Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Assets and liabilities measured on recurring basis at fair value

The table below presents the Corporation’s financial instruments measured at fair value on a recurring basis as of December 31, 2018 and 2017, aggregated by the level in the fair value hierarchy within which those measurements fall:



	Fair Value Hierarchy	December 31, 2018		December 31, 2017
		($ in Thousands)
Assets
Investment securities available for sale
U.S. Treasury securities	Level 1	$	999	$	996
Residential mortgage-related securities
FNMA / FHLMC	Level 2	295,252		464,768
GNMA	Level 2	2,128,531		1,913,350
Private-label	Level 2	1,003		1,059
GNMA commercial mortgage-related securities	Level 2	1,220,797		1,513,277
FFELP asset backed securities	Level 2	297,360		145,176
Other equity securities	Level 1	1,568		1,632
Other debt securities	Level 2	3,000		3,188
Total investment securities available for sale	Level 1	2,567		2,628
Total investment securities available for sale	Level 2	3,945,943		4,040,818
Residential loans held for sale	Level 2	64,321		85,544
Commercial loans held for sale	Level 2	14,943		—
Interest rate-related instruments	Level 2	52,796		28,494
Foreign currency exchange forwards	Level 2	721		2,495
Interest rate lock commitments to originate residential mortgage loans held for sale	Level 3	2,208		1,538
Commodity contracts	Level 2	35,426		38,686
Purchased options (time deposit)	Level 2	109		1,175
Liabilities
Interest rate-related instruments	Level 2	$	52,653	$	28,035
Foreign currency exchange forwards	Level 2	675		2,339
Forward commitments to sell residential mortgage loans	Level 3	2,072		313
Commodity contracts	Level 2	34,340		37,286
Written options (time deposit)	Level 2	109		1,175
Interest rate products (designated as hedging instruments)	Level 2	40		—

Assets and liabilities measured at fair value using significant unobservable inputs (level 3)

The table below presents a rollforward of the balance sheet amounts for the years ended December 31, 2018 and 2017, for financial instruments measured on a recurring basis and classified within Level 3 of the fair value hierarchy:



	Investment Securities Available for Sale			Derivative Financial Instruments
	($ in Thousands)
Balance December 31, 2016	$	200		$	3,114
Total net gains (losses) included in income
Mortgage derivative gain (loss)	—			(1,889		)
Transfer out of level 3 securities ^(a)	(200		)	—
Balance December 31, 2017	$	—		$	1,225
Total net gains (losses) included in income
Mortgage derivative gain (loss)	—			(1,085		)
Balance December 31, 2018	$	—		$	140

(a) During the first quarter of 2017, the $200,000 level 3 investment security was transferred to level 2 based upon new pricing information.

Assets and liabilities measured on nonrecurring basis at fair value

The table below presents the Corporation’s assets measured at fair value on a nonrecurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall:



($ in Thousands)	Fair Value Hierarchy	Fair Value		Income Statement Category of Adjustment Recognized in Income	Adjustment Recognized in Income
December 31, 2018
Assets
Impaired loans ^(a)	Level 3	$	26,191	Provision for credit losses ^(b)	$	(14,521	)
Other real estate owned^(c)	Level 2	2,200		Foreclosure / OREO expense, net	(1,545		)
Mortgage servicing rights	Level 3	81,012		Mortgage banking, net	545

December 31, 2017
Assets
Impaired loans ^(a)	Level 3	$	92,534	Provision for credit losses ^(b)	$	(32,159	)
Other real estate owned^(c)	Level 2	2,604		Foreclosure / OREO expense, net	(939		)
Mortgage servicing rights	Level 3	64,387		Mortgage banking, net	(175		)


(a)	Represents individually evaluated impaired loans, net of the related allowance for loan losses.


(b)	Represents provision for credit losses on individually evaluated impaired loans.

(c)

If the fair value of the collateral exceeds the carrying amount of the asset, no charge off or adjustment is necessary, the asset is not considered to be carried at fair value, and is therefore not included in the table.

Schedule of assumptions for fair value as of balance sheet date of assets or liabilities that relate to transferor's continuing involvement

The table below presents information about these inputs and further discussion is found above:



December 31, 2018	Valuation Technique	Significant Unobservable Input	Weighted Average Input Applied
Mortgage servicing rights	Discounted cash flow	Discount rate	11%
Mortgage servicing rights	Discounted cash flow	Constant prepayment rate	11%
Impaired loans	Appraisals / Discounted cash flow	Collateral / Discount factor	40%

Estimated fair values of financial instruments

Fair value estimates are set forth below for the Corporation’s financial instruments:



		December 31, 2018				December 31, 2017
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	Fair Value Hierarchy Level	Carrying Amount		Fair Value		Carrying Amount		Fair Value
		($ in Thousands)
Financial assets
Cash and due from banks	Level 1	$	507,187	$	507,187	$	483,666	$	483,666
Interest-bearing deposits in other financial institutions	Level 1	221,226		221,226		199,702		199,702
Federal funds sold and securities purchased under agreements to resell	Level 1	148,285		148,285		32,650		32,650
Investment securities held to maturity	Level 2	2,740,511		2,710,271		2,282,853		2,283,574
Investment securities available for sale	Level 1	2,567		2,567		2,628		2,628
Investment securities available for sale	Level 2	3,945,943		3,945,943		4,040,818		4,040,818
FHLB and Federal Reserve Bank stocks	Level 2	250,534		250,534		165,331		165,331
Residential loans held for sale	Level 2	64,321		64,321		85,544		85,544
Commercial loans held for sale	Level 2	14,943		14,943		—		—
Loans, net	Level 3	22,702,406		22,317,395		20,519,111		20,314,984
Bank and corporate owned life insurance	Level 2	663,203		663,203		591,057		591,057
Derivatives (trading and other assets)	Level 2	89,052		89,052		70,850		70,850
Derivatives (trading and other assets)	Level 3	2,208		2,208		1,538		1,538
Financial liabilities
Noninterest-bearing demand, savings, interest-bearing demand, and money market accounts	Level 3	$	22,081,992	$	22,081,992	$	20,436,893	$	20,436,893
Brokered CDs and other time deposits ^(a)	Level 2	2,815,401		2,815,401		2,349,069		2,349,069
Short-term funding^(b)	Level 2	1,057,074		1,057,074		676,282		676,282
Long-term funding	Level 2	3,469,982		3,492,174		3,397,450		3,411,368
Standby letters of credit ^(c)	Level 2	2,482		2,482		2,402		2,402
Derivatives (trading and other liabilities)	Level 2	87,817		87,817		68,835		68,835
Derivatives (trading and other liabilities)	Level 3	2,072		2,072		313		313

(a) When the estimated fair value is less than the carrying value, the carrying value is reported as the fair value.

(b) The carrying amount is a reasonable estimate of fair value for existing short-term funding.

(c) The commitment on standby letters of credit was $256 million and $235 million at December 31, 2018 and 2017, respectively. See Note 15 for additional information on the standby letters of credit and for information on the fair value of lending-related commitments.