INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

The following table presents the amortized cost and fair value of the investment securities portfolio as of the dates indicated:



($ in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
September 30, 2019
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	$	40,374	$	—	$	—		$	40,374
Non-agency residential mortgage-backed securities	267		10		—			277
Collateralized loan obligations	748,605		—		(13,594		)	735,011
Total securities available-for-sale	$	789,246	$	10	$	(13,594	)	$	775,662
December 31, 2018
Securities available-for-sale:
SBA loan pool securities	$	911	$	—	$	(1	)	$	910
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	461,987		—		(24,545		)	437,442
Non-agency residential mortgage-backed securities	418		9		—			427
Non-agency commercial mortgage-backed securities	132,199		—		—			132,199
Collateralized loan obligations	1,431,171		141		(9,790		)	1,421,522
Total securities available-for-sale	$	2,026,686	$	150	$	(34,336	)	$	1,992,500

As of December 31, 2018, the Company changed its intent and decided to sell its non-agency commercial mortgage-backed securities in an unrealized loss position due to its strategy to reposition its securities profile and recognized $3.3 million of other-than-temporary impairment (OTTI) losses during the fourth quarter of 2018. During the first quarter of 2019, the Company completed the sale of all remaining non-agency commercial mortgage-backed securities totaling $132.2 million resulting in a gain of $9 thousand. During the three and nine months ended September 30, 2019, the Company sold $380.9 million and $385.8 million, respectively, in mortgage-backed securities resulting in a loss of $5.1 million and $5.0 million, respectively. Additionally, during the three and nine months ended September 30, 2019, the Company sold zero and $644.5 million, respectively, in collateralized loan obligations resulting in a gain of zero and $143 thousand, respectively. During the first quarter of 2018, the Company completed the sale of all remaining corporate debt securities, totaling $76.8 million resulting in a gain of $4.9 million.

At September 30, 2019, the Company's investment securities portfolio consisted of mortgage-backed securities and collateralized loan obligations. The expected maturities of these types of securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

At September 30, 2019 and December 31, 2018, there were no holdings of any one issuer in an amount greater than 10 percent of the Company's stockholders’ equity.

The following table presents proceeds from sales and calls of securities available-for-sale and the associated gross gains and losses realized through earnings upon the sales and calls of securities available-for-sale for the periods indicated:



	Three Months Ended September 30,					Nine Months Ended September 30,
($ in thousands)	2019			2018		2019			2018
Gross realized gains on sales and calls of securities available-for-sale	$	71		$	13	$	279		$	5,532
Gross realized losses on sales and calls of securities available-for-sale	(5,134		)	—		(5,134		)	—
Net realized (losses) gains on sales and calls of securities available-for-sale	$	(5,063	)	$	13	$	(4,855	)	$	5,532
Proceeds from sales and calls of securities available-for-sale	$	43,252		$	283,114	$	861,008		$	896,070

Investment securities with carrying values of $64.6 million and $163.0 million as of September 30, 2019 and December 31, 2018, respectively, were pledged to secure FHLB advances, public deposits and for other purposes as required or permitted by law.

The following table summarizes the investment securities with unrealized losses by security type and length of time in a continuous unrealized loss position as of the dates indicated:



	Less Than 12 Months					12 Months or Longer					Total
($ in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
September 30, 2019
Securities available-for-sale:
Collateralized loan obligations	$	435,191	$	(6,539	)	$	299,820	$	(7,055	)	$	735,011	$	(13,594	)
Total securities available-for-sale	$	435,191	$	(6,539	)	$	299,820	$	(7,055	)	$	735,011	$	(13,594	)
December 31, 2018
Securities available-for-sale:
SBA loan pool securities	$	—	$	—		$	910	$	(1	)	$	910	$	(1	)
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	13,494		(133		)	423,916		(24,412		)	437,410		(24,545		)
Non-agency residential mortgage-backed securities	90		—			16		—			106		—
Collateralized loan obligations	1,364,317		(9,480		)	32,790		(310		)	1,397,107		(9,790		)
Total securities available-for-sale	$	1,377,901	$	(9,613	)	$	457,632	$	(24,723	)	$	1,835,533	$	(34,336	)

During the three and nine months ended September 30, 2019, the Company recorded OTTI for its remaining portfolio of mortgage-backed securities of $731 thousand and $731 thousand, respectively. The OTTI was recognized as a result of the Company's ongoing strategic decision to liquidate this longer duration portfolio. During the three and nine months ended September 30, 2018, no OTTI was recorded.

At September 30, 2019, the Company’s securities available-for-sale portfolio consisted of 57 securities, 45 of which were in an unrealized loss position. At December 31, 2018, the Company’s securities available-for-sale portfolio consisted of 145 securities, 118 of which were in an unrealized loss position.

The Company monitors its securities portfolio to ensure it has adequate credit support. The majority of unrealized losses are related to the Company's collateralized loan obligations. The Company also considers the lowest credit rating for identification of potential OTTI for other securities. As of September 30, 2019, nearly all of the Company's non-agency mortgage-backed securities or collateralized loan obligations investment securities in an unrealized loss position received an investment grade credit rating. The decline in fair value is attributable to changes in interest rates, and not credit quality. Except for the remaining portfolio of 9 mortgage-backed securities which the Company intends to sell, the Company believes there was no further OTTI as of September 30, 2019. The Company does not have the intent to sell the remaining 45 securities in an unrealized loss position and further believes it is not likely that it will be required to sell these securities before their anticipated recovery.

The following table presents the composition and the repricing and yield information of the investment securities portfolio as of September 30, 2019:



	One year or less				More than One Year through Five Years				More than Five Years through Ten Years				More than Ten Years				Total
($ in thousands)	Fair Value		Weighted-Average Yield		Fair Value		Weighted-Average Yield		Fair Value		Weighted-Average Yield		Fair Value		Weighted-Average Yield		Fair Value		Weighted-Average Yield
Securities available-for-sale:
U.S. government agency and U.S. government sponsored enterprise residential mortgage-backed securities	$	—	—	%	$	—	—	%	$	—	—	%	$	40,374	2.56	%	$	40,374	2.56	%
Non-agency residential mortgage-backed securities	65		2.68	%	—		—	%	—		—	%	212		5.79	%	277		5.06	%
Collateralized loan obligations	735,011		3.52	%	—		—	%	—		—	%	—		—	%	735,011		3.52	%
Total securities available-for-sale	$	735,076	3.52	%	$	—	—	%	$	—	—	%	$	40,586	2.58	%	$	775,662	3.47	%