Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

ollowing tables present summaries of the Corporation’s assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets:



	September 30, 2012
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	85,477	$	—	$	85,477
Available for sale investment securities:
Equity securities	44,113		—		—		44,113
U.S. Government securities	—		326		—		326
U.S. Government sponsored agency securities	—		2,440		—		2,440
State and municipal securities	—		308,032		—		308,032
Corporate debt securities	—		97,875		8,251		106,126
Collateralized mortgage obligations	—		1,030,190		—		1,030,190
Mortgage-backed securities	—		1,065,190		—		1,065,190
Auction rate securities	—		—		160,062		160,062
Total available for sale investments	44,113		2,504,053		168,313		2,716,479
Other financial assets	15,797		20,079		—		35,876
Total assets	$	59,910	$	2,609,609	$	168,313	$	2,837,832
Other financial liabilities	$	15,420	$	14,995	$	—	$	30,415



	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	47,009	$	—	$	47,009
Available for sale investment securities:
Equity securities	34,586		—		—		34,586
U.S. Government securities	—		334		—		334
U.S. Government sponsored agency securities	—		4,073		—		4,073
State and municipal securities	—		322,018		—		322,018
Corporate debt securities	—		114,017		9,289		123,306
Collateralized mortgage obligations	—		1,001,209		—		1,001,209
Mortgage-backed securities	—		880,097		—		880,097
Auction rate securities	—		—		225,211		225,211
Total available for sale investments	34,586		2,321,748		234,500		2,590,834
Other financial assets	15,292		6,645		—		21,937
Total assets	$	49,878	$	2,375,402	$	234,500	$	2,659,780
Other financial liabilities	$	15,721	$	5,478	$	—	$	21,199

Schedule of Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis using Level 3 Inputs

The following table presents the changes in the Corporation’s assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three and nine months ended September 30, 2012 and 2011:



	Three months ended September 30, 2012
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance at June 30, 2012	$	5,018		$	4,100		$	203,282
Sales	—			(956		)	—
Realized adjustment to fair value (1)	(19		)	19			—
Unrealized adjustment to fair value (2)	298			(55		)	6,809
Settlements - calls	(202		)	—			(50,370		)
(Premium amortization) discount accretion (3)	46			2			341
Balance at September 30, 2012	$	5,141		$	3,110		$	160,062

	Three months ended September 30, 2011
Balance at June 30, 2011	$	5,433		$	7,819		$	255,142
Realized adjustment to fair value (1)	(53		)	—			(292		)
Unrealized adjustment to fair value (2)	12			(585		)	(14,660		)
Settlements - calls	(117		)	(650		)	(318		)
(Premium amortization) discount accretion (3)	—			(1		)	830
Balance at September 30, 2011	$	5,275		$	6,583		$	240,702



	Nine months ended September 30, 2012
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance at December 31, 2011	$	5,109		$	4,180		$	225,211
Sales	—			(956		)	—
Realized adjustment to fair value (1)	(19		)	19			—
Unrealized adjustment to fair value (2)	612			111			(12,677		)
Settlements - calls	(605		)	(250		)	(54,880		)
(Premium amortization) discount accretion (3)	44			6			2,408
Balance at September 30, 2012	$	5,141		$	3,110		$	160,062

	Nine months ended September 30, 2011
Balance, December 31, 2010	$	4,528		$	8,583		$	260,679
Transfer to Level 3 from Level 2 (4)	—			(800		)	—
Realized adjustment to fair value (1)	(1,406		)	—			(292		)
Unrealized adjustment to fair value (2)	2,490			6			(15,891		)
Settlements - calls	(335		)	(1,205		)	(6,817		)
(Premium amortization) discount accretion (3)	(2		)	(1		)	3,023
Balance at September 30, 2011	$	5,275		$	6,583		$	240,702


(1)	Realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains on the consolidated statements of income.


(2)	Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of available for sale investment securities on the consolidated balance sheet.


(3)	Included as a component of net interest income on the consolidated statements of income.


(4)	During the nine months ended September 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 was reclassified as a Level 2 asset.

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

Certain financial assets are not measured at fair value on an ongoing basis but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment. The following table presents the Corporation’s financial assets measured at fair value on a nonrecurring basis and reported on the Corporation’s consolidated balance sheets:



	September 30, 2012
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	189,143	$	189,143
Other financial assets	—		—		64,170		64,170
Total assets	$	—	$	—	$	253,313	$	253,313



	December 31, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	216,812	$	216,812
Other financial assets	—		—		63,919		63,919
Total assets	$	—	$	—	$	280,731	$	280,731

Details of Book Value and Fair Value of Financial Instruments

As required by FASB ASC Section 825-10-50, the following table details the book values and estimated fair values of the Corporation’s financial instruments as of September 30, 2012 and December 31, 2011. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.

Fair values of financial instruments are significantly affected by the assumptions used, principally the timing of future cash flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. The aggregate fair value amounts presented do not necessarily represent management’s estimate of the underlying value of the Corporation.



	September 30, 2012				December 31, 2011
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	217,207	$	217,207	$	292,598	$	292,598
Interest-bearing deposits with other banks	202,305		202,305		175,336		175,336
Loans held for sale (1)	85,477		85,477		47,009		47,009
Securities held to maturity	454		487		6,669		6,699
Securities available for sale (1)	2,789,684		2,789,684		2,673,298		2,673,298
Loans, net of unearned income (1)	11,933,001		11,886,084		11,968,970		11,992,586
Accrued interest receivable	49,784		49,784		51,098		51,098
Other financial assets (1)	151,274		151,274		320,858		320,858
FINANCIAL LIABILITIES
Demand and savings deposits	$	9,022,312	$	9,022,312	$	8,511,789	$	8,511,789
Time deposits	3,578,998		3,611,952		4,013,950		4,056,247
Short-term borrowings	486,971		486,971		597,033		597,033
Accrued interest payable	21,818		21,818		25,686		25,686
Other financial liabilities (1)	84,053		84,053		75,151		75,151
Federal Home Loan Bank advances and long-term debt	908,623		871,236		1,040,149		982,010


(1)	Description of fair value determinations for these financial instruments, or certain financial instruments within these categories, measured at fair value on the Corporation’s consolidated balance sheets, are disclosed above.

Schedule of Financial Instruments Classified as Predominantly Short-Term Instruments

The following instruments are predominantly short-term:



Assets		Liabilities
Cash and due from banks		Demand and savings deposits
Interest bearing deposits		Short-term borrowings
Accrued interest receivable		Accrued interest payable

- Definition

Tabular disclosure of assets and liabilities by class, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). The disclosures that may be required or desired include: (a) the fair value measurements recorded during the period and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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- 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, 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, issuances, 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 (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

+ References

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