Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 30, 2013 and December 31, 2012 measured at estimated fair value on a recurring basis:

	Fair value measurements at September 30, 2013		Level 1 (a)		Level 2 (a)		Level 3
	(in thousands)
Trading account assets	$	371,370		48,344		323,026		—
Investment securities available for sale:
U.S. Treasury and federal agencies		37,887		—		37,887		—
Obligations of states and political subdivisions		17,963		—		17,963		—
Mortgage-backed securities:
Government issued or guaranteed		4,330,399		—		4,330,399		—
Privately issued		3,816		—		—		3,816
Collateralized debt obligations		59,303		—		—		59,303
Other debt securities		119,404		—		119,404		—
Equity securities		123,408		91,075		32,333		—
		4,692,180		91,075		4,537,986		63,119
Real estate loans held for sale		819,029		—		819,029		—
Other assets (b)		141,625		—		123,440		18,185
Total assets	$	6,024,204		139,419		5,803,481		81,304
Trading account liabilities	$	261,449		—		261,449		—
Other liabilities (b)		24,210		—		19,100		5,110
Total liabilities	$	285,659		—		280,549		5,110

	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 nine months ended September 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 September 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 – June 30, 2013	$	5,272		$	59,916		$	7,408
Total gains (losses) realized/unrealized:
Included in earnings		—			—			24,440	(b)
Included in other comprehensive income		400	(e)		213	(e)		—
Settlements		(1,856	)		(826	)		—
Transfers in and/or out of Level 3 (c)		—			—			(18,773	)(d)
Balance – September 30, 2013	$	3,816		$	59,303		$	13,075
Changes in unrealized gains (losses) included in earnings related to assets still held at September 30, 2013	$	—		$	—		$	(1,727	)(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended September 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 – June 30, 2012	$	1,080,519		$	55,098		$	34,051
Total gains (losses) realized/unrealized:
Included in earnings		(5,672	)(a)		—			84,864	(b)
Included in other comprehensive income		40,603	(e)		3,297	(e)		—
Settlements		(49,814	)		(1,194	)		—
Transfers in and/or out of Level 3 (c)		—			—			(48,570	)(d)
Balance – September 30, 2012	$	1,065,636		$	57,201		$	70,345
Changes in unrealized gains (losses) included in earnings related to assets still held at September 30, 2012	$	(5,672	)(a)	$	—		$	63,357	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 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)		—			83,252	(b)
Included in other comprehensive income		116,984	(e)		(324	)(e)		—
Sales		(978,608	)		—			—
Settlements		(102,344	)		(2,242	)		—
Transfers in and/or out of Level 3 (c)		—			—			(118,036	)(d)
Balance – September 30, 2013	$	3,816		$	59,303		$	13,075
Changes in unrealized gains included in earnings related to assets still held at September 30, 2013	$	—		$	—		$	925	(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 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		(27,976	)(a)		—			157,381	(b)
Included in other comprehensive income		89,397	(e)		7,008	(e)		—
Settlements		(147,070	)		(2,307	)		—
Transfers in and/or out of Level 3 (c)		—			—			(93,959	)(d)
Balance – September 30, 2012	$	1,065,636		$	57,201		$	70,345
Changes in unrealized gains (losses) included in earnings related to assets still held at September 30, 2012	$	(27,976	)(a)	$	—		$	70,187	(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 significant unobservable inputs used in the fair value measurements for Level 3 assets and liabilities at September 30, 2013 and December 31, 2012.

	Fair value at September 30, 2013		Valuation technique	Unobservable input/assumptions	Range (weighted- average)
	(in thousands)
Recurring fair value measurements
Privately issued mortgage–backed securities	$	3,816	Two independent price quotes	—	—
Collateralized debt obligations		59,303	Discounted cash flow	Probability of default	13%-55% (39%)
				Loss severity	100%
Net other assets (liabilities)(a)		13,075	Discounted cash flow	Commitment expirations	0%-91% (21%)

	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:

	September 30, 2013
	Carrying amount			Estimated fair value			Level 1		Level 2			Level 3
	(in thousands)
Financial assets:
Cash and cash equivalents	$	2,059,753		$	2,059,753		$	1,992,949	$	66,804		$	—
Interest-bearing deposits at banks		1,925,811			1,925,811			—		1,925,811			—
Trading account assets		371,370			371,370			48,344		323,026			—
Investment securities		8,309,773			8,268,045			91,075		7,945,975			230,995
Loans and leases:
Commercial loans and leases		17,911,149			17,685,646			—		—			17,685,646
Commercial real estate loans		26,345,267			26,256,932			—		151,690			26,105,242
Residential real estate loans		9,228,003			9,198,681			—		5,757,491			3,441,190
Consumer loans		10,174,623			10,151,004			—		—			10,151,004
Allowance for credit losses		(916,370	)		—			—		—			—
Loans and leases, net		62,742,672			63,292,263			—		5,909,181			57,383,082
Accrued interest receivable		234,208			234,208			—		234,208			—
Financial liabilities:
Noninterest-bearing deposits	$	(24,150,771	)	$	(24,150,771	)	$	—	$	(24,150,771	)	$	—
Savings deposits and NOW accounts		(38,253,417	)		(38,253,417	)		—		(38,253,417	)		—
Time deposits		(3,831,443	)		(3,853,552	)		—		(3,853,552	)		—
Deposits at Cayman Islands office		(316,510	)		(316,510	)		—		(316,510	)		—
Short-term borrowings		(246,019	)		(246,019	)		—		(246,019	)		—
Long-term borrowings		(5,121,326	)		(5,257,947	)		—		(5,257,947	)		—
Accrued interest payable		(62,773	)		(62,773	)		—		(62,773	)		—
Trading account liabilities		(261,449	)		(261,449	)		—		(261,449	)		—
Other financial instruments:
Commitments to originate real estate loans for sale	$	13,075		$	13,075		$	—	$	—		$	13,075
Commitments to sell real estate loans		(9,743	)		(9,743	)		—		(9,743	)		—
Other credit-related commitments		(114,048	)		(114,048	)		—		—			(114,048	)
Interest rate swap agreements used for interest rate risk management		114,083			114,083			—		114,083			—

	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			—