Fair Value (Tables)

9 Months Ended

Sep. 30, 2013

Financial assets and liabilities measured at fair value recurring basis

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value ($ in thousands). There were no transfers between fair value levels for the nine months ended September 30, 2013 and the year ended December 31, 2012.

	September 30, 2013
	Total		Level 1		Level 2		Level 3
U.S. Treasury securities	$	503	$	-	$	503	$	-
U.S. Government agency obligations		265,438		-		265,438		-
Obligations of states and political subdivisions		212,991		-		212,991		-
Mortgage-backed securities		2,665,441		-		2,665,441		-
Asset-backed securities		227,728		-		227,728		-
Securities available for sale		3,372,101		-		3,372,101		-
Loans held for sale		119,986		-		119,986		-
Mortgage servicing rights		63,150		-		-		63,150
Other assets - derivatives		10,841		2,633		6,161		2,047
Other liabilities - derivatives		7,305		480		6,825		-

	December 31, 2012
	Total		Level 1			Level 2		Level 3
U.S. Government agency obligations	$	105,745	$	-		$	105,745	$	-
Obligations of states and political subdivisions		215,761		-			215,761		-
Mortgage-backed securities		2,094,612		-			2,094,612		-
Asset-backed securities		241,627		-			241,627		-
Securities available for sale		2,657,745		-			2,657,745		-
Loans held for sale		257,986		-			257,986		-
Mortgage servicing rights		47,341		-			-		47,341
Other assets - derivatives		7,107		(440	)		5,263		2,284
Other liabilities - derivatives		6,612		545			6,067		-

Changes in level 3 assets measured at fair value on a recurring basis

The changes in Level 3 assets measured at fair value on a recurring basis for the periods ended September 30, 2013 and 2012 are summarized as follows ($ in thousands):

	MSR			Other Assets - Derivatives
Balance, January 1, 2013	$	47,341		$	2,284
Total net gains included in net income (1)		258			7,558
Additions		15,551			-
Sales		-			(7,795	)
Balance, September 30, 2013	$	63,150		$	2,047

The amount of total gains for the period included in earnings that are attributable to the change in unrealized gains or losses still held at September 30, 2013	$	7,881		$	954

Balance, January 1, 2012	$	43,274		$	702
Total net (losses) gains included in net income (1)		(16,137	)		10,261
Additions		17,074			-
Sales		-			(6,658	)
Balance, September 30, 2012	$	44,211		$	4,305

The amount of total (losses) gains for the period included in earnings that are attributable to the change in unrealized gains or losses still held at September 30, 2012	$	(8,960	)	$	2,320

(1) Total net gains (losses) included in net income relating to MSR includes changes in fair value due to market changes and due to runoff.

Carrying amounts and estimated fair values of financial instruments

The carrying amounts and estimated fair values of financial instruments at September 30, 2013 and December 31, 2012, are as follows ($ in thousands):

	September 30, 2013				December 31, 2012
	Carrying		Estimated		Carrying		Estimated
	Value		Fair Value		Value		Fair Value
Financial Assets:
Level 2 Inputs:
Cash and short-term investments	$	343,562	$	343,562	$	238,535	$	238,535
Securities held to maturity		69,980		70,949		42,188		46,888
Level 3 Inputs:
Net LHFI		5,628,009		5,701,646		5,514,016		5,619,933
Net acquired loans		869,792		869,792		127,489		127,489
FDIC indemnification asset		17,085		17,085		21,774		21,774

Financial Liabilities:
Level 2 Inputs:
Deposits		9,787,234		9,792,076		7,896,517		7,904,179
Short-term liabilities		403,163		403,163		375,749		375,749
Long-term FHLB advances		8,562		8,562		-		-
Subordinated notes		49,896		53,605		49,871		53,980
Junior subordinated debt securities		61,856		40,206		61,856		40,206

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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