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Securities | 3 Months Ended
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Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The following tables present the amortized cost, gross unrealized gains and losses, and fair value by major categories of available-for-sale investment securities carried at fair value, as of March 31, 2018 and December 31, 2017:
|  | As of March 31, 2018
($ in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available-for-sale investment securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 668,670 |  |  | $ | 93 |  |  | $ | (16,933 | ) |  | $ | 651,830 |
U.S. government agency and U.S. government sponsored enterprise debt securities |  | 235,776 |  |  | 175 |  |  | (2,935 | ) |  | 233,016 |
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 352,980 |  |  | 170 |  |  | (13,316 | ) |  | 339,834 |
Residential mortgage-backed securities |  | 1,008,235 |  |  | 1,844 |  |  | (20,626 | ) |  | 989,453 |
Municipal securities |  | 74,942 |  |  | 251 |  |  | (1,117 | ) |  | 74,076 |
Non-agency residential mortgage-backed securities: |  |  |  |  |  |  |  |  |
Investment grade (1) |  | 8,547 |  |  | — |  |  | (143 | ) |  | 8,404 |
Corporate debt securities: |  |  |  |  |  |  |  |  |
Investment grade (1) |  | 36,379 |  |  | 178 |  |  | (699 | ) |  | 35,858 |
Foreign bonds: |  |  |  |  |  |  |  |  |
Investment grade (1) (2) |  | 505,364 |  |  | — |  |  | (26,419 | ) |  | 478,945 |
Total available-for-sale investment securities |  | $ | 2,890,893 |  |  | $ | 2,711 |  |  | $ | (82,188 | ) |  | $ | 2,811,416 |
|  | As of December 31, 2017
($ in thousands) |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available-for-sale investment securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 651,395 |  |  | $ | — |  |  | $ | (11,115 | ) |  | $ | 640,280 |
U.S. government agency and U.S. government sponsored enterprise debt securities |  | 206,815 |  |  | 62 |  |  | (3,485 | ) |  | 203,392 |
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 328,348 |  |  | 141 |  |  | (9,532 | ) |  | 318,957 |
Residential mortgage-backed securities |  | 1,199,869 |  |  | 3,964 |  |  | (13,562 | ) |  | 1,190,271 |
Municipal securities |  | 99,636 |  |  | 655 |  |  | (309 | ) |  | 99,982 |
Non-agency residential mortgage-backed securities: |  |  |  |  |  |  |  |  |
Investment grade (1) |  | 9,136 |  |  | 3 |  |  | (22 | ) |  | 9,117 |
Corporate debt securities: |  |  |  |  |  |  |  |  |
Investment grade (1) |  | 37,585 |  |  | 164 |  |  | (746 | ) |  | 37,003 |
Foreign bonds: |  |  |  |  |  |  |  |
Investment grade (1) (2) |  | 505,396 |  |  | 24 |  |  | (19,012 | ) |  | 486,408 |
Other securities (3) |  | 31,887 |  |  | — |  |  | (545 | ) |  | 31,342 |
Total available-for-sale investment securities |  | $ | 3,070,067 |  |  | $ | 5,013 |  |  | $ | (58,328 | ) |  | $ | 3,016,752 |
(1) | Available-for-sale investment securities rated BBB- or higher by Standard & Poor’s (“S&P”) or Baa3 or higher by Moody’s are considered investment grade. Conversely, available-for-sale investment securities rated lower than BBB- by S&P or lower than Baa3 by Moody’s are considered non-investment grade. Classifications are based on the lower of the credit ratings by S&P or Moody’s.
(2) | Fair value of foreign bonds include $448.5 million and $456.1 million of multilateral development bank bonds as of March 31, 2018 and December 31, 2017, respectively.
(3) | Other securities are comprised of mutual funds, which are equity securities with readily determinable fair value. Prior to the adoption of ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, these securities were reported as available-for-sale investment securities with changes in fair value recorded through other comprehensive income. Upon adoption of ASU 2016-01, which became effective January 1, 2018, these securities were reclassified from Available-for-sale investment securities to Investments in tax credit and other investments, net, with changes in fair value recorded through net income.
Unrealized Losses The following tables present the gross unrealized losses and related fair value of the Company’s investment portfolio, aggregated by investment category and the length of time that individual security has been in a continuous unrealized loss position, as of March 31, 2018 and December 31, 2017:
|  | As of March 31, 2018
($ in thousands) |  | Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Available-for-sale investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 170,103 |  |  | $ | (3,130 | ) |  | $ | 457,952 |  |  | $ | (13,803 | ) |  | $ | 628,055 |  |  | $ | (16,933 | )
U.S. government agency and U.S. government sponsored enterprise debt securities |  | 133,861 |  |  | (2,157 | ) |  | 86,549 |  |  | (778 | ) |  | 220,410 |  |  | (2,935 | )
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 117,057 |  |  | (3,255 | ) |  | 192,874 |  |  | (10,061 | ) |  | 309,931 |  |  | (13,316 | )
Residential mortgage-backed securities |  | 461,197 |  |  | (8,362 | ) |  | 339,157 |  |  | (12,264 | ) |  | 800,354 |  |  | (20,626 | )
Municipal securities |  | 24,618 |  |  | (671 | ) |  | 8,323 |  |  | (446 | ) |  | 32,941 |  |  | (1,117 | )
Non-agency residential mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 8,404 |  |  | (143 | ) |  | — |  |  | — |  |  | 8,404 |  |  | (143 | )
Corporate debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | — |  |  | — |  |  | 10,742 |  |  | (699 | ) |  | 10,742 |  |  | (699 | )
Foreign bonds: |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 130,436 |  |  | (5,010 | ) |  | 348,510 |  |  | (21,409 | ) |  | 478,946 |  |  | (26,419 | )
Total available-for-sale investment securities |  | $ | 1,045,676 |  |  | $ | (22,728 | ) |  | $ | 1,444,107 |  |  | $ | (59,460 | ) |  | $ | 2,489,783 |  |  | $ | (82,188 | )
|  | As of December 31, 2017
($ in thousands) |  | Less Than 12 Months |  | 12 Months or More |  | Total
| Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses |  | Fair Value |  | Gross Unrealized Losses
Available-for-sale investment securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities |  | $ | 168,061 |  |  | $ | (1,005 | ) |  | $ | 472,219 |  |  | $ | (10,110 | ) |  | $ | 640,280 |  |  | $ | (11,115 | )
U.S. government agency and U.S. government sponsored enterprise debt securities |  | 99,935 |  |  | (623 | ) |  | 85,281 |  |  | (2,862 | ) |  | 185,216 |  |  | (3,485 | )
U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial mortgage-backed securities |  | 113,775 |  |  | (2,071 | ) |  | 191,827 |  |  | (7,461 | ) |  | 305,602 |  |  | (9,532 | )
Residential mortgage-backed securities |  | 413,621 |  |  | (4,205 | ) |  | 361,809 |  |  | (9,357 | ) |  | 775,430 |  |  | (13,562 | )
Municipal securities |  | 8,490 |  |  | (123 | ) |  | 8,588 |  |  | (186 | ) |  | 17,078 |  |  | (309 | )
Non-agency residential mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 4,599 |  |  | (22 | ) |  | — |  |  | — |  |  | 4,599 |  |  | (22 | )
Corporate debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | — |  |  | — |  |  | 11,905 |  |  | (746 | ) |  | 11,905 |  |  | (746 | )
Foreign bonds: |  |  |  |  |  |  |  |  |  |  |  |
Investment grade |  | 103,149 |  |  | (1,325 | ) |  | 352,239 |  |  | (17,687 | ) |  | 455,388 |  |  | (19,012 | )
Other securities(1) |  | 31,215 |  |  | (545 | ) |  | — |  |  | — |  |  | 31,215 |  |  | (545 | )
Total available-for-sale investment securities |  | $ | 942,845 |  |  | $ | (9,919 | ) |  | $ | 1,483,868 |  |  | $ | (48,409 | ) |  | $ | 2,426,713 |  |  | $ | (58,328 | )
(1) | Other securities are comprised of mutual funds, which are equity securities with readily determinable fair value. Prior to the adoption of ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, these securities were reported as available-for-sale investment securities with changes in fair value recorded through other comprehensive income. Upon adoption of ASU 2016-01, which became effective January 1, 2018, these securities were reclassified from Available-for-sale investment securities, at fair value to Investments in tax credit and other investments, net, with changes in fair value recorded through net income.
For each reporting period, the Company examines all individual securities that are in an unrealized loss position for Other-Than-Temporary-Impairment (“OTTI”). For a discussion of the factors and criteria the Company uses in analyzing securities for OTTI, see Note 1 — Summary of Significant Accounting Policies — Securities to the Consolidated Financial Statements of the Company’s 2017 Form 10-K. The unrealized losses were primarily attributable to the yield curve movement, in addition to widened liquidity and credit spreads. The issuers of these securities have not, to the Company’s knowledge, established any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market interest rates have fluctuated. The Company believes that the gross unrealized losses detailed in the previous tables are temporary and no credit loss is expected. As a result, the Company expects to recover the entire amortized cost basis of these securities. Accordingly, no impairment loss was recorded on the Company’s Consolidated Statement of Income for each of the three months ended March 31, 2018 and 2017. As of March 31, 2018, the Company had 192 available-for-sale investment securities in a gross unrealized loss position with no credit impairment, primarily comprised of 111 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, 23 U.S. Treasury securities and 17 investment grade foreign bonds. In comparison, as of December 31, 2017, the Company had 165 available-for-sale investment securities in a gross unrealized loss position with no credit impairment, primarily comprised of 98 U.S. government agency and U.S. government sponsored enterprise mortgage-backed securities, 25 U.S. Treasury securities and 16 investment grade foreign bonds. Other-Than-Temporary Impairment No OTTI credit losses were recognized for each of the three months ended March 31, 2018 and 2017. Realized Gains and Losses The following table presents the proceeds, gross realized gains and tax expense related to the sales of available-for-sale investment securities for the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31,
| 2018 |  | 2017
Proceeds from sales |  | $ | 214,790 |  |  | $ | 302,656 |
Gross realized gains |  | $ | 2,129 |  |  | $ | 2,474 |
Related tax expense |  | $ | 628 |  |  | $ | 1,040 |
Scheduled Maturities of Investment Securities The following table presents the scheduled maturities of available-for-sale investment securities as of March 31, 2018:
($ in thousands) |  | Amortized Cost |  | Fair Value
Due within one year |  | $ | 573,138 |  |  | $ | 549,190 |
Due after one year through five years |  | 818,412 |  |  | 796,717 |
Due after five years through ten years |  | 188,149 |  |  | 184,944 |
Due after ten years |  | 1,311,194 |  |  | 1,280,565 |
Total available-for-sale investment securities |  | $ | 2,890,893 |  |  | $ | 2,811,416 |
Actual maturities of mortgage-backed securities can differ from contractual maturities as the borrowers have the right to prepay obligations. In addition, factors such as prepayments and interest rates may affect the yields on the carrying values of mortgage-backed securities. Available-for-sale investment securities with fair value of $498.7 million and $534.3 million as of March 31, 2018 and December 31, 2017, respectively, were primarily pledged to secure repurchase agreements, public deposits, the FRB’s discount window and for other purposes required or permitted by law. Restricted Equity Securities Restricted equity securities include stock of the FRB and of the FHLB. Restricted equity securities are carried at cost as these securities do not have a readily determinable fair value. The following table presents the restricted equity securities as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018 |  | December 31, 2017
FRB stock |  | $ | 56,537 |  |  | $ | 56,271 |
FHLB stock |  | 17,250 |  |  | 17,250 |
Total |  | $ | 73,787 |  |  | $ | 73,521 |

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