INVESTMENT SECURITIES

Securities Available-for-Sale

The following table presents amortized cost, gross unrealized gains and losses, and fair values of securities available-for-sale as of the dates indicated:



	September 30, 2018									December 31, 2017
			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	$	251,150	$	1,971	$	(3,290	)	$	249,831	$	243,375	$	3,743	$	(844	)	$	246,274
Agency CMOs	583,062		220		(13,677		)	569,605		277,638		968		(2,897		)	275,709
Private label CMOs	110,353		2,699		(2,602		)	110,450		122,816		3,813		(642		)	125,987
Municipal securities	1,272,501		10,974		(11,892		)	1,271,583		1,627,707		53,700		(1,339		)	1,680,068
Agency commercial MBS	1,117,749		—		(40,744		)	1,077,005		1,169,969		2,758		(8,758		)	1,163,969
U.S. Treasury securities	400,591		—		(2,960		)	397,631		—		—		—			—
SBA securities	69,999		—		(2,413		)	67,586		160,214		695		(575		)	160,334
Asset-backed securities	59,322		18		(888		)	58,452		89,425		159		(874		)	88,710
Corporate debt securities	17,000		1,190		—			18,190		17,000		2,295		—			19,295
Collateralized loan obligations	—		—		—			—		6,960		55		—			7,015
Equity investments ⁽¹⁾	—		—		—			—		6,421		779		(130		)	7,070
Total	$	3,881,727	$	17,072	$	(78,466	)	$	3,820,333	$	3,721,525	$	68,965	$	(16,059	)	$	3,774,431

____________________________


(1)	In connection with our adoption of ASU 2016-01 and ASU 2018-03 on January 1, 2018, we reclassified $7.1 million of equity investments from securities available-for-sale to other assets in the first quarter of 2018. The reclassification was applied prospectively without prior period amounts being restated.

As of September 30, 2018, securities available-for-sale with a fair value of $427.8 million were pledged as collateral for borrowings, public deposits, and other purposes as required by various statutes and agreements.

Realized Gains and Losses on Securities Available-for-Sale

During the three months ended September 30, 2018, we sold $130.5 million of securities available-for-sale for a gross realized gain of $958,000 and a gross realized loss of $132,000. During the three months ended September 30, 2017, we sold $98.3 million of securities available-for-sale for a gross realized gain of $1.3 million and a gross realized loss of $119,000.

During the nine months ended September 30, 2018, we sold $492.7 million of securities available-for-sale for a gross realized gain of $8.1 million and a gross realized loss of $707,000. During the nine months ended September 30, 2017, we sold $182.7 million of securities available-for-sale for a gross realized gain of $3.3 million and a gross realized loss of $498,000.

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:



	September 30, 2018
	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	$	76,238	$	(1,332	)	$	51,861	$	(1,958	)	$	128,099	$	(3,290	)
Agency CMOs	401,795		(6,418		)	140,997		(7,259		)	542,792		(13,677		)
Private label CMOs	46,713		(1,101		)	34,654		(1,501		)	81,367		(2,602		)
Municipal securities	436,012		(8,743		)	55,402		(3,149		)	491,414		(11,892		)
Agency commercial MBS	784,452		(26,454		)	292,553		(14,290		)	1,077,005		(40,744		)
U.S. Treasury securities	397,631		(2,960		)	—		—			397,631		(2,960		)
SBA securities	32,867		(1,143		)	34,719		(1,270		)	67,586		(2,413		)
Asset-backed securities	20,815		(147		)	35,278		(741		)	56,093		(888		)
Total	$	2,196,523	$	(48,298	)	$	645,464	$	(30,168	)	$	2,841,987	$	(78,466	)



	December 31, 2017
	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	$	44,795	$	(311	)	$	26,010	$	(533	)	$	70,805	$	(844	)
Agency CMOs	163,014		(2,452		)	20,928		(445		)	183,942		(2,897		)
Private label CMOs	50,521		(500		)	5,035		(142		)	55,556		(642		)
Municipal securities	67,936		(365		)	32,326		(974		)	100,262		(1,339		)
Agency commercial MBS	579,373		(3,777		)	129,060		(4,981		)	708,433		(8,758		)
SBA securities	74,904		(575		)	—		—			74,904		(575		)
Asset-backed securities	45,198		(818		)	10,473		(56		)	55,671		(874		)
Equity investments ⁽¹⁾	1,039		(130		)	—		—			1,039		(130		)
Total	$	1,026,780	$	(8,928	)	$	223,832	$	(7,131	)	$	1,250,612	$	(16,059	)

____________________________


(1)	In connection with our adoption of ASU 2016-01 and ASU 2018-03 on January 1, 2018, we reclassified $7.1 million of equity investments from securities available-for-sale to other assets in the first quarter of 2018. The reclassification was applied prospectively without prior period amounts being restated.

We reviewed the securities that were in an unrealized loss position at September 30, 2018, and concluded their unrealized 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 condensed 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 securities available-for-sale portfolio based on amortized cost and carrying value as of the date indicated:



	September 30, 2018
	Amortized		Fair
Maturities	Cost		Value
	(In thousands)
Due in one year or less	$	39,300	$	39,272
Due after one year through five years	716,172		707,368
Due after five years through ten years	970,758		937,317
Due after ten years	2,155,497		2,136,376
Total securities available-for-sale	$	3,881,727	$	3,820,333

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.

Interest Income on Investment Securities

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



	Three Months Ended						Nine Months Ended
	September 30,		June 30,		September 30,		September 30,
	2018		2018		2017		2018		2017
	(In thousands)
Taxable interest	$	17,618	$	17,106	$	13,576	$	49,323	$	39,257
Non-taxable interest	10,127		10,276		10,795		31,510		31,926
Dividend income	316		348		391		1,096		1,307
Total interest income on investment securities	$	28,061	$	27,730	$	24,762	$	81,929	$	72,490