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Fair value measurements (Tables)
 9 Months Ended
Sep. 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 September 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)

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading account assets

 

$

624,556

 

 

$

50,335

 

 

$

574,221

 

 

$

—

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

9,744

 

 

 

—

 

 

 

9,744

 

 

 

—

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

3,475,479

 

 

 

—

 

 

 

3,475,479

 

 

 

—

 

Other debt securities

 

 

132,883

 

 

 

—

 

 

 

132,883

 

 

 

—

 

 

 

 

3,618,106

 

 

 

—

 

 

 

3,618,106

 

 

 

—

 

Equity securities

 

 

82,456

 

 

 

75,169

 

 

 

7,287

 

 

 

—

 

Real estate loans held for sale

 

 

838,051

 

 

 

—

 

 

 

838,051

 

 

 

—

 

Other assets (a)

 

 

44,383

 

 

 

—

 

 

 

19,924

 

 

 

24,459

 

Total assets

 

$

5,207,552

 

 

$

125,504

 

 

$

5,057,589

 

 

$

24,459

 

Trading account liabilities

 

$

92,649

 

 

$

—

 

 

$

92,649

 

 

$

—

 

Other liabilities (a)

 

 

13,120

 

 

 

—

 

 

 

8,806

 

 

 

4,314

 

Total liabilities

 

$

105,769

 

 

$

—

 

 

$

101,455

 

 

$

4,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 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 — June 30, 2021

 

$

—

 

 

 

35,666

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

44,152

 

(a)

Settlements

 

 

—

 

 

 

—

 

 

Transfers out of Level 3

 

 

—

 

 

 

(59,673

)

(b)

Balance — September 30, 2021

 

$

—

 

 

 

20,145

 

 

Changes in unrealized gains included in earnings

   related to assets still held at September 30, 2021

 

$

—

 

 

 

18,196

 

(a)

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — June 30, 2020

 

$

16

 

 

 

40,106

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

57,819

 

(a)

Transfers out of Level 3

 

 

—

 

 

 

(46,422

)

(b)

Balance — September 30, 2020

 

$

16

 

 

 

51,503

 

 

Changes in unrealized gains included in earnings

   related to assets still held at September 30, 2020

 

$

—

 

 

 

44,127

 

(a)

The changes in Level 3 assets and liabilities measured at estimated fair value on a recurring basis during the nine months ended September 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

 

 

—

 

 

 

102,489

 

(a)

Settlements

 

 

(16

)

 

 

—

 

 

Transfers out of Level 3

 

 

—

 

 

 

(125,578

)

(b)

Balance — September 30, 2021

 

$

—

 

 

 

20,145

 

 

Changes in unrealized gains included in earnings

   related to assets still held at September 30, 2021

 

$

—

 

 

 

21,722

 

(a)

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance — January 1, 2020

 

$

16

 

 

 

10,740

 

 

Total gains realized/unrealized:

 

 

 

 

 

 

 

 

 

Included in earnings

 

 

—

 

 

 

150,632

 

(a)

Transfers out of Level 3

 

 

—

 

 

 

(109,869

)

(b)

Balance — September 30, 2020

 

$

16

 

 

 

51,503

 

 

Changes in unrealized gains included in earnings

   related to assets still held at September 30, 2020

 

$

—

 

 

 

50,411

 

(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 September 30, 2021 and December 31, 2020:

 

 

 

Fair Value

 

 

Valuation

Technique

 

Unobservable

Inputs/Assumptions

 

 

Range

(Weighted-

Average)

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring fair value measurements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net other assets (liabilities) (a)

 

 

20,145

 

 

Discounted cash flow

 

Commitment expirations

 

 

0% - 93% (14%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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:

 

 

 

September 30, 2021

 

 

 

Carrying

Amount

 

 

Estimated

Fair Value

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(In thousands)

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,479,712

 

 

 

1,479,712

 

 

 

1,351,944

 

 

 

127,768

 

 

 

—

 

Interest-bearing deposits at banks

 

 

38,445,788

 

 

 

38,445,788

 

 

 

—

 

 

 

38,445,788

 

 

 

—

 

Trading account assets

 

 

624,556

 

 

 

624,556

 

 

 

50,335

 

 

 

574,221

 

 

 

—

 

Investment securities

 

 

6,447,622

 

 

 

6,501,833

 

 

 

75,169

 

 

 

6,364,735

 

 

 

61,929

 

Loans and leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial loans and leases

 

 

22,514,940

 

 

 

22,315,530

 

 

 

—

 

 

 

—

 

 

 

22,315,530

 

Commercial real estate loans

 

 

37,023,952

 

 

 

36,312,089

 

 

 

—

 

 

 

558,970

 

 

 

35,753,119

 

Residential real estate loans

 

 

16,209,354

 

 

 

16,397,551

 

 

 

—

 

 

 

3,902,745

 

 

 

12,494,806

 

Consumer loans

 

 

17,834,648

 

 

 

17,935,068

 

 

 

—

 

 

 

—

 

 

 

17,935,068

 

Allowance for credit losses

 

 

(1,515,024

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Loans and leases, net

 

 

92,067,870

 

 

 

92,960,238

 

 

 

—

 

 

 

4,461,715

 

 

 

88,498,523

 

Accrued interest receivable

 

 

378,433

 

 

 

378,433

 

 

 

—

 

 

 

378,433

 

 

 

—

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing deposits

 

$

(56,542,309

)

 

 

(56,542,309

)

 

 

—

 

 

 

(56,542,309

)

 

 

—

 

Savings and interest-checking deposits

 

 

(69,195,960

)

 

 

(69,195,960

)

 

 

—

 

 

 

(69,195,960

)

 

 

—

 

Time deposits

 

 

(2,963,027

)

 

 

(2,967,906

)

 

 

—

 

 

 

(2,967,906

)

 

 

—

 

Short-term borrowings

 

 

(103,548

)

 

 

(103,548

)

 

 

—

 

 

 

(103,548

)

 

 

—

 

Long-term borrowings

 

 

(3,500,391

)

 

 

(3,605,637

)

 

 

—

 

 

 

(3,605,637

)

 

 

—

 

Accrued interest payable

 

 

(38,808

)

 

 

(38,808

)

 

 

—

 

 

 

(38,808

)

 

 

—

 

Trading account liabilities

 

 

(92,649

)

 

 

(92,649

)

 

 

—

 

 

 

(92,649

)

 

 

—

 

Other financial instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments to originate real estate

   loans for sale

 

$

20,145

 

 

 

20,145

 

 

 

—

 

 

 

—

 

 

 

20,145

 

Commitments to sell real estate loans

 

 

9,734

 

 

 

9,734

 

 

 

—

 

 

 

9,734

 

 

 

—

 

Other credit-related commitments

 

 

(124,145

)

 

 

(124,145

)

 

 

—

 

 

 

—

 

 

 

(124,145

)

Interest rate swap agreements used for

   interest rate risk management

 

 

1,384

 

 

 

1,384

 

 

 

—

 

 

 

1,384

 

 

 

—

 

13. 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

 

 

 

—