Note 3. Securities

At September 30, 2014, the Company had total securities of $9.21 billion, comprised of securities available-for-sale at fair value of $5.63 billion, securities held-to-maturity at amortized cost of $3.45 billion and trading securities at fair value of $125.9 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 September 30, 2014 and December 31, 2013:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
September 30, 2014
Securities available-for-sale:
U.S. Treasury	$	46,716	$	49	$	—		$	46,765
Federal agency - Debt	1,329,891		581		(3,744		)	1,326,728
Federal agency - MBS	105,992		2,826		(1,842		)	106,976
CMOs - Federal agency	3,583,667		23,201		(47,790		)	3,559,078
CMOs - Non-agency	25,521		128		(367		)	25,282
State and municipal	374,948		7,131		(86		)	381,993
Other debt securities	174,538		2,504		—			177,042
Total debt securities	5,641,273		36,420		(53,829		)	5,623,864
Equity securities and mutual funds	621		4,691		—			5,312
Total securities available-for-sale	$	5,641,894	$	41,111	$	(53,829	)	$	5,629,176

Securities held-to-maturity (1):
Federal agency - Debt	$	296,900	$	4,013	$	(1,154	)	$	299,759
Federal agency - MBS	582,365		7,137		(5,186		)	584,316
CMOs - Federal agency	1,847,655		14,816		(23,018		)	1,839,453
State and municipal	625,860		17,884		(2,925		)	640,819
Other debt securities	97,771		60		(190		)	97,641
Total securities held-to-maturity	$	3,450,551	$	43,910	$	(32,473	)	$	3,461,988

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 $1.0 million and $627.1 million for the three and nine months ended September 30, 2014, respectively, compared with $584.7 million and $1.84 billion for the three and nine months ended September 30, 2013. There were no sales of securities held-to-maturity during the three and nine months ended September 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 nine months ended
	September 30,						September 30,
(in thousands)	2014			2013			2014			2013
Gross realized gains	$	19		$	17,533		$	7,989		$	24,369
Gross realized losses	(5		)	(11,745		)	(486		)	(11,745		)
Net realized gains	$	14		$	5,788		$	7,503		$	12,624

Interest income on securities for the three months ended September 30, 2014 and 2013 is comprised of: (i) taxable interest income of $37.5 million and $35.5 million, respectively, (ii) nontaxable interest income of $6.4 million and $4.5 million, respectively, and (iii) dividend income of $22 thousand and $19 thousand, respectively. Interest income on securities for the nine months ended September 30, 2014 and 2013 is comprised of: (i) taxable interest income of $111.0 million and $112.1 million, respectively, (ii) nontaxable interest income of $17.9 million and $13.3 million, respectively, and (iii) dividend income of $47 thousand and $0.1 million, respectively.

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at September 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	$	23,134	$	23,631	$	—	$	—	$	46,765
Federal agency - Debt	188,384		1,099,385		38,959		—		1,326,728
Federal agency - MBS	—		89,263		17,713		—		106,976
CMOs - Federal agency	70,795		3,218,376		269,907		—		3,559,078
CMOs - Non-agency	1,853		23,429		—		—		25,282
State and municipal	131,825		246,842		—		3,326		381,993
Other	88,678		88,364		—		—		177,042
Total debt securities available-for-sale	$	504,669	$	4,789,290	$	326,579	$	3,326	$	5,623,864

Amortized cost	$	501,637	$	4,801,098	$	335,138	$	3,400	$	5,641,273

Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	93,517	$	203,383	$	296,900
Federal agency - MBS	—		84,998		492,868		4,499		582,365
CMOs - Federal agency	—		720,174		1,127,481		—		1,847,655
State and municipal	—		103,459		449,877		72,524		625,860
Other	—		97,771		—		—		97,771
Total debt securities held-to-maturity at amortized cost	$	—	$	1,006,402	$	2,163,743	$	280,406	$	3,450,551

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 $0.1 million and $0.3 million for the three and nine months ended September 30, 2014, respectively. Impairment losses of $0.1 million and $0.3 million were recognized in earnings for the three and nine months ended September 30, 2013. The Company recognized $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 September 30, 2014. There was no non-credit related other-than-temporary impairment recognized in AOCI on securities available-for-sale at September 30, 2013. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three and nine months ended September 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 nine months ended September 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 September 30,					For the nine months ended September 30,
(in thousands)	2014		2013			2014			2013
Balance, beginning of period	$	2,395	$	3,654		$	4,549		$	16,486
Subsequent credit-related impairment	75		144			323			326
Reduction for securities sold or redeemed	—		—			(2,402		)	(12,761		)
Reduction for increase in expected cash flows on securities for which OTTI was previously recognized	—		(421		)	—			(674		)
Balance, end of period	$	2,470	$	3,377		$	2,470		$	3,377

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 September 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
September 30, 2014
Securities available-for-sale:
Federal agency - Debt	$	844,088	$	1,412	$	271,824	$	2,332	$	1,115,912	$	3,744
Federal agency - MBS	17,748		64		40,660		1,778		58,408		1,842
CMOs - Federal agency	651,362		3,535		1,270,590		44,255		1,921,952		47,790
CMOs - Non-agency	1,983		3		12,979		364		14,962		367
State and municipal	—		—		4,164		86		4,164		86
Total securities available-for-sale	$	1,515,181	$	5,014	$	1,600,217	$	48,815	$	3,115,398	$	53,829

Securities held-to-maturity:
Federal agency - Debt	$	25,034	$	22	$	72,829	$	1,132	$	97,863	$	1,154
Federal agency - MBS	119,935		726		122,965		4,460		242,900		5,186
CMOs - Federal agency	743,948		12,015		353,787		11,003		1,097,735		23,018
State and municipal	22,365		124		119,691		2,801		142,056		2,925
Other debt securities	79,147		190		—		—		79,147		190
Total securities held-to-maturity	$	990,429	$	13,077	$	669,272	$	19,396	$	1,659,701	$	32,473

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 September 30, 2014, the Company had $3.12 billion of securities available-for-sale and $1.66 billion of securities held-to-maturity in an unrealized loss position. The debt securities in an unrealized loss position totaled 497 and included 49 federal agency debt securities, 44 federal agency MBS securities, 145 federal agency CMOs, 3 non-agency CMOs, 249 state and municipal securities and 7 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.