XML 96 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
Available-For-Sale And Held-To-Maturity Securities
 12 Months Ended
Dec. 31, 2013
Available-For-Sale And Held-To-Maturity Securities [Abstract]  
Available-For-Sale And Held-To-Maturity Securities

NOTE 8 – Available-for-Sale and Held-to-Maturity Securities

The following tables provide a summary of the amortized cost and fair values of the available-for-sale securities and held-to-maturity securities at December 31, 2013 and 2012 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Amortized cost

 

Gross unrealized gains (1)

 

Gross unrealized losses (1)

 

Estimated fair value

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

$
1,074 

 

$

 -

 

$
(2)

 

$
1,072 

State and municipal securities

 
96,475 

 

 
739 

 

 
(6,537)

 

 
90,677 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

Agency

 
184,533 

 

 
2,859 

 

 
(3,405)

 

 
183,987 

Commercial

 
209,949 

 

 
3,084 

 

 
(1,787)

 

 
211,246 

Non-agency

 
4,547 

 

 
72 

 

 

 -

 

 
4,619 

Corporate fixed income securities

 
496,385 

 

 
4,769 

 

 
(2,838)

 

 
498,316 

Asset-backed securities

 
769,553 

 

 
2,499 

 

 
(5,716)

 

 
766,336 

 

$
1,762,516 

 

$
14,022 

 

$
(20,285)

 

$
1,756,253 

Held-to-maturity securities (2)

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

Agency

$
968,759 

 

$
1,156 

 

$
(7,915)

 

$
962,000 

Commercial

 
59,404 

 

 

 -

 

 
(186)

 

 
59,218 

Asset-backed securities

 
228,623 

 

 
6,157 

 

 
(2,774)

 

 
232,006 

Corporate fixed income securities

 
55,329 

 

 
11 

 

 
(2,605)

 

 
52,735 

Municipal auction rate securities

 

 -

 

 

 -

 

 

 -

 

 

 -

 

$
1,312,115 

 

$
7,324 

 

$
(13,480)

 

$
1,305,959 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

Amortized cost

 

Gross unrealized gains (1)

 

Gross unrealized losses (1)

 

Estimated fair value

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

U.S. government agency securities

$
1,114 

 

$
1 

 

$
(2)

 

$
1,113 

State and municipal securities

 
153,885 

 

 
4,648 

 

 
(1,113)

 

 
157,420 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 -

Agency

 
676,861 

 

 
8,140 

 

 
(153)

 

 
684,848 

Commercial

 
255,255 

 

 
5,902 

 

 
(183)

 

 
260,974 

Non-agency

 
13,077 

 

 
801 

 

 

 -

 

 
13,878 

Corporate fixed income securities

 
474,338 

 

 
7,590 

 

 
(1,746)

 

 
480,182 

Asset-backed securities

 
26,572 

 

 
378 

 

 
(197)

 

 
26,753 

 

$
1,601,102 

 

$
27,460 

 

$
(3,394)

 

$
1,625,168 

Held-to-maturity securities (2)

 

 

 

 

 

 

 

 

 

 

 

Asset-backed securities

$
630,279 

 

$
9,364 

 

$
(2,971)

 

$
636,672 

Corporate fixed income securities

 
55,420 

 

 
36 

 

 
(519)

 

 
54,937 

Municipal auction rate securities

 
22,309 

 

 
1,376 

 

 
(20)

 

 
23,665 

 

$
708,008 

 

$
10,776 

 

$
(3,510)

 

$
715,274 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Unrealized gains/(losses) related to available-for-sale securities are reported in accumulated other comprehensive income.

(2)

Held-to-maturity securities are carried in the consolidated statements of financial condition at amortized cost, and the changes in the value of these securities, other than impairment charges, are not reported on the consolidated financial statements.

 

During the year ended December 31, 2013, we transferred $1.1 billion of mortgage-backed securities from our available-for-sale portfolio to the held-to-maturity category reflecting our company’s intent to hold those securities to maturity. During the year ended December 31, 2013, we transferred $387.5 million from our held-to-maturity portfolio to the available-for-sale category as these CLO investments may become non-compliant under the provisions of the new Volcker Rule, which could require us to sell them before maturity.

For the years ended December 31, 2013, 2012, and 2011, we received proceeds of $197.5 million,  $250.2 million, and $362.1 million, respectively, from the sale of available-for-sale securities, which resulted in realized gains of $2.0 million,  $3.8 million, and $7.9 million, respectively.

During the year ended December 31, 2013, unrealized losses, net of deferred taxes, of $48.5 million was recorded in accumulated other comprehensive income/(loss) in the consolidated statements of financial condition. During the years ended December 31, 2012 and 2011, unrealized gains, net of deferred taxes, of $8.7 million and $2.1 million, respectively, were recorded in accumulated other comprehensive income/(loss) in the consolidated statements of financial condition.

The table below summarizes the amortized cost and fair values of debt securities, by contractual maturity (in thousands). Expected maturities may differ significantly from contractual maturities, as issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Available-for-sale securities

 

Held-to-maturity securities

 

Amortized cost

 

Estimated fair value

 

Amortized cost

 

Estimated fair value

Debt securities

 

 

 

 

 

 

 

 

 

 

 

Within one year

$
160,392 

 

$
161,647 

 

$

 -

 

$

 -

After one year through three years

 
169,499 

 

 
172,158 

 

 
15,050 

 

 
14,779 

After three years through five years

 
123,643 

 

 
123,862 

 

 
40,279 

 

 
37,955 

After five years through ten years

 
407,866 

 

 
406,477 

 

 

 -

 

 

 -

After ten years

 
502,087 

 

 
492,257 

 

 
228,623 

 

 
232,007 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

After one year through three years

 
9,090 

 

 
9,236 

 

 
10 

 

 
10 

After three years through five years

 
2,681 

 

 
2,702 

 

 

 -

 

 

 -

After five years through ten years

 
69,924 

 

 
69,559 

 

 
59,404 

 

 
59,219 

After ten years

 
317,334 

 

 
318,355 

 

 
968,749 

 

 
961,989 

 

$
1,762,516 

 

$
1,756,253 

 

$
1,312,115 

 

$
1,305,959 

 

At December 31, 2013 and 2012, securities of $505.5 million and $613.8 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits.

The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at December 31, 2013 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less than 12 months

 

12 months or more

 

Total

 

Gross unrealized losses

 

Estimated fair value

 

Gross unrealized losses

 

Estimated fair value

 

Gross unrealized losses

 

Estimated fair value

Available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government securities

$
(2)

 

$
721 

 

$

 -

 

$

 -

 

$
(2)

 

$
721 

State and municipal securities

 
(2,966)

 

 
32,272 

 

 
(3,571)

 

 
41,182 

 

 
(6,537)

 

 
73,454 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 
(3,260)

 

 
89,395 

 

 
(145)

 

 
1,335 

 

 
(3,405)

 

 
90,730 

Commercial

 
(1,787)

 

 
46,970 

 

 

 -

 

 

 -

 

 
(1,787)

 

 
46,970 

Corporate fixed income securities

 
(2,062)

 

 
80,700 

 

 
(776)

 

 
39,421 

 

 
(2,838)

 

 

120,121

Asset-backed securities

 
(4,516)

 

 

436,770

 

 
(1,200)

 

 
31,938 

 

 
(5,716)

 

 

468,708

 

$
(14,593)

 

$

686,828

 

$
(5,692)

 

$

113,876

 

$
(20,285)

 

$

800,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 
(91)

 

 
8,217 

 

 
(7,824)

 

 
846,119 

 

 
(7,915)

 

 
854,336 

Commercial

 

 -

 

 

 -

 

 
(186)

 

 
59,804 

 

 
(186)

 

 
59,804 

Asset-backed securities

 

 -

 

 

 -

 

 
(2,774)

 

 
95,580 

 

 
(2,774)

 

 
95,580 

Corporate fixed income securities

 

 -

 

 

 -

 

 
(2,605)

 

 
50,332 

 

 
(2,605)

 

 
50,332 

 

$
(91)

 

$
8,217 

 

$
(13,389)

 

$

1,051,835

 

$
(13,480)

 

$

1,060,052

 

 

The gross unrealized losses on our available-for-sale securities of $20.3 million as of December 31, 2013 relate to 100 individual securities.

Certain investments in the available-for-sale portfolio at December  31, 2013, are reported in the consolidated statements of financial condition at an amount less than their amortized cost. The total fair value of these investments at December  31, 2013, was $800.7 million, which was 45.6% of our available-for-sale investment portfolio. The amortized cost basis of these investments was $821.0 million at December 31, 2013. As discussed in more detail below, we conduct periodic reviews of all securities with unrealized losses to assess whether the impairment is other-than-temporary.

Other-Than-Temporary Impairment

We evaluate all securities in an unrealized loss position quarterly to assess whether the impairment is other-than-temporary. Our other-than-temporary impairment (“OTTI”) assessment is a subjective process requiring the use of judgments and assumptions. There was no credit-related OTTI recognized during the year ended December 31, 2013. Based on the evaluation, we recognized a credit-related OTTI of $0.6 million and $1.9 million in earnings for the years ended December 31, 2012 and 2011, respectively.

We believe the gross unrealized losses related to all other securities of $20.3 million as of December 31, 2013, are attributable to issuer-specific credit spreads and changes in market interest rates and asset spreads. We, therefore, do not expect to incur any credit losses related to these securities. In addition, we have no intent to sell these securities with unrealized losses, and it is not more likely than not that we will be required to sell these securities prior to recovery of the amortized cost. At December 31, 2013, the CLOs in our available-for-sale portfolio had $2.9 million in unrealized losses. No OTTI charge was recorded in 2013 related to these securities. Accordingly, we have concluded that the impairment on these securities is not other-than-temporary.