4. AGENCY MORTGAGE-BACKED SECURITIES

The following tables present the Company’s available-for-sale Agency mortgage-backed securities portfolio as of September 30, 2015 and December 31, 2014, which were carried at their fair value:

September 30, 2015	Freddie Mac			Fannie Mae			Ginnie Mae			Total
	(dollars in thousands)

Principal outstanding	$	21,598,845		$	39,061,904		$	72,826		$	60,733,575
Unamortized premium		1,913,855			2,909,606			31,899			4,855,360
Unamortized discount		(6,039	)		(6,201	)		(11	)		(12,251	)
Amortized cost		23,506,661			41,965,309			104,714			65,576,684
Gross unrealized gains		244,683			547,434			6,467			798,584
Gross unrealized losses		(249,094	)		(316,455	)		(3,079	)		(568,628	)
Estimated fair value	$	23,502,250		$	42,196,288		$	108,102		$	65,806,640

	Fixed Rate			Adjustable Rate			Total
	(dollars in thousands)
Amortized cost	$	61,727,096		$	3,849,588		$	65,576,684
Gross unrealized gains		668,600			129,984			798,584
Gross unrealized losses		(551,434	)		(17,194	)		(568,628	)
Estimated fair value	$	61,844,262		$	3,962,378		$	65,806,640

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

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 September 30, 2015 and December 31, 2014, according to their estimated weighted average life classifications:

	September 30, 2015				December 31, 2014
Weighted Average Life	Estimated Fair Value		Amortized Cost		Estimated Fair Value		Amortized Cost
	(dollars in thousands)
Less than one year	$	26,908	$	27,387	$	43,248	$	42,831
Greater than one year through five years		24,579,949		24,237,266		42,222,114		41,908,586
Greater than five years through ten years		40,978,447		41,081,291		39,018,833		39,098,352
Greater than ten years		221,336		230,740		281,061		283,756
Total	$	65,806,640	$	65,576,684	$	81,565,256	$	81,333,525

The weighted average lives of the Agency mortgage-backed securities at September 30, 2015 and December 31, 2014 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 September 30, 2015 and December 31, 2014.

	September 30, 2015							December 31, 2014
	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		6,574,181		(61,722	)		283		4,613,599		(36,959	)		205
12 Months or More		22,917,561		(506,906	)		286		35,175,194		(713,311	)		302
Total		29,491,742		(568,628	)		569		39,788,793		(750,270	)		507

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 Agency.

During the quarter and nine months ended September 30, 2015, the Company disposed of $3.6 billion and $20.1 billion of Agency mortgage-backed securities, respectively, resulting in a net realized gain of $6.3 million and $77.9, respectively.

During the quarter and nine months ended September 30, 2014, the Company disposed of $4.1 billion and $13.3 billion of Agency mortgage-backed securities, respectively, resulting in a net realized gain of $5.5 million and $176.5 million, respectively.

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. Interest-only mortgage-backed securities in the Company’s portfolio as of September 30, 2015 and December 31, 2014 had net unrealized gains (losses) of $(42.7) million and $(8.0) million and an amortized cost of $1.6 billion and $1.2 billion, respectively