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Securities
 9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Securities Securities

The following tables present the amortized cost, gross unrealized gains and losses, and fair value by major categories of available-for-sale investment securities as of September 30, 2019 and December 31, 2018:
 
($ in thousands)
 
September 30, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
427,535

 
$
—

 
$
(1,422
)
 
$
426,113

U.S. government agency and U.S. government sponsored enterprise debt securities
 
688,529

 
2,924

 
(85
)
 
691,368

U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
Commercial mortgage-backed securities
 
539,957

 
12,500

 
(2,664
)
 
549,793

Residential mortgage-backed securities
 
914,379

 
11,914

 
(906
)
 
925,387

Municipal securities
 
76,948

 
1,218

 
(7
)
 
78,159

Non-agency mortgage-backed securities:
 
 
 
 
 
 
 
 
Commercial mortgage-backed securities
 
67,518

 
2,731

 
(6
)
 
70,243

Residential mortgage-backed securities
 
31,209

 
425

 
(139
)
 
31,495

Corporate debt securities
 
11,250

 
—

 
(228
)
 
11,022

Foreign bonds
 
454,431

 
607

 
(1,859
)
 
453,179

Asset-backed securities
 
48,028

 
—

 
(753
)
 
47,275

Total available-for-sale investment securities
 
$
3,259,784

 
$
32,319

 
$
(8,069
)
 
$
3,284,034

 
 
($ in thousands)
 
December 31, 2018
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale investment securities:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
577,561

 
$
153

 
$
(12,899
)
 
$
564,815

U.S. government agency and U.S. government sponsored enterprise debt securities
 
219,485

 
382

 
(2,694
)
 
217,173

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


Commercial mortgage-backed securities
 
420,486

 
811

 
(12,694
)
 
408,603

Residential mortgage-backed securities
 
957,219

 
4,026

 
(14,552
)
 
946,693

Municipal securities
 
82,965

 
87

 
(1,032
)
 
82,020

Non-agency mortgage-backed securities:
 
 
 
 
 
 
 


Commercial mortgage-backed securities
 
25,826

 
226

 
—

 
26,052

Residential mortgage-backed securities
 
10,109

 
7

 
(185
)
 
9,931

Corporate debt securities
 
11,250

 
—

 
(381
)
 
10,869

Foreign bonds
 
489,378

 
—

 
(26,330
)
 
463,048

Asset-backed securities
 
12,621

 
22

 
—

 
12,643

Total available-for-sale investment securities
 
$
2,806,900

 
$
5,714

 
$
(70,767
)
 
$
2,741,847

 
 
 
 
 
 
 
 
 


Unrealized Losses

The following tables present the fair value and the associated gross unrealized losses of the Company’s available-for-sale investment securities, aggregated by investment category and the length of time that the securities have been in a continuous unrealized loss position, as of September 30, 2019 and December 31, 2018:
 
($ in thousands)
 
September 30, 2019
 
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
 
$
199,711

 
$
(76
)
 
$
226,402

 
$
(1,346
)
 
$
426,113

 
$
(1,422
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
354,916

 
(85
)
 
—

 
—

 
354,916

 
(85
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage-backed securities
 
60,336

 
(573
)
 
116,139

 
(2,091
)
 
176,475

 
(2,664
)
Residential mortgage-backed securities
 
87,356

 
(553
)
 
43,403

 
(353
)
 
130,759

 
(906
)
Municipal securities
 
979

 
(1
)
 
5,046

 
(6
)
 
6,025

 
(7
)
Non-agency mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage-backed securities
 
7,914

 
(6
)
 
—

 
—

 
7,914

 
(6
)
Residential mortgage-backed securities
 
11,145

 
(139
)
 
—

 
—

 
11,145

 
(139
)
Corporate debt securities
 
1,247

 
(3
)
 
9,775

 
(225
)
 
11,022

 
(228
)
Foreign bonds
 
14,338

 
(101
)
 
123,243

 
(1,758
)
 
137,581

 
(1,859
)
Asset-backed securities
 
47,275

 
(753
)
 
—

 
—

 
47,275

 
(753
)
Total available-for-sale investment securities
 
$
785,217

 
$
(2,290
)
 
$
524,008

 
$
(5,779
)
 
$
1,309,225

 
$
(8,069
)
 
 
($ in thousands)
 
December 31, 2018
 
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
 
$
—

 
$
—

 
$
516,520

 
$
(12,899
)
 
$
516,520

 
$
(12,899
)
U.S. government agency and U.S. government sponsored enterprise debt securities
 
22,755

 
(238
)
 
159,814

 
(2,456
)
 
182,569

 
(2,694
)
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage-backed securities
 
26,886

 
(245
)
 
274,666

 
(12,449
)
 
301,552

 
(12,694
)
Residential mortgage-backed securities
 
75,675

 
(491
)
 
653,660

 
(14,061
)
 
729,335

 
(14,552
)
Municipal securities
 
9,458

 
(104
)
 
30,295

 
(928
)
 
39,753

 
(1,032
)
Non-agency mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed securities
 
3,067

 
(19
)
 
3,949

 
(166
)
 
7,016

 
(185
)
Corporate debt securities
 
10,869

 
(381
)
 
—

 
—

 
10,869

 
(381
)
Foreign bonds
 
14,418

 
(40
)
 
448,630

 
(26,290
)
 
463,048

 
(26,330
)
Total available-for-sale investment securities
 
$
163,128

 
$
(1,518
)
 
$
2,087,534

 
$
(69,249
)
 
$
2,250,662

 
$
(70,767
)
 


Other-Than-Temporary Impairment

For each reporting period, the Company assesses individual securities that are in an unrealized loss position for OTTI. For a discussion of the factors and criteria the Company uses in analyzing securities for OTTI, see Note 1 — Summary of Significant Accounting Policies — Securities to the Consolidated Financial Statements of the Company’s 2018 Form 10-K.

The unrealized losses were primarily attributable to the movement in the yield curve, 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 because of changes in market interest rates. The Company believes that the gross unrealized losses presented in the previous tables are temporary and no credit losses are expected. As a result, the Company expects to recover the entire amortized cost basis of these securities. The Company has the intent to hold these securities through the anticipated recovery period and it is not more-likely-than-not that the Company will have to sell these securities before recovery of their amortized cost. As of September 30, 2019, the Company had 70 available-for-sale investment securities in a gross unrealized loss position with no credit impairment, primarily consisting of 37 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, six foreign bonds, and 10 U.S. Treasury securities. In comparison, as of December 31, 2018, the Company had 184 available-for-sale investment securities in a gross unrealized loss position with no credit impairment, primarily consisting of 108 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, 16 foreign bonds, and 19 U.S. Treasury securities. There were no OTTI credit losses recognized in earnings for each of the three and nine months ended September 30, 2019 and 2018.

Realized Gains and Losses

The following table presents the proceeds, gross realized gains and tax expense related to the sales of available-for-sale investment securities for the three and nine months ended September 30, 2019 and 2018:
 
($ in thousands)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Proceeds from sales
 
$
101,129

 
$
39,377

 
$
476,231

 
$
296,252

Gross realized gains
 
$
58

 
$
35

 
$
3,066

 
$
2,374

Related tax expense
 
$
17

 
$
11

 
$
906

 
$
701

 


Contractual Maturities of Investment Securities

The following table presents the contractual maturities of available-for-sale investment securities as of September 30, 2019:
 
($ in thousands)
 
Amortized Cost
 
Fair Value
Due within one year
 
$
1,100,414

 
$
1,099,412

Due after one year through five years
 
430,577

 
429,725

Due after five years through ten years
 
185,633

 
189,981

Due after ten years
 
1,543,160

 
1,564,916

Total available-for-sale investment securities
 
$
3,259,784

 
$
3,284,034

 

Actual maturities of mortgage-backed securities can differ from contractual maturities as the 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.

As of September 30, 2019 and December 31, 2018, available-for-sale investment securities with fair value of $524.4 million and $435.8 million, respectively, were pledged to secure public deposits, repurchase agreements, interest rate contracts, and for other purposes required or permitted by law.

Restricted Equity Securities

Restricted equity securities include the Federal Reserve Bank of San Francisco (“FRB”) and the FHLB stock. Restricted equity securities are carried at cost as these securities do not have a readily determinable fair value. The following table presents the restricted equity securities as of September 30, 2019 and December 31, 2018:
 
($ in thousands)
 
September 30, 2019
 
December 31, 2018
FRB stock
 
$
58,084

 
$
56,819

FHLB stock
 
20,250

 
17,250

Total restricted equity securities
 
$
78,334

 
$
74,069