XML 34 R23.htm IDEA: XBRL DOCUMENT v3.19.1
Investments (Tables)
 3 Months Ended
Mar. 31, 2019
Investments [Abstract]  
Aggregate Values And Unrealized Gains And Losses Of Investment Securities
The amortized cost and fair value of investment securities at March 31, 2019 and December 31, 2018, were as follows:
 
March 31, 2019
(Dollars in thousands)
Cost
 
Gross
unrealized
gains
 
Gross unrealized
losses
 
Fair
value
Investment securities available for sale
 
 
 
 
 
 
 
U.S. Treasury
$
1,196,584

 
$
1,305

 
$
847

 
$
1,197,042

Government agency
351,284

 
330

 
1,087

 
350,527

Mortgage-backed securities
2,917,000

 
7,373

 
28,429

 
2,895,944

Corporate bonds
142,939

 
183

 
960

 
142,162

Other
3,929

 
196

 
—

 
4,125

Total investment securities available for sale
4,611,736

 
9,387

 
31,323

 
4,589,800

Investment in marketable equity securities
79,809

 
30,252

 
177

 
109,884

Investment securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities
2,214,829

 
40,545

 
450

 
2,254,924

Total investment securities
$
6,906,374

 
$
80,184

 
$
31,950

 
$
6,954,608

 
 
 
 
 
 
 
 
 
December 31, 2018
(Dollars in thousands)
Cost
 
Gross
unrealized
gains
 
Gross unrealized
losses
 
Fair
value
Investment securities available for sale
 
 
 
 
 
 
 
U.S. Treasury
$
1,249,243

 
$
633

 
$
2,166

 
$
1,247,710

Government agency
257,252

 
222

 
639

 
256,835

Mortgage-backed securities
2,956,793

 
5,309

 
52,763

 
2,909,339

Corporate bonds
139,906

 
59

 
864

 
139,101

Other
3,923

 
202

 
—

 
4,125

Total investment securities available for sale
4,607,117

 
6,425

 
56,432

 
4,557,110

Investment in marketable equity securities
73,809

 
19,010

 
220

 
92,599

Investment securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities
2,184,653

 
17,339

 
490

 
2,201,502

Total investment securities
$
6,865,579

 
$
42,774

 
$
57,142

 
$
6,851,211
Investment Securities Maturity Information
The following table provides the amortized cost and fair value by contractual maturity for investment securities available for sale and held to maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances, while repayments of certain corporate bonds are subject to call provisions that can be exercised by the issuer at their discretion.
 
March 31, 2019
 
December 31, 2018
(Dollars in thousands)
Cost
 
Fair value
 
Cost
 
Fair value
Investment securities available for sale
 
 
 
 
 
 
 
Non-amortizing securities maturing in:
 
 
 
 
 
 
 
One year or less
$
1,046,796

 
$
1,046,362

 
$
1,049,253

 
$
1,047,380

One through five years
155,297

 
155,680

 
205,526

 
205,805

Five through 10 years
137,430

 
137,162

 
134,370

 
133,626

Over 10 years
3,929

 
4,125

 
3,923

 
4,125

Government agency
351,284

 
350,527

 
257,252

 
256,835

Mortgage-backed securities
2,917,000

 
2,895,944

 
2,956,793

 
2,909,339

Total investment securities available for sale
$
4,611,736

 
$
4,589,800

 
$
4,607,117

 
$
4,557,110

Investment securities held to maturity
 
 
 
 
 
 
 
Total investment securities held to maturity
$
2,214,829

 
$
2,254,924

 
$
2,184,653

 
$
2,201,502
Marketable Securities Gains (Losses)
The following table provides the realized and unrealized gains on marketable equity securities for the three months ended March 31, 2019.
 
Three months ended March 31
(Dollars in thousands)
2019
 
2018
Marketable equity securities gains, net
$
11,328

 
$
971

Less net gains recognized on marketable equity securities sold
44

 
96

Unrealized gains recognized on marketable equity securities held
$
11,284

 
$
875
Investment Securities With Unrealized Losses
The following table provides information regarding securities with unrealized losses as of March 31, 2019 and December 31, 2018.
 
March 31, 2019
 
Less than 12 months
 
12 months or more
 
Total
(Dollars in thousands)
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Investment securities available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
—

 
$
—

 
$
599,883

 
$
847

 
$
599,883

 
$
847

Government agency
219,395

 
901

 
12,590

 
186

 
231,985

 
1,087

Mortgage-backed securities
114,863

 
314

 
1,956,003

 
28,115

 
2,070,866

 
28,429

Corporate bonds
56,393

 
891

 
9,950

 
69

 
66,343

 
960

Total
$
390,651

 
$
2,106

 
$
2,578,426

 
$
29,217

 
$
2,969,077

 
$
31,323

Investment securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
40,142

 
$
291

 
$
9,988

 
$
159

 
$
50,130

 
$
450

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
Less than 12 months
 
12 months or more
 
Total
(Dollars in thousands)
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Investment securities available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
248,983

 
$
113

 
$
848,622

 
$
2,053

 
$
1,097,605

 
$
2,166

Government agency
115,273

 
601

 
2,310

 
38

 
117,583

 
639

Mortgage-backed securities
262,204

 
2,387

 
1,940,695

 
50,376

 
2,202,899

 
52,763

Corporate bonds
79,066

 
842

 
5,000

 
22

 
84,066

 
864

Total
$
705,526

 
$
3,943

 
$
2,796,627

 
$
52,489

 
$
3,502,153

 
$
56,432

Investment securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
5,111

 
$
181

 
$
10,131

 
$
309

 
$
15,242

 
$
490
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
INVESTMENTS
The amortized cost and fair value of investment securities at March 31, 2019 and December 31, 2018, were as follows:
 
March 31, 2019
(Dollars in thousands)
Cost
 
Gross
unrealized
gains
 
Gross unrealized
losses
 
Fair
value
Investment securities available for sale
 
 
 
 
 
 
 
U.S. Treasury
$
1,196,584

 
$
1,305

 
$
847

 
$
1,197,042

Government agency
351,284

 
330

 
1,087

 
350,527

Mortgage-backed securities
2,917,000

 
7,373

 
28,429

 
2,895,944

Corporate bonds
142,939

 
183

 
960

 
142,162

Other
3,929

 
196

 
—

 
4,125

Total investment securities available for sale
4,611,736

 
9,387

 
31,323

 
4,589,800

Investment in marketable equity securities
79,809

 
30,252

 
177

 
109,884

Investment securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities
2,214,829

 
40,545

 
450

 
2,254,924

Total investment securities
$
6,906,374

 
$
80,184

 
$
31,950

 
$
6,954,608

 
 
 
 
 
 
 
 
 
December 31, 2018
(Dollars in thousands)
Cost
 
Gross
unrealized
gains
 
Gross unrealized
losses
 
Fair
value
Investment securities available for sale
 
 
 
 
 
 
 
U.S. Treasury
$
1,249,243

 
$
633

 
$
2,166

 
$
1,247,710

Government agency
257,252

 
222

 
639

 
256,835

Mortgage-backed securities
2,956,793

 
5,309

 
52,763

 
2,909,339

Corporate bonds
139,906

 
59

 
864

 
139,101

Other
3,923

 
202

 
—

 
4,125

Total investment securities available for sale
4,607,117

 
6,425

 
56,432

 
4,557,110

Investment in marketable equity securities
73,809

 
19,010

 
220

 
92,599

Investment securities held to maturity
 
 
 
 
 
 
 
Mortgage-backed securities
2,184,653

 
17,339

 
490

 
2,201,502

Total investment securities
$
6,865,579

 
$
42,774

 
$
57,142

 
$
6,851,211


Investments in mortgage-backed securities represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Investments in government agency securities represent securities issued by the United States Small Business Administration. Investments in corporate bonds and marketable equity securities represent positions in securities of other financial institutions. Other investments include trust preferred securities of financial institutions. BancShares holds approximately 298,000 shares of Visa Class B common stock. BancShares' Visa Class B shares are not considered to have a readily determinable fair value and are included in the Consolidated Balance Sheet with no fair value.
The following table provides the amortized cost and fair value by contractual maturity for investment securities available for sale and held to maturity. Expected maturities will differ from contractual maturities on certain securities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances, while repayments of certain corporate bonds are subject to call provisions that can be exercised by the issuer at their discretion.
 
March 31, 2019
 
December 31, 2018
(Dollars in thousands)
Cost
 
Fair value
 
Cost
 
Fair value
Investment securities available for sale
 
 
 
 
 
 
 
Non-amortizing securities maturing in:
 
 
 
 
 
 
 
One year or less
$
1,046,796

 
$
1,046,362

 
$
1,049,253

 
$
1,047,380

One through five years
155,297

 
155,680

 
205,526

 
205,805

Five through 10 years
137,430

 
137,162

 
134,370

 
133,626

Over 10 years
3,929

 
4,125

 
3,923

 
4,125

Government agency
351,284

 
350,527

 
257,252

 
256,835

Mortgage-backed securities
2,917,000

 
2,895,944

 
2,956,793

 
2,909,339

Total investment securities available for sale
$
4,611,736

 
$
4,589,800

 
$
4,607,117

 
$
4,557,110

Investment securities held to maturity
 
 
 
 
 
 
 
Total investment securities held to maturity
$
2,214,829

 
$
2,254,924

 
$
2,184,653

 
$
2,201,502


There were no gross gains or losses on sales of investment securities available for sale for the three months ended March 31, 2019 and March 31, 2018.
The following table provides the realized and unrealized gains on marketable equity securities for the three months ended March 31, 2019.
 
Three months ended March 31
(Dollars in thousands)
2019
 
2018
Marketable equity securities gains, net
$
11,328

 
$
971

Less net gains recognized on marketable equity securities sold
44

 
96

Unrealized gains recognized on marketable equity securities held
$
11,284

 
$
875


The following table provides information regarding securities with unrealized losses as of March 31, 2019 and December 31, 2018.
 
March 31, 2019
 
Less than 12 months
 
12 months or more
 
Total
(Dollars in thousands)
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Investment securities available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
—

 
$
—

 
$
599,883

 
$
847

 
$
599,883

 
$
847

Government agency
219,395

 
901

 
12,590

 
186

 
231,985

 
1,087

Mortgage-backed securities
114,863

 
314

 
1,956,003

 
28,115

 
2,070,866

 
28,429

Corporate bonds
56,393

 
891

 
9,950

 
69

 
66,343

 
960

Total
$
390,651

 
$
2,106

 
$
2,578,426

 
$
29,217

 
$
2,969,077

 
$
31,323

Investment securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
40,142

 
$
291

 
$
9,988

 
$
159

 
$
50,130

 
$
450

 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
Less than 12 months
 
12 months or more
 
Total
(Dollars in thousands)
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
 
Fair
value
 
Unrealized
losses
Investment securities available for sale
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
248,983

 
$
113

 
$
848,622

 
$
2,053

 
$
1,097,605

 
$
2,166

Government agency
115,273

 
601

 
2,310

 
38

 
117,583

 
639

Mortgage-backed securities
262,204

 
2,387

 
1,940,695

 
50,376

 
2,202,899

 
52,763

Corporate bonds
79,066

 
842

 
5,000

 
22

 
84,066

 
864

Total
$
705,526

 
$
3,943

 
$
2,796,627

 
$
52,489

 
$
3,502,153

 
$
56,432

Investment securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
$
5,111

 
$
181

 
$
10,131

 
$
309

 
$
15,242

 
$
490


As of March 31, 2019, there were 230 investment securities available for sale that had continuous losses for more than 12 months of which 223 were government sponsored enterprise-issued mortgage-backed securities or government agency securities, five were U.S. Treasury securities and two were corporate bonds. There were two investment securities held to maturity, which were government sponsored enterprise-issued mortgage-backed securities, which had continuous losses for more than 12 months at March 31, 2019.
None of the unrealized losses identified as of March 31, 2019 or December 31, 2018 relate to the marketability of the securities or the issuers' ability to honor redemption obligations. Rather, the unrealized losses relate to changes in interest rates relative to when the debt securities were purchased. BancShares has the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.
Debt securities having an aggregate carrying value of $3.68 billion at March 31, 2019 and $4.03 billion at December 31, 2018 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.