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Investment Securities
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Investment
NOTE 6.  INVESTMENT SECURITIES
Securities Available-for-Sale
The following table presents amortized cost, gross unrealized gains and losses, and carrying values of securities available-for-sale as of the dates indicated:
 
December 31, 2016
 
December 31, 2015
 
 
 
Gross
 
Gross
 
 
 
 
 
Gross
 
Gross
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
Security Type:
Cost
 
Gains
 
Losses
 
Value
 
Cost
 
Gains
 
Losses
 
Value
 
(In thousands)
Residential MBS and CMOs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency MBS
$
499,185

 
$
6,222

 
$
(2,964
)
 
$
502,443

 
$
660,069

 
$
11,517

 
$
(3,746
)
 
$
667,840

Agency CMOs
145,258

 
1,528

 
(497
)
 
146,289

 
193,148

 
2,633

 
(1,026
)
 
194,755

Private label CMOs
122,707

 
4,199

 
(1,437
)
 
125,469

 
140,065

 
5,837

 
(1,106
)
 
144,796

Municipal securities
1,447,064

 
15,406

 
(6,011
)
 
1,456,459

 
1,508,968

 
39,435

 
(1,072
)
 
1,547,331

Agency commercial MBS
555,552

 
1,798

 
(9,658
)
 
547,692

 
392,729

 
1,509

 
(2,797
)
 
391,441

Corporate debt securities
47,100

 
680

 
(271
)
 
47,509

 
49,047

 
327

 
(950
)
 
48,424

Collateralized loan obligations
155,440

 
1,685

 
(238
)
 
156,887

 
133,192

 
128

 
(1,131
)
 
132,189

SBA securities
179,085

 
510

 
(750
)
 
178,845

 
211,946

 
41

 
(830
)
 
211,157

US Treasury securities
—

 
—

 
—

 
—

 
70,196

 
—

 
(816
)
 
69,380

Agency debt securities
—

 
—

 
—

 
—

 
36,302

 
611

 
—

 
36,913

Asset-backed and other securities
62,264

 
358

 
(385
)
 
62,237

 
116,723

 
119

 
(1,631
)
 
115,211

Total
$
3,213,655

 
$
32,386

 
$
(22,211
)
 
$
3,223,830

 
$
3,512,385

 
$
62,157

 
$
(15,105
)
 
$
3,559,437


See Note 13. Fair Value Measurements for information on fair value measurements and methodology.
As of December 31, 2016, securities available‑for‑sale with a carrying value of $425.5 million were pledged as collateral for borrowings, public deposits and other purposes as required by various statutes and agreements.
Realized gains or losses in the statement of earnings resulting from the sale of securities are calculated using the specific identification method and included in gain on sale of securities. During the year ended December 31, 2016, we sold $384.0 million of securities available-for-sale for a gross realized gain of $11.1 million and a gross realized loss of $1.6 million. During the year ended December 31, 2015, we sold $208.4 million of securities available-for-sale for a gross realized gain of $4.5 million and a gross realized loss of $0.7 million. We also sold $823.8 million of the $2.2 billion of securities obtained in the Square 1 acquisition for no gain or loss as they were marked to fair value at the time of acquisition. During the year ended December 31, 2014, we sold $138.1 million of securities available-for-sale for a gross realized gain of $4.8 million. We also sold $322.7 million of the $382.8 million of securities obtained in the CapitalSource Inc. merger for no gain or loss as they were marked to fair value at the time of acquisition.
During the years ended December 31, 2016, 2015 and 2014 accumulated other comprehensive income included $(16.2) million, $3.6 million and $32.6 million of net unrealized after-tax (losses) gains.
Unrealized Losses on Securities Available-for-Sale
The following tables present the gross unrealized losses and fair values of securities available-for-sale that were in unrealized loss positions, for which other-than-temporary impairments have not been recognized in earnings, as of the dates indicated:
 
December 31, 2016
 
Less Than 12 Months
 
12 Months or More
 
Total
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
Security Type:
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
(In thousands)
Residential MBS and CMOs:
 
 
 
 
 
 
 
 
 
 
 
Agency MBS
$
149,281

 
$
(1,691
)
 
$
122,902

 
$
(1,273
)
 
$
272,183

 
$
(2,964
)
Agency CMOs
44,111

 
(416
)
 
25,316

 
(81
)
 
69,427

 
(497
)
Private label CMOs
49,067

 
(906
)
 
30,155

 
(531
)
 
79,222

 
(1,437
)
Municipal securities
644,424

 
(6,011
)
 
—

 
—

 
644,424

 
(6,011
)
Agency commercial MBS
349,550

 
(9,658
)
 
—

 
—

 
349,550

 
(9,658
)
Corporate debt securities
29,829

 
(271
)
 
—

 
—

 
29,829

 
(271
)
Collateralized loan obligations
12,450

 
(37
)
 
39,231

 
(201
)
 
51,681

 
(238
)
SBA securities
69,293

 
(407
)
 
39,024

 
(343
)
 
108,317

 
(750
)
Asset-backed and other securities
18,213

 
(309
)
 
7,851

 
(76
)
 
26,064

 
(385
)
     Total
$
1,366,218

 
$
(19,706
)
 
$
264,479

 
$
(2,505
)
 
$
1,630,697

 
$
(22,211
)
 
December 31, 2015
 
Less Than 12 Months
 
12 Months or More
 
Total
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
Security Type:
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
 
(In thousands)
Residential MBS and CMOs:
 
 
 
 
 
 
 
 
 
 
 
Agency MBS
$
352,042

 
$
(3,480
)
 
$
9,342

 
$
(266
)
 
$
361,384

 
$
(3,746
)
Agency CMOs
117,786

 
(1,026
)
 
—

 
—

 
117,786

 
(1,026
)
Private label CMOs
93,533

 
(1,000
)
 
1,638

 
(106
)
 
95,171

 
(1,106
)
Municipal securities
126,892

 
(1,061
)
 
531

 
(11
)
 
127,423

 
(1,072
)
Agency commercial MBS
236,098

 
(2,156
)
 
14,230

 
(641
)
 
250,328

 
(2,797
)
Corporate debt securities
29,379

 
(950
)
 
—

 
—

 
29,379

 
(950
)
Collateralized loan obligations
100,993

 
(1,131
)
 
—

 
—

 
100,993

 
(1,131
)
SBA securities
179,942

 
(830
)
 
—

 
—

 
179,942

 
(830
)
US Treasury securities
69,380

 
(816
)
 
—

 
—

 
69,380

 
(816
)
Asset-backed and other securities
71,619

 
(1,182
)
 
16,091

 
(449
)
 
87,710

 
(1,631
)
Total
$
1,377,664

 
$
(13,632
)
 
$
41,832

 
$
(1,473
)
 
$
1,419,496

 
$
(15,105
)

We reviewed the securities that were in a loss position at December 31, 2016 and 2015, and concluded 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 the securities were temporarily impaired and we did not recognize such impairment in the consolidated statements of earnings. Although we periodically sell securities for portfolio management purposes, we do not foresee having to sell any temporarily impaired securities strictly for liquidity needs and believe that it is more likely than not we would not be required to sell any temporarily impaired securities before recovery of their amortized cost.
Contractual Maturities of Securities Available-for-Sale
The following table presents the contractual maturities of our available-for-sale securities portfolio based on amortized cost and carrying value as of the date indicated.
 
December 31, 2016
 
Amortized
 
Fair
Maturity:
Cost
 
Value
 
(In thousands)
Due in one year or less
$
13,199

 
$
13,210

Due after one year through five years
257,229

 
260,224

Due after five years through ten years
760,797

 
764,024

Due after ten years
2,182,430

 
2,186,372

Total securities available-for-sale
$
3,213,655

 
$
3,223,830


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.
FHLB Stock
In connection with outstanding FHLB advances, the Bank owned FHLB stock carried at cost of $21.9 million and $19.7 million at December 31, 2016 and 2015. At December 31, 2016 and 2015, the Bank was required to own FHLB stock at least equal to 2.7% of outstanding FHLB advances. During the year ended December 31, 2016, FHLB stock increased by $2.2 million due to $15.6 million in purchases, offset partially by $13.4 million in redemptions. We evaluated the carrying value of our FHLB stock investment at December 31, 2016, 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 from recurring dividends, and our intent and ability to hold this investment for a period of time sufficient to recover our recorded investment.
Interest Income on Investment Securities
The following table presents the composition of our interest income on investment securities for the years indicated:
 
Year Ended December 31,
 
2016
 
2015
 
2014
 
(In thousands)
Taxable interest
$
46,097

 
$
35,103

 
$
30,135

Non-taxable interest
41,885

 
25,219

 
13,597

Dividend income
2,575

 
4,046

 
3,613

Total interest income on investment securities
$
90,557

 
$
64,368

 
$
47,345