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Securities
 3 Months Ended
Mar. 31, 2017
Investments, Debt and Equity Securities [Abstract]  
Securities
Note 6 — Securities

The following tables present as of March 31, 2017 and December 31, 2016 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 the held-to-maturity investment security, which is carried at amortized cost:
 
 
 
As of March 31, 2017
($ in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
709,332

 
$
10

 
$
(8,482
)
 
$
700,860

U.S. government agency and U.S. government sponsored enterprise debt securities
 
183,605

 
134

 
(2,876
)
 
180,863

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

 
 

 
 

 
 

Commercial mortgage-backed securities
 
271,025

 
337

 
(6,840
)
 
264,522

Residential mortgage-backed securities
 
1,185,382

 
3,855

 
(9,482
)
 
1,179,755

Municipal securities
 
146,559

 
1,909

 
(1,399
)
 
147,069

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
10,837

 
—

 
(107
)
 
10,730

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
2,476

 
—

 
(222
)
 
2,254

Non-investment grade (1)
 
10,191

 
—

 
(1,007
)
 
9,184

Foreign bonds:
 
 
 
 
 
 
 


Investment grade (1) (2)
 
445,433

 
49

 
(19,614
)
 
425,868

Other securities
 
40,593

 
853

 
(517
)
 
40,929

Total available-for-sale investment securities
 
$
3,005,433

 
$
7,147

 
$
(50,546
)
 
$
2,962,034

Held-to-maturity investment security:
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
132,497

 
$
1,159

 
$
—

 
$
133,656

Total investment securities
 
$
3,137,930

 
$
8,306

 
$
(50,546
)
 
$
3,095,690

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
($ in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
730,287

 
$
21

 
$
(9,829
)
 
$
720,479

U.S. government agency and U.S. government sponsored enterprise debt securities
 
277,891

 
224

 
(3,249
)
 
274,866

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

 
 

 
 

 
 

Commercial mortgage-backed securities
 
272,672

 
345

 
(6,218
)
 
266,799

Residential mortgage-backed securities
 
1,266,372

 
3,924

 
(11,549
)
 
1,258,747

Municipal securities
 
148,302

 
1,252

 
(1,900
)
 
147,654

Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
11,592

 
—

 
(115
)
 
11,477

Corporate debt securities:
 
 
 
 
 
 
 
 

Investment grade (1)
 
222,190

 
562

 
(375
)
 
222,377

Non-investment grade (1)
 
10,191

 
—

 
(1,018
)
 
9,173

Foreign bonds:
 
 
 
 
 
 
 
 
Investment grade (1) (2)
 
405,443

 
30

 
(21,579
)
 
383,894

Other securities
 
40,501

 
337

 
(509
)
 
40,329

Total available-for-sale investment securities
 
$
3,385,441

 
$
6,695

 
$
(56,341
)
 
$
3,335,795

Held-to-maturity investment security:
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
143,971

 
$
622

 
$
—

 
$
144,593

Total investment securities
 
$
3,529,412

 
$
7,317

 
$
(56,341
)
 
$
3,480,388

 
 
 
 
 
 
 
 
 
(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 of the credit ratings by S&P or Moody’s.
(2)
Fair values of foreign bonds include $395.5 million and $353.6 million of multilateral development bank bonds as of March 31, 2017 and December 31, 2016, respectively.
Unrealized Losses

The following tables present as of March 31, 2017 and December 31, 2016 the Company’s investment portfolio’s gross unrealized losses and related fair values, aggregated by investment category and the length of time that individual securities have been in a continuous unrealized loss position:
 
 
 
As of March 31, 2017
($ 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
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
680,801

 
$
(8,482
)
 
$
—

 
$
—

 
$
680,801

 
$
(8,482
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
154,847

 
(2,876
)
 
—

 
—

 
154,847

 
(2,876
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Commercial mortgage-backed securities
 
212,706

 
(5,879
)
 
35,193

 
(961
)
 
247,899

 
(6,840
)
Residential mortgage-backed securities
 
598,526

 
(8,151
)
 
132,328

 
(1,331
)
 
730,854

 
(9,482
)
Municipal securities
 
45,327

 
(1,006
)
 
6,925

 
(393
)
 
52,252

 
(1,399
)
Non-agency residential mortgage-backed securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
10,729

 
(107
)
 
—

 
—

 
10,729

 
(107
)
Corporate debt securities:
 
 

 
 

 
 

 
 

 
 

 
 

Investment grade
 
—

 
—

 
2,254

 
(222
)
 
2,254

 
(222
)
Non-investment grade
 
—

 
—

 
9,184

 
(1,007
)
 
9,184

 
(1,007
)
Foreign bonds:
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade
 
380,530

 
(19,409
)
 
9,795

 
(205
)
 
390,325

 
(19,614
)
Other securities
 
31,013

 
(517
)
 
—

 
—

 
31,013

 
(517
)
Total available-for-sale investment securities
 
$
2,114,479

 
$
(46,427
)
 
$
195,679

 
$
(4,119
)
 
$
2,310,158

 
$
(50,546
)
Held-to-maturity investment security:
 
 
 
 
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Total investment securities
 
$
2,114,479

 
$
(46,427
)
 
$
195,679

 
$
(4,119
)
 
$
2,310,158

 
$
(50,546
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
($ 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
Available-for-sale investment securities:
 
 

 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$
670,268

 
$
(9,829
)
 
$
—

 
$
—

 
$
670,268

 
$
(9,829
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
203,901

 
(3,249
)
 
—

 
—

 
203,901

 
(3,249
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Commercial mortgage-backed securities
 
202,106

 
(5,452
)
 
29,201

 
(766
)
 
231,307

 
(6,218
)
Residential mortgage-backed securities
 
629,324

 
(9,594
)
 
119,603

 
(1,955
)
 
748,927

 
(11,549
)
Municipal securities
 
57,655

 
(1,699
)
 
2,692

 
(201
)
 
60,347

 
(1,900
)
Non-agency residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
5,033

 
(101
)
 
6,444

 
(14
)
 
11,477

 
(115
)
Corporate debt securities:
 
 
 
 
 
 
 
 
 
 

 
 

Investment grade
 
—

 
—

 
71,667

 
(375
)
 
71,667

 
(375
)
Non-investment grade
 
—

 
—

 
9,173

 
(1,018
)
 
9,173

 
(1,018
)
Foreign bonds:
 
 
 
 
 
 
 
 
 
 
 
 
Investment grade
 
363,618

 
(21,327
)
 
14,258

 
(252
)
 
377,876

 
(21,579
)
Other securities
 
30,991

 
(509
)
 
—

 
—

 
30,991

 
(509
)
Total available-for-sale investment securities
 
$
2,162,896

 
$
(51,760
)
 
$
253,038

 
$
(4,581
)
 
$
2,415,934

 
$
(56,341
)
Held-to-maturity investment security:
 
 
 
 
 
 
 
 
 
 
 
 
Non-agency commercial mortgage-backed security
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Total investment securities
 
$
2,162,896

 
$
(51,760
)
 
$
253,038

 
$
(4,581
)
 
$
2,415,934

 
$
(56,341
)
 


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, see Note 1 — Summary of Significant Accounting Policies — Available-for-Sale Investment Securities to the Consolidated Financial Statements of the Company’s 2016 Form 10-K.

The unrealized losses were primarily attributed to the yield curve movement, in addition to widened liquidity and credit spreads. 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 that the gross unrealized losses detailed in the previous tables are temporary and 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 on the Company’s Consolidated Statements of Income for the three months ended March 31, 2017 and 2016. As of March 31, 2017, the Company had 163 available-for-sale investment securities in an unrealized loss position with no credit impairment, primarily comprised of 13 investment grade foreign bonds, 83 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities and 27 U.S. Treasury securities. In comparison, the Company had 170 available-for-sale investment securities in an unrealized loss position with no credit impairment, primarily comprised of 13 investment grade foreign bonds, 82 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities and 26 U.S. Treasury securities as of December 31, 2016.

During the first quarter of 2016, the Company obtained a non-agency mortgage-backed investment security, through the securitization of multifamily real estate loans, which was classified as held-to-maturity and recorded at amortized cost. The Company has the intent and ability to hold the security to maturity.

OTTI

No OTTI credit losses were recognized for the three months ended March 31, 2017 and 2016.

Realized Gains and Losses

The following table presents the proceeds, gross realized gains and losses, and tax expense related to the sales of available-for-sale investment securities for the three months ended March 31, 2017 and 2016:
 
($ in thousands)
 
Three Months Ended March 31,
 
2017
 
2016
Proceeds from sales
 
$
302,656

 
$
652,753

Gross realized gains
 
$
2,474

 
$
3,967

Gross realized losses
 
$
—

 
$
125

Related tax expense
 
$
1,040

 
$
1,616

 


Scheduled Maturities of Investment Securities
 
The following table presents the scheduled maturities of available-for-sale investment securities as of March 31, 2017:
 
($ in thousands)
 
Amortized
Cost
 
Estimated
Fair Value
Due within one year
 
$
519,223

 
$
503,271

Due after one year through five years
 
878,436

 
867,870

Due after five years through ten years
 
241,665

 
236,183

Due after ten years
 
1,366,109

 
1,354,710

Total available-for-sale investment securities
 
$
3,005,433

 
$
2,962,034

 

The following table presents the scheduled maturity of the held-to-maturity investment security as of March 31, 2017:
 
($ in thousands)
 
Amortized
Cost
 
Estimated
Fair Value
Due after ten years
 
$
132,497

 
$
133,656

 


Actual maturities of mortgage-backed securities can differ from contractual maturities because borrowers have the right to prepay obligations. In addition, factors such 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 $640.9 million and $767.4 million as of March 31, 2017 and December 31, 2016, 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.

Restricted Equity Securities

Restricted equity securities include stock of the Federal Reserve Bank and the Federal Home Loan Bank. Restricted equity securities are carried at cost as these securities do not have a readily determined fair value because ownership of these shares is restricted and they lack a market. The following table presents the restricted equity securities as of March 31, 2017 and December 31, 2016:
 
 
 
 
 
($ in thousands)
 
March 31, 2017
 
December 31, 2016
Federal Reserve Bank stock
 
$
17,250

 
$
17,250

FHLB stock
 
55,769

 
55,525

Total
 
$
73,019

 
$
72,775