x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 91-1962278 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3003 Tasman Drive, Santa Clara, California | 95054-1191 | |
(Address of principal executive offices) | (Zip Code) |
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(Dollars in thousands, except par value and share data) | March 31, 2016 | December 31, 2015 | ||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,868,512 | $ | 1,503,257 | ||||
Available-for-sale securities, at fair value (cost of $14,150,695 and $16,375,941, respectively) | 14,327,079 | 16,380,748 | ||||||
Held-to-maturity securities, at cost (fair value of $8,630,952 and $8,758,622, respectively) | 8,548,238 | 8,790,963 | ||||||
Non-marketable and other securities | 668,497 | 674,946 | ||||||
Total investment securities | 23,543,814 | 25,846,657 | ||||||
Loans, net of unearned income | 17,735,147 | 16,742,070 | ||||||
Allowance for loan losses | (230,249 | ) | (217,613 | ) | ||||
Net loans | 17,504,898 | 16,524,457 | ||||||
Premises and equipment, net of accumulated depreciation and amortization | 108,570 | 102,625 | ||||||
Accrued interest receivable and other assets | 548,108 | 709,707 | ||||||
Total assets | $ | 43,573,902 | $ | 44,686,703 | ||||
Liabilities and total equity | ||||||||
Liabilities: | ||||||||
Noninterest-bearing demand deposits | $ | 30,933,256 | $ | 30,867,497 | ||||
Interest-bearing deposits | 7,826,465 | 8,275,279 | ||||||
Total deposits | 38,759,721 | 39,142,776 | ||||||
Short-term borrowings | — | 774,900 | ||||||
Other liabilities | 506,571 | 639,094 | ||||||
Long-term debt | 796,570 | 796,702 | ||||||
Total liabilities | 40,062,862 | 41,353,472 | ||||||
Commitments and contingencies (Note 12 and Note 15) | ||||||||
SVBFG stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; no shares issued and outstanding | — | — | ||||||
Common stock, $0.001 par value, 150,000,000 shares authorized; 51,701,312 shares and 51,610,226 shares outstanding, respectively | 52 | 52 | ||||||
Additional paid-in capital | 1,192,782 | 1,189,032 | ||||||
Retained earnings | 2,072,820 | 1,993,646 | ||||||
Accumulated other comprehensive income | 115,390 | 15,404 | ||||||
Total SVBFG stockholders’ equity | 3,381,044 | 3,198,134 | ||||||
Noncontrolling interests | 129,996 | 135,097 | ||||||
Total equity | 3,511,040 | 3,333,231 | ||||||
Total liabilities and total equity | $ | 43,573,902 | $ | 44,686,703 |
Three months ended March 31, | ||||||||
(Dollars in thousands, except per share amounts) | 2016 | 2015 | ||||||
Interest income: | ||||||||
Loans (1) | $ | 197,942 | $ | 165,501 | ||||
Investment securities: | ||||||||
Taxable | 91,050 | 81,274 | ||||||
Non-taxable | 596 | 772 | ||||||
Federal funds sold, securities purchased under agreements to resell and other short-term investment securities (1) | 2,070 | 1,269 | ||||||
Total interest income | 291,658 | 248,816 | ||||||
Interest expense: | ||||||||
Deposits | 1,188 | 1,943 | ||||||
Borrowings (1) | 9,049 | 7,948 | ||||||
Total interest expense | 10,237 | 9,891 | ||||||
Net interest income | 281,421 | 238,925 | ||||||
Provision for loan losses | 33,341 | 6,452 | ||||||
Net interest income after provision for loan losses | 248,080 | 232,473 | ||||||
Noninterest income: | ||||||||
(Losses) gains on investment securities, net (1) | (4,684 | ) | 33,263 | |||||
(Losses) gains on derivative instruments, net | (1,695 | ) | 39,729 | |||||
Foreign exchange fees | 26,966 | 17,678 | ||||||
Credit card fees | 15,507 | 12,090 | ||||||
Deposit service charges | 12,672 | 10,736 | ||||||
Client investment fees | 7,995 | 4,482 | ||||||
Lending related fees | 7,813 | 8,022 | ||||||
Letters of credit and standby letters of credit fees | 5,589 | 5,202 | ||||||
Other (1) | 15,971 | (7,678 | ) | |||||
Total noninterest income | 86,134 | 123,524 | ||||||
Noninterest expense: | ||||||||
Compensation and benefits | 122,262 | 115,770 | ||||||
Professional services (1) | 19,000 | 18,747 | ||||||
Premises and equipment | 14,984 | 12,657 | ||||||
Business development and travel | 12,246 | 11,112 | ||||||
Net occupancy | 10,035 | 7,313 | ||||||
FDIC and state assessments | 6,927 | 5,789 | ||||||
Correspondent bank fees (1) | 3,652 | 3,368 | ||||||
Provision for unfunded credit commitments | 134 | 2,263 | ||||||
Other (1) | 14,793 | 13,522 | ||||||
Total noninterest expense | 204,033 | 190,541 | ||||||
Income before income tax expense | 130,181 | 165,456 | ||||||
Income tax expense | 53,584 | 63,066 | ||||||
Net income before noncontrolling interests | 76,597 | 102,390 | ||||||
Net loss (income) attributable to noncontrolling interests (1) | 2,577 | (13,874 | ) | |||||
Net income available to common stockholders | $ | 79,174 | $ | 88,516 | ||||
Earnings per common share—basic | $ | 1.53 | $ | 1.74 | ||||
Earnings per common share—diluted | 1.52 | 1.71 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
Three months ended March 31, | ||||||||
(Dollars in thousands) | 2016 | 2015 | ||||||
Net income before noncontrolling interests (1) | $ | 76,597 | $ | 102,390 | ||||
Other comprehensive income, net of tax: | ||||||||
Change in cumulative translation gains and (losses): | ||||||||
Foreign currency translation (losses) gains (1) | (254 | ) | 2,161 | |||||
Related tax benefit (expense) | 104 | (820 | ) | |||||
Change in unrealized gains on available-for-sale securities: | ||||||||
Unrealized holding gains | 170,831 | 87,107 | ||||||
Related tax expense | (69,603 | ) | (35,215 | ) | ||||
Reclassification adjustment for losses (gains) included in net income | 746 | (2,596 | ) | |||||
Related tax (benefit) expense | (304 | ) | 1,048 | |||||
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity | (2,567 | ) | (2,828 | ) | ||||
Related tax benefit | 1,033 | 1,139 | ||||||
Other comprehensive income, net of tax | 99,986 | 49,996 | ||||||
Comprehensive income | 176,583 | 152,386 | ||||||
Comprehensive loss (income) attributable to noncontrolling interests (1) | 2,577 | (13,874 | ) | |||||
Comprehensive income attributable to SVBFG | $ | 179,160 | $ | 138,512 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Total SVBFG Stockholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||
(Dollars in thousands) | Shares | Amount | |||||||||||||||||||||||||||||
Balance at December 31, 2014 | 50,924,925 | $ | 51 | $ | 1,120,350 | $ | 1,649,967 | $ | 42,704 | $ | 2,813,072 | $ | 1,238,662 | $ | 4,051,734 | ||||||||||||||||
Common stock issued under employee benefit plans, net of restricted stock cancellations | 142,991 | — | 6,595 | — | — | 6,595 | — | 6,595 | |||||||||||||||||||||||
Common stock issued under ESOP | 27,425 | — | 3,512 | — | — | 3,512 | — | 3,512 | |||||||||||||||||||||||
Income tax benefit from stock options exercised, vesting of restricted stock and other (1) | — | — | 2,537 | — | — | 2,537 | — | 2,537 | |||||||||||||||||||||||
Deconsolidation of noncontrolling interest (1) | — | — | — | — | — | — | (1,069,437 | ) | (1,069,437 | ) | |||||||||||||||||||||
Net income (1) | — | — | — | 88,516 | — | 88,516 | 13,874 | 102,390 | |||||||||||||||||||||||
Capital calls and distributions, net (1) | — | — | — | — | — | — | (40,823 | ) | (40,823 | ) | |||||||||||||||||||||
Net change in unrealized gains and losses on available-for-sale securities, net of tax | — | — | — | — | 50,344 | 50,344 | — | 50,344 | |||||||||||||||||||||||
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax | — | — | — | — | (1,689 | ) | (1,689 | ) | — | (1,689 | ) | ||||||||||||||||||||
Foreign currency translation adjustments, net of tax (1) | — | — | — | — | 1,341 | 1,341 | — | 1,341 | |||||||||||||||||||||||
Share-based compensation expense | — | — | 7,464 | — | — | 7,464 | — | 7,464 | |||||||||||||||||||||||
Balance at March 31, 2015 | 51,095,341 | $ | 51 | $ | 1,140,458 | $ | 1,738,483 | $ | 92,700 | $ | 2,971,692 | $ | 142,276 | $ | 3,113,968 | ||||||||||||||||
Balance at December 31, 2015 | 51,610,226 | $ | 52 | $ | 1,189,032 | $ | 1,993,646 | $ | 15,404 | $ | 3,198,134 | $ | 135,097 | $ | 3,333,231 | ||||||||||||||||
Common stock issued under employee benefit plans, net of restricted stock cancellations | 47,921 | — | (250 | ) | — | — | (250 | ) | — | (250 | ) | ||||||||||||||||||||
Common stock issued under ESOP | 43,165 | — | 4,328 | — | — | 4,328 | — | 4,328 | |||||||||||||||||||||||
Income tax effect from stock options exercised, vesting of restricted stock and other | — | — | (8,483 | ) | — | — | (8,483 | ) | — | (8,483 | ) | ||||||||||||||||||||
Net income (loss) | — | — | — | 79,174 | — | 79,174 | (2,577 | ) | 76,597 | ||||||||||||||||||||||
Capital calls and distributions, net | — | — | — | — | — | — | (2,524 | ) | (2,524 | ) | |||||||||||||||||||||
Net change in unrealized gains and losses on available-for-sale securities, net of tax | — | — | — | — | 101,670 | 101,670 | — | 101,670 | |||||||||||||||||||||||
Amortization of unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax | — | — | — | — | (1,534 | ) | (1,534 | ) | — | (1,534 | ) | ||||||||||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | — | (150 | ) | (150 | ) | — | (150 | ) | ||||||||||||||||||||
Share-based compensation expense | — | — | 8,155 | — | — | 8,155 | — | 8,155 | |||||||||||||||||||||||
Balance at March 31, 2016 | 51,701,312 | $ | 52 | $ | 1,192,782 | $ | 2,072,820 | $ | 115,390 | $ | 3,381,044 | $ | 129,996 | $ | 3,511,040 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
March 31, | ||||||||
(Dollars in thousands) | 2016 | 2015 | ||||||
Cash flows from operating activities: | ||||||||
Net income before noncontrolling interests (1) | $ | 76,597 | $ | 102,390 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Provision for loan losses | 33,341 | 6,452 | ||||||
Provision for unfunded credit commitments | 134 | 2,263 | ||||||
Changes in fair values of derivatives, net | 842 | (20,404 | ) | |||||
Losses (gains) on investment securities, net | 4,684 | (33,263 | ) | |||||
Depreciation and amortization (1) | 11,536 | 9,892 | ||||||
Amortization of premiums and discounts on investment securities, net | 4,931 | 6,418 | ||||||
Amortization of share-based compensation | 6,877 | 7,771 | ||||||
Amortization of deferred loan fees | (24,042 | ) | (21,169 | ) | ||||
Pre-tax net gain on SVBIF sale transaction | — | (887 | ) | |||||
Deferred income tax (benefit) expense | (5,982 | ) | 1,311 | |||||
Changes in other assets and liabilities: | ||||||||
Accrued interest receivable and payable, net | (4,628 | ) | 772 | |||||
Accounts payable and receivable, net | 552 | (9,141 | ) | |||||
Income tax payable and receivable, net (1) | 28,711 | 9,283 | ||||||
Accrued compensation | (101,241 | ) | (74,614 | ) | ||||
Foreign exchange spot contracts, net | 9,541 | 33,934 | ||||||
Other, net | 14,208 | 32,198 | ||||||
Net cash provided by operating activities (1) | 56,061 | 53,206 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of available-for-sale securities | — | (552,573 | ) | |||||
Proceeds from sales of available-for-sale securities | 1,864,396 | 5,612 | ||||||
Proceeds from maturities and pay downs of available-for-sale securities | 364,101 | 424,713 | ||||||
Purchases of held-to-maturity securities | (98,199 | ) | (739,291 | ) | ||||
Proceeds from maturities and pay downs of held-to-maturity securities | 351,834 | 336,511 | ||||||
Purchases of non-marketable and other securities | (12,412 | ) | (9,924 | ) | ||||
Proceeds from sales and distributions of non-marketable and other securities | 9,977 | 45,120 | ||||||
Net increase in loans | (997,408 | ) | (53,886 | ) | ||||
Proceeds from recoveries of charged-off loans | 5,469 | 1,551 | ||||||
Effect of deconsolidation of noncontrolling interest | — | 15,995 | ||||||
Purchases of premises and equipment | (13,680 | ) | (12,038 | ) | ||||
Net cash provided by (used for) investing activities | 1,474,078 | (538,210 | ) | |||||
Cash flows from financing activities: | ||||||||
Net decrease in deposits | (383,055 | ) | (491,924 | ) | ||||
Net (decrease) increase in short-term borrowings | (774,900 | ) | 69,985 | |||||
(Distributions to noncontrolling interests), net of contributions from noncontrolling interests | (2,524 | ) | 703 | |||||
Tax benefit from stock exercises | (8,483 | ) | 2,534 | |||||
Proceeds from issuance of common stock, ESPP, and ESOP | 4,078 | 10,107 | ||||||
Proceeds from issuance of 3.50% Senior Notes | — | 346,431 | ||||||
Net cash used for financing activities | (1,164,884 | ) | (62,164 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 365,255 | (547,168 | ) | |||||
Cash and cash equivalents at beginning of period (1) (2) | 1,503,257 | 1,811,014 | ||||||
Cash and cash equivalents at end of period (1) (2) | $ | 1,868,512 | $ | 1,263,846 | ||||
Supplemental disclosures: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 17,407 | $ | 11,859 | ||||
Income taxes | 35,778 | 46,599 | ||||||
Noncash items during the period: | ||||||||
Changes in unrealized gains and losses on available-for-sale securities, net of tax | $ | 101,670 | $ | 50,344 | ||||
Distributions of stock from investments (3) | 34 | 61,649 |
(1) | Amounts for the three months ended March 31, 2015, have been revised to reflect the retrospective application of new accounting guidance adopted in the second quarter of 2015 related to our consolidated variable interest entities (ASU 2015-02). |
(2) | Cash and cash equivalents at March 31, 2015 and December 31, 2014 included $9.3 million and $15.0 million, respectively, recognized in assets held-for-sale in conjunction with the SVBIF sale transaction. |
(3) | For the quarter ended March 31, 2015, includes distributions to noncontrolling interests of $41.5 million. |
1. | Basis of Presentation |
2. | Stockholders’ Equity and EPS |
Three months ended March 31, | ||||||||||
(Dollars in thousands) | Income Statement Location | 2016 | 2015 | |||||||
Reclassification adjustment for losses (gains) included in net income | (Losses) gains on investment securities, net | $ | 746 | $ | (2,596 | ) | ||||
Related tax (benefit) expense | Income tax expense | (304 | ) | 1,048 | ||||||
Total reclassification adjustment for losses (gains) included in net income, net of tax | $ | 442 | $ | (1,548 | ) |
Three months ended March 31, | ||||||||
(Dollars and shares in thousands, except per share amounts) | 2016 | 2015 | ||||||
Numerator: | ||||||||
Net income available to common stockholders | $ | 79,174 | $ | 88,516 | ||||
Denominator: | ||||||||
Weighted average common shares outstanding-basic | 51,646 | 51,009 | ||||||
Weighted average effect of dilutive securities: | ||||||||
Stock options and ESPP | 264 | 445 | ||||||
Restricted stock units | 175 | 265 | ||||||
Denominator for diluted calculation | 52,085 | 51,719 | ||||||
Earnings per common share: | ||||||||
Basic | $ | 1.53 | $ | 1.74 | ||||
Diluted | $ | 1.52 | $ | 1.71 |
Three months ended March 31, | ||||||
(Shares in thousands) | 2016 | 2015 | ||||
Stock options | 351 | 241 | ||||
Restricted stock units | 14 | 2 | ||||
Total | 365 | 243 |
3. | Share-Based Compensation |
Three months ended March 31, | ||||||||
(Dollars in thousands) | 2016 | 2015 | ||||||
Share-based compensation expense | $ | 6,877 | $ | 7,771 | ||||
Income tax benefit related to share-based compensation expense | (2,117 | ) | (2,638 | ) |
(Dollars in thousands) | Unrecognized Expense | Average Expected Recognition Period - in Years | ||||
Stock options | $ | 9,444 | 2.18 | |||
Restricted stock units | 39,942 | 2.50 | ||||
Total unrecognized share-based compensation expense | $ | 49,386 |
Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life - in Years | Aggregate Intrinsic Value of In-The- Money Options | ||||||||||
Outstanding at December 31, 2015 | 1,137,228 | $ | 77.12 | ||||||||||
Exercised | (31,006 | ) | 25.17 | ||||||||||
Forfeited | (4,154 | ) | 87.99 | ||||||||||
Outstanding at March 31, 2016 | 1,102,068 | 78.54 | 3.65 | $ | 30,595,989 | ||||||||
Vested and expected to vest at March 31, 2016 | 1,078,583 | 77.88 | 3.61 | 30,455,095 | |||||||||
Exercisable at March 31, 2016 | 589,043 | 63.10 | 2.68 | 23,310,253 |
Shares | Weighted Average Grant Date Fair Value | ||||||
Nonvested at December 31, 2015 | 572,038 | $ | 103.50 | ||||
Granted | 95,464 | 87.22 | |||||
Vested | (28,638 | ) | 60.63 | ||||
Forfeited | (4,113 | ) | 101.31 | ||||
Nonvested at March 31, 2016 | 634,751 | 103.00 |
4. | Variable Interest Entities |
(Dollars in thousands) | Consolidated VIEs | Unconsolidated VIEs | Maximum Exposure to Loss in Unconsolidated VIEs | |||||||||
March 31, 2016: | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 10,855 | $ | — | $ | — | ||||||
Non-marketable and other securities (1) | 196,789 | 362,470 | 362,470 | |||||||||
Accrued interest receivable and other assets | 614 | — | — | |||||||||
Total assets | $ | 208,258 | $ | 362,470 | $ | 362,470 | ||||||
Liabilities: | ||||||||||||
Other liabilities | $ | 563 | $ | — | $ | — | ||||||
Accrued expenses and other liabilities (1) | — | 87,754 | — | |||||||||
Total liabilities | $ | 563 | $ | 87,754 | $ | — | ||||||
December 31, 2015: | ||||||||||||
Assets: | ||||||||||||
Cash and cash equivalents | $ | 11,811 | $ | — | $ | — | ||||||
Non-marketable and other securities (1) | 203,714 | 364,450 | 364,450 | |||||||||
Accrued interest receivable and other assets | 494 | — | — | |||||||||
Total assets | $ | 216,019 | $ | 364,450 | $ | 364,450 | ||||||
Liabilities: | ||||||||||||
Other liabilities | $ | 433 | $ | — | $ | — | ||||||
Accrued expenses and other liabilities (1) | — | 90,978 | — | |||||||||
Total liabilities | $ | 433 | $ | 90,978 | $ | — |
(1) | Included in our unconsolidated non-marketable and other securities portfolio at March 31, 2016 and December 31, 2015 are investments in qualified affordable housing projects of $157.7 million and $154.4 million, respectively and related unfunded commitments of $87.8 million and $91.0 million, respectively. |
5. | Cash and Cash Equivalents |
(Dollars in thousands) | March 31, 2016 | December 31, 2015 | ||||||
Cash and due from banks (1) | $ | 1,574,966 | $ | 1,372,743 | ||||
Securities purchased under agreements to resell (2) | 288,421 | 125,391 | ||||||
Other short-term investment securities | 5,125 | 5,123 | ||||||
Total cash and cash equivalents | $ | 1,868,512 | $ | 1,503,257 |
(1) | At March 31, 2016 and December 31, 2015, $479 million and $405 million, respectively, of our cash and due from banks was deposited at the Federal Reserve Bank and was earning interest at the Federal Funds target rate, and interest-earning deposits in other financial institutions were $793 million and $500 million, respectively. |
(2) | At March 31, 2016 and December 31, 2015, securities purchased under agreements to resell were collateralized by U.S. Treasury securities and U.S. agency securities with aggregate fair values of $295 million and $128 million, respectively. None of these securities received as collateral were sold or pledged as of March 31, 2016 or December 31, 2015. |
6. | Investment Securities |
March 31, 2016 | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | ||||||||||||
Available-for-sale securities, at fair value: | ||||||||||||||||
U.S. Treasury securities | $ | 9,824,755 | $ | 129,634 | $ | (35 | ) | $ | 9,954,354 | |||||||
U.S. agency debentures | 2,444,137 | 41,294 | — | 2,485,431 | ||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 1,308,859 | 7,414 | (4,256 | ) | 1,312,017 | |||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 570,740 | 2,421 | (127 | ) | 573,034 | |||||||||||
Equity securities | 2,204 | 242 | (203 | ) | 2,243 | |||||||||||
Total available-for-sale securities | $ | 14,150,695 | $ | 181,005 | $ | (4,621 | ) | $ | 14,327,079 |
December 31, 2015 | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Carrying Value | ||||||||||||
Available-for-sale securities, at fair value: | ||||||||||||||||
U.S. Treasury securities | $ | 11,679,450 | $ | 19,134 | $ | (20,549 | ) | $ | 11,678,035 | |||||||
U.S. agency debentures | 2,677,453 | 17,684 | (5,108 | ) | 2,690,029 | |||||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 1,408,206 | 6,591 | (15,518 | ) | 1,399,279 | |||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 604,236 | 3,709 | (9 | ) | 607,936 | |||||||||||
Equity securities | 6,596 | 460 | (1,587 | ) | 5,469 | |||||||||||
Total available-for-sale securities | $ | 16,375,941 | $ | 47,578 | $ | (42,771 | ) | $ | 16,380,748 |
March 31, 2016 | ||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | ||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 201,215 | $ | (35 | ) | $ | — | $ | — | $ | 201,215 | $ | (35 | ) | ||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 176,469 | (157 | ) | 462,143 | (4,099 | ) | 638,612 | (4,256 | ) | |||||||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 103,900 | (127 | ) | — | — | 103,900 | (127 | ) | ||||||||||||||||
Equity securities | 1,561 | (203 | ) | — | — | 1,561 | (203 | ) | ||||||||||||||||
Total temporarily impaired securities: (1) | $ | 483,145 | $ | (522 | ) | $ | 462,143 | $ | (4,099 | ) | $ | 945,288 | $ | (4,621 | ) |
(1) | As of March 31, 2016, we identified a total of 70 investments that were in unrealized loss positions, of which 24 investments totaling $462.1 million with unrealized losses of $4.1 million have been in an impaired position for a period of time greater than 12 months. As of March 31, 2016, we do not intend to sell any impaired fixed income investment securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis. Based on our analysis as of March 31, 2016, we deem all impairments to be temporary, and therefore changes in value for our temporarily impaired securities as of the same date are included in other comprehensive income. Market valuations and impairment analyses on assets in the available-for-sale securities portfolio are reviewed and monitored on a quarterly basis. |
December 31, 2015 | ||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | ||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | 7,467,519 | $ | (20,549 | ) | $ | — | $ | — | $ | 7,467,519 | $ | (20,549 | ) | ||||||||||
U.S. agency debentures | 760,071 | (5,108 | ) | — | — | 760,071 | (5,108 | ) | ||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 545,404 | (4,681 | ) | 373,284 | (10,837 | ) | 918,688 | (15,518 | ) | |||||||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 7,776 | (9 | ) | — | — | 7,776 | (9 | ) | ||||||||||||||||
Equity securities | 2,955 | (1,587 | ) | — | — | 2,955 | (1,587 | ) | ||||||||||||||||
Total temporarily impaired securities (1): | $ | 8,783,725 | $ | (31,934 | ) | $ | 373,284 | $ | (10,837 | ) | $ | 9,157,009 | $ | (42,771 | ) |
(1) | As of December 31, 2015, we identified a total of 243 investments that were in unrealized loss positions, of which 18 investments totaling $373.3 million with unrealized losses of $10.8 million have been in an impaired position for a period of time greater than 12 months. |
March 31, 2016 | |||||||||||||||||||||||||||||||||||
Total | One Year or Less | After One Year to Five Years | After Five Years to Ten Years | After Ten Years | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Carrying Value | Weighted- Average Yield | Carrying Value | Weighted- Average Yield | Carrying Value | Weighted- Average Yield | Carrying Value | Weighted- Average Yield | Carrying Value | Weighted- Average Yield | |||||||||||||||||||||||||
U.S. Treasury securities | $ | 9,954,354 | 1.31 | % | $ | 651,416 | 0.73 | % | $ | 9,302,938 | 1.35 | % | $ | — | — | % | $ | — | — | % | |||||||||||||||
U.S. agency debentures | 2,485,431 | 1.60 | 382,836 | 1.57 | 2,102,595 | 1.60 | — | — | — | — | |||||||||||||||||||||||||
Residential mortgage-backed securities: | |||||||||||||||||||||||||||||||||||
Agency-issued collateralized mortgage obligations - fixed rate | 1,312,017 | 1.95 | — | — | — | — | 884,785 | 2.15 | 427,232 | 1.53 | |||||||||||||||||||||||||
Agency-issued collateralized mortgage obligations - variable rate | 573,034 | 0.71 | — | — | — | — | — | — | 573,034 | 0.71 | |||||||||||||||||||||||||
Total | $ | 14,324,836 | 1.39 | $ | 1,034,252 | 1.04 | $ | 11,405,533 | 1.40 | $ | 884,785 | 2.15 | $ | 1,000,266 | 1.06 |
March 31, 2016 | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Held-to-maturity securities, at cost: | ||||||||||||||||
U.S. agency debentures (1) | $ | 589,076 | $ | 15,170 | $ | — | $ | 604,246 | ||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency-issued mortgage-backed securities | 2,308,454 | 26,627 | (622 | ) | 2,334,459 | |||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 4,047,342 | 32,071 | (4,483 | ) | 4,074,930 | |||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 359,244 | 387 | (352 | ) | 359,279 | |||||||||||
Agency-issued commercial mortgage-backed securities | 1,181,904 | 14,773 | (203 | ) | 1,196,474 | |||||||||||
Municipal bonds and notes | 62,218 | 113 | (767 | ) | 61,564 | |||||||||||
Total held-to-maturity securities | $ | 8,548,238 | $ | 89,141 | $ | (6,427 | ) | $ | 8,630,952 |
(1) | Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States. |
December 31, 2015 | ||||||||||||||||
(Dollars in thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||
Held-to-maturity securities, at cost: | ||||||||||||||||
U.S. agency debentures (1) | $ | 545,473 | $ | 8,876 | $ | — | $ | 554,349 | ||||||||
Residential mortgage-backed securities: | ||||||||||||||||
Agency-issued mortgage-backed securities | 2,366,627 | 546 | (11,698 | ) | 2,355,475 | |||||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 4,225,781 | 3,054 | (32,999 | ) | 4,195,836 | |||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 370,779 | 758 | (33 | ) | 371,504 | |||||||||||
Agency-issued commercial mortgage-backed securities | 1,214,716 | 3,405 | (3,475 | ) | 1,214,646 | |||||||||||
Municipal bonds and notes | 67,587 | 55 | (830 | ) | 66,812 | |||||||||||
Total held-to-maturity securities | $ | 8,790,963 | $ | 16,694 | $ | (49,035 | ) | $ | 8,758,622 |
(1) | Consists of pools of Small Business Investment Company debentures issued and guaranteed by the U.S. Small Business Administration, an independent agency of the United States. |
March 31, 2016 | ||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | ||||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||
Agency-issued mortgage-backed securities | $ | 31,969 | $ | (147 | ) | $ | 42,989 | $ | (475 | ) | $ | 74,958 | $ | (622 | ) | |||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 181,655 | (1,466 | ) | 358,847 | (3,017 | ) | 540,502 | (4,483 | ) | |||||||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 177,805 | (352 | ) | — | — | 177,805 | (352 | ) | ||||||||||||||||
Agency-issued commercial mortgage-backed securities | 31,913 | (19 | ) | 26,907 | (184 | ) | 58,820 | (203 | ) | |||||||||||||||
Municipal bonds and notes | 25,875 | (168 | ) | 27,982 | (599 | ) | 53,857 | (767 | ) | |||||||||||||||
Total temporarily impaired securities (1): | $ | 449,217 | $ | (2,152 | ) | $ | 456,725 | $ | (4,275 | ) | $ | 905,942 | $ | (6,427 | ) |
(1) | As of March 31, 2016, we identified a total of 161 investments that were in unrealized loss positions, of which 72 investments totaling $456.7 million with unrealized losses of $4.3 million have been in an impaired position for a period of time greater than 12 months. As of March 31, 2016, we do not intend to sell any impaired fixed income investment securities prior to recovery of our adjusted cost basis, and it is more likely than not that we will not be required to sell any of our securities prior to recovery of our adjusted cost basis, which is consistent with our classification of these securities. Based on our analysis as of March 31, 2016, we deem all impairments to be temporary. Market valuations and impairment analyses on assets in the held-to-maturity securities portfolio are reviewed and monitored on a quarterly basis. |
December 31, 2015 | ||||||||||||||||||||||||
Less than 12 months | 12 months or longer | Total | ||||||||||||||||||||||
(Dollars in thousands) | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | Fair Value of Investments | Unrealized Losses | ||||||||||||||||||
Held-to-maturity securities: | ||||||||||||||||||||||||
Residential mortgage-backed securities: | ||||||||||||||||||||||||
Agency-issued mortgage-backed securities | $ | 2,121,258 | $ | (10,860 | ) | $ | 22,507 | $ | (838 | ) | $ | 2,143,765 | $ | (11,698 | ) | |||||||||
Agency-issued collateralized mortgage obligations—fixed rate | 3,153,483 | (30,230 | ) | 150,058 | (2,769 | ) | 3,303,541 | (32,999 | ) | |||||||||||||||
Agency-issued collateralized mortgage obligations—variable rate | 170,350 | (33 | ) | — | — | 170,350 | (33 | ) | ||||||||||||||||
Agency-issued commercial mortgage-backed securities | 823,414 | (2,994 | ) | 40,276 | (481 | ) | 863,690 | (3,475 | ) | |||||||||||||||
Municipal bonds and notes | 34,278 | (274 | ) | 25,509 | (556 | ) | 59,787 | (830 | ) | |||||||||||||||
Total temporarily impaired securities (1): | $ | 6,302,783 | $ | (44,391 | ) | $ | 238,350 | $ | (4,644 | ) | $ | 6,541,133 | $ | (49,035 | ) |
(1) | As of December 31, 2015, we identified a total of 384 investments that were in unrealized loss positions, of which 58 investments totaling $238.4 million with unrealized losses of $4.6 million have been in an impaired position for a period of time greater than 12 months. |
March 31, 2016 | |||||||||||||||||||||||||||||||||||
Total | One Year or Less | After One Year to Five Years | After Five Years to Ten Years | After Ten Years | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Amortized Cost | Weighted- Average Yield | Amortized Cost | Weighted- Average Yield | Amortized Cost | Weighted- Average Yield | Amortized Cost | Weighted- Average Yield | Amortized Cost | Weighted- Average Yield | |||||||||||||||||||||||||
U.S. agency debentures | $ | 589,076 | 2.70 | % | $ | — | — | % | $ | 16,702 | 4.07 | % | $ | 572,374 | 2.66 | % | $ | — | — | % | |||||||||||||||
Residential mortgage-backed securities: |