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Securities

6 Months Ended

Jun. 30, 2021

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):

						June 30, 2021												December 31, 2020
						Fair Value						Net Unrealized Gain (Loss)						Fair Value						Net Unrealized Gain (Loss)
U.S. government securities						$	13,481					$	(1)					$	9,183					$	—
Residential agency mortgage-backed securities						5,577,986						(9,598)						4,669,148						(3,624)
Municipal securities						49,636						(20)						19,172						42
Other debt securities						57,967						(25)						10,472						22
Total trading securities						$	5,699,070					$	(9,644)					$	4,707,975					$	(3,560)

Investment Securities

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

						June 30, 2021
						Amortized						Fair						Gross Unrealized
						Cost						Value						Gain						Loss
Municipal securities						$	211,725					$	235,697					$	23,986					$	(14)
Residential agency mortgage-backed securities						7,863						8,601						738						—
Other debt securities						1,737						1,736						—						(1)
Total investment securities						221,325						246,034						24,724						(15)
Allowance for credit losses						(493)
Investment securities, net of allowance						$	220,832					$	246,034					$	24,724					$	(15)

						December 31, 2020
						Amortized						Fair						Gross Unrealized
						Cost						Value						Gain						Loss
Municipal securities						$	229,245					$	255,270					$	26,169					$	(144)
Residential agency mortgage-backed securities						8,913						9,790						877						—
Other debt securities						7,373						7,371						—						(2)
Total investment securities						245,531						272,431						27,046						(146)
Allowance for credit losses						(688)
Investment securities, net of allowance						$	244,843					$	272,431					$	27,046					$	(146)

The amortized cost and fair values of investment securities at June 30, 2021, 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 Maturity1
Fixed maturity debt securities:
Amortized cost						$	24,344					$	106,071					$	76,287					$	6,760					$	213,462					4.81
Fair value						24,881						122,166						83,482						6,904						237,433
Residential mortgage-backed securities:
Amortized cost																														$	7,863					2
Fair value																														8,601
Total investment securities:
Amortized cost																														$	221,325
Fair value																														246,034

1Expected maturities may differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without penalty.

2The average expected lives of residential mortgage-backed securities were 4.3 years based upon current prepayment assumptions.

Temporarily Impaired Investment Securities

(in thousands):

						June 30, 2021
						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 securities						1						$	—					$	—					$	587					$	14					$	587					$	14
Other debt securities						2						275						1						—						—						275						1
Total investment securities						3						$	275					$	1					$	587					$	14					$	862					$	15

						December 31, 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:
Municipal securities						6						$	2,451					$	40					$	2,043					$	104					$	4,494					$	144
Other debt securities						2						250						1						25						1						275						2
Total investment securities						8						$	2,701					$	41					$	2,068					$	105					$	4,769					$	146

Available for Sale Securities 

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

						June 30, 2021
						Amortized						Fair						Gross Unrealized
						Cost						Value						Gain						Loss
U.S. Treasury						$	500					$	504					$	4					$	—
Municipal securities						387,257						386,509						1,798						(2,546)
Mortgage-backed securities:
Residential agency						8,406,672						8,624,876						247,171						(28,967)
Residential non-agency						13,468						28,261						14,793						—
Commercial agency						4,212,258						4,277,301						75,310						(10,267)
Other debt securities						500						471						—						(29)
Total available for sale securities						$	13,020,655					$	13,317,922					$	339,076					$	(41,809)

						December 31, 2020
						Amortized						Fair						Gross Unrealized
						Cost						Value						Gain						Loss
U.S. Treasury						$	500					$	508					$	8					$	—
Municipal securities						165,318						167,979						2,666						(5)
Mortgage-backed securities:
Residential agency						9,019,013						9,340,471						328,183						(6,725)
Residential non-agency						17,563						32,770						15,207						—
Commercial agency						3,406,956						3,508,465						103,590						(2,081)
Other debt securities						500						472						—						(28)
Total available for sale securities						$	12,609,850					$	13,050,665					$	449,654					$	(8,839)

The amortized cost and fair values of available for sale securities at June 30, 2021, 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 Maturity1
Fixed maturity debt securities:
Amortized cost			$	85,688					$	1,714,881					$	2,116,584					$	683,362					$	4,600,515					7.82
Fair value			86,175						1,764,174						2,116,490						697,946						4,664,785
Residential mortgage-backed securities:
Amortized cost																											$	8,420,140					2
Fair value																											8,653,137
Total available for sale securities:
Amortized cost																											$	13,020,655
Fair value																											13,317,922

1Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalty.

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

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

			Three Months Ended June 30,												Six Months Ended June 30,
			2021						2020						2021						2020
Proceeds			$	338,109					$	179,051					$	394,146					$	205,945
Gross realized gains			1,767						5,580						2,240						5,583
Gross realized losses			(337)						—						(343)						—
Related federal and state income tax expense (benefit)			336						1,421						455						1,422

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 $9.5 billion at June 30, 2021 and $11.6 billion at December 31, 2020. The secured parties do not have the right to sell or repledge these securities.

Temporarily Impaired Available for Sale Securities

(in thousands)

						June 30, 2021
						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 securities						91						$	260,980					$	2,546					$	—					$	—					$	260,980					$	2,546
Mortgage-backed securities:
Residential agency						88						2,508,370						27,595						190,052						1,372						2,698,422						28,967
Commercial agency						80						1,046,798						9,879						344,518						388						1,391,316						10,267
Other debt securities						1						—						—						471						29						471						29
Total available for sale securities						260						$	3,816,148					$	40,020					$	535,041					$	1,789					$	4,351,189					$	41,809

						December 31, 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 securities						1						$	6,166					$	5					$	—					$	—					$	6,166					$	5
Mortgage-backed securities:
Residential agency						38						786,890						6,605						160,747						120						947,637						6,725
Commercial agency						37						350,506						1,587						277,627						494						628,133						2,081
Other debt securities						1						—						—						472						28						472						28
Total available for sale securities						77						$	1,143,562					$	8,197					$	438,846					$	642					$	1,582,408					$	8,839

Based on evaluations of impaired securities as of June 30, 2021, 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):

						June 30, 2021												December 31, 2020
						Fair Value						Net Unrealized Gain (Loss)						Fair Value						Net Unrealized Gain (Loss)
Residential agency mortgage-backed securities						$	60,432					$	2,596					$	114,982					$	4,463

X

- 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

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- References

No definition available.

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