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Fair value measurements (Tables)
 6 Months Ended
Jun. 30, 2021
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, 2021 and December 31, 2020 measured at estimated fair value on a recurring basis:

 

 

 

Fair Value Measurements

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading account assets

 

$

712,558

 

 

$

49,544

 

 

$

663,014

 

 

$

—

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

7,023

 

 

 

—

 

 

 

7,023

 

 

 

—

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

3,820,490

 

 

 

—

 

 

 

3,820,490

 

 

 

—

 

Other debt securities

 

 

132,270

 

 

 

—

 

 

 

132,270

 

 

 

—

 

 

 

 

3,959,783

 

 

 

—

 

 

 

3,959,783

 

 

 

—

 

Equity securities

 

 

78,671

 

 

 

71,917

 

 

 

6,754

 

 

 

—

 

Real estate loans held for sale

 

 

884,355

 

 

 

—

 

 

 

884,355

 

 

 

—

 

Other assets (a)

 

 

47,882

 

 

 

—

 

 

 

8,620

 

 

 

39,262

 

Total assets

 

$

5,683,249

 

 

$

121,461

 

 

$

5,522,526

 

 

$

39,262

 

Trading account liabilities

 

$

101,271

 

 

$

—

 

 

$

101,271

 

 

$

—

 

Other liabilities (a)

 

 

13,759

 

 

 

—

 

 

 

10,163

 

 

 

3,596

 

Total liabilities

 

$

115,030

 

 

$

—

 

 

$

111,434

 

 

$

3,596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading account assets

 

$

1,068,581

 

 

$

50,060

 

 

$

1,018,521

 

 

$

—

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

9,338

 

 

 

—

 

 

 

9,338

 

 

 

—

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

4,683,438

 

 

 

—

 

 

 

4,683,438

 

 

 

—

 

Privately issued

 

 

16

 

 

 

—

 

 

 

—

 

 

 

16

 

Other debt securities

 

 

129,814

 

 

 

—

 

 

 

129,814

 

 

 

—

 

 

 

 

4,822,606

 

 

 

—

 

 

 

4,822,590

 

 

 

16

 

Equity securities

 

 

92,985

 

 

 

63,129

 

 

 

29,856

 

 

 

—

 

Real estate loans held for sale

 

 

1,054,676

 

 

 

—

 

 

 

1,054,676

 

 

 

—

 

Other assets (a)

 

 

49,464

 

 

 

—

 

 

 

5,865

 

 

 

43,599

 

Total assets

 

$

7,088,312

 

 

$

113,189

 

 

$

6,931,508

 

 

$

43,615

 

Trading account liabilities

 

$

116,902

 

 

$

—

 

 

$

116,902

 

 

$

—

 

Other liabilities (a)

 

 

23,583

 

 

 

—

 

 

 

23,218

 

 

 

365

 

Total liabilities

 

$

140,485

 

 

$

—

 

 

$

140,120

 

 

$

365

 

 

 (a)

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 Three 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 June 30, 2021 and 2020 were as follows:

 

 

Investment

Securities

Available for Sale

 

 

 

 

 

 

 

 

Privately Issued Mortgage-Backed Securities

 

 

Other Assets and Other Liabilities

 

 

2021

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Balance — March 31, 2021

 

$

16

 

 

 

13,757

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

52,312

 

(a)

Settlements

 

 

(16

)

 

 

—

 

 

Transfers out of Level 3

 

 

—

 

 

 

(30,403

)

(b)

Balance — June 30, 2021

 

$

—

 

 

 

35,666

 

 

Changes in unrealized gains included in earnings

   related to assets still held at June 30, 2021

 

$

—

 

 

 

37,300

 

(a)

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — March 31, 2020

 

$

16

 

 

 

35,027

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

48,732

 

(a)

Transfers out of Level 3

 

 

—

 

 

 

(43,653

)

(b)

Balance — June 30, 2020

 

$

16

 

 

 

40,106

 

 

Changes in unrealized gains included in earnings

   related to assets still held at June 30, 2020

 

$

—

 

 

 

33,725

 

(a)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the six months ended June 30, 2021 and 2020 were as follows:

 

 

Investment

Securities

Available for Sale

 

 

 

 

 

 

 

 

Privately Issued Mortgage-Backed Securities

 

 

Other Assets and Other Liabilities

 

 

2021

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Balance — January 1, 2021

 

$

16

 

 

 

43,234

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

58,337

 

(a)

Settlements

 

 

(16

)

 

 

—

 

 

Transfers out of Level 3

 

 

—

 

 

 

(65,905

)

(b)

Balance — June 30, 2021

 

$

—

 

 

 

35,666

 

 

Changes in unrealized gains included in earnings

   related to assets still held at June 30, 2021

 

$

—

 

 

 

35,492

 

(a)

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — January 1, 2020

 

$

16

 

 

 

10,740

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

92,813

 

(a)

Transfers out of Level 3

 

 

—

 

 

 

(63,447

)

(b)

Balance — June 30, 2020

 

$

16

 

 

 

40,106

 

 

Changes in unrealized gains included in earnings

   related to assets still held at June 30, 2020

 

$

—

 

 

 

38,514

 

(a)

(a)

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

(b)

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 June 30, 2021 and December 31, 2020:

 

 

 

Fair Value

 

 

Valuation

Technique

 

Unobservable

Inputs/Assumptions

 

 

Range

(Weighted-

Average)

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring fair value measurements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net other assets (liabilities) (a)

 

 

35,666

 

 

Discounted cash flow

 

Commitment expirations

 

 

0% - 91% (16%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring fair value measurements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Privately issued mortgage-

   backed securities

 

$

16

 

 

Two independent pricing quotes

 

 

—

 

 

 

—

 

Net other assets (liabilities) (a)

 

 

43,234

 

 

Discounted cash flow

 

Commitment expirations

 

 

0% - 98% (16%)

 

(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, 2021

 

 

 

Carrying

Amount

 

 

Estimated

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,410,468

 

 

 

1,410,468

 

 

 

1,291,665

 

 

 

118,803

 

 

 

—

 

Interest-bearing deposits at banks

 

 

33,864,824

 

 

 

33,864,824

 

 

 

—

 

 

 

33,864,824

 

 

 

—

 

Trading account assets

 

 

712,558

 

 

 

712,558

 

 

 

49,544

 

 

 

663,014

 

 

 

—

 

Investment securities

 

 

6,143,177

 

 

 

6,209,993

 

 

 

71,917

 

 

 

6,073,252

 

 

 

64,824

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans and leases

 

 

25,409,291

 

 

 

25,174,858

 

 

 

—

 

 

 

—

 

 

 

25,174,858

 

Commercial real estate loans

 

 

37,558,775

 

 

 

36,777,235

 

 

 

—

 

 

 

205,591

 

 

 

36,571,644

 

Residential real estate loans

 

 

16,704,951

 

 

 

16,865,571

 

 

 

—

 

 

 

3,834,635

 

 

 

13,030,936

 

Consumer loans

 

 

17,440,415

 

 

 

17,541,515

 

 

 

—

 

 

 

—

 

 

 

17,541,515

 

Allowance for credit losses

 

 

(1,575,128

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Loans and leases, net

 

 

95,538,304

 

 

 

96,359,179

 

 

 

—

 

 

 

4,040,226

 

 

 

92,318,953

 

Accrued interest receivable

 

 

409,745

 

 

 

409,745

 

 

 

—

 

 

 

409,745

 

 

 

—

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

(55,621,230

)

 

 

(55,621,230

)

 

 

—

 

 

 

(55,621,230

)

 

 

—

 

Savings and interest-checking deposits

 

 

(69,491,942

)

 

 

(69,491,942

)

 

 

—

 

 

 

(69,491,942

)

 

 

—

 

Time deposits

 

 

(3,155,600

)

 

 

(3,163,772

)

 

 

—

 

 

 

(3,163,772

)

 

 

—

 

Short-term borrowings

 

 

(91,235

)

 

 

(91,235

)

 

 

—

 

 

 

(91,235

)

 

 

—

 

Long-term borrowings

 

 

(3,499,448

)

 

 

(3,609,147

)

 

 

—

 

 

 

(3,609,147

)

 

 

—

 

Accrued interest payable

 

 

(48,677

)

 

 

(48,677

)

 

 

—

 

 

 

(48,677

)

 

 

—

 

Trading account liabilities

 

 

(101,271

)

 

 

(101,271

)

 

 

—

 

 

 

(101,271

)

 

 

—

 

Other financial instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments to originate real estate

   loans for sale

 

$

35,666

 

 

 

35,666

 

 

 

—

 

 

 

—

 

 

 

35,666

 

Commitments to sell real estate loans

 

 

(2,471

)

 

 

(2,471

)

 

 

—

 

 

 

(2,471

)

 

 

—

 

Other credit-related commitments

 

 

(131,136

)

 

 

(131,136

)

 

 

—

 

 

 

—

 

 

 

(131,136

)

Interest rate swap agreements used for

   interest rate risk management

 

 

928

 

 

 

928

 

 

 

—

 

 

 

928

 

 

 

—

 

12. Fair value measurements, continued

 

 

 

December 31, 2020

 

 

 

Carrying

Amount

 

 

Estimated

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

 

 

 

 

(In thousands)

 

 

 

 

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,552,743

 

 

 

1,552,743

 

 

 

1,497,457

 

 

 

55,286

 

 

 

—

 

Interest-bearing deposits at banks

 

 

23,663,810

 

 

 

23,663,810

 

 

 

—

 

 

 

23,663,810

 

 

 

—

 

Trading account assets

 

 

1,068,581

 

 

 

1,068,581

 

 

 

50,060

 

 

 

1,018,521

 

 

 

—

 

Investment securities

 

 

7,045,697

 

 

 

7,138,989

 

 

 

63,129

 

 

 

7,005,571

 

 

 

70,289

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans and leases

 

 

27,574,564

 

 

 

27,220,699

 

 

 

—

 

 

 

—

 

 

 

27,220,699

 

Commercial real estate loans

 

 

37,637,889

 

 

 

36,816,580

 

 

 

—

 

 

 

277,911

 

 

 

36,538,669

 

Residential real estate loans

 

 

16,752,993

 

 

 

17,089,141

 

 

 

—

 

 

 

4,135,655

 

 

 

12,953,486

 

Consumer loans

 

 

16,570,421

 

 

 

16,554,050

 

 

 

—

 

 

 

—

 

 

 

16,554,050

 

Allowance for credit losses

 

 

(1,736,387

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Loans and leases, net

 

 

96,799,480

 

 

 

97,680,470

 

 

 

—

 

 

 

4,413,566

 

 

 

93,266,904

 

Accrued interest receivable

 

 

419,936

 

 

 

419,936

 

 

 

—

 

 

 

419,936

 

 

 

—

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

(47,572,884

)

 

 

(47,572,884

)

 

 

—

 

 

 

(47,572,884

)

 

 

—

 

Savings and interest-checking deposits

 

 

(67,680,840

)

 

 

(67,680,840

)

 

 

—

 

 

 

(67,680,840

)

 

 

—

 

Time deposits

 

 

(3,899,910

)

 

 

(3,919,367

)

 

 

—

 

 

 

(3,919,367

)

 

 

—

 

Deposits at Cayman Islands office

 

 

(652,104

)

 

 

(652,104

)

 

 

—

 

 

 

(652,104

)

 

 

—

 

Short-term borrowings

 

 

(59,482

)

 

 

(59,482

)

 

 

—

 

 

 

(59,482

)

 

 

—

 

Long-term borrowings

 

 

(4,382,193

)

 

 

(4,490,433

)

 

 

—

 

 

 

(4,490,433

)

 

 

—

 

Accrued interest payable

 

 

(59,916

)

 

 

(59,916

)

 

 

—

 

 

 

(59,916

)

 

 

—

 

Trading account liabilities

 

 

(116,902

)

 

 

(116,902

)

 

 

—

 

 

 

(116,902

)

 

 

—

 

Other financial instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments to originate real estate

   loans for sale

 

$

43,234

 

 

 

43,234

 

 

 

—

 

 

 

—

 

 

 

43,234

 

Commitments to sell real estate loans

 

 

(18,429

)

 

 

(18,429

)

 

 

—

 

 

 

(18,429

)

 

 

—

 

Other credit-related commitments

 

 

(133,354

)

 

 

(133,354

)

 

 

—

 

 

 

—

 

 

 

(133,354

)

Interest rate swap agreements used

   for interest rate risk management

 

 

1,076

 

 

 

1,076

 

 

 

—

 

 

 

1,076

 

 

 

—