XML 33 R9.htm IDEA: XBRL DOCUMENT v3.19.3
Securities
 9 Months Ended
Sep. 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):
 
 
 
September 30, 2019
 
December 31, 2018
 
 
Fair Value
 
Net Unrealized Gain (Loss)
 
Fair Value
 
Net Unrealized Gain (Loss)
U.S. government agency debentures
 
$
63,334

 
$
23

 
$
63,765

 
$
254

Residential agency mortgage-backed securities
 
1,480,458

 
3,851

 
1,791,584

 
9,966

Municipal and other tax-exempt securities
 
44,105

 
(99
)
 
34,507

 
(1
)
Asset-backed securities
 
36,928

 
50

 
42,656

 
685

Other debt securities
 
50,387

 
116

 
24,411

 
65

Total trading securities
 
$
1,675,212

 
$
3,941

 
$
1,956,923

 
$
10,969


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

 
 
September 30, 2019
 
 
Amortized
 
Fair
 
Gross Unrealized
 
 
Cost
 
Value
 
Gain
 
Loss
Municipal and other tax-exempt
 
$
104,418

 
$
107,647

 
$
3,247

 
$
(18
)
Residential agency mortgage-backed securities
 
11,125

 
11,650

 
528

 
(3
)
Other debt securities
 
188,681

 
204,724

 
16,457

 
(414
)
Total investment securities
 
$
304,224

 
$
324,021

 
$
20,232

 
$
(435
)

 
 
December 31, 2018
 
 
Amortized
 
Fair
 
Gross Unrealized
 
 
Cost
 
Value
 
Gain
 
Loss
Municipal and other tax-exempt
 
$
137,296

 
$
138,562

 
$
1,858

 
$
(592
)
Residential agency 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 September 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
 
$
42,266

 
$
93,139

 
$
145,046

 
$
12,648

 
$
293,099

 
5.16

Fair value
 
42,426

 
96,704

 
160,698

 
12,543

 
312,371

 
 

Residential mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Amortized cost
 
 

 
 

 
 

 
 

 
$
11,125

 
2 
Fair value
 
 

 
 

 
 

 
 

 
11,650

 
 

Total investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

Amortized cost
 
 

 
 

 
 

 
 

 
$
304,224

 
 

Fair value
 
 

 
 

 
 

 
 

 
324,021

 
 

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 4.5 years based upon current prepayment assumptions.

Temporarily Impaired Investment Securities
(in thousands):
 
 
September 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
 
18

 
$
10,302

 
$
3

 
$
2,213

 
$
15

 
$
12,515

 
$
18

Residential agency mortgage-backed securities
 
1

 
2,318

 
3

 
—

 
—

 
2,318

 
3

Other debt securities
 
18

 
275

 
1

 
10,897

 
413

 
11,172

 
414

Total investment securities
 
37

 
$
12,895

 
$
7

 
$
13,110

 
$
428

 
$
26,005

 
$
435


 
 
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

Residential agency 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):
 
 
September 30, 2019
 
 
Amortized
 
Fair
 
Gross Unrealized
 
 
Cost
 
Value
 
Gain
 
Loss
U.S. Treasury
 
$
2,294

 
$
2,296

 
$
2

 
$
—

Municipal and other tax-exempt
 
1,772

 
1,848

 
76

 
—

Mortgage-backed securities:
 
 

 
 

 
 

 
 

Residential agency
 
7,636,923

 
7,740,461

 
114,646

 
(11,108
)
Residential non-agency
 
28,814

 
44,803

 
15,989

 
—

Commercial agency
 
3,176,188

 
3,234,671

 
61,003

 
(2,520
)
Other debt securities
 
500

 
472

 
—

 
(28
)
Total available for sale securities
 
$
10,846,491

 
$
11,024,551

 
$
191,716

 
$
(13,656
)

 
 
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 September 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
$
35,845

 
$
1,069,415

 
$
1,476,121

 
$
599,373

 
$
3,180,754

 
8.29

Fair value
35,806

 
1,081,571

 
1,512,308

 
609,602

 
3,239,287

 
 
Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
 
 
 
 
 
 
 
$
7,665,737

 
2 
Fair value
 
 
 
 
 
 
 
 
7,785,264

 
 
Total available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
 
 
 
 
 
 
 
$
10,846,491

 
 
Fair value
 
 
 
 
 
 
 
 
11,024,551

 
 
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
September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Proceeds
$
261,028

 
$
45,293

 
$
628,385

 
$
232,826

Gross realized gains
989

 
250

 
7,316

 
700

Gross realized losses
(984
)
 
—

 
(6,206
)
 
(1,502
)
Related federal and state income tax expense (benefit)
1

 
64

 
282

 
(204
)


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 $10.8 billion at September 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)
 
 
September 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
 
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Mortgage-backed securities:
 
 
 
 

 
 

 
 

 
 

 


 


Residential agency
 
108


931,248


3,260


753,448


7,848


1,684,696


11,108

Commercial agency
 
57

 
449,798

 
1,612

 
224,409

 
908

 
674,207

 
2,520

Other debt securities
 
1

 
—

 
—

 
472

 
28

 
472

 
28

Total available for sale securities
 
166

 
$
1,381,046


$
4,872


$
978,329


$
8,784


$
2,359,375


$
13,656



 
 
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 September 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.


Fair Value Option Securities
 
Fair value option securities represent securities which the Company has elected to carry at fair value and are separately identified on the Consolidated Balance Sheets. Changes in the fair value are recognized in earnings as they occur. Certain securities 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):
 
 
September 30, 2019
 
December 31, 2018
 
 
Fair Value
 
Net Unrealized Gain (Loss)
 
Fair Value
 
Net Unrealized Gain (Loss)
U.S. Treasury
 
$
552,536

 
$
927

 
$
—

 
$
—

Residential agency mortgage-backed securities
 
1,263,862

 
18,588

 
283,235

 
2,766

Total
 
$
1,816,398

 
$
19,515

 
$
283,235

 
$
2,766