Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

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:



	June 30, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	36,079	$	—	$	36,079
Available for sale investment securities:
Equity securities	45,884		364		—		46,248
U.S. Government securities	—		525		—		525
U.S. Government sponsored agency securities	—		260		—		260
State and municipal securities	—		269,823		—		269,823
Corporate debt securities	—		92,558		8,095		100,653
Collateralized mortgage obligations	—		1,002,731		—		1,002,731
Mortgage-backed securities	—		930,605		—		930,605
Auction rate securities	—		—		146,931		146,931
Total available for sale investments	45,884		2,296,866		155,026		2,497,776
Other assets	16,306		13,056		—		29,362
Total assets	$	62,190	$	2,346,001	$	155,026	$	2,563,217
Other liabilities	$	16,242	$	12,399	$	—	$	28,641



	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	21,351	$	—	$	21,351
Available for sale investment securities:
Equity securities	46,201		—		—		46,201
U.S. Government securities	—		525		—		525
U.S. Government sponsored agency securities	—		726		—		726
State and municipal securities	—		284,849		—		284,849
Corporate debt securities	—		89,662		9,087		98,749
Collateralized mortgage obligations	—		1,032,398		—		1,032,398
Mortgage-backed securities	—		945,712		—		945,712
Auction rate securities	—		—		159,274		159,274
Total available for sale investments	46,201		2,353,872		168,361		2,568,434
Other assets	15,779		7,227		—		23,006
Total assets	$	61,980	$	2,382,450	$	168,361	$	2,612,791
Other liabilities	$	15,648	$	5,161	$	—	$	20,809

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 available for sale investment securities measured at fair value on a recurring basis using unobservable inputs (Level 3):



	Three months ended June 30, 2014
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARCs
	(in thousands)
Balance at March 31, 2014	$	5,659		$	3,820		$	147,713
Sales	(1,394		)	—			—
Unrealized adjustment to fair value (1)	38			(2		)	124
Settlements - calls	(28		)	—			(1,081		)
Discount accretion (2)	—			2			175
Balance at June 30, 2014	$	4,275		$	3,820		$	146,931

	Three months ended June 30, 2013
Balance at March 31, 2013	$	8,356		$	3,370		$	154,639
Sales	(3,286		)	—			—
Unrealized adjustment to fair value (1)	445			297			(172		)
Settlements - calls	(124		)	—			(2,066		)
Discount accretion (2)	—			3			191
Balance at June 30, 2013	$	5,391		$	3,670		$	152,592

	Six months ended June 30, 2014
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARCs
	(in thousands)
Balance at December 31, 2013	$	5,306		$	3,781		$	159,274
Sales	(1,394		)	—			(11,912		)
Unrealized adjustment to fair value (1)	559			36			248
Settlements - calls	(200		)	—			(1,081		)
Discount accretion (2)	4			3			402
Balance at June 30, 2014	$	4,275		$	3,820		$	146,931

	Six months ended June 30, 2013
Balance at December 31, 2012	$	6,927		$	3,360		$	149,339
Sales	(3,286		)	—			—
Unrealized adjustment to fair value (1)	1,874			304			5,188
Settlements - calls	(124		)	—			(2,408		)
Discount accretion (2)	—			6			473
Balance at June 30, 2013	$	5,391		$	3,670		$	152,592


(1)	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 sheets.


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

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

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:



	June 30, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	134,643	$	134,643
Other financial assets	—		—		56,068		56,068
Total assets	$	—	$	—	$	190,711	$	190,711



	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	138,666	$	138,666
Other financial assets	—		—		57,504		57,504
Total assets	$	—	$	—	$	196,170	$	196,170

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 June 30, 2014 and December 31, 2013. 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.



	June 30, 2014				December 31, 2013
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	258,837	$	258,837	$	218,540	$	218,540
Interest-bearing deposits with other banks	222,894		222,894		163,988		163,988
Federal Reserve Bank and Federal Home Loan Bank stock	82,624		82,624		84,173		84,173
Loans held for sale (1)	36,079		36,079		21,351		21,351
Available for sale investment securities (1)	2,497,776		2,497,776		2,568,434		2,568,434
Loans, net of unearned income (1)	12,839,511		12,744,881		12,782,220		12,688,774
Accrued interest receivable	42,116		42,116		44,037		44,037
Other financial assets (1)	155,336		155,336		146,933		146,933
FINANCIAL LIABILITIES
Demand and savings deposits	$	9,677,654	$	9,677,654	$	9,573,264	$	9,573,264
Time deposits	3,016,005		3,025,680		2,917,922		2,927,374
Short-term borrowings	1,008,307		1,008,307		1,258,629		1,258,629
Accrued interest payable	16,647		16,647		15,218		15,218
Other financial liabilities (1)	165,358		165,358		124,440		124,440
Federal Home Loan Bank advances and long-term debt	968,395		964,797		883,584		875,984


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

- 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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