Available-For-Sale And Held-To-Maturity Securities |
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Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-For-Sale And Held-To-Maturity Securities |
NOTE 7 – 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, 2020 and 2019 (in thousands):
Effective January 1, 2020, we adopted the new accounting standard for credit losses that requires evaluation of available-for-sale and held-to-maturity debt securities for any expected losses with recognition of an allowance for credit losses, when applicable. For more information, see Note 2 – Summary of Significant Accounting Policies. At December 31, 2020, we did not have an allowance for credit losses recorded on our investment portfolio. Accrued interest receivable for our investment portfolio at December 31, 2020, was $26.0 million and is reported in other assets in the consolidated statements of financial condition. We do not include reserves for interest receivable in the measurement of the allowance for credit losses. For the year ended December 31, 2020, we received proceeds of $491.9 million from the sale of available-for-sale securities, which resulted in a realized loss of $0.5 million. For the year ended December 31, 2019, we received proceeds of $641.8 million from the sale of available-for-sale securities, which resulted in a realized loss of $0.3 million. For the year ended December 31, 2018, we received proceeds of $372.4 million from the sale of available-for-sale securities, which resulted in a realized loss of $3.9 million. During the year ended December 31, 2020, the Company transferred $1.0 billion of certain asset-backed securities from the available-for-sale category to held-to-maturity. Management determined that it has both the positive intent and ability to hold these securities to maturity. The reclassification of these securities was accounted for at fair value. There were no gains or losses recognized as a result of these transfers. During the year ended December 31, 2019, the Company transferred certain asset-backed securities from the held-to-maturity category to available-for sale. At the date of transfer, the securities reclassified had a fair value of $1.1 billion and resulted in a net of tax increase to other comprehensive income of $17.9 million. During the years ended December 31, 2020 and 2019, unrealized gains, net of deferred taxes, of $33.1 million and $42.4 million, respectively, were recorded in accumulated other comprehensive income/(loss) in the consolidated statements of financial condition. During the year ended December 31, 2018, unrealized losses, net of deferred taxes, of $36.3 million 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 our 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.
The maturities of our available-for-sale (fair value) and held-to-maturity (amortized cost) securities at December 31, 2020, are as follows (in thousands):
At December 31, 2020 and 2019, securities of $368.4 million and $801.5 million, respectively, were pledged at the Federal Home Loan Bank as collateral for borrowings and letters of credit obtained to secure public deposits. At December 31, 2020 and 2019, securities of $1.4 billion and $816.1 million, respectively, were pledged with the Federal Reserve discount window. 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, 2020 (in thousands):
At December 31, 2020, the amortized cost of 40 securities classified as available for sale exceeded their fair value by $5.6 million, of which $3.4 million related to investment securities that had been in a loss position for 12 months or longer. The total fair value of these investments at December 31, 2020, was $524.1 million, which was 23.5% of our available-for-sale portfolio. Credit Quality Indicators The Company uses Moody credit ratings as the credit quality indicator for its held-to-maturity debt securities. Each security is evaluated at least quarterly. The indicators represent the rating for debt securities, as of the date presented, based on the most recent assessment performed. The following table shows the amortized cost of our held-to-maturity securities by credit quality indicator at December 31, 2020 (in thousands):
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