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Investment Securities
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Investment Securities Investment Securities

The following tables are a summary of the investment securities portfolios as of the dates shown:
 
March 31, 2020
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
120,404

 
$
1,266

 
$
—

 
$
121,670

U.S. Government agencies
362,969

 
5,674

 
—

 
368,643

Municipal
143,273

 
3,571

 
(235
)
 
146,609

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
111,718

 
90

 
(11,821
)
 
99,987

Other
1,000

 
31

 
—

 
1,031

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
2,697,264

 
111,275

 
(4
)
 
2,808,535

Collateralized mortgage obligations
24,077

 
416

 
(9
)
 
24,484

Total available-for-sale securities
$
3,460,705

 
$
122,323

 
$
(12,069
)
 
$
3,570,959

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
646,976

 
$
5,996

 
$
(4
)
 
$
652,968

Municipal
218,470

 
7,909

 
(155
)
 
226,224

Total held-to-maturity securities
$
865,446

 
$
13,905

 
$
(159
)
 
$
879,192

Less: Allowance for credit losses (2)
(70
)
 
 
 
 
 
 
Held-to-maturity securities, net of allowance for credit losses
$
865,376

 
 
 
 
 
 
Equity securities with readily determinable fair value
$
48,060

 
$
781

 
$
(1,531
)
 
$
47,310

 
December 31, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
(Dollars in thousands)
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
120,275

 
$
813

 
$
—

 
$
121,088

U.S. Government agencies
365,639

 
3,557

 
(3,754
)
 
365,442

Municipal
141,701

 
3,785

 
(168
)
 
145,318

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
97,051

 
761

 
(4,002
)
 
93,810

Other
1,000

 
31

 
—

 
1,031

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
2,328,383

 
21,240

 
(3,013
)
 
2,346,610

Collateralized mortgage obligations
32,775

 
280

 
(140
)
 
32,915

Total available-for-sale securities
$
3,086,824

 
$
30,467

 
$
(11,077
)
 
$
3,106,214

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
902,974

 
$
2,159

 
$
(5,460
)
 
$
899,673

Municipal
231,426

 
7,536

 
(239
)
 
238,723

Total held-to-maturity securities
$
1,134,400

 
$
9,695

 
$
(5,699
)
 
$
1,138,396

Equity securities with readily determinable fair value
$
48,044

 
$
3,511

 
$
(715
)
 
$
50,840

 
March 31, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
(Dollars in thousands)
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
126,236

 
$
579

 
$
(97
)
 
$
126,718

U.S. Government agencies
129,258

 
1,431

 
(2
)
 
130,687

Municipal
132,870

 
3,701

 
(218
)
 
136,353

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
97,072

 
63

 
(4,802
)
 
92,333

Other
1,000

 
—

 
—

 
1,000

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
1,677,903

 
6,041

 
(27,662
)
 
1,656,282

Collateralized mortgage obligations
42,514

 
293

 
(398
)
 
42,409

Total available-for-sale securities
$
2,206,853

 
$
12,108

 
$
(33,179
)
 
$
2,185,782

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
806,293

 
$
1,945

 
$
(14,580
)
 
$
793,658

Municipal
245,249

 
3,669

 
(881
)
 
248,037

Total held-to-maturity securities
$
1,051,542

 
$
5,614

 
$
(15,461
)
 
$
1,041,695

Equity securities with readily determinable fair value
$
45,915

 
$
2,708

 
$
(970
)
 
$
47,653

(1)
Consisting entirely of residential mortgage-backed securities, none of which are subprime.
(2)
As of January 1, 2020, the Company adopted ASU 2016-13 related to credit losses on financial assets held at amortized cost. As a result of such adoption, the Company measured an allowance for credit losses related to lifetime expected credit losses on held-to-maturity investment securities.

Equity securities without readily determinable fair values totaled $29.1 million as of March 31, 2020. Equity securities without readily determinable fair values are included as part of accrued interest receivable and other assets in the Company's Consolidated Statements of Condition. The Company recorded $393,000 of upward adjustments and no downward adjustments on such securities in the first quarter of 2020 related to observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company monitors its equity investments without readily determinable fair values to identify potential transactions that may indicate an observable price change requiring adjustment to its carrying amount. During the three months ended March 31, 2020, the Company recorded $1.7 million of impairment of equity securities without readily determinable fair values. The Company conducts a quarterly assessment of its equity securities without readily determinable fair values to determine
whether impairment exists in such securities, considering, among other factors, the nature of the securities, financial condition of the issuer and expected future cash flows.

The following table presents the portion of the Company’s available-for-sale investment securities portfolios which has gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at March 31, 2020:
 
Continuous unrealized
losses existing for
less than 12 months
 
Continuous unrealized
losses existing for
greater than 12 months
 
Total
(Dollars in thousands)
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

U.S. Government agencies
—

 
—

 
—

 
—

 
—

 
—

Municipal
39,637

 
(207
)
 
1,006

 
(28
)
 
40,643

 
(235
)
Corporate notes:
 
 
 
 
 
 
 
 
 
 
 
Financial issuers
35,154

 
(1,518
)
 
56,681

 
(10,303
)
 
91,835

 
(11,821
)
Other
—

 
—

 
—

 
—

 
—

 
—

Mortgage-backed:
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
1,007

 
(4
)
 
—

 
—

 
1,007

 
(4
)
Collateralized mortgage obligations
1,046

 
(9
)
 
—

 
—

 
1,046

 
(9
)
Total available-for-sale securities
$
76,844

 
$
(1,738
)
 
$
57,687

 
$
(10,331
)
 
$
134,531

 
$
(12,069
)


The Company conducts a regular assessment of its investment securities to determine whether securities are experiencing credit losses considering, among other factors, the nature of the securities, credit ratings or financial condition of the issuer, the extent of the unrealized loss, expected cash flows, market conditions and the Company’s ability to hold the securities through the anticipated recovery period.

The Company does not consider available-for-sale securities with unrealized losses at March 31, 2020 to be experiencing credit losses and recognized no resulting allowance for credit losses for such individually assessed credit losses. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost bases, which may be the maturity dates of the securities. The unrealized losses within each category have occurred as a result of changes in interest rates, market spreads and market conditions subsequent to purchase. Available-for-sale securities with continuous unrealized losses existing for more than twelve months were primarily corporate notes.

See Note 7—Allowance for Credit Losses for further discussion regarding any credit losses associated with held-to-maturity securities at March 31, 2020.

The following table provides information as to the amount of gross gains and losses, adjustments and impairment on investment securities recognized in earnings and proceeds received through the sale or call of investment securities:
 
Three months ended March 31,
(Dollars in thousands)
2020
 
2019
Realized gains on investment securities
$
496

 
$
17

Realized losses on investment securities
(5
)
 
(84
)
Net realized gains on investment securities
491

 
$
(67
)
Unrealized gains on equity securities with readily determinable fair value
—

 
1,431

Unrealized losses on equity securities with readily determinable fair value
(3,546
)
 
—

Net unrealized (losses) gains on equity securities with readily determinable fair value
(3,546
)
 
1,431

Upward adjustments of equity securities without readily determinable fair values
393

 
—

Downward adjustments of equity securities without readily determinable fair values
—

 
—

Impairment of equity securities without readily determinable fair values
(1,697
)
 
—

Adjustment and impairment, net, of equity securities without readily determinable fair values
(1,304
)
 
—

Other than temporary impairment charges (1)
—

 
—

(Losses) gains on investment securities, net
$
(4,359
)
 
$
1,364

Proceeds from sales of available-for-sale securities(2)
$
491

 
$
263,456

Proceeds from sales of equity securities with readily determinable fair value
30

 
—

Proceeds from sales and capital distributions of equity securities without readily determinable fair value
288

 
220


(1)
Applicable to periods prior to the adoption of ASU 2016-13.
(2)
Includes proceeds from available-for-sale securities sold in accordance with written covered call options sold to a third party.

The amortized cost and fair value of available-for-sale and held-to-maturity investment securities as of March 31, 2020, December 31, 2019 and March 31, 2019, by contractual maturity, are shown in the following table. Contractual maturities may differ from actual maturities as borrowers may have the right to call or repay obligations with or without call or prepayment penalties. Mortgage-backed securities are not included in the maturity categories in the following maturity summary as actual maturities may differ from contractual maturities because the underlying mortgages may be called or prepaid without penalties:
 
March 31, 2020
 
December 31, 2019
 
March 31, 2019
(Dollars in thousands)
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
$
186,538

 
$
187,789

 
$
183,996

 
$
185,035

 
$
68,996

 
$
69,060

Due in one to five years
70,812

 
71,825

 
62,679

 
64,064

 
171,058

 
172,673

Due in five to ten years
174,262

 
164,479

 
186,683

 
184,666

 
116,901

 
113,825

Due after ten years
307,752

 
313,847

 
292,308

 
292,924

 
129,481

 
131,533

Mortgage-backed
2,721,341

 
2,833,019

 
2,361,158

 
2,379,525

 
1,720,417

 
1,698,691

Total available-for-sale securities
$
3,460,705

 
$
3,570,959

 
$
3,086,824

 
$
3,106,214

 
$
2,206,853

 
$
2,185,782

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
$
5,310

 
$
5,333

 
$
6,061

 
$
6,074

 
$
9,134

 
$
9,112

Due in one to five years
23,801

 
24,158

 
28,697

 
28,986

 
27,477

 
27,539

Due in five to ten years
143,783

 
148,746

 
213,104

 
216,957

 
301,971

 
302,066

Due after ten years
692,552

 
700,955

 
886,538

 
886,379

 
712,960

 
702,978

Total held-to-maturity securities
$
865,446

 
$
879,192

 
$
1,134,400

 
$
1,138,396

 
$
1,051,542

 
$
1,041,695

Less: Allowance for credit losses(1)
(70
)
 
 
 
 
 
 
 
 
 
 
Held-to-maturity securities, net of allowance for credit losses
$
865,376

 
 
 
 
 
 
 
 
 
 

(1)
As of January 1, 2020, the Company adopted ASU 2016-13 related to credit losses on financial assets held at amortized cost. As a result of such adoption, the Company measured an allowance for credit losses in the three months ended March 31, 2020 related to lifetime expected credit losses on held-to-maturity investment securities.

Securities having a fair value of $1.5 billion at March 31, 2020 as well as securities having a fair value of $1.7 billion and $1.7 billion at December 31, 2019 and March 31, 2019, respectively, were pledged as collateral for public deposits, trust deposits, Federal Home Loan Bank ("FHLB") advances, securities sold under repurchase agreements and derivatives. At March 31, 2020, there were no securities of a single issuer, other than U.S. Government-sponsored agency securities, which exceeded 10% of shareholders’ equity.