Securities

6 Months Ended

Jun. 30, 2019

Marketable Securities [Abstract]

Securities [Text Block]

Securities

Trading Securities

The fair value and net unrealized gain (loss) included in trading securities are as follows (in thousands):

	June 30, 2019				December 31, 2018
	Fair Value		Net Unrealized Gain (Loss)		Fair Value		Net Unrealized Gain (Loss)
U.S. government agency debentures	$	83,148	$	127	$	63,765	$	254
U.S. government agency residential mortgage-backed securities	1,620,613		7,558		1,791,584		9,966
Municipal and other tax-exempt securities	49,718		191		34,507		(1		)
Asset-backed securities	93,546		548		42,656		685
Other trading securities	53,370		202		24,411		65
Total trading securities	$	1,900,395	$	8,626	$	1,956,923	$	10,969

Investment Securities

The amortized cost and fair values of investment securities are as follows (in thousands):

	June 30, 2019
	Amortized		Fair		Gross Unrealized
	Cost		Value		Gain		Loss
Municipal and other tax-exempt	$	124,822	$	128,009	$	3,221	$	(34	)
U.S. government agency residential mortgage-backed securities	11,599		12,099		500		—
Other debt securities	191,256		206,907		16,312		(661		)
Total investment securities	$	327,677	$	347,015	$	20,033	$	(695	)

	December 31, 2018
	Amortized		Fair		Gross Unrealized
	Cost		Value		Gain		Loss
Municipal and other tax-exempt	$	137,296	$	138,562	$	1,858	$	(592	)
U.S. government agency residential mortgage-backed securities	12,612		12,770		293		(135		)
Other debt securities	205,279		215,966		12,257		(1,570		)
Total investment securities	$	355,187	$	367,298	$	14,408	$	(2,297	)

The amortized cost and fair values of investment securities at June 30, 2019, 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 Maturity1
Fixed maturity debt securities:
Amortized cost	$	51,600	$	104,247	$	144,405	$	15,826	$	316,078	5.03
Fair value	51,791		108,001		159,416		15,708		334,916
Residential mortgage-backed securities:
Amortized cost									$	11,599	2
Fair value									12,099
Total investment securities:
Amortized cost									$	327,677
Fair value									347,015

¹  Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty.

²  The average expected lives of residential mortgage-backed securities were 4.6 years based upon current prepayment assumptions.

Temporarily Impaired Investment Securities

(in thousands):

	June 30, 2019
	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	25	$	—	$	—	$	16,433	$	34	$	16,433	$	34
Other debt securities	24	25		1		13,607		660		13,632		661
Total investment securities	49	$	25	$	1	$	30,040	$	694	$	30,065	$	695

	December 31, 2018
	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	72	$	18,255	$	69	$	66,141	$	523	$	84,396	$	592
U.S. government agency residential mortgage-backed securities	2	—		—		5,633		135		5,633		135
Other debt securities	72	13,372		64		23,028		1,506		36,400		1,570
Total investment securities	146	$	31,627	$	133	$	94,802	$	2,164	$	126,429	$	2,297

Available for Sale Securities 

The amortized cost and fair value of available for sale securities are as follows (in thousands):

	June 30, 2019
	Amortized		Fair		Gross Unrealized
	Cost		Value		Gain		Loss
U.S. Treasury	$	1,887	$	1,889	$	3	$	(1	)
Municipal and other tax-exempt	2,386		2,470		84		—
Mortgage-backed securities:
Residential agency	7,280,092		7,354,741		90,111		(15,462		)
Residential non-agency	31,327		47,057		15,730		—
Commercial agency	3,066,442		3,107,785		44,783		(3,440		)
Other debt securities	500		472		—		(28		)
Total available for sale securities	$	10,382,634	$	10,514,414	$	150,711	$	(18,931	)

	December 31, 2018
	Amortized		Fair		Gross Unrealized
	Cost		Value		Gain		Loss
U.S. Treasury	$	496	$	493	$	—	$	(3	)
Municipal and other tax-exempt	2,782		2,864		82		—
Mortgage-backed securities:
Residential agency	5,886,323		5,804,708		16,149		(97,764		)
Residential non-agency	40,948		59,736		18,788		—
Commercial agency	2,986,297		2,953,889		7,955		(40,363		)
Other debt securities	35,545		35,430		12		(127		)
Total available for sale securities	$	8,952,391	$	8,857,120	$	42,986	$	(138,257	)

The amortized cost and fair values of available for sale securities at June 30, 2019, 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 Maturity1
Fixed maturity debt securities:
Amortized cost	$	90,708	$	968,503	$	1,571,395	$	440,609	$	3,071,215	7.35
Fair value	90,536		974,073		1,600,106		447,901		3,112,616
Residential mortgage-backed securities:
Amortized cost									$	7,311,419	2
Fair value									7,401,798
Total available-for-sale securities:
Amortized cost									$	10,382,634
Fair value									10,514,414

¹  Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.

²  The average expected lives of residential mortgage-backed securities were 4.0 years based upon current prepayment assumptions.

Sales of available for sale securities resulted in gains and losses as follows (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Proceeds	$	122,098	$	142,743		$	367,357		$	187,533
Gross realized gains	1,029		257			6,327			450
Gross realized losses	—		(1,019		)	(5,222		)	(1,502		)
Related federal and state income tax expense (benefit)	262		(194		)	281			(268		)

The fair value of debt securities pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was $10.3 billion at June 30, 2019 and $9.1 billion at December 31, 2018. The secured parties do not have the right to sell or repledge these securities.

Temporarily Impaired Available for Sale Securities

(in thousands)

	June 30, 2019
	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	1	$	—	$	—	$	498	$	1	$	498	$	1
Mortgage-backed securities:
Residential agency	125	267,481		898		1,317,121		14,564		1,584,602		15,462
Commercial agency	78	440,095		895		595,351		2,545		1,035,446		3,440
Other debt securities	1	—		—		472		28		472		28
Total available for sale securities	205	$	707,576	$	1,793	$	1,913,442	$	17,138	$	2,621,018	$	18,931

	December 31, 2018
	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	1	$	—	$	—	$	493	$	3	$	493	$	3
Mortgage-backed securities:
Residential agency	289	510,824		1,158		3,641,370		96,606		4,152,194		97,764
Commercial agency	197	179,258		394		1,969,504		39,969		2,148,762		40,363
Other debt securities	3	9,982		63		20,436		64		30,418		127
Total available for sale securities	490	$	700,064	$	1,615	$	5,631,803	$	136,642	$	6,331,867	$	138,257

Based on evaluations of impaired securities as of June 30, 2019, the Company does not intend to sell any impaired available for sale debt securities before fair value recovers to the current amortized cost and it is more-likely-than-not that the Company will not be required to sell impaired securities before fair value recovers, which may be maturity.