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Debt Securities | 9 Months Ended
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Sep. 30, 2021
Investments Debt And Equity Securities [Abstract] |
Debt Securities | Note 4 – Debt Securities Investments in debt securities, classified as available-for-sale, are as follows:
(in thousands) |  | Amortized cost |  |  | Allowance for credit losses |  |  | Gross unrealized |  |  | Estimated fair value |
|  |  |  |  | Gains |  |  | Losses |  |  |
September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds |  | $ | 172,255 |  |  | $ | — |  |  | $ | 695 |  |  | $ | (1,207 | ) |  | $ | 171,743 |
Municipal bonds |  |  | 1,564,102 |  |  |  | — |  |  |  | 60,705 |  |  |  | (11,006 | ) |  |  | 1,613,801 |
Foreign government bonds |  |  | 232,495 |  |  |  | — |  |  |  | 2,209 |  |  |  | (3,329 | ) |  |  | 231,375 |
Governmental agency bonds |  |  | 208,094 |  |  |  | — |  |  |  | 3,975 |  |  |  | (562 | ) |  |  | 211,507 |
Governmental agency mortgage-backed securities |  |  | 5,360,175 |  |  |  | — |  |  |  | 44,912 |  |  |  | (31,929 | ) |  |  | 5,373,158 |
U.S. corporate debt securities |  |  | 1,002,449 |  |  |  | (101 | ) |  |  | 23,760 |  |  |  | (3,719 | ) |  |  | 1,022,389 |
Foreign corporate debt securities |  |  | 461,183 |  |  |  | — |  |  |  | 12,137 |  |  |  | (1,487 | ) |  |  | 471,833 |
|  | $ | 9,000,753 |  |  | $ | (101 | ) |  | $ | 148,393 |  |  | $ | (53,239 | ) |  | $ | 9,095,806 |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds |  | $ | 80,172 |  |  | $ | — |  |  | $ | 778 |  |  | $ | (104 | ) |  | $ | 80,846 |
Municipal bonds |  |  | 1,168,425 |  |  |  | — |  |  |  | 80,953 |  |  |  | (570 | ) |  |  | 1,248,808 |
Foreign government bonds |  |  | 194,042 |  |  |  | — |  |  |  | 6,004 |  |  |  | (516 | ) |  |  | 199,530 |
Governmental agency bonds |  |  | 254,248 |  |  |  | — |  |  |  | 9,869 |  |  |  | (195 | ) |  |  | 263,922 |
Governmental agency mortgage-backed securities |  |  | 3,401,737 |  |  |  | — |  |  |  | 74,549 |  |  |  | (1,668 | ) |  |  | 3,474,618 |
U.S. corporate debt securities |  |  | 637,808 |  |  |  | (119 | ) |  |  | 43,505 |  |  |  | (497 | ) |  |  | 680,697 |
Foreign corporate debt securities |  |  | 384,572 |  |  |  | (13 | ) |  |  | 22,078 |  |  |  | (236 | ) |  |  | 406,401 |
|  | $ | 6,121,004 |  |  | $ | (132 | ) |  | $ | 237,736 |  |  | $ | (3,786 | ) |  | $ | 6,354,822 |
Sales of debt securities resulted in realized gains of $7.1 million and $25.3 million, realized losses of $0.2 million and $7.4 million, and proceeds of $189.1 million and $869.1 million for the three and nine months ended September 30, 2021, respectively. Sales of debt securities during the three and nine months ended September 30, 2020 resulted in realized gains of $7.1 million and $16.4 million, realized losses of $0.4 million and $3.4 million, and proceeds of $200.1 million and $694.6 million, respectively. Investments in debt securities in an unrealized loss position, based on length of time, are as follows:
|  | Less than 12 months |  |  | 12 months or longer |  |  | Total |
(in thousands) |  | Estimated fair value |  |  | Unrealized losses |  |  | Estimated fair value |  |  | Unrealized losses |  |  | Estimated fair value |  |  | Unrealized losses |
September 30, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds |  | $ | 52,927 |  |  | $ | (916 | ) |  | $ | 6,518 |  |  | $ | (291 | ) |  | $ | 59,445 |  |  | $ | (1,207 | )
Municipal bonds |  |  | 570,038 |  |  |  | (10,724 | ) |  |  | 6,711 |  |  |  | (282 | ) |  |  | 576,749 |  |  |  | (11,006 | )
Foreign government bonds |  |  | 125,918 |  |  |  | (1,094 | ) |  |  | 29,032 |  |  |  | (2,235 | ) |  |  | 154,950 |  |  |  | (3,329 | )
Governmental agency bonds |  |  | 72,325 |  |  |  | (469 | ) |  |  | 3,222 |  |  |  | (93 | ) |  |  | 75,547 |  |  |  | (562 | )
Governmental agency mortgage-backed securities |  |  | 3,070,056 |  |  |  | (31,928 | ) |  |  | 103 |  |  |  | (1 | ) |  |  | 3,070,159 |  |  |  | (31,929 | )
U.S. corporate debt securities |  |  | 425,854 |  |  |  | (3,388 | ) |  |  | 6,848 |  |  |  | (331 | ) |  |  | 432,702 |  |  |  | (3,719 | )
Foreign corporate debt securities |  |  | 161,416 |  |  |  | (1,473 | ) |  |  | 1,234 |  |  |  | (14 | ) |  |  | 162,650 |  |  |  | (1,487 | )
|  | $ | 4,478,534 |  |  | $ | (49,992 | ) |  | $ | 53,668 |  |  | $ | (3,247 | ) |  | $ | 4,532,202 |  |  | $ | (53,239 | )
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds |  | $ | 7,744 |  |  | $ | (104 | ) |  | $ | — |  |  | $ | — |  |  | $ | 7,744 |  |  | $ | (104 | )
Municipal bonds |  |  | 74,045 |  |  |  | (570 | ) |  |  | — |  |  |  | — |  |  |  | 74,045 |  |  |  | (570 | )
Foreign government bonds |  |  | 67,094 |  |  |  | (516 | ) |  |  | — |  |  |  | — |  |  |  | 67,094 |  |  |  | (516 | )
Governmental agency bonds |  |  | 15,353 |  |  |  | (195 | ) |  |  | — |  |  |  | — |  |  |  | 15,353 |  |  |  | (195 | )
Governmental agency mortgage-backed securities |  |  | 287,947 |  |  |  | (1,089 | ) |  |  | 100,473 |  |  |  | (579 | ) |  |  | 388,420 |  |  |  | (1,668 | )
U.S. corporate debt securities |  |  | 42,508 |  |  |  | (484 | ) |  |  | 1,357 |  |  |  | (13 | ) |  |  | 43,865 |  |  |  | (497 | )
Foreign corporate debt securities |  |  | 19,042 |  |  |  | (232 | ) |  |  | 276 |  |  |  | (4 | ) |  |  | 19,318 |  |  |  | (236 | )
|  | $ | 513,733 |  |  | $ | (3,190 | ) |  | $ | 102,106 |  |  | $ | (596 | ) |  | $ | 615,839 |  |  | $ | (3,786 | )
Based on the Company’s review of its debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded, it determined that the losses were due to non-credit factors. As such, the Company does not consider these securities to be credit impaired at September 30, 2021. Activity in the allowance for credit losses on debt securities for the three and nine months ended September 30, 2021 and 2020, is summarized as follows:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(in thousands) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Balance at beginning of period |  | $ | (105 | ) |  | $ | (1,380 | ) |  | $ | (132 | ) |  | $ | — |
Credit losses recognized during the period |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (7,493 | )
Net (increases) decreases to credit losses previously recognized |  |  | (4 | ) |  |  | 278 |  |  |  | — |  |  |  | 3,738 |
Reductions for securities sold/matured |  |  | 8 |  |  |  | 271 |  |  |  | 31 |  |  |  | 2,924 |
Reclassification to assets previously held for sale |  |  | — |  |  |  | 10 |  |  |  | — |  |  |  | 10 |
Balance at end of period |  | $ | (101 | ) |  | $ | (821 | ) |  | $ | (101 | ) |  | $ | (821 | )
Investments in debt securities at September 30, 2021, by contractual maturities, are as follows:
(in thousands) |  | Due in one year or less |  |  | Due after one through five years |  |  | Due after five through ten years |  |  | Due after ten years |  |  | Total |
U.S. Treasury bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  | $ | 46,695 |  |  | $ | 78,036 |  |  | $ | 25,518 |  |  | $ | 22,006 |  |  | $ | 172,255 |
Estimated fair value |  | $ | 46,776 |  |  | $ | 77,850 |  |  | $ | 25,673 |  |  | $ | 21,444 |  |  | $ | 171,743 |
Municipal bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  | 26,737 |  |  |  | 97,493 |  |  |  | 751,040 |  |  |  | 688,832 |  |  |  | 1,564,102 |
Estimated fair value |  |  | 26,884 |  |  |  | 102,020 |  |  |  | 771,806 |  |  |  | 713,091 |  |  |  | 1,613,801 |
Foreign government bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  | 52,799 |  |  |  | 93,254 |  |  |  | 76,214 |  |  |  | 10,228 |  |  |  | 232,495 |
Estimated fair value |  |  | 52,826 |  |  |  | 94,105 |  |  |  | 74,215 |  |  |  | 10,229 |  |  |  | 231,375 |
Governmental agency bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  | 19,375 |  |  |  | 80,313 |  |  |  | 37,500 |  |  |  | 70,906 |  |  |  | 208,094 |
Estimated fair value |  |  | 19,596 |  |  |  | 81,677 |  |  |  | 37,644 |  |  |  | 72,590 |  |  |  | 211,507 |
U.S. corporate debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  | 36,886 |  |  |  | 479,958 |  |  |  | 414,830 |  |  |  | 70,775 |  |  |  | 1,002,449 |
Estimated fair value |  |  | 37,292 |  |  |  | 492,943 |  |  |  | 417,154 |  |  |  | 75,000 |  |  |  | 1,022,389 |
Foreign corporate debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  | 20,621 |  |  |  | 266,364 |  |  |  | 134,173 |  |  |  | 40,025 |  |  |  | 461,183 |
Estimated fair value |  |  | 20,876 |  |  |  | 272,278 |  |  |  | 136,133 |  |  |  | 42,546 |  |  |  | 471,833 |
Total debt securities excluding mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  | $ | 203,113 |  |  | $ | 1,095,418 |  |  | $ | 1,439,275 |  |  | $ | 902,772 |  |  | $ | 3,640,578 |
Estimated fair value |  | $ | 204,250 |  |  | $ | 1,120,873 |  |  | $ | 1,462,625 |  |  | $ | 934,900 |  |  | $ | 3,722,648 |
Total mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,360,175 |
Estimated fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,373,158 |
Total debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,000,753 |
Estimated fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,095,806 |
Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties. The composition of the debt securities portfolio at September 30, 2021, by credit rating, is as follows:
|  | A- or higher |  |  | BBB+ to BBB- |  |  | Non-Investment Grade |  |  | Total |  |
(in thousands, except percentages) |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds |  | $ | 171,743 |  |  |  | 100.0 |  |  | $ | — |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 171,743 |  |
Municipal bonds |  |  | 1,577,214 |  |  |  | 97.7 |  |  |  | 36,587 |  |  |  | 2.3 |  |  |  | — |  |  |  | — |  |  |  | 1,613,801 |  |
Foreign government bonds |  |  | 218,100 |  |  |  | 94.2 |  |  |  | 10,088 |  |  |  | 4.4 |  |  |  | 3,187 |  |  |  | 1.4 |  |  |  | 231,375 |  |
Governmental agency bonds |  |  | 211,507 |  |  |  | 100.0 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 211,507 |  |
Governmental agency mortgage-backed securities |  |  | 5,373,158 |  |  |  | 100.0 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,373,158 |  |
U.S. corporate debt securities |  |  | 435,436 |  |  |  | 42.6 |  |  |  | 403,668 |  |  |  | 39.5 |  |  |  | 183,285 |  |  |  | 17.9 |  |  |  | 1,022,389 |  |
Foreign corporate debt securities |  |  | 200,539 |  |  |  | 42.5 |  |  |  | 222,298 |  |  |  | 47.1 |  |  |  | 48,996 |  |  |  | 10.4 |  |  |  | 471,833 |  |
|  | $ | 8,187,697 |  |  |  | 90.0 |  |  | $ | 672,641 |  |  |  | 7.4 |  |  | $ | 235,468 |  |  |  | 2.6 |  |  | $ | 9,095,806 |  |
Included in debt securities at September 30, 2021, were bank loans totaling $141.4 million, of which $135.7 million were non-investment grade; high yield corporate debt securities totaling $85.5 million, all of which were non-investment grade; and emerging market debt securities totaling $91.0 million, of which $14.3 million were non-investment grade. The composition of the debt securities portfolio in an unrealized loss position at September 30, 2021, by credit rating, is as follows:
|  | A- or higher |  |  | BBB+ to BBB- |  |  | Non-Investment Grade |  |  | Total |  |
(in thousands, except percentages) |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |  | Percentage |  |  | Estimated fair value |  |
U.S. Treasury bonds |  | $ | 59,445 |  |  |  | 100.0 |  |  | $ | — |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | 59,445 |  |
Municipal bonds |  |  | 563,613 |  |  |  | 97.7 |  |  |  | 13,136 |  |  |  | 2.3 |  |  |  | — |  |  |  | — |  |  |  | 576,749 |  |
Foreign government bonds |  |  | 153,987 |  |  |  | 99.4 |  |  |  | — |  |  |  | — |  |  |  | 963 |  |  |  | 0.6 |  |  |  | 154,950 |  |
Governmental agency bonds |  |  | 75,547 |  |  |  | 100.0 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 75,547 |  |
Governmental agency mortgage-backed securities |  |  | 3,070,159 |  |  |  | 100.0 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,070,159 |  |
U.S. corporate debt securities |  |  | 233,772 |  |  |  | 54.0 |  |  |  | 127,998 |  |  |  | 29.6 |  |  |  | 70,932 |  |  |  | 16.4 |  |  |  | 432,702 |  |
Foreign corporate debt securities |  |  | 94,410 |  |  |  | 58.0 |  |  |  | 47,163 |  |  |  | 29.0 |  |  |  | 21,077 |  |  |  | 13.0 |  |  |  | 162,650 |  |
|  | $ | 4,250,933 |  |  |  | 93.7 |  |  | $ | 188,297 |  |  |  | 4.2 |  |  | $ | 92,972 |  |  |  | 2.1 |  |  | $ | 4,532,202 |  |
Debt securities in an unrealized loss position at September 30, 2021, included bank loans totaling $57.3 million, of which $55.5 million were non-investment grade; high yield corporate debt securities totaling $31.8 million, all of which were non-investment grade; and emerging market debt securities totaling $25.8 million, of which $5.7 million were non-investment grade. The credit ratings in the above tables reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the above table in the “A- or higher” rating category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.

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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 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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