5. Securities

Securities Available for Sale

This table provides detailed information about securities available for sale at September 30, 2018 and December 31, 2017 (in thousands):

September 30, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury	$	40,101	$	—	$	(2,163	)	$	37,938
U.S. Agencies		200		—		(2	)		198
Mortgage-backed		3,778,032		337		(157,991	)		3,620,378
State and political subdivisions		2,323,440		1,419		(50,632	)		2,274,227
Corporates		—		—		—			—
Total	$	6,141,773	$	1,756	$	(210,788	)	$	5,932,741

December 31, 2017	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U.S. Treasury	$	40,092	$	—	$	(1,449	)	$	38,643
U.S. Agencies		14,762		—		(10	)		14,752
Mortgage-backed		3,719,369		1,914		(72,040	)		3,649,243
State and political subdivisions		2,546,517		11,965		(15,809	)		2,542,673
Corporates		13,278		—		(12	)		13,266
Total	$	6,334,018	$	13,879	$	(89,320	)	$	6,258,577

The following table presents contractual maturity information for securities available for sale at September 30, 2018 (in thousands):

	Amortized		Fair
	Cost		Value
Due in 1 year or less	$	327,988	$	327,198
Due after 1 year through 5 years		917,975		906,234
Due after 5 years through 10 years		733,789		708,373
Due after 10 years		383,989		370,558
Total		2,363,741		2,312,363
Mortgage-backed securities		3,778,032		3,620,378
Total securities available for sale	$	6,141,773	$	5,932,741

Securities may be disposed of before contractual maturities due to sales by the Company or because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

For the nine months ended September 30, 2018, proceeds from the sales of securities available for sale were $95.5 million compared to $573.1 million for the same period in 2017. Securities transactions resulted in gross realized gains of $581 thousand and $4.1 million for the nine months ended September 30, 2018 and 2017, respectively. Securities transactions resulted in gross realized losses of $3 thousand for the nine months ended September 30, 2018, and there were no gross realized losses for the nine months ended September 30, 2017.

Securities available for sale with a fair value of $4.8 billion at September 30, 2018 and $5.7 billion at December 31, 2017 were pledged to secure U.S. Government deposits, other public deposits, certain trust deposits, derivative transactions, and repurchase agreements. Of this amount, securities with a market value of $1.6 billion and $1.8 billion at September 30, 2018 and December 31, 2017, respectively, were pledged at the Federal Reserve Discount Window but were unencumbered as of those dates.

The following table shows the Company’s available for sale investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2018 and December 31, 2017 (in thousands):

	Less than 12 months					12 months or more					Total
September 30, 2018	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Description of Securities
U.S. Treasury	$	—	$	—		$	37,938	$	(2,163	)	$	37,938	$	(2,163	)
U.S. Agencies		—		—			198		(2	)		198		(2	)
Mortgage-backed		1,700,611		(50,116	)		1,889,126		(107,875	)		3,589,737		(157,991	)
State and political subdivisions		1,426,793		(22,319	)		593,013		(28,313	)		2,019,806		(50,632	)
Corporates		—		—			—		—			—		—
Total temporarily-impaired debt securities available for sale	$	3,127,404	$	(72,435	)	$	2,520,275	$	(138,353	)	$	5,647,679	$	(210,788	)

	Less than 12 months					12 months or more					Total
December 31, 2017	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Description of Securities
U.S. Treasury	$	9,851	$	(64	)	$	28,792	$	(1,385	)	$	38,643	$	(1,449	)
U.S. Agencies		14,553		(10	)		—		—			14,553		(10	)
Mortgage-backed		1,990,006		(19,980	)		1,562,333		(52,060	)		3,552,339		(72,040	)
State and political subdivisions		1,076,930		(7,325	)		376,560		(8,484	)		1,453,490		(15,809	)
Corporates		13,266		(12	)		—		—			13,266		(12	)
Total temporarily-impaired debt securities available for sale	$	3,104,606	$	(27,391	)	$	1,967,685	$	(61,929	)	$	5,072,291	$	(89,320	)

The unrealized losses in the Company’s investments in U.S. Treasury obligations, U.S. government agencies, Government Sponsored Entity (GSE) mortgage-backed securities, and municipal securities were caused by changes in interest rates. The Company does not have the intent to sell these securities and does not believe it is more likely than not that the Company will be required to sell these securities before a recovery of amortized cost. The Company expects to recover its cost basis in the securities and does not consider these investments to be other-than-temporarily impaired at September 30, 2018.

Securities Held to Maturity

The following table shows the Company’s held-to-maturity investments’ amortized cost, fair value, and gross unrealized gains and losses at September 30, 2018 and December 31, 2017, respectively (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2018	Cost		Gains		Losses			Value
State and political subdivisions:
Due in 1 year or less	$	7,434	$	—	$	(1,027	)	$	6,407
Due after 1 year through 5 years		101,824		237		(9,363	)		92,698
Due after 5 years through 10 years		372,672		4,639		(23,328	)		353,983
Due after 10 years		717,184		5,200		(83,832	)		638,552
Total state and political subdivisions	$	1,199,114	$	10,076	$	(117,550	)	$	1,091,640

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2017	Cost		Gains		Losses			Value
State and political subdivisions:
Due in 1 year or less	$	2,275	$	3	$	(24	)	$	2,254
Due after 1 year through 5 years		100,648		3,111		(2,834	)		100,925
Due after 5 years through 10 years		372,234		5,006		(14,117	)		363,123
Due after 10 years		785,857		6,952		(51,664	)		741,145
Total state and political subdivisions	$	1,261,014	$	15,072	$	(68,639	)	$	1,207,447

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.

There were no sales of securities held to maturity during the nine months ended September 30, 2018 or 2017.

Trading Securities

There were net unrealized losses on trading securities of $442 thousand and $214 thousand at September 30, 2018 and September 30, 2017, respectively. Net unrealized gains/losses are included in Trading and investment banking income on the Consolidated Statements of Income. Securities sold not yet purchased totaled $40.3 million and $4.1 million at September 30, 2018 and December 31, 2017, respectively, and are classified within the Other liabilities line of the Company’s Consolidated Balance Sheets.

Other Securities

The table below provides detailed information for FRB stock and Federal Home Loan Bank (FHLB) stock and other securities at September 30, 2018 and December 31, 2017 (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
September 30, 2018	Cost		Gains		Losses			Value
FRB and FHLB stock	$	33,262	$	—	$	—		$	33,262
Other securities – marketable		—		5,091		—			5,091
Other securities – non-marketable		23,987		2,914		(2	)		26,899
Total Other securities	$	57,249	$	8,005	$	(2	)	$	65,252

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2017	Cost		Gains		Losses			Value
FRB and FHLB stock	$	33,262	$	—	$	—		$	33,262
Other securities – marketable		3		4,637		—			4,640
Other securities – non-marketable		26,606		1,389		—			27,995
Total Other securities	$	59,871	$	6,026	$	—		$	65,897

Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is mainly tied to the level of borrowings from the FHLB. These holdings are carried at cost. Other marketable and non-marketable securities include Prairie Capital Management (PCM) alternative investments in hedge funds and private equity funds, which are accounted for as equity-method investments. The fair value of other marketable securities includes alternative investment securities of $5.1 million at September 30, 2018 and $4.6 million at December 31, 2017. The fair value of other non-marketable securities includes alternative investment securities of $4.6 million at September 30, 2018 and $3.4 million at December 31, 2017. Unrealized gains or losses on alternative investments are recognized in the Other noninterest income line on the Company’s Consolidated Statements of Income.