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Investment Securities | 12 Months Ended
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Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract] |
Investment Securities | Investment Securities Investment securities, at fair value, consisted of the following at December 31, 2020 and 2019:
(In thousands) | 2020 | 2019
Available for sale debt securities | $ | 12,449,264 |  | $ | 8,571,626 |
Trading debt securities | 35,321 |  | 28,161 |
Equity securities: |  |
Readily determinable fair value | 2,966 |  | 2,929 |
No readily determinable fair value | 1,397 |  | 1,280 |
Other: |  |
Federal Reserve Bank stock | 34,070 |  | 33,770 |
Federal Home Loan Bank stock | 10,307 |  | 10,000 |
Equity method investments | 18,000 |  | — |
Private equity investments | 94,368 |  | 94,122 |
Total investment securities (1) | $ | 12,645,693 |  | $ | 8,741,888 |
(1) Accrued interest receivable totaled $41.5 million at December 31, 2020 and was included within other assets on the consolidated balance sheet. The Company has elected to measure equity securities with no readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes for the identical or similar investment of the same issuer. This portfolio includes the Company's holdings of Visa Class B shares, which have a carrying value of zero, as there have not been observable price changes in orderly transactions for identical or similar investments of the same issuer. During the year-ended December 31, 2020, the Company did not record any impairment or other adjustments to the carrying amount of its portfolio of equity securities with no readily determinable fair value. Other investment securities include Federal Reserve Bank (FRB) stock, Federal Home Loan Bank (FHLB) stock, equity method investments, and investments in portfolio concerns held by the Company's private equity subsidiary. FRB stock and FHLB stock are held for debt and regulatory purposes. Investment in FRB stock is based on the capital structure of the investing bank, and investment in FHLB stock is tied to the level of borrowings from the FHLB. These holdings are carried at cost. The Company's equity method investments are carried at cost, adjusted to reflect the Company's portion of income, loss, or dividends of the investee. The private equity investments, in the absence of readily ascertainable market values, are carried at estimated fair value. The majority of the Company’s investment portfolio is comprised of available for sale debt securities, which are carried at fair value with changes in fair value reported in accumulated other comprehensive income (AOCI). A summary of the available for sale debt securities by maturity groupings as of December 31, 2020 is shown in the following table. The weighted average yield for each range of maturities was calculated using the yield on each security within that range weighted by the amortized cost of each security at December 31, 2020. Yields on tax exempt securities have not been adjusted for tax exempt status. The investment portfolio includes agency mortgage-backed securities, which are guaranteed by agencies such as FHLMC, FNMA, and GNMA, in addition to non-agency mortgage-backed securities, which have no guarantee but are collateralized by commercial and residential mortgages. Also included are certain other asset-backed securities, which are primarily collateralized by credit cards, automobiles, student loans, and commercial loans. These securities differ from traditional debt securities primarily in that they may have uncertain maturity dates and are priced based on estimated prepayment rates on the underlying collateral.
(Dollars in thousands) | Amortized Cost | Fair Value | Weighted Average Yield
U.S. government and federal agency obligations: |  |  |
Within 1 year | $ | 59,627 |  | $ | 59,641 |  | .90 | *%
After 1 but within 5 years | 490,333 |  | 521,540 |  | 2.22 | *
After 5 but within 10 years | 225,632 |  | 256,878 |  | .65 | *
Total U.S. government and federal agency obligations | 775,592 |  | 838,059 |  | 1.66 | *
Government-sponsored enterprise obligations: |  |  |
Within 1 year | 14,993 |  | 14,916 |  | 2.15 |
After 10 years | 35,810 |  | 39,569 |  | 2.39 |
Total government-sponsored enterprise obligations | 50,803 |  | 54,485 |  | 2.32 |
State and municipal obligations: |  |  |
Within 1 year | 34,694 |  | 34,866 |  | 2.35 |
After 1 but within 5 years | 865,165 |  | 901,201 |  | 2.20 |
After 5 but within 10 years | 595,510 |  | 627,063 |  | 2.01 |
After 10 years | 472,637 |  | 481,969 |  | 1.84 |
Total state and municipal obligations | 1,968,006 |  | 2,045,099 |  | 2.06 |
Mortgage and asset-backed securities: |  |  |
Agency mortgage-backed securities | 6,557,098 |  | 6,712,085 |  | 2.00 |
Non-agency mortgage-backed securities | 358,074 |  | 361,074 |  | 2.39 |
Asset-backed securities | 1,853,791 |  | 1,882,243 |  | 1.53 |
Total mortgage and asset-backed securities | 8,768,963 |  | 8,955,402 |  | 1.92 |
Other debt securities: |  |  |
Within 1 year | 8,041 |  | 8,118 |  |
After 1 but within 5 years | 254,173 |  | 265,486 |  |
After 5 but within 10 years | 240,759 |  | 250,036 |  |
After 10 years | 31,196 |  | 32,579 |  |
Total other debt securities | 534,169 |  | 556,219 |  |
Total available for sale debt securities | $ | 12,097,533 |  | $ | 12,449,264 |  |
* Rate does not reflect inflation adjustment on inflation-protected securities Investments in U.S. government and federal agency obligations include U.S. Treasury inflation-protected securities, which totaled $434.6 million, at fair value, at December 31, 2020. Interest paid on these securities increases with inflation and decreases with deflation, as measured by the Consumer Price Index. At maturity, the principal paid is the greater of an inflation-adjusted principal or the original principal. Allowance for credit losses on available for sale debt securities As described in Note 1, the Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments, on January 1, 2020. The adoption of ASU 2016-13 had no impact to the Company's available for sale securities reported in its consolidated financial statements at January 1, 2020. For the year ended December 31, 2020, the Company did not recognize a credit loss expense on any available for sale debt securities. The Company’s model for establishing its allowance for credit losses uses cash flows projected to be received over the estimated life of the securities, discounted to present value, and compared to the current amortized cost bases of the securities. Securities for which fair value is less than amortized cost are reviewed for impairment. Special emphasis is placed on securities whose credit rating has fallen below Baa3 (Moody's) or BBB- (Standard & Poor's), whose fair values have fallen more than 20% below purchase price, or who have been identified based on management’s judgment. These securities are placed on a watch list and cash flow analyses are prepared on an individual security basis. Credit impairment is determined using input factors such as cash flow projections, contractual payments required, expected delinquency rates, credit support from other tranches, prepayment speeds, collateral loss severity rates (including loan to values), and various other information related to the underlying collateral. At December 31, 2020, the fair value of securities on this watch list was $31.0 million compared to $51.6 million at December 31, 2019. Significant inputs to the cash flow model used at December 31, 2020 to quantify credit losses were primarily credit support agreements, as the securities on the Company's watch list at December 31, 2020 were securities backed by government-guaranteed student loans and are expected to perform as contractually required. As of December 31, 2020, the Company did not identify any securities for which a credit loss exists. The table below summarizes debt securities available for sale in an unrealized loss position, aggregated by length of impairment period, for which an allowance for credit losses has not been recorded at December 31, 2020. Unrealized losses on these available for sale securities have not been recognized into income because after review, the securities were deemed not to be impaired. The unrealized losses on these securities are primarily attributable to changes in interest rates and current market conditions. Additionally, management does not intend to sell the securities, and it is more likely than not that management will not be required to sell the securities prior to their anticipated recovery.
| Less than 12 months |  | 12 months or longer |  | Total
(In thousands) | Fair Value | Unrealized Losses |  | Fair Value | Unrealized Losses |  | Fair Value | Unrealized Losses
December 31, 2020 |  |  |  |  |  |  |  |
Government-sponsored enterprise obligations | $ | 19,720 |  | $ | 98 |  |  | $ | — |  | $ | — |  |  | $ | 19,720 |  | $ | 98 |
State and municipal obligations | 45,622 |  | 230 |  |  | — |  | — |  |  | 45,622 |  | 230 |
Mortgage and asset-backed securities: |  |  |  |  |  |  |  |
Agency mortgage-backed securities | 470,373 |  | 2,802 |  |  | — |  | — |  |  | 470,373 |  | 2,802 |
Non-agency mortgage-backed securities | 112,861 |  | 380 |  |  | — |  | — |  |  | 112,861 |  | 380 |
Asset-backed securities | 21,360 |  | 56 |  |  | 253,734 |  | 2,617 |  |  | 275,094 |  | 2,673 |
Total mortgage and asset-backed securities | 604,594 |  | 3,238 |  |  | 253,734 |  | 2,617 |  |  | 858,328 |  | 5,855 |
Other debt securities | 24,522 |  | 175 |  |  | — |  | — |  |  | 24,522 |  | 175 |
Total | $ | 694,458 |  | $ | 3,741 |  |  | $ | 253,734 |  | $ | 2,617 |  |  | $ | 948,192 |  | $ | 6,358 |
Debt securities available for sale in an unrealized loss position, aggregated by major security type and length of impairment period, are as follows:
| Less than 12 months |  | 12 months or longer |  | Total
(In thousands) | Fair Value | Unrealized Losses |  | Fair Value | Unrealized Losses |  | Fair Value | Unrealized Losses
December 31, 2019 |  |  |  |  |  |  |  |
U.S. government and federal agency obligations | $ | 31,787 |  | $ | 21 |  |  | $ | 25,405 |  | $ | 21 |  |  | $ | 57,192 |  | $ | 42 |
Government-sponsored enterprise obligations | 6,155 |  | 187 |  |  | — |  | — |  |  | 6,155 |  | 187 |
State and municipal obligations | 6,700 |  | 31 |  |  | 1,554 |  | 1 |  |  | 8,254 |  | 32 |
Mortgage and asset-backed securities: |  |  |  |  |  |  |  |
Agency mortgage-backed securities | 652,352 |  | 5,306 |  |  | 147,653 |  | 867 |  |  | 800,005 |  | 6,173 |
Non-agency mortgage-backed securities | 102,931 |  | 254 |  |  | 189,747 |  | 451 |  |  | 292,678 |  | 705 |
Asset-backed securities | 330,876 |  | 3,610 |  |  | 152,461 |  | 2,108 |  |  | 483,337 |  | 5,718 |
Total mortgage and asset-backed securities | 1,086,159 |  | 9,170 |  |  | 489,861 |  | 3,426 |  |  | 1,576,020 |  | 12,596 |
Other debt securities | 5,496 |  | 4 |  |  | 997 |  | 3 |  |  | 6,493 |  | 7 |
Total | $ | 1,136,297 |  | $ | 9,413 |  |  | $ | 517,817 |  | $ | 3,451 |  |  | $ | 1,654,114 |  | $ | 12,864 |
The entire available for sale debt portfolio included $948.2 million of securities that were in a loss position at December 31, 2020, compared to $1.7 billion at December 31, 2019. The total amount of unrealized loss on these securities was $6.4 million at December 31, 2020, a decrease of $6.5 million compared to the loss at December 31, 2019. Securities with significant unrealized losses are discussed in the "Allowance for credit losses on available for sale debt securities" section above. For debt securities classified as available for sale, the following table shows the amortized cost, fair value, and allowance for credit losses of securities available for sale at December 31, 2020 and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type.
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Allowance for Credit Losses | Fair Value
December 31, 2020 |  |  |  |  |
U.S. government and federal agency obligations | $ | 775,592 |  | $ | 62,467 |  | $ | — |  | $ | — |  | $ | 838,059 |
Government-sponsored enterprise obligations | 50,803 |  | 3,780 |  | (98) |  | — |  | 54,485 |
State and municipal obligations | 1,968,006 |  | 77,323 |  | (230) |  | — |  | 2,045,099 |
Mortgage and asset-backed securities: |  |  |  |  |
Agency mortgage-backed securities | 6,557,098 |  | 157,789 |  | (2,802) |  | — |  | 6,712,085 |
Non-agency mortgage-backed securities | 358,074 |  | 3,380 |  | (380) |  | — |  | 361,074 |
Asset-backed securities | 1,853,791 |  | 31,125 |  | (2,673) |  | — |  | 1,882,243 |
Total mortgage and asset-backed securities | 8,768,963 |  | 192,294 |  | (5,855) |  | — |  | 8,955,402 |
Other debt securities | 534,169 |  | 22,225 |  | (175) |  | — |  | 556,219 |
Total | $ | 12,097,533 |  | $ | 358,089 |  | $ | (6,358) |  | $ | — |  | $ | 12,449,264 |
For debt securities classified as available for sale, the following table shows the amortized cost and fair value of securities available for sale at December 31, 2019 and the corresponding amounts of gross unrealized gains and losses (pre-tax) in AOCI, by security type.
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value
December 31, 2019 |  |  |  |
U.S. government and federal agency obligations | $ | 827,861 |  | $ | 23,957 |  | $ | (42) |  | $ | 851,776 |
Government-sponsored enterprise obligations | 138,734 |  | 730 |  | (187) |  | 139,277 |
State and municipal obligations | 1,225,532 |  | 42,427 |  | (32) |  | 1,267,927 |
Mortgage and asset-backed securities: |  |  |  |
Agency mortgage-backed securities | 3,893,247 |  | 50,890 |  | (6,173) |  | 3,937,964 |
Non-agency mortgage-backed securities | 796,451 |  | 14,036 |  | (705) |  | 809,782 |
Asset-backed securities | 1,228,151 |  | 11,056 |  | (5,718) |  | 1,233,489 |
Total mortgage and asset-backed securities | 5,917,849 |  | 75,982 |  | (12,596) |  | 5,981,235 |
Other debt securities | 325,555 |  | 5,863 |  | (7) |  | 331,411 |
Total | $ | 8,435,531 |  | $ | 148,959 |  | $ | (12,864) |  | $ | 8,571,626 |
The following table presents proceeds from sales of securities and the components of investment securities gains and losses which have been recognized in earnings.
| For the Year Ended December 31
(In thousands) | 2020 | 2019 | 2018
Proceeds from sales of securities: |  |  |
Available for sale debt securities | $ | 602,475 |  | $ | 402,103 |  | $ | 667,227 |
Equity securities | 2 |  | 3,856 |  | 41,637 |
Other | — |  | 7,244 |  | — |
Total proceeds | $ | 602,477 |  | $ | 413,203 |  | $ | 708,864 |
Investment securities gains (losses), net: |  |  |
Available for sale debt securities: |  |  |
Gains realized on sales | $ | 21,096 |  | $ | 2,354 |  | $ | 448 |
Losses realized on sales | — |  | (2,568) |  | (10,101) |
Other-than-temporary impairment recognized on debt securities | — |  | (133) |  | (68) |
Equity securities: |  |  |
Gains realized on sales | 2 |  | 3,262 |  | 1,759 |
Losses realized on sales | — |  | — |  | (8,917) |
Fair value adjustments, net | 37 |  | 344 |  | 2,542 |
Other: |  |  |
Gains realized on sales | — |  | 1,094 |  | — |
Fair value adjustments, net | (10,103) |  | (727) |  | 13,849 |
Total investment securities gains (losses), net | $ | 11,032 |  | $ | 3,626 |  | $ | (488) |
Net gains and losses on investment securities for the year ended December 31, 2020 included net gains of $21.1 million realized on sales of available for sale debt securities and net losses in fair value of $10.1 million on private equity investments due to fair value adjustments. At December 31, 2020 securities totaling $4.8 billion in fair value were pledged to secure public fund deposits, securities sold under agreements to repurchase, trust funds, and borrowings at the FRB and FHLB, compared to $4.3 billion at December 31, 2019. Securities pledged under agreements pursuant to which the collateral may be sold or re-pledged by the secured parties approximated $214.2 million, while the remaining securities were pledged under agreements pursuant to which the secured parties may not sell or re-pledge the collateral. Except for obligations of various government-sponsored enterprises such as FNMA, FHLB and FHLMC, no investment in a single issuer exceeds 10% of stockholders’ equity.

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