XML 148 R10.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Investment securities
 12 Months Ended
Dec. 31, 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)

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

9,742

 

 

$

41

 

 

$

16

 

 

$

9,767

 

Obligations of states and political subdivisions

 

 

776

 

 

 

2

 

 

 

3

 

 

 

775

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

6,113,913

 

 

 

88,634

 

 

 

21,607

 

 

 

6,180,940

 

Privately issued

 

 

16

 

 

 

—

 

 

 

—

 

 

 

16

 

Other debt securities

 

 

133,829

 

 

 

2,046

 

 

 

8,597

 

 

 

127,278

 

 

 

 

6,258,276

 

 

 

90,723

 

 

 

30,223

 

 

 

6,318,776

 

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

 

249,862

 

 

 

286

 

 

 

—

 

 

 

250,148

 

Obligations of states and political subdivisions

 

 

4,140

 

 

 

16

 

 

 

—

 

 

 

4,156

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

2,306,180

 

 

 

50,381

 

 

 

1,992

 

 

 

2,354,569

 

Privately issued

 

 

93,496

 

 

 

11,779

 

 

 

18,181

 

 

 

87,094

 

Other debt securities

 

 

3,239

 

 

 

—

 

 

 

—

 

 

 

3,239

 

 

 

 

2,656,917

 

 

 

62,462

 

 

 

20,173

 

 

 

2,699,206

 

Total debt securities

 

$

8,915,193

 

 

$

153,185

 

 

$

50,396

 

 

$

9,017,982

 

Equity and other securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Readily marketable equity — at fair value

 

$

105,524

 

 

$

34,786

 

 

$

269

 

 

$

140,041

 

Other — at cost

 

 

381,517

 

 

 

—

 

 

 

—

 

 

 

381,517

 

Total equity and other securities

 

$

487,041

 

 

$

34,786

 

 

$

269

 

 

$

521,558

 

 

 

 

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

 

 

No investment in securities of a single non-U.S. Government, government agency or government guaranteed issuer exceeded ten percent of shareholders’ equity at December 31, 2019.  

As of December 31, 2019, the latest available investment ratings of all obligations of states and political subdivisions, privately issued mortgage-backed securities and other debt securities were:

 

 

 

 

 

 

 

 

 

 

 

Average Credit Rating of Fair Value Amount

 

 

 

Amortized

Cost

 

 

Estimated

Fair Value

 

 

A or

Better

 

 

BBB

 

 

BB

 

 

B or Less

 

 

Not

Rated

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Obligations of states and political

   subdivisions

 

$

4,916

 

 

$

4,931

 

 

$

4,809

 

 

$

122

 

 

$

—

 

 

$

—

 

 

$

—

 

Privately issued mortgage-backed

   securities

 

 

93,512

 

 

 

87,110

 

 

 

8,015

 

 

 

8,768

 

 

 

—

 

 

 

20,671

 

 

 

49,656

 

Other debt securities

 

 

137,068

 

 

 

130,517

 

 

 

4,740

 

 

 

74,770

 

 

 

19,106

 

 

 

—

 

 

 

31,901

 

Total

 

$

235,496

 

 

$

222,558

 

 

$

17,564

 

 

$

83,660

 

 

$

19,106

 

 

$

20,671

 

 

$

81,557

 

The amortized cost and estimated fair value of collateralized mortgage obligations included in mortgage-backed securities were as follows:

 

 

 

December 31

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Collateralized mortgage obligations:

 

 

 

 

 

 

 

 

Amortized cost

 

$

94,817

 

 

$

115,171

 

Estimated fair value

 

 

88,410

 

 

 

105,155

 

Gross realized gains on investment securities were $23 million in 2017.  During 2017, the Company sold a portion of its Fannie Mae and Freddie Mac preferred stock holdings held in the available-for-sale investment securities portfolio for a gain of $18 million.  There were no significant gross realized gains or losses from sales of investment securities in 2019 or 2018. There were no significant gross realized losses from sales of investment securities in 2017.

At December 31, 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

 

$

4,418

 

 

 

4,427

 

Due after one year through five years

 

 

10,717

 

 

 

10,777

 

Due after five years through ten years

 

 

99,212

 

 

 

98,616

 

Due after ten years

 

 

30,000

 

 

 

24,000

 

 

 

 

144,347

 

 

 

137,820

 

Mortgage-backed securities available for sale

 

 

6,113,929

 

 

 

6,180,956

 

 

 

$

6,258,276

 

 

 

6,318,776

 

Debt securities held to maturity:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

251,457

 

 

 

251,749

 

Due after one year through five years

 

 

2,545

 

 

 

2,555

 

Due after ten years

 

 

3,239

 

 

 

3,239

 

 

 

 

257,241

 

 

 

257,543

 

Mortgage-backed securities held to maturity

 

 

2,399,676

 

 

 

2,441,663

 

 

 

$

2,656,917

 

 

 

2,699,206

 

 

 

A summary of investment securities that as of December 31, 2019 and 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)

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and federal agencies

 

$

1,406

 

 

 

(7

)

 

 

2,893

 

 

 

(9

)

Obligations of states and political subdivisions

 

 

—

 

 

 

—

 

 

 

277

 

 

 

(3

)

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

117,299

 

 

 

(222

)

 

 

2,002,364

 

 

 

(21,385

)

Other debt securities

 

 

6,600

 

 

 

(354

)

 

 

56,313

 

 

 

(8,243

)

 

 

 

125,305

 

 

 

(583

)

 

 

2,061,847

 

 

 

(29,640

)

Investment securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government issued or guaranteed

 

 

2,727

 

 

 

(5

)

 

 

145,235

 

 

 

(1,987

)

Privately issued

 

 

—

 

 

 

—

 

 

 

49,656

 

 

 

(18,181

)

 

 

 

2,727

 

 

 

(5

)

 

 

194,891

 

 

 

(20,168

)

Total

 

$

128,032

 

 

 

(588

)

 

 

2,256,738

 

 

 

(49,808

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 641 individual investment securities with aggregate gross unrealized losses of $50 million at December 31, 2019. Based on a review of each of the securities in the investment securities portfolio at December 31, 2019, the Company concluded that it expected to recover the amortized cost basis of its investment. As of December 31, 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 December 31, 2019, the Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of the $382 million of cost method investment securities.

At December 31, 2019, investment securities with a carrying value of $1.9 billion, including $1.5 billion of investment securities available for sale, were pledged to secure borrowings from various FHLBs, repurchase agreements, governmental deposits, interest rate swap agreements and available lines of credit as described in note 8.

Investment securities pledged by the Company to secure obligations whereby the secured party is permitted by contract or custom to sell or repledge such collateral totaled $200 million at December 31, 2019. The pledged securities included securities of the U.S. Treasury and federal agencies and mortgage-backed securities.