Investment Securities

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities

d fair values of investment securities at March 31, 2019 and December 31, 2018 are summarized as follows:

	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	(in thousands)
Held-to-maturity debt securities
Tax-exempt	$	310,865	$	20,218	$	—		$	331,083
Available-for-sale debt securities
CDO	$	50	$	14,976	$	—		$	15,026
Commercial MBS issued by GSEs	104,227		104		(5,232		)	99,099
Corporate debt securities	105,026		116		(8,100		)	97,042
Private label residential MBS	946,757		2,861		(14,271		)	935,347
Residential MBS issued by GSEs	1,509,590		2,408		(19,762		)	1,492,236
Tax-exempt	526,899		11,666		(1,575		)	536,990
Trust preferred securities	32,000		—		(3,383		)	28,617
U.S. government sponsored agency securities	40,000		—		(1,099		)	38,901
U.S. treasury securities	997		—		(8		)	989
Total AFS debt securities	$	3,265,546	$	32,131	$	(53,430	)	$	3,244,247
Equity securities
CRA investments	$	52,361	$	—	$	(747	)	$	51,614
Preferred stock	65,913		954		(476		)	66,391
Total equity securities	$	118,274	$	954	$	(1,223	)	$	118,005

	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
	(in thousands)
Held-to-maturity debt securities
Tax-exempt	$	302,905	$	3,163	$	(7,420	)	$	298,648
Available-for-sale debt securities
CDO	$	50	$	15,277	$	—		$	15,327
Commercial MBS issued by GSEs	106,385		82		(6,361		)	100,106
Corporate debt securities	105,029		—		(5,649		)	99,380
Private label residential MBS	948,161		945		(24,512		)	924,594
Residential MBS issued by GSEs	1,564,181		1,415		(35,472		)	1,530,124
Tax-exempt	542,086		4,335		(7,753		)	538,668
Trust preferred securities	32,000		—		(3,383		)	28,617
U.S. government sponsored agency securities	40,000		—		(1,812		)	38,188
U.S. treasury securities	1,996		—		(12		)	1,984
Total AFS debt securities	$	3,339,888	$	22,054	$	(84,954	)	$	3,276,988
Equity securities
CRA investments	$	52,210	$	—	$	(1,068	)	$	51,142
Preferred stock	65,954		148		(2,183		)	63,919
Total equity securities	$	118,164	$	148	$	(3,251	)	$	115,061

The Company conducts an OTTI analysis on a quarterly basis. The initial indication of OTTI is a decline in the market value below the amount recorded for an investment, and taking into account the severity and duration of the decline. Another potential indication of OTTI is a downgrade below investment grade. In determining whether an impairment is OTTI, the Company considers the length of time and the extent to which the market value has been below cost, recent events specific to the issuer, including investment downgrades by rating agencies and economic conditions of its industry, and the Company’s ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery.

For debt securities, for the purpose of an OTTI analysis, the Company also considers the cause of the price decline (general level of interest rates, credit spreads, and industry and issuer-specific factors), whether downgrades by bond rating agencies have occurred, the issuer’s financial condition, near-term prospects, and current ability to make future payments in a timely manner, as well as the issuer’s ability to service debt, and any change in agencies’ ratings at the evaluation date from the acquisition date and any likely imminent action.

At March 31, 2019 and December 31, 2018, the Company’s unrealized losses relate primarily to market interest rate increases since the securities' original purchase date. The total number of AFS securities in an unrealized loss position at March 31, 2019 is 230, compared to 373 at December 31, 2018. The Company has reviewed securities for which there is an unrealized loss in accordance with its accounting policy for OTTI described above and determined that there are no impairment charges for the three months ended March 31, 2019 and 2018. The Company does not consider any securities to be other-than-temporarily impaired as of March 31, 2019 and December 31, 2018. No assurance can be made that OTTI will not occur in future periods.

Information pertaining to securities with gross unrealized losses at March 31, 2019 and December 31, 2018, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows: 

	March 31, 2019
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Available-for-sale debt securities
Commercial MBS issued by GSEs	$	—	$	—	$	5,232	$	97,264	$	5,232	$	97,264
Corporate debt securities	—		—		8,100		91,900		8,100		91,900
Private label residential MBS	—		—		14,271		703,525		14,271		703,525
Residential MBS issued by GSEs	2		265		19,760		1,184,558		19,762		1,184,823
Tax-exempt	—		—		1,575		80,676		1,575		80,676
Trust preferred securities	—		—		3,383		28,617		3,383		28,617
U.S. government sponsored agency securities	—		—		1,099		33,901		1,099		33,901
U.S. treasury securities	—		—		8		989		8		989
Total AFS securities	$	2	$	265	$	53,428	$	2,221,430	$	53,430	$	2,221,695

	December 31, 2018
	Less Than Twelve Months				More Than Twelve Months				Total
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity debt securities
Tax-exempt	$	3,868	$	91,095	$	3,552	$	69,991	$	7,420	$	161,086
Available-for-sale debt securities
Commercial MBS issued by GSEs	$	—	$	—	$	6,361	$	98,275	$	6,361	$	98,275
Corporate debt securities	16		5,013		5,633		94,367		5,649		99,380
Private label residential MBS	5,173		217,982		19,339		537,316		24,512		755,298
Residential MBS issued by GSEs	1,363		141,493		34,109		1,215,490		35,472		1,356,983
Tax-exempt	3,562		209,767		4,191		72,382		7,753		282,149
Trust preferred securities	—		—		3,383		28,617		3,383		28,617
U.S. government sponsored agency securities	—		—		1,812		38,188		1,812		38,188
U.S. treasury securities	—		—		12		1,984		12		1,984
Total AFS securities	$	10,114	$	574,255	$	74,840	$	2,086,619	$	84,954	$	2,660,874

The amortized cost and fair value of securities as of March 31, 2019, by contractual maturities, are shown below. MBS are shown separately as individual MBS are comprised of pools of loans with varying maturities. Therefore, these securities are listed separately in the maturity summary. 

	March 31, 2019
	Amortized Cost		Estimated Fair Value
	(in thousands)
Held-to-maturity
Due in one year or less	$	10,100	$	10,147
After five years through ten years	14,386		14,984
After ten years	286,379		305,952
Total HTM securities	$	310,865	$	331,083
Available-for-sale
Due in one year or less	$	2,296	$	2,313
After one year through five years	12,036		12,206
After five years through ten years	211,149		203,258
After ten years	479,491		499,788
Mortgage-backed securities	2,560,574		2,526,682
Total AFS securities	$	3,265,546	$	3,244,247

The following tables summarize the carrying amount of the Company’s investment ratings position as of March 31, 2019 and December 31, 2018: 

	March 31, 2019
	AAA		Split-rated AAA/AA+		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in thousands)
Held-to-maturity debt securities
Tax-exempt	$	—	$	—	$	—	$	—	$	—	$	—	$	310,865	$	310,865
Available-for-sale debt securities
CDO	$	—	$	—	$	—	$	—	$	—	$	15,026	$	—	$	15,026
Commercial MBS issued by GSEs	—		99,099		—		—		—		—		—		99,099
Corporate debt securities	—		—		—		64,300		32,742		—		—		97,042
Private label residential MBS	911,689		—		21,079		297		898		1,384		—		935,347
Residential MBS issued by GSEs	—		1,492,236		—		—		—		—		—		1,492,236
Tax-exempt	68,227		8,875		294,830		163,391		—		—		1,667		536,990
Trust preferred securities	—		—		—		—		28,617		—		—		28,617
U.S. government sponsored agency securities	—		38,901		—		—		—		—		—		38,901
U.S. treasury securities	—		989		—		—		—		—		—		989
Total AFS securities	$	979,916	$	1,640,100	$	315,909	$	227,988	$	62,257	$	16,410	$	1,667	$	3,244,247
Equity securities
CRA investments	$	—	$	25,375	$	—	$	—	$	—	$	—	$	26,239	$	51,614
Preferred stock	—		—		—		—		47,931		3,925		14,535		66,391
Total equity securities	$	—	$	25,375	$	—	$	—	$	47,931	$	3,925	$	40,774	$	118,005

(1)Where ratings differ, the Company uses an average of the available ratings by major credit agencies.

	December 31, 2018
	AAA		Split-rated AAA/AA+		AA+ to AA-		A+ to A-		BBB+ to BBB-		BB+ and below		Unrated		Totals
	(in thousands)
Held-to-maturity debt securities
Tax-exempt	$	—	$	—	$	—	$	—	$	—	$	—	$	302,905	$	302,905
Available-for-sale debt securities
CDO	$	—	$	—	$	—	$	—	$	—	$	15,327	$	—	$	15,327
Commercial MBS issued by GSEs	—		100,106		—		—		—		—		—		100,106
Corporate debt securities	—		—		—		66,515		32,865		—		—		99,380
Private label residential MBS	887,520		—		34,342		343		947		1,442		—		924,594
Residential MBS issued by GSEs	—		1,530,124		—		—		—		—		—		1,530,124
Tax-exempt	66,160		12,146		306,409		152,330		—		—		1,623		538,668
Trust preferred securities	—		—		—		—		28,617		—		—		28,617
U.S. government sponsored agency securities	—		38,188		—		—		—		—		—		38,188
U.S. treasury securities	—		1,984		—		—		—		—		—		1,984
Total AFS securities	$	953,680	$	1,682,548	$	340,751	$	219,188	$	62,429	$	16,769	$	1,623	$	3,276,988
Equity securities
CRA investments	$	—	$	25,375	$	—	$	—	$	—	$	—	$	25,767	$	51,142
Preferred stock	—		—		—		—		45,771		3,693		14,455		63,919
Total equity securities	$	—	$	25,375	$	—	$	—	$	45,771	$	3,693	$	40,222	$	115,061

(1) Where ratings differ, the Company uses an average of the available ratings by major credit agencies.

Securities with carrying amounts of approximately $940.0 million and $788.4 million at March 31, 2019 and December 31, 2018, respectively, were pledged for various purposes as required or permitted by law.

There were no gains and losses on sales of investment securities during the three months ended March 31, 2019 and March 31, 2018.