Investment Securities

A Summary of the amortized cost and fair value of investment securities is presented below:



	At December 31,
	2015									2014
(In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available-for-sale:
U.S. Treasury Bills	$	924	$	—	$	—		$	924	$	525	$	—	$	—		$	525
Agency collateralized mortgage obligations (“agency CMO”)	546,168		5,532		(2,946		)	548,754		543,417		8,636		(1,065		)	550,988
Agency mortgage-backed securities (“agency MBS”)	1,075,941		6,459		(17,291		)	1,065,109		1,030,724		10,462		(12,668		)	1,028,518
Agency commercial mortgage-backed securities (“agency CMBS”)	215,670		639		(959		)	215,350		80,400		—		(134		)	80,266
Non-agency commercial mortgage-backed securities ("non-agency CMBS")	574,686		7,485		(2,905		)	579,266		534,631		18,885		(123		)	553,393
Collateralized loan obligations ("CLO")	431,837		592		(3,270		)	429,159		426,269		482		(1,017		)	425,734
Single issuer trust preferred securities	42,168		—		(4,998		)	37,170		41,981		—		(3,736		)	38,245
Corporate debt securities	104,031		2,290		—			106,321		106,520		3,781		—			110,301
Equities - financial institutions	3,499		—		(921		)	2,578		3,500		2,403		—			5,903
Total available-for-sale	$	2,994,924	$	22,997	$	(33,290	)	$	2,984,631	$	2,767,967	$	44,649	$	(18,743	)	$	2,793,873
Held-to-maturity:
Agency CMO	$	407,494	$	3,717	$	(2,058	)	$	409,153	$	442,129	$	6,584	$	(739	)	$	447,974
Agency MBS	2,030,176		38,813		(19,908		)	2,049,081		2,134,319		57,196		(11,340		)	2,180,175
Agency CMBS	686,086		4,253		(325		)	690,014		578,687		1,597		(1,143		)	579,141
Municipal bonds and notes	435,905		12,019		(417		)	447,507		373,211		15,138		(55		)	388,294
Non-agency CMBS	360,018		5,046		(2,704		)	362,360		338,723		9,428		(1,015		)	347,136
Private Label MBS	3,373		46		—			3,419		5,886		100		—			5,986
Total held-to-maturity	$	3,923,052	$	63,894	$	(25,412	)	$	3,961,534	$	3,872,955	$	90,043	$	(14,292	)	$	3,948,706

Other-Than-Temporary Impairment

The balance of OTTI, included in the amortized cost columns above, is related to certain CLO securities that are considered Covered Funds as defined by Section 619 of the Dodd-Frank Act, which continue to decline due to CLO deal refinancing and modifications.

To the extent that changes occur in interest rates, credit movements, and other factors that impact fair value and expected recovery of amortized cost of its investment securities, the Company may be required to record a charge for OTTI in future periods.

The following table presents the changes in OTTI:



	Years ended December 31,
(In thousands)	2015			2014			2013
Beginning balance	$	3,696		$	16,633		$	10,460
Reduction for securities sold or called	(518		)	(14,082		)	(1,104		)
Additions for OTTI not previously recognized	110			1,145			7,277
Ending balance	$	3,288		$	3,696		$	16,633

Fair Value and Unrealized Losses

The following tables provide information on fair value and unrealized losses for the individual securities with an unrealized loss, aggregated by investment security type and length of time that the individual securities have been in a continuous unrealized loss position:



	At December 31, 2015
	Less Than Twelve Months					Twelve Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			# of Holdings	Fair Value		Unrealized Losses
Available-for-sale:
Agency CMO	$	195,369	$	(2,195	)	$	26,039	$	(751	)	14	$	221,408	$	(2,946	)
Agency MBS	481,839		(6,386		)	351,911		(10,905		)	84	833,750		(17,291		)
Agency CMBS	124,241		(959		)	—		—			7	124,241		(959		)
Non-agency CMBS	276,330		(2,879		)	19,382		(26		)	29	295,712		(2,905		)
CLO	211,515		(2,709		)	15,708		(561		)	13	227,223		(3,270		)
Single issuer trust preferred securities	4,087		(128		)	33,083		(4,870		)	8	37,170		(4,998		)
Equities-financial institutions	2,578		(921		)	—		—			1	2,578		(921		)
Total available-for-sale in an unrealized loss position	$	1,295,959	$	(16,177	)	$	446,123	$	(17,113	)	156	$	1,742,082	$	(33,290	)
Held-to-maturity:
Agency CMO	$	143,364	$	(1,304	)	$	27,928	$	(754	)	13	$	171,292	$	(2,058	)
Agency MBS	551,918		(7,089		)	470,828		(12,819		)	87	1,022,746		(19,908		)
Agency CMBS	110,864		(325		)	—		—			7	110,864		(325		)
Municipal bonds and notes	29,034		(130		)	13,829		(287		)	27	42,863		(417		)
Non-agency CMBS	142,382		(1,983		)	30,129		(721		)	18	172,511		(2,704		)
Total held-to-maturity in an unrealized loss position	$	977,562	$	(10,831	)	$	542,714	$	(14,581	)	152	$	1,520,276	$	(25,412	)



	At December 31, 2014
	Less Than Twelve Months					Twelve Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			# of Holdings	Fair Value		Unrealized Losses
Available-for-sale:
Agency CMO	$	47,217	$	(240	)	$	35,968	$	(825	)	8	$	83,185	$	(1,065	)
Agency MBS	3,691		(18		)	641,355		(12,650		)	64	645,046		(12,668		)
Agency CMBS	80,266		(134		)	—		—			4	80,266		(134		)
Non-agency CMBS	24,932		(117		)	9,396		(6		)	4	34,328		(123		)
CLO	99,221		(1,017		)	—		—			6	99,221		(1,017		)
Single issuer trust preferred securities	4,150		(36		)	34,095		(3,700		)	8	38,245		(3,736		)
Equities-financial institutions	—		—			—		—			—	—		—
Total available-for-sale in an unrealized loss position	$	259,477	$	(1,562	)	$	720,814	$	(17,181	)	94	$	980,291	$	(18,743	)
Held-to-maturity:
Agency CMO	$	52,172	$	(187	)	$	24,942	$	(552	)	6	$	77,114	$	(739	)
Agency MBS	20,791		(86		)	608,568		(11,254		)	44	629,359		(11,340		)
Agency CMBS	324,394		(1,143		)	—		—			17	324,394		(1,143		)
Municipal bonds and notes	5,341		(23		)	3,074		(32		)	15	8,415		(55		)
Non-agency CMBS	13,003		(30		)	65,913		(985		)	7	78,916		(1,015		)
Total held-to-maturity in an unrealized loss position	$	415,701	$	(1,469	)	$	702,497	$	(12,823	)	89	$	1,118,198	$	(14,292	)

Impairment Analysis

The following impairment analysis by investment security type, summarizes the basis for evaluating if investment securities within the Company’s available-for-sale and held-to-maturity portfolios are other-than-temporarily impaired. Unless otherwise noted for an investment security type, management does not intend to sell these investments and has determined, based upon available evidence, that it is more likely than not that the Company will not be required to sell these securities before the recovery of their amortized cost. As such, based on the following impairment analysis the Company does not consider these securities to be other-than-temporarily impaired at December 31, 2015.

Available-for-Sale Securities

Agency CMO. There were unrealized losses of $2.9 million on the Company’s investment in agency CMO at December 31, 2015, compared to $1.1 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. The contractual cash flows for these investments are performing as expected, and there has been no change in the underlying credit quality.

Agency MBS.There were unrealized losses of $17.3 million on the Company’s investment in residential mortgage-backed securities issued by government agencies at December 31, 2015, compared to $12.7 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. These investments are issued by a government or government sponsored agency and therefore, are backed by certain government guarantees, either direct or indirect. There has been no change in the credit quality, and the contractual cash flows are performing as expected.

Agency CMBS. There were unrealized losses of $1.0 million on the Company's investment in commercial mortgage-backed securities issued by government agencies at December 31, 2015, compared to $0.1 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014.

Non-agency CMBS. There were unrealized losses of $2.9 million on the Company’s investment in non-agency commercial mortgage-backed securities at December 31, 2015, compared to $0.1 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. Internal and external metrics are considered when evaluating potential OTTI. Internal stress tests are performed on individual bonds to monitor potential losses under stress scenarios. Contractual cash flows for the bonds continue to perform as expected.

CLO. There were unrealized losses of $3.3 million on the Company’s investments in CLO at December 31, 2015 compared to $1.0 million unrealized losses at December 31, 2014. Unrealized losses increased due to higher market spreads for the asset class which resulted in lower security prices since December 31, 2014. Internal stress tests are performed on individual bonds to monitor potential losses under stress scenarios.

Single issuer trust preferred securities. There were unrealized losses of $5.0 million on the Company's investment in single issuer trust preferred securities at December 31, 2015, compared to $3.7 million at December 31, 2014. Unrealized losses increased due to higher market spreads which resulted in lower security prices since December 31, 2014. The single issuer portfolio consists of four investments issued by three large capitalization money center financial institutions, which continue to service the debt. The Company performs periodic credit reviews of the issuer to assess the likelihood for ultimate recovery of amortized cost.

Equities - financial institutions. There were $0.9 million unrealized losses on the Company’s investment in equities - financial institutions at December 31, 2015 compared to no unrealized losses at December 31, 2014.

Held-to-Maturity Securities

Agency CMO. There were unrealized losses of $2.1 million on the Company’s investment in agency CMO at December 31, 2015, compared to $0.7 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. The contractual cash flows for these investments are performing as expected, and there has been no change in the underlying credit quality.

Agency MBS. There were unrealized losses of $19.9 million on the Company’s investment in residential mortgage-backed securities issued by government agencies at December 31, 2015, compared to $11.3 million at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. These investments are issued by a government or government sponsored agency and therefore, are backed by certain government guarantees, either direct or indirect. There has been no change in the credit quality, and the contractual cash flows are performing as expected.

Agency CMBS. There were unrealized losses of $0.3 million on the Company’s investment in commercial mortgage-backed securities issued by government agencies at December 31, 2015, compared to $1.1 million at December 31, 2014. Unrealized losses decreased due to security seasoning which resulted in higher security prices since December 31, 2014.

Municipal bonds and notes. There were unrealized losses of $417 thousand on the Company’s investment in municipal bonds and notes at December 31, 2015, compared to $55 thousand at December 31, 2014, as market rates were essentially unchanged. The Company performs periodic credit reviews of the issuers and the securities are currently performing as expected.

Non-agency CMBS. There were unrealized losses of $2.7 million on the Company’s investment in non-agency commercial mortgage-backed securities at December 31, 2015, compared to $1.0 million unrealized losses at December 31, 2014. Unrealized losses increased due to higher market rates which resulted in lower security prices since December 31, 2014. Internal and external metrics are considered when evaluating potential OTTI. Internal stress tests are performed on individual bonds to monitor potential losses under stress scenarios.

Sales of Available-for Sale Securities

The following table provides information on sales of available-for-sale securities:



	Years ended December 31,
(In thousands)	2015		2014		2013
Proceeds from sales	$	95,101	$	126,580	$	57,804

Gross realized gains on sales	$	1,029	$	7,268	$	2,847
Gross realized losses on sales	420		1,769		2,135
Gain on sale of investment securities, net	$	609	$	5,499	$	712

Contractual Maturities

The amortized cost and fair value of debt securities by contractual maturity are set forth below:



	At December 31, 2015

	Available-for-Sale				Held-to-Maturity
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	35,941	$	35,660	$	320	$	323
Due after one year through five years	99,028		101,313		33,940		34,880
Due after five through ten years	435,444		433,733		48,818		50,534
Due after ten years	2,421,012		2,411,347		3,839,974		3,875,797
Total debt securities	$	2,991,425	$	2,982,053	$	3,923,052	$	3,961,534

For the maturity schedule above, mortgage-backed securities and collateralized loan obligations, which are not due at a single maturity date, have been categorized based on the maturity date of the underlying collateral. Actual principal cash flows may differ from this maturity date presentation because borrowers have the right to prepay obligations with or without prepayment penalties. At December 31, 2015, the Company had a carrying value of $961.6 million in callable securities in its CMBS, CLO, and municipal bond portfolios. The Company considers these factors in the evaluation of its interest rate risk profile. These maturities do not reflect actual duration which is impacted by prepayment.

Securities with a carrying value totaling $2.6 billion at December 31, 2015 and $2.9 billion at December 31, 2014 were pledged to secure public funds, trust deposits, repurchase agreements, and for other purposes, as required or permitted by law.