Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

ollowing tables present summaries of the Corporation’s assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets:



	March 31, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	24,417	$	—	$	24,417
Available for sale investment securities:
Equity securities	45,734		—		—		45,734
U.S. Government securities	—		526		—		526
U.S. Government sponsored agency securities	—		280		—		280
State and municipal securities	—		283,453		—		283,453
Corporate debt securities	—		91,073		9,479		100,552
Collateralized mortgage obligations	—		1,006,737		—		1,006,737
Mortgage-backed securities	—		916,203		—		916,203
Auction rate securities	—		—		147,713		147,713
Total available for sale investments	45,734		2,298,272		157,192		2,501,198
Other assets	15,943		7,798		—		23,741
Total assets	$	61,677	$	2,330,487	$	157,192	$	2,549,356
Other liabilities	$	15,886	$	6,841	$	—	$	22,727



	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	21,351	$	—	$	21,351
Available for sale investment securities:
Equity securities	46,201		—		—		46,201
U.S. Government securities	—		525		—		525
U.S. Government sponsored agency securities	—		726		—		726
State and municipal securities	—		284,849		—		284,849
Corporate debt securities	—		89,662		9,087		98,749
Collateralized mortgage obligations	—		1,032,398		—		1,032,398
Mortgage-backed securities	—		945,712		—		945,712
Auction rate securities	—		—		159,274		159,274
Total available for sale investments	46,201		2,353,872		168,361		2,568,434
Other assets	15,779		7,227		—		23,006
Total assets	$	61,980	$	2,382,450	$	168,361	$	2,612,791
Other liabilities	$	15,648	$	5,161	$	—	$	20,809

Schedule of Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis using Level 3 Inputs

The following table presents the changes in the Corporation’s available for sale investment securities measured at fair value on a recurring basis using unobservable inputs (Level 3):



	Three months ended March 31, 2014
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities		ARCs
	(in thousands)
Balance at December 31, 2013	$	5,306		$	3,781	$	159,274
Sales	—			—		(11,912		)
Unrealized adjustment to fair value (1)	521			38		124
Settlements - calls	(172		)	—		—
Discount accretion (2)	4			1		227
Balance at March 31, 2014	$	5,659		$	3,820	$	147,713

	Three months ended March 31, 2013
Balance at December 31, 2012	$	6,927		$	3,360	$	149,339
Unrealized adjustment to fair value (1)	1,429			7		5,360
Settlements - calls	—			—		(342		)
Discount accretion (2)	—			3		282
Balance at March 31, 2013	$	8,356		$	3,370	$	154,639


(1)	Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain and included as a component of available for sale investment securities on the consolidated balance sheets.


(2)	Included as a component of net interest income on the consolidated statements of income.

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

Certain financial assets are not measured at fair value on an ongoing basis, but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment. The following table presents the Corporation’s financial assets measured at fair value on a nonrecurring basis and reported on the Corporation’s consolidated balance sheets:



	March 31, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	137,488	$	137,488
Other financial assets	—		—		56,968		56,968
Total assets	$	—	$	—	$	194,456	$	194,456



	December 31, 2013
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	138,666	$	138,666
Other financial assets	—		—		57,504		57,504
Total assets	$	—	$	—	$	196,170	$	196,170

Details of Book Value and Fair Value of Financial Instruments

As required by FASB ASC Section 825-10-50, the following table details the book values and estimated fair values of the Corporation’s financial instruments as of March 31, 2014 and December 31, 2013. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.

Fair values of financial instruments are significantly affected by the assumptions used, principally the timing of future cash flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. The aggregate fair value amounts presented do not necessarily represent management’s estimate of the underlying value of the Corporation.



	March 31, 2014				December 31, 2013
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	260,389	$	260,389	$	218,540	$	218,540
Interest-bearing deposits with other banks	225,428		225,428		163,988		163,988
Federal Reserve Bank and Federal Home Loan Bank stock	81,634		81,634		84,173		84,173
Loans held for sale (1)	24,417		24,417		21,351		21,351
Available for sale investment securities (1)	2,501,198		2,501,198		2,568,434		2,568,434
Loans, net of unearned income (1)	12,733,792		12,628,983		12,782,220		12,688,774
Accrued interest receivable	43,376		43,376		44,037		44,037
Other financial assets (1)	149,453		149,453		146,933		146,933
FINANCIAL LIABILITIES
Demand and savings deposits	$	9,667,357	$	9,667,357	$	9,573,264	$	9,573,264
Time deposits	3,002,560		3,011,698		2,917,922		2,927,374
Short-term borrowings	1,069,684		1,069,684		1,258,629		1,258,629
Accrued interest payable	16,972		16,972		15,218		15,218
Other financial liabilities (1)	133,848		133,848		124,440		124,440
FHLB advances and long-term debt	883,461		881,197		883,584		875,984


(1)

Schedule of Financial Instruments Classified as Predominantly Short-Term Instruments

The following instruments are predominantly short-term:



Assets		Liabilities
Cash and due from banks		Demand and savings deposits
Interest bearing deposits		Short-term borrowings
Accrued interest receivable		Accrued interest payable

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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