 
253

 

Foreign exchange
254

 

 
254

 

       Total derivative assets
117,842

 

 
117,842

 

       Total fair value of assets (1)
$
4,440,492

 
$
2,788

 
$
4,094,800

 
$
342,904

Derivative liabilities:
 
 
 
 
 
 
 
Interest rate swaps - fair value hedges
$
2,772

 
$

 
$
2,772

 
$

Interest rate swaps - nondesignated
87,575

 

 
87,575

 

Forward sales contracts
61

 

 
61

 

Credit contracts
7

 

 
7

 

Foreign exchange
207

 

 
207

 

      Total derivative liabilities
90,622

 

 
90,622

 

True-up liability
16,170

 

 

 
16,170

      Total fair value of liabilities (1)
$
106,792

 
$

 
$
90,622

 
$
16,170

Nonrecurring fair value measurement
 
 
 
 
 
 
 
Mortgage servicing rights (2)
$
15,954

 
$

 
$

 
$
15,954

Impaired loans (3)
104,208

 

 

 
104,208

Other property (4)
10,027

 

 

 
10,027

Other real estate covered by loss share (5)
4

 

 

 
4

Total nonrecurring fair value
$
130,193

 
$

 
$

 
$
130,193

 
 
 
 
 
 
 
 


(1) There were no transfers between levels 1, 2 or 3 of the fair value hierarchy during the three months ended June 30, 2016.
(2) MSRs with a recorded investment of $17.3 million were reduced by a specific valuation allowance totaling $1.5 million to a reported carrying value of $15.8 million resulting in recognition of $0.7 million in expense included in loan sales and servicing income in the three months ended June 30, 2016.
(3) At June 30, 2016, collateral dependent impaired loans with a recorded investment of $116.1 million were reduced by specific valuation allowance allocations totaling $11.9 million to a reported net carrying value of $104.2 million.
(4) Amounts do not include assets held at cost at June 30, 2016. During the three months ended June 30, 2016, the re-measurement of foreclosed assets at fair value subsequent to initial recognition resulted in losses of $0.7 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)
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
5,432

 

 
5,432

 

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)
$
3,892,014

 
$
2,824

 
$
3,577,654

 
$
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 and 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 recovery of a previously recognized expense of $0.6 million in the three months ended June 30, 2015.
(3) At June 30, 2015, 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 resulted in losses of $0.2 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, 2016 and 2015 are summarized as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
(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
$
334,157

 
$
15,115

 
$
346,685

 
$
13,707

 
$
341,644

 
$
14,750

 
$
339,187

 
$
13,294

(Gains) losses included in earnings (1)

 
1,055

 

 
(299
)
 

 
1,420

 

 
114

Unrealized gains (losses) (2)
8,926

 

 
4,561

 

 
1,370

 

 
11,697

 

Purchases

 

 
41,509

 

 

 

 
41,509

 

Sales

 

 
(71,832
)
 

 

 

 
(71,832
)
 

Settlements
(179
)
 

 
(9,387
)
 

 
(110
)
 

 
(9,025
)
 

Balance at ending of period
$
342,904

 
$
16,170

 
$
311,536

 
$
13,408

 
$
342,904

 
$
16,170

 
$
311,536

 
$
13,408

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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, 2016
 
December 31, 2015
 
June 30, 2015
Aggregate fair value carrying amount
$
3,962

 
$
5,472

 
$
5,432

Aggregate unpaid principal / contractual balance
3,836

 
5,320

 
5,285

Carrying amount over aggregate unpaid principal (1)
$
126

 
$
152

 
$
147

 
 
 
 
 
 
(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, 2016, December 31, 2015, and June 30, 2015 are shown in the tables below.
 
June 30, 2016
 
Carrying
Amount
 
Fair Value
(In thousands)
 
Total
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
524,287

 
$
524,287

 
$
524,287

 
$

 
$

Available-for-sale securities
4,318,688

 
4,318,688

 
2,788

 
3,972,996

 
342,904

Held-to-maturity securities
2,514,161

 
2,545,740

 

 
2,545,740

 

Other securities
148,367

 
148,367

 

 
148,367

 

Loans held for sale
3,962

 
3,962

 

 
3,962

 

Net originated loans
14,560,456

 
14,349,013

 

 

 
14,349,013

Net acquired loans
1,484,380

 
1,532,344

 

 

 
1,532,344

Net FDIC acquired loans and loss share receivable
149,121

 
149,121

 

 

 
149,121

Accrued interest receivable
65,666

 
65,666

 

 
65,666

 

       Derivatives
117,842

 
117,842

 

 
117,842

 

Financial liabilities:
 
 
 
 
 
 
 
 
 
Deposits
$
20,952,643

 
$
20,960,182

 
$

 
$
20,960,182

 

Federal funds purchased and securities sold under agreements to repurchase
686,890

 
686,890

 

 
686,890

 

Wholesale borrowings
468,447

 
473,187

 

 
473,187

 

Long-term debt
526,389

 
522,151

 

 
522,151

 

Accrued interest payable
10,632

 
10,632

 

 
10,632

 

Derivatives
90,622

 
90,622

 

 
90,622

 

 
 
 
 
 
 
 
 
 
 


 
December 31, 2015
 
Carrying
Amount
 
Fair Value
(In thousands)
 
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

 

 
 
 
 
 
 
 
 
 
 

 
June 30, 2015
 
Carrying
Amount
 
Fair Value
(In thousands)
 
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

 
5,432

 

 
5,432

 

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