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Investment securities
 9 Months Ended
Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]  
Investment securities

2. Investment securities

On January 1, 2018, the Company adopted amended guidance requiring equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in the consolidated statement of income. This amended guidance excludes equity method investments, investments in consolidated subsidiaries, exchange membership ownership interests, and Federal Home Loan Bank of New York and Federal Reserve Bank of New York capital stock. Upon adoption the Company reclassified $17 million, after-tax effect, from accumulated other comprehensive income to retained earnings, representing the difference between fair value and the cost basis of equity investments with readily determinable fair values at January 1, 2018.

The amortized cost and estimated fair value of investment securities were as follows:

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

 

(In thousands)

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

359,723

 

 

$

66

 

 

$

395

 

 

$

359,394

 

Obligations of states and political subdivisions

 

 

933

 

 

 

4

 

 

 

3

 

 

 

934

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

6,435,730

 

 

 

88,522

 

 

 

29,352

 

 

 

6,494,900

 

Privately issued

 

 

16

 

 

 

—

 

 

 

—

 

 

 

16

 

Other debt securities

 

 

138,307

 

 

 

1,373

 

 

 

9,507

 

 

 

130,173

 

 

 

 

6,934,709

 

 

 

89,965

 

 

 

39,257

 

 

 

6,985,417

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

498,776

 

 

 

956

 

 

 

—

 

 

 

499,732

 

Obligations of states and political subdivisions

 

 

4,775

 

 

 

21

 

 

 

—

 

 

 

4,796

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

2,424,716

 

 

 

53,076

 

 

 

1,879

 

 

 

2,475,913

 

Privately issued

 

 

99,679

 

 

 

11,791

 

 

 

19,960

 

 

 

91,510

 

Other debt securities

 

 

3,353

 

 

 

—

 

 

 

—

 

 

 

3,353

 

 

 

 

3,031,299

 

 

 

65,844

 

 

 

21,839

 

 

 

3,075,304

 

Total debt securities

 

$

9,966,008

 

 

$

155,809

 

 

$

61,096

 

 

$

10,060,721

 

Equity and other securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable equity — at fair value

 

$

109,131

 

 

$

41,152

 

 

$

179

 

 

$

150,104

 

Other — at cost

 

 

510,763

 

 

 

—

 

 

 

—

 

 

 

510,763

 

Total equity and other securities

 

$

619,894

 

 

$

41,152

 

 

$

179

 

 

$

660,867

 

 

 

 2. Investment securities, continued

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gains

 

 

Gross

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

 

(In thousands)

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

1,346,782

 

 

$

—

 

 

$

9,851

 

 

$

1,336,931

 

Obligations of states and political subdivisions

 

 

1,660

 

 

 

4

 

 

 

5

 

 

 

1,659

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

7,383,340

 

 

 

15,754

 

 

 

182,103

 

 

 

7,216,991

 

Privately issued

 

 

24

 

 

 

—

 

 

 

2

 

 

 

22

 

Other debt securities

 

 

137,617

 

 

 

770

 

 

 

11,481

 

 

 

126,906

 

 

 

 

8,869,423

 

 

 

16,528

 

 

 

203,442

 

 

 

8,682,509

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

446,542

 

 

 

—

 

 

 

239

 

 

 

446,303

 

Obligations of states and political subdivisions

 

 

7,494

 

 

 

22

 

 

 

12

 

 

 

7,504

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

2,745,776

 

 

 

4,165

 

 

 

55,111

 

 

 

2,694,830

 

Privately issued

 

 

113,160

 

 

 

12,345

 

 

 

22,327

 

 

 

103,178

 

Other debt securities

 

 

3,668

 

 

 

—

 

 

 

—

 

 

 

3,668

 

 

 

 

3,316,640

 

 

 

16,532

 

 

 

77,689

 

 

 

3,255,483

 

Total debt securities

 

$

12,186,063

 

 

$

33,060

 

 

$

281,131

 

 

$

11,937,992

 

Equity and other securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable equity — at fair value

 

$

77,440

 

 

$

17,295

 

 

$

818

 

 

$

93,917

 

Other — at cost

 

 

599,747

 

 

 

—

 

 

 

—

 

 

 

599,747

 

Total equity and other securities

 

$

677,187

 

 

$

17,295

 

 

$

818

 

 

$

693,664

 

 

There were no significant gross realized gains or losses from sales of investment securities for the three-month and nine-month periods ended September 30, 2019 and 2018. Net unrealized gains recorded as gain (loss) on bank investment securities in the consolidated statement of income during the three months and nine months ended September 30, 2019 were $4 million and $24 million, respectively, compared with net unrealized losses of $3 million and $11 million during the three months and nine months ended September 30, 2018, respectively.

 2. Investment securities, continued

At September 30, 2019, the amortized cost and estimated fair value of debt securities by contractual maturity were as follows:

 

 

 

Amortized

Cost

 

 

Estimated

Fair Value

 

 

 

(In thousands)

 

Debt securities available for sale:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

355,210

 

 

 

354,825

 

Due after one year through five years

 

 

11,470

 

 

 

11,585

 

Due after five years through ten years

 

 

102,283

 

 

 

100,091

 

Due after ten years

 

 

30,000

 

 

 

24,000

 

 

 

 

498,963

 

 

 

490,501

 

Mortgage-backed securities available for sale

 

 

6,435,746

 

 

 

6,494,916

 

 

 

$

6,934,709

 

 

 

6,985,417

 

Debt securities held to maturity:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

500,476

 

 

 

501,438

 

Due after one year through five years

 

 

3,075

 

 

 

3,090

 

Due after ten years

 

 

3,353

 

 

 

3,353

 

 

 

 

506,904

 

 

 

507,881

 

Mortgage-backed securities held to maturity

 

 

2,524,395

 

 

 

2,567,423

 

 

 

$

3,031,299

 

 

 

3,075,304

 

 2. Investment securities, continued

A summary of investment securities that as of September 30, 2019 and December 31, 2018 had been in a continuous unrealized loss position for less than twelve months and those that had been in a continuous unrealized loss position for twelve months or longer follows:

 

 

 

Less Than 12 Months

 

 

12 Months or More

 

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

Fair

Value

 

 

Unrealized

Losses

 

 

 

(In thousands)

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

—

 

 

 

—

 

 

 

352,482

 

 

 

(395

)

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

375

 

 

 

(3

)

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

240,208

 

 

 

(589

)

 

 

2,107,684

 

 

 

(28,763

)

Other debt securities

 

 

20,290

 

 

 

(563

)

 

 

77,140

 

 

 

(8,944

)

 

 

 

260,498

 

 

 

(1,152

)

 

 

2,537,681

 

 

 

(38,105

)

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

—

 

 

 

—

 

 

 

165,983

 

 

 

(1,879

)

Privately issued

 

 

—

 

 

 

—

 

 

 

49,824

 

 

 

(19,960

)

 

 

 

—

 

 

 

—

 

 

 

215,807

 

 

 

(21,839

)

Total

 

$

260,498

 

 

 

(1,152

)

 

 

2,753,488

 

 

 

(59,944

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

273

 

 

 

(2

)

 

 

1,335,559

 

 

 

(9,849

)

Obligations of states and political subdivisions

 

 

629

 

 

 

(5

)

 

 

—

 

 

 

—

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

405,558

 

 

 

(2,892

)

 

 

5,646,773

 

 

 

(179,211

)

Privately issued

 

 

22

 

 

 

(2

)

 

 

—

 

 

 

—

 

Other debt securities

 

 

53,478

 

 

 

(2,187

)

 

 

66,014

 

 

 

(9,294

)

 

 

 

459,960

 

 

 

(5,088

)

 

 

7,048,346

 

 

 

(198,354

)

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

446,303

 

 

 

(239

)

 

 

—

 

 

 

—

 

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

3,126

 

 

 

(12

)

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

179,354

 

 

 

(989

)

 

 

2,082,723

 

 

 

(54,122

)

Privately issued

 

 

—

 

 

 

—

 

 

 

51,943

 

 

 

(22,327

)

 

 

 

625,657

 

 

 

(1,228

)

 

 

2,137,792

 

 

 

(76,461

)

Total

 

$

1,085,617

 

 

 

(6,316

)

 

 

9,186,138

 

 

 

(274,815

)

 

The Company owned 657 individual debt securities with aggregate gross unrealized losses of $61 million at September 30, 2019. Based on a review of each of the securities in the investment securities portfolio at September 30, 2019, the Company concluded that it expected to recover the amortized cost basis of its investment.  As of September 30, 2019, the Company does not intend to sell nor is it anticipated that it would be required to sell any of its impaired investment securities at a loss.  At September 30, 2019, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $511 million of cost method equity securities.