Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 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 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)	Carrying Amount		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)	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		—



	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		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		—