5. Securities

Securities Available for Sale

This table provides detailed information about securities available for sale at September 30, 2016 and December 31, 2015 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2016
U.S. Treasury	$	249,461	$	291	$	(226	)	$	249,526
U.S. Agencies		289,244		247		(51	)		289,440
Mortgage-backed		3,322,340		45,857		(5,901	)		3,362,296
State and political subdivisions		2,291,316		37,450		(1,546	)		2,327,220
Corporates		67,242		30		(67	)		67,205

Total	$	6,219,603	$	83,875	$	(7,791	)	$	6,295,687


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
December 31, 2015
U.S. Treasury	$	350,354	$	1	$	(576	)	$	349,779
U.S. Agencies		667,414		7		(1,032	)		666,389
Mortgage-backed		3,598,115		12,420		(38,089	)		3,572,446
State and political subdivisions		2,116,543		23,965		(2,095	)		2,138,413
Corporates		80,585		—		(663	)		79,922

Total	$	6,813,011	$	36,393	$	(42,455	)	$	6,806,949

The following table presents contractual maturity information for securities available for sale at September 30, 2016 (in thousands):


	Amortized		Fair
	Cost		Value
Due in 1 year or less	$	743,207	$	743,589
Due after 1 year through 5 years		1,065,114		1,078,518
Due after 5 years through 10 years		844,091		864,353
Due after 10 years		244,851		246,931

Total		2,897,263		2,933,391
Mortgage-backed securities		3,322,340		3,362,296

Total securities available for sale	$	6,219,603	$	6,295,687

Securities may be disposed of before contractual maturities due to sales by the Company or because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

For the nine months ended September 30, 2016, proceeds from the sales of securities available for sale were $951.3 million compared to $782.8 million for the same period in 2015. Securities transactions resulted in gross realized gains of $8.5 million and $8.5 million for the nine months ended September 30, 2016 and 2015, respectively. The gross realized losses for the nine months ended September 30, 2016 and 2015 were $1 thousand and $48 thousand, respectively.

Securities available for sale with a market value of $5.1 billion at September 30, 2016 and $5.9 billion at December 31, 2015 were pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase agreements. Of this amount, securities with a market value of $1.4 billion at September 30, 2016 and $1.6 billion at December 31, 2015 were pledged at the Federal Reserve Discount Window but were unencumbered as of those dates.

The following table shows the Company’s available for sale investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2016 and December 31, 2015 (in thousands):


September 30, 2016	Less than 12 months					12 months or more					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury	$	75,083	$	(226	)	$	—	$	—		$	75,083	$	(226	)
U.S. Agencies		62,425		(33	)		12,994		(18	)		75,419		(51	)
Mortgage-backed		424,586		(1,395	)		291,636		(4,506	)		716,222		(5,901	)
State and political subdivisions		427,223		(1,513	)		6,159		(33	)		433,382		(1,546	)
Corporates		20,979		(21	)		30,539		(46	)		51,518		(67	)

Total	$	1,010,296	$	(3,188	)	$	341,328	$	(4,603	)	$	1,351,624	$	(7,791	)


December 31, 2015	Less than 12 months					12 months or more					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury	$	344,556	$	(576	)	$	—	$	—		$	344,556	$	(576	)
U.S. Agencies		615,993		(1,032	)		—		—			615,993		(1,032	)
Mortgage-backed		2,056,316		(21,013	)		426,959		(17,076	)		2,483,275		(38,089	)
State and political subdivisions		479,197		(1,316	)		60,324		(779	)		539,521		(2,095	)
Corporates		29,126		(183	)		50,796		(480	)		79,922		(663	)

Total	$	3,525,188	$	(24,120	)	$	538,079	$	(18,335	)	$	4,063,267	$	(42,455	)

The unrealized losses in the Company’s investments in U.S. treasury obligations, U.S. government agencies, Government Sponsored Entity (GSE) mortgage-backed securities, municipal securities, and corporates were caused by changes in interest rates. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost. The Company expects to recover its cost basis in the securities and does not consider these investments to be other-than-temporarily impaired at September 30, 2016.

Securities Held to Maturity

The table below provides detailed information for securities held to maturity at September 30, 2016 and December 31, 2015 (in thousands):


			Net
	Amortized		Unrealized		Fair
	Cost		Gains		Value
September 30, 2016
State and political subdivisions	$	1,009,117	$	88,871	$	1,097,988

December 31, 2015
State and political subdivisions	$	667,106	$	24,273	$	691,379

The following table presents contractual maturity information for securities held to maturity at September 30, 2016 (in thousands):


	Amortized		Fair
	Cost		Value
Due in 1 year or less	$	17,219	$	18,735
Due after 1 year through 5 years		83,572		90,932
Due after 5 years through 10 years		565,141		614,912
Due after 10 years		343,185		373,409

Total securities held to maturity	$	1,009,117	$	1,097,988

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

There were no sales of securities held to maturity during the nine months ended September 30, 2016 or 2015.

Trading Securities

The net unrealized gains on trading securities at September 30, 2016 and September 30, 2015 were $14 thousand and $8 thousand, respectively, and were included in trading and investment banking income on the Consolidated Statements of Income.

Other Securities

The table below provides detailed information for Federal Reserve Bank (FRB) stock and Federal Home Loan Bank (FHLB) stock and other securities at September 30, 2016 and December 31, 2015 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
September 30, 2016
FRB and FHLB stock	$	33,397	$	—	$	—		$	33,397
Other securities – marketable		4		9,578		—			9,582
Other securities – non-marketable		23,185		700		(11	)		23,874

Total Other securities	$	56,586	$	10,278	$	(11	)	$	66,853

December 31, 2015
FRB and FHLB stock	$	33,215	$	—	$	—		$	33,215
Other securities – marketable		5		7,159		—			7,164
Other securities – non-marketable		23,855		964		—			24,819

Total Other securities	$	57,075	$	8,123	$	—		$	65,198

Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is mainly tied to the level of borrowings from the FHLB. These holdings are carried at cost. Other marketable and non-marketable securities include Prairie Capital Management (PCM) alternative investments in hedge funds and private equity funds, which are accounted for as equity-method investments. The fair value of other marketable securities includes alternative investment securities of $9.6 million at September 30, 2016 and $7.2 million at December 31, 2015. The fair value of other non-marketable securities includes alternative investment securities of $1.8 million at September 30, 2016 and $2.0 million at December 31, 2015. Unrealized gains or losses on alternative investments are recognized in the Equity earnings (loss) on alternative investments of the Company’s Consolidated Statements of Income.