Note 3. Securities

At June 30, 2014, the Company had total securities of $8.83 billion, comprised of securities available-for-sale at fair value of $5.33 billion, securities held-to-maturity at amortized cost of $3.42 billion and trading securities at fair value of $86.1 million. At December 31, 2013, the Company had total securities of $9.28 billion, comprised of securities available-for-sale at fair value of $6.24 billion, securities held-to-maturity at amortized cost of $2.96 billion and trading securities at fair value of $82.4 million.

The following is a summary of amortized cost and estimated fair value for the major categories of securities available-for-sale and securities held-to-maturity at June 30, 2014 and December 31, 2013:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
June 30, 2014
Securities available-for-sale:
U.S. Treasury	$	36,213	$	45	$	—		$	36,258
Federal agency - Debt	1,027,192		815		(1,491		)	1,026,516
Federal agency - MBS	121,501		3,305		(1,577		)	123,229
CMOs - Federal agency	3,552,834		28,089		(41,604		)	3,539,319
CMOs - Non-agency	27,168		135		(400		)	26,903
State and municipal	384,359		8,335		(101		)	392,593
Other debt securities	174,723		3,264		—			177,987
Total debt securities	5,323,990		43,988		(45,173		)	5,322,805
Equity securities and mutual funds	621		5,066		—			5,687
Total securities available-for-sale	$	5,324,611	$	49,054	$	(45,173	)	$	5,328,492

Securities held-to-maturity (1):
Federal agency - Debt	$	302,918	$	4,319	$	(856	)	$	306,381
Federal agency - MBS	554,421		9,328		(4,058		)	559,691
CMOs - Federal agency	1,883,461		23,027		(16,534		)	1,889,954
State and municipal	579,473		13,067		(4,949		)	587,591
Other debt securities	98,080		291		(4		)	98,367
Total securities held-to-maturity	$	3,418,353	$	50,032	$	(26,401	)	$	3,441,984

December 31, 2013
Securities available-for-sale:
U.S. Treasury	$	35,312	$	23	$	—		$	35,335
Federal agency - Debt	1,417,509		938		(7,911		)	1,410,536
Federal agency - MBS	156,399		3,615		(2,788		)	157,226
CMOs - Federal agency	4,037,348		30,721		(70,771		)	3,997,298
CMOs - Non-agency	38,383		127		(1,048		)	37,462
State and municipal	407,312		8,806		(123		)	415,995
Other debt securities	175,091		3,731		—			178,822
Total debt securities	6,267,354		47,961		(82,641		)	6,232,674
Equity securities and mutual funds	337		8,106		—			8,443
Total securities available-for-sale	$	6,267,691	$	56,067	$	(82,641	)	$	6,241,117

Securities held-to-maturity (1):
Federal agency - Debt	$	178,413	$	133	$	(5,122	)	$	173,424
Federal agency - MBS	445,360		1,005		(11,930		)	434,435
CMOs - Federal agency	1,781,219		1,839		(40,621		)	1,742,437
State and municipal	454,155		421		(19,014		)	435,562
Other debt securities	98,696		—		(619		)	98,077
Total securities held-to-maturity	$	2,957,843	$	3,398	$	(77,306	)	$	2,883,935

(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost.

Proceeds from sales of securities available-for-sale were $15.0 million and $626.1 million for the three and six months ended June 30, 2014, respectively, compared with $0.2 million and $1.25 billion for the three and six months ended June 30, 2013. There were no sales of securities held-to-maturity during the three and six months ended June 30, 2014 and 2013. The following table provides the gross realized gains and losses on the sales and calls of securities (including trading securities):

	For the three months ended					For the six months ended
	June 30,					June 30,
(in thousands)	2014			2013		2014			2013
Gross realized gains	$	5,368		$	5,790	$	7,970		$	6,836
Gross realized losses	(1		)	—		(481		)	—
Net realized gains	$	5,367		$	5,790	$	7,489		$	6,836

Interest income on securities for the three months ended June 30, 2014 and 2013 is comprised of: (i) taxable interest income of $37.5 million and $36.7 million, respectively (ii) nontaxable interest income of $6.0 million and $4.4 million, respectively, and (iii) dividend income of $16 thousand and $0.1 million, respectively. Interest income on securities for the six months ended June 30, 2014 and 2013 is comprised of: (i) taxable interest income of $73.5 million and $76.6 million, respectively (ii) nontaxable interest income of $11.5 million and $8.8 million, respectively, and (iii) dividend income of $25 thousand and $0.1 million, respectively.

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at June 30, 2014, except for maturities of mortgage-backed securities which are allocated according to the average life of expected cash flows. Average expected maturities will differ from contractual maturities because of the amortizing nature of the loan collateral and prepayment behavior of borrowers.

(in thousands)	One year or less		Over 1 year through 5 years		Over 5 years through 10 years		Over 10 years		Total

Securities available-for-sale:
U.S. Treasury	$	23,194	$	13,064	$	—	$	—	$	36,258
Federal agency - Debt	639,733		347,513		39,270		—		1,026,516
Federal agency - MBS	—		105,432		17,797		—		123,229
CMOs - Federal agency	98,070		3,236,456		204,793		—		3,539,319
CMOs - Non-agency	2,237		24,666		—		—		26,903
State and municipal	100,959		288,314		—		3,320		392,593
Other	58,751		119,236		—		—		177,987
Total debt securities available-for-sale	$	922,944	$	4,134,681	$	261,860	$	3,320	$	5,322,805

Amortized cost	$	919,336	$	4,135,324	$	265,930	$	3,400	$	5,323,990

Securities held-to-maturity:
Federal agency - Debt	$	—	$	26,000	$	86,170	$	190,748	$	302,918
Federal agency - MBS	—		75,854		467,171		11,396		554,421
CMOs - Federal agency	—		805,601		1,077,860		—		1,883,461
State and municipal	—		80,107		399,352		100,014		579,473
Other	—		98,080		—		—		98,080
Total debt securities held-to-maturity at amortized cost	$	—	$	1,085,642	$	2,030,553	$	302,158	$	3,418,353

Impairment Assessment

The Company performs a quarterly assessment of debt and equity securities in its investment portfolio to determine whether a decline in fair value below amortized cost is other-than-temporary. The Company’s impairment assessment of debt securities takes the following factors into consideration: the length of time and the extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer, including events specific to the issuer or industry; defaults or deferrals of scheduled interest and principal payments; external credit ratings; and whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. For equity securities, the evaluation of whether an impairment is other than temporary is based on whether and when an equity security will recover in value and whether the Company has the intent and ability to hold the equity security until the anticipated recovery in value occurs. If a decline in fair value is determined to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the security’s new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value.

Other-than-temporary impairment losses on equity securities are recognized in earnings. For debt securities, if the Company intends to sell an impaired security or it is more likely than not it will be required to sell a security prior to recovery of its amortized cost, an impairment loss is recognized in earnings for the entire difference between the amortized cost and fair value of the security on the measurement date. If the Company does not intend to sell the security or it is not more likely than not it will be required to sell the security prior to recovery of its amortized cost, the credit loss component of impairment is recognized in earnings. Impairment associated with factors other than credit, such as market liquidity, is recognized in other comprehensive income, net of tax.

Securities Deemed to be Other-Than-Temporarily Impaired

The Company recorded impairment losses in earnings on securities available-for-sale of $0.2 million for the three and six months ended June 30, 2014 and 2013, respectively. The Company recognized $0.3 million and $0.2 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on non-agency CMO securities classified as available-for-sale at June 30, 2014 and 2013, respectively. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three and six months ended June 30, 2014 and 2013.

The following table summarizes the changes in cumulative credit-related other-than-temporary impairment recognized in earnings for debt securities for the three and six months ended June 30, 2014 and 2013. Credit-related other-than-temporary impairment that was recognized in earnings is reflected as an “Initial credit-related impairment” if the period reported is the first time the security had a credit impairment. A credit-related other-than-temporary impairment is reflected as a “Subsequent credit-related impairment” if the period reported is not the first time the security had a credit impairment. Cumulative impairment is reduced for securities with previously recognized credit-related impairment that were sold or redeemed during the period. Cumulative impairment is further adjusted for other changes in expected cash flows.

	For the three months ended June 30,						For the six months ended June 30,
(in thousands)	2014			2013			2014			2013
Balance, beginning of period	$	4,549		$	3,676		$	4,549		$	16,486
Subsequent credit-related impairment	248			182			248			182
Reduction for securities sold or redeemed	(2,402		)	—			(2,402		)	(12,761		)
Reduction for increase in expected cash flows on securities for which OTTI was previously recognized	—			(204		)	—			(253		)
Balance, end of period	$	2,395		$	3,654		$	2,395		$	3,654

The following table provides a summary of the gross unrealized losses and fair value of investment securities that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that the securities have been in a continuous unrealized loss position as of June 30, 2014 and December 31, 2013. The table also includes investment securities that had both a credit-related impairment recognized in earnings and a non-credit-related impairment recognized in AOCI.

	Less than 12 months				12 months or greater				Total
(in thousands)	Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss		Fair Value		Estimated Unrealized Loss
June 30, 2014
Securities available-for-sale:
Federal agency - Debt	$	104,163	$	31	$	312,696	$	1,460	$	416,859	$	1,491
Federal agency - MBS	17,834		70		42,442		1,507		60,276		1,577
CMOs - Federal agency	615,321		1,909		1,299,169		39,695		1,914,490		41,604
CMOs - Non-agency	—		—		13,610		400		13,610		400
State and municipal	1,720		4		5,194		97		6,914		101
Total securities available-for-sale	$	739,038	$	2,014	$	1,673,111	$	43,159	$	2,412,149	$	45,173

Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	76,094	$	856	$	76,094	$	856
Federal agency - MBS	27,802		154		123,966		3,904		151,768		4,058
CMOs - Federal agency	619,017		8,334		362,367		8,200		981,384		16,534
State and municipal	46,463		283		140,436		4,666		186,899		4,949
Other debt securities	24,437		4		—		—		24,437		4
Total securities held-to-maturity	$	717,719	$	8,775	$	702,863	$	17,626	$	1,420,582	$	26,401

December 31, 2013
Securities available-for-sale:
Federal agency - Debt	$	1,026,142	$	7,911	$	—	$	—	$	1,026,142	$	7,911
Federal agency - MBS	17,962		85		43,492		2,703		61,454		2,788
CMOs - Federal agency	1,637,994		35,922		728,101		34,849		2,366,095		70,771
CMOs - Non-agency	10,056		319		8,483		729		18,539		1,048
State and municipal	16,521		39		4,266		84		20,787		123
Total securities available-for-sale	$	2,708,675	$	44,276	$	784,342	$	38,365	$	3,493,017	$	82,641

Securities held-to-maturity:
Federal agency - Debt	$	156,290	$	5,122	$	—	$	—	$	156,290	$	5,122
Federal agency - MBS	321,090		10,513		15,338		1,417		336,428		11,930
CMOs - Federal agency	1,539,464		36,435		63,276		4,186		1,602,740		40,621
State and municipal	347,305		14,190		41,102		4,824		388,407		19,014
Other debt securities	98,077		619		—		—		98,077		619
Total securities held-to-maturity	$	2,462,226	$	66,879	$	119,716	$	10,427	$	2,581,942	$	77,306

At June 30, 2014, the Company had $2.41 billion of securities available-for-sale and $1.42 billion of securities held-to-maturity in an unrealized loss position. The debt securities in an unrealized loss position totaled 520 and included 22 federal agency debt securities, 29 federal agency MBS securities, 140 federal agency CMOs, 2 non-agency CMOs, 325 state and municipal securities and 2 other debt securities.

At December 31, 2013, the Company had $3.49 billion of securities available-for-sale and $2.58 billion of securities held-to-maturity in an unrealized loss position. The debt securities in an unrealized loss position totaled 809 and included 47 federal agency debt securities, 44 federal agency MBS, 182 federal agency CMOs, 4 non-agency CMOs, 520 state and municipal securities and 12 other debt securities.