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INVESTMENT SECURITIES
 3 Months Ended
Mar. 31, 2014
INVESTMENT SECURITIES  
INVESTMENT SECURITIES

NOTE 5—INVESTMENT SECURITIES

  • Securities Available-for-Sale

        The following tables present amortized cost, gross unrealized gains and losses, and carrying value of securities available-for-sale as of the dates indicated:

 
   March 31, 2014  
Security Type
  Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Carrying
Value		  
 
   (In thousands)
  

Residential mortgage-backed securities:

                          

Government agency and government-sponsored enterprise pass through securities

   $ 560,004   $ 16,204   $ (1,539 ) $ 574,669  

Government agency and government-sponsored enterprise collateralized mortgage obligations

     272,832     762     (3,957 )   269,637  

Covered private label collateralized mortgage obligations

     29,649     8,032     (87 )   37,594  

Municipal securities

     455,437     5,599     (13,103 )   447,933  

Corporate debt securities

     84,210     308     (307 )   84,211  

Government-sponsored enterprise debt securities

     36,180     74     (200 )   36,054  

Other securities

     27,393     37     (55 )   27,375  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total securities available-for-sale

   $ 1,465,705   $ 31,016   $ (19,248 ) $ 1,477,473  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   


 

 
   December 31, 2013  
Security Type
  Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Carrying
Value		  
 
   (In thousands)
  

Residential mortgage-backed securities:

                          

Government agency and government-sponsored enterprise pass through securities

   $ 691,944   $ 18,012   $ (2,768 ) $ 707,188  

Government agency and government-sponsored enterprise collateralized mortgage obligations

     197,069     388     (4,584 )   192,873  

Covered private label collateralized mortgage obligations

     30,502     7,552     (150 )   37,904  

Municipal securities

     459,182     1,749     (24,273 )   436,658  

Corporate debt securities

     84,119     71     (1,483 )   82,707  

Government-sponsored enterprise debt securities

     10,046     —     (174 )   9,872  

Other securities

     27,654     2     (113 )   27,543  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total securities available-for-sale

   $ 1,500,516   $ 27,774   $ (33,545 ) $ 1,494,745  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   

        The covered private label collateralized mortgage obligations ("CMO's") were acquired in the FDIC-assisted acquisition of Affinity Bank in August 2009 and are covered by an FDIC loss sharing agreement. The loss sharing provisions of this agreement expire in the third quarter of 2014 for non-single family covered assets such as these private label CMO's. Other securities consist primarily of asset-backed securities. See Note 11, Fair Value Measurements, for information on fair value measurements and methodology.

        As of March 31, 2014, securities available-for-sale with a carrying value of $291.9 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.

        During the three months ended March 31, 2014, we sold $137.3 million in government-sponsored enterprise ("GSE") pass through securities for which we realized a gross gain of $4.8 million. We sold these securities to take advantage of favorable market conditions for premium coupon seasoned GSE pass through securities, and redeployed the proceeds into single-maturity investments that are expected to perform better under current market conditions. During the three months ended March 31, 2013, we sold $12.4 million in corporate debt securities for which we realized a $409,000 gross gain. These securities were sold as part of our investment portfolio risk management activities to reduce price volatility and duration.

        The following tables present, for those securities that were in a gross unrealized loss position, the carrying values and the gross unrealized losses on securities by length of time the securities were in an unrealized loss position as of the dates indicated:

 
   March 31, 2014  
 
   Less Than 12 Months   12 months or Longer   Total  
Security Type
  Carrying
Value		   Gross
Unrealized
Losses		   Carrying
Value		   Gross
Unrealized
Losses		   Carrying
Value		   Gross
Unrealized
Losses		  
 
   (In thousands)
  

Residential mortgage-backed securities:

                                      

Government agency and government-sponsored enterprise pass through securities

   $ 119,687   $ (1,381 ) $ 673   $ (158 ) $ 120,360   $ (1,539 )

Government agency and government-sponsored enterprise collateralized mortgage obligations

     218,387     (3,957 )   —     —     218,387     (3,957 )

Covered private label collateralized mortgage obligations

     89     (1 )   1,047     (86 )   1,136     (87 )

Municipal securities

     175,910     (5,984 )   98,152     (7,119 )   274,062     (13,103 )

Corporate debt securities

     37,294     (307 )   —     —     37,294     (307 )

Government-sponsored enterprise debt securities

     25,936     (200 )   —     —     25,936     (200 )

Other securities

     16,550     (55 )   —     —     16,550     (55 )
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 593,853   $ (11,885 ) $ 99,872   $ (7,363 ) $ 693,725   $ (19,248 )
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           


 

 
   December 31, 2013  
 
   Less Than 12 Months   12 months or Longer   Total  
Security Type
  Carrying
Value		   Gross
Unrealized
Losses		   Carrying
Value		   Gross
Unrealized
Losses		   Carrying
Value		   Gross
Unrealized
Losses		  
 
   (In thousands)
  

Residential mortgage-backed securities:

                                      

Government agency and government-sponsored enterprise pass through securities

   $ 148,662   $ (2,767 ) $ 32   $ (1 ) $ 148,694   $ (2,768 )

Government agency and government-sponsored enterprise collateralized mortgage obligations

     179,938     (4,486 )   4,383     (98 )   184,321     (4,584 )

Covered private label collateralized mortgage obligations

     1,640     (60 )   617     (90 )   2,257     (150 )

Municipal securities

     337,208     (24,273 )   —     —     337,208     (24,273 )

Corporate debt securities

     72,636     (1,483 )   —     —     72,636     (1,483 )

Government-sponsored enterprise debt securities

     9,872     (174 )   —     —     9,872     (174 )

Other securities

     23,969     (113 )   —     —     23,969     (113 )
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 773,925   $ (33,356 ) $ 5,032   $ (189 ) $ 778,957   $ (33,545 )
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           

        We reviewed the securities that were in a continuous loss position less than 12 months and longer than 12 months at March 31, 2014, and concluded that their losses were a result of the level of market interest rates relative to the types of securities and pricing changes caused by shifting supply and demand dynamics and not a result of downgraded credit ratings or other indicators of deterioration of the underlying issuers' ability to repay. Accordingly, we determined that the securities were temporarily impaired and we did not recognize such impairment in the condensed consolidated statements of earnings. Additionally, we have no plans to sell these securities and believe that it is more likely than not we would not be required to sell these securities before recovery of their amortized cost.

        The following table presents the contractual maturity distribution of our available-for-sale securities portfolio based on amortized cost and carrying value as of the date indicated:

 
   March 31, 2014  
Maturity
  Amortized
Cost		   Carrying
Value		  
 
   (In thousands)
  

Due in one year or less

   $ 3,585   $ 3,587  

Due after one year through five years

     24,390     24,614  

Due after five years through ten years

     266,745     265,949  

Due after ten years

     1,170,985     1,183,323  
           
​ ​ ​ ​ ​ ​ ​ ​

Total securities available-for-sale

   $ 1,465,705   $ 1,477,473  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

        Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities may differ from contractual maturities because obligors and/or issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

        The following table presents the composition of our interest income on investment securities:

 
   Three Months Ended  
Securities Interest by Type:
  March 31,
2014		   December 31,
2013		   March 31,
2013		  
 
   (In thousands)
  

Taxable interest

   $ 6,920   $ 6,564   $ 5,563  

Nontaxable interest

     3,328     3,333     2,425  

Dividend income

     575     525     228  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total interest income on investment securities

   $ 10,823   $ 10,422   $ 8,216  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

  • FHLB Stock

        At March 31, 2014, the Company had a $25.0 million investment in Federal Home Loan Bank of San Francisco ("FHLB") stock carried at cost. During the first quarter of 2014, FHLB stock decreased $2.9 million due to redemptions by the FHLB. We evaluated the carrying value of our FHLB stock investment at March 31, 2014, and determined that it was not impaired. Our evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.