Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Estimated Fair Value on Recurring Basis

The following tables present assets and liabilities at June 30, 2013 and December 31, 2012 measured at estimated fair value on a recurring basis:

	Fair value measurements at June 30, 2013		Level 1 (a)		Level 2 (a)		Level 3
	(in thousands)
Trading account assets	$	378,235		48,001		330,234		—
Investment securities available for sale:
U.S. Treasury and federal agencies		38,108		—		38,108		—
Obligations of states and political subdivisions		19,231		—		19,231		—
Mortgage-backed securities:
Government issued or guaranteed		2,694,893		—		2,694,893		—
Privately issued		5,272		—		—		5,272
Collateralized debt obligations		59,916		—		—		59,916
Other debt securities		117,951		—		117,951		—
Equity securities		149,715		121,254		28,461		—
		3,085,086		121,254		2,898,644		65,188
Real estate loans held for sale		2,014,505		—		2,014,505		—
Other assets (b)		220,957		—		204,848		16,109
Total assets	$	5,698,783		169,255		5,448,231		81,297
Trading account liabilities	$	277,904		—		277,904		—
Other liabilities (b)		23,242		—		14,541		8,701
Total liabilities	$	301,146		—		292,445		8,701

	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		1,023,886		—		—		1,023,886
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

(a) There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the three months and six months ended June 30, 2013 and 2012.

(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 three months ended June 30, 2013 were as follows:

	Investment securities available for sale
	Privately issued mortgage-backed securities			Collateralized debt obligations			Other assets and other liabilities
	(in thousands)
Balance – March 31, 2013	$	993,247		$	61,718		$	36,119
Total gains (losses) realized/unrealized:
Included in earnings		(46,302	) (a)		—			15,500	(b)
Included in other comprehensive income		90,203	(e)		(1,277	) (e)		—
Sales		(978,608	)		—			—
Settlements		(53,268	)		(525	)		—
Transfers in and/or out of Level 3 (c)		—			—			(44,211	) (d)
Balance – June 30, 2013	$	5,272		$	59,916		$	7,408
Changes in unrealized gains included in earnings related to assets still held at June 30, 2013	$	—		$	—		$	4,123	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended June 30, 2012 were as follows:

	Investment securities available for sale
	Privately issued mortgage-backed securities			Collateralized debt obligations			Other assets and other liabilities
	(in thousands)
Balance – March 31, 2012	$	1,124,130		$	58,184		$	20,435
Total gains (losses) realized/unrealized:
Included in earnings		(14,627	) (a)		—			45,486	(b)
Included in other comprehensive income		23,376	(e)		(2,712	) (e)		—
Settlements		(52,360	)		(374	)		—
Transfers in and/or out of Level 3 (c)		—			—			(31,870	) (d)
Balance – June 30, 2012	$	1,080,519		$	55,098		$	34,051
Changes in unrealized gains (losses) included in earnings related to assets still held at June 30, 2012	$	(14,627	) (a)	$	—		$	28,904	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the six months ended June 30, 2013 were as follows:

	Investment securities available for sale
	Privately issued mortgage-backed securities			Collateralized debt obligations			Other assets and other liabilities
	(in thousands)
Balance – January 1, 2013	$	1,023,886		$	61,869		$	47,859
Total gains (losses) realized/unrealized:
Included in earnings		(56,102	) (a)		—			58,812	(b)
Included in other comprehensive income		116,584	(e)		(537	) (e)		—
Sales		(978,608	)		—			—
Settlements		(100,488	)		(1,416	)		—
Transfers in and/or out of Level 3 (c)		—			—			(99,263	) (d)
Balance – June 30, 2013	$	5,272		$	59,916		$	7,408
Changes in unrealized gains included in earnings related to assets still held at June 30, 2013	$	—		$	—		$	5,132	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the six months ended June 30, 2012 were as follows:

	Investment securities available for sale
	Privately issued mortgage-backed securities			Collateralized debt obligations			Other assets and other liabilities
	(in thousands)
Balance – January 1, 2012	$	1,151,285		$	52,500		$	6,923
Total gains (losses) realized/unrealized:
Included in earnings		(22,304	) (a)		—			72,517	(b)
Included in other comprehensive income		48,794	(e)		3,711	(e)		—
Settlements		(97,256	)		(1,113	)		—
Transfers in and/or out of Level 3 (c)		—			—			(45,389	) (d)
Balance – June 30, 2012	$	1,080,519		$	55,098		$	34,051
Changes in unrealized gains (losses) included in earnings related to assets still held at June 30, 2012	$	(22,304	) (a)	$	—		$	33,647	(b)

(a) Reported as an OTTI loss or as gain (loss) on bank investment securities in the consolidated statement of income.

(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.

Quantitative Information Related to Significant Unobservable Inputs

The following tables present quantitative information about the significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities at June 30, 2013 and December 31, 2012:

	Fair value at June 30,  2013		Valuation technique	Unobservable input/assumptions	Range (weighted- average)
	(in thousands)
Recurring fair value measurements
Privately issued mortgage–backed securities	$	5,272	Two independent price quotes	—	—
Collateralized debt obligations		59,916	Discounted cash flow	Probability of default	21%-69% (48%)
				Loss severity	100%
Net other assets (liabilities) (a)		7,408	Discounted cash flow	Commitment expirations	0%-64% (18%)
	Fair value at December 31, 2012		Valuation technique	Unobservable input/assumptions	Range (weighted- average)
	(in thousands)
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%)
Collateralized debt obligations		61,869	Discounted cash flow	Probability of default	22%-69% (47%)
				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:

	June 30, 2013
	Carrying amount			Estimated fair value			Level 1		Level 2			Level 3
	(in thousands)
Financial assets:
Cash and cash equivalents	$	1,474,502		$	1,474,502		$	1,412,924	$	61,578		$	—
Interest-bearing deposits at banks		2,555,354			2,555,354			—		2,555,354			—
Trading account assets		378,235			378,235			48,001		330,234			—
Investment securities		5,210,526			5,128,413			121,254		4,779,417			227,742
Loans and leases:
Commercial loans and leases		18,021,812			17,763,265			—		—			17,763,265
Commercial real estate loans		26,116,394			26,107,812			—		132,729			25,975,083
Residential real estate loans		10,399,749			10,328,995			—		6,980,989			3,348,006
Consumer loans		11,433,911			11,373,978			—		—			11,373,978
Allowance for credit losses		(927,065	)		—			—		—			—
Loans and leases, net		65,044,801			65,574,050			—		7,113,718			58,460,332
Accrued interest receivable		222,705			222,705			—		222,705			—
Financial liabilities:
Noninterest-bearing deposits	$	(24,074,815	)	$	(24,074,815	)	$	—	$	(24,074,815	)	$	—
Savings deposits and NOW accounts		(37,247,688	)		(37,247,688	)		—		(37,247,688	)		—
Time deposits		(4,054,524	)		(4,071,757	)		—		(4,071,757	)		—
Deposits at Cayman Islands office		(284,443	)		(284,443	)		—		(284,443	)		—
Short-term borrowings		(307,740	)		(307,740	)		—		(307,740	)		—
Long-term borrowings		(5,122,398	)		(5,260,847	)		—		(5,260,847	)		—
Accrued interest payable		(52,958	)		(52,958	)		—		(52,958	)		—
Trading account liabilities		(277,904	)		(277,904	)		—		(277,904	)		—
Other financial instruments:
Commitments to originate real estate loans for sale	$	7,408		$	7,408		$	—	$	—		$	7,408
Commitments to sell real estate loans		76,139			76,139			—		76,139			—
Other credit-related commitments		(118,338	)		(118,338	)		—		—			(118,338	)
Interest rate swap agreements used for interest rate risk management		114,168			114,168			—		114,168			—

	December 31, 2012
	Carrying amount			Estimated fair value			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			—