Securities [Text Block] |
Securities Trading Securities The fair value and net unrealized gain (loss) included in trading securities is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | December 31, 2015 | | | Fair Value | | Net Unrealized Gain (Loss) | | Fair Value | | Net Unrealized Gain (Loss) | U.S. government agency debentures | | $ | 6,234 |
| | $ | (4 | ) | | $ | 61,295 |
| | $ | (71 | ) | U.S. government agency residential mortgage-backed securities | | 310,067 |
| | 635 |
| | 10,989 |
| | 17 |
| Municipal and other tax-exempt securities | | 14,427 |
| | 50 |
| | 31,901 |
| | 210 |
| Other trading securities | | 6,900 |
| | 57 |
| | 18,219 |
| | (16 | ) | Total trading securities | | $ | 337,628 |
| | $ | 738 |
| | $ | 122,404 |
| | $ | 140 |
|
Investment Securities The amortized cost and fair values of investment securities are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | | Amortized | | Carrying | | Fair | | Gross Unrealized1 | | | Cost | | Value | | Value | | Gain | | Loss | Municipal and other tax-exempt securities | | $ | 320,364 |
| | $ | 320,364 |
| | $ | 321,225 |
| | $ | 2,272 |
| | $ | (1,411 | ) | U.S. government agency residential mortgage-backed securities – Other | | 20,777 |
| | 20,777 |
| | 21,473 |
| | 767 |
| | (71 | ) | Other debt securities | | 205,004 |
| | 205,004 |
| | 222,795 |
| | 18,115 |
| | (324 | ) | Total investment securities | | $ | 546,145 |
| | $ | 546,145 |
| | $ | 565,493 |
| | $ | 21,154 |
| | $ | (1,806 | ) |
| | 1 | Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets. |
| | | | | | | | | | | | | | | | | | | | | | | | December 31, 2015 | | | Amortized | | Carrying | | Fair | | Gross Unrealized1 | | | Cost | | Value | | Value | | Gain | | Loss | Municipal and other tax-exempt securities | | $ | 365,258 |
| | $ | 365,258 |
| | $ | 368,910 |
| | $ | 3,935 |
| | $ | (283 | ) | U.S. government agency residential mortgage-backed securities – Other | | 26,721 |
| | 26,833 |
| | 27,874 |
| | 1,063 |
| | (22 | ) | Other debt securities | | 205,745 |
| | 205,745 |
| | 232,375 |
| | 26,689 |
| | (59 | ) | Total investment securities | | $ | 597,724 |
| | $ | 597,836 |
| | $ | 629,159 |
| | $ | 31,687 |
| | $ | (364 | ) |
| | 1 | Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets. |
The amortized cost and fair values of investment securities at December 31, 2016, by contractual maturity, are as shown in the following table (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than One Year | | One to Five Years | | Six to Ten Years | | Over Ten Years | | Total | | Weighted Average Maturity² | Municipal and other tax-exempt securities: | | | | | | | | | | | | | Carrying value | | $ | 83,583 |
| | $ | 181,596 |
| | $ | 5,909 |
| | $ | 49,276 |
| | $ | 320,364 |
| | 3.41 |
| Fair value | | 83,544 |
| | 180,993 |
| | 5,836 |
| | 50,852 |
| | 321,225 |
| | | Nominal yield¹ | | 1.48 | % | | 2.08 | % | | 3.31 | % | | 5.20 | % | | 2.43 | % | | | Other debt securities: | | |
| | |
| | |
| | |
| | |
| | | Carrying value | | $ | 16,045 |
| | $ | 41,804 |
| | $ | 127,320 |
| | $ | 19,835 |
| | $ | 205,004 |
| | 6.66 |
| Fair value | | 16,107 |
| | 44,372 |
| | 142,010 |
| | 20,306 |
| | 222,795 |
| | | Nominal yield | | 3.28 | % | | 5.14 | % | | 5.86 | % | | 4.79 | % | | 5.41 | % | | | Total fixed maturity securities: | | |
| | |
| | |
| | |
| | |
| | | Carrying value | | $ | 99,628 |
| | $ | 223,400 |
| | $ | 133,229 |
| | $ | 69,111 |
| | $ | 525,368 |
| | 4.68 |
| Fair value | | 99,651 |
| | 225,365 |
| | 147,846 |
| | 71,158 |
| | 544,020 |
| | |
| Nominal yield | | 1.77 | % | | 2.65 | % | | 5.75 | % | | 5.08 | % | | 3.59 | % | | |
| Residential mortgage-backed securities: | | |
| | |
| | |
| | |
| | |
| | |
| Carrying value | | |
| | |
| | |
| | |
| | $ | 20,777 |
| | ³ |
| Fair value | | |
| | |
| | |
| | |
| | 21,473 |
| | |
| Nominal yield4 | | |
| | |
| | |
| | |
| | 2.76 | % | | |
| Total investment securities: | | |
| | |
| | |
| | |
| | |
| | |
| Carrying value | | |
| | |
| | |
| | |
| | $ | 546,145 |
| | |
| Fair value | | |
| | |
| | |
| | |
| | 565,493 |
| | |
| Nominal yield | | |
| | |
| | |
| | |
| | 3.56 | % | | |
|
| | 1 | Calculated on a taxable equivalent basis using a 39% effective tax rate. |
| | 2 | Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. |
| | 3 | The average expected lives of residential mortgage-backed securities were 4.7 years based upon current prepayment assumptions. |
| | 4 | The nominal yield on residential mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary - Unaudited for current yields on the investment securities portfolio. |
Available for Sale Securities
The amortized cost and fair value of available for sale securities are as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | | Amortized | | Fair | | Gross Unrealized1 | | | | | Cost | | Value | | Gain | | Loss | | OTTI² | U.S. Treasury securities | | $ | 1,000 |
| | $ | 999 |
| | $ | — |
| | $ | (1 | ) | | $ | — |
| Municipal and other tax-exempt securities | | 41,050 |
| | 40,993 |
| | 343 |
| | (400 | ) | | — |
| Residential mortgage-backed securities: | | |
| | |
| | |
| | |
| | |
| U.S. government agencies: | | |
| | |
| | |
| | |
| | |
| FNMA | | 3,062,525 |
| | 3,055,676 |
| | 25,066 |
| | (31,915 | ) | | — |
| FHLMC | | 1,534,451 |
| | 1,531,116 |
| | 8,475 |
| | (11,810 | ) | | — |
| GNMA | | 878,375 |
| | 873,594 |
| | 2,259 |
| | (7,040 | ) | | — |
| Total U.S. government agencies | | 5,475,351 |
| | 5,460,386 |
| | 35,800 |
| | (50,765 | ) | | — |
| Private issue: | | |
| | |
| | |
| | |
| | |
| Alt-A loans | | 44,245 |
| | 51,512 |
| | 7,485 |
| | — |
| | (218 | ) | Jumbo-A loans | | 56,947 |
| | 64,023 |
| | 7,092 |
| | (16 | ) | | — |
| Total private issue | | 101,192 |
| | 115,535 |
| | 14,577 |
| | (16 | ) | | (218 | ) | Total residential mortgage-backed securities | | 5,576,543 |
|
| 5,575,921 |
| | 50,377 |
| | (50,781 | ) | | (218 | ) | Commercial mortgage-backed securities guaranteed by U.S. government agencies | | 3,035,750 |
| | 3,017,933 |
| | 5,472 |
| | (23,289 | ) | | — |
| Other debt securities | | 4,400 |
| | 4,152 |
| | — |
| | (248 | ) | | — |
| Perpetual preferred stock | | 15,561 |
| | 18,474 |
| | 2,913 |
| | — |
| | — |
| Equity securities and mutual funds | | 17,424 |
| | 18,357 |
| | 1,060 |
| | (127 | ) | | — |
| Total available for sale securities | | $ | 8,691,728 |
| | $ | 8,676,829 |
| | $ | 60,165 |
| | $ | (74,846 | ) | | $ | (218 | ) |
| | 1 | Gross unrealized gain/loss recognized in AOCI in the consolidated balance sheet. |
| | 2 | Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income. |
| | | | | | | | | | | | | | | | | | | | | | | | December 31, 2015 | | | Amortized | | Fair | | Gross Unrealized¹ | | | | | Cost | | Value | | Gain | | Loss | | OTTI² | U.S. Treasury securities | | $ | 1,000 |
| | $ | 995 |
| | $ | — |
| | $ | (5 | ) | | $ | — |
| Municipal and other tax-exempt securities | | 56,681 |
| | 56,817 |
| | 873 |
| | (737 | ) | | — |
| Residential mortgage-backed securities: | | | | |
| | |
| | |
| | |
| U.S. government agencies: | | |
| | |
| | |
| | |
| | |
| FNMA | | 3,156,214 |
| | 3,187,215 |
| | 41,502 |
| | (10,501 | ) | | — |
| FHLMC | | 1,940,915 |
| | 1,949,335 |
| | 14,727 |
| | (6,307 | ) | | — |
| GNMA | | 763,967 |
| | 761,801 |
| | 2,385 |
| | (4,551 | ) | | — |
| Total U.S. government agencies | | 5,861,096 |
| | 5,898,351 |
| | 58,614 |
| | (21,359 | ) | | — |
| Private issue: | | |
| | |
| | |
| | |
| | |
| Alt-A loans | | 56,387 |
| | 62,574 |
| | 6,574 |
| | — |
| | (387 | ) | Jumbo-A loans | | 71,724 |
| | 76,544 |
| | 5,260 |
| | — |
| | (440 | ) | Total private issue | | 128,111 |
| | 139,118 |
| | 11,834 |
| | — |
| | (827 | ) | Total residential mortgage-backed securities | | 5,989,207 |
| | 6,037,469 |
| | 70,448 |
| | (21,359 | ) | | (827 | ) | Commercial mortgage-backed securities guaranteed by U.S. government agencies | | 2,919,044 |
| | 2,905,796 |
| | 5,396 |
| | (18,644 | ) | | — |
| Other debt securities | | 4,400 |
| | 4,151 |
| | — |
| | (249 | ) | | — |
| Perpetual preferred stock | | 17,171 |
| | 19,672 |
| | 2,501 |
| | — |
| | — |
| Equity securities and mutual funds | | 17,121 |
| | 17,833 |
| | 752 |
| | (40 | ) | | — |
| Total available for sale securities | | $ | 9,004,624 |
| | $ | 9,042,733 |
| | $ | 79,970 |
| | $ | (41,034 | ) | | $ | (827 | ) |
| | 1 | Gross unrealized gain/loss recognized in AOCI in the consolidated balance sheet. |
| | 2 | Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income. |
The amortized cost and fair values of available for sale securities at December 31, 2016, by contractual maturity, are as shown in the following table (dollars in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | Less than One Year | | One to Five Years | | Six to Ten Years | | Over Ten Years | | Total | | Weighted Average Maturity5 | U.S. Treasury securities: | | | | | | | | | | | | Amortized cost | $ | — |
| | $ | 1,000 |
| | $ | — |
| | $ | — |
| | $ | 1,000 |
| | 1.04 |
| Fair value | — |
| | 999 |
| | — |
| | — |
| | 999 |
| | | Nominal yield | — | % | | 0.87 | % | | — | % | | — | % | | 0.87 | % | | | Municipal and other tax-exempt securities: | |
| | |
| | |
| | |
| | |
| | | Amortized cost | 9,848 |
| | 12,254 |
| | 2,103 |
| | 16,845 |
| | 41,050 |
| | 7.95 |
| Fair value | 9,903 |
| | 12,399 |
| | 2,151 |
| | 16,540 |
| | 40,993 |
| | | Nominal yield¹ | 4.81 | % | | 4.01 | % | | 3.47 | % | | 2.28 | % | 6 |
| 3.46 | % | | | Commercial mortgage-backed securities: | |
| | |
| | |
| | |
| | |
| | | Amortized cost | 31,910 |
| | 921,981 |
| | 1,832,535 |
| | 249,324 |
| | 3,035,750 |
| | 6.90 |
| Fair value | 31,856 |
| | 920,108 |
| | 1,820,627 |
| | 245,342 |
| | 3,017,933 |
| | | Nominal yield | 1.00 | % | | 1.79 | % | | 1.85 | % | | 1.82 | % | | 1.81 | % | | | Other debt securities: | | | | | | | | | | | | Amortized cost | — |
| | — |
| | — |
| | 4,400 |
| | 4,400 |
| | 30.66 |
| Fair value | — |
| | — |
| | — |
| | 4,152 |
| | 4,152 |
| | | Nominal yield | — | % | | — | % | | — | % | | 1.71 | % | | 1.71 | % | | | Total fixed maturity securities: | |
| | |
| | |
| | |
| | |
| | | Amortized cost | $ | 41,758 |
| | $ | 935,235 |
| | $ | 1,834,638 |
| | $ | 270,569 |
| | $ | 3,082,200 |
| | 6.95 |
| Fair value | 41,759 |
| | 933,506 |
| | 1,822,778 |
| | 266,034 |
| | 3,064,077 |
| | | Nominal yield | 1.89 | % | | 1.82 | % | | 1.85 | % | | 1.84 | % | | 1.83 | % | | | Residential mortgage-backed securities: | |
| | |
| | |
| | |
| | |
| | | Amortized cost | |
| | |
| | |
| | |
| | $ | 5,576,543 |
| | 2 |
| Fair value | |
| | |
| | |
| | |
| | 5,575,921 |
| | | Nominal yield4 | |
| | |
| | |
| | |
| | 1.86 | % | | | Perpetual preferred stock. equity securities and mutual funds: | |
| | |
| | |
| | |
| | |
| | |
| Amortized cost | |
| | |
| | |
| | |
| | $ | 32,985 |
| | ³ |
| Fair value | |
| | |
| | |
| | |
| | 36,831 |
| | |
| Nominal yield | |
| | |
| | |
| | |
| | — | % | | |
| Total available-for-sale securities: | |
| | |
| | |
| | |
| | | | |
| Amortized cost | |
| | |
| | |
| | |
| | $ | 8,691,728 |
| | |
| Fair value | |
| | |
| | |
| | |
| | 8,676,829 |
| | |
| Nominal yield | |
| | |
| | |
| | |
| | 1.84 | % | | |
|
| | 1 | Calculated on a taxable equivalent basis using a 39% effective tax rate. |
| | 2 | The average expected lives of mortgage-backed securities were 3.9 years based upon current prepayment assumptions. |
| | 3 | Primarily common stock and preferred stock of corporate issuers with no stated maturity. |
| | 4 | The nominal yield on mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary –– Unaudited following for current yields on available for sale securities portfolio. |
| | 5 | Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty. |
| | 6 | Nominal yield on municipal and other tax-exempt securities and other debt securities with contractual maturity dates over ten years are based on variable rates which generally are reset within 35 days. |
Sales of available for sale securities resulted in gains and losses as follows (in thousands): | | | | | | | | | | | | | Year Ended December 31, | | 2016 | | 2015 | | 2014 | Proceeds | $ | 899,381 |
| | $ | 1,600,380 |
| | 2,664,740 |
| Gross realized gains | 11,696 |
| | 15,849 |
| | 24,923 |
| Gross realized losses | (21 | ) | | (3,791 | ) | | (23,384 | ) | Related federal and state income tax expense | 4,542 |
| | 4,691 |
| | 599 |
|
A summary of investment and available for sale securities that have been pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was as follows (in thousands): | | | | | | | | | | December 31, | | 2016 | | 2015 | Investment: | | | | Carrying value | $ | 322,208 |
| | $ | 231,033 |
| Fair value | 323,808 |
| | 234,382 |
| | | | | Available for sale: | | | | Amortized cost | 7,353,116 |
| | 6,831,743 |
| Fair value | 7,327,470 |
| | 6,849,524 |
|
The secured parties do not have the right to sell or re-pledge these securities.
Temporarily Impaired Securities as of December 31, 2016 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Securities | | Less Than 12 Months | | 12 Months or Longer | | Total | | | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | Investment: | | | | | | | | | | | | | | | Municipal and other tax-exempt securities | | 151 |
| | $ | 219,892 |
| | $ | 1,316 |
| | $ | 4,333 |
| | $ | 95 |
| | $ | 224,225 |
| | $ | 1,411 |
| U.S. government agency residential mortgage-backed securities – Other | | 1 |
| | 4,358 |
| | 71 |
| | — |
| | — |
| | 4,358 |
| | 71 |
| Other debt securities | | 41 |
| | 11,820 |
| | 322 |
| | 855 |
| | 2 |
| | 12,675 |
| | 324 |
| Total investment securities | | 193 |
| | $ | 236,070 |
| | $ | 1,709 |
| | $ | 5,188 |
| | $ | 97 |
| | $ | 241,258 |
| | $ | 1,806 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Securities | | Less Than 12 Months | | 12 Months or Longer | | Total | | | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | Available for sale: | | |
| | |
| | |
| | |
| | |
| | |
| | |
| U.S. Treasury securities | | 1 |
| | $ | 999 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | 999 |
| | $ | 1 |
| Municipal and other tax-exempt securities | | 24 |
| | $ | 15,666 |
| | $ | 22 |
| | $ | 4,689 |
| | $ | 378 |
| | 20,355 |
| | 400 |
| Residential mortgage-backed securities: | | | | |
| | |
| | |
| | |
| |
|
| |
|
| U.S. government agencies: | | | | |
| | |
| | |
| | |
| |
|
| |
|
| FNMA | | 91 |
| | 1,787,644 |
| | 30,238 |
| | 72,105 |
| | 1,677 |
| | 1,859,749 |
| | 31,915 |
| FHLMC | | 58 |
| | 964,017 |
| | 11,210 |
| | 18,307 |
| | 600 |
| | 982,324 |
| | 11,810 |
| GNMA | | 31 |
| | 548,637 |
| | 6,145 |
| | 25,796 |
| | 895 |
| | 574,433 |
| | 7,040 |
| Total U.S. agencies | | 180 |
| | 3,300,298 |
| | 47,593 |
| | 116,208 |
| | 3,172 |
| | 3,416,506 |
| | 50,765 |
| Private issue1: | | |
| | |
| | |
| | |
| | |
| |
|
| |
|
| Alt-A loans | | 5 |
| | 7,931 |
| | 174 |
| | 7,410 |
| | 44 |
| | 15,341 |
| | 218 |
| Jumbo-A loans | | 1 |
| | — |
| | — |
| | 6,098 |
| | 16 |
| | 6,098 |
| | 16 |
| Total private issue | | 6 |
| | 7,931 |
| | 174 |
| | 13,508 |
| | 60 |
| | 21,439 |
| | 234 |
| Total residential mortgage-backed securities | | 186 |
| | 3,308,229 |
| | 47,767 |
| | 129,716 |
| | 3,232 |
| | 3,437,945 |
| | 50,999 |
| Commercial mortgage-backed securities guaranteed by U.S. government agencies | | 171 |
| | 1,904,584 |
| | 22,987 |
| | 38,875 |
| | 302 |
| | 1,943,459 |
| | 23,289 |
| Other debt securities | | 2 |
| | — |
| | — |
| | 4,152 |
| | 248 |
| | 4,152 |
| | 248 |
| Perpetual preferred stock | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Equity securities and mutual funds | | 104 |
| | 2,127 |
| | 41 |
| | 817 |
| | 86 |
| | 2,944 |
| | 127 |
| Total available for sale securities | | 488 |
| | $ | 5,231,605 |
| | $ | 70,818 |
| | $ | 178,249 |
| | $ | 4,246 |
| | $ | 5,409,854 |
| | $ | 75,064 |
|
| | 1 | Includes securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income. |
Temporarily Impaired Securities as of December 31, 2015 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Securities | | Less Than 12 Months | | 12 Months or Longer | | Total | | | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | Investment: | | | | | | | | | | | | | | | Municipal and other tax- exempt securities | | 73 |
| | $ | 127,319 |
| | $ | 206 |
| | $ | 13,380 |
| | $ | 77 |
| | $ | 140,699 |
| | $ | 283 |
| U.S. government agency residential mortgage-backed securities – Other | | 1 |
| | 5,533 |
| | 22 |
| | — |
| | — |
| | 5,533 |
| | 22 |
| Other debt securities | | 11 |
| | 1,082 |
| | 41 |
| | 1,715 |
| | 18 |
| | 2,797 |
| | 59 |
| Total investment securities | | 85 |
| | $ | 133,934 |
| | $ | 269 |
| | $ | 15,095 |
| | $ | 95 |
| | $ | 149,029 |
| | $ | 364 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Number of Securities | | Less Than 12 Months | | 12 Months or Longer | | Total | | | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | | Fair Value | | Unrealized Loss | Available for sale: | | |
| | |
| | |
| | |
| | |
| |
|
| |
|
| U.S. Treasury securities | | 1 |
| | $ | 995 |
| | $ | 5 |
| | $ | — |
| | $ | — |
| | $ | 995 |
| | $ | 5 |
| Municipal and other tax-exempt securities | | 20 |
| | $ | 9,909 |
| | $ | 27 |
| | $ | 11,664 |
| | $ | 710 |
| | 21,573 |
| | 737 |
| Residential mortgage-backed securities: | | |
| | |
| | |
| | |
| | |
| |
|
| |
|
| U. S. government agencies: | | |
| | |
| | |
| | |
| | |
| |
|
| |
|
| FNMA | | 55 |
| | 1,188,022 |
| | 10,262 |
| | 18,236 |
| | 239 |
| | 1,206,258 |
| | 10,501 |
| FHLMC | | 40 |
| | 726,713 |
| | 4,827 |
| | 77,545 |
| | 1,480 |
| | 804,258 |
| | 6,307 |
| GNMA | | 15 |
| | 364,919 |
| | 1,951 |
| | 102,109 |
| | 2,600 |
| | 467,028 |
| | 4,551 |
| Total U.S. agencies | | 110 |
| | 2,279,654 |
| | 17,040 |
| | 197,890 |
| | 4,319 |
| | 2,477,544 |
| | 21,359 |
| Private issue1: | | |
| | |
| | |
| | |
| | |
| |
|
| |
|
| Alt-A loans | | 4 |
| | — |
| | — |
| | 9,264 |
| | 387 |
| | 9,264 |
| | 387 |
| Jumbo-A loans | | 8 |
| | — |
| | — |
| | 8,482 |
| | 440 |
| | 8,482 |
| | 440 |
| Total private issue | | 12 |
| | — |
| | — |
| | 17,746 |
| | 827 |
| | 17,746 |
| | 827 |
| Total residential mortgage-backed securities | | 122 |
| | 2,279,654 |
| | 17,040 |
| | 215,636 |
| | 5,146 |
| | 2,495,290 |
| | 22,186 |
| Commercial mortgage-backed securities guaranteed by U.S. government agencies | | 213 |
| | 1,582,469 |
| | 11,419 |
| | 484,258 |
| | 7,225 |
| | 2,066,727 |
| | 18,644 |
| Other debt securities | | 2 |
| | — |
| | — |
| | 4,151 |
| | 249 |
| | 4,151 |
| | 249 |
| Perpetual preferred stock | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Equity securities and mutual funds | | 61 |
| | 782 |
| | 5 |
| | 991 |
| | 35 |
| | 1,773 |
| | 40 |
| Total available for sale securities | | 419 |
|
| $ | 3,873,809 |
|
| $ | 28,496 |
|
| $ | 716,700 |
|
| $ | 13,365 |
|
| $ | 4,590,509 |
|
| $ | 41,861 |
|
| | 1 | Includes securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income. |
For debt securities, management determines whether it intends to sell or if it is more-likely-than-not that it will be required to sell impaired securities. Based on this evaluation as of December 31, 2016, we do not intend to sell any impaired available for sale securities before fair value recovers to our current amortized cost and it is more-likely-than-not that we will not be required to sell impaired securities before fair value recovers, which may be maturity.
At December 31, 2016, the composition of the Company’s investment and available for sale securities portfolios by the lowest current credit rating assigned by any of the three nationally-recognized rating agencies is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
AAA - AA | | A - BBB | | Below Investment Grade | | Not Rated | | Total | | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | Investment: | | | | | | | | | | | | | | | | | | | | | Municipal and other tax-exempt | | $ | 193,931 |
| | $ | 193,834 |
| | $ | 6,028 |
| | $ | 6,037 |
| | $ | — |
| | $ | — |
| | $ | 120,405 |
| | $ | 121,354 |
| | $ | 320,364 |
| | $ | 321,225 |
| U.S. government agency residential mortgage-backed securities1 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 20,777 |
| | 21,473 |
| | 20,777 |
| | 21,473 |
| Other debt securities | | 140,184 |
| | 156,641 |
| | — |
| | — |
| | — |
| | — |
| | 64,820 |
| | 66,154 |
| | 205,004 |
| | 222,795 |
| Total investment securities | | $ | 334,115 |
| | $ | 350,475 |
| | $ | 6,028 |
| | $ | 6,037 |
| | $ | — |
| | $ | — |
| | $ | 206,002 |
| | $ | 208,981 |
| | $ | 546,145 |
| | $ | 565,493 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AAA - AA | | A - BBB | | Below Investment Grade | | Not Rated | | Total | | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value | Available for Sale: | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| U.S. Treasury securities | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,000 |
| | $ | 999 |
| | $ | 1,000 |
| | $ | 999 |
| Municipal and other tax-exempt | | 23,343 |
| | 23,657 |
| | 5,595 |
| | 5,237 |
| | — |
| | — |
| | 12,112 |
| | 12,099 |
| | 41,050 |
| | 40,993 |
| U.S. government agency residential mortgage-backed securities1 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 5,475,351 |
| | 5,460,386 |
| | 5,475,351 |
| | 5,460,386 |
| Privately issued residential mortgage-backed securities | | — |
| | — |
| | — |
| | — |
| | 101,192 |
| | 115,535 |
| | — |
| | — |
| | 101,192 |
| | 115,535 |
| Commercial mortgage-backed securities guaranteed by U.S. government agencies | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 3,035,750 |
| | 3,017,933 |
| | 3,035,750 |
| | 3,017,933 |
| Other debt securities | | 4,400 |
| | 4,152 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 4,400 |
| | 4,152 |
| Perpetual preferred stock | | — |
| | — |
| | 4,796 |
| | 5,177 |
| | 10,765 |
| | 13,297 |
| | — |
| | — |
| | 15,561 |
| | 18,474 |
| Equity securities and mutual funds | | 4 |
| | 759 |
| | — |
| | — |
| | — |
| | — |
| | 17,420 |
| | 17,598 |
| | 17,424 |
| | 18,357 |
| Total available for sale securities | | $ | 27,747 |
|
| $ | 28,568 |
|
| $ | 10,391 |
|
| $ | 10,414 |
|
| $ | 111,957 |
|
| $ | 128,832 |
|
| $ | 8,541,633 |
|
| $ | 8,509,015 |
|
| $ | 8,691,728 |
|
| $ | 8,676,829 |
|
| | 1 | U.S. government and government sponsored enterprises are not rated by the nationally-recognized rating agencies as these securities are guaranteed by agencies of the U.S. government or government-sponsored enterprises. |
At December 31, 2016, the entire portfolio of privately issued residential mortgage-backed securities was rated below investment grade by at least one of the nationally-recognized rating agencies. The gross unrealized loss on these securities totaled $234 thousand. Impairment of these securities was evaluated based on projections of estimated cash flows.
The primary assumptions used in this evaluation were:
| | | | | | December 31, | | 2016 | | 2015 | | | | | Unemployment rate | Decreasing to 4.6% over the next 12 months and remain at 4.6% thereafter. | | Decreasing to 4.8% over the next 12 months and remain at 4.8% thereafter. | Housing price appreciation/depreciation | Starting with current depreciated housing prices based on information derived from the FHFA1, appreciating 3.1% over the next 12 months, then flat for the following 12 months and then appreciating at 2% per year thereafter. | | Starting with current depreciated housing prices based on information derived from the FHFA1, appreciating 3.5% over the next 12 months, then flat for the following 12 months and then appreciating at 2% per year thereafter. | Estimated liquidation costs | Reflect actual historical liquidations costs observed on Jumbo and Alt-A residential mortgage loans in securities owned by the Company. | | Reflect actual historical liquidations costs observed on Jumbo and Alt-A residential mortgage loans in securities owned by the Company. | Discount rates | Estimated cash flows were discounted at rates that range from 2.00% to 6.25% based on our current expected yields. | | Estimated cash flows were discounted at rates that range from 2.00% to 6.25% based on our current expected yields. |
| | 1 | Federal Housing Finance Agency |
The Company recognized no credit loss impairment on private-label residential mortgage-backed securities in earnings during 2016. Credit loss impairment of $157 thousand was recognized in earnings on private-label residential mortgage-backed securities in 2015 and none was recognized in 2014.
Impaired equity securities, including perpetual preferred stocks, are evaluated based on management's ability and intent to hold the securities until fair value recovers. Based on this evaluation, no other-than-temporary impairment losses were recorded in earnings on equity securities during 2016. A $1.7 million other-than-temporary impairment loss related to equity securities was recorded in earnings in 2015 and $373 thousand in impairment losses were recognized on equity securities in 2014.
The following is a tabular roll forward of the amount of credit-related OTTI recognized on available for sale debt securities in earnings (in thousands): | | | | | | | | | | | | | | | | Year Ended December 31, | | | 2016 | | 2015 | | 2014 | Balance of credit-related OTTI recognized on available for sale debt, beginning of period | | $ | 54,504 |
| | $ | 54,347 |
| | $ | 67,346 |
| Additions for credit-related OTTI not previously recognized | | — |
| | — |
| | — |
| Additions for increases in credit-related OTTI previously recognized when there is no intent to sell and no requirement to sell before recovery of amortized cost | | — |
| | 157 |
| | — |
| Reductions for change in intent to hold before recovery | | — |
| | — |
| | — |
| Sales | | — |
| | — |
| | (12,999 | ) | Balance of credit-related OTTI recognized on available for sale debt securities, end of period | | $ | 54,504 |
| | $ | 54,504 |
| | $ | 54,347 |
|
Fair Value Option Securities Fair value option securities represent securities which the Company has elected to carry at fair value and separately identified on the Consolidated Balance Sheets with changes in the fair value recognized in earnings as they occur. Certain residential mortgage-backed securities issued by U.S. government agencies and derivative contracts are held as an economic hedge of the mortgage servicing rights.
The fair value and net unrealized gain (loss) included in Fair value option securities is as follows (in thousands): | | | | | | | | | | | | | | | | | | | | December 31, 2016 | | December 31, 2015 | | | Fair Value | | Net Unrealized Gain (Loss) | | Fair Value | | Net Unrealized Gain (Loss) | U.S. government agency residential mortgage-backed securities | | $ | 77,046 |
| | $ | (1,777 | ) | | $ | 444,217 |
| | $ | (2,060 | ) |
Restricted Equity Securities
Restricted equity securities include stock we are required to hold as members of the Federal Reserve system and the Federal Home Loan Banks ("FHLB"). Restricted equity securities are carried at cost as these securities do not have a readily determined fair value because ownership of these shares is restricted and they lack a market. A summary of restricted equity securities follows (in thousands):
| | | | | | | | | | December 31, | | 2016 | | 2015 | Federal Reserve Bank stock | $ | 36,498 |
| | $ | 36,148 |
| Federal Home Loan Bank stock | 270,541 |
| | 237,365 |
| Other | 201 |
| | 171 |
| Total | $ | 307,240 |
| | $ | 273,684 |
|
|