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Securities | 9 Months Ended
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Sep. 30, 2020
Marketable Securities [Abstract] |
Securities [Text Block] | Securities Trading Securities The fair value and net unrealized gain (loss) included in trading securities are as follows (in thousands):
|  | September 30, 2020 |  | December 31, 2019
|  | Fair Value |  | Net Unrealized Gain (Loss) |  | Fair Value |  | Net Unrealized Gain (Loss)
U.S. government agency debentures |  | $ | 5,181 |  |  | $ | (1) |  |  | $ | 44,264 |  |  | $ | 6 |
Residential agency mortgage-backed securities |  | 2,150,759 |  |  | (693) |  |  | 1,504,651 |  |  | 2,293 |
Municipal and other tax-exempt securities |  | 30,533 |  |  | (44) |  |  | 26,196 |  |  | 60 |
Asset-backed securities |  | — |  |  | — |  |  | 14,084 |  |  | (21) |
Other debt securities |  | 59,007 |  |  | 61 |  |  | 34,726 |  |  | 21 |
Total trading securities |  | $ | 2,245,480 |  |  | $ | (677) |  |  | $ | 1,623,921 |  |  | $ | 2,359 |
Investment Securities The amortized cost and fair values of investment securities are as follows (in thousands):
|  | September 30, 2020
|  | Amortized |  | Fair |  | Gross Unrealized
|  | Cost |  | Value |  | Gain |  | Loss
Municipal and other tax-exempt |  | $ | 76,109 |  |  | $ | 80,368 |  |  | $ | 4,259 |  |  | $ | — |
Residential agency mortgage-backed securities |  | 9,317 |  |  | 10,219 |  |  | 902 |  |  | — |
Other debt securities |  | 171,314 |  |  | 194,342 |  |  | 23,227 |  |  | (199) |
Total investment securities |  | 256,740 |  |  | 284,929 |  |  | 28,388 |  |  | (199) |
Allowance for credit losses 1 |  | (739) |  |  |  |  |  |  |
Investment securities, net of allowance |  | 256,001 |  |  | 284,929 |  |  | 28,388 |  |  | (199) |
1 Effective with the adoption of FASB ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) on January 1, 2020.
|  | December 31, 2019
|  | Amortized |  | Fair |  | Gross Unrealized
|  | Cost |  | Value |  | Gain |  | Loss
Municipal and other tax-exempt |  | $ | 93,653 |  |  | $ | 96,897 |  |  | $ | 3,250 |  |  | $ | (6) |
Residential agency mortgage-backed securities |  | 10,676 |  |  | 11,164 |  |  | 488 |  |  | — |
Other debt securities |  | 189,089 |  |  | 206,341 |  |  | 17,547 |  |  | (295) |
Total investment securities |  | $ | 293,418 |  |  | $ | 314,402 |  |  | $ | 21,285 |  |  | $ | (301) |
The amortized cost and fair values of investment securities at September 30, 2020, 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 Maturity 1
Fixed maturity debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  | $ | 30,455 |  |  | $ | 87,606 |  |  | $ | 120,073 |  |  | $ | 9,289 |  |  | $ | 247,423 |  |  | 4.94 |
Fair value |  | 30,761 |  |  | 95,912 |  |  | 138,580 |  |  | 9,457 |  |  | 274,710 |  |  |
Residential mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  | $ | 9,317 |  |  | 2
Fair value |  |  |  |  |  |  |  |  |  | 10,219 |  |  |
Total investment securities: |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  | $ | 256,740 |  |  |
Fair value |  |  |  |  |  |  |  |  |  | 284,929 |  |  |
1 Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty. 2 The average expected lives of residential mortgage-backed securities were 4.58 years based upon current prepayment assumptions. Temporarily Impaired Investment Securities (in thousands):
|  | September 30, 2020
|  | Number of Securities |  | Less Than 12 Months |  | 12 Months or Longer |  | Total
|  |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
Investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other debt securities |  | 8 |  |  | 3,026 |  |  | 68 |  |  | 2,043 |  |  | 131 |  |  | 5,069 |  |  | 199 |
Total investment securities |  | 8 |  |  | $ | 3,026 |  |  | $ | 68 |  |  | $ | 2,043 |  |  | $ | 131 |  |  | $ | 5,069 |  |  | $ | 199 |
|  | December 31, 2019
|  | Number of Securities |  | Less Than 12 Months |  | 12 Months or Longer |  | Total
|  |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
Investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal and other tax-exempt |  | 4 |  |  | $ | 1,001 |  |  | $ | 1 |  |  | $ | 1,706 |  |  | $ | 5 |  |  | $ | 2,707 |  |  | $ | 6 |
Other debt securities |  | 13 |  |  | 275 |  |  | 1 |  |  | 8,041 |  |  | 294 |  |  | 8,316 |  |  | 295 |
Total investment securities |  | 17 |  |  | $ | 1,276 |  |  | $ | 2 |  |  | $ | 9,747 |  |  | $ | 299 |  |  | $ | 11,023 |  |  | $ | 301 |
Available for Sale Securities The amortized cost and fair value of available for sale securities are as follows (in thousands):
|  | September 30, 2020 |  |
|  | Amortized |  | Fair |  | Gross Unrealized |  |
|  | Cost |  | Value |  | Gain |  | Loss |  |
U.S. Treasury |  | $ | 500 |  |  | $ | 509 |  |  | $ | 9 |  |  | $ | — |  |  |
Municipal and other tax-exempt |  | 50,050 |  |  | 51,601 |  |  | 1,648 |  |  | (97) |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Residential agency |  | 9,033,728 |  |  | 9,384,998 |  |  | 354,669 |  |  | (3,399) |  |  |
Residential non-agency |  | 19,954 |  |  | 34,873 |  |  | 14,919 |  |  | — |  |  |
Commercial agency |  | 3,221,538 |  |  | 3,334,409 |  |  | 114,244 |  |  | (1,373) |  |  |
Other debt securities |  | 10,936 |  |  | 10,879 |  |  | — |  |  | (57) |  |  |
Total available for sale securities |  | $ | 12,336,706 |  |  | $ | 12,817,269 |  |  | $ | 485,489 |  |  | $ | (4,926) |  |  |
|  | December 31, 2019 |  |
|  | Amortized |  | Fair |  | Gross Unrealized |  |
|  | Cost |  | Value |  | Gain |  | Loss |  |
U.S. Treasury |  | $ | 1,598 |  |  | $ | 1,600 |  |  | $ | 2 |  |  | $ | — |  |  |
Municipal and other tax-exempt |  | 1,789 |  |  | 1,861 |  |  | 72 |  |  | — |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |
Residential agency |  | 7,956,297 |  |  | 8,046,096 |  |  | 104,912 |  |  | (15,113) |  |  |
Residential non-agency |  | 25,968 |  |  | 41,609 |  |  | 15,641 |  |  | — |  |  |
Commercial agency |  | 3,145,342 |  |  | 3,178,005 |  |  | 37,808 |  |  | (5,145) |  |  |
Other debt securities |  | 500 |  |  | 472 |  |  | — |  |  | (28) |  |  |
Total available for sale securities |  | $ | 11,131,494 |  |  | $ | 11,269,643 |  |  | $ | 158,435 |  |  | $ | (20,286) |  |  |
The amortized cost and fair values of available for sale securities at September 30, 2020, 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 Maturity 1
Fixed maturity debt securities: |  |  |  |  |  |  |  |  |  |  |
Amortized cost | $ | 70,791 |  |  | $ | 1,326,715 |  |  | $ | 1,282,122 |  |  | $ | 603,396 |  |  | $ | 3,283,024 |  |  | 8.02 |
Fair value | 71,123 |  |  | 1,383,695 |  |  | 1,313,942 |  |  | 628,638 |  |  | 3,397,398 |  |  |
Residential mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  | $ | 9,053,682 |  |  | 2
Fair value |  |  |  |  |  |  |  |  | 9,419,871 |  |  |
Total available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  | $ | 12,336,706 |  |  |
Fair value |  |  |  |  |  |  |  |  | 12,817,269 |  |  |
1 Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty. 2 The average expected lives of residential mortgage-backed securities were 3.02 years based upon current prepayment assumptions. Sales of available for sale securities resulted in gains and losses as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Proceeds | $ | 1,034 |  |  | $ | 261,028 |  |  | $ | 206,979 |  |  | $ | 628,385 |
Gross realized gains | 54 |  |  | 989 |  |  | 5,637 |  |  | 7,316 |
Gross realized losses | (66) |  |  | (984) |  |  | (66) |  |  | (6,206) |
Related federal and state income tax expense (benefit) | (3) |  |  | 1 |  |  | 1,419 |  |  | 282 |
The fair value of debt securities pledged as collateral for repurchase agreements, public trust funds on deposit and for other purposes, as required by law was $12.5 billion at September 30, 2020 and $10.1 billion at December 31, 2019. The secured parties do not have the right to sell or repledge these securities. Temporarily Impaired Available for Sale Securities (in thousands)
|  | September 30, 2020
|  | Number of Securities |  | Less Than 12 Months |  | 12 Months or Longer |  | Total
|  |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal and other tax-exempt |  | 11 |  |  | $ | 19,768 |  |  | $ | 97 |  |  | $ | — |  |  | $ | — |  |  | $ | 19,768 |  |  | $ | 97 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency |  | 32 |  |  | 630,460 |  |  | 3,178 |  |  | 165,726 |  |  | 221 |  |  | 796,186 |  |  | 3,399 |
Commercial agency |  | 29 |  |  | 264,836 |  |  | 923 |  |  | 253,378 |  |  | 450 |  |  | 518,214 |  |  | 1,373 |
Other debt securities |  | 5 |  |  | 10,407 |  |  | 29 |  |  | 472 |  |  | 28 |  |  | 10,879 |  |  | 57 |
Total available for sale securities |  | 77 |  |  | $ | 925,471 |  |  | $ | 4,227 |  |  | $ | 419,576 |  |  | $ | 699 |  |  | $ | 1,345,047 |  |  | $ | 4,926 |
|  | December 31, 2019
|  | Number of Securities |  | Less Than 12 Months |  | 12 Months or Longer |  | Total
|  |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss
Available for sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential agency |  | 133 |  |  | $ | 1,352,597 |  |  | $ | 6,690 |  |  | $ | 686,002 |  |  | $ | 8,423 |  |  | $ | 2,038,599 |  |  | $ | 15,113 |
Commercial agency |  | 69 |  |  | 830,047 |  |  | 4,238 |  |  | 210,877 |  |  | 907 |  |  | 1,040,924 |  |  | 5,145 |
Other debt securities |  | 1 |  |  | — |  |  | — |  |  | 472 |  |  | 28 |  |  | 472 |  |  | 28 |
Total available for sale securities |  | 203 |  |  | $ | 2,182,644 |  |  | $ | 10,928 |  |  | $ | 897,351 |  |  | $ | 9,358 |  |  | $ | 3,079,995 |  |  | $ | 20,286 |
Based on evaluations of impaired securities as of September 30, 2020, the Company does not intend to sell any impaired available for sale debt securities before fair value recovers to the current amortized cost and it is more-likely-than-not that the Company will not be required to sell impaired securities before fair value recovers, which may be maturity. Fair Value Option Securities Fair value option securities represent securities which the Company has elected to carry at fair value and are separately identified on the Consolidated Balance Sheets. Changes in the fair value are recognized in earnings as they occur. Certain securities are held as an economic hedge of the mortgage servicing rights. The fair value and net unrealized gain (loss) included in fair value option securities is as follows (in thousands):
|  | September 30, 2020 |  | December 31, 2019
|  | Fair Value |  | Net Unrealized Gain (Loss) |  | Fair Value |  | Net Unrealized Gain (Loss)
U.S. Treasury |  | $ | — |  |  | $ | — |  |  | $ | 9,917 |  |  | $ | (48) |
Residential agency mortgage-backed securities |  | 134,756 |  |  | 4,926 |  |  | 1,088,660 |  |  | 14,109 |
Total |  | $ | 134,756 |  |  | $ | 4,926 |  |  | $ | 1,098,577 |  |  | $ | 14,061 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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