XML 81 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
SECURITIES
 12 Months Ended
Dec. 31, 2013
SECURITIES  
SECURITIES

NOTE 4. SECURITIES

        The Company accounts for securities based on the following categories: (i) securities available-for-sale, which are carried at estimated fair value, with unrealized gains and losses reported in accumulated other comprehensive loss; (ii) other securities, at estimated fair value, with unrealized gains and losses recorded in the consolidated statements of operations; and (iii) RMBS, at estimated fair value, with unrealized gains and losses recorded in the consolidated statements of operations.

        The following table summarizes the Company's securities as of December 31, 2013, which are carried at estimated fair value (amounts in thousands):

 
   December 31, 2013  
 
   Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair
Value		  

Securities available-for-sale

   $ 326,775   $ 24,791   $ (1,225 ) $ 350,341  

Other securities, at estimated fair value(1)

     135,968     12,436     (1,437 )   146,967  

Residential mortgage-backed securities, at estimated fair value(1)

     138,284     2,809     (65,089 )   76,004  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total securities

   $ 601,027   $ 40,036   $ (67,751 ) $ 573,312  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
(1)
Unrealized gains and losses presented represent amounts as of period-end. Unrealized gains and losses recognized during the year for these securities are recorded in earnings.

        The following table summarizes the Company's securities as of December 31, 2012, which are carried at estimated fair value (amounts in thousands):

 
   December 31, 2012  
 
   Amortized
Cost		   Gross
Unrealized
Gains		   Gross
Unrealized
Losses		   Estimated
Fair
Value		  

Securities available-for-sale

   $ 394,821   $ 27,281   $ (9,809 ) $ 412,293  

Other securities, at estimated fair value(1)

     27,991     9,768     (374 )   37,385  

Residential mortgage-backed securities, at estimated fair value(1)

     171,385     3,762     (91,305 )   83,842  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total securities

   $ 594,197   $ 40,811   $ (101,488 ) $ 533,520  
                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                   
(1)
Unrealized gains and losses presented represent amounts as of period-end. Unrealized gains and losses recognized during the year for these securities are recorded in earnings.

        The following table shows the gross unrealized losses and fair value of the Company's available-for-sale securities, aggregated by length of time that the individual securities have been in a continuous unrealized loss position as of December 31, 2013 and 2012 (amounts in thousands):

 
   Less Than 12 months   12 Months or More   Total  
 
   Estimated
Fair Value		   Unrealized
Losses		   Estimated
Fair Value		   Unrealized
Losses		   Estimated
Fair Value		   Unrealized
Losses		  

December 31, 2013

                                      

Securities available-for-sale

   $ 25,543   $ (658 ) $ 30,034   $ (567 ) $ 55,577   $ (1,225 )

December 31, 2012

                                      

Securities available-for-sale

   $ 45,900   $ (4,398 ) $ 37,500   $ (5,411 ) $ 83,400   $ (9,809 )

        The unrealized losses in the table above are considered to be temporary impairments due to market factors and are not reflective of credit deterioration. The Company considers many factors when evaluating whether impairment is other-than-temporary. For securities available-for-sale included in the table above, the Company does not intend to sell or believe that it is more likely than not that the Company will be required to sell any of its securities available-for-sale prior to recovery. In addition, based on the analyses performed by the Company on each of its securities available-for-sale, the Company believes that it is able to recover the entire amortized cost amount of the securities available-for-sale included in the table above.

        During the year ended December 31, 2013, the Company recognized a loss totaling $19.5 million for securities available-for-sale that it determined to be other-than-temporarily impaired. During the years ended December 31, 2012 and 2011, the Company recognized losses totaling $8.2 million and $1.5 million, respectively, for securities available-for-sale that it determined to be other-than-temporarily impaired. The Company intends to sell these securities and as a result, the entire amount of the loss is recorded through earnings in net realized and unrealized gain on investments in the consolidated statements of operations.

        For common and preferred stock, the Company considers many factors when evaluating whether impairment is other-than-temporary, including its intent and ability to hold the common and preferred stock for a period of time sufficient for recovery to cost. If the Company believes it will not recover the cost basis based on its intent or ability, an other-than-temporary loss will be recorded through earnings in net realized and unrealized gain on investments in the consolidated statements of operations.

        During the year ended December 31, 2013, the Company did not recognize a loss for common and preferred stock that it determined to be other-than-temporarily impaired. As of December 31, 2013, the Company had no investments in common or preferred stock classified as available-for-sale. During the years ended December 31, 2012 and 2011, the Company recognized losses totaling $0.2 million and $2.2 million, respectively, for common and preferred stock that it determined to be other-than-temporary impaired.

        As of December 31, 2013, the Company had a corporate debt security from one issuer in default with an estimated fair value of $25.4 million, which was on non-accrual status. As of December 31, 2012, the Company had no corporate debt securities in default.

        Securities available-for-sale sold at a loss typically include those that the Company determined to be other-than-temporarily impaired or had a deterioration in credit quality. The following table shows the net realized gains on the sales of securities available-for-sale (amounts in thousands):

 
   Year ended
December 31,
2013		   Year ended
December 31,
2012		   Year ended
December 31,
2011		  

Gross realized gains

   $ 2,829   $ 85,982   $ 100,565  

Gross realized losses

     (42 )   (12 )   (559 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net realized gains

   $ 2,787   $ 85,970   $ 100,006  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

        The following table summarizes the amortized cost and estimated fair value of securities available-for-sale by remaining contractual maturity and weighted average coupon based on par values as of December 31, 2013 (dollar amounts in thousands):

Description
  Amortized
Cost		   Estimated
Fair
Value		   Weighted
Average
Coupon		  

Due within one year

   $ 23,702   $ 24,517     7.9 %

One to five years

     207,987     221,393     8.2  

Five to ten years

     92,329     101,341     8.5  

Greater than ten years

     2,757     3,090     1.1  
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 326,775   $ 350,341        
                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                 

        The remaining contractual maturities in the table above were allocated assuming no prepayments. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.

Concentration Risk

        The Company's corporate debt securities portfolio, which includes securities available-for-sale and other securities at estimated fair value, has certain credit risk concentrated in a limited number of issuers. As of December 31, 2013, approximately 55% of the estimated fair value of the Company's corporate debt securities portfolio was concentrated in ten issuers, with the three largest concentrations of debt securities in securities issued by LCI Helicopters Limited, JC Penney Corp. Inc. and NXP Semiconductor NV, which combined represented $104.5 million, or approximately 21% of the estimated fair value of the Company's corporate debt securities. As of December 31, 2012, approximately 51% of the estimated fair value of the Company's corporate debt securities portfolio, was concentrated in ten issuers, with the three largest concentrations of debt securities in securities issued by Sanmina Corporation, Avaya, Inc. and iPayment, Inc., which combined represented $87.0 million, or approximately 19% of the estimated fair value of the Company's corporate debt securities.

Pledged Assets

        Note 7 to these consolidated financial statements describes the Company's borrowings under which the Company has pledged securities for borrowings. The following table summarizes the estimated fair value of securities pledged as collateral as of December 31, 2013 and 2012 (amounts in thousands):

 
   As of
December 31,
2013		   As of
December 31,
2012		  

Pledged as collateral for collateralized loan obligation secured debt and junior secured notes to affiliates

   $ 324,830   $ 354,088  
           
​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 324,830   $ 354,088  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​