Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2012

Assets and Liabilities Measured at Estimated Fair Value on Recurring Basis

The following tables present assets and liabilities at December 31, 2012 and 2011 measured at estimated fair value on a recurring basis:

	Fair Value Measurements at December  31, 2012		Level 1(a)		Level 2(a)		Level 3
	(In thousands)
Trading account assets	$	488,966		56,106		432,860		—
Investment securities available for sale:
U.S. Treasury and federal agencies		39,344		—		39,344		—
Obligations of states and political subdivisions		20,901		—		20,901		—
Mortgage-backed securities:
Government issued or guaranteed		3,371,041		—		3,371,041		—
Privately issued residential		1,012,886		—		—		1,012,886
Privately issued commercial		11,000		—		—		11,000
Collateralized debt obligations		61,869		—		—		61,869
Other debt securities		111,950		—		111,950		—
Equity securities		110,446		98,364		12,082		—
		4,739,437		98,364		3,555,318		1,085,755
Real estate loans held for sale		1,387,491		—		1,387,491		—
Other assets(b)		194,331		—		146,275		48,056
Total assets	$	6,810,225		154,470		5,521,944		1,133,811
Trading account liabilities	$	374,274		—		374,274		—
Other liabilities(b)		10,592		—		10,395		197
Total liabilities	$	384,866		—		384,669		197

	Fair Value Measurements at December  31, 2011		Level 1(a)		Level 2(a)		Level 3
Trading account assets	$	561,834		53,165		508,669		—
Investment securities available for sale:
U.S. Treasury and federal agencies		70,723		—		70,723		—
Obligations of states and political subdivisions		40,269		—		40,269		—
Mortgage-backed securities:
Government issued or guaranteed		4,521,233		—		4,521,233		—
Privately issued residential		1,136,256		—		—		1,136,256
Privately issued commercial		15,029		—		—		15,029
Collateralized debt obligations		52,500		—		—		52,500
Other debt securities		176,845		—		176,845		—
Equity securities		215,705		205,587		10,118		—
		6,228,560		205,587		4,819,188		1,203,785
Real estate loans held for sale		371,437		—		371,437		—
Other assets (b)		156,853		—		148,862		7,991
Total assets	$	7,318,684		258,752		5,848,156		1,211,776
Trading account liabilities	$	434,559		—		434,559		—
Other liabilities (b)		6,126		—		5,058		1,068
Total liabilities	$	440,685		—		439,617		1,068

(a) There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the years ended December 31, 2012 and 2011.

(b) Comprised predominantly of interest rate swap agreements used for interest rate risk management (Level 2), commitments to sell real estate loans (Level 2) and commitments to originate real estate loans to be held for sale (Level 3).

Changes in Level 3 Assets and Liabilities Measured at Estimated Fair Value on a Recurring Basis

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the year ended December 31, 2012 were as follows:

	Investment Securities Available for Sale
	Privately Issued Residential Mortgage- backed Securities			Privately Issued Commercial Mortgage- backed Securities			Collateralized Debt Obligations			Other Assets and Other Liabilities
	(In thousands)
Balance – January 1, 2012	$	1,136,256		$	15,029		$	52,500		$	6,923
Total gains (losses) realized/unrealized:
Included in earnings		(42,467	)(a)		—			—			212,281	(b)
Included in other comprehensive income		110,309	(e)		4,283	(e)		12,214	(e)		—
Settlements		(191,212	)		(8,312	)		(2,845	)		—
Transfers in and/or out of Level 3 (c)		—			—			—			(171,345	)(d)
Balance – December 31, 2012	$	1,012,886		$	11,000		$	61,869		$	47,859
Changes in unrealized gains (losses) included in earnings related to assets still held at December 31, 2012	$	(42,467	)(a)	$	—		$	—		$	47,859	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the year ended December 31, 2011 were as follows:

	Investment Securities Available for Sale
	Privately Issued Residential Mortgage- backed Securities			Privately Issued Commercial Mortgage- backed Securities			Collateralized Debt Obligations			Other Assets  and Other Liabilities
	(In thousands)
Balance – January 1, 2011	$	1,435,561		$	22,407		$	110,756		$	2,244
Total gains (losses) realized/unrealized:
Included in earnings		(64,919	)(a)		—			19,231	(a)		67,163	(b)
Included in other comprehensive income		6,489	(e)		327	(e)		(272	)(e)		—
Purchases		—			—			50,790			—
Sales		—			—			(124,874	)		—
Settlements		(240,875	)		(7,705	)		(3,131	)		—
Transfers in and/or out of Level 3 (c)		—			—			—			(62,484	)(d)
Balance – December 31, 2011	$	1,136,256		$	15,029		$	52,500		$	6,923
Changes in unrealized gains (losses) included in earnings related to assets still held at December 31, 2011	$	(64,919	)(a)	$	—		$	—		$	6,902	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the year ended December 31, 2010 were as follows:

	Investment Securities Available for Sale
	Privately Issued Residential Mortgage- backed Securities			Privately Issued Commercial Mortgage- backed Securities			Collateralized Debt Obligations			Other Debt Securities			Other Assets and Other Liabilities
	(In thousands)
Balance – January 1, 2010	$	2,064,904		$	25,166		$	115,346		$	420		$	(80	)
Total gains (losses) realized/unrealized:
Included in earnings		(63,503	)(a)		—			(5,703	)(a)		—			95,661	(b)
Included in other comprehensive income		135,434	(e)		5,462	(e)		2,887	(e)		35	(e)		—
Settlements		(346,026	)		(8,221	)		(1,774	)		—			—
Transfers in and/or out of Level 3 (c)		(355,248	)(f)		—			—			(455	)		(93,337	)(d)
Balance – December 31, 2010	$	1,435,561		$	22,407		$	110,756		$	—		$	2,244
Changes in unrealized gains (losses) included in earnings related to assets still held at December 31, 2010	$	(63,503	)(a)	$	—		$	(5,703	)(a)	$	—		$	2,153	(b)

(a) Reported as an other-than-temporary impairment loss in the consolidated statement of income or as gain (loss) on bank investment securities.

(b) Reported as mortgage banking revenues in the consolidated statement of income and includes the fair value of commitment issuances and expirations.

(c) The Company’s policy for transfers between fair value levels is to recognize the transfer as of the actual date of the event or change in circumstances that caused the transfer.

(d) Transfers out of Level 3 consist of interest rate locks transferred to closed loans.

(e) Reported as net unrealized gains on investment securities in the consolidated statement of comprehensive income.

(f) As a result of the Company’s adoption of new accounting rules governing the consolidation of variable interest entities, effective January 1, 2010 the Company derecognized $355 million of available-for-sale investment securities previously classified as Level 3 measurements.

Quantitative Information Related to Significant Unobservable Inputs

The following table presents quantitative information about significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities at December 31, 2012:

	Fair Value at December 31, 2012		Valuation Technique	Unobservable Input/Assumptions	Range (Weighted- Average)
Recurring fair value measurements
Privately issued mortgage–backed securities	$	1,023,886	Discounted cash flow	Probability of default	1%-40% (19%)
				Loss severity	32%-82% (51%)
Colateralized debt obligations		61,869	Discounted cash flow	Probability of default	0%-65% (12%)
				Loss severity	100%
Net other assets (liabilities)(a)		47,859	Discounted cash flow	Commitment expirations	0%-69% (20%)

(a) Other Level 3 assets (liabilities) consist of commitments to originate real estate loans.

Carrying Amounts and Estimated Fair Value for Financial Instrument Assets (Liabilities)

The carrying amounts and estimated fair value for financial instrument assets (liabilities) are presented in the following table:

	December 31, 2012
	Carrying Amount			Calculated Estimate			Level 1		Level 2			Level 3
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,986,615		$	1,986,615		$	1,895,423	$	91,192		$	—
Interest-bearing deposits at banks		129,945			129,945			—		129,945			—
Trading account assets		488,966			488,966			56,106		432,860			—
Investment securities		6,074,361			6,018,968			98,364		4,687,211			1,233,393
Loans and leases:
Commercial loans and leases		17,776,953			17,554,562			—		—			17,554,562
Commercial real estate loans		25,993,790			25,858,482			—		199,997			25,658,485
Residential real estate loans		11,240,837			11,381,319			—		8,100,915			3,280,404
Consumer loans		11,559,377			11,504,799			—		—			11,504,799
Allowance for credit losses		(925,860	)		—			—		—			—
Loans and leases, net		65,645,097			66,299,162			—		8,300,912			57,998,250
Accrued interest receivable		222,897			222,897			—		222,897			—
Financial liabilities:
Noninterest-bearing deposits	$	(24,240,802	)	$	(24,240,802	)		—	$	(24,240,802	)		—
Savings deposits and NOW accounts		(35,763,566	)		(35,763,566	)		—		(35,763,566	)		—
Time deposits		(4,562,366	)		(4,584,384	)		—		(4,584,384	)		—
Deposits at Cayman Islands office		(1,044,519	)		(1,044,519	)		—		(1,044,519	)		—
Short-term borrowings		(1,074,482	)		(1,074,482	)		—		(1,074,482	)		—
Long-term borrowings		(4,607,758	)		(4,768,408	)		—		(4,768,408	)		—
Accrued interest payable		(54,281	)		(54,281	)		—		(54,281	)		—
Trading account liabilities		(374,274	)		(374,274	)		—		(374,274	)		—
Other financial instruments:
Commitments to originate real estate loans for sale	$	47,859		$	47,859			—	$	—		$	47,859
Commitments to sell real estate loans		(7,299	)		(7,299	)		—		(7,299	)		—
Other credit-related commitments		(119,464	)		(119,464	)		—		—			(119,464	)
Interest rate swap agreements used for interest rate risk management		143,179			143,179			—		143,179			—

	December 31, 2011
	Carrying Amount			Calculated Estimate
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,452,397		$	1,452,397
Interest-bearing deposits at banks		154,960			154,960
Trading account assets		561,834			561,834
Investment securities		7,673,154			7,608,008
Loans and leases:
Commercial loans and leases		15,734,436			15,507,342
Commercial real estate loans		24,411,114			24,024,585
Residential real estate loans		7,923,165			7,782,935
Consumer loans		12,027,290			11,869,813
Allowance for credit losses		(908,290	)		—
Loans and leases, net		59,187,715			59,184,675
Accrued interest receivable		222,618			222,618
Financial liabilities:
Noninterest-bearing deposits	$	(20,017,883	)	$	(20,017,883	)
Savings deposits and NOW accounts		(32,913,309	)		(32,913,309	)
Time deposits		(6,107,530	)		(6,133,806	)
Deposits at Cayman Islands office		(355,927	)		(355,927	)
Short-term borrowings		(782,082	)		(782,082	)
Long-term borrowings		(6,686,226	)		(6,720,174	)
Accrued interest payable		(67,900	)		(67,900	)
Trading account liabilities		(434,559	)		(434,559	)
Other financial instruments:
Commitments to originate real estate loans for sale	$	6,923		$	6,923
Commitments to sell real estate loans		(3,498	)		(3,498	)
Other credit-related commitments		(109,828	)		(109,828	)
Interest rate swap agreements used for interest rate risk management		147,302			147,302