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Investment Securities
 6 Months Ended
Jun. 30, 2018
Available-for-sale Securities and Held-to-maturity Securities [Abstract]  
Investment Securities
Investment Securities

The following tables are a summary of the investment securities portfolios as of the dates shown:
 
June 30, 2018
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
30,506

 
$
—

 
$
(290
)
 
$
30,216

U.S. Government agencies
114,692

 
17

 
(301
)
 
114,408

Municipal
131,488

 
1,945

 
(840
)
 
132,593

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
98,285

 
104

 
(4,012
)
 
94,377

Other
1,000

 
—

 
—

 
1,000

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
1,589,815

 
164

 
(70,815
)
 
1,519,164

Collateralized mortgage obligations
51,617

 
5

 
(2,593
)
 
49,029

Equity securities (2)
—

 
—

 
—

 
—

Total available-for-sale securities
$
2,017,403

 
$
2,235

 
$
(78,851
)
 
$
1,940,787

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
639,433

 
$
—

 
$
(34,040
)
 
$
605,393

Municipal
251,401

 
927

 
(5,879
)
 
246,449

Total held-to-maturity securities
$
890,834

 
$
927

 
$
(39,919
)
 
$
851,842

Equity securities with readily determinable fair value (2)
$
34,230

 
$
4,783

 
$
(1,174
)
 
$
37,839


 
December 31, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
(Dollars in thousands)
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
144,904

 
$
—

 
$
(1,082
)
 
$
143,822

U.S. Government agencies
157,638

 
2

 
(725
)
 
156,915

Municipal
113,197

 
2,712

 
(557
)
 
115,352

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
30,309

 
43

 
(301
)
 
30,051

Other
1,000

 
—

 
(1
)
 
999

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
1,291,695

 
446

 
(31,955
)
 
1,260,186

Collateralized mortgage obligations
60,092

 
64

 
(617
)
 
59,539

Equity securities (2)
34,234

 
3,357

 
(789
)
 
36,802

Total available-for-sale securities
$
1,833,069

 
$
6,624

 
$
(36,027
)
 
$
1,803,666

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
579,062

 
$
23

 
$
(14,066
)
 
$
565,019

Municipal
247,387

 
2,668

 
(2,558
)
 
247,497

Total held-to-maturity securities
$
826,449

 
$
2,691

 
$
(16,624
)
 
$
812,516

(1)
Consisting entirely of residential mortgage-backed securities, none of which are subprime.
(2)
As a result of the adoption of ASU No. 2016-01 effective January 1, 2018, equity securities with readily determinable fair value are no longer presented within available-for-sale securities and are now presented as equity securities with readily determinable fair values in the Company's Consolidated Statements of Condition for the current period.

 
June 30, 2017
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
(Dollars in thousands)
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
119,804

 
$
—

 
$
(723
)
 
$
119,081

U.S. Government agencies
158,162

 
22

 
(674
)
 
157,510

Municipal
121,610

 
2,774

 
(264
)
 
124,120

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
60,340

 
71

 
(810
)
 
59,601

Other
1,000

 
—

 
(3
)
 
997

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
1,139,734

 
2,301

 
(31,704
)
 
1,110,331

Collateralized mortgage obligations
42,845

 
433

 
(319
)
 
42,959

Equity securities (2)
32,642

 
3,028

 
(633
)
 
35,037

Total available-for-sale securities
$
1,676,137

 
$
8,629

 
$
(35,130
)
 
$
1,649,636

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
585,071

 
$
556

 
$
(7,461
)
 
$
578,166

Municipal
208,305

 
2,298

 
(1,280
)
 
209,323

Total held-to-maturity securities
$
793,376

 
$
2,854

 
$
(8,741
)
 
$
787,489

(1)
Consisting entirely of residential mortgage-backed securities, none of which are subprime.
(2)
As a result of the adoption of ASU No. 2016-01 effective January 1, 2018, equity securities with readily determinable fair value are no longer presented within available-for-sale securities and are now presented as equity securities with readily determinable fair values in the Company's Consolidated Statements of Condition for the current period.

Equity securities without readily determinable fair values totaled $24.7 million as of June 30, 2018. Equity securities without readily determinable fair values are included as part of accrued interest receivable and other assets in the Company's Consolidated Statements of Condition. In accordance with the adoption of ASU No. 2016-01, the Company recorded upward adjustments on such securities of $25,000 in the second quarter of 2018 and $156,000 on a year-to-date basis, related to observable price changes in orderly transactions for the identical or a similar investment of the same issuer. No downward adjustments of equity securities without readily determinable fair values were recorded during the current periods. The Company monitors its equity investments without a readily determinable fair values to identify potential transactions that may indicate an observable price change requiring adjustment to its carrying amount.

The following table presents the portion of the Company’s available-for-sale and held-to-maturity investment securities portfolios which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at June 30, 2018:
 
Continuous unrealized
losses existing for
less than 12 months
 
Continuous unrealized
losses existing for
greater than 12 months
 
Total
(Dollars in thousands)
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
30,216

 
$
(290
)
 
$
—

 
$
—

 
$
30,216

 
$
(290
)
U.S. Government agencies
11,127

 
(87
)
 
99,799

 
(214
)
 
110,926

 
(301
)
Municipal
31,744

 
(438
)
 
14,660

 
(402
)
 
46,404

 
(840
)
Corporate notes:
 
 
 
 
 
 
 
 
 
 
 
Financial issuers
70,557

 
(3,759
)
 
3,720

 
(253
)
 
74,277

 
(4,012
)
Other
—

 
—

 
—

 
—

 
—

 
—

Mortgage-backed:
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
600,141

 
(15,423
)
 
914,167

 
(55,392
)
 
1,514,308

 
(70,815
)
Collateralized mortgage obligations
27,427

 
(1,247
)
 
21,093

 
(1,346
)
 
48,520

 
(2,593
)
Total available-for-sale securities
$
771,212

 
$
(21,244
)
 
$
1,053,439

 
$
(57,607
)
 
$
1,824,651

 
$
(78,851
)
Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
U.S. Government agencies
$
317,261

 
$
(11,169
)
 
$
288,132

 
$
(22,871
)
 
$
605,393

 
$
(34,040
)
Municipal
157,123

 
(3,702
)
 
53,078

 
(2,177
)
 
210,201

 
(5,879
)
Total held-to-maturity securities
$
474,384

 
$
(14,871
)
 
$
341,210

 
$
(25,048
)
 
$
815,594

 
$
(39,919
)


The Company conducts a regular assessment of its available-for-sale and held-to-maturity investment securities to determine whether securities are other-than-temporarily impaired considering, among other factors, the nature of the securities, credit ratings or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

The Company does not consider available-for-sale and held-to-maturity securities with unrealized losses at June 30, 2018 to be other-than-temporarily impaired. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost bases, which may be the maturity dates of the securities. The unrealized losses within each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. Securities with continuous unrealized losses existing for more than twelve months were primarily mortgage-backed securities, U.S. government agency securities and municipal securities.

The following table provides information as to the amount of gross gains and losses, adjustments and impairment on investment securities and proceeds received through the sale or call of investment securities:

 
Three months ended June 30,
 
Six months ended June 30,
(Dollars in thousands)
2018
 
2017
 
2018
 
2017
Realized gains on investment debt securities
$
6

 
$
48

 
$
6

 
$
48

Realized losses on investment debt securities
(26
)
 
(1
)
 
(1,001
)
 
(56
)
Net realized (losses) gains on investment debt securities
(20
)
 
$
47

 
(995
)
 
$
(8
)
Unrealized gains on equity securities with readily determinable fair value
229

 
—

 
2,102

 
—

Unrealized losses on equity securities with readily determinable fair value
(222
)
 
—

 
(1,065
)
 
—

Net unrealized gains on equity securities with readily determinable fair value
7

 
—

 
1,037

 
—

Upward adjustments of equity securities without readily determinable fair values
25

 
—

 
156

 
—

Downward adjustments of equity securities without readily determinable fair values
—

 
—

 
—

 
—

Impairment of equity securities without readily determinable fair values
—

 
—

 
(537
)
 
—

Adjustment and impairment, net, of equity securities without readily determinable fair values
25

 
—

 
(381
)
 
—

Other than temporary impairment charges
—

 
—

 
—

 
—

Gains (losses) on investment securities, net
$
12

 
$
47

 
$
(339
)
 
$
(8
)
Proceeds from sales of available-for-sale securities
$
—

 
$
—

 
$
208,991

 
$
3,676

Proceeds from sales of equity securities with readily determinable fair value
—

 
—

 
—

 
—

Proceeds from sales and capital distributions of equity securities without readily determinable fair value
616

 
—

 
616

 
—



During the three months ended June 30, 2018, the Company recorded no impairment of equity securities without readily determinable fair values. On a year-to-date basis, the Company recorded impairment of equity securities without readily determinable fair values totaling $537,000. The Company conducts a quarterly assessment of its equity securities without a readily determinable fair values to determine whether impairment exists in such securities, considering, among other factors, the nature of the securities, financial condition of the issuer and expected future cash flows.

The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of June 30, 2018, December 31, 2017 and June 30, 2017, by contractual maturity, are shown in the following table. Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties:
 
June 30, 2018
 
December 31, 2017
 
June 30, 2017
(Dollars in thousands)
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
$
147,550

 
$
147,271

 
$
300,833

 
$
299,285

 
$
125,706

 
$
125,170

Due in one to five years
103,903

 
103,919

 
97,019

 
97,326

 
289,688

 
289,243

Due in five to ten years
117,799

 
114,640

 
33,947

 
35,029

 
38,213

 
39,463

Due after ten years
6,719

 
6,764

 
15,249

 
15,499

 
7,309

 
7,433

Mortgage-backed
1,641,432

 
1,568,193

 
1,351,787

 
1,319,725

 
1,182,579

 
1,153,290

Equity securities (1)
—

 
—

 
34,234

 
36,802

 
32,642

 
35,037

Total available-for-sale securities
$
2,017,403

 
$
1,940,787

 
$
1,833,069

 
$
1,803,666

 
$
1,676,137

 
$
1,649,636

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
$
5,667

 
$
5,658

 
$
170

 
$
171

 
$
—

 
$
—

Due in one to five years
32,392

 
31,863

 
38,392

 
38,012

 
32,925

 
32,776

Due in five to ten years
214,991

 
208,835

 
205,227

 
203,680

 
172,398

 
172,800

Due after ten years
637,784

 
605,486

 
582,660

 
570,653

 
588,053

 
581,913

Total held-to-maturity securities
$
890,834

 
$
851,842

 
$
826,449

 
$
812,516

 
$
793,376

 
$
787,489


(1)
As a result of the adoption of ASU No. 2016-01 effective January 1, 2018, equity securities with readily determinable fair value are no longer presented within available-for-sale securities and are now presented as equity securities with readily determinable fair values in the Company's Consolidated Statements of Condition for the current period.

Securities having a fair value of $1.7 billion at June 30, 2018 as well as securities having a fair value of $1.7 billion and $1.5 billion at December 31, 2017 and June 30, 2017, respectively, were pledged as collateral for public deposits, trust deposits, Federal Home Loan Bank ("FHLB") advances, securities sold under repurchase agreements and derivatives. At June 30, 2018, there were no securities of a single issuer, other than U.S. Government-sponsored agency securities, which exceeded 10% of shareholders’ equity.