Securities (Tables)

9 Months Ended

Sep. 30, 2014

Summary of Portfolio of Securities Available for Sale

The following table summarizes the Company’s portfolio of securities available for sale at September 30, 2014:

	September 30, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gain		Loss		Fair Value
Mortgage-Related Securities:
GSE ⁽¹⁾ certificates	$	19,295	$	1,397	$	--	$	20,692
GSE CMOs ⁽²⁾		59,499		743		1,167		59,075
Private label CMOs		9,417		--		50		9,367
Total mortgage-related securities	$	88,211	$	2,140	$	1,217	$	89,134
Other Securities:
Municipal bonds	$	964	$	133	$	--	$	1,097
Capital trust notes		13,428		51		1,870		11,609
Preferred stock		118,205		5,116		635		122,686
Common stock		17,943		608		45		18,506
Total other securities	$	150,540	$	5,908	$	2,550	$	153,898
Total securities available for sale	$	238,751	$	8,048	$	3,767	$	243,032

(1)	Government-sponsored enterprise

(2)	Collateralized mortgage obligations

The following table summarizes the Company’s portfolio of securities available for sale at December 31, 2013:

	December 31, 2013
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gain		Loss		Fair Value
Mortgage-Related Securities:
GSE certificates	$	23,759	$	1,442	$	1	$	25,200
GSE CMOs		62,082		598		1,861		60,819
Private label CMOs		10,214	--			12		10,202
Total mortgage-related securities	$	96,055	$	2,040	$	1,874	$	96,221
Other Securities:
Municipal bonds	$	957	$	69	$	--	$	1,026
Capital trust notes		13,419		60		1,681		11,798
Preferred stock		118,205		1,936		3,902		116,239
Common stock		51,654		4,093		293		55,454
Total other securities	$	184,235	$	6,158	$	5,876	$	184,517
Total securities available for sale	$	280,290	$	8,198	$	7,750	$	280,738

Summary of Portfolio of Securities Held to Maturity

The following tables summarize the Company’s portfolio of securities held to maturity at September 30, 2014 and December 31, 2013:

	September 30, 2014
					Gross		Gross
	Amortized		Carrying		Unrealized		Unrealized
(in thousands)	Cost		Amount		Gain		Loss		Fair Value
Mortgage-Related Securities:
GSE certificates	$	2,515,030	$	2,515,030	$	74,212	$	13,892	$	2,575,350
GSE CMOs		1,764,784		1,764,784		55,971		3,352		1,817,403
Total mortgage-related securities	$	4,279,814	$	4,279,814	$	130,183	$	17,244	$	4,392,753
Other Securities:
GSE debentures	$	2,780,330	$	2,780,330	$	16,530	$	86,860	$	2,710,000
Corporate bonds		73,211		73,211		12,381		--		85,592
Municipal bonds		59,277		59,277		5		1,775		57,507
Capital trust notes		84,470		75,612		5,587		10,036		71,163
Total other securities	$	2,997,288	$	2,988,430	$	34,503	$	98,671	$	2,924,262
Total securities held to maturity ⁽¹⁾	$	7,277,102	$	7,268,244	$	164,686	$	115,915	$	7,317,015

(1)	Held-to-maturity securities are reported at a carrying amount equal to amortized cost less the non-credit portion of OTTI recorded in AOCL. At September 30, 2014, the non-credit portion of OTTI recorded in AOCL was $8.9 million (before taxes).

	December 31, 2013
					Gross		Gross
	Amortized		Carrying		Unrealized		Unrealized
(in thousands)	Cost		Amount		Gain		Loss		Fair Value
Mortgage-Related Securities:
GSE certificates	$	2,529,102	$	2,529,102	$	30,145	$	61,280	$	2,497,967
GSE CMOs		1,878,885		1,878,885		29,330		22,520		1,885,695
Total mortgage-related securities	$	4,407,987	$	4,407,987	$	59,475	$	83,800	$	4,383,662
Other Securities:
GSE debentures	$	3,053,253	$	3,053,253	$	6,512	$	208,506	$	2,851,259
Corporate bonds		72,899		72,899		11,063		--		83,962
Municipal bonds		60,462		60,462		19		3,849		56,632
Capital trust notes		84,871		75,681		3,134		9,086		69,729
Total other securities	$	3,271,485	$	3,262,295	$	20,728	$	221,441	$	3,061,582
Total securities held to maturity ⁽¹⁾	$	7,679,472	$	7,670,282	$	80,203	$	305,241	$	7,445,244

(1)	Held-to-maturity securities are reported at a carrying amount equal to amortized cost less the non-credit portion of OTTI recorded in AOCL. At December 31, 2013, the non-credit portion of OTTI recorded in AOCL was $9.2 million (before taxes).

Summary of Gross Proceeds, Gross Realized Gains, and Gross Realized Losses from Sale of Available-for-Sale Securities

The following table summarizes the gross proceeds, gross realized gains, and gross realized losses from the sale of available-for-sale securities during the nine months ended September 30, 2014 and 2013:

	For the Nine Months Ended
	September 30,
(in thousands)	2014		2013
Gross proceeds	$	254,491	$	593,551
Gross realized gains		5,317		6,212
Gross realized losses		--		--

Credit Loss Component of Other Than Temporary Impairment on Debt Securities

In the following table, the beginning balance represents the credit loss component for debt securities on which OTTI occurred prior to January 1, 2014. For credit-impaired debt securities, OTTI recognized in earnings after that date is presented as an addition in two components, based upon whether the current period is the first time a debt security was credit-impaired (initial credit impairment) or is not the first time a debt security was credit-impaired (subsequent credit impairment).

	For the Nine Months Ended
(in thousands)	September 30, 2014
Beginning credit loss amount as of December 31, 2013	$	216,334
Add: Initial other-than-temporary credit losses		--
Subsequent other-than-temporary credit losses		--
Amount previously recognized in AOCL		--
Less: Realized losses for securities sold		--
Securities intended or required to be sold		--
Increases in expected cash flows on debt securities		--
Ending credit loss amount as of September 30, 2014	$	216,334

Summary of Carrying Amount and Estimated Fair Value of Held-to-Maturity Debt Securities and Amortized Cost and Estimated Fair Value of Available-for-Sale Debt Securities by Contractual Maturity

The following table summarizes the carrying amounts and estimated fair values of held-to-maturity debt securities, and the amortized costs and estimated fair values of available-for-sale debt securities, at September 30, 2014, by contractual maturity. Mortgage-related securities held to maturity and available for sale, all of which have prepayment provisions, are distributed to a maturity category based on the ends of the estimated average lives of such securities. Principal and amortization prepayments are not shown in maturity categories as they occur, but are considered in the determination of estimated average life.

	At September 30, 2014
						U.S.
	Mortgage-					Treasury
	Related		Average			and GSE		Average			Municipal		Average			Other Debt		Average
(dollars in thousands)	Securities		Yield			Obligations		Yield			Bonds		Yield ⁽¹⁾			Securities ⁽²⁾		Yield			Fair Value
Held-to-Maturity Securities:
Due within one year	$	--	--		%	$	--	--		%	$	--	--		%	$	--	--		%	$	--
Due from one to five years		841		5.89			60,190		4.17			967		2.96			--		--			67,544
Due from five to ten years		3,233,780		3.22			2,707,852		2.74			--		--			47,251		3.14			6,000,178
Due after ten years		1,045,193		3.36			12,288		3.99			58,310		2.85			101,572		5.80			1,249,293
Total debt securities held to maturity	$	4,279,814		3.25	%	$	2,780,330		2.78	%	$	59,277		2.85	%	$	148,823		4.96	%	$	7,317,015
Available-for-Sale Securities:⁽³⁾
Due within one year	$	--	--		%	$	--	--		%	$	125		6.09	%	$	--	--		%	$	126
Due from one to five years		4,083		6.82			--		--			558		6.45			--		--			4,921
Due from five to ten years		16,137		3.72			--		--			281		6.63			--		--			17,416
Due after ten years		67,991		3.59			--		--			--		--			13,428		5.67			79,377
Total debt securities available for sale	$	88,211		3.76	%	$	--	--		%	$	964		6.46	%	$	13,428		5.67	%	$	101,840

(1)	Not presented on a tax-equivalent basis.

(2)	Consists of corporate bonds and capital trust notes. Included in capital trust notes are $247,000 of pooled trust preferred securities held to maturity, all of which are due after ten years. The remaining capital trust notes consist of single-issue trust preferred securities.

(3)	As equity securities have no contractual maturity, they have been excluded from this table.

Summary of Held-to-Maturity and Available-for-Sale Securities having Continuous Unrealized Loss Position

The following table presents held-to-maturity and available-for-sale securities having a continuous unrealized loss position for less than twelve months and for twelve months or longer as of September 30, 2014:

At September 30, 2014	Less than Twelve Months				Twelve Months or Longer				Total
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Held-to-Maturity Debt Securities:
GSE debentures	$	129,894	$	75	$	2,150,525	$	86,785	$	2,280,419	$	86,860
GSE certificates		269,519		1,606		493,289		12,286		762,808		13,892
GSE CMOs		52,932		93		147,839		3,259		200,771		3,352
Municipal bonds		14,078		158		42,456		1,617		56,534		1,775
Capital trust notes		24,907		93		36,238		9,943		61,145		10,036
Total temporarily impaired held-to-maturity debt securities	$	491,330	$	2,025	$	2,870,347	$	113,890	$	3,361,677	$	115,915
Temporarily Impaired Available-for-Sale Securities:
Debt Securities:
Private label CMOs	$	9,367	$	50	$	--	$	--	$	9,367	$	50
GSE CMOs		--		--		45,456		1,167		45,456		1,167
Capital trust notes		1,993		8		5,566		1,862		7,559		1,870
Total temporarily impaired available-for-sale debt securities	$	11,360	$	58	$	51,022	$	3,029	$	62,382	$	3,087
Equity securities		8,897		171		14,784		509		23,681		680
Total temporarily impaired available-for-sale securities	$	20,257	$	229	$	65,806	$	3,538	$	86,063	$	3,767

At December 31, 2013	Less than Twelve Months				Twelve Months or Longer				Total
(in thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily Impaired Held-to-Maturity Debt Securities:
GSE debentures	$	2,777,417	$	208,506	$	--	$	--	$	2,777,417	$	208,506
GSE certificates		1,684,793		61,280		--		--		1,684,793		61,280
GSE CMOs		936,691		22,520		--		--		936,691		22,520
Municipal bonds		55,333		3,849		--		--		55,333		3,849
Capital trust notes		24,900		100		37,181		8,986		62,081		9,086
Total temporarily impaired held-to-maturity debt securities	$	5,479,134	$	296,255	$	37,181	$	8,986	$	5,516,315	$	305,241

Temporarily Impaired Available-for-Sale Securities:
Debt Securities:
GSE certificates	$	--	$	--	$	110	$	1	$	110	$	1
Private label CMOs		10,202		12		--		--		10,202		12
GSE CMOs		44,725		1,861		--		--		44,725		1,861
Capital trust notes		1,992		8		5,746		1,673		7,738		1,681
Total temporarily impaired available-for-sale debt securities	$	56,919	$	1,881	$	5,856	$	1,674	$	62,775	$	3,555
Equity securities		75,886		4,195		--		--		75,886		4,195
Total temporarily impaired available-for-sale securities	$	132,805	$	6,076	$	5,856	$	1,674	$	138,661	$	7,750

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- Definition

Tabular disclosure of all investments in certain debt and equity securities for which the entity has the positive intent and ability to hold until maturity.

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- Definition

Tabular disclosure of the amount of other than temporary impairment (OTTI) related to credit losses recognized in earnings including: (a) the beginning balance of the amount related to credit losses on debt securities held by the investor at the beginning of the period for which a portion of an OTTI was recognized in other comprehensive income; (b) additions for the amount related to the credit loss for which an OTTI was not previously recognized; (c) reductions for securities sold during the period (realized); (d) reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the investor intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis; (e) additional increases to the amount related to the credit loss for which an OTTI was previously recognized when the investor does not intend to sell the security and it is not more likely than not that the investor will be required to sell the security before recovery of its amortized cost basis; (f) reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security; and (g) the ending balance of the amount related to credit losses on debt securities held by the entity at the end of the period for which a portion of an OTTI was recognized in other comprehensive income.

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