Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2017

Assets and Liabilities Measured at Estimated Fair Value on Recurring Basis

The following tables present assets and liabilities at March 31, 2017 and December 31, 2016 measured at estimated fair value on a recurring basis:

	Fair Value Measurements		Level 1 (a)		Level 2 (a)		Level 3
	(In thousands)
March 31, 2017
Trading account assets	$	174,854		46,137		128,717		—
Investment securities available for sale:
U.S. Treasury and federal agencies		1,898,250		—		1,898,250		—
Obligations of states and political subdivisions		3,124		—		3,124		—
Mortgage-backed securities:
Government issued or guaranteed		10,504,314		—		10,504,314		—
Privately issued		41		—		—		41
Other debt securities		119,767		—		119,767		—
Equity securities		105,504		63,698		41,806		—
		12,631,000		63,698		12,567,261		41
Real estate loans held for sale		372,023		—		372,023		—
Other assets (b)		29,571		—		12,724		16,847
Total assets	$	13,207,448		109,835		13,080,725		16,888
Trading account liabilities	$	138,695		—		138,695		—
Other liabilities (b)		4,548		—		3,903		645
Total liabilities	$	143,243		—		142,598		645

December 31, 2016
Trading account assets	$	323,867		46,135		277,732		—
Investment securities available for sale:
U.S. Treasury and federal agencies		1,902,544		—		1,902,544		—
Obligations of states and political subdivisions		3,641		—		3,641		—
Mortgage-backed securities:
Government issued or guaranteed		10,954,861		—		10,954,861		—
Privately issued		44		—		—		44
Other debt securities		118,516		—		118,516		—
Equity securities		352,466		301,711		50,755		—
		13,332,072		301,711		13,030,317		44
Real estate loans held for sale		1,056,180		—		1,056,180		—
Other assets (b)		58,351		—		50,291		8,060
Total assets	$	14,770,470		347,846		14,414,520		8,104
Trading account liabilities	$	174,376		—		174,376		—
Other liabilities (b)		2,481		—		1,746		735
Total liabilities	$	176,857		—		176,122		735

(a)	There were no significant transfers between Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2017 and the year ended December 31, 2016.

(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 Recurring Basis

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended March 31, 2017 were as follows:

	Investment Securities Available for Sale
	Privately Issued Mortgage-Backed Securities			Other Assets and Other Liabilities
	(In thousands)

Balance — January 1, 2017	$	44			7,325
Total gains (losses) realized/unrealized:
Included in earnings		—			23,940		(b)
Included in other comprehensive income		—			—
Sales		—			—
Settlements		(3	)		—
Transfers in and/or out of Level 3 (a)		—			(15,063	)	(d)
Balance — March 31, 2017	$	41			16,202
Changes in unrealized gains included in earnings related to assets still held at March 31, 2017	$	—			15,094		(b)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the three months ended March 31, 2016 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, 2016	$	74			47,393				9,879
Total gains (losses) realized/unrealized:
Included in earnings		—			—				23,898		(b)
Included in other comprehensive income		—			(2,148	)	(c)		—
Settlements		(9	)		(205	)			—
Transfers in and/or out of Level 3 (a)		—			—				(16,892	)	(d)
Balance — March 31, 2016	$	65			45,040				16,885
Changes in unrealized gains included in earnings related to assets still held at March 31, 2016	$	—			—				14,539		(b)

(a)	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.

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

(c)	Reported as net unrealized losses on investment securities in the consolidated statement of comprehensive income. The Company sold its collateralized debt obligations during the third and fourth quarters of 2016.

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

Quantitative Information Related to Significant Unobservable Inputs

The following tables present quantitative information about significant unobservable inputs used in the fair value measurements for certain Level 3 assets and liabilities at March 31, 2017 and December 31, 2016:

Fair Value

Valuation

Technique

Unobservable

Inputs/Assumptions

Range

(Weighted-

Average)

(In thousands)

March 31, 2017

Recurring fair value measurements

Privately issued mortgage-backed

securities

Two independent pricing quotes

—

Net other assets (liabilities) (a)

16,202

Discounted cash flow

Commitment expirations

0%-80% (24%)

December 31, 2016

Recurring fair value measurements

Privately issued mortgage-backed

securities

Two independent pricing quotes

—

Net other assets (liabilities) (a)

7,325

Discounted cash flow

Commitment expirations

0%-77% (30%)

(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:

	March 31, 2017
	Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3
	(In thousands)
Financial assets:
Cash and cash equivalents	$	1,286,962			1,286,962			1,213,120		73,842			—
Interest-bearing deposits at banks		6,945,149			6,945,149			—		6,945,149			—
Trading account		174,854			174,854			46,137		128,717			—
Investment securities		15,968,415			15,958,181			63,698		15,775,917			118,566
Loans and leases:
Commercial loans and leases		22,295,376			21,882,456			—		—			21,882,456
Commercial real estate loans		33,071,654			32,607,794			—		74,563			32,533,231
Residential real estate loans		21,724,491			21,776,908			—		4,686,339			17,090,569
Consumer loans		12,221,481			12,083,513			—		—			12,083,513
Allowance for credit losses		(1,001,430	)		—			—		—			—
Loans and leases, net		88,311,572			88,350,671			—		4,760,902			83,589,769
Accrued interest receivable		318,152			318,152			—		318,152			—
Financial liabilities:
Noninterest-bearing deposits	$	(34,279,591	)		(34,279,591	)		—		(34,279,591	)		—
Savings and interest-checking deposits		(53,542,149	)		(53,542,149	)		—		(53,542,149	)		—
Time deposits		(9,028,018	)		(9,106,654	)		—		(9,106,654	)		—
Deposits at Cayman Islands office		(192,763	)		(192,763	)		—		(192,763	)		—
Short-term borrowings		(185,102	)		(185,102	)		—		(185,102	)		—
Long-term borrowings		(8,087,619	)		(8,104,055	)		—		(8,104,055	)		—
Accrued interest payable		(60,737	)		(60,737	)		—		(60,737	)		—
Trading account		(138,695	)		(138,695	)		—		(138,695	)		—
Other financial instruments:
Commitments to originate real estate loans for sale	$	16,202			16,202			—		—			16,202
Commitments to sell real estate loans		1,048			1,048			—		1,048			—
Other credit-related commitments		(129,968	)		(129,968	)		—		—			(129,968	)
Interest rate swap agreements used for interest rate risk management		7,773			7,773			—		7,773			—

	December 31, 2016
	Carrying Amount			Estimated Fair Value			Level 1		Level 2			Level 3
				(In thousands)
Financial assets:
Cash and cash equivalents	$	1,320,549			1,320,549			1,249,654		70,895		—
Interest-bearing deposits at banks		5,000,638			5,000,638			—		5,000,638		—
Trading account		323,867			323,867			46,135		277,732		—
Investment securities		16,250,468			16,244,412			301,711		15,821,176			121,525
Loans and leases:
Commercial loans and leases		22,610,047			22,239,428		—		—				22,239,428
Commercial real estate loans		33,506,394			33,129,428		—			642,590			32,486,838
Residential real estate loans		22,590,912			22,638,167		—			4,912,488			17,725,679
Consumer loans		12,146,063			12,061,590		—			—			12,061,590
Allowance for credit losses		(988,997	)		—		—			—			—
Loans and leases, net		89,864,419			90,068,613		—			5,555,078			84,513,535
Accrued interest receivable		308,805			308,805		—			308,805		—
Financial liabilities:
Noninterest-bearing deposits	$	(32,813,896	)		(32,813,896	)	—			(32,813,896	)	—
Savings and interest-checking deposits		(52,346,207	)		(52,346,207	)	—			(52,346,207	)	—
Time deposits		(10,131,846	)		(10,222,585	)	—			(10,222,585	)	—
Deposits at Cayman Islands office		(201,927	)		(201,927	)	—			(201,927	)	—
Short-term borrowings		(163,442	)		(163,442	)	—			(163,442	)	—
Long-term borrowings		(9,493,835	)		(9,473,844	)	—			(9,473,844	)	—
Accrued interest payable		(75,172	)		(75,172	)	—			(75,172	)	—
Trading account		(174,376	)		(174,376	)	—			(174,376	)	—
Other financial instruments:
Commitments to originate real estate loans for sale	$	7,325			7,325		—			—			7,325
Commitments to sell real estate loans		36,653			36,653		—			36,653		—
Other credit-related commitments		(136,295	)		(136,295	)	—			—			(136,295	)
Interest rate swap agreements used for interest rate risk management		11,892			11,892		—			11,892		—