ISBC 2017 Form 10-K & 2018 Proxy Statement

FORM 10-K Tax Anticipation notes and $4.3 million of longer term New Jersey Revenue Bonds. These purchases were made to diversify the securities portfolio and are designated as held to maturity. Government Sponsored Enterprises. At December 31, 2017, debt securities issued by Government Sponsored Enterprises held in our security portfolio totaled $43.3 million representing 1.14% of our total securities portfolio. Marketable Equity Securities. At December 31, 2017, we had $5.7 million in equity securities representing 0.15% of our total securities portfolio. Equity securities are not insured or guaranteed investments and are affected by market interest rates and stock market fluctuations. Such investments are classified as available-for-sale, carried at their fair value with fluctuations in the fair value of such investments, including temporary declines in value, directly affect our net capital position. Securities Portfolios. The following table sets forth the composition of our investment securities portfolios at the dates indicated. At December 31, 2017 2016 2015 Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value (In thousands) Available-for-sale: Equity securities $ 4,911 $ 5,701 $ 5,825 $ 6,660 $ 5,778 $ 6,495 Mortgage-backed securities: Federal National Mortgage Association 1,322,255 1,303,576 1,022,383 1,008,587 724,851 726,072 Federal Home Loan Mortgage Corporation 649,060 640,242 603,774 598,439 546,652 547,451 Government National Mortgage Association 39,577 38,208 47,538 46,747 24,841 24,679 Total mortgage-backed securities available for sale 2,010,892 1,982,026 1,673,695 1,653,773 1,296,344 1,298,202 Total available-for-sale securities $2,015,803 $1,987,727 $1,679,520 $1,660,433 $1,302,122 $1,304,697 Held-to-maturity: Debt securities: Government sponsored enterprises $ 43,281 $ 42,596 $ 2,128 $ 2,140 $ 4,232 $ 4,243 Municipal bonds 40,595 41,846 37,978 39,493 43,058 44,365 Corporate and other debt securities 48,087 86,294 44,092 84,245 35,113 77,817 Total debt securities 131,963 170,736 84,198 125,878 82,403 126,425 Mortgage-backed securities: Federal National Mortgage Association 1,101,093 1,091,600 1,244,833 1,233,079 1,226,140 1,227,325 Federal Home Loan Mortgage Corporation 473,345 468,436 410,133 407,424 514,339 513,470 Government National Mortgage Association 90,220 89,353 16,392 16,420 21,330 21,455 Federal housing authorities — — — — 11 11 Total mortgage-backed securities held-to-maturity 1,664,658 1,649,389 1,671,358 1,656,923 1,761,820 1,762,261 Total held-to-maturity securities $1,796,621 $1,820,125 $1,755,556 $1,782,801 $1,844,223 $1,888,686 Total securities $3,812,424 $3,807,852 $3,435,076 $3,443,234 $3,146,345 $3,193,383 17