Securities (Tables)

12 Months Ended

Dec. 31, 2013

The fair value and net unrealized gain (loss) included in trading securities is as follows (in thousands):



	December 31, 2013					December 31, 2012
	Fair Value		Net Unrealized Gain (Loss)			Fair Value		Net Unrealized Gain (Loss)
U.S. Government agency debentures	$	34,120	$	77		$	16,545	$	(57	)
U.S. agency residential mortgage-backed securities	21,011		123			86,361		447
Municipal and other tax-exempt securities	27,350		(182		)	90,326		(226		)
Other trading securities	9,135		(7		)	20,870		(13		)
Total	$	91,616	$	11		$	214,102	$	151

Investment Securities (Held-to-Maturity) [Table Text Block]

The amortized cost and fair values of investment securities are as follows (in thousands):



	December 31, 2013
	Amortized		Carrying		Fair		Gross Unrealized²
	Cost		Value¹		Value		Gain		Loss
Municipal and other tax-exempt	$	440,187	$	440,187	$	439,870	$	2,452	$	(2,769	)
U.S. agency residential mortgage-backed securities – Other	48,351		50,182		51,864		1,738		(56		)
Other debt securities	187,509		187,509		195,393		8,497		(613		)
Total	$	676,047	$	677,878	$	687,127	$	12,687	$	(3,438	)


¹	Carrying value includes $1.8 million of net unrealized gain which remains in Accumulated other comprehensive income (“AOCI”) in the Consolidated Balance Sheets related to certain securities transferred from the Available for Sale securities portfolio to the Investment securities portfolio as discussed in greater detail following.


²	Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets.



	December 31, 2012
	Amortized		Carrying		Fair		Gross Unrealized²
	Cost		Value¹		Value		Gain		Loss
Municipal and other tax-exempt	$	232,700	$	232,700	$	235,940	$	3,723	$	(483	)
U.S. agency residential mortgage-backed securities – Other	77,726		82,767		85,943		3,176		—
Other debt securities	184,067		184,067		206,575		22,528		(20		)
Total	$	494,493	$	499,534	$	528,458	$	29,427	$	(503	)


¹	Carrying value includes $5.0 million of net unrealized gain which remains in AOCI in the Consolidated Balance Sheets related to certain securities transferred from the Available for Sale securities portfolio to the Investment securities portfolio as discussed in greater detail following.


²	Gross unrealized gains and losses are not recognized in AOCI in the Consolidated Balance Sheets.

In 2011, the Company transferred certain U.S. government agency residential mortgage-backed securities from the available for sale portfolio to the investment securities (held-to-maturity) portfolio as the Company has the positive intent and ability to hold these securities to maturity. No gains or losses were recognized in the Consolidated Statement of Earnings at the time of the transfer. Transfers of debt securities into the investment securities portfolio (held-to-maturity) are made at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in Accumulated Other Comprehensive Income and in the carrying value of the investment securities portfolio. Such amounts are amortized over the estimated remaining life of the security as an adjustment to yield, offsetting the related amortization of the premium or accretion of the discount on the transferred securities. At the time of transfer, the fair value totaled $131 million, amortized cost totaled $118 million and the pretax unrealized gain totaled $13 million.

The amortized cost and fair values of investment securities at December 31, 2013, by contractual maturity, are as shown in the following table (dollars in thousands):



	Less than One Year			One to Five Years			Six to Ten Years			Over Ten Years			Total			Weighted Average Maturity²
Municipal and other tax-exempt:
Carrying value	$	33,821		$	308,451		$	57,873		$	40,042		$	440,187		4.43
Fair value	33,996			308,701			57,168			40,005			439,870
Nominal yield¹	2.91		%	1.66		%	2.65		%	4.75		%	2.23		%
Other debt securities:
Carrying value	$	9,138		$	33,043		$	44,539		$	100,789		$	187,509		8.63
Fair value	9,140			33,269			44,686			108,298			195,393
Nominal yield	4.08		%	5.02		%	5.27		%	6.27		%	5.71		%
Total fixed maturity securities:
Carrying value	$	42,959		$	341,494		$	102,412		$	140,831		$	627,696		5.69
Fair value	43,136			341,970			101,854			148,303			635,263
Nominal yield	3.16		%	1.98		%	3.79		%	5.84		%	3.27		%
Residential mortgage-backed securities:
Carrying value													$	50,182		³
Fair value													51,864
Nominal yield⁴													2.73		%
Total investment securities:
Carrying value													$	677,878
Fair value													687,127
Nominal yield													3.23		%


^1.	Calculated on a taxable equivalent basis using a 39% effective tax rate.


^2.	Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.


^3.	The average expected lives of residential mortgage-backed securities were 3.1 years based upon current prepayment assumptions.


^4.	The nominal yield on residential mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary - Unaudited for current yields on the investment securities portfolio.

Available For Sale Securities [Table Text Block]

The amortized cost and fair value of available for sale securities are as follows (in thousands):



	December 31, 2013
	Amortized		Fair		Gross Unrealized¹
	Cost		Value		Gain		Loss			OTTI²
U.S. Treasury	$	1,042	$	1,042	$	—	$	—		$	—
Municipal and other tax-exempt	73,232		73,775		1,606		(1,063		)	—
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	4,224,327		4,232,332		68,154		(60,149		)	—
FHLMC	2,308,341		2,293,943		25,813		(40,211		)	—
GNMA	1,151,225		1,152,128		9,435		(8,532		)	—
Other	36,296		37,607		1,311		—			—
Total U.S. government agencies	7,720,189		7,716,010		104,713		(108,892		)	—
Private issue:
Alt-A loans	104,559		107,212		4,386		—			(1,733		)
Jumbo-A loans	109,622		113,887		4,974		—			(709		)
Total private issue	214,181		221,099		9,360		—			(2,442		)
Total residential mortgage-backed securities	7,934,370		7,937,109		114,073		(108,892		)	(2,442		)
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,100,146		2,055,804		1,042		(45,384		)	—
Other debt securities	35,061		35,241		368		(188		)	—
Perpetual preferred stock	22,171		22,863		705		(13		)	—
Equity securities and mutual funds	19,069		21,328		2,326		(67		)	—
Total	$	10,185,091	$	10,147,162	$	120,120	$	(155,607	)	$	(2,442	)

¹ Gross unrealized gain/loss recognized in AOCI in the consolidated balance sheet.

² Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income.



	December 31, 2012
	Amortized		Fair		Gross Unrealized¹
	Cost		Value		Gain		Loss			OTTI²
U.S. Treasury	$	1,000	$	1,002	$	2	$	—		$	—
Municipal and other tax-exempt	84,892		87,142		2,414		(164		)	—
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	5,308,463		5,453,549		146,247		(1,161		)	—
FHLMC	2,978,608		3,045,564		66,956		—			—
GNMA	1,215,554		1,237,041		21,487		—			—
Other	148,025		153,667		5,642		—			—
Total U.S. government agencies	9,650,650		9,889,821		240,332		(1,161		)	—
Private issue:
Alt-A loans	124,314		123,174		1,440		—			(2,580		)
Jumbo-A loans	198,588		201,989		5,138		(134		)	(1,603		)
Total private issue	322,902		325,163		6,578		(134		)	(4,183		)
Total residential mortgage-backed securities	9,973,552		10,214,984		246,910		(1,295		)	(4,183		)
Commercial mortgage-backed securities guaranteed by U.S. government agencies	890,746		895,075		5,006		(677		)	—
Other debt securities	35,680		36,389		709		—			—
Perpetual preferred stock	22,171		25,072		2,901		—			—
Equity securities and mutual funds	24,593		27,557		3,242		(278		)	—
Total	$	11,032,634	$	11,287,221	$	261,184	$	(2,414	)	$	(4,183	)

¹ Gross unrealized gain/loss recognized in AOCI in the consolidated balance sheet

² Amounts represent unrealized loss that remains in AOCI after an other-than-temporary credit loss has been recognized in income.

The amortized cost and fair values of available for sale securities at December 31, 2013, by contractual maturity, are as shown in the following table (dollars in thousands):



	Less than One Year			One to Five Years			Six to Ten Years			Over Ten Years⁶			Total			Weighted Average Maturity⁵
U.S. Treasuries:
Amortized cost	$	1,042		$	—		$	—		$	—		$	1,042		1.16
Fair value	1,042			—			—			—			1,042
Nominal yield	0.24		%	—		%	—		%	—		%	0.24		%
Municipal and other tax-exempt:
Amortized cost	1,856			36,183			3,239			31,954			73,232			10.48
Fair value	1,882			37,470			3,451			30,972			73,775
Nominal yield¹	6.35		%	3.84		%	6.34		%	5.41		%	4.70		%
Commercial mortgage-backed securities:
Amortized cost	—			626,327			1,104,095			369,724			2,100,146			9.41
Fair value	—			619,219			1,073,471			363,114			2,055,804
Nominal yield	—		%	1.22		%	1.43		%	1.25		%	1.34		%
Other debt securities:
Amortized cost	24,992			5,169			—			4,900			35,061			5.31
Fair value	25,270			5,259			—			4,712			35,241
Nominal yield	1.74		%	2.12		%	—		%	1.54		%	1.77		%
Total fixed maturity securities:
Amortized cost	$	27,890		$	667,679		$	1,107,334		$	406,578		$	2,209,481		9.38
Fair value	28,194			661,948			1,076,922			398,798			2,165,862
Nominal yield	2.05		%	1.37		%	1.44		%	1.58		%	1.45		%
Residential mortgage-backed securities:
Amortized cost													$	7,934,370		²
Fair value													7,937,109
Nominal yield⁴													1.90		%
Equity securities and mutual funds:
Amortized cost													$	41,240		³
Fair value													44,191
Nominal yield													1.33		%
Total available-for-sale securities:
Amortized cost													$	10,185,091
Fair value													10,147,162
Nominal yield													1.80		%


¹	Calculated on a taxable equivalent basis using a 39% effective tax rate.


²	The average expected lives of mortgage-backed securities were 3.3 years based upon current prepayment assumptions.


³	Primarily common stock and preferred stock of corporate issuers with no stated maturity.


⁴	The nominal yield on mortgage-backed securities is based upon prepayment assumptions at the purchase date. Actual yields earned may differ significantly based upon actual prepayments. See Quarterly Financial Summary –– Unaudited following for current yields on available for sale securities portfolio.


⁵	Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty.


⁶	Nominal yield on municipal and other tax-exempt securities and other debt securities with contractual maturity dates over ten years are based on variable rates which generally are reset within 35 days.

Sales of available for sale securities resulted in gains and losses as follows (in thousands):



	Year Ended December 31,
	2013			2012			2011
Proceeds	$	2,436,093		$	1,744,662		2,725,760
Gross realized gains	25,711			41,191			41,284
Gross realized losses	(14,991		)	(7,346		)	(7,140	)
Related federal and state income tax expense	4,170			13,166			13,282

Securities Pledged As Collateral [Table Text Block]

A summary of investment and available for sale securities that have been pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was as follows (in thousands):



	December 31,
	2013		2012
Investment:
Carrying value	$	89,087	$	117,346
Fair value	91,804		121,647

Available for sale:
Amortized cost	5,171,782		4,070,250
Fair value	5,133,530		4,186,390

The secured parties do not have the right to sell or re-pledge these securities. At December 31, 2012, municipal trading securities with a fair value of $13 million were pledged as collateral on a line of credit for the trading activities of BOSC, Inc. Under the terms of the credit agreement, the creditor has the right to sell or repledge the collateral.

Schedule of Unrealized Loss on Investments [Table Text Block]

ds):



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investment:
Municipal and other tax-exempt	107	$	166,382	$	1,921	$	53,073	$	848	$	219,455	$	2,769
U.S. Agency residential mortgage-backed securities – Other	2	15,224		56		—		—		15,224		56
Other debt securities	30	10,932		549		777		64		11,709		613
Total investment	139	$	192,538	$	2,526	$	53,850	$	912	$	246,388	$	3,438



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available for sale:
Municipal and other tax-exempt	27	$	13,286	$	245	$	17,805	$	818	$	31,091	$	1,063
Residential mortgage-backed securities:
U. S. agencies:
FNMA	81	2,281,491		60,149		—		—		2,281,491		60,149
FHLMC	50	1,450,588		40,211		—		—		1,450,588		40,211
GNMA	27	647,058		8,532		—		—		647,058		8,532
Total U.S. agencies	158	4,379,137		108,892		—		—		4,379,137		108,892
Private issue¹:
Alt-A loans	7	11,043		756		30,774		977		41,817		1,733
Jumbo-A loans	9	14,642		709		—		—		14,642		709
Total private issue	16	25,685		1,465		30,774		977		56,459		2,442
Total residential mortgage-backed securities	174	4,404,822		110,357		30,774		977		4,435,596		111,334
Commercial mortgage-backed securities guaranteed by U.S. government agencies	123	1,800,717		45,302		2,286		82		1,803,003		45,384
Other debt securities	3	4,712		188		—		—		4,712		188
Perpetual preferred stocks	1	4,988		13		—		—		4,988		13
Equity securities and mutual funds	118	2,070		67		—		—		2,070		67
Total available for sale	446	$	6,230,595	$	156,172	$	50,865	$	1,877	$	6,281,460	$	158,049

¹Includes the following securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income:



Alt-A loans	7	11,043	756	30,774	977	41,817	1,733
Jumbo-A loans	9	14,642	709	—	—	14,642	709

Temporarily Impaired Securities as of December 31, 2012

(In thousands)



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investment:
Municipal and other tax- exempt	53	$	92,768	$	483	$	—	$	—	$	92,768	$	483
U.S. Agency residential mortgage-backed securities – Other	—	—		—		—		—		—		—
Other debt securities	14	881		20		—		—		881		20
Total investment	67	$	93,649	$	503	$	—	$	—	$	93,649	$	503



	Number of Securities	Less Than 12 Months				12 Months or Longer				Total
	Number of Securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available for sale:

Municipal and other tax-exempt	38	$	6,150	$	11	$	26,108	$	153	$	32,258	$	164
Residential mortgage-backed securities:
U. S. agencies:
FNMA	12	161,828		1,161		—		—		161,828		1,161
FHLMC	—	—		—		—		—		—		—
GNMA	—	—		—		—		—		—		—
Total U.S. agencies	12	161,828		1,161		—		—		161,828		1,161
Private issue¹:
Alt-A loans	12	—		—		87,907		2,580		87,907		2,580
Jumbo-A loans	11	—		—		43,252		1,737		43,252		1,737
Total private issue	23	—		—		131,159		4,317		131,159		4,317
Total residential mortgage-backed securities	35	161,828		1,161		131,159		4,317		292,987		5,478
Commercial mortgage-backed securities guaranteed by U.S. government agencies	8	275,065		677		—		—		275,065		677
Other debt securities	3	4,899		—		—		—		4,899		—
Perpetual preferred stocks	—	—		—		—		—		—		—
Equity securities and mutual funds	22	202		1		2,161		277		2,363		278
Total available for sale	106	$	448,144	$	1,850	$	159,428	$	4,747	$	607,572	$	6,597


¹	Includes the following securities for which an unrealized loss remains in AOCI after an other-than-temporary credit loss has been recognized in income:



Alt-A loans	12	$	—	$	—	$	87,907	$	2,580	$	87,907	$	2,580
Jumbo-A loans	10	—		—		29,128		1,602		29,128		1,602

Schedule of Investments by Lowest Current Credit Rating [Table Text Block]

At December 31, 2013, the composition of the Company’s investment and available for sale securities portfolios by the lowest current credit rating assigned by any of the three nationally-recognized rating agencies is as follows (in thousands):



	U.S. Govt/GSE ¹				AAA - AA				A - BBB				Below Investment Grade				Not Rated				Total
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Investment:
Municipal and other tax-exempt	$	—	$	—	$	280,583	$	278,789	$	20,784	$	21,012	$	—	$	—	$	138,820	$	140,069	$	440,187	$	439,870
Mortgage-backed securities -- other	50,182		51,864		—		—		—		—		—		—		—		—		50,182		51,864
Other debt securities	—		—		167,463		175,921		—		—		—		—		20,046		19,472		187,509		195,393
Total investment securities	$	50,182	$	51,864	$	448,046	$	454,710	$	20,784	$	21,012	$	—	$	—	$	158,866	$	159,541	$	677,878	$	687,127



	U.S. Govt / GSE ¹				AAA - AA				A - BBB				Below Investment Grade				Not Rated				Total
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
Available for Sale:
U.S. Treasury	$	1,042	$	1,042	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1,042	$	1,042
Municipal and other tax-exempt	—		—		44,969		45,984		15,854		15,545		—		—		12,409		12,246		73,232		73,775
Residential mortgage-backed securities:
U. S. government agencies:
FNMA	4,224,327		4,232,332		—		—		—		—		—		—		—		—		4,224,327		4,232,332
FHLMC	2,308,341		2,293,943		—		—		—		—		—		—		—		—		2,308,341		2,293,943
GNMA	1,151,225		1,152,128		—		—		—		—		—		—		—		—		1,151,225		1,152,128
Other	36,296		37,607		—		—		—		—		—		—		—		—		36,296		37,607
Total U.S. government agencies	7,720,189		7,716,010		—		—		—		—		—		—		—		—		7,720,189		7,716,010
Private issue:
Alt-A loans	—		—		—		—		—		—		104,559		107,212		—		—		104,559		107,212
Jumbo-A loans	—		—		—		—		—		—		109,622		113,887		—		—		109,622		113,887
Total private issue	—		—		—		—		—		—		214,181		221,099		—		—		214,181		221,099
Total residential mortgage-backed securities	7,720,189		7,716,010		—		—		—		—		214,181		221,099		—		—		7,934,370		7,937,109
Commercial mortgage-backed securities guaranteed by U.S. government agencies	2,100,146		2,055,804		—		—		—		—		—		—		—		—		2,100,146		2,055,804
Other debt securities	—		—		4,900		4,712		30,161		30,529		—		—		—		—		35,061		35,241
Perpetual preferred stock	—		—		—		—		11,406		11,859		10,765		11,004		—		—		22,171		22,863
Equity securities and mutual funds	—		—		4		457		—		—		—		—		19,065		20,871		19,069		21,328
Total available for sale securities	$	9,821,377	$	9,772,856	$	49,873	$	51,153	$	57,421	$	57,933	$	224,946	$	232,103	$	31,474	$	33,117	$	10,185,091	$	10,147,162


¹	U.S. government and government sponsored enterprises are not rated by the nationally-recognized rating agencies as these securities are guaranteed by agencies of the U.S. government or government-sponsored enterprises.

Schedule of Primary Assumptions Used in Other-Than-Temporary Impairment Evaluation [Table Text Block]



	December 31,
	2013	2012

Unemployment rate	Increasing to 7.3% over the next 12 months and remain at 7.3% thereafter	Increasing to 8.5% over the next 12 months, dropping to 8% over the following 21 months and holding at 8% thereafter.
Housing price appreciation/depreciation	Starting with current depreciated housing prices based on information derived from the FHFA¹, appreciating 4% over the next 12 months, then flat for the following 12 months and then appreciating at 2% per year thereafter.	Starting with current depreciated housing prices based on information derived from the FHFA¹, depreciating 2% over the next 12 months, then flat for the following 12 months and then appreciating at 2% per year thereafter.
Estimated liquidation costs	Reflect actual historical liquidations costs observed on Jumbo and Alt-A residential mortgage loans in securities owned by the Company.	Reflect actual historical liquidations costs observed on Jumbo and Alt-A residential mortgage loans in securities owned by the Company.
Discount rates	Estimated cash flows were discounted at rates that range from 2.00% to 6.25% based on our current expected yields.	Estimated cash flows were discounted at rates that range from 2.00% to 6.25% based on our current expected yields.

Schedule of Privately Issued Residential Mortgage-backed Securities [Table Text Block]



						Credit Losses Recognized
						Year ended
						December 31, 2013			Life-to-date
	Number of Securities	Amortized Cost		Fair Value		Number of Securities	Amount		Number of Securities	Amount
Alt-A	16	$	104,559	$	107,212	4	$	938	16	$	49,126
Jumbo-A	31	109,622		113,887		—	—		29	18,220
Total	47	$	214,181	$	221,099	4	$	938	45	$	67,346

Rollforward Other-than-temporary Impairment Credit Losses Recognized in Earnings [Table Text Block]



	Year Ended December 31,
	2013			2012
Balance of credit-related OTTI recognized on available for sale debt, beginning of period	$	75,228		$	76,131
Additions for credit-related OTTI not previously recognized	618			113
Additions for increases in credit-related OTTI previously recognized when there is no intent to sell and no requirement to sell before recovery of amortized cost	320			6,780
Reductions for change in intent to hold before recovery	(3,589		)	—
Sales	(5,231		)	(7,796		)
Balance of credit-related OTTI recognized on available for sale debt securities, end of period	$	67,346		$	75,228

Fair Value Option Securities [Table Text Block]

The fair value and net unrealized gain (loss) included in Fair value option securities is as follows (in thousands):



	December 31, 2013					December 31, 2012
	Fair Value		Net Unrealized Gain (Loss)			Fair Value		Net Unrealized Gain (Loss)
U.S. agency residential mortgage-backed securities	$	157,431	$	(8,378	)	$	257,040	$	3,314
Corporate debt securities	—		—			26,486		1,409
Other securities	$	9,694	$	209		$	770	$	47
Total	$	167,125	$	(8,169	)	$	284,296	$	4,770