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Securities
 12 Months Ended
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity at December 31, 2019 and 2018 are as follows (in thousands):
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
At December 31, 2019
 
 
 
 
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
149,120

 
$
1,408

 
$
(93
)
 
$
150,435

State and municipal obligations
 
25

 
—

 
—

 
25

Total investment securities
 
149,145

 
1,408

 
(93
)
 
150,460

Mortgage-backed securities - FNMA
 
495

 
5

 
—

 
500

Total debt securities available-for-sale
 
$
149,640

 
$
1,413

 
$
(93
)
 
$
150,960

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
4,984

 
$
14

 
$
—

 
$
4,998

State and municipal obligations
 
124,430

 
1,537

 
(208
)
 
125,759

Corporate debt securities
 
79,547

 
833

 
(2,421
)
 
77,959

Total investment securities
 
208,961

 
2,384

 
(2,629
)
 
208,716

Mortgage-backed securities:
 
 
 
 
 
 
 
 
FHLMC
 
206,985

 
2,221

 
(524
)
 
208,682

FNMA
 
244,428

 
2,680

 
(493
)
 
246,615

GNMA
 
110,661

 
939

 
(212
)
 
111,388

SBA
 
1,940

 
—

 
(51
)
 
1,889

Total mortgage-backed securities
 
564,014

 
5,840

 
(1,280
)
 
568,574

Total debt securities held-to-maturity
 
$
772,975

 
$
8,224

 
$
(3,909
)
 
$
777,290

Total debt securities
 
$
922,615

 
$
9,637

 
$
(4,002
)
 
$
928,250

At December 31, 2018
 
 
 
 
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
 
$
100,524

 
$
163

 
$
(963
)
 
$
99,724

Mortgage-backed securities - FNMA
 
998

 
—

 
(5
)
 
993

Total debt securities available-for-sale
 
$
101,522

 
$
163

 
$
(968
)
 
$
100,717

Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
14,975

 
$
—

 
$
(130
)
 
$
14,845

State and municipal obligations
 
123,987

 
67

 
(1,697
)
 
122,357

Corporate debt securities
 
66,834

 
126

 
(4,984
)
 
61,976

Total investment securities
 
205,796

 
193

 
(6,811
)
 
199,178

Mortgage-backed securities:
 
 
 
 
 
 
 
 
FHLMC
 
237,703

 
159

 
(5,110
)
 
232,752

FNMA
 
277,266

 
753

 
(6,030
)
 
271,989

GNMA
 
127,611

 
198

 
(2,360
)
 
125,449

SBA
 
3,527

 
—

 
(80
)
 
3,447

Total mortgage-backed securities
 
646,107

 
1,110

 
(13,580
)
 
633,637

Total debt securities held-to-maturity
 
$
851,903

 
$
1,303

 
$
(20,391
)
 
$
832,815

Total debt securities
 
$
953,425

 
$
1,466

 
$
(21,359
)
 
$
933,532


 
During the third quarter 2013, the Bank transferred $536.0 million of previously designated available-for-sale debt securities to a held-to-maturity designation at estimated fair value. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer which continues to be reflected in accumulated other comprehensive loss on the consolidated balance sheet, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the debt securities held-to-maturity at December 31, 2019 and 2018 are as follows (in thousands):
 
 
December 31,
 
 
2019
 
2018
Amortized cost
 
$
772,975

 
$
851,903

Net loss on date of transfer from available-for-sale
 
(13,347
)
 
(13,347
)
Accretion of net unrealized loss on securities reclassified as held-to-maturity
 
9,245

 
8,254

Carrying value
 
$
768,873

 
$
846,810


Realized gains were $0 and $248,000 for the year ended December 31, 2019 and 2018, respectively.
The amortized cost and estimated fair value of investment securities at December 31, 2019 by contractual maturity, are shown below (in thousands). Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2019, corporate debt securities with an amortized cost and estimated fair value of $59.4 million and $57.4 million, respectively, were callable prior to the maturity date.
December 31, 2019
 
Amortized
Cost
 
Estimated
Fair  Value
Less than one year
 
$
69,635

 
$
69,723

Due after one year through five years
 
203,081

 
205,520

Due after five years through ten years
 
71,590

 
70,118

Due after ten years
 
13,800

 
13,815

 
 
$
358,106

 
$
359,176


Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.
The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $475.6 million and $563.1 million, at December 31, 2019 and 2018, respectively, including $81.4 million and $74.1 million at December 31, 2019 and 2018, respectively, pledged as collateral for securities sold under agreements to repurchase.
The estimated fair value and unrealized losses for debt securities available-for-sale and held-to-maturity at December 31, 2019 and December 31, 2018, segregated by the duration of the unrealized losses, are as follows (in thousands): 
 
 
As of December 31, 2019
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
 
$
25,021

 
$
(54
)
 
$
22,451

 
$
(39
)
 
$
47,472

 
$
(93
)
Total debt securities available-for-sale
 
25,021

 
(54
)
 
22,451

 
(39
)
 
47,472

 
(93
)
Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal obligations
 
7,308

 
(58
)
 
14,531

 
(150
)
 
21,839

 
(208
)
Corporate debt securities
 
9,727

 
(213
)
 
37,628

 
(2,208
)
 
47,355

 
(2,421
)
Total investment securities
 
17,035

 
(271
)
 
52,159

 
(2,358
)
 
69,194

 
(2,629
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
FHLMC
 
6,329

 
(29
)
 
38,641

 
(495
)
 
44,970

 
(524
)
FNMA
 
13,682

 
(59
)
 
38,568

 
(434
)
 
52,250

 
(493
)
GNMA
 
30,268

 
(93
)
 
19,828

 
(119
)
 
50,096

 
(212
)
SBA
 
—

 
—

 
1,889

 
(51
)
 
1,889

 
(51
)
Total mortgage-backed securities
 
50,279

 
(181
)
 
98,926

 
(1,099
)
 
149,205

 
(1,280
)
Total debt securities held-to-maturity
 
67,314

 
(452
)
 
151,085

 
(3,457
)
 
218,399

 
(3,909
)
Total debt securities
 
$
92,335

 
$
(506
)
 
$
173,536

 
$
(3,496
)
 
$
265,871

 
$
(4,002
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
 
$
985

 
$
(3
)
 
$
66,438

 
$
(960
)
 
$
67,423

 
$
(963
)
Mortgage-backed securities - FNMA
 
993

 
(5
)
 
—

 
—

 
993

 
(5
)
Total debt securities available-for-sale
 
1,978

 
(8
)
 
66,438

 
(960
)
 
68,416

 
(968
)
Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
—

 
—

 
14,845

 
(130
)
 
14,845

 
(130
)
State and municipal obligations
 
2,856

 
(4
)
 
106,073

 
(1,693
)
 
108,929

 
(1,697
)
Corporate debt securities
 
2,470

 
(21
)
 
43,059

 
(4,963
)
 
45,529

 
(4,984
)
Total investment securities
 
5,326

 
(25
)
 
163,977

 
(6,786
)
 
169,303

 
(6,811
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
FHLMC
 
46,615

 
(159
)
 
147,763

 
(4,951
)
 
194,378

 
(5,110
)
FNMA
 
27,594

 
(125
)
 
185,328

 
(5,905
)
 
212,922

 
(6,030
)
GNMA
 
35,221

 
(535
)
 
59,468

 
(1,825
)
 
94,689

 
(2,360
)
SBA
 
3,447

 
(80
)
 
—

 
—

 
3,447

 
(80
)
Total mortgage-backed securities
 
112,877

 
(899
)
 
392,559

 
(12,681
)
 
505,436

 
(13,580
)
Total debt securities held-to-maturity
 
118,203

 
(924
)
 
556,536

 
(19,467
)
 
674,739

 
(20,391
)
Total debt securities
 
$
120,181

 
$
(932
)
 
$
622,974

 
$
(20,427
)
 
$
743,155

 
$
(21,359
)

At December 31, 2019, the amortized cost, estimated fair value and credit rating of the individual corporate debt securities in an unrealized loss position for greater than one year are as follows (in thousands):
 
 
 
As of December 31, 2019
Security Description
 
Amortized
Cost
 
Estimated
Fair Value
 
Credit Rating
Moody’s/S&P
Chase Capital
 
$
10,000

 
$
9,632

 
Baa1/BBB-
Wells Fargo Capital
 
5,000

 
4,744

 
A1/BBB
Huntington Capital
 
5,000

 
4,500

 
Baa2/BB+
Keycorp Capital
 
5,000

 
4,625

 
Baa2/BB+
PNC Capital
 
5,000

 
4,700

 
Baa1/BBB-
State Street Capital
 
3,332

 
3,199

 
A3/BBB
SunTrust Capital
 
5,000

 
4,725

 
Not Rated/BBB-
Southern Company
 
1,504

 
1,503

 
Baa2/BBB+
 
 
$
39,836

 
$
37,628

 
 


At December 31, 2019, the estimated fair value of each of the above corporate debt securities was below cost. The Company concluded that these corporate debt securities were only temporarily impaired at December 31, 2019. In concluding that the impairments were only temporary, the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not intend to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. Historically, the Company has not utilized securities sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio.

The mortgage-backed securities are issued and guaranteed by either the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”), or the Small Business Administration (“SBA”), corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were only temporarily impaired at December 31, 2019.
State and municipal obligations are securities issued by state and local governments for various purposes. The Company is not aware of any information subsequent to the purchase of any state and municipal obligation that indicates an inability on the part of an issuer to meet all of its financial commitments. The weighted average credit rating of these securities is Aa/AA with no credit rating below A3/A-. The Company has the ability and stated intention to hold these securities to maturity at which time the Company expects to receive full repayment. Current unrealized losses are considered to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the securities. As a result, the Company concluded that these securities were only temporarily impaired as of December 31, 2019.