| Assets and liabilities measured on recurring basis at fair value |
The table below presents the Corporation’s investment securities available for sale and derivative financial instruments measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Recurring Basis | | | | | | | | | | | | Fair Value Hierarchy | | September 30, 2016 | | December 31, 2015 | | | | ($ in Thousands) | Assets: | | | | | | Investment securities available for sale: | | | | | | U.S. Treasury securities | Level 1 | | $ | 1,001 |
| | $ | 997 |
| Residential mortgage-related securities: | | | | | | FNMA / FHLMC | Level 2 | | 912,860 |
| | 1,414,626 |
| GNMA | Level 2 | | 1,811,529 |
| | 1,590,003 |
| Private-label | Level 2 | | 1,200 |
| | 1,709 |
| GNMA commercial mortgage-related securities | Level 2 | | 2,114,669 |
| | 1,955,310 |
| Other securities (debt and equity) | Level 1 | | 1,629 |
| | 1,569 |
| Other securities (debt and equity) | Level 2 | | 3,000 |
| | 3,000 |
| Other securities (debt and equity) | Level 3 | | 200 |
| | 200 |
| Total investment securities available for sale | Level 1 | | 2,630 |
| | 2,566 |
| Total investment securities available for sale | Level 2 | | 4,843,258 |
| | 4,964,648 |
| Total investment securities available for sale | Level 3 | | 200 |
| | 200 |
| Interest rate-related instruments | Level 2 | | 47,504 |
| | 29,391 |
| Foreign currency exchange forwards | Level 2 | | 1,063 |
| | 1,532 |
| Interest rate lock commitments to originate residential mortgage loans held for sale | Level 3 | | 3,726 |
| | 958 |
| Forward commitments to sell residential mortgage loans | Level 3 | | — |
| | 403 |
| Commodity contracts | Level 2 | | 12,213 |
| | 1,269 |
| Purchased options (time deposit) | Level 2 | | 2,455 |
| | 2,715 |
| Liabilities: | | | | | | Interest rate-related instruments | Level 2 | | $ | 49,887 |
| | $ | 30,886 |
| Foreign currency exchange forwards | Level 2 | | 1,014 |
| | 1,398 |
| Forward commitments to sell residential mortgage loans | Level 3 | | 1,868 |
| | — |
| Commodity contracts | Level 2 | | 11,400 |
| | 1,146 |
| Written options (time deposit) | Level 2 | | 2,455 |
| | 2,715 |
|
|
| Assets and liabilities measured on nonrecurring basis at fair value |
The table below presents the Corporation’s loans held for sale, impaired loans, and mortgage servicing rights measured at fair value on a nonrecurring basis as of September 30, 2016 and December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis | | | | | | | | | | | | | Income Statement Category of
Adjustment Recognized in Income | Adjustment Recognized in Income | ($ in Thousands) | Fair Value Hierarchy | | Fair Value | September 30, 2016 | | | | | | Assets: | | | | Commercial loans held for sale | Level 2 | | $ | 16,912 |
| Provision for credit losses | $ | (451 | ) | Mortgage loans held for sale (1) | Level 2 | | 214,298 |
| Mortgage banking, net | — |
| Impaired loans (2) | Level 3 | | 47,554 |
| Provision for credit losses | (53,866 | ) | Mortgage servicing rights | Level 3 | | 58,937 |
| Mortgage banking, net | (2,486 | ) | | | | | | | December 31, 2015 | | | | | | Assets: | | | | | | Mortgage loans held for sale | Level 2 | | $ | 124,915 |
| Mortgage banking, net | $ | (155 | ) | Impaired loans (2) | Level 3 | | 41,891 |
| Provision for credit losses | (7,796 | ) | Mortgage servicing rights | Level 3 | | 70,686 |
| Mortgage banking, net | 425 |
|
| | (1) | Loans held for sale are carried at the lower of cost or estimated fair value. At September 30, 2016, the estimated fair value exceeded the cost and therefore there was no adjustment recognized in the Consolidated Statements of Income. |
| | (2) | Represents individually evaluated impaired loans, net of the related allowance for loan losses. |
|
| Estimated fair values of financial instruments |
Fair value estimates, methods, and assumptions are set forth below for the Corporation’s financial instruments. | | | | | | | | | | | | | | | | | | | | | | September 30, 2016 | | December 31, 2015 | | Fair Value Hierarchy Level | | Carrying Amount | | Fair Value | | Carrying Amount | | Fair Value | | | | | | | ($ in Thousands) | Financial assets: | | | | | | | | | | Cash and due from banks | Level 1 | | $ | 356,047 |
| | $ | 356,047 |
| | $ | 374,921 |
| | $ | 374,921 |
| Interest-bearing deposits in other financial institutions | Level 1 | | 240,010 |
| | 240,010 |
| | 79,764 |
| | 79,764 |
| Federal funds sold and securities purchased under agreements to resell | Level 1 | | 14,250 |
| | 14,250 |
| | 19,000 |
| | 19,000 |
| Investment securities held to maturity | Level 2 | | 1,253,494 |
| | 1,287,830 |
| | 1,168,230 |
| | 1,184,442 |
| Investment securities available for sale | Level 1 | | 2,630 |
| | 2,630 |
| | 2,566 |
| | 2,566 |
| Investment securities available for sale | Level 2 | | 4,843,258 |
| | 4,843,258 |
| | 4,964,648 |
| | 4,964,648 |
| Investment securities available for sale | Level 3 | | 200 |
| | 200 |
| | 200 |
| | 200 |
| FHLB and Federal Reserve Bank stocks | Level 2 | | 140,215 |
| | 140,215 |
| | 147,240 |
| | 147,240 |
| Loans held for sale | Level 2 | | 230,795 |
| | 231,210 |
| | 124,915 |
| | 124,915 |
| Loans, net | Level 3 | | 19,574,465 |
| | 19,588,911 |
| | 18,440,079 |
| | 18,389,832 |
| Bank owned life insurance | Level 2 | | 584,088 |
| | 584,088 |
| | 583,019 |
| | 583,019 |
| Derivatives (trading and other assets) | Level 2 | | 63,235 |
| | 63,235 |
| | 34,907 |
| | 34,907 |
| Derivatives (trading and other assets) | Level 3 | | 3,726 |
| | 3,726 |
| | 1,361 |
| | 1,361 |
| Financial liabilities: | | | | | | | | | | Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts | Level 3 | | $ | 20,221,611 |
| | $ | 20,221,611 |
| | $ | 19,444,863 |
| | $ | 19,444,863 |
| Brokered CDs and other time deposits | Level 2 | | 1,526,101 |
| | 1,530,993 |
| | 1,562,802 |
| | 1,564,464 |
| Short-term funding | Level 2 | | 1,240,093 |
| | 1,240,093 |
| | 834,416 |
| | 834,416 |
| Long-term funding | Level 2 | | 2,761,635 |
| | 2,820,062 |
| | 2,676,164 |
| | 2,728,112 |
| Standby letters of credit (1) | Level 2 | | 2,619 |
| | 2,619 |
| | 2,954 |
| | 2,954 |
| Derivatives (trading and other liabilities) | Level 2 | | 64,756 |
| | 64,756 |
| | 36,145 |
| | 36,145 |
| Derivatives (trading and other liabilities) | Level 3 | | 1,868 |
| | 1,868 |
| | — |
| | — |
|
| | (1) | The commitment on standby letters of credit was $265 million and $297 million at September 30, 2016 and December 31, 2015, respectively. See Note 12 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments. |
|