Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Hierarchy Tables Present Information about Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2014:

(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2014
Assets
Available-for-sale securities:
U.S. treasury securities	$	7,302,273	$	—	$	—	$	7,302,273
U.S. agency debentures	—		3,561,556		—		3,561,556
Residential mortgage-backed securities:
Agency-issued collateralized mortgage obligations -    fixed rate	—		1,884,843		—		1,884,843
Agency-issued collateralized mortgage obligations -    variable rate	—		784,475		—		784,475
Equity securities	4,290		3,218		—		7,508
Total available-for-sale securities	7,306,563		6,234,092		—		13,540,655
Non-marketable and other securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments	—		—		1,130,882		1,130,882
Other venture capital investments	—		—		71,204		71,204
Other securities	108,251		—		—		108,251
Total non-marketable and other securities (fair value accounting)	108,251		—		1,202,086		1,310,337
Other assets:
Interest rate swaps	—		4,609		—		4,609
Foreign exchange forward and option contracts	—		34,231		—		34,231
Equity warrant assets	—		1,906		114,698		116,604
Client interest rate derivatives	—		2,546		—		2,546
Total assets (1)	$	7,414,814	$	6,277,384	$	1,316,784	$	15,008,982
Liabilities
Foreign exchange forward and option contracts	$	—	$	28,363	$	—	$	28,363
Client interest rate derivatives	—		2,748		—		2,748
Total liabilities	$	—	$	31,111	$	—	$	31,111

(1) Included in Level 1 and Level 3 assets are $100 million and $1.1 billion, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

The following fair value hierarchy table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2013:

(Dollars in thousands)	Level 1		Level 2		Level 3		Balance at December 31, 2013
Assets
Available-for-sale securities:
U.S. agency debentures	$	—	$	4,345,232	$	—	$	4,345,232
Residential mortgage-backed securities:
Agency-issued mortgage-backed securities	—		2,473,576		—		2,473,576
Agency-issued collateralized mortgage obligations -     fixed rate	—		3,325,758		—		3,325,758
Agency-issued collateralized mortgage obligations -     variable rate	—		1,186,573		—		1,186,573
Agency-issued commercial mortgage-backed securities	—		564,604		—		564,604
Municipal bonds and notes	—		86,027		—		86,027
Equity securities	3,732		1,319		—		5,051
Total available-for-sale securities	3,732		11,983,089		—		11,986,821
Non-marketable and other securities (fair value accounting):
Non-marketable securities:
Venture capital and private equity fund investments	—		—		862,972		862,972
Other venture capital investments	—		—		32,839		32,839
Other securities	2,125		—		319,249		321,374
Total non-marketable and other securities (fair value accounting)	2,125		—		1,215,060		1,217,185
Other assets:
Interest rate swaps	—		6,492		—		6,492
Foreign exchange forward and option contracts	—		15,530		—		15,530
Equity warrant assets	—		3,622		99,891		103,513
Loan conversion options	—		314		—		314
Client interest rate derivatives	—		1,265		—		1,265
Total assets (1)	$	5,857	$	12,010,312	$	1,314,951	$	13,331,120
Liabilities
Foreign exchange forward and option contracts	$	—	$	12,617	$	—	$	12,617
Client interest rate derivatives	—		1,396		—		1,396
Total liabilities	$	—	$	14,013	$	—	$	14,013

(1) Included in Level 1 and Level 3 assets are $2 million and $1.1 billion, respectively, attributable to noncontrolling interests calculated based on the ownership percentages of the noncontrolling interests.

Additional Information about Level 3 Assets Measured at Fair Value on a Recurring Basis

The following table presents additional information about Level 3 assets measured at fair value on a recurring basis for 2014, 2013 and 2012, respectively:

(Dollars in thousands)	Beginning Balance		Total Realized and Unrealized Gains, net Included in Income		Purchases		Sales			Issuances		Distributions and Other Settlements			Transfers Into Level 3		Transfers Out of Level 3			Ending Balance
Year ended December 31, 2014:
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	862,972	$	263,484	$	224,233	$	—		$	—	$	(219,807	)	$	—	$	—		$	1,130,882
Other venture capital investments	32,839		12,793		51,407		(20,362		)	—		(5,347		)	—		(126		)	71,204
Other securities (fair value accounting)	319,249		103,864		—		(46,840		)	—		3,863			—		(380,136		)	—
Total non-marketable and other securities (fair value accounting) (1)	1,215,060		380,141		275,640		(67,202		)	—		(221,291		)	—		(380,262		)	1,202,086
Other assets:
Equity warrant assets (2)	99,891		71,516		—		(70,875		)	13,671		2,215			—		(1,720		)	114,698
Total assets	$	1,314,951	$	451,657	$	275,640	$	(138,077	)	$	13,671	$	(219,076	)	$	—	$	(381,982	)	$	1,316,784
Year ended December 31, 2013:
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	665,921	$	169,219	$	146,564	$	—		$	—	$	(118,732	)	$	—	$	—		$	862,972
Other venture capital investments	127,091		5,745		2,712		(1,224		)	—		(97,924		)	—		(3,561		)	32,839
Other securities (fair value accounting)	—		222,368		—		—			—		96,881			—		—			319,249
Total non-marketable and other securities (fair value accounting) (1)	793,012		397,332		149,276		(1,224		)	—		(119,775		)	—		(3,561		)	1,215,060
Other assets:
Equity warrant assets (2)	66,129		22,929		—		(16,680		)	9,098		1,540			24,217		(7,342		)	99,891
Total assets	$	859,141	$	420,261	$	149,276	$	(17,904	)	$	9,098	$	(118,235	)	$	24,217	$	(10,903	)	$	1,314,951
Year ended December 31, 2012:
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	611,824	$	44,283	$	122,238	$	—		$	—	$	(112,424	)	$	—	$	—		$	665,921
Other venture capital investments	124,121		46,711		13,123		(9,716		)	—		(39,558		)	—		(7,590		)	127,091
Other investments	987		21		—		—			—		(1,008		)	—		—			—
Total non-marketable and other securities (fair value accounting) (1)	736,932		91,015		135,361		(9,716		)	—		(152,990		)	—		(7,590		)	793,012
Other assets:
Equity warrant assets (2)	63,030		13,697		—		(21,077		)	11,978		(78		)	—		(1,421		)	66,129
Total assets	$	799,962	$	104,712	$	135,361	$	(30,793	)	$	11,978	$	(153,068	)	$	—	$	(9,011	)	$	859,141

(1) Realized and unrealized gains, net are recorded on the line items “gains on investment securities, net”, and “other noninterest income”, components of noninterest income.

(2) Realized and unrealized gains are recorded on the line item “gains on derivative instruments, net”, a component of noninterest income.

Unrealized Gains Included in Earnings Attributable to Level 3 Assets Held

The following table presents the amount of unrealized gains (losses) included in earnings (which is inclusive of noncontrolling interest) attributable to Level 3 assets still held at December 31, 2014 and December 31, 2013, respectively:

	Year ended December 31,
(Dollars in thousands)	2014		2013
Non-marketable and other securities (fair value accounting):
Venture capital and private equity fund investments	$	276,686	$	168,567
Other venture capital investments (1)	3,044		6,207
Other securities (1)	—		222,368
Total non-marketable and other securities (fair value accounting) (2)	279,730		397,142
Other assets:
Equity warrant assets (3)	36,516		30,579
Total unrealized gains, net	$	316,246	$	427,721
Unrealized gains attributable to noncontrolling interests	$	255,131	$	346,954

(1) 2013 included total unrealized valuation gains of $219 million attributable to two of our portfolio companies, FireEye and Twitter.

(2) Unrealized gains are recorded on the line items “gains on investment securities, net”, and “other noninterest income”, components of noninterest income.

(3) Unrealized gains are recorded on the line item “gains on derivative instruments, net”, a component of noninterest income.

Quantitative Information About Significant Unobservable Inputs

The following table presents quantitative information about the significant unobservable inputs used for certain of our Level 3 fair value measurements at December 31, 2014. We have not included in this table our venture capital and private equity fund investments (fair value accounting) as we use net asset value per share (as obtained from the general partners of the investments) as a practical expedient to determine fair value.

(Dollars in thousands)	Fair Value		Valuation Technique	Significant Unobservable Inputs	Weighted Average
December 31, 2014:
Other venture capital investments (fair value accounting)	$	71,204	Private company equity pricing	(1)	(1)
Equity warrant assets (public portfolio)	1,681		Modified Black-Scholes option pricing model	Volatility	42.6	%
				Risk-Free interest rate	1.7
				Sales restrictions discount (2)	17.8
Equity warrant assets (private portfolio)	113,017		Modified Black-Scholes option pricing model	Volatility	38.3
				Risk-Free interest rate	0.9
				Marketability discount (3)	20.0
				Remaining life assumption (4)	45.0
December 31, 2013:
Other venture capital investments (fair value accounting)	$	32,839	Private company equity pricing	(1)	(1)
Other securities	319,249		Modified stock price	Sales restrictions discount (2)	12.0	%
Equity warrant assets (public portfolio)	24,217		Modified Black-Scholes option pricing model	Volatility	41.3
				Risk-Free interest rate	1.7
				Sales restrictions discount (2)	13.7
Equity warrant assets (private portfolio)	75,674		Modified Black-Scholes option pricing model	Volatility	40.1
				Risk-Free interest rate	0.8
				Marketability discount (3)	22.5
				Remaining life assumption (4)	45.0

(1) In determining the fair value of our other venture capital investment portfolio, we evaluate a variety of factors related to each underlying private portfolio company including, but not limited to, actual and forecasted results, cash position, recent or planned transactions and market comparable companies. Additionally, we have ongoing communication with the portfolio companies and venture capital fund managers, to determine whether there is a material change in fair value. These factors are specific to each portfolio company and a weighted average or range of values of the unobservable inputs is not meaningful.

(2) We adjust quoted market prices of public companies which are subject to certain sales restrictions. Sales restriction discounts generally range from 10 percent to 20 percent depending on the duration of the sales restrictions which typically range from 3 to 6 months.

(3) Our marketability discount is applied to all private company warrants to account for a general lack of liquidity due to the private nature of the associated underlying company. The quantitative measure used is based on long-run averages and is influenced over time by various factors, including market conditions. On a quarterly basis, a sensitivity analysis is performed on our marketability discount.

(4) We adjust the contractual remaining term of private company warrants based on our best estimate of the actual remaining life, which we determine by utilizing historical data on cancellations and exercises. At December 31, 2014, the weighted average contractual remaining term was 2.7 years, compared to our estimated remaining life of 5.9 years. On a quarterly basis, a sensitivity analysis is performed on our remaining life assumption.

Summary of Estimated Fair Values of Financial Instruments Not Carried at Fair Value

The following fair value hierarchy table presents the estimated fair values of our financial instruments that are not carried at fair value at December 31, 2014 and 2013:

			Estimated Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3
December 31, 2014:
Financial assets:
Cash and cash equivalents	$	1,796,062	$	1,796,062	$	—	$	—
Held-to-maturity securities	7,421,042		—		7,415,656		—
Non-marketable securities (cost and equity method accounting)	418,551		—		—		512,473
Net commercial loans	12,947,869		—		—		13,082,487
Net consumer loans	1,271,048		—		—		1,247,336
Net long-lived assets held-for-sale	44,253		—		—		45,410
FHLB and FRB stock	53,496		—		—		53,496
Accrued interest receivable	94,180		—		94,180		—
Financial liabilities:
Other short-term borrowings	7,781		7,781		—		—
Non-maturity deposits (1)	34,215,372		34,215,372		—		—
Time deposits	128,127		—		128,107		—
5.375% Senior Notes	348,436		—		392,616		—
6.05% Subordinated Notes (2)	50,162		—		53,537		—
7.0% Junior Subordinated Debentures	54,845		—		52,990		—
Accrued interest payable	6,998		—		6,998		—
Off-balance sheet financial assets:
Commitments to extend credit	—		—		—		29,097
December 31, 2013:
Financial assets:
Cash and cash equivalents	$	1,538,779	$	1,538,779	$	—	$	—
Non-marketable securities (cost and equity method accounting)	378,309		—		—		447,783
Net commercial loans	9,796,878		—		—		9,935,917
Net consumer loans	966,622		—		—		1,005,080
FHLB and FRB stock	40,632		—		—		40,632
Accrued interest receivable	67,772		—		67,772		—
Financial liabilities:
Other short-term borrowings	5,080		5,080		—		—
Non-maturity deposits (1)	22,259,119		22,259,119		—		—
Time deposits	213,860		—		213,874		—
5.375% Senior Notes	348,209		—		383,782		—
6.05% Subordinated Notes (2)	51,987		—		56,297		—
7.0% Junior Subordinated Debentures	55,020		—		51,915		—
Accrued interest payable	6,858		—		6,858		—
Off-balance sheet financial assets:
Commitments to extend credit	—		—		—		24,285

(1) Includes noninterest-bearing demand deposits, interest-bearing checking accounts, money market accounts and interest-bearing sweep deposits.

(2) At December 31, 2014 and 2013, included in the carrying value and estimated fair value of our 6.05% Subordinated Notes was $4.6 million and $6.5 million, respectively, related to hedge accounting associated with the notes.

Summary of Estimated Fair Values of Investments and Remaining Unfunded Commitments for Each Major Category of Investments

The following table is a summary of the estimated fair values of these investments and remaining unfunded commitments for each major category of these investments as of December 31, 2014:

(Dollars in thousands)	Carrying Amount		Fair Value		Unfunded Commitments
Non-marketable securities (fair value accounting):
Venture capital and private equity fund investments (1)	$	1,130,882	$	1,130,882	$	462,314
Non-marketable securities (equity method accounting):
Other investments (2)	47,876		49,066		5,836
Non-marketable securities (cost method accounting):
Venture capital and private equity fund investments (3)	140,551		234,053		18,563
Total	$	1,319,309	$	1,414,001	$	486,713

(1) Venture capital and private equity fund investments within non-marketable and other securities (fair value accounting) include investments made by our managed funds of funds and one of our direct venture funds. These investments represent investments in venture capital and private equity funds that invest primarily in U.S. and global technology and life science & healthcare companies. Included in the fair value and unfunded commitments of fund investments under fair value accounting are $1.0 billion and $459 million, respectively, attributable to noncontrolling interests. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of terms of the funds.

(2) Other investments within non-marketable securities (equity method accounting) include investments in debt funds and venture capital and private equity fund investments that invest in or lend money to primarily U.S. and global technology and life science & healthcare companies. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds.

(3) Venture capital and private equity fund investments within non-marketable securities (cost method accounting) include investments in venture capital and private equity fund investments that invest primarily in U.S. and global technology and life science & healthcare companies. It is estimated that we will receive distributions from the fund investments over the next 10 to 13 years, depending on the age of the funds and any potential extensions of the terms of the funds.