XML 21 R10.htm IDEA: XBRL DOCUMENT
v3.21.2

Investment Securities | 6 Months Ended
--- | ---
Jun. 30, 2021
Investment Securities |
Investment Securities | 2. Investment Securities ​ As of June 30, 2021 and December 31, 2020, 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 agencies. ​ 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. ​ As of June 30, 2021 and December 31, 2020, all of the Company’s investment securities were classified as available-for-sale. Amortized cost and fair value of securities as of June 30, 2021 and December 31, 2020 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2021 | ​ | December 31, 2020
​ | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair | ​ | Amortized | ​ | Unrealized | ​ | Unrealized | ​ | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Value |  | Cost |  | Gains |  | Losses |  | Value
U.S. Treasury and government agency debt securities | ​ | $ | 182,354 | ​ | $ | 545 | ​ | $ | (2,127) | ​ | $ | 180,772 | ​ | $ | 170,123 | ​ | $ | 1,359 | ​ | $ | (61) | ​ | $ | 171,421
Mortgage-backed securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential - Government agency | ​ | ​ | 110,115 | ​ | ​ | 3,174 | ​ | ​ | — | ​ | ​ | 113,289 | ​ | ​ | 155,169 | ​ | ​ | 5,293 | ​ | ​ | — | ​ | ​ | 160,462
Residential - Government-sponsored enterprises | ​ | ​ | 1,257,032 | ​ | ​ | 10,776 | ​ | ​ | (4,360) | ​ | ​ | 1,263,448 | ​ | ​ | 434,282 | ​ | ​ | 13,643 | ​ | ​ | (725) | ​ | ​ | 447,200
Commercial - Government agency | ​ | ​ | 487,607 | ​ | ​ | 6,956 | ​ | ​ | (3,116) | ​ | ​ | 491,447 | ​ | ​ | 583,232 | ​ | ​ | 16,537 | ​ | ​ | (119) | ​ | ​ | 599,650
Commercial - Government-sponsored enterprises | ​ | ​ | 1,244,031 | ​ | ​ | 7,116 | ​ | ​ | (27,342) | ​ | ​ | 1,223,805 | ​ | ​ | 931,095 | ​ | ​ | 9,045 | ​ | ​ | (7,983) | ​ | ​ | 932,157
Collateralized mortgage obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Government agency | ​ | ​ | 1,645,170 | ​ | ​ | 22,631 | ​ | ​ | (5,667) | ​ | ​ | 1,662,134 | ​ | ​ | 1,902,326 | ​ | ​ | 32,246 | ​ | ​ | (1,019) | ​ | ​ | 1,933,553
Government-sponsored enterprises | ​ | ​ | 2,024,844 | ​ | ​ | 11,195 | ​ | ​ | (17,004) | ​ | ​ | 2,019,035 | ​ | ​ | 1,808,804 | ​ | ​ | 18,991 | ​ | ​ | (823) | ​ | ​ | 1,826,972
Total available-for-sale securities | ​ | $ | 6,951,153 | ​ | $ | 62,393 | ​ | $ | (59,616) | ​ | $ | 6,953,930 | ​ | $ | 5,985,031 | ​ | $ | 97,114 | ​ | $ | (10,730) | ​ | $ | 6,071,415
​ Accrued interest receivable related to available-for-sale investment securities was $11.6 million and $10.6 million as of June 30, 2021 and December 31, 2020, respectively, and is recorded separately from the amortized cost basis of investment securities on the Company’s unaudited interim consolidated balance sheets. ​ Proceeds from calls and sales of investment securities were $0.2 million and $2.5 million, respectively, for the three months ended June 30, 2021, and $0.3 million and $2.5 million, respectively, for the six months ended June 30, 2021. Proceeds from calls and sales of investment securities were $26.7 million and $539.5 million, respectively, for the three months ended June 30, 2020, and $101.7 million and $543.0 million, respectively, for the six months ended June 30, 2020. The Company recorded gross realized gains of $0.1 million and gross realized losses of nil during both the three and six months ended June 30, 2021. The Company recorded gross realized gains of $0.5 million and gross realized losses of $0.8 million for the three months ended June 30, 2020, and gross realized gains of $0.6 million and gross realized losses of $0.8 million for the six months ended June 30, 2020. The income tax expense related to the Company’s net realized gains on the sale of investment securities was nil during both the three and six months ended June 30, 2021. The income tax benefit related to the net realized loss on the sale of investment securities was $0.1 million and nil, respectively, for the three and six months ended June 30, 2020. Gains and losses realized on sales of securities are determined using the specific identification method. ​ Interest income from taxable investment securities was $22.4 million and $17.5 million, respectively, for the three months ended June 30, 2021 and 2020, and $44.6 million and $38.7 million, respectively, for the six months ended June 30, 2021 and 2020. Interest income from non-taxable investment securities was $2.2 million and nil, respectively, during the three months ended June 30, 2021 and 2020, and $3.2 million and nil, respectively, during the six months ended June 30, 2021 and 2020. ​ The amortized cost and fair value of debt securities issued by the U.S. Treasury and government agencies as of June 30, 2021, 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, 2021
​ | ​ | Amortized | ​ | Fair
(dollars in thousands) |  | Cost |  | Value
Due in one year or less | ​ | $ | — | ​ | $ | —
Due after one year through five years | ​ | ​ | 41,497 | ​ | ​ | 41,787
Due after five years through ten years | ​ | ​ | 83,608 | ​ | ​ | 82,670
Due after ten years | ​ | ​ | 57,249 | ​ | ​ | 56,315
​ | ​ | ​ | 182,354 | ​ | ​ | 180,772
​ | ​ | ​ | ​ | ​ | ​ | ​
Mortgage-backed securities: | ​ | ​ | ​ | ​ | ​ | ​
Residential - Government agency | ​ | ​ | 110,115 | ​ | ​ | 113,289
Residential - Government-sponsored enterprises | ​ | ​ | 1,257,032 | ​ | ​ | 1,263,448
Commercial - Government agency | ​ | ​ | 487,607 | ​ | ​ | 491,447
Commercial - Government-sponsored enterprises | ​ | ​ | 1,244,031 | ​ | ​ | 1,223,805
Total mortgage-backed securities | ​ | ​ | 3,098,785 | ​ | ​ | 3,091,989
Collateralized mortgage obligations: | ​ | ​ | ​ | ​ | ​ | ​
Government agency | ​ | ​ | 1,645,170 | ​ | ​ | 1,662,134
Government-sponsored enterprises | ​ | ​ | 2,024,844 | ​ | ​ | 2,019,035
Total collateralized mortgage obligations | ​ | ​ | 3,670,014 | ​ | ​ | 3,681,169
Total available-for-sale securities | ​ | $ | 6,951,153 | ​ | $ | 6,953,930
​ At June 30, 2021, pledged securities totaled $2.0 billion, of which $1.8 billion was pledged to secure public deposits and $192.8 million was pledged to secure other financial transactions. At December 31, 2020, pledged securities totaled $2.4 billion, of which $2.3 billion was pledged to secure public deposits and $186.1 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, 2021 or December 31, 2020. ​ The following tables present the unrealized gross losses and fair values of securities in the available-for-sale portfolio by length of time that the 162 and 50 individual securities in each category have been in a continuous loss position as of June 30, 2021 and December 31, 2020, 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, 2021
​ | ​ | 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 and government agency debt securities | ​ | $ | (2,127) | ​ | $ | 120,987 | ​ | $ | — | ​ | $ | — | ​ | $ | (2,127) | ​ | $ | 120,987
Mortgage-backed securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential - Government-sponsored enterprises | ​ | ​ | (4,360) | ​ | ​ | 618,414 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (4,360) | ​ | ​ | 618,414
Commercial - Government agency | ​ | ​ | (2,899) | ​ | ​ | 193,041 | ​ | ​ | (217) | ​ | ​ | 7,064 | ​ | ​ | (3,116) | ​ | ​ | 200,105
Commercial - Government-sponsored enterprises | ​ | ​ | (27,342) | ​ | ​ | 865,899 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (27,342) | ​ | ​ | 865,899
Collateralized mortgage obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Government agency | ​ | ​ | (5,667) | ​ | ​ | 463,392 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (5,667) | ​ | ​ | 463,392
Government-sponsored enterprises | ​ | ​ | (17,004) | ​ | ​ | 1,237,282 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (17,004) | ​ | ​ | 1,237,282
Total available-for-sale securities with unrealized losses | ​ | $ | (59,399) | ​ | $ | 3,499,015 | ​ | $ | (217) | ​ | $ | 7,064 | ​ | $ | (59,616) | ​ | $ | 3,506,079
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Time in Continuous Loss as of December 31, 2020
​ | ​ | 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 and government agency debt securities | ​ | $ | (61) | ​ | $ | 38,507 | ​ | $ | — | ​ | $ | — | ​ | $ | (61) | ​ | $ | 38,507
Mortgage-backed securities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Residential - Government-sponsored enterprises | ​ | ​ | (725) | ​ | ​ | 64,987 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (725) | ​ | ​ | 64,987
Commercial - Government agency | ​ | ​ | (119) | ​ | ​ | 32,346 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (119) | ​ | ​ | 32,346
Commercial - Government-sponsored enterprises | ​ | ​ | (7,983) | ​ | ​ | 427,759 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (7,983) | ​ | ​ | 427,759
Collateralized mortgage obligations: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Government agency | ​ | ​ | (994) | ​ | ​ | 209,124 | ​ | ​ | (25) | ​ | ​ | 6,190 | ​ | ​ | (1,019) | ​ | ​ | 215,314
Government-sponsored enterprises | ​ | ​ | (823) | ​ | ​ | 296,160 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (823) | ​ | ​ | 296,160
Total available-for-sale securities with unrealized losses | ​ | $ | (10,705) | ​ | $ | 1,068,883 | ​ | $ | (25) | ​ | $ | 6,190 | ​ | $ | (10,730) | ​ | $ | 1,075,073
​ At June 30, 2021 and December 31, 2020, the Company did not have any securities with 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 had the intent and ability to hold the remaining securities in an unrealized loss position as of June 30, 2021 and December 31, 2020, each security with an unrealized loss position in the above tables has been further assessed to determine if a credit loss exists. As of June 30, 2021 and December 31, 2020, the Company did not expect any credit losses in its debt securities and no credit losses were recognized on securities during the three and six months ended June 30, 2021 and for the year ended December 31, 2020. ​ As of June 30, 2021 and December 31, 2020, the Company’s available-for-sale investment securities were comprised entirely of debt, mortgage-backed securities and collateralized mortgage obligations issued by the U.S. Government, its agencies and government-sponsored enterprises. Management has concluded that the long history with no credit losses from these issuers indicates an expectation that nonpayment of the amortized cost basis is zero. The Company’s available-for-sale investment securities are explicitly or implicitly fully guaranteed by the U.S. government. The U.S. government can print its own currency and its currency is routinely held by central banks and other major financial institutions. The dollar is used in international commerce, and commonly is viewed as a reserve currency, all of which qualitatively indicates that historical credit loss information should be minimally affected by current conditions and reasonable and supportable forecasts. Thus, the Company has not recorded an allowance for credit losses for its available-for-sale debt securities as of June 30, 2021 and December 31, 2020. ​ Visa Class B Restricted Shares ​ In 2008, the Company received 394,000 Visa Class B restricted shares as part of Visa’s IPO. 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. On June 28, 2018, Visa additionally funded its litigation escrow account, thereby reducing each member bank’s Class B conversion rate to unrestricted Class A common shares. Accordingly, on July 5, 2018, Visa announced a decrease in conversion rate from 1.6483 to 1.6298, effective June 28, 2018. In July 2018, the Company made a payment of approximately $0.7 million to the buyer as a result of the reduction in the Visa Class B conversion rate. On September 27, 2019, Visa additionally funded its litigation escrow account, thereby further reducing each member bank’s Class B conversion rate to unrestricted Class A common shares. Accordingly, on September 30, 2019, Visa announced a decrease in conversion rate from 1.6298 to 1.6228, effective September 27, 2019. In October 2019, the Company made a payment of approximately $0.3 million to the buyer as a result of the reduction in the Visa Class B conversion rate. See “Note 11. Derivative Financial Instruments” for more information. ​ The Company held approximately 120,000 Visa Class B restricted shares as of both June 30, 2021 and December 31, 2020. These shares continued to be carried at $0 cost basis as of both June 30, 2021 and December 31, 2020.

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://fasb.org/us-gaap/role/ref/legacyRef -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=120401592&loc=d3e611322-123010 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-12B) -URI http://asc.fasb.org/extlink&oid=120401592&loc=d3e611197-123010 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -Section S99 -Paragraph 5D -Subparagraph (SX 210.12-13D) -URI http://asc.fasb.org/extlink&oid=120401592&loc=SL120429264-123010 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -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=120401592&loc=d3e611133-123010 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -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=120401592&loc=d3e611282-123010 + 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