Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC Topic 825, Financial Instruments, excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The carrying amount and estimated fair values, as well as the level within the fair value hierarchy, of the Company’s financial instruments are included in the tables below. See Note 1, Summary of Significant Accounting Policies, in the 2016 Annual Report on Form 10-K for the year ended December 31, 2016 for a description of how fair value measurements are determined.



	September 30, 2017
(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	881,216	$	881,216	$	881,216	$	—	$	—
Investment securities	4,912,245		4,912,654		—		4,912,654		—
Loans and loans held for sale, net of unearned income and allowance for loan losses	19,799,675		19,810,531		—		141,218		19,669,313
Derivative instruments	31,779		31,779		—		31,779		—

Financial Liabilities
Deposits	$	21,334,271	$	21,333,374	$	—	$	—	$	21,333,374
Short-term borrowings	1,523,704		1,523,704		548,696		975,008		—
Long-term debt	1,127,584		1,114,132		—		—		1,114,132
Derivative instruments	28,453		28,453		—		28,453		—

	December 31, 2016
(Dollars in thousands)	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,362,126	$	1,362,126	$	1,362,126	$	—	$	—
Investment securities	3,535,313		3,536,029		—		3,536,029		—
Loans and loans held for sale, net of unearned income and allowance for loan losses	15,077,293		15,066,055		—		157,041		14,909,014
Derivative instruments	38,886		38,886		—		38,886		—

Financial Liabilities
Deposits	$	17,408,283	$	16,762,475	$	—	$	—	$	16,762,475
Short-term borrowings	509,136		509,136		334,136		175,000		—
Long-term debt	628,953		617,656		—		—		617,656
Derivative instruments	30,209		30,209		—		30,209		—

The fair value estimates presented herein are based upon pertinent information available to management as of September 30, 2017 and December 31, 2016. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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