Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

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

The following 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:



	September 30, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	—	$	25,212	$	—	$	25,212
Available for sale investment securities:
Equity securities	45,278		—		—		45,278
U.S. Government securities	—		200		—		200
U.S. Government sponsored agency securities	—		240		—		240
State and municipal securities	—		257,616		—		257,616
Corporate debt securities	—		93,071		8,356		101,427
Collateralized mortgage obligations	—		955,040		—		955,040
Mortgage-backed securities	—		962,335		—		962,335
Auction rate securities	—		—		148,473		148,473
Total available for sale investments	45,278		2,268,502		156,829		2,470,609
Other assets	17,475		11,988		—		29,463
Total assets	$	62,753	$	2,305,702	$	156,829	$	2,525,284
Other liabilities	$	17,376	$	11,050	$	—	$	28,426



	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 September 30, 2014
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities		ARCs
	(in thousands)
Balance at June 30, 2014	$	4,275		$	3,820	$	146,931
Realized adjustment to fair value (1)	(18		)	—		—
Unrealized adjustment to fair value (2)	230			47		1,280
Discount accretion (3)	—			2		262
Balance at September 30, 2014	$	4,487		$	3,869	$	148,473

	Three months ended September 30, 2013
Balance at June 30, 2013	$	5,391		$	3,670	$	152,592
Sales	—			—		(25		)
Realized adjustment to fair value (1)	(97		)	—		—
Unrealized adjustment to fair value (2)	(103		)	108		1,983
Settlements - calls	—			—		(317		)
Discount accretion (3)	—			2		277
Balance at September 30, 2013	$	5,191		$	3,780	$	154,510

	Nine months ended September 30, 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	(1,394		)	—		(11,912		)
Realized adjustment to fair value (1)	(18		)	—		—
Unrealized adjustment to fair value (2)	789			83		1,528
Settlements - calls	(200		)	—		(1,081		)
Discount accretion (3)	4			5		664
Balance at September 30, 2014	$	4,487		$	3,869	$	148,473

	Nine months ended September 30, 2013
Balance at December 31, 2012	$	6,927		$	3,360	$	149,339
Sales	(4,987		)	—		(25		)
Realized adjustment to fair value (1)	1,604			—		—
Unrealized adjustment to fair value (2)	1,771			412		7,171
Settlements - calls	(124		)	—		(2,725		)
Discount accretion (3)	—			8		750
Balance at September 30, 2013	$	5,191		$	3,780	$	154,510


(1)	Realized adjustments to fair value represent credit related other-than-temporary impairment charges and gains on sales of investment securities, both included

as components of investment securities gains on the consolidated statements of income.


(2)	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 (loss) and included as a component of available for sale investment securities on the consolidated balance sheets.


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

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis

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:



	September 30, 2014
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	—	$	—	$	128,952	$	128,952
Other financial assets	—		—		55,867		55,867
Total assets	$	—	$	—	$	184,819	$	184,819



	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 September 30, 2014 and December 31, 2013. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.



	September 30, 2014				December 31, 2013
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
FINANCIAL ASSETS
Cash and due from banks	$	220,946	$	220,946	$	218,540	$	218,540
Interest-bearing deposits with other banks	291,523		291,523		163,988		163,988
Federal Reserve Bank and Federal Home Loan Bank stock	86,056		86,056		84,173		84,173
Loans held for sale (1)	25,212		25,212		21,351		21,351
Available for sale investment securities (1)	2,470,609		2,470,609		2,568,434		2,568,434
Loans, net of unearned income (1)	13,030,405		12,909,164		12,782,220		12,688,774
Accrued interest receivable	43,544		43,544		44,037		44,037
Other financial assets (1)	157,664		157,664		146,933		146,933
FINANCIAL LIABILITIES
Demand and savings deposits	$	10,342,243	$	10,342,243	$	9,573,264	$	9,573,264
Time deposits	2,991,384		2,986,545		2,917,922		2,927,374
Short-term borrowings	564,952		564,952		1,258,629		1,258,629
Accrued interest payable	17,425		17,425		15,218		15,218
Other financial liabilities (1)	147,121		147,121		124,440		124,440
Federal Home Loan Bank advances and long-term debt	1,018,289		1,012,741		883,584		875,984


(1)	These financial instruments, or certain financial instruments within these categories, are measured at fair value on the Corporation’s consolidated balance sheets. Descriptions of the fair value determinations for these financial instruments are disclosed above.

- 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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