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Securities
 9 Months Ended
Sep. 30, 2017
Investments, Debt and Equity Securities [Abstract]  
Securities
Note 6 — Securities

The following tables present the amortized cost, gross unrealized gains and losses and fair value by major categories of available-for-sale investment securities, which are carried at fair value, and the held-to-maturity investment security, which is carried at amortized cost, as of September 30, 2017 and December 31, 2016:
 
 
 
As of September 30, 2017
($ in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
533,035

 
$
—

 
$
(6,703
)
 
$
526,332

U.S. government agency and U.S. government sponsored enterprise debt securities
 
191,727

 
81

 
(2,623
)
 
189,185

U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
321,943

 
326

 
(7,097
)
 
315,172

Residential mortgage-backed securities
 
1,154,026

 
4,790

 
(7,882
)
 
1,150,934

Municipal securities
 
116,798

 
900

 
(456
)
 
117,242

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
9,680

 
21

 
(7
)
 
9,694

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
2,464

 
—

 
(137
)
 
2,327

Non-investment grade (1)
 
10,191

 
—

 
(576
)
 
9,615

Foreign bonds:
 
 
 
 
 
 
 


Investment grade (1) (2)
 
505,395

 
229

 
(16,484
)
 
489,140

Other securities  (3)
 
147,504

 
3

 
(372
)
 
147,135

Total available-for-sale investment securities
 
$
2,992,763

 
$
6,350

 
$
(42,337
)
 
$
2,956,776

Held-to-maturity investment security:
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
—

 
$
—

 
$
—

 
$
—

Total investment securities
 
$
2,992,763

 
$
6,350

 
$
(42,337
)
 
$
2,956,776

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
($ in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
730,287

 
$
21

 
$
(9,829
)
 
$
720,479

U.S. government agency and U.S. government sponsored enterprise debt securities
 
277,891

 
224

 
(3,249
)
 
274,866

U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
272,672

 
345

 
(6,218
)
 
266,799

Residential mortgage-backed securities
 
1,266,372

 
3,924

 
(11,549
)
 
1,258,747

Municipal securities
 
148,302

 
1,252

 
(1,900
)
 
147,654

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
11,592

 
—

 
(115
)
 
11,477

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
222,190

 
562

 
(375
)
 
222,377

Non-investment grade (1)
 
10,191

 
—

 
(1,018
)
 
9,173

Foreign bonds:
 
 
 
 
 
 
 
 
Investment grade (1) (2)
 
405,443

 
30

 
(21,579
)
 
383,894

Other securities
 
40,501

 
337

 
(509
)
 
40,329

Total available-for-sale investment securities
 
$
3,385,441

 
$
6,695

 
$
(56,341
)
 
$
3,335,795

Held-to-maturity investment security:
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security (3)
 
$
143,971

 
$
622

 
$
—

 
$
144,593

Total investment securities
 
$
3,529,412

 
$
7,317

 
$
(56,341
)
 
$
3,480,388

 
 
 
 
 
 
 
 
 
(1)
Available-for-sale investment securities rated BBB- or higher by Standard &Poor’s (“S&P”) or Baa3 or higher by Moody’s are considered investment grade.  Conversely, available-for-sale investment securities rated lower than BBB- by S&P or lower than Baa3 by Moody’s are considered non-investment grade. Classifications are based on the lower of the credit ratings by S&P or Moody’s.
(2)
Fair values of foreign bonds include $458.9 million and $353.6 million of multilateral development bank bonds as of September 30, 2017 and December 31, 2016, respectively.
(3)
During the third quarter of 2017, the Company transferred a non-agency commercial mortgage-backed security with a net carrying amount of $115.6 million from held-to-maturity to available-for-sale.

Unrealized Losses

The following tables present the gross unrealized losses and related fair values of the Company’s investment portfolio, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position, as of September 30, 2017 and December 31, 2016:
 
 
 
As of September 30, 2017
($ in thousands)
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
415,507

 
$
(4,615
)
 
$
110,825

 
$
(2,088
)
 
$
526,332

 
$
(6,703
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
96,681

 
(367
)
 
54,512

 
(2,256
)
 
151,193

 
(2,623
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
120,070

 
(1,721
)
 
155,128

 
(5,376
)
 
275,198

 
(7,097
)
Residential mortgage-backed securities
 
365,038

 
(2,344
)
 
288,768

 
(5,538
)
 
653,806

 
(7,882
)
Municipal securities
 
22,010

 
(222
)
 
11,256

 
(234
)
 
33,266

 
(456
)
Non-agency residential mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
4,715

 
(7
)
 
—

 
—

 
4,715

 
(7
)
Corporate debt securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
—

 
—

 
2,327

 
(137
)
 
2,327

 
(137
)
Non-investment grade
 
—

 
—

 
9,615

 
(576
)
 
9,615

 
(576
)
Foreign bonds:
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade
 
73,619

 
(873
)
 
344,298

 
(15,611
)
 
417,917

 
(16,484
)
Other securities
 
31,223

 
(372
)
 
—

 
—

 
31,223

 
(372
)
Total available-for-sale investment securities
 
$
1,128,863

 
$
(10,521
)
 
$
976,729

 
$
(31,816
)
 
$
2,105,592

 
$
(42,337
)
Held-to-maturity investment security:
 
 
 
 
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Total investment securities
 
$
1,128,863

 
$
(10,521
)
 
$
976,729

 
$
(31,816
)
 
$
2,105,592

 
$
(42,337
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
($ in thousands)
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
670,268

 
$
(9,829
)
 
$
—

 
$
—

 
$
670,268

 
$
(9,829
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
203,901

 
(3,249
)
 
—

 
—

 
203,901

 
(3,249
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Commercial mortgage-backed securities
 
202,106

 
(5,452
)
 
29,201

 
(766
)
 
231,307

 
(6,218
)
Residential mortgage-backed securities
 
629,324

 
(9,594
)
 
119,603

 
(1,955
)
 
748,927

 
(11,549
)
Municipal securities
 
57,655

 
(1,699
)
 
2,692

 
(201
)
 
60,347

 
(1,900
)
Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
5,033

 
(101
)
 
6,444

 
(14
)
 
11,477

 
(115
)
Corporate debt securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
—

 
—

 
71,667

 
(375
)
 
71,667

 
(375
)
Non-investment grade
 
—

 
—

 
9,173

 
(1,018
)
 
9,173

 
(1,018
)
Foreign bonds:
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade
 
363,618

 
(21,327
)
 
14,258

 
(252
)
 
377,876

 
(21,579
)
Other securities
 
30,991

 
(509
)
 
—

 
—

 
30,991

 
(509
)
Total available-for-sale investment securities
 
$
2,162,896

 
$
(51,760
)
 
$
253,038

 
$
(4,581
)
 
$
2,415,934

 
$
(56,341
)
Held-to-maturity investment security:
 
 
 
 
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Total investment securities
 
$
2,162,896

 
$
(51,760
)
 
$
253,038

 
$
(4,581
)
 
$
2,415,934

 
$
(56,341
)
 

For each reporting period, the Company examines all individual securities that are in an unrealized loss position for OTTI.  For discussion of the factors and criteria the Company uses in analyzing securities for OTTI, see Note 1 — Summary of Significant Accounting Policies — Available-for-Sale Investment Securities to the Consolidated Financial Statements of the Company’s 2016 Form 10-K.

The unrealized losses were primarily attributable to the yield curve movement, in addition to widened liquidity and credit spreads. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated. The Company believes that the gross unrealized losses detailed in the previous tables are temporary and not due to reasons of credit quality. As a result, the Company expects to recover the entire amortized cost basis of these securities. Accordingly, no impairment loss was recorded on the Company’s Consolidated Statements of Income for the three and nine months ended September 30, 2017 and 2016. As of September 30, 2017, the Company had 146 available-for-sale investment securities in an unrealized loss position with no credit impairment, primarily comprised of 79 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, 22 U.S. Treasury securities and 14 investment grade foreign bonds. In comparison, as of December 31, 2016, the Company had 170 available-for-sale investment securities in an unrealized loss position with no credit impairment, primarily comprised of 82 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, 26 U.S. Treasury securities and 13 investment grade foreign bonds.

During the first quarter of 2016, the Company obtained a non-agency commercial mortgage-backed security, through the securitization of multifamily real estate loans, which was classified as held-to-maturity and recorded at amortized cost. During the third quarter of 2017, the Company transferred this non-agency commercial mortgage-backed security with a net carrying amount of $115.6 million from held-to-maturity to available-for-sale. The transfer reflects the Company’s intent to sell the security under active liquidity management.

Other-Than-Temporary Impairment

No OTTI credit losses were recognized for the three and nine months ended September 30, 2017 and 2016.

Realized Gains and Losses

The following table presents the proceeds, gross realized gains and losses, and tax expense related to the sales of available-for-sale investment securities for the three and nine months ended September 30, 2017 and 2016:
 
($ in thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Proceeds from sales
 
$
124,887

 
$
143,513

 
$
676,776

 
$
1,008,256

Gross realized gains
 
$
1,539

 
$
1,790

 
$
6,733

 
$
8,593

Gross realized losses
 
$
—

 
$
—

 
$
—

 
$
(125
)
Related tax expense
 
$
647

 
$
752

 
$
2,831

 
$
3,560

 


Scheduled Maturities of Investment Securities
 
The following table presents the scheduled maturities of available-for-sale investment securities as of September 30, 2017:
 
($ in thousands)
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
 
$
638,257

 
$
621,343

Due after one year through five years
 
629,892

 
623,058

Due after five years through ten years
 
176,117

 
172,902

Due after ten years
 
1,548,497

 
1,539,473

Total available-for-sale investment securities
 
$
2,992,763

 
$
2,956,776

 

Actual maturities of mortgage-backed securities can differ from contractual maturities because borrowers have the right to prepay obligations. In addition, factors such as prepayments and interest rates may affect the yields on the carrying values of mortgage-backed securities.

Available-for-sale investment securities with fair values of $584.9 million and $767.4 million as of September 30, 2017 and December 31, 2016, respectively, were pledged to secure public deposits, repurchase agreements, the Federal Reserve Bank’s discount window and for other purposes required or permitted by law.

Restricted Equity Securities

Restricted equity securities include stock of the Federal Reserve Bank and of the FHLB. Restricted equity securities are carried at cost as these securities do not have a readily determinable fair value. The following table presents the restricted equity securities as of September 30, 2017 and December 31, 2016:
 
 
 
 
 
($ in thousands)
 
September 30, 2017
 
December 31, 2016
Federal Reserve Bank stock
 
$
56,072

 
$
55,525

FHLB stock
 
17,250

 
17,250

Total
 
$
73,322

 
$
72,775