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INVESTMENT SECURITIES
 3 Months Ended
Mar. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES
NOTE 5 — INVESTMENT SECURITIES

The following table presents the amortized cost, gross unrealized gains and losses and fair value by major categories of available-for-sale investment securities, which are carried at fair value, and a held-to-maturity investment security, which is carried at amortized cost:
 
($ in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
As of March 31, 2016
 
 

 
 

 
 

 
 

Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
514,827

 
$
2,002

 
$
(74
)
 
$
516,755

U.S. government agency and U.S. government sponsored enterprise debt securities
 
787,846

 
1,671

 
(582
)
 
788,935

U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
325,071

 
3,132

 
(1,216
)
 
326,987

Residential mortgage-backed securities
 
927,989

 
9,421

 
(2,311
)
 
935,099

Municipal securities
 
156,327

 
3,254

 
(155
)
 
159,426

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
58,960

 
1,015

 
(76
)
 
59,899

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
368,206

 
212

 
(2,513
)
 
365,905

Non-investment grade (1)
 
10,191

 
—

 
(2,267
)
 
7,924

Other securities
 
44,136

 
499

 
(327
)
 
44,308

Total available-for-sale investment securities
 
3,193,553

 
21,206

 
(9,521
)
 
3,205,238

 
 
 
 
 
 
 
 
 
Held-to-maturity investment security:
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
160,135

 
—

 
—

 
160,135

Total investment securities
 
$
3,353,688

 
$
21,206

 
$
(9,521
)
 
$
3,365,373

 
 
 
 
 
 
 
 
 
As of December 31, 2015
 
 

 
 

 
 

 
 

Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
1,002,874

 
$
33

 
$
(4,392
)
 
$
998,515

U.S. government agency and U.S. government sponsored enterprise debt securities
 
771,288

 
555

 
(2,994
)
 
768,849

U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
354,418

 
268

 
(3,024
)
 
351,662

Residential mortgage-backed securities
 
996,255

 
7,542

 
(6,401
)
 
997,396

Municipal securities
 
173,785

 
2,657

 
(793
)
 
175,649

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
62,133

 
433

 
(173
)
 
62,393

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
366,921

 
132

 
(2,340
)
 
364,713

Non-investment grade (1)
 
11,491

 
—

 
(1,849
)
 
9,642

Other securities
 
44,664

 
124

 
(381
)
 
44,407

Total available-for-sale investment securities
 
$
3,783,829

 
$
11,744

 
$
(22,347
)
 
$
3,773,226

 
 
 
 
 
 
 
 
 
(1)
Available-for-sale investment securities rated BBB- or higher by S&P or Baa3 or higher by Moody’s are considered investment grade.  Conversely, available-for-sale investment securities rated lower than BBB- by S&P or lower than Baa3 by Moody’s are considered non-investment grade. Classifications are based on the lower credit rating by S&P or Moody’s.

Unrealized Losses

The following table presents the Company’s investment portfolio’s gross unrealized losses and related fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
 
($ in thousands)
 
Less Than 12 Months
 
12 Months or More
 
Total
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
 
Fair
Value
 
Gross Unrealized
Losses
As of March 31, 2016
 
 

 
 

 
 

 
 

 
 

 
 

Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
60,855

 
$
(42
)
 
$
30,570

 
$
(32
)
 
$
91,425

 
$
(74
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
229,834

 
(571
)
 
9,189

 
(11
)
 
239,023

 
(582
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
103,881

 
(826
)
 
31,130

 
(390
)
 
135,011

 
(1,216
)
Residential mortgage-backed securities
 
255,839

 
(1,381
)
 
45,674

 
(930
)
 
301,513

 
(2,311
)
Municipal securities
 
5,917

 
(31
)
 
15,794

 
(124
)
 
21,711

 
(155
)
Non-agency residential mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
13,945

 
(57
)
 
6,167

 
(19
)
 
20,112

 
(76
)
Corporate debt securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
248,730

 
(976
)
 
90,899

 
(1,537
)
 
339,629

 
(2,513
)
Non-investment grade
 
—

 
—

 
7,924

 
(2,267
)
 
7,924

 
(2,267
)
Other securities
 
7,203

 
(3
)
 
8,676

 
(324
)
 
15,879

 
(327
)
Total available-for-sale investment securities
 
$
926,204

 
$
(3,887
)
 
$
246,023

 
$
(5,634
)
 
$
1,172,227

 
$
(9,521
)
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2015
 
 

 
 

 
 

 
 

 
 

 
 

Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
907,400

 
$
(4,250
)
 
$
20,282

 
$
(142
)
 
$
927,682

 
$
(4,392
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
541,385

 
(2,994
)
 
—

 
—

 
541,385

 
(2,994
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Commercial mortgage-backed securities
 
252,340

 
(2,562
)
 
20,793

 
(462
)
 
273,133

 
(3,024
)
Residential mortgage-backed securities
 
535,842

 
(4,530
)
 
58,315

 
(1,871
)
 
594,157

 
(6,401
)
Municipal securities
 
48,495

 
(437
)
 
14,739

 
(356
)
 
63,234

 
(793
)
Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
5,123

 
(1
)
 
6,242

 
(172
)
 
11,365

 
(173
)
Corporate debt securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
218,944

 
(1,189
)
 
89,989

 
(1,151
)
 
308,933

 
(2,340
)
Non-investment grade
 
—

 
—

 
9,642

 
(1,849
)
 
9,642

 
(1,849
)
Other securities
 
17,990

 
(112
)
 
8,731

 
(269
)
 
26,721

 
(381
)
Total available-for-sale investment securities
 
$
2,527,519

 
$
(16,075
)
 
$
228,733

 
$
(6,272
)
 
$
2,756,252

 
$
(22,347
)
 

  
For each reporting period, the Company examines all individual securities that are in an unrealized loss position for OTTI.  For discussion of the factors and criteria the Company uses in analyzing securities for OTTI, please see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2015 Form 10-K.

The unrealized losses on U.S. Treasury and agency securities were primarily attributed to yield curve movement. The unrealized losses on other investment securities, other than U.S. Treasury and agency securities, were primarily attributed to the widened liquidity spread and credit spread in addition to yield curve movement. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated.

The Company believes the gross unrealized losses detailed in the tables above are temporary and are not due to reasons of credit quality. As a result, the Company expects to recover the entire amortized cost basis of these securities. Accordingly, no impairment loss has been recorded in the Company’s Consolidated Statements of Income for the three months ended March 31, 2016 and 2015.

During the three months ended March 31, 2016, the Company obtained a non-agency mortgage-backed held-to-maturity investment security, which is measured at amortized cost, through a securitization of multifamily real estate loans. The Company has the intent and ability to hold the security to maturity. For detailed discussion, please refer to Note 7 — Loans Receivable And Allowance For Credit Losses to the Consolidated Financial Statements.

OTTI

The following table presents a rollforward of the amounts related to the OTTI credit losses recognized in earnings for the three months ended March 31, 2016 and 2015:
 
 
 
 
 
($ in thousands)
 
Three Months Ended March 31,
 
2016
 
2015
Beginning balance
 
$
—

 
$
112,338

Addition of OTTI previously not recognized
 
—

 
—

Additional increase to the amount related to the credit
 loss for which an OTTI was previously recognized
 
—

 
—

Reduction for securities sold
 
—

 
(5,650
)
Ending balance
 
$
—

 
$
106,688

 


No OTTI credit losses were recognized for the three months ended March 31, 2016 and 2015. For the three months ended March 31, 2015, the Company realized a gain of $960 thousand from the sale of a non-investment grade corporate debt security with previously recognized OTTI credit losses of $5.7 million.

Realized Gains and Losses

The following table presents the proceeds, gross realized gains and losses related to the sales of available-for-sale investment securities for the three months ended March 31, 2016 and 2015:
 
($ in thousands)
 
Three Months Ended March 31,
 
2016
 
2015
Proceeds from sales
 
$
652,753

 
$
180,501

Gross realized gains
 
$
3,967

 
$
4,404

Gross realized losses
 
$
125

 
$
—

Related tax expense
 
$
1,614

 
$
1,850

 


There were no sales of held-to-maturity investment securities for the three months ended March 31, 2016 and 2015.

Scheduled Maturities of Investment Securities
 
The following table presents the scheduled maturities of available-for-sale investment securities as of March 31, 2016:
 
($ in thousands)
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
 
$
821,310

 
$
819,156

Due after one year through five years
 
712,823

 
718,395

Due after five years through ten years
 
380,657

 
380,493

Due after ten years
 
1,278,763

 
1,287,194

Total available-for-sale investment securities
 
$
3,193,553

 
$
3,205,238

 

The following table presents the scheduled maturity of the held-to-maturity investment security as of March 31, 2016:
 
($ in thousands)
 
Amortized
Cost
 
Estimated
Fair Value
Due after ten years
 
$
160,135

 
$
160,135

 


Actual maturities of mortgage-backed securities can differ from contractual maturities because borrowers have the right to prepay obligations. In addition, such factors as prepayments and interest rates may affect the yields on the carrying values of mortgage-backed securities.

Available-for-sale investment securities with fair values of $1.11 billion and $873.0 million as of March 31, 2016 and December 31, 2015, respectively, were pledged to secure public deposits, repurchase agreements, the Federal Reserve Bank’s discount window, and for other purposes required or permitted by law.