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Investment Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities
Investment securities include investment securities available for sale, marketable equity securities, and investment securities held to maturity. The investment securities portfolio consisted of the following at the dates indicated (in thousands):
 
June 30, 2019
 
Amortized Cost
 
Gross Unrealized
 
Carrying Value (1)
 
 
Gains
 
Losses
 
Investment securities available for sale:
 
 
 
 
 
 
 
U.S. Treasury securities
$
49,992

 
$
221

 
$
—

 
$
50,213

U.S. Government agency and sponsored enterprise residential MBS
2,222,327

 
14,446

 
(8,978
)
 
2,227,795

U.S. Government agency and sponsored enterprise commercial MBS
378,167

 
4,057

 
(1,120
)
 
381,104

Private label residential MBS and CMOs
1,374,008

 
22,256

 
(1,082
)
 
1,395,182

Private label commercial MBS
1,549,733

 
8,462

 
(242
)
 
1,557,953

Single family rental real estate-backed securities
387,104

 
5,392

 
(190
)
 
392,306

Collateralized loan obligations
1,205,295

 
766

 
(7,779
)
 
1,198,282

Non-mortgage asset-backed securities
155,542

 
2,321

 
(46
)
 
157,817

State and municipal obligations
265,856

 
13,471

 
—

 
279,327

SBA securities
418,494

 
5,631

 
(2,352
)
 
421,773

Other debt securities
1,395

 
3,386

 
—

 
4,781

 
8,007,913

 
$
80,409

 
$
(21,789
)
 
8,066,533

Investment securities held to maturity
10,000

 
 
 
 
 
10,000

 
$
8,017,913

 
 
 
 
 
8,076,533

Marketable equity securities
 
 
 
 
 
 
62,175

 
 
 
 
 
 
 
$
8,138,708

 
December 31, 2018
 
Amortized Cost
 
Gross Unrealized
 
Carrying Value (1)
 
 
Gains
 
Losses
 
Investment securities available for sale:
 
 
 
 
 
 
 
U.S. Treasury securities
$
39,885

 
$
2

 
$
(14
)
 
$
39,873

U.S. Government agency and sponsored enterprise residential MBS
1,885,302

 
16,580

 
(4,408
)
 
1,897,474

U.S. Government agency and sponsored enterprise commercial MBS
374,569

 
1,293

 
(1,075
)
 
374,787

Private label residential MBS and CMOs
1,539,058

 
10,138

 
(14,998
)
 
1,534,198

Private label commercial MBS
1,486,835

 
5,021

 
(6,140
)
 
1,485,716

Single family rental real estate-backed securities
406,310

 
266

 
(4,118
)
 
402,458

Collateralized loan obligations
1,239,355

 
1,060

 
(5,217
)
 
1,235,198

Non-mortgage asset-backed securities
204,372

 
1,031

 
(1,336
)
 
204,067

State and municipal obligations
398,810

 
3,684

 
(4,065
)
 
398,429

SBA securities
514,765

 
6,502

 
(1,954
)
 
519,313

Other debt securities
1,393

 
3,453

 
—

 
4,846

 
8,090,654

 
$
49,030

 
$
(43,325
)
 
8,096,359

Investment securities held to maturity
10,000

 


 


 
10,000

 
$
8,100,654

 
 
 
 
 
8,106,359

Marketable equity securities


 
 
 
 
 
60,519

 
 
 


 


 
$
8,166,878

 
 
(1)
At fair value except for securities held to maturity.
Investment securities held to maturity at June 30, 2019 and December 31, 2018 consisted of one State of Israel bond maturing in 2024.
At June 30, 2019, contractual maturities of investment securities available for sale, adjusted for anticipated prepayments when applicable, were as follows (in thousands):
 
Amortized Cost
 
Fair Value
Due in one year or less
$
767,598

 
$
775,378

Due after one year through five years
4,350,779

 
4,371,075

Due after five years through ten years
2,457,216

 
2,480,114

Due after ten years
432,320

 
439,966

 
$
8,007,913

 
$
8,066,533

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 $2.2 billion and $2.1 billion at June 30, 2019 and December 31, 2018, respectively.
The following table provides information about gains and losses on investment securities for the periods indicated (in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Proceeds from sale of investment securities available for sale
$
850,527


$
569,387

 
$
1,626,250

 
$
836,317

 
 
 
 
 
 
 
 
Gross realized gains:
 
 


 
 
 
 
Investment securities available for sale
$
4,631

 
$
2,554

 
$
8,956

 
$
6,041

Gross realized losses:
 
 


 
 
 
 
Investment securities available for sale
(716
)
 
(4
)
 
(724
)
 
(2,514
)
Net realized gain
3,915

 
2,550

 
8,232

 
3,527

 
 
 
 
 
 
 
 
Net unrealized gains (losses) on marketable equity securities recognized in earnings
201

 
(408
)
 
1,669

 
(1,021
)
 
 
 
 
 
 
 
 
Gain on investment securities, net
$
4,116

 
$
2,142

 
$
9,901

 
$
2,506


The following tables present the aggregate fair value and the aggregate amount by which amortized cost exceeded fair value for investment securities available for sale in unrealized loss positions, aggregated by investment category and length of time that individual securities had been in continuous unrealized loss positions at the dates indicated (in thousands):
 
June 30, 2019
 
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
$
919,284

 
$
(6,994
)
 
$
140,310

 
$
(1,984
)
 
$
1,059,594

 
$
(8,978
)
U.S. Government agency and sponsored enterprise commercial MBS
99,590

 
(1,083
)
 
6,477

 
(37
)
 
106,067

 
(1,120
)
Private label residential MBS and CMOs
121,628

 
(180
)
 
204,205

 
(902
)
 
325,833

 
(1,082
)
Private label commercial MBS
100,262

 
(220
)
 
14,780

 
(22
)
 
115,042

 
(242
)
Single family rental real estate-backed securities
142,824

 
(148
)
 
22,946

 
(42
)
 
165,770

 
(190
)
Collateralized loan obligations
623,797

 
(5,981
)
 
80,202

 
(1,798
)
 
703,999

 
(7,779
)
Non-mortgage asset-backed securities
39,505

 
(46
)
 
—

 
—

 
39,505

 
(46
)
SBA securities
62,857

 
(1,050
)
 
101,227

 
(1,302
)
 
164,084

 
(2,352
)
 
$
2,109,747

 
$
(15,702
)
 
$
570,147

 
$
(6,087
)
 
$
2,679,894

 
$
(21,789
)
 
December 31, 2018
 
Less than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
U.S. Treasury securities
$
14,921

 
$
(14
)
 
$
—

 
$
—

 
$
14,921

 
$
(14
)
U.S. Government agency and sponsored enterprise residential MBS
450,666

 
(1,828
)
 
87,311

 
(2,580
)
 
537,977

 
(4,408
)
U.S. Government agency and sponsored enterprise commercial MBS
146,096

 
(352
)
 
25,815

 
(723
)
 
171,911

 
(1,075
)
Private label residential MBS and CMOs
759,921

 
(7,073
)
 
278,108

 
(7,925
)
 
1,038,029

 
(14,998
)
Private label commercial MBS
742,092

 
(5,371
)
 
39,531

 
(769
)
 
781,623

 
(6,140
)
Single family rental real estate-backed securities
234,305

 
(1,973
)
 
85,282

 
(2,145
)
 
319,587

 
(4,118
)
Collateralized loan obligations
749,047

 
(5,217
)
 
—

 
—

 
749,047

 
(5,217
)
Non-mortgage asset-backed securities
136,100

 
(1,336
)
 
—

 
—

 
136,100

 
(1,336
)
State and municipal obligations
208,971

 
(3,522
)
 
46,247

 
(543
)
 
255,218

 
(4,065
)
SBA securities
215,975

 
(1,391
)
 
31,481

 
(563
)
 
247,456

 
(1,954
)
 
$
3,658,094

 
$
(28,077
)
 
$
593,775

 
$
(15,248
)
 
$
4,251,869

 
$
(43,325
)
The Company monitors its investment securities available for sale for OTTI on an individual security basis. No securities were determined to be other-than-temporarily impaired during the six months ended June 30, 2019 or 2018. The Company does not intend to sell securities that are in significant unrealized loss positions at June 30, 2019 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 June 30, 2019, 126 securities were in unrealized loss positions. The amount of impairment related to 48 of these securities was considered insignificant both individually and in the aggregate, totaling approximately $422 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 and commercial MBS
At June 30, 2019, thirty-six U.S. Government agency and sponsored enterprise residential MBS and four U.S. Government agency and sponsored enterprise commercial MBS were in unrealized loss positions. Impairment of these securities was primarily attributable to increases in market interest rates subsequent to the date of acquisition and for certain securities, widening spreads. 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 June 30, 2019, eight private label residential MBS and CMOs were in unrealized loss positions, primarily as a result of an increase in medium and long-term market interest rates subsequent to acquisition. 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 June 30, 2019. Given the expectation of timely recovery of outstanding principal the impairments were considered to be temporary.
Private label commercial MBS
At June 30, 2019, three private label commercial MBS were in unrealized loss positions, primarily as a result of an increase in market interest rates since acquisition. 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 expectation of timely recovery of outstanding principal the impairments were considered to be temporary.
Single family rental real estate-backed securities
At June 30, 2019, two single family rental real estate-backed securities were in unrealized loss positions. The unrealized losses were primarily due to increases in market interest rates since the purchase of the securities. 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 absence of projected credit losses the impairments were considered to be temporary.
Collateralized loan obligations:
At June 30, 2019, sixteen collateralized loan obligations were in unrealized loss positions, primarily due to widening credit spreads for this asset class. 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 expectation of timely recovery of outstanding principal, the impairments were considered to be temporary.
Non-mortgage asset-backed securities
At June 30, 2019, one non-mortgage asset-backed security was in an unrealized loss position, due primarily to increases in market interest rates subsequent to the date of acquisition. This security was assessed for OTTI using a credit and prepayment behavioral model incorporating assumptions consistent with the collateral characteristics of the security. The results of this analysis were not indicative of expected credit losses. Given the expectation of timely recovery of outstanding principal, the impairment was considered to be temporary.
SBA Securities
At June 30, 2019, eight SBA securities were in unrealized loss positions. These securities were purchased at a premium and the impairment was attributable primarily to increased prepayment speeds. The timely payment of principal and interest on these securities is guaranteed by this U.S. Government agency. Given the expectation of timely payment of principal and interest, the impairments were considered to be temporary.