4. AGENCY MORTGAGE-BACKED SECURITIES

The following tables present the Company’s available-for-sale Agency mortgage-backed securities portfolio as of December 31, 2014 and 2013 which were carried at their fair value:

December 31, 2014	Freddie Mac			Fannie Mae			Ginnie Mae			Total
	(dollars in thousands)

Principal outstanding	$	27,906,221		$	47,979,778		$	97,000		$	75,982,999
Unamortized premium		1,951,798			3,396,368			20,560			5,368,726
Unamortized discount		(8,985	)		(8,857	)		(358	)		(18,200	)
Amortized cost		29,849,034			51,367,289			117,202			81,333,525
Gross unrealized gains		313,761			660,230			8,010			982,001
Gross unrealized losses		(322,094	)		(424,800	)		(3,376	)		(750,270	)
Estimated fair value	$	29,840,701		$	51,602,719		$	121,836		$	81,565,256


	Fixed Rate			Adjustable Rate			Total
	(dollars in thousands)
Amortized cost	$	78,250,313		$	3,083,212		$	81,333,525
Gross unrealized gains		847,615			134,386			982,001
Gross unrealized losses		(732,533	)		(17,737	)		(750,270	)
Estimated fair value	$	78,365,395		$	3,199,861		$	81,565,256


December 31, 2013	Freddie Mac			Fannie Mae			Ginnie Mae			Total
	(dollars in thousands)
Principal outstanding	$	24,458,925		$	43,564,657		$	120,739		$	68,144,321
Unamortized premium		1,627,966			2,970,813			27,085			4,625,864
Unamortized discount		(9,533	)		(11,568	)		(383	)		(21,484	)
Amortized cost		26,077,358			46,523,902			147,441			72,748,701
Gross unrealized gains		227,423			456,057			9,845			693,325
Gross unrealized losses		(1,267,106	)		(1,781,683	)		(4,288	)		(3,053,077	)
Estimated fair value	$	25,037,675		$	45,198,276		$	152,998		$	70,388,949

	Fixed Rate			Adjustable Rate			Total
	(dollars in thousands)
Amortized cost	$	68,784,424		$	3,964,277		$	72,748,701
Gross unrealized gains		538,556			154,769			693,325
Gross unrealized losses		(3,040,153	)		(12,924	)		(3,053,077	)
Estimated fair value	$	66,282,827		$	4,106,122		$	70,388,949

Actual maturities of Agency mortgage-backed securities are generally shorter than stated contractual maturities because actual maturities of Agency mortgage-backed securities are affected by periodic payments and prepayments of principal on the underlying mortgages. The following table summarizes the Company’s Agency mortgage-backed securities as of December 31, 2014 and 2013, according to their estimated weighted average life classifications:

	December 31, 2014				December 31, 2013
Weighted Average Life	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost

Less than one year	$	43,248	$	42,831	$	65,584	$	64,561
Greater than one year through five years		42,222,114		41,908,586		50,046,013		51,710,059
Greater than five years through ten years		39,018,833		39,098,352		14,915,716		15,292,973
Greater than ten years		281,061		283,756		5,361,636		5,681,108
Total	$	81,565,256	$	81,333,525	$	70,388,949	$	72,748,701

The weighted average lives of the Agency mortgage-backed securities at December 31, 2014 and 2013 in the table above are based upon projected principal prepayment rates. The actual weighted average lives of the Agency mortgage-backed securities could be longer or shorter than projected.

The following table presents the gross unrealized losses and estimated fair value of the Company’s Agency mortgage-backed securities by length of time that such securities have been in a continuous unrealized loss position at December 31, 2014 and 2013.

	December 31, 2014							December 31, 2013
	Estimated Fair Value		Gross Unrealized Losses			Number of Securities		Estimated Fair Value		Gross Unrealized Losses			Number of Securities
	(dollars in thousands)
Less than 12 Months	$	4,613,599	$	(36,959	)		205	$	47,677,197	$	(2,569,474	)		583
12 Months or More		35,175,194		(713,311	)		302		6,102,283		(483,603	)		55
Total	$	39,788,793	$	(750,270	)		507	$	53,779,480	$	(3,053,077	)		638

The decline in value of these securities is solely due to market conditions and not the quality of the assets. Substantially all of the Agency mortgage-backed securities are “AAA” rated or carry an implied “AAA” rating. The investments are not considered to be other-than-temporarily impaired because the Company currently has the ability and intent to hold the investments to maturity or for a period of time sufficient for a forecasted market price recovery up to or beyond the cost of the investments, and it is not more likely than not that the Company will be required to sell the investments before recovery of the amortized cost bases, which may be maturity. Also, the Company is guaranteed payment of the principal amount of the securities by the respective issuing government agency.

During the year ended December 31, 2014, the Company disposed of $20.6 billion of Agency mortgage-backed securities, resulting in a realized gain of $179.7 million. During the year ended December 31, 2013, the Company disposed of $54.5 billion of Agency mortgage-backed securities, resulting in a realized gain of $440.2 million. During the year ended December 31, 2012, the Company sold $30.4 billion of Agency mortgage-backed securities, resulting in a realized gain of $438.5 million. Average cost is used as the basis on which the realized gain or loss on sale is determined.

Agency interest-only mortgage-backed securities represent the right to receive a specified portion of the contractual interest flows of the underlying outstanding principal balance of specific Agency mortgage-backed securities. Agency interest-only mortgage-backed securities in the Company’s portfolio as of December 31, 2014 and 2013 had net unrealized gains (losses) of ($8.0) million and $78.1 million and an amortized cost of $1.2 billion and $1.0 billion, respectively.