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Investment Securities
 12 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
Investment securities available for sale consisted of the following at December 31, 2016 and 2015 (in thousands):
 
 
 
2016
 
 
 
Amortized Cost
 
Gross Unrealized
 
Fair Value
 
 
Gains
 
Losses
 
U.S. Treasury securities
$
4,999

 
$
6

 
$
—

 
$
5,005

U.S. Government agency and sponsored enterprise residential MBS
1,513,028

 
15,922

 
(1,708
)
 
1,527,242

U.S. Government agency and sponsored enterprise commercial MBS
126,754

 
670

 
(2,838
)
 
124,586

Private label residential MBS and CMOs
334,167

 
42,939

 
(2,008
)
 
375,098

Private label commercial MBS
1,180,386

 
9,623

 
(2,385
)
 
1,187,624

Single family rental real estate-backed securities
858,339

 
4,748

 
(1,836
)
 
861,251

Collateralized loan obligations
487,678

 
868

 
(1,250
)
 
487,296

Non-mortgage asset-backed securities
187,660

 
2,002

 
(2,926
)
 
186,736

Preferred stocks
76,180

 
12,027

 
(4
)
 
88,203

State and municipal obligations
705,884

 
3,711

 
(11,049
)
 
698,546

SBA securities
517,129

 
7,198

 
(421
)
 
523,906

Other debt securities
3,999

 
4,092

 
—

 
8,091

 
$
5,996,203

 
$
103,806

 
$
(26,425
)
 
$
6,073,584

 
 
 
2015
 
 
 
Amortized Cost
 
Gross Unrealized
 
Fair Value
 
 
Gains
 
Losses
 
U.S. Treasury securities
$
4,997

 
$
—

 
$
—

 
$
4,997

U.S. Government agency and sponsored enterprise residential MBS
1,167,197

 
15,376

 
(4,255
)
 
1,178,318

U.S. Government agency and sponsored enterprise commercial MBS
95,997

 
944

 
(127
)
 
96,814

Re-Remics
88,658

 
1,138

 
(105
)
 
89,691

Private label residential MBS and CMOs
502,723

 
44,822

 
(2,933
)
 
544,612

Private label commercial MBS
1,219,355

 
5,533

 
(6,148
)
 
1,218,740

Single family rental real estate-backed securities
646,156

 
284

 
(9,735
)
 
636,705

Collateralized loan obligations
309,615

 
—

 
(2,738
)
 
306,877

Non-mortgage asset-backed securities
54,981

 
1,519

 
—

 
56,500

Preferred stocks
75,742

 
7,467

 
—

 
83,209

State and municipal obligations
351,456

 
10,297

 
—

 
361,753

SBA securities
270,553

 
3,343

 
(560
)
 
273,336

Other debt securities
3,854

 
4,133

 
—

 
7,987

 
$
4,791,284

 
$
94,856

 
$
(26,601
)
 
$
4,859,539

Investment securities held to maturity at December 31, 2016 and 2015 consisted of one State of Israel bond with a carrying value of $10 million. Fair value approximated carrying value at December 31, 2016 and 2015. The bond matures in 2024.
At December 31, 2016, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments of mortgage-backed and other pass-through securities, were as follows (in thousands): 
 
Amortized Cost
 
Fair Value
Due in one year or less
$
561,441

 
$
574,582

Due after one year through five years
3,113,496

 
3,143,551

Due after five years through ten years
1,933,476

 
1,941,201

Due after ten years
311,610

 
326,047

Preferred stocks with no stated maturity
76,180

 
88,203

 
$
5,996,203

 
$
6,073,584

Based on the Company’s proprietary assumptions, the estimated weighted average life of the investment portfolio as of December 31, 2016 was 5.0 years. The effective duration of the investment portfolio as of December 31, 2016 was 1.7 years. The model results are based on assumptions that may differ from actual results. 
The carrying value of securities pledged as collateral for FHLB advances, public deposits, interest rate swaps and to secure borrowing capacity at the FRB totaled $1.8 billion and $1.5 billion at December 31, 2016 and 2015, respectively. 
The following table provides information about gains and losses on investment securities available for sale for the years ended December 31, 2016, 2015 and 2014 (in thousands): 
 
2016
 
2015
 
2014
Proceeds from sale of investment securities available for sale
$
1,127,983

 
$
1,114,020

 
$
355,798

 
 
 
 
 
 
Gross realized gains
$
14,924

 
$
8,955

 
$
4,987

Gross realized losses
—

 
(475
)
 
(1,128
)
Net realized gain
14,924

 
8,480

 
3,859

OTTI
(463
)
 
—

 
—

Gain on investment securities available for sale, net
$
14,461

 
$
8,480

 
$
3,859


During the year ended December 31, 2016, OTTI was recognized on two positions in one private label commercial MBS. These positions were in unrealized loss positions at September 30, 2016 and the Company sold the security before the end of the year.
The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities in unrealized loss positions, aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at December 31, 2016 and 2015 (in thousands): 
 
2016
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Government agency and sponsored enterprise residential MBS
$
191,463

 
$
(628
)
 
$
112,391

 
$
(1,080
)
 
$
303,854

 
$
(1,708
)
U.S. Government agency and sponsored enterprise commercial MBS
89,437

 
(2,838
)
 
—

 
—

 
89,437

 
(2,838
)
Private label residential MBS and CMOs
122,142

 
(1,680
)
 
8,074

 
(328
)
 
130,216

 
(2,008
)
Private label commercial MBS
169,535

 
(2,370
)
 
24,985

 
(15
)
 
194,520

 
(2,385
)
Single family rental real estate-backed securities
139,867

 
(842
)
 
176,057

 
(994
)
 
315,924

 
(1,836
)
Collateralized loan obligations
69,598

 
(402
)
 
173,983

 
(848
)
 
243,581

 
(1,250
)
Non-mortgage asset-backed securities
139,477

 
(2,926
)
 
—

 
—

 
139,477

 
(2,926
)
Preferred stocks
10,087

 
(4
)
 
—

 
—

 
10,087

 
(4
)
State and municipal obligations
448,180

 
(11,049
)
 
—

 
—

 
448,180

 
(11,049
)
SBA securities
4,204

 
(13
)
 
20,076

 
(408
)
 
24,280

 
(421
)
 
$
1,383,990

 
$
(22,752
)
 
$
515,566

 
$
(3,673
)
 
$
1,899,556

 
$
(26,425
)
 
2015
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Government agency and sponsored enterprise residential MBS
$
321,143

 
$
(3,065
)
 
$
54,290

 
$
(1,190
)
 
$
375,433

 
$
(4,255
)
U.S. Government agency and sponsored enterprise commercial MBS
5,273

 
(127
)
 
—

 
—

 
5,273

 
(127
)
Re-Remics
20,421

 
(105
)
 
—

 
—

 
20,421

 
(105
)
Private label residential MBS and CMOs
289,312

 
(2,401
)
 
16,342

 
(532
)
 
305,654

 
(2,933
)
Private label commercial MBS
739,376

 
(4,476
)
 
106,280

 
(1,672
)
 
845,656

 
(6,148
)
Single family rental real estate-backed securities
381,033

 
(4,499
)
 
212,491

 
(5,236
)
 
593,524

 
(9,735
)
Collateralized loan obligations
257,442

 
(2,173
)
 
49,435

 
(565
)
 
306,877

 
(2,738
)
SBA securities
41,996

 
(543
)
 
868

 
(17
)
 
42,864

 
(560
)
 
$
2,055,996

 
$
(17,389
)
 
$
439,706

 
$
(9,212
)
 
$
2,495,702

 
$
(26,601
)

The Company monitors its investment securities available for sale for OTTI on an individual security basis. As discussed above, OTTI was recognized on two positions in one private label commercial MBS during the year ended December 31, 2016. No securities were determined to be other-than-temporarily impaired during the years ended December 31, 2015 and 2014. The Company does not intend to sell securities that are in significant unrealized loss positions at December 31, 2016 and it is not more likely than not that the Company will be required to sell these securities before recovery of the amortized cost basis, which may be at maturity. At December 31, 2016, 112 securities were in unrealized loss positions. The amount of impairment related to 30 of these securities was considered insignificant, totaling approximately $309 thousand and no further analysis with respect to these securities was considered necessary. The basis for concluding that impairment of the remaining securities was not other-than-temporary is further described below:
U.S. Government agency and sponsored enterprise residential MBS and commercial MBS
At December 31, 2016, eleven U.S. Government agency and sponsored enterprise residential MBS and five U.S. Government agency and sponsored enterprise commercial MBS were in unrealized loss positions. For five fixed rate securities, the impairment was primarily attributable to an increase in medium and long-term market interest rates subsequent to the date of acquisition. For the remaining eleven variable rate securities, the amount of impairment was less than 2% of amortized cost and was primarily due to increased credit spreads subsequent to acquisition. The timely payment of principal and interest on these securities is explicitly or implicitly guaranteed by the U.S. Government. Given the expectation of timely payment of principal and interest, the impairments were considered to be temporary.
Private label residential MBS and CMOs
At December 31, 2016, ten private label residential MBS were in unrealized loss positions, primarily as a result of a widening of credit spreads and an increase in medium and long-term market interest rates subsequent to acquisition. The amount of impairment of each of the individual securities ranged from less than 1% to just under 5% of amortized cost. These securities were assessed for OTTI using credit and prepayment behavioral models that incorporate CUSIP level constant default rates, voluntary prepayment rates and loss severity and delinquency assumptions. The results of these assessments were not indicative of credit losses related to any of these securities as of December 31, 2016. Given the limited severity of impairment and the expectation of timely recovery of outstanding principal, the impairments were considered to be temporary.
Private label commercial MBS:
At December 31, 2016, nine private label commercial MBS were in unrealized loss positions. The amount of impairment of each of the individual securities was less than 3% of amortized cost. The amount of impairment for seven of the securities falls within a normal bid/ask range. The unrealized losses were primarily attributable to increases in market interest rates since the purchase of the securities. These securities were assessed for OTTI using credit and prepayment behavioral models incorporating assumptions consistent with the collateral characteristics of each security. The results of this analysis were not indicative of expected credit losses. Given the limited severity of impairment and the expectation of timely recovery of outstanding principal, the impairments were considered to be temporary.
Single family rental real estate-backed securities:
At December 31, 2016, eight single family rental real estate-backed securities were in unrealized loss positions. The unrealized losses were primarily due to widening credit spreads, leading to increased extension risk, and to a lesser extent, increases in market interest rates since the purchase of the securities. The amount of impairment of each of the individual securities was 4% or less of amortized cost. Management's analysis of the credit characteristics, including loan-to-value and debt service coverage ratios, and levels of subordination for each of the securities is not indicative of projected credit losses. Given the limited severity of impairment and the absence of projected credit losses, the impairments were considered to be temporary.
Collateralized loan obligations:
At December 31, 2016, four collateralized loan obligations were in unrealized loss positions, due to widening credit spreads subsequent to acquisition. The amount of impairment of each of the individual securities was less than 1% of amortized cost. Given the limited severity of impairment, levels of subordination and the results of independent analyses of the credit quality of loans underlying the securities, the impairments were considered to be temporary.
Non-mortgage asset-backed securities:
At December 31, 2016, three non-mortgage asset-backed securities were in unrealized loss positions, due primarily to increases in market interest rates subsequent to the date of acquisition. The amount of impairment of each of the individual securities was less than 3% of amortized cost. These securities were assessed for OTTI using credit and prepayment behavioral models incorporating assumptions consistent with the collateral characteristics of each security. The results of this analysis were not indicative of expected credit losses. Given the limited severity of impairment and the expectation of timely recovery of outstanding principal, the impairments were considered to be temporary.
State and municipal obligations:
At December 31, 2016, 31 state and municipal obligations were in unrealized loss positions, due to increases in market interest rates. All of the securities are rated investment grade by nationally recognized statistical ratings organizations. Management's evaluation of these securities for OTTI also encompassed the review of credit scores and analysis provided by a third party firm specializing in the analysis and credit review of municipal securities. Given the absence of expected credit losses and management's ability and intent to hold the securities until recovery, the impairments were considered to be temporary.
SBA securities:
At December 31, 2016, one SBA security was in an unrealized loss position. The amount of impairment was less than 2% of amortized cost. This security was purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on this security is guaranteed by this U.S. Government agency. Given the limited severity of impairment and the expectation of timely payment of principal and interest, the impairment was considered to be temporary.