Investments

The amortized cost and fair value of investment securities classified as available for sale and held to maturity at March 31, 2014 and December 31, 2013, are as follows:



	March 31, 2014
(Dollars in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities available for sale
U.S. Treasury	$	1,274,716	$	379	$	1,874	$	1,273,221
Government agency	1,811,889		1,764		879		1,812,774
Mortgage-backed securities	2,592,766		5,524		31,624		2,566,666
Equity securities	543		22,017		—		22,560
Municipal securities	186		—		—		186
Other	870		—		40		830
Total investment securities available for sale	$	5,680,970	$	29,684	$	34,417	$	5,676,237

	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
U.S. Treasury	$	373,223	$	259	$	45	$	373,437
Government agency	2,543,223		1,798		792		2,544,229
Mortgage-backed securities	2,486,297		4,526		43,950		2,446,873
Equity securities	543		21,604		—		22,147
Municipal securities	186		1		—		187
Other	863		—		33		830
Total investment securities available for sale	$	5,404,335	$	28,188	$	44,820	$	5,387,703

	March 31, 2014
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Investment securities held to maturity
Mortgage-backed securities	$	782	$	53	$	—	$	835

	December 31, 2013
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Mortgage-backed securities	$	907	$	67	$	—	$	974

Investments in mortgage-backed securities primarily represent securities issued by the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. Other investments include a subordinated debenture investment in another financial institution.

The following table provides the amortized cost and fair value by contractual maturity. Expected maturities will differ from contractual maturities because borrowers and issuers may have the right to call or prepay obligations with or without prepayment penalties. Repayments of mortgage-backed securities are dependent on the repayments of the underlying loan balances. Equity securities do not have a stated maturity date.



	March 31, 2014				December 31, 2013
(Dollars in thousands)	Cost		Fair value		Cost		Fair value
Investment securities available for sale
Amortizing securities maturing in:
One year or less	$	829,091	$	829,997	$	839,956	$	840,883
One through five years	2,258,570		2,257,014		2,077,539		2,077,800
Mortgage-backed securities	2,592,766		2,566,666		2,486,297		2,446,873
Equity securities	543		22,560		543		22,147
Total investment securities available for sale	$	5,680,970	$	5,676,237	$	5,404,335	$	5,387,703
Investment securities held to maturity
Mortgage-backed securities held to maturity	$	782	$	835	$	907	$	974

There were no realized securities gains (losses) during any period presented.

The following table provides information regarding securities with unrealized losses as of March 31, 2014 and December 31, 2013.



	March 31, 2014
	Less than 12 months				12 months or more				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Investment securities available for sale:
U.S. Treasury	$	699,985	$	1,874	$	—	$	—	$	699,985	$	1,874
Government agency	400,423		879		—		—		400,423		879
Mortgage-backed securities	2,012,814		30,816		23,622		808		2,036,436		31,624
Other	830		40		—		—		830		40
Total	$	3,114,052	$	33,609	$	23,622	$	808	$	3,137,674	$	34,417

	December 31, 2013
	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Investment securities available for sale:
U.S. Treasury	$	102,105	$	45	$	—	$	—	$	102,105	$	45
Government agency	780,552		761		29,969		31		810,521		792
Mortgage-backed securities	2,221,213		42,876		26,861		1,074		2,248,074		43,950
Other	830		33		—		—		830		33
Total	$	3,104,700	$	43,715	$	56,830	$	1,105	$	3,161,530	$	44,820

Investment securities with an aggregate fair value of $23.6 million and $56.8 million have had continuous unrealized losses for more than 12 months as of March 31, 2014 and December 31, 2013, with an aggregate unrealized loss of $0.8 million and $1.1 million, respectively. As of March 31, 2014, all 16 of these investments are mortgage-backed securities. None of the unrealized losses identified as of March 31, 2014 or December 31, 2013 relate to the marketability of the securities or the issuer’s ability to honor redemption obligations. For all periods presented, BancShares had the ability and intent to retain these securities for a period of time sufficient to recover all unrealized losses. Therefore, none of the securities were deemed to be other than temporarily impaired.

Investment securities having an aggregate carrying value of $2.78 billion at March 31, 2014 and $2.75 billion at December 31, 2013 were pledged as collateral to secure public funds on deposit and certain short-term borrowings, and for other purposes as required by law.