NYCB 2017 Annual Report

59 The following table presents a geographical analysis of our non-performing loans at December 31, 2017: (in thousands) New York $52,705 New Jersey 10,976 Maryland 6,200 Connecticut 1,781 Arizona 1,174 All other states 846 Total non-performing loans $73,682 Securities Securities represented $3.5 billion, or 7.2%, of total assets at the end of this December, as compared to $3.8 billion, or 7.8%, of total assets at December 31, 2016. During the second quarter of 2017, the Company repositioned its “Held -to- Maturity” securities portfolio by designating the entire portfolio as “Available -for- Sale.” In addition, it took advantage of favorable bond market conditions and sold approximately $521.0 million of securities, resulting in a pre-tax gain on sale of $26.9 million. We do not foresee designating securities purchases as “Held -to- Maturity” in the near future. At December 31, 2017, available-for-sale securities represented $3.5 billion and had an estimated weighted average life of 5.2 years. Included in the year-end amount were mortgage-related securities of $2.6 billion and other securities of $912.7 million. At the prior year-end, available-for-sale securities represented $104.3 million, or 2.7%, of total securities, and had an estimated weighted average life of 13.1 years. Mortgage-related securities accounted for $7.3 million of the year-end balance, with other securities accounting for the remaining $97.0 million. The investment policies of the Company and the Banks are established by the respective Boards of Directors and implemented by their respective Investment Committees, in concert with the respective Asset and Liability Management Committees. The Investment Committees generally meet quarterly or on an as-needed basis to review the portfolios and specific capital market transactions. In addition, the securities portfolios are reviewed monthly by the Boards of Directors as a whole. Furthermore, the policies guiding the Company’s and the Banks’ investments are reviewed at least annually by the respective Investment Committees, as well as by the respective Boards. While the policies permit investment in various types of liquid assets, neither the Company nor the Banks currently maintains a trading portfolio. Our general investment strategy is to purchase liquid investments with various maturities to ensure that our overall interest rate risk position stays within the required limits of our investment policies. We generally limit our investments to GSE obligations (defined as GSE certificates; GSE collateralized mortgage obligations, or “CMOs”; and GSE debentures) and U.S. Treasury obligations. At December 31, 2017 and 2016, GSE obligations and U.S. Treasury obligations together represented 94.4% and 93.0% of total securities, respectively. The remainder of the portfolio at those dates was comprised of corporate bonds, trust preferred securities, and municipal obligations. None of our securities investments are backed by subprime or Alt-A loans. Depending on management’s intent at the time of purchase, securities are classified as either “held to maturity” or “available for sale.” Held -to-maturity securities are securities that management has the positive intent to hold to maturity. In addition to generating cash flows from repayments, securities held to maturity are a source of earnings and serve as collateral for our wholesale borrowings. During the second quarter of 2017, the Company designated its entire securities portfolio as available-for-sale. Available-for-sale securities are securities that management intends to hold for an indefinite period of time. In addition to generating cash flows from sales and from repayments of principal and interest, such securities serve as a source of liquidity for future loan production, the reduction of higher-cost funding, and general operating activities. A decision to purchase or sell available-for-sale securities is based on economic conditions, including changes in interest rates, liquidity, and our asset and liability management strategy.