Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Of Assets And Liabilities Measured On Recurring Basis

A summary of fair value for assets and liabilities measured at fair value on a recurring basis is as follows:



	At September 30, 2014
(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets held at fair value:
Available-for-sale investment securities:
U.S. Treasury Bills	$	525	$	525	$	—	$	—
Agency CMO	638,223		—		638,223		—
Agency MBS	1,090,820		—		1,090,820		—
Agency CMBS	80,383		—		80,383		—
CMBS	532,842		—		532,842		—
CLO	380,511		—		380,511		—
Pooled trust preferred securities	—		—		—		—
Single issuer trust preferred securities	39,382		—		39,382		—
Corporate debt	111,200		—		111,200		—
Equity securities	—		—		—		—
Total available-for-sale investment securities	2,873,886		525		2,873,361		—
Derivative instruments	43,039		8		43,031		—
Mortgage banking derivatives	387		—		387		—
Investments held in Rabbi Trust	5,841		5,841		—		—
Alternative investments	477		—		—		477
Total financial assets held at fair value	$	2,923,630	$	6,374	$	2,916,779	$	477
Financial liabilities held at fair value:
Derivative instruments	$	24,820	$	450	$	24,370	$	—
Total financial liabilities held at fair value	$	24,820	$	450	$	24,370	$	—



	At December 31, 2013
(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets held at fair value:
Available-for-sale investment securities:
U.S. Treasury Bills	$	325	$	325	$	—	$	—
Agency CMO	806,912		—		806,912		—
Agency MBS	1,226,702		—		1,226,702		—
Agency CMBS	70,977		—		70,977		—
CMBS	464,274		—		464,274		—
CLO	357,641		—		357,641		—
Pooled trust preferred securities	28,490		—		—		28,490
Single issuer trust preferred securities	34,935		—		34,935		—
Corporate debt	113,091		—		113,091		—
Equity securities	3,584		3,309		275		—
Total available-for-sale investment securities	3,106,931		3,634		3,074,807		28,490
Derivative instruments	41,795		32		41,763		—
Mortgage banking derivatives	540		—		540		—
Investments held in Rabbi Trust	6,097		6,097		—		—
Alternative investments	565		—		—		565
Total financial assets held at fair value	$	3,155,928	$	9,763	$	3,117,110	$	29,055
Financial liabilities held at fair value:
Derivative instruments	$	24,038	$	259	$	23,779	$	—
Total financial liabilities held at fair value	$	24,038	$	259	$	23,779	$	—

Schedule Of Quantitative Inputs And Assumptions For Items Categorized In Level 3 Of The Fair Value Hierarchy

The following table presents the changes in Level 3 assets and liabilities that are measured at fair value on a recurring basis:



	Three months ended September 30,						Nine months ended September 30,
(In thousands)	2014			2013			2014			2013
Level 3, beginning of period	$	11,668		$	31,572		$	29,055		$	116,280
Transfers out of Level 3 ⁽¹⁾	—			—			—			(248,844		)
Change in unrealized loss included in other comprehensive income	3,216			7,194			3,410			14,194
Unrealized loss included in net income	(29		)	(70		)	(261		)	(355		)
Realized gain on sale of available for sale securities	(1,680		)	269			2,656			269
Purchases/capital calls	173			—			173			159,412
Sales/proceeds	(12,881		)	(7,740		)	(34,576		)	(7,740		)
Accretion/amortization	10			26			62			214
Calls/paydowns	—			(483		)	(42		)	(2,662		)
Level 3, end of period	$	477		$	30,768		$	477		$	30,768

(1)

As of April 1, 2013, the CLO portfolio was transferred from Level 3 to Level 2 based on having more observable inputs in determining fair value. In prior quarters, the CLO portfolio was priced using average non-binding broker quotes. During the second quarter of 2013, the Company engaged a third-party pricing vendor to provide monthly fair value measurements. This methodology used is a combination of matrix pricing, observed market activity and metrics. Pricing inputs such as credit spreads are observable and market corroborated and, therefore, the CLO portfolio qualifies for Level 2 categorization. The market for CLO is an active market, and there is ample price transparency.

Schedule Of Valuation Methodology And Unobservable Inputs

The table below presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2014:



(Dollars in thousands)
Asset	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
Impaired loans and leases	$	40,927	Real Estate Appraisals	Discount for appraisal type	2% - 15%
				Discount for costs to sell	0% - 8%
Other real estate owned	$	831	Real Estate Appraisals	Discount for appraisal type	0% - 25%
				Discount for costs to sell	8%
Mortgage servicing assets	$	29,213	Discounted cash flow	Constant prepayment rate	6.8% - 25.3%
				Discount rates	1.4% - 3.7%

Summary Of Estimated Fair Values Of Significant Financial Instruments

The estimated fair values of selected financial instruments are as follows:



	At September 30, 2014				At December 31, 2013
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Assets
Level 2 inputs:
Held-to-maturity investment securities	$	3,641,979	$	3,699,825	$	3,358,721	$	3,370,912
Loans held for sale	26,083		26,453		20,802		20,903
Level 3 inputs:
Loans and leases	13,357,020		13,377,939		12,547,203		12,515,714
Mortgage servicing assets ⁽¹⁾	19,651		29,213		20,983		29,150
Alternative investments	16,188		19,208		16,582		17,047
Financial Liabilities
Level 2 inputs:
Deposit liabilities, other than time deposits	$	13,244,672	$	13,244,672	$	12,627,276	$	12,627,276
Time deposits	2,302,246		2,317,764		2,227,144		2,250,141
Securities sold under agreements to repurchase and other borrowings	1,236,975		1,257,595		1,331,662		1,365,427
Federal Home Loan Bank advances ⁽²⁾	2,290,204		2,301,591		2,052,421		2,063,312
Long-term debt ⁽³⁾	226,208		223,278		228,365		221,613


(1)	The carrying amount of mortgage servicing assets is net of $11 thousand and $0.2 million reserves at September 30, 2014 and December 31, 2013, respectively. The estimated fair value does not include such adjustments.


(2)	The carrying amount of FHLB advances is net of $43 thousand and $61 thousand in hedge accounting adjustments and discounts at September 30, 2014 and December 31, 2013, respectively. The estimated fair value does not include such adjustments.


(3)	The carrying amount of long-term debt is net of $1.1 million in discount at September 30, 2014 and $1.0 million in discount and hedge accounting adjustments, net at December 31, 2013. The estimated fair value does not include such adjustments.

- 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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