XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Investment Securities | 6 Months Ended
--- | ---
Jun. 30, 2018
Investment Securities |
Investment Securities | 2. Investment Securities As of June 30, 2018 and December 31, 2017, investment securities consisted predominantly of the following investment categories: U.S. Treasury and debt securities – includes U.S. Treasury notes and debt securities issued by government- sponsored enterprises. Mortgage-backed securities – includes securities backed by notes or receivables secured by mortgage assets with cash flows based on actual or scheduled payments. Collateralized mortgage obligations – includes securities backed by a pool of mortgages with cash flows distributed based on certain rules rather than pass through payments. Debt securities issued by states and political subdivisions – includes general obligation bonds issued by state and local governments. As of June 30, 2018 and December 31, 2017, all of the Company’s investment securities were classified as debt securities and available-for-sale. Amortized cost and fair value of securities as of June 30, 2018 and December 31, 2017 were as follows:
|  | June 30, 2018 |  | December 31, 2017
|  | Amortized |  | Unrealized |  | Unrealized |  | Fair |  | Amortized |  | Unrealized |  | Unrealized |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gains |  | Losses |  | Value
U.S. Treasury securities |  | $ | 403,744 |  | $ | — |  | $ | (17,687) |  | $ | 386,057 |  | $ | 404,376 |  | $ | — |  | $ | (12,121) |  | $ | 392,255
Government-sponsored enterprises debt securities |  |  | 249,714 |  |  | — |  |  | (11,187) |  |  | 238,527 |  |  | 249,712 |  |  | — |  |  | (7,111) |  |  | 242,601
Government agency mortgage-backed securities |  |  | 455,769 |  |  | — |  |  | (16,919) |  |  | 438,850 |  |  | 356,858 |  |  | — |  |  | (5,468) |  |  | 351,390
Government-sponsored enterprises mortgage-backed securities |  |  | 168,151 |  |  | 109 |  |  | (7,019) |  |  | 161,241 |  |  | 178,702 |  |  | 169 |  |  | (4,130) |  |  | 174,741
Collateralized mortgage obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency |  |  | 3,057,867 |  |  | — |  |  | (133,061) |  |  | 2,924,806 |  |  | 3,367,173 |  |  | 47 |  |  | (76,746) |  |  | 3,290,474
Government-sponsored enterprises |  |  | 700,900 |  |  | — |  |  | (27,646) |  |  | 673,254 |  |  | 779,911 |  |  | 25 |  |  | (17,218) |  |  | 762,718
Debt securities issued by states and political subdivisions |  |  | 20,411 |  |  | — |  |  | (595) |  |  | 19,816 |  |  | 20,543 |  |  | — |  |  | (64) |  |  | 20,479
Total available-for-sale securities |  | $ | 5,056,556 |  | $ | 109 |  | $ | (214,114) |  | $ | 4,842,551 |  | $ | 5,357,275 |  | $ | 241 |  | $ | (122,858) |  | $ | 5,234,658
Proceeds from both calls and sales of investment securities were nil for both the three and six months ended June 30, 2018 and 2017. The Company recorded no gross realized gains and no gross realized losses for both the three and six months ended June 30, 2018 and 2017. Accordingly, no provision for income taxes related to net realized gains on the sale of investment securities was recorded for the three and six months ended June 30, 2018 and 2017. Gains and losses realized on sales of securities are determined using the specific identification method. Interest income from taxable investment securities was $27.3 million and $25.1 million for the three months ended June 30, 2018 and 2017, respectively, and $56.1 million and $51.5 million for the six months ended June 30, 2018 and 2017, respectively. Interest income from non-taxable investment securities was $0.1 million and $0.3 million during the three and six months ended June 30, 2018, respectively. The Company did not own any non-taxable investment securities during the three and six months ended June 30, 2017. The amortized cost and fair value of debt securities issued by the U.S. Treasury, government-sponsored enterprises and states and political subdivisions as of June 30, 2018, by contractual maturity, are shown below. Mortgage-backed securities and collateralized mortgage obligations are disclosed separately in the table below as remaining expected maturities will differ from contractual maturities as borrowers have the right to prepay obligations.
|  | June 30, 2018
|  | Amortized |  | Fair
(dollars in thousands) |  | Cost |  | Value
Due after one year through five years |  | $ | 478,744 |  | $ | 458,717
Due after five years through ten years |  |  | 174,714 |  |  | 165,867
Due after ten years |  |  | 20,411 |  |  | 19,816
|  |  | 673,869 |  |  | 644,400
Government agency mortgage-backed securities |  |  | 455,769 |  |  | 438,850
Government-sponsored enterprises mortgage-backed securities |  |  | 168,151 |  |  | 161,241
Collateralized mortgage obligations: |  |  |  |  |  |
Government agency |  |  | 3,057,867 |  |  | 2,924,806
Government-sponsored enterprises |  |  | 700,900 |  |  | 673,254
Total mortgage-backed securities and collateralized mortgage obligations |  |  | 4,382,687 |  |  | 4,198,151
Total available-for-sale securities |  | $ | 5,056,556 |  | $ | 4,842,551
At June 30, 2018, pledged securities totaled $2.5 billion, of which $2.3 billion was pledged to secure public deposits and $233.9 million was pledged to secure other financial transactions. At December 31, 2017, pledged securities totaled $3.0 billion, of which $2.8 billion was pledged to secure public deposits and $229.2 million was pledged to secure other financial transactions. The Company held no securities of any single issuer, other than debt securities issued by the U.S. government, government agencies and government-sponsored enterprises taken in the aggregate, which were in excess of 10% of stockholders’ equity as of June 30, 2018 and December 31, 2017. The following table presents the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 203 and 196 individual securities in each category have been in a continuous loss position as of June 30, 2018 and December 31, 2017, respectively. The unrealized losses on investment securities were attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities.
|  | Time in Continuous Loss as of June 30, 2018
|  | Less Than 12 Months |  | 12 Months or More |  | Total
|  | Unrealized |  |  |  |  | Unrealized |  |  |  |  | Unrealized |  |  |
(dollars in thousands) |  | Losses |  | Fair Value |  | Losses |  | Fair Value |  | Losses |  | Fair Value
U.S. Treasury securities |  | $ | (1,963) |  | $ | 47,287 |  | $ | (15,724) |  | $ | 338,770 |  | $ | (17,687) |  | $ | 386,057
Government-sponsored enterprises debt securities |  |  | (1,700) |  |  | 58,300 |  |  | (9,487) |  |  | 180,227 |  |  | (11,187) |  |  | 238,527
Government agency mortgage-backed securities |  |  | (8,499) |  |  | 304,708 |  |  | (8,420) |  |  | 134,142 |  |  | (16,919) |  |  | 438,850
Government-sponsored enterprises mortgage-backed securities |  |  | (1) |  |  | 189 |  |  | (7,018) |  |  | 155,708 |  |  | (7,019) |  |  | 155,897
Collateralized mortgage obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency |  |  | (42,264) |  |  | 1,162,582 |  |  | (90,796) |  |  | 1,762,224 |  |  | (133,060) |  |  | 2,924,806
Government-sponsored enterprises |  |  | (7,362) |  |  | 272,911 |  |  | (20,285) |  |  | 400,343 |  |  | (27,647) |  |  | 673,254
Debt securities issued by states and political subdivisions |  |  | (595) |  |  | 19,816 |  |  | — |  |  | — |  |  | (595) |  |  | 19,816
Total available-for-sale securities with unrealized losses |  | $ | (62,384) |  | $ | 1,865,793 |  | $ | (151,730) |  | $ | 2,971,414 |  | $ | (214,114) |  | $ | 4,837,207
|  | Time in Continuous Loss as of December 31, 2017
|  | Less Than 12 Months |  | 12 Months or More |  | Total
|  | Unrealized |  |  |  |  | Unrealized |  |  |  |  | Unrealized |  |  |
(dollars in thousands) |  | Losses |  | Fair Value |  | Losses |  | Fair Value |  | Losses |  | Fair Value
U.S. Treasury securities |  | $ | (994) |  | $ | 48,182 |  | $ | (11,127) |  | $ | 344,073 |  | $ | (12,121) |  | $ | 392,255
Government-sponsored enterprises debt securities |  |  | (642) |  |  | 59,358 |  |  | (6,469) |  |  | 183,243 |  |  | (7,111) |  |  | 242,601
Government agency mortgage-backed securities |  |  | (976) |  |  | 200,963 |  |  | (4,492) |  |  | 150,427 |  |  | (5,468) |  |  | 351,390
Government-sponsored enterprises mortgage-backed securities |  |  | (1) |  |  | 63 |  |  | (4,129) |  |  | 168,342 |  |  | (4,130) |  |  | 168,405
Collateralized mortgage obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency |  |  | (23,236) |  |  | 1,473,170 |  |  | (53,510) |  |  | 1,803,338 |  |  | (76,746) |  |  | 3,276,508
Government-sponsored enterprises |  |  | (3,203) |  |  | 327,435 |  |  | (14,015) |  |  | 403,321 |  |  | (17,218) |  |  | 730,756
Debt securities issued by states and political subdivisions |  |  | (64) |  |  | 10,641 |  |  | — |  |  | — |  |  | (64) |  |  | 10,641
Total available-for-sale securities with unrealized losses |  | $ | (29,116) |  | $ | 2,119,812 |  | $ | (93,742) |  | $ | 3,052,744 |  | $ | (122,858) |  | $ | 5,172,556
Other-Than-Temporary Impairment (“OTTI”) Unrealized losses for all investment securities are reviewed to determine whether the losses are other than temporary. Investment securities are evaluated for OTTI on at least a quarterly basis, and more frequently when economic and market conditions warrant such an evaluation, to determine whether the decline in fair value below amortized cost is other than temporary. The term “other-than-temporary” is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a general lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. The decline in value is not related to any issuer- or industry-specific credit event. At June 30, 2018 and December 31, 2017, the Company did not have the intent to sell and determined it was more likely than not that the Company would not be required to sell the securities prior to recovery of the amortized cost basis. As the Company has the intent and ability to hold securities in an unrealized loss position, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. If it is probable that the Company will not collect all amounts due according to the contractual terms of an investment security, an OTTI is considered to have occurred. In determining whether a credit loss exists, the Company estimates the present value of future cash flows expected to be collected from the investment security. If the present value of future cash flows is less than the amortized cost basis of the security, an OTTI exists. As of June 30, 2018 and December 31, 2017, the Company did not expect any credit losses in its debt securities and no OTTI was recognized on securities during the three and six months ended June 30, 2018 and for the year ended December 31, 2017. Visa Class B Restricted Shares In 2008, the Company received 394,000 Visa Class B restricted shares as part of Visa’s initial public offering. Visa Class B restricted shares are not currently convertible to publicly traded Visa Class A common shares, and only transferable in limited circumstances, until the settlement of certain litigation which are indemnified by Visa members, including the Company. As there are existing transfer restrictions and the outcome of the aforementioned litigation is uncertain, these shares were included in the consolidated balance sheets at their historical cost of $0. In 2016, the Company recorded a $22.7 million net realized gain related to the sale of 274,000 Visa Class B restricted shares. Concurrent with the sale of the Visa Class B restricted shares, the Company entered into an agreement with the buyer that requires payment to the buyer in the event Visa reduces each member bank’s Class B conversion rate to unrestricted Class A common shares. During the three months ended June 30, 2018, Visa additionally funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares. On July 5, 2018, Visa announced a decrease in conversion rate from 1.6483 to 1.6298 effective June 28, 2018. As of June 30, 2018, the Company recorded an estimated $0.7 million liability to be paid to the buyer as a result of the reduction in the Visa Class B conversion rate. See “Note 12. Derivative Financial Instruments” for more information. The Company held approximately 120,000 Visa Class B restricted shares as of both June 30, 2018 and December 31, 2017. These shares continued to be carried at $0 cost basis during each of the respective periods.

X
- Definition The entire disclosure for investment holdings. This includes the long positions of investments for the entity. It contains investments in affiliated and unaffiliated issuers. The investments include securities and non securities (i.e. commodities and futures contracts). + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 4 -Subparagraph (SX 210.12-12C) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611225-123010 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 6 -Subparagraph (SX 210.12-14) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611322-123010 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 5 -Subparagraph (SX 210.12-13) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611282-123010 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-12) -URI http://asc.fasb.org/extlink&oid=50485924&loc=d3e611133-123010 + Details
Name: | us-gaap_InvestmentHoldingsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration