Fair Value Measurements

Fair value is defined by applicable accounting guidance as the price to sell an asset or transfer a liability in an orderly transaction between market participants in the principal market for the given asset or liability at the measurement date based on market conditions at that date. An orderly transaction assumes exposure to the market for a customary period for marketing activities prior to the measurement date and not a forced liquidation or distressed sale. Certain assets and liabilities are recorded in the Company’s financial statements at fair value. Some are recorded on a recurring basis and some on a non-recurring basis.

For some assets and liabilities, observable market transactions and market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. A hierarchy for fair value has been established which categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels are as follows:

Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) - Fair value is based on unadjusted quoted prices in active markets for identical assets or liabilities.

Significant Other Observable Inputs (Level 2) - Fair value is based on significant other observable inputs which are generally determined based on a single price for each financial instrument provided to us by an applicable third-party pricing service and is based on one or more of the following:


•	Quoted prices for similar, but not identical, assets or liabilities in active markets;


•	Quoted prices for identical or similar assets or liabilities in inactive markets;


•	Inputs other than quoted prices that are observable, such as interest rate and yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates;


•	Other inputs derived from or corroborated by observable market inputs.

Significant Unobservable Inputs (Level 3) - Fair value is based upon model-based valuation techniques for which at least one significant assumption is not observable in the market.

Transfers between levels are recognized as of the end of the reporting period. There were no transfers in or out of quoted prices in active markets for identical instruments to significant other observable inputs or significant unobservable inputs during the six months ended June 30, 2018 and 2017, respectively. Transfers between significant other observable inputs and significant unobservable inputs during the six months ended June 30, 2018 and 2017 are included in the summary of changes in recurring fair values measured using unobservable inputs.

The underlying methods used by the third-party pricing services are considered in determining the primary inputs used to determine fair values. Management has evaluated the methodologies employed by the third-party pricing services by comparing the price provided by the pricing service with other sources, including brokers' quotes, sales or purchases of similar instruments and discounted cash flows to establish a basis for reliance on the pricing service values. Significant differences between the pricing service provided value and other sources are discussed with the pricing service to understand the basis for their values. Based on all observable inputs, management may adjust prices obtained from third-party pricing services to more appropriately reflect the prices that would be received to sell assets or paid to transfer liabilities in orderly transactions in the current market. No significant adjustments were made to prices provided by third-party pricing services at June 30, 2018, December 31, 2017 or June 30, 2017.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of June 30, 2018 (in thousands):



	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Trading securities:
U.S. government agency debentures	$	28,750	$	—	$	28,750	$	—
U.S. government agency residential mortgage-backed securities	1,605,001		—		1,605,001		—
Municipal and other tax-exempt securities	70,606		—		70,606		—
Asset-backed securities	193,271		—		193,271		—
Other trading securities	11,987		—		11,987		—
Total trading securities	1,909,615		—		1,909,615		—
Available for sale securities:
U.S. Treasury	490		490		—		—
Municipal and other tax-exempt securities	10,697		—		8,667		2,030
U.S. government agency residential mortgage-backed securities	5,304,560		—		5,304,560		—
Privately issued residential mortgage-backed securities	83,224		—		83,224		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,738,451		—		2,738,451		—
Other debt securities	25,444		—		24,973		471
Total available for sale securities	8,162,866		490		8,159,875		2,501
Fair value option securities – U.S. government agency residential mortgage-backed securities	482,227		—		482,227		—
Residential mortgage loans held for sale	223,301		—		209,058		14,243
Mortgage servicing rights¹	278,719		—		—		278,719
Derivative contracts, net of cash collateral²	373,373		21,056		352,317		—
Liabilities:
Derivative contracts, net of cash collateral²	234,856		17,214		217,642		—


¹	A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 6, Mortgage Banking Activities.

See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts in asset positions that were valued based on quoted prices in active markets for identical instruments (Level 1) are primarily exchange-traded interest rate and agricultural derivative contacts, net of cah margin. Derivative contacts in liability positions that were valued using quoted prices in active markets for identical instruments are exchange-traded energy and interest rate derivative contracts, net of cash margin.

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of December 31, 2017 (in thousands):



	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Trading securities:
U.S. government agency debentures	$	21,196	$	—	$	21,196	$	—
U.S. government agency residential mortgage-backed securities	392,673		—		392,673		—
Municipal and other tax-exempt securities	13,559		—		13,559		—
Asset-backed securities	23,885		—		23,885		—
Other trading securities	11,363		—		11,363		—
Total trading securities	462,676		—		462,676		—
Available for sale securities:
U.S. Treasury	1,000		1,000		—		—
Municipal and other tax-exempt securities	27,080		—		22,278		4,802
U.S. government agency residential mortgage-backed securities	5,309,152		—		5,309,152		—
Privately issued residential mortgage-backed securities	93,221		—		93,221		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,834,961		—		2,834,961		—
Other debt securities	25,481		—		25,009		472
Perpetual preferred stock	15,767		—		15,767		—
Equity securities and mutual funds	14,916		—		14,916		—
Total available for sale securities	8,321,578		1,000		8,315,304		5,274
Fair value option securities – U.S. government agency residential mortgage-backed securities	755,054		—		755,054		—
Residential mortgage loans held for sale	221,378		—		209,079		12,299
Mortgage servicing rights¹	252,867		—		—		252,867
Derivative contracts, net of cash collateral²	220,502		8,179		212,323		—
Liabilities:
Derivative contracts, net of cash collateral²	171,963		—		171,963		—


¹	A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 6, Mortgage Banking Activities.

See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts based on quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate, energy and agricultural derivative contacts. Derivative contracts in liability positions that were valued using quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate and energy derivative contracts, fully offset by cash margin.

The fair value of financial assets and liabilities measured on a recurring basis was as follows as of June 30, 2017 (in thousands):



	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Trading securities:
U.S. government agency debentures	$	20,954	$	—	$	20,954	$	—
U.S. government agency residential mortgage-backed securities	365,171		—		365,171		—
Municipal and other tax-exempt securities	45,444		—		45,444		—
Other trading securities	9,845		—		9,845		—
Total trading securities	441,414		—		441,414		—
Available for sale securities:
U.S. Treasury	998		998		—		—
Municipal and other tax-exempt securities	32,765		—		28,110		4,655
U.S. government agency residential mortgage-backed securities	5,382,377		—		5,382,377		—
Privately issued residential mortgage-backed securities	103,383		—		103,383		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,782,070		—		2,782,070		—
Other debt securities	4,152		—		—		4,152
Perpetual preferred stock	16,568		—		16,568		—
Equity securities and mutual funds	18,728		3,516		15,212		—
Total available for sale securities	8,341,041		4,514		8,327,720		8,807
Fair value option securities – U.S. government agency residential mortgage-backed securities	445,169		—		445,169		—
Residential mortgage loans held for sale	287,259		—		274,524		12,735
Mortgage servicing rights¹	245,239		—		—		245,239
Derivative contracts, net of cash collateral²	280,289		46,366		233,923		—
Liabilities:
Derivative contracts, net of cash collateral²	285,819		20,915		264,904		—


¹	A reconciliation of the beginning and ending fair value of mortgage servicing rights and disclosures of significant assumptions used to determine fair value are presented in Note 6, Mortgage Banking Activities.

See Note 3 for detail of fair value of derivative contracts by contract type. Derivative contracts based on quoted prices in active markets for identical instruments (Level 1) are exchange-traded energy and interest rate derivative contacts. Derivative contracts in liability positions that were valued using quoted prices in active markets for identical instruments (Level 1) are exchange-traded interest rate and agricultural derivative contracts, net cash margin.

Following is a description of the Company's valuation methodologies used for assets and liabilities measured on a recurring basis:

Securities

The fair values of trading, available for sale and fair value option securities are based on quoted prices for identical instruments in active markets, when available. If quoted prices for identical instruments are not available, fair values are based on significant other observable inputs such as quoted prices of comparable instruments or interest rates and credit spreads, yield curves, volatilities, prepayment speeds and loss severities.

The fair value of certain available for sale municipal and other debt securities may be based on significant unobservable inputs. These significant unobservable inputs include limited observed trades, projected cash flows, current credit rating of the issuers and, when applicable, the insurers of the debt and observed trades of similar debt. Discount rates are primarily based on references to interest rate spreads on comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies adjusted for a lack of trading volume. Significant unobservable inputs are developed by investment securities professionals involved in the active trading of similar securities. A summary of significant inputs used to value these securities follows. A management committee composed of senior members from the Company's Capital Markets, Risk Management and Finance departments assesses the appropriateness of these inputs quarterly.

Derivatives

All derivative instruments are carried on the balance sheet at fair value. Fair values for exchange-traded contracts are based on quoted prices. Fair values for over-the-counter interest rate, commodity and foreign exchange contracts are based on valuations provided either by third-party dealers in the contracts, quotes provided by independent pricing services, or a third-party provided pricing model that uses significant other observable market inputs.

Credit risk is considered in determining the fair value of derivative instruments. Management determines fair value adjustments based on various risk factors including but not limited to current fair value, probability of default and loss given default.

We also consider our own credit risk in determining the fair value of derivative contracts. Changes in our credit rating would affect the fair value of our derivative liabilities. In the event of a credit downgrade, the fair value of our derivative liabilities would increase.

Residential Mortgage Loans Held for Sale

Residential mortgage loans held for sale are carried on the balance sheet at fair value. The fair values of residential mortgage loans held for sale are based upon quoted market prices of such loans sold in securitization transactions, including related unfunded loan commitments and forward sales contracts. The fair value of mortgage loans that were unable to be sold to U.S. government agencies were determined using quoted prices of loans that are sold in securitization transactions with a liquidity discount applied.

The following represents the changes for the three and six months ended June 30, 2018 related to assets measured at fair value on a recurring basis using significant unobservable inputs (in thousands):



	Available for Sale Securities
	Municipal and other tax-exempt securities		Other debt securities			Residential mortgage loans held for sale
Balance, March 31, 2018	$	1,891	$	472		$	13,871
Transfer to Level 3 from Level 2¹	—		—			687
Purchases	—		—			—
Proceeds from sales	—		—			(488		)
Redemptions and distributions	—		—			—
Gain (loss) recognized in earnings:
Mortgage banking revenue	—		—			173
Other comprehensive income:
Net change in unrealized gain	139		(1		)	—
Balance, June 30, 2018	$	2,030	$	471		$	14,243


¹	Recurring transfers to Level 3 from Level 2 consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards.



	Available for Sale Securities
	Municipal and other tax-exempt			Other debt securities			Residential mortgage loans held for sale
Balance, December 31, 2017	$	4,802		$	472		$	12,299
Transfer to Level 3 from Level 2¹	—			—			2,843
Purchases	—			—			—
Proceeds from sales	—			—			(812		)
Redemptions and distributions	(3,045		)	—			—
Gain (loss) recognized in earnings:
Mortgage banking revenue	—			—			(87		)
Other comprehensive income (loss):
Net change in unrealized gain (loss)	273			(1		)	—
Balance, June 30, 2018	$	2,030		$	471		$	14,243


¹	Recurring transfers to Level 3 from Level 2 consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards.

The following represents the changes for the three and six months ended June 30, 2017 related to assets measured at fair value on a recurring basis using significant unobservable inputs (in thousands):



	Available for Sale Securities
	Municipal and other tax-exempt securities			Other debt securities			Residential mortgage loans held for sale
Balance, March 31, 2017	$	5,722		$	4,153		$	12,679
Transfer to Level 3 from Level 2¹	—			—			853
Purchases	—			—			—
Proceeds from sales	—			—			(1,030		)
Redemptions and distributions	(1,100		)	—			—
Gain (loss) recognized in earnings:
Mortgage banking revenue	—			—			233
Other comprehensive income (loss):
Net change in unrealized gain (loss)	33			(1		)	—
Balance, June 30, 2017	$	4,655		$	4,152		$	12,735


¹	Recurring transfers to Level 3 from Level 2 consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards.



	Available for Sale Securities
	Municipal and other tax-exempt			Other debt securities		Residential mortgage loans held for sale
Balance, December 31, 2016	$	5,789		$	4,152	$	11,617
Transfer to Level 3 from Level 2¹	—			—		2,740
Purchases	—			—		—
Proceeds from sales	—			—		(1,702		)
Redemptions and distributions	(1,100		)	—		—
Gain (loss) recognized in earnings
Mortgage banking revenue	—			—		80
Other comprehensive income (loss):
Net change in unrealized gain (loss)	(34		)	—		—
Balance, June 30, 2017	$	4,655		$	4,152	$	12,735


¹	Recurring transfers to Level 3 from Level 2 consist of residential mortgage loans intended for sale to U.S. government agencies that fail to meet conforming standards.

A summary of quantitative information about assets measured at fair value on a recurring basis using Significant Unobservable Inputs (Level 3) as of June 30, 2018 follows (in thousands):



	Par Value		Amortized Cost/Unpaid Principal Balance		Fair Value		Valuation Technique(s)		Unobservable Input	Range (Weighted Average)

Available for sale securities
Municipal and other tax-exempt securities	$	2,050	$	2,033	$	2,030	Discounted cash flows	¹	Interest rate spread	6.69%-6.69% (6.69%)	²
										99.00%-99.00% (99.00%)	³
Other debt securities	500		500		471		Discounted cash flows	¹	Interest rate spread	6.32%-6.32% (6.32%)	⁴
										94.36% - 94.36 (94.36%)	³

Residential mortgage loans held for sale	N/A		15,025		14,252		Quoted prices of loans sold in securitization transactions, with a liquidity discount applied		Liquidity discount applied to the market value of mortgage loans qualifying for sale to U.S. government agencies.	94.86%


¹	Discounted cash flows developed using discount rates primarily based on reference to interest rate spreads for comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies, adjusted for lack of trading volume.


²	Interest rate yields used to value investment grade tax-exempt securities represent a spread of 413 basis points over average yields for comparable tax-exempt securities.


³	Represents fair value as a percentage of par value.


⁴	Interest rate yields used to value investment grade taxable securities based on comparable short-term taxable securities which are generally yielding less than 3 percent.

A summary of quantitative information about Recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of December 31, 2017 follows (in thousands):



	Par Value		Amortized Cost/Unpaid Principal Balance		Fair Value		Valuation Technique(s)		Unobservable Input	Range (Weighted Average)

Available for sale securities
Municipal and other tax-exempt securities	$	5,095	$	5,068	$	4,802	Discounted cash flows	¹	Interest rate spread	6.60%-6.60% (6.60%)	²
										92.25%-94.76% (93.75%)	³
Other debt securities	500		500		472		Discounted cash flows	¹	Interest rate spread	6.85%-6.85% (6.85%)	⁴
										94.39% - 94.39 (94.39%)	³
Residential mortgage loans held for sale	N/A		12,981		12,299		Quoted prices of loans sold in securitization transactions, with a liquidity discount applied		Liquidity discount applied to the market value of mortgage loans qualifying for sale to U.S. government agencies.	94.75%


¹	Discounted cash flows developed using discount rates primarily based on reference to interest rate spreads for comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies, adjusted for lack of trading volume.


²	Interest rate yields used to value investment grade tax-exempt securities represent a spread of 372 to 466 basis points over average yields for comparable tax-exempt securities.


³	Represents fair value as a percentage of par value.


⁴	Interest rate yields used to value investment grade taxable securities based on comparable short-term taxable securities which are generally yielding less than 3 percent.

A summary of quantitative information about Recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of June 30, 2017 follows (in thousands):



	Par Value		Amortized Cost		Fair Value		Valuation Technique(s)		Unobservable Input	Range (Weighted Average)

Available for sale securities
Municipal and other tax-exempt securities	$	5,095	$	5,067	$	4,655	Discounted cash flows	¹	Interest rate spread	5.98%-5.98% (5.98%)	²
										90.00%-94.90% (92.93%)	³
Other debt securities	4,400		4,400		4,152		Discounted cash flows	¹	Interest rate spread	5.41%-6.72% (6.57%)	⁴
										94.31% - 94.38 (94.37%)	³

Residential mortgage loans held for sale	N/A		13,274		12,735		Quoted prices of loans sold in securitization transactions, with a liquidity discount applied		Liquidity discount applied to the market value of a mortgage loans qualifying for sale to U.S. government agencies.	95.94%


¹	Discounted cash flows developed using discount rates primarily based on reference to interest rate spreads for comparable securities of similar duration and credit rating as determined by the nationally-recognized rating agencies, adjusted for lack of trading volume.


²	Interest rate yields used to value investment grade tax-exempt securities represent a spread of 360 to 446 basis points over average yields for comparable tax-exempt securities.


³	Represents fair value as a percentage of par value.


⁴	Interest rate yields used to value investment grade taxable securities based on comparable short-term taxable securities which are generally yielding less than 3 percent.

Fair Value of Assets and Liabilities Measured on a Non-Recurring Basis

Assets measured at fair value on a non-recurring basis include collateral for certain impaired loans and real property and other assets acquired to satisfy loans, which are based primarily on comparisons to completed sales of similar assets.

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at June 30, 2018 for which the fair value was adjusted during the six months ended June 30, 2018:



							Fair Value Adjustments for the
	Carrying Value at June 30, 2018						Three Months Ended June 30, 2018 Recognized in:				Six Months Ended June 30, 2018 Recognized in:
	Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Net losses and expenses of repossessed assets, net		Gross charge-offs against allowance for loan losses		Net losses and expenses of repossessed assets, net
Impaired loans	$	—	$	1,045	$	11,763	$	6,701	$	—	$	7,198	$	—
Real estate and other repossessed assets	—		1,996		6,838		—		118		—		5,242

The following represents the carrying value of assets measured at fair value on a non-recurring basis (and related losses) during the period. The carrying value represents only those assets with a balance at June 30, 2017 for which the fair value was adjusted during the six months ended June 30, 2017:



							Fair Value Adjustments for the
	Carrying Value at June 30, 2017						Three Months Ended June 30, 2017 Recognized in:				Six Months Ended June 30, 2017 Recognized in:
	Quoted Prices in Active Markets for Identical Instruments		Significant Other Observable Inputs		Significant Unobservable Inputs		Gross charge-offs against allowance for loan losses		Net losses and expenses of repossessed assets, net		Gross charge-offs against allowance for loan losses		Net losses and expenses of repossessed assets, net
Impaired loans	$	—	$	464	$	3,570	$	232	$	—	$	676	$	—
Real estate and other repossessed assets	—		3,488		530		—		772		—		906

The fair value of collateral-dependent impaired loans secured by real estate and real estate and other repossessed assets and the related fair value adjustments are generally based on unadjusted third-party appraisals. Our appraisal review policies require appraised values to be supported by observed inputs derived principally from or corroborated by observable market data. Appraisals that are not based on observable inputs or that require significant adjustments or fair value measurements that are not based on third-party appraisals are considered to be based on significant unobservable inputs. Non-recurring fair value measurements of collateral-dependent impaired loans and real estate and other repossessed assets based on significant unobservable inputs are generally due to estimates of current fair values between appraisal dates. Significant unobservable inputs include listing prices for the same or comparable assets, uncorroborated expert opinions or management's knowledge of the collateral or industry. Non-recurring fair value measurements of collateral dependent loans secured by mineral rights are generally determined by our internal staff of engineers on projected cash flows under current market conditions and are based on significant unobservable inputs. Projected cash flows are discounted according to risk characteristics of the underlying oil and gas properties. Assets are evaluated to demonstrate with reasonable certainty that crude oil, natural gas and natural gas liquids can be recovered from known oil and gas reservoirs under existing economic and operating conditions at current prices with existing conventional equipment, operating methods and costs. Significant unobservable inputs are developed by asset management and workout professionals and approved by senior Credit Administration executives.

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of June 30, 2018 follows (in thousands):



	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Impaired loans	$	11,763	Discounted cash flows	Management knowledge of industry and non-real estate collateral including but not limited to recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs	43% - 84% (53%)¹
Real estate and other repossessed assets	6,838		Discounted cash flows	Recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs	N/A


¹	Represents fair value as a percentage of the unpaid principal balance.

A summary of quantitative information about Non-recurring Fair Value Measurements based on Significant Unobservable Inputs (Level 3) as of June 30, 2017 follows (in thousands):



	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average)
Impaired loans	$	3,570	Discounted cash flows	Recoverable oil and gas reserves, forward-looking commodity prices, estimated operating costs	75% - 90% (83%)¹
Real estate and other repossessed assets	530		Appraised value, as adjusted	Marketability adjustments off appraised value2	65% - 88% (80%)


¹	Represents fair value as a percentage of the unpaid principal balance.


²	Marketability adjustments include consideration of estimated costs to sell which is approximately 10% of the fair value.

Fair Value of Financial Instruments

The following table presents the carrying values and estimated fair values of all financial instruments, including those financial assets and liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis as of June 30, 2018 (dollars in thousands):



	Carrying Value			Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	$	585,801		$	585,801	$	585,801	$	—	$	—
Interest-bearing cash and cash equivalents	872,999			872,999		872,999		—		—
Trading securities:
U.S. government agency debentures	28,750			28,750		—		28,750		—
U.S. government agency residential mortgage-backed securities	1,605,001			1,605,001		—		1,605,001		—
Municipal and other tax-exempt securities	70,606			70,606		—		70,606		—
Asset-backed securities	193,271			193,271		—		193,271		—
Other trading securities	11,987			11,987		—		11,987		—
Total trading securities	1,909,615			1,909,615		—		1,909,615		—
Investment securities:
Municipal and other tax-exempt securities	173,097			174,205		—		174,205		—
U.S. government agency residential mortgage-backed securities	13,989			13,984		—		13,984		—
Other debt securities	204,927			215,195		—		215,195		—
Total investment securities	392,013			403,384		—		403,384		—
Available for sale securities:
U.S. Treasury	490			490		490		—		—
Municipal and other tax-exempt securities	10,697			10,697		—		8,667		2,030
U.S. government agency residential mortgage-backed securities	5,304,560			5,304,560		—		5,304,560		—
Privately issued residential mortgage-backed securities	83,224			83,224		—		83,224		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,738,451			2,738,451		—		2,738,451		—
Other debt securities	25,444			25,444		—		24,973		471
Total available for sale securities	8,162,866			8,162,866		490		8,159,875		2,501
Fair value option securities – U.S. government agency residential mortgage-backed securities	482,227			482,227		—		482,227		—
Residential mortgage loans held for sale	223,301			223,301		—		209,058		14,243
Loans:
Commercial	11,349,039			11,116,828		—		—		11,116,828
Commercial real estate	3,712,220			3,639,121		—		—		3,639,121
Residential mortgage	1,942,250			1,917,099		—		—		1,917,099
Personal	1,000,187			990,419		—		—		990,419
Total loans	18,003,696			17,663,467		—		—		17,663,467
Allowance for loan losses	(215,142		)	—		—		—		—
Loans, net of allowance	17,788,554			17,663,467		—		—		17,663,467
Mortgage servicing rights	278,719			278,719		—		—		278,719
Derivative instruments with positive fair value, net of cash collateral	373,373			373,373		21,056		352,317		—
Deposits with no stated maturity	20,041,532			20,041,532		—		—		20,041,532
Time deposits	2,127,732			2,078,486		—		—		2,078,486
Other borrowed funds	6,809,472			6,571,762		—		—		6,571,762
Subordinated debentures	144,697			148,112		—		148,112		—
Derivative instruments with negative fair value, net of cash collateral	234,856			234,856		17,214		217,642		—



	Carrying Value			Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	$	602,510		$	602,510	$	602,510	$	—	$	—
Interest-bearing cash and cash equivalents	1,714,544			1,714,544		1,714,544		—		—
Trading securities:
U.S. government agency debentures	21,196			21,196		—		21,196		—
U.S. government agency residential mortgage-backed securities	392,673			392,673		—		392,673		—
Municipal and other tax-exempt securities	13,559			13,559		—		13,559		—
Asset-backed securities	23,885			23,885		—		23,885		—
Other trading securities	11,363			11,363		—		11,363		—
Total trading securities	462,676			462,676		—		462,676		—
Investment securities:
Municipal and other tax-exempt securities	228,186			230,349		—		230,349		—
U.S. government agency residential mortgage-backed securities	15,891			16,242		—		16,242		—
Other debt securities	217,716			233,444		—		233,444		—
Total investment securities	461,793			480,035		—		480,035		—
Available for sale securities:
U.S. Treasury	1,000			1,000		1,000		—		—
Municipal and other tax-exempt securities	27,080			27,080		—		22,278		4,802
U.S. government agency residential mortgage-backed securities	5,309,152			5,309,152		—		5,309,152		—
Privately issued residential mortgage-backed securities	93,221			93,221		—		93,221		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,834,961			2,834,961		—		2,834,961		—
Other debt securities	25,481			25,481		—		25,009		472
Perpetual preferred stock	15,767			15,767		—		15,767		—
Equity securities and mutual funds	14,916			14,916		—		14,916		—
Total available for sale securities	8,321,578			8,321,578		1,000		8,315,304		5,274
Fair value option securities – U.S. government agency residential mortgage-backed securities	755,054			755,054		—		755,054		—
Residential mortgage loans held for sale	221,378			221,378		—		209,079		12,299
Loans:
Commercial	10,733,975			10,524,627		—		—		10,524,627
Commercial real estate	3,479,987			3,428,733		—		—		3,428,733
Residential mortgage	1,973,686			1,977,721		—		—		1,977,721
Personal	965,776			956,706		—		—		956,706
Total loans	17,153,424			16,887,787		—		—		16,887,787
Allowance for loan losses	(230,682		)	—		—		—		—
Loans, net of allowance	16,922,742			16,887,787		—		—		16,887,787
Mortgage servicing rights	252,867			252,867		—		—		252,867
Derivative instruments with positive fair value, net of cash collateral	220,502			220,502		8,179		212,323		—
Deposits with no stated maturity	19,962,889			19,962,889		—		—		19,962,889
Time deposits	2,098,416			2,064,558		—		—		2,064,558
Other borrowed funds	5,709,861			5,703,121		—		—		5,703,121
Subordinated debentures	144,677			148,207		—		148,207		—
Derivative instruments with negative fair value, net of cash collateral	171,963			171,963		—		171,963		—



	Carrying Value			Estimated Fair Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and due from banks	$	561,587		$	561,587	$	561,587	$	—	$	—
Interest-bearing cash and cash equivalents	2,078,831			2,078,831		2,078,831		—		—
Trading securities:
U.S. government agency debentures	20,954			20,954		—		20,954		—
U.S. government agency residential mortgage-backed securities	365,171			365,171		—		365,171		—
Municipal and other tax-exempt securities	45,444			45,444		—		45,444		—
Other trading securities	9,845			9,845		—		9,845		—
Total trading securities	441,414			441,414		—		441,414		—
Investment securities:
Municipal and other tax-exempt securities	267,375			270,531		—		270,531		—
U.S. government agency residential mortgage-backed securities	18,035			18,642		—		18,642		—
Other debt securities	205,016			226,502		—		226,502		—
Total investment securities	490,426			515,675		—		515,675		—
Available for sale securities:
U.S. Treasury	998			998		998		—		—
Municipal and other tax-exempt securities	32,765			32,765		—		28,110		4,655
U.S. government agency residential mortgage-backed securities	5,382,377			5,382,377		—		5,382,377		—
Privately issued residential mortgage-backed securities	103,383			103,383		—		103,383		—
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,782,070			2,782,070		—		2,782,070		—
Other debt securities	4,152			4,152		—		—		4,152
Perpetual preferred stock	16,568			16,568		—		16,568		—
Equity securities and mutual funds	18,728			18,728		3,516		15,212		—
Total available for sale securities	8,341,041			8,341,041		4,514		8,327,720		8,807
Fair value option securities – U.S. government agency residential mortgage-backed securities	445,169			445,169		—		445,169		—
Residential mortgage loans held for sale	287,259			287,259		—		274,524		12,735
Loans:
Commercial	10,637,955			10,413,704		—		—		10,413,704
Commercial real estate	3,688,592			3,636,365		—		—		3,636,365
Residential mortgage	1,939,198			1,950,577		—		—		1,950,577
Personal	917,900			909,055		—		—		909,055
Total loans	17,183,645			16,909,701		—		—		16,909,701
Allowance for loan losses	(250,061		)	—		—		—		—
Loans, net of allowance	16,933,584			16,909,701		—		—		16,909,701
Mortgage servicing rights	245,239			245,239		—		—		245,239
Derivative instruments with positive fair value, net of cash collateral	280,289			280,289		46,366		233,923		—
Deposits with no stated maturity	20,120,352			20,120,352		—		—		20,120,352
Time deposits	2,196,122			2,164,115		—		—		2,164,115
Other borrowed funds	5,696,666			5,664,273		—		—		5,664,273
Subordinated debentures	144,658			147,204		—		147,204		—
Derivative instruments with negative fair value, net of cash collateral	285,819			285,819		20,915		264,904		—

Because no market exists for certain of these financial instruments and management does not intend to sell these financial instruments, the fair values shown in the tables above may not represent values at which the respective financial instruments could be sold individually or in the aggregate at the given reporting date.

Fair Value Election

As more fully disclosed in Note 2 and Note 6 to the Consolidated Financial Statements, the Company has elected to carry all residential mortgage-backed securities guaranteed by U.S. government agencies held as economic hedges against changes in the fair value of mortgage servicing rights and all residential mortgage loans originated for sale at fair value. Changes in the fair value of these financial instruments are recognized in earnings.