Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2011

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

The Corporation’s assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets were as follows:



	September 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	63,554	$	—	$	63,554
Available for sale investment securities:
Equity securities	34,983		—		—		34,983
U.S. Government securities	—		1,325		—		1,325
U.S. Government sponsored agency securities	—		4,844		—		4,844
State and municipal securities	—		334,060		—		334,060
Corporate debt securities	—		110,577		11,858		122,435
Collateralized mortgage obligations	—		1,107,255		—		1,107,255
Mortgage-backed securities	—		838,836		—		838,836
Auction rate securities	—		—		240,702		240,702
Total available for sale investments	34,983		2,396,897		252,560		2,684,440
Other financial assets	12,892		6,952		—		19,844
Total assets	$	47,875	$	2,467,403	$	252,560	$	2,767,838
Other financial liabilities	$	12,892	$	5,669	$	—	$	18,561



	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	83,940	$	—	$	83,940
Available for sale investment securities:
Equity securities	40,070		—		—		40,070
U.S. Government securities	—		1,649		—		1,649
U.S. Government sponsored agency securities	—		5,058		—		5,058
State and municipal securities	—		349,563		—		349,563
Corporate debt securities	—		111,675		13,111		124,786
Collateralized mortgage obligations	—		1,104,058		—		1,104,058
Mortgage-backed securities	—		871,472		—		871,472
Auction rate securities	—		—		260,679		260,679
Total available for sale investments	40,070		2,443,475		273,790		2,757,335
Other financial assets	13,582		9,256		—		22,838
Total assets	$	53,652	$	2,536,671	$	273,790	$	2,864,113
Other financial liabilities	$	13,582	$	760	$	—	$	14,342

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

The following tables present 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, 2011 and 2010:



	Three months ended September 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
Realized adjustment to fair value (2)	(53		)	—			(292		)
Unrealized adjustment to fair value (3)	12			(1,235		)	(14,660		)
Redemptions	(117		)	—			(318		)
(Premium amortization) discount accretion (4)	—			(1		)	830
Balance, September 30, 2011	$	5,275		$	6,583		$	240,702

	Three months ended September 30, 2010
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539
Realized adjustment to fair value (2)	(2,335		)	—			—
Unrealized adjustment to fair value (3)	2,805			466			(704		)
Sales	—			—			(10,233		)
Redemptions	(328		)	—			(1,470		)
(Premium amortization) discount accretion (4)	20			—			1,163
Balance, September 30, 2010	$	4,441		$	8,551		$	265,295



	Nine months ended September 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, December 31, 2010	$	4,528		$	8,583		$	260,679
Transfer from Level 3 to Level 2 (1)	—			(800		)	—
Realized adjustment to fair value (2)	(1,406		)	—			(292		)
Unrealized adjustment to fair value (3)	2,564			(1,197		)	(22,139		)
Redemptions	(409		)	—			(569		)
(Premium amortization) discount accretion (4)	(2		)	(3		)	3,023
Balance, September 30, 2011	$	5,275		$	6,583		$	240,702

	Nine months ended September 30, 2010
Balance, December 31, 2009	$	4,979		$	6,981		$	289,203
Transfer to Level 3 from Level 2 (1)	—			650			—
Realized adjustment to fair value (2)	(9,477		)	—			—
Unrealized adjustment to fair value (3)	9,258			919			(4,346		)
Sales	—			—			(15,266		)
Redemptions	(328		)	—			(7,852		)
(Premium amortization) discount accretion (4)	9			1			3,556
Balance, September 30, 2010	$	4,441		$	8,551		$	265,295

(1)

During the nine months ended September 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 as of December 31, 2010 was reclassified as a Level 2 asset. As of September 30, 2011, the fair value of this security was measured by a third-party pricing service using both quoted prices for similar assets and model-based valuation techniques that derived fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As of December 31, 2010, the fair value of this security was determined based on quotes provided by third-party brokers who determined its fair value based predominantly on an internal valuation model.


(2)	For pooled trust preferred securities and ARCs, realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains (losses) on the consolidated statements of income.


(3)	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.


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

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

The Corporation’s assets measured at fair value on a nonrecurring basis and reported on the Corporation’s consolidated balance sheets were as follows:



	September 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	219,526	$	219,526
Other financial assets	—		—		69,528		69,528
Total assets	$	—	$	—	$	289,054	$	289,054
Reserve for unfunded commitments	$	—	$	—	$	1,839	$	1,839



	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	457,678	$	457,678
Other financial assets	—		—		62,109		62,109
Total assets	$	—	$	—	$	519,787	$	519,787
Reserve for unfunded commitments	$	—	$	—	$	1,227	$	1,227

Details of Book Value and Fair Value of Financial Instruments



	September 30, 2011				December 31, 2010
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	291,870	$	291,870	$	198,954	$	198,954
Interest-bearing deposits with other banks	256,360		256,360		33,297		33,297
Loans held for sale (1)	63,554		63,554		83,940		83,940
Securities held to maturity	6,734		6,774		7,751		7,818
Securities available for sale (1)	2,769,823		2,769,823		2,853,733		2,853,733
Loans, net of unearned income (1)	11,895,655		11,875,115		11,933,307		11,909,539
Accrued interest receivable	52,460		52,460		53,841		53,841
Other financial assets (1)	140,385		140,385		230,044		230,044
FINANCIAL LIABILITIES
Demand and savings deposits	$	8,487,266	$	8,487,266	$	7,758,613	$	7,758,613
Time deposits	4,150,358		4,198,043		4,629,968		4,677,494
Short-term borrowings	448,955		448,955		674,077		674,077
Accrued interest payable	27,678		27,678		33,333		33,333
Other financial liabilities (1)	86,649		86,649		80,551		80,551
Federal Home Loan Bank advances and long-term debt	1,025,505		965,389		1,119,450		1,077,724


(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
Federal funds sold		Accrued interest payable
Accrued interest receivable		Other financial liabilities

- 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.

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