Note 3. Securities

At June 30, 2015, the Company had total securities of $8.47 billion, comprised of securities available-for-sale at fair value of $4.94 billion, securities held-to-maturity at amortized cost of $3.42 billion and trading securities at fair value of $110.1 million. At December 31, 2014, the Company had total securities of $9.48 billion, comprised of securities available-for-sale at fair value of $5.88 billion, securities held-to-maturity at amortized cost of $3.43 billion and trading securities at fair value of $173.2 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, 2015 and December 31, 2014:

			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses			Fair Value
June 30, 2015
Securities available-for-sale:
U.S. Treasury	$	148,263	$	59	$	(14	)	$	148,308
Federal agency - Debt	899,379		762		(207		)	899,934
Federal agency - MBS	95,778		2,139		(1,039		)	96,878
CMOs - Federal agency	3,295,300		19,497		(28,721		)	3,286,076
CMOs - Non-agency	22,091		21		(381		)	21,731
State and municipal	395,350		4,946		(241		)	400,055
Other debt securities	86,308		1,087		—			87,395

Total debt securities	4,942,469		28,511		(30,603		)	4,940,377
Equity securities and mutual funds	664		—		(198		)	466

Total securities available-for-sale	$	4,943,133	$	28,511	$	(30,801	)	$	4,940,843


Securities held-to-maturity (1):
Federal agency - Debt	$	323,805	$	6,431	$	(166	)	$	330,070
Federal agency - MBS	578,603		11,447		(3,105		)	586,945
CMOs - Federal agency	1,684,687		26,833		(7,480		)	1,704,040
State and municipal	749,253		13,641		(9,021		)	753,873
Other debt securities	85,831		183		—			86,014

Total securities held-to-maturity	$	3,422,179	$	58,535	$	(19,772	)	$	3,460,942


December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	116,919	$	17	$	(10	)	$	116,926
Federal agency - Debt	1,401,303		558		(3,280		)	1,398,581
Federal agency - MBS	102,939		2,601		(1,014		)	104,526
CMOs - Federal agency	3,599,831		19,628		(38,869		)	3,580,590
CMOs - Non-agency	24,385		40		(411		)	24,014
State and municipal	473,272		6,139		(380		)	479,031
Other debt securities	174,352		1,817		—			176,169

Total debt securities	5,893,001		30,800		(43,964		)	5,879,837
Equity securities and mutual funds	1,508		1,988		(350		)	3,146

Total securities available-for-sale	$	5,894,509	$	32,788	$	(44,314	)	$	5,882,983


Securities held-to-maturity (1):
Federal agency - Debt	$	292,932	$	6,430	$	(255	)	$	299,107
Federal agency - MBS	553,589		13,427		(2,275		)	564,741
CMOs - Federal agency	1,811,574		29,998		(10,292		)	1,831,280
State and municipal	682,705		22,732		(1,997		)	703,440
Other debt securities	86,231		72		(224		)	86,079

Total securities held-to-maturity	$	3,427,031	$	72,659	$	(15,043	)	$	3,484,647

(1)

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

Proceeds from sales of securities available-for-sale were $2.6 million and $400.8 million for the three and six months ended June 30, 2015, compared with $15.0 million and $626.1 million for the three and six months ended June 30, 2014. There were no sales of securities held-to-maturity during the three and six months ended June 30, 2015 and 2014. 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)	2015			2014			2015			2014
Gross realized gains	$	2,032		$	5,368		$	5,424		$	7,970
Gross realized losses	(108		)	(1		)	(124		)	(481		)

Net realized gains	$	1,924		$	5,367		$	5,300		$	7,489

Interest income on securities for the three months ended June 30, 2015 and 2014 is comprised of: (i) taxable interest income of $34.1 million and $37.5 million, respectively, (ii) nontaxable interest income of $7.1 million and $6.0 million, respectively, and (iii) dividend income of $19 thousand and $16 thousand, respectively. Interest income on securities for the six months ended June 30, 2015 and 2014 is comprised of: (i) taxable interest income of $69.1 million and $73.5 million, respectively, (ii) nontaxable interest income of $14.1 million and $11.5 million, respectively, and (iii) dividend income of $30 thousand and $25 thousand, respectively.

The following table provides the expected remaining maturities of debt securities included in the securities portfolio at June 30, 2015, 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	$	72,793	$	75,515	$	—	$	—	$	148,308
Federal agency - Debt	476,226		423,708		—		—		899,934
Federal agency - MBS	—		96,878		—		—		96,878
CMOs - Federal agency	120,247		2,988,305		177,524		—		3,286,076
CMOs - Non-agency	1,223		20,508		—		—		21,731
State and municipal	175,966		220,741		—		3,348		400,055
Other	38,636		48,759		—		—		87,395

Total debt securities available-for-sale	$	885,091	$	3,874,414	$	177,524	$	3,348	$	4,940,377


Amortized cost	$	882,733	$	3,877,641	$	178,695	$	3,400	$	4,942,469


Securities held-to-maturity:
Federal agency - Debt	$	—	$	23,000	$	149,266	$	151,539	$	323,805
Federal agency - MBS	—		47,500		526,581		4,522		578,603
CMOs - Federal agency	9,728		762,883		912,076		—		1,684,687
State and municipal	—		141,904		401,476		205,873		749,253
Other	—		85,831		—		—		85,831

Total debt securities held-to-maturity at amortized cost	$	9,728	$	1,061,118	$	1,989,399	$	361,934	$	3,422,179

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. Amortized cost includes adjustments made to the cost of an investment for amortization, accretion, collection of cash and previous other-than-temporary impairment recognized in earnings. 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. A credit loss is the difference between the amortized cost of the security and the present value of cash flows expected to be collected, discounted at the security’s effective interest rate at the date of acquisition. 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 $0.3 million for the three and six months ended June 30, 2015. The Company recorded impairment losses in earnings of $0.2 million for the three and six months ended June 30, 2014. The Company recognized after-tax amounts of $0.2 million of non-credit-related other-than-temporary impairment in accumulated other comprehensive income or loss (“AOCI”) on securities classified as available-for-sale at June 30, 2015 and 2014. No impairment losses were recognized in earnings or AOCI for securities held-to-maturity during the three and six months ended June 30, 2015 and 2014.

The following table provides total impairment losses recognized in earnings on other-than-temporarily impaired securities for the three and six months ended June 30, 2015 and 2014:

(in thousands)	For the three months ended				For the six months ended
Impairment Losses on	June 30,				June 30,
Other-Than-Temporarily Impaired Securities	2015		2014		2015		2014
Non-agency CMOs	$	52	$	248	$	117	$	248
Equity securities	219		—		219		—

Total	$	271	$	248	$	336	$	248

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, 2015 and 2014. 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					For the six months ended
	June 30,					June 30,
(in thousands)	2015		2014			2015		2014
Balance, beginning of period	$	2,535	$	4,549		$	2,470	$	4,549
Subsequent credit-related impairment	52		248			117		248
Reduction for securities sold or redeemed	—		(2,402		)	—		(2,402		)

Balance, end of period	$	2,587	$	2,395		$	2,587	$	2,395

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, 2015 and December 31, 2014. 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, 2015
Securities available-for-sale:
U.S. Treasury	$	89,266	$	14	$	—	$	—	$	89,266	$	14
Federal agency - Debt	307,112		207		—		—		307,112		207
Federal agency - MBS	—		—		54,924		1,039		54,924		1,039
CMOs - Federal agency	718,502		3,031		1,200,002		25,690		1,918,504		28,721
CMOs - Non-agency	6,342		19		11,738		362		18,080		381
State and municipal	151,358		188		3,547		53		154,905		241

Total debt securities	1,272,580		3,459		1,270,211		27,144		2,542,791		30,603
Equity securities and mutual funds	466		198		—		—		466		198

Total securities available-for-sale	$	1,273,046	$	3,657	$	1,270,211	$	27,144	$	2,543,257	$	30,801


Securities held-to-maturity:
Federal agency - Debt	$	27,656	$	68	$	5,668	$	98	$	33,324	$	166
Federal agency - MBS	130,389		2,014		39,975		1,091		170,364		3,105
CMOs - Federal agency	400,181		3,376		221,525		4,104		621,706		7,480
State and municipal	264,376		7,102		33,001		1,919		297,377		9,021

Total securities held-to-maturity	$	822,602	$	12,560	$	300,169	$	7,212	$	1,122,771	$	19,772


December 31, 2014
Securities available-for-sale:
U.S. Treasury	$	15,814	$	10	$	—	$	—	$	15,814	$	10
Federal agency - Debt	1,008,234		2,622		135,868		658		1,144,102		3,280
Federal agency - MBS	35		—		57,970		1,014		58,005		1,014
CMOs - Federal agency	871,026		3,417		1,261,695		35,452		2,132,721		38,869
CMOs - Non-agency	1,949		15		12,720		396		14,669		411
State and municipal	130,208		314		4,183		66		134,391		380

Total debt securities	2,027,266		6,378		1,472,436		37,586		3,499,702		43,964
Equity securities and mutual funds	538		350		—		—		538		350

Total securities available-for-sale	$	2,027,804	$	6,728	$	1,472,436	$	37,586	$	3,500,240	$	44,314


Securities held-to-maturity:
Federal agency - Debt	$	—	$	—	$	26,316	$	255	$	26,316	$	255
Federal agency - MBS	4,800		21		114,856		2,254		119,656		2,275
CMOs - Federal agency	202,014		2,247		588,019		8,045		790,033		10,292
State and municipal	14,851		76		95,647		1,921		110,498		1,997
Other debt securities	61,813		224		—		—		61,813		224

Total securities held-to-maturity	$	283,478	$	2,568	$	824,838	$	12,475	$	1,108,316	$	15,043

At June 30, 2015, the Company had securities available-for-sale with a fair value of $2.54 billion and securities held-to-maturity with a fair value of $1.12 billion in an unrealized loss position. The debt securities in an unrealized loss position totaled 553 and included 4 U.S. Treasury notes, 10 federal agency debt securities, 28 federal agency MBS, 131 federal agency CMOs, 4 non-agency CMOs and 376 state and municipal securities. At June 30, 2015, the Company had one equity security in an unrealized loss position.

At December 31, 2014, the Company had securities available-for-sale with a fair value of $3.50 billion and securities held-to-maturity with a fair value of $1.11 billion in an unrealized loss position. The debt securities in an unrealized loss position totaled 436 and included 2 U.S. Treasury notes, 37 federal agency debt securities, 23 federal agency MBS, 141 federal agency CMOs, 3 non-agency CMOs, 225 state and municipal securities and 5 other debt securities. At December 31, 2014, the Company had one equity security in an unrealized loss position.