Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Assets and Liabilities Measured on Recurring Basis at Fair Value

The table below presents the Corporation’s financial instruments measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall.



	Fair Value Hierarchy	September 30, 2017		December 31, 2016
		($ in Thousands)
Assets
Investment securities available for sale:
U.S. Treasury securities	Level 1	$	1,001	$	1,000
Residential mortgage-related securities:
FNMA / FHLMC	Level 2	505,261		639,930
GNMA	Level 2	1,667,836		2,004,475
Private-label	Level 2	1,072		1,121
GNMA commercial mortgage-related securities	Level 2	1,513,077		2,028,898
Asset backed securities	Level 2	108,628		—
Other securities (debt and equity)	Level 1	1,650		1,602
Other securities (debt and equity)	Level 2	3,174		3,000
Other securities (debt and equity)	Level 3	—		200
Total investment securities available for sale	Level 1	2,651		2,602
Total investment securities available for sale	Level 2	3,799,048		4,677,424
Total investment securities available for sale	Level 3	—		200
Residential loans held for sale ^(a)	Level 2	113,064		—
Interest rate-related instruments	Level 2	26,837		33,671
Foreign currency exchange forwards	Level 2	3,053		2,002
Interest rate lock commitments to originate residential mortgage loans held for sale	Level 3	2,729		206
Forward commitments to sell residential mortgage loans	Level 3	234		2,908
Commodity contracts	Level 2	18,539		16,725
Purchased options (time deposit)	Level 2	1,434		2,576
Liabilities
Interest rate-related instruments	Level 2	$	26,469	$	33,188
Foreign currency exchange forwards	Level 2	3,033		1,943
Commodity contracts	Level 2	17,310		15,972
Written options (time deposit)	Level 2	1,434		2,576

(a)

Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated. For more information on this accounting policy change, please refer to Note 3.

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The table below presents a rollforward of the balance sheet amounts for the nine months ended September 30, 2017 and the year ended December 31, 2016, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy.



	Investment Securities Available for Sale			Derivative Financial Instruments
	($ in Thousands)
Balance December 31, 2015	$	200		$	1,361
Total net gains included in income
Mortgage derivative gain	—			1,753
Balance December 31, 2016	$	200		$	3,114
Total net losses included in income
Mortgage derivative loss	—			(151		)
Transfer out of level 3 securities^(a)	(200		)	—
Balance September 30, 2017	$	—		$	2,963

(a) During the first quarter of 2017, the $200,000 level 3 investment security was transferred to level 2 based upon new pricing information.

Assets and Liabilities Measured on Nonrecurring Basis at Fair Value

The table below presents the Corporation’s assets measured at fair value on a nonrecurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall.



				Income Statement Category of Adjustment Recognized in Income	Adjustment Recognized in Income
($ in Thousands)	Fair Value Hierarchy	Fair Value			Adjustment Recognized in Income
September 30, 2017
Assets
Commercial loans held for sale^(a)	Level 2	$	9,718	Provision for credit losses	$	—
Impaired loans^(c)	Level 3	54,762		Provision for credit losses^(d)	(22,703		)
Other real estate owned	Level 2	3,291		Foreclosure / OREO expense, net	(939		)
Mortgage servicing rights	Level 3	62,625		Mortgage banking, net	(286		)

December 31, 2016
Assets
Commercial loans held for sale	Level 2	$	12,474	Provision for credit losses	$	(559	)
Residential loans held for sale^(b)	Level 2	108,010		Mortgage banking, net	(3,760		)
Impaired loans^(c)	Level 3	79,270		Provision for credit losses^(d)	(75,194		)
Other real estate owned	Level 2	9,752		Foreclosure / OREO expense, net	(1,091		)
Mortgage servicing rights	Level 3	73,149		Mortgage banking, net	200


(a)	Commercial loans held for sale are carried at the lower of cost or estimated fair value. At September 30, 2017, the estimated fair value exceeded the cost and therefore there was no adjustment recognized in income.


(b)	Effective January 1, 2017, residential loans originated for sale are accounted for under the fair value option. Prior periods have not been restated. For more information on this accounting policy change, please refer to Note 3.


(c)	Represents individually evaluated impaired loans, net of the related allowance for loan losses.

(d)

Represents provision for credit losses on individually evaluated impaired loans.

Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Table Text Block]

The table below presents information about these inputs and further discussion is found above.



	Valuation Technique	Significant Unobservable Input	Weighted Average Input Applied
September 30, 2017	Valuation Technique	Significant Unobservable Input	Weighted Average Input Applied
Mortgage servicing rights	Discounted cash flow	Discount rate	11%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	12%
Impaired Loans	Appraisals / Discounted cash flow	Collateral / Discount factor	16%

Estimated fair values of financial instruments

Fair value estimates, methods, and assumptions are set forth below for the Corporation’s financial instruments.



		September 30, 2017				December 31, 2016
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		($ in Thousands)
Financial assets
Cash and due from banks	Level 1	$	354,331	$	354,331	$	446,558	$	446,558
Interest-bearing deposits in other financial institutions	Level 1	109,596		109,596		149,175		149,175
Federal funds sold and securities purchased under agreements to resell	Level 1	27,700		27,700		46,500		46,500
Investment securities held to maturity	Level 2	2,233,579		2,243,845		1,273,536		1,264,674
Investment securities available for sale	Level 1	2,651		2,651		2,602		2,602
Investment securities available for sale	Level 2	3,799,048		3,799,048		4,677,424		4,677,424
Investment securities available for sale	Level 3	—		—		200		200
FHLB and Federal Reserve Bank stocks	Level 2	172,446		172,446		140,001		140,001
Commercial loans held for sale	Level 2	9,718		9,718		12,474		12,474
Residential loans held for sale	Level 2	113,064		113,064		108,010		108,010
Loans, net	Level 3	20,654,909		20,504,971		19,776,381		19,680,317
Bank and corporate owned life insurance	Level 2	589,093		589,093		585,290		585,290
Derivatives (trading and other assets)	Level 2	49,863		49,863		54,974		54,974
Derivatives (trading and other assets)	Level 3	2,963		2,963		3,114		3,114
Financial liabilities
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Level 3	$	20,012,174	$	20,012,174	$	20,282,321	$	20,282,321
Brokered CDs and other time deposits	Level 2	2,321,277		2,321,277		1,606,127		1,606,127
Short-term funding	Level 2	1,064,617		1,064,617		1,092,035		1,092,035
Long-term funding	Level 2	3,147,285		3,171,059		2,761,795		2,791,841
Standby letters of credit^(a)	Level 2	2,346		2,346		2,566		2,566
Derivatives (trading and other liabilities)	Level 2	48,246		48,246		53,679		53,679

(a)

The commitment on standby letters of credit was $234 million and $260 million at September 30, 2017 and December 31, 2016, respectively. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.