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Investment Securities
 3 Months Ended
Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
The amortized cost and fair values of investment securities available for sale and held to maturity were as follows.
March 31, 2015:
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair value
 
($ in Thousands)
Investment securities available for sale:
 
 
 
 
 
 
 
U.S. Treasury securities
$
999

 
$
3

 
$
—

 
$
1,002

Obligations of state and political subdivisions (municipal securities)
501,679

 
22,912

 
(4
)
 
524,587

Residential mortgage-related securities:
 
 
 
 
 
 
 
Government-sponsored enterprise (“GSE”)
3,613,144

 
73,227

 
(11,257
)
 
3,675,114

Private-label
1,962

 
1

 
(10
)
 
1,953

GSE commercial mortgage-related securities
1,158,217

 
6,114

 
(15,075
)
 
1,149,256

Other securities (debt and equity)
6,338

 
60

 
—

 
6,398

Total investment securities available for sale
$
5,282,339

 
$
102,317

 
$
(26,346
)
 
$
5,358,310

Investment securities held to maturity:
 
 
 
 
 
 
 
Obligations of state and political subdivisions (municipal securities)
$
438,047

 
$
9,482

 
$
(832
)
 
$
446,697

Total investment securities held to maturity
$
438,047

 
$
9,482

 
$
(832
)
 
$
446,697

December 31, 2014:
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Fair value
 
($ in Thousands)
Investment securities available for sale:
 
 
 
 
 
 
 
U.S. Treasury securities
$
999

 
$
—

 
$
(1
)
 
$
998

Obligations of state and political subdivisions (municipal securities)
560,839

 
21,869

 
(29
)
 
582,679

Residential mortgage-related securities:
 
 
 
 
 
 
 
GSE
3,700,103

 
61,236

 
(30,550
)
 
3,730,789

Private-label
2,297

 
7

 
(10
)
 
2,294

GSE commercial mortgage-related securities
1,097,913

 
1,922

 
(25,942
)
 
1,073,893

Other securities (debt and equity)
6,108

 
51

 
—

 
6,159

Total investment securities available for sale
$
5,368,259

 
$
85,085

 
$
(56,532
)
 
$
5,396,812

Investment securities held to maturity:
 
 
 
 
 
 
 
Obligations of state and political subdivisions (municipal securities)
$
404,455

 
$
9,444

 
$
(832
)
 
$
413,067

Total investment securities held to maturity
$
404,455

 
$
9,444

 
$
(832
)
 
$
413,067


The amortized cost and fair values of investment securities available for sale and held to maturity at March 31, 2015, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Available for Sale
 
Held to Maturity
($ in Thousands)
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Due in one year or less
$
40,879

 
$
41,115

 
$
—

 
$
—

Due after one year through five years
233,433

 
245,483

 
2,253

 
2,291

Due after five years through ten years
234,102

 
244,730

 
122,372

 
124,896

Due after ten years
584

 
609

 
313,422

 
319,510

Total debt securities
508,998

 
531,937

 
438,047

 
446,697

Residential mortgage-related securities:
 
 
 
 
 
 
 
GSE
3,613,144

 
3,675,114

 
—

 
—

Private-label
1,962

 
1,953

 
—

 
—

GSE commercial mortgage-related securities
1,158,217

 
1,149,256

 
—

 
—

Equity securities
18

 
50

 
—

 
—

Total investment securities
$
5,282,339

 
$
5,358,310

 
$
438,047

 
$
446,697

Ratio of Fair Value to Amortized Cost
 
 
101.4
%
 
 
 
102.0
%

The following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2015.
 
Less than 12 months
 
12 months or more
 
Total
March 31, 2015
Number of
Securities
 
Unrealized
Losses
 
Fair
Value
 
Number of
Securities
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
 
 
($ in Thousands)
Investment securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of state and political subdivisions (municipal securities)
2

 
$
(1
)
 
$
629

 
1

 
$
(3
)
 
$
186

 
$
(4
)
 
$
815

Residential mortgage-related securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GSE
22

 
(805
)
 
204,345

 
43

 
(10,452
)
 
1,060,452

 
(11,257
)
 
1,264,797

Private-label
1

 
(9
)
 
1,750

 
2

 
(1
)
 
24

 
(10
)
 
1,774

GSE commercial mortgage-related securities
4

 
(95
)
 
99,052

 
20

 
(14,980
)
 
455,874

 
(15,075
)
 
554,926

Total
 
 
$
(910
)
 
$
305,776

 
 
 
$
(25,436
)
 
$
1,516,536

 
$
(26,346
)
 
$
1,822,312

Investment securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of state and political subdivisions (municipal securities)
163

 
$
(568
)
 
$
73,163

 
21

 
$
(264
)
 
$
9,552

 
$
(832
)
 
$
82,715

Total
 
 
$
(568
)
 
$
73,163

 
 
 
$
(264
)
 
$
9,552

 
$
(832
)
 
$
82,715






For comparative purposes, the following represents gross unrealized losses and the related fair value of investment securities available for sale and held to maturity, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2014.
 
Less than 12 months
 
12 months or more
 
Total
December 31, 2014
Number of
Securities
 
Unrealized
Losses
 
Fair
Value
 
Number of
Securities
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
 
 
($ in Thousands)
Investment securities available for sale:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities
1

 
$
(1
)
 
$
998

 
—

 
$
—

 
$
—

 
$
(1
)
 
$
998

Obligations of state and political subdivisions (municipal securities)
6

 
(9
)
 
3,374

 
6

 
(20
)
 
2,133

 
(29
)
 
5,507

Residential mortgage-related securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GSE
16

 
(1,404
)
 
333,713

 
56

 
(29,146
)
 
1,256,533

 
(30,550
)
 
1,590,246

Private-label
1

 
(9
)
 
1,772

 
2

 
(1
)
 
27

 
(10
)
 
1,799

GSE commercial mortgage-related securities
9

 
(1,766
)
 
329,982

 
20

 
(24,176
)
 
460,425

 
(25,942
)
 
790,407

Total
 
 
$
(3,189
)
 
$
669,839

 
 
 
$
(53,343
)
 
$
1,719,118

 
$
(56,532
)
 
$
2,388,957

Investment securities held to maturity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of state and political subdivisions (municipal securities)
74

 
$
(216
)
 
$
31,924

 
85

 
$
(616
)
 
$
38,915

 
$
(832
)
 
$
70,839

Total
 
 
$
(216
)
 
$
31,924

 
 
 
$
(616
)
 
$
38,915

 
$
(832
)
 
$
70,839


The Corporation reviews the investment securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the Corporation may consider in the other-than-temporary impairment analysis include, the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions. In addition, with regards to its debt securities, the Corporation may also evaluate payment structure, whether there are defaulted payments or expected defaults, prepayment speeds, and the value of any underlying collateral.
Based on the Corporation’s evaluation, management does not believe any unrealized loss at March 31, 2015 represents an other-than-temporary impairment as these unrealized losses are primarily attributable to changes in interest rates and the current market conditions, and not credit deterioration. The unrealized losses reported for residential mortgage-related securities relate to private-label residential mortgage-related securities as well as residential mortgage-related securities issued by government-sponsored enterprises such as the Government National Mortgage Association (“GNMA”), the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). The unrealized losses reported for commercial mortgage-related securities relate to securities issued by GNMA. The unrealized losses reported for municipal securities relate to various state and local political subdivisions and school districts. The Corporation currently does not intend to sell nor does it believe that it will be required to sell the securities contained in the above unrealized losses table before recovery of their amortized cost basis. The improvement in the unrealized loss position of the investment securities portfolio was due to a reduction in the overall level of interest rates from December 31, 2014 to March 31, 2015. Since December 31, 2014, the three-year and ten-year U.S. Treasury note rates declined approximately 20 basis points ("bp") and 25 bp, respectively.
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank Stocks: The Corporation is required to maintain Federal Reserve stock and FHLB stock as a member of both the Federal Reserve System and the FHLB, and in amounts as required by these institutions. These equity securities are “restricted” in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value is equal to amortized cost. The Corporation had FHLB stock of $118 million at both March 31, 2015 and December 31, 2014 and Federal Reserve Bank stock of $71 million at both March 31, 2015 and December 31, 2014.