XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Investment Securities | 12 Months Ended
--- | ---
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract] |
Investment Securities |
5. | INVESTMENT SECURITIES
The amortized cost and estimated fair value of investment securities are summarized below. The majority of securities held are traded in markets where similar assets are actively traded. Estimated fair values were obtained from an independent pricing service based upon market quotes.
|  | December 31, 2016 |
|  | Amortized Cost |  |  | Gross Unrealized Holding Gain |  |  | Gross Unrealized Holding Loss |  |  | Fair Value |  |  | Total Percent |
|  | (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 2,750 |  |  | $ | 2 |  |  | $ | - |  |  | $ | 2,752 |  |  |  | 0.12% |
Residential mortgage-backed securities |  |  | 1,822,168 |  |  |  | 18,812 |  |  |  | (6,232) |  |  |  | 1,834,748 |  |  |  | 80.81% |
CMO/REMIC - residential |  |  | 345,313 |  |  |  | 3,361 |  |  |  | (1,485) |  |  |  | 347,189 |  |  |  | 15.29% |
Municipal bonds |  |  | 80,137 |  |  |  | 889 |  |  |  | (955) |  |  |  | 80,071 |  |  |  | 3.53% |
Other securities |  |  | 5,506 |  |  |  | 200 |  |  |  | - |  |  |  | 5,706 |  |  |  | 0.25% |
Total available-for-sale securities |  | $ | 2,255,874 |  |  | $ | 23,264 |  |  | $ | (8,672) |  |  | $ | 2,270,466 |  |  |  | 100.00% |
Investment securities held-to-maturity (1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 182,648 |  |  | $ | 362 |  |  |  | (1,972) |  |  | $ | 181,038 |  |  |  | 20.03% |
Residential mortgage-backed securities |  |  | 193,699 |  |  |  | - |  |  |  | (1,892) |  |  |  | 191,807 |  |  |  | 21.25% |
CMO |  |  | 244,419 |  |  |  | - |  |  |  | (6,808) |  |  |  | 237,611 |  |  |  | 26.81% |
Municipal bonds |  |  | 290,910 |  |  |  | 776 |  |  |  | (4,768) |  |  |  | 286,918 |  |  |  | 31.91% |
Total held-to-maturity securities |  | $ | 911,676 |  |  | $ | 1,138 |  |  | $ | (15,440) |  |  | $ | 897,374 |  |  |  | 100.00% |
|  | December 31, 2015 |
|  | Amortized Cost |  |  | Gross Unrealized Holding Gain |  |  | Gross Unrealized Holding Loss |  |  | Fair Value |  |  | Total Percent |
|  | (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 5,752 |  |  | $ | - |  |  | $ | (7) |  |  | $ | 5,745 |  |  |  | 0.24% |
Residential mortgage-backed securities |  |  | 1,788,857 |  |  |  | 26,001 |  |  |  | (1,761) |  |  |  | 1,813,097 |  |  |  | 76.55% |
CMO/REMIC - residential |  |  | 380,166 |  |  |  | 4,689 |  |  |  | (1,074) |  |  |  | 383,781 |  |  |  | 16.20% |
Municipal bonds |  |  | 157,940 |  |  |  | 3,036 |  |  |  | (3) |  |  |  | 160,973 |  |  |  | 6.80% |
Other securities |  |  | 5,000 |  |  |  | 50 |  |  |  | - |  |  |  | 5,050 |  |  |  | 0.21% |
Total available-for-sale securities |  | $ | 2,337,715 |  |  | $ | 33,776 |  |  | $ | (2,845) |  |  | $ | 2,368,646 |  |  |  | 100.00% |
Investment securities held-to-maturity (1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 293,338 |  |  | $ | 1,176 |  |  | $ | (734) |  |  | $ | 293,780 |  |  |  | 34.47% |
Residential mortgage-backed securities |  |  | 232,053 |  |  |  | - |  |  |  | (1,293) |  |  |  | 230,760 |  |  |  | 27.27% |
CMO |  |  | 1,284 |  |  |  | 569 |  |  |  | - |  |  |  | 1,853 |  |  |  | 0.15% |
Municipal bonds |  |  | 324,314 |  |  |  | 3,051 |  |  |  | (719) |  |  |  | 326,646 |  |  |  | 38.11% |
Total held-to-maturity securities |  | $ | 850,989 |  |  | $ | 4,796 |  |  | $ | (2,746) |  |  | $ | 853,039 |  |  |  | 100.00% |
(1) Securities held-to-maturity are presented in the consolidated balance sheets at amortized cost. During the quarter ended September 30, 2015, investment securities were transferred from the available-for-sale security portfolio to the held-to-maturity security portfolio. Transfers of securities into the held-to-maturity category from the available-for-sale category are transferred at fair value at the date of transfer. The fair value of these securities at the date of transfer was $898.6 million. The unrealized holding gain or loss at the date of transfer is retained in AOCI and in the carrying value of the held-to-maturity securities. The net unrealized holding gain at the date of transfer was $3.9 million after-tax and will continue to be reported in AOCI and amortized over the remaining life of the securities as a yield adjustment. At December 31, 2016, investment securities HTM totaled $911.7 million. The after-tax unrealized gain reported in AOCI on investment securities HTM was $1.7 million at December 31, 2016. The following table provides information about the amount of interest income earned on investment securities which is fully taxable and which is exempt from regular federal income tax.
|  | For the Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
|  | (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  | $ | 43,538 |  |  | $ | 48,854 |  |  | $ | 47,301 |
Tax-advantaged |  |  | 4,164 |  |  |  | 14,336 |  |  |  | 20,913 |
Total interest income from available-for-sale securities |  |  | 47,702 |  |  |  | 63,190 |  |  |  | 68,214 |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |
Taxable |  |  | 10,183 |  |  |  | 4,451 |  |  |  | 164 |
Tax-advantaged |  |  | 10,044 |  |  |  | 4,567 |  |  |  | - |
Total interest income from held-to-maturity securities |  |  | 20,227 |  |  |  | 9,018 |  |  |  | 164 |
Total interest income from investment securities |  | $ | 67,929 |  |  | $ | 72,208 |  |  | $ | 68,378 |
Approximately 88% of the total investment securities portfolio at December 31, 2016 represents securities issued by the U.S government or U.S. government-sponsored enterprises, with the implied guarantee of payment of principal and interest. All non-agency available-for-sale Collateralized Mortgage Obligations (“CMO”)/Real Estate Mortgage Investment Conduit (“REMIC”) issues held are rated investment grade or better by either Standard & Poor’s or Moody’s, as of December 31, 2016 and 2015. At December 31, 2016, the Bank had $84,000 in total CMO backed by whole loans issued by private-label companies (nongovernment sponsored). There was a $548,000 realized gain for the year ended December 31, 2016, compared to $22,000 in realized losses for the year ended December 31, 2015 and zero realized gains or losses for the year ended December 31, 2014. The tables below show the Company’s investment securities’ gross unrealized losses and fair value by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 and 2015. Management has reviewed individual securities to determine whether a decline in fair value below the amortized cost basis is other-than-temporary. The unrealized losses on these securities were primarily attributed to changes in interest rates. The issuers of these securities have not, to our knowledge, evidenced any cause for default on these securities. These securities have fluctuated in value since their purchase dates as market rates have fluctuated. However, we have the ability and the intention to hold these securities until their fair values recover to cost or maturity. As such, management does not deem these securities to be OTTI. As of December 31, 2015, the Company had one OTTI HTM security with a net carrying value of $1.3 million. This security sold for a net gain of $546,000 in the third quarter of 2016. The Company did not record any charges for OTTI losses for the years ended December 31, 2016 and 2015.
|  | December 31, 2016 |
|  | Less Than 12 Months |  |  | 12 Months or Longer |  |  | Total |
| Fair Value |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |  |  | Gross Unrealized Holding Losses |
|  | (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Residential mortgage-backed securities |  |  | 583,143 |  |  |  | (6,232) |  |  |  | - |  |  |  | - |  |  |  | 583,143 |  |  |  | (6,232) |
CMO/REMIC - residential |  |  | 128,595 |  |  |  | (1,485) |  |  |  | - |  |  |  | - |  |  |  | 128,595 |  |  |  | (1,485) |
Municipal bonds |  |  | 23,255 |  |  |  | (954) |  |  |  | 5,981 |  |  |  | (1) |  |  |  | 29,236 |  |  |  | (955) |
Other securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total available-for-sale securities |  | $ | 734,993 |  |  | $ | (8,671) |  |  | $ | 5,981 |  |  | $ | (1) |  |  | $ | 740,974 |  |  | $ | (8,672) |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 76,854 |  |  | $ | (1,972) |  |  | $ | - |  |  | $ | - |  |  | $ | 76,854 |  |  | $ | (1,972) |
Residential mortgage-backed securities |  |  | 191,807 |  |  |  | (1,892) |  |  |  | - |  |  |  | - |  |  |  | 191,807 |  |  |  | (1,892) |
CMO |  |  | 237,611 |  |  |  | (6,808) |  |  |  | - |  |  |  | - |  |  |  | 237,611 |  |  |  | (6,808) |
Municipal bonds |  |  | 145,804 |  |  |  | (3,711) |  |  |  | 36,971 |  |  |  | (1,057) |  |  |  | 182,775 |  |  |  | (4,768) |
Total held-to-maturity securities |  | $ | 652,076 |  |  | $ | (14,383) |  |  | $ | 36,971 |  |  | $ | (1,057) |  |  | $ | 689,047 |  |  | $ | (15,440) |
|  | December 31, 2015 |
|  | Less Than 12 Months |  |  | 12 Months or Longer |  |  | Total |
| Fair Value |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |  |  | Gross Unrealized Holding Losses |
|  | (Dollars in thousands) |
Investment securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 5,745 |  |  | $ | (7) |  |  | $ | - |  |  | $ | - |  |  | $ | 5,745 |  |  | $ | (7) |
Residential mortgage-backed securities |  |  | 437,699 |  |  |  | (1,761) |  |  |  | - |  |  |  | - |  |  |  | 437,699 |  |  |  | (1,761) |
CMO/REMIC - residential |  |  | 171,923 |  |  |  | (1,074) |  |  |  | - |  |  |  | - |  |  |  | 171,923 |  |  |  | (1,074) |
Municipal bonds |  |  | 398 |  |  |  | (2) |  |  |  | 5,961 |  |  |  | (1) |  |  |  | 6,359 |  |  |  | (3) |
Other securities |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total available-for-sale securities |  | $ | 615,765 |  |  | $ | (2,844) |  |  | $ | 5,961 |  |  | $ | (1) |  |  | $ | 621,726 |  |  | $ | (2,845) |
Investment securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government agency/GSE |  | $ | 84,495 |  |  | $ | (734) |  |  | $ | - |  |  | $ | - |  |  | $ | 84,495 |  |  | $ | (734) |
Residential mortgage-backed securities |  |  | 230,760 |  |  |  | (1,293) |  |  |  | - |  |  |  | - |  |  |  | 230,760 |  |  |  | (1,293) |
CMO |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Municipal bonds |  |  | 110,119 |  |  |  | (719) |  |  |  | - |  |  |  | - |  |  |  | 110,119 |  |  |  | (719) |
Total held-to-maturity securities |  | $ | 425,374 |  |  | $ | (2,746) |  |  | $ | - |  |  | $ | - |  |  | $ | 425,374 |  |  | $ | (2,746) |
The following summarizes our analysis of these securities and the unrealized losses. This assessment was based on the following factors: i) the length of the time and the extent to which the fair value has been less than amortized cost; ii) adverse condition specifically related to the security, an industry, or a geographic area and whether or not the Company expects to recover the entire amortized cost, iii) historical and implied volatility of the fair value of the security; iv) the payment structure of the security and the likelihood of the issuer being able to make payments in the future; v) failure of the issuer of the security to make scheduled interest or principal payments, vi) any changes to the rating of the security by a rating agency, and vii) recoveries or additional declines in fair value subsequent to the balance sheet date. Government Agency & Government-Sponsored Enterprise (“GSE”) — The government agency bonds are backed by the full faith and credit of agencies of the U.S. Government. While the Government-Sponsored Enterprise bonds are not expressly guaranteed by the U.S. Government, they are currently being supported by the U.S. Government under a conservatorship arrangement. As of December 31, 2016, approximately $114.1 million in U.S. government agency bonds were callable. These securities are bullet securities, that is, they have a defined maturity date on which the principal is paid. The contractual term of these investments provides that the Company will receive the face value of the bond at maturity which will equal the amortized cost of the bond. Interest is received throughout the life of the security. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the bonds. Mortgage-Backed Securities (“MBS”) and CMO/REMIC — Most of the Company’s mortgage-backed and CMO/REMIC securities are issued by Government Agencies or Government-Sponsored Enterprises such as Ginnie Mae, Fannie Mae and Freddie Mac. These securities are collateralized or backed by the underlying residential or commercial mortgages. All mortgage-backed securities are considered to be rated investment grade with a weighted average life of approximately 4.4 years. Of the total MBS/CMO, 99.997% have the implied guarantee of U.S. Government-Sponsored Agencies and Enterprises. The remaining 0.003% are issued by banks. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the bonds. There were no credit-related OTTI recognized in earnings for the years ended December 31, 2016 and 2015. Municipal Bonds — The majority of the Company’s municipal bonds, with maturities of approximately 9.9 years, are insured by the largest U.S. bond insurance companies. The Company diversifies its holdings by owning selections of securities from different issuers and by holding securities from geographically diversified municipal issuers, thus reducing the Company’s exposure to any single adverse event. The decline in fair value is primarily due to the changes in interest rates. Since the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized costs, these investments are not considered other than temporarily impaired at December 31, 2016. At December 31, 2016 and 2015, investment securities having a carrying value of approximately $2.19 billion and $2.81 billion, respectively, were pledged to secure public deposits, short and long-term borrowings, and for other purposes as required or permitted by law. The amortized cost and fair value of debt securities at December 31, 2016, by contractual maturity, are shown in the table below. Although mortgage-backed securities and CMO/REMIC have contractual maturities through 2057, expected maturities will differ from contractual maturities because borrowers may have the right to prepay such obligations without penalty. Mortgage-backed securities and CMO/REMIC are included in maturity categories based upon estimated prepayment speeds.
|  | December 31, 2016 |
|  | Available-for-sale |  |  | Held-to-maturity |
|  | Amortized Cost |  |  | Fair Value |  |  | Amortized Cost |  |  | Fair Value |
|  | (Dollars in thousands) |
Due in one year or less |  | $ | 16,863 |  |  | $ | 17,004 |  |  | $ | - |  |  | $ | - |
Due after one year through five years |  |  | 1,974,483 |  |  |  | 1,986,171 |  |  |  | 355,263 |  |  |  | 349,455 |
Due after five years through ten years |  |  | 87,968 |  |  |  | 88,907 |  |  |  | 200,570 |  |  |  | 196,869 |
Due after ten years |  |  | 176,560 |  |  |  | 178,384 |  |  |  | 355,843 |  |  |  | 351,050 |
Total investment securities |  | $ | 2,255,874 |  |  | $ | 2,270,466 |  |  | $ | 911,676 |  |  | $ | 897,374 |
The investment in FHLB stock is periodically evaluated for impairment based on, among other things, the capital adequacy of the FHLB and its overall financial condition. No impairment losses have been recorded through December 31, 2016.

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

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Debt Security -URI http://asc.fasb.org/extlink&oid=6509901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27290-111563 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27232-111563 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -Glossary Equity Security -URI http://asc.fasb.org/extlink&oid=6511694 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27161-111563 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27357-111563 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=73527792&loc=d3e27405-111563 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration