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Investment Securities
 9 Months Ended
Sep. 30, 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:
 
September 30, 2020
(Dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
279,903

 
$
206

 
$
(1
)
 
$
280,108

U.S. Government agencies
172,951

 
5,715

 
—

 
178,666

Municipal
150,333

 
3,996

 
(134
)
 
154,195

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
106,764

 
455

 
(4,110
)
 
103,109

Other
1,000

 
26

 
—

 
1,026

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
2,121,423

 
94,543

 
(11
)
 
2,215,955

Collateralized mortgage obligations
13,036

 
365

 
(1
)
 
13,400

Total available-for-sale securities
$
2,845,410

 
$
105,306

 
$
(4,257
)
 
$
2,946,459

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
349,415

 
$
4,396

 
$
—

 
$
353,811

Municipal
210,915

 
11,339

 
(118
)
 
222,136

Total held-to-maturity securities
$
560,330

 
$
15,735

 
$
(118
)
 
$
575,947

Less: Allowance for credit losses (2)
(63
)
 
 
 
 
 
 
Held-to-maturity securities, net of allowance for credit losses
$
560,267

 
 
 
 
 
 
Equity securities with readily determinable fair value
$
53,250

 
$
1,537

 
$
(389
)
 
$
54,398

(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.

 
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

(1)
Consisting entirely of residential mortgage-backed securities, none of which are subprime.

 
September 30, 2019
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
(Dollars in thousands)
 
 
 
Available-for-sale securities
 
 
 
 
 
 
 
U.S. Treasury
$
220,756

 
$
914

 
$
—

 
$
221,670

U.S. Government agencies
221,891

 
3,569

 
(1
)
 
225,459

Municipal
141,311

 
4,896

 
(103
)
 
146,104

Corporate notes:
 
 
 
 
 
 
 
Financial issuers
97,058

 
126

 
(4,233
)
 
92,951

Other
1,000

 
53

 
—

 
1,053

Mortgage-backed: (1)
 
 
 
 
 
 
 
Mortgage-backed securities
1,529,749

 
18,682

 
(1,762
)
 
1,546,669

Collateralized mortgage obligations
35,880

 
370

 
(97
)
 
36,153

Total available-for-sale securities
$
2,247,645

 
$
28,610

 
$
(6,196
)
 
$
2,270,059

Held-to-maturity securities
 
 
 
 
 
 
 
U.S. Government agencies
$
859,011

 
$
3,310

 
$
(2,187
)
 
$
860,134

Municipal
236,791

 
8,211

 
(233
)
 
244,769

Total held-to-maturity securities
$
1,095,802

 
$
11,521

 
$
(2,420
)
 
$
1,104,903

Equity securities with readily determinable fair value
$
43,941

 
$
2,794

 
$
(649
)
 
$
46,086

(1)
Consisting entirely of residential mortgage-backed securities, none of which are subprime.

Equity securities without readily determinable fair values totaled $30.0 million as of September 30, 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 monitors its equity investments without readily determinable fair values to identify potential transactions that may indicate an observable price change in orderly transactions for the identical or a similar investment of the same issuer, requiring adjustment to its carrying amount. The Company recorded no upward adjustments related to such observable price changes for the three months ended September 30, 2020 and a $393,000 upward adjustment for the nine months ended September 30, 2020. No downward adjustments on such securities were recorded for the three and nine month periods ended September 30, 2020. 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. During the three months ended September 30, 2020, the Company recorded
no impairment of equity securities without readily determinable fair values and $2.1 million of impairment during the nine month period ending September 30, 2020.

The following table presents the portion of the Company’s available-for-sale investment securities portfolios that have gross unrealized losses, reflecting the length of time that individual securities have been in a continuous unrealized loss position at September 30, 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
$
109,968

 
$
(1
)
 
$
—

 
$
—

 
$
109,968

 
$
(1
)
U.S. Government agencies
—

 
—

 
—

 
—

 
—

 
—

Municipal
38,446

 
(132
)
 
113

 
(2
)
 
38,559

 
(134
)
Corporate notes:
 
 
 
 
 
 
 
 
 
 
 
Financial issuers
—

 
—

 
69,869

 
(4,110
)
 
69,869

 
(4,110
)
Other
—

 
—

 
—

 
—

 
—

 
—

Mortgage-backed:
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
989

 
(10
)
 
62

 
(1
)
 
1,051

 
(11
)
Collateralized mortgage obligations
—

 
—

 
348

 
(1
)
 
348

 
(1
)
Total available-for-sale securities
$
149,403

 
$
(143
)
 
$
70,392

 
$
(4,114
)
 
$
219,795

 
$
(4,257
)


The Company conducts a regular assessment of its investment securities to determine whether securities are experiencing credit losses. Factors for consideration include 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 September 30, 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 September 30, 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 September 30,
 
Nine months ended September 30,
(Dollars in thousands)
2020
 
2019
 
2020
 
2019
Realized gains on investment securities
$
78

 
$
801

 
$
725

 
$
1,348

Realized losses on investment securities
(28
)
 
(5
)
 
(525
)
 
(96
)
Net realized gains on investment securities
50

 
796

 
200

 
1,252

Unrealized gains on equity securities with readily determinable fair value
471

 
165

 
2,118

 
2,299

Unrealized losses on equity securities with readily determinable fair value
(110
)
 
(251
)
 
(3,766
)
 
(460
)
Net unrealized gains (losses) on equity securities with readily determinable fair value
361

 
(86
)
 
(1,648
)
 
1,839

Upward adjustments of equity securities without readily determinable fair values
—

 
—

 
393

 
110

Downward adjustments of equity securities without readily determinable fair values
—

 
—

 
—

 
—

Impairment of equity securities without readily determinable fair values
—

 
—

 
(2,085
)
 
(263
)
Adjustment and impairment, net, of equity securities without readily determinable fair values
—

 
—

 
(1,692
)
 
(153
)
Other than temporary impairment charges (1)
—

 
—

 
—

 
—

Gains (losses) on investment securities, net
$
411

 
$
710

 
$
(3,140
)
 
$
2,938

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

 
$
238,008

 
$
502,676

 
$
905,926

Proceeds from sales of equity securities with readily determinable fair value
2,500

 
5,200

 
6,530

 
16,200

Proceeds from sales and capital distributions of equity securities without readily determinable fair value
1,247

 
852

 
1,691

 
1,461


(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 September 30, 2020, December 31, 2019 and September 30, 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:
 
September 30, 2020
 
December 31, 2019
 
September 30, 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
$
338,702

 
$
338,954

 
$
183,996

 
$
185,035

 
$
201,572

 
$
201,866

Due in one to five years
76,843

 
78,843

 
62,679

 
64,064

 
141,319

 
143,804

Due in five to ten years
108,688

 
105,968

 
186,683

 
184,666

 
200,118

 
198,250

Due after ten years
186,718

 
193,339

 
292,308

 
292,924

 
139,007

 
143,317

Mortgage-backed
2,134,459

 
2,229,355

 
2,361,158

 
2,379,525

 
1,565,629

 
1,582,822

Total available-for-sale securities
$
2,845,410

 
$
2,946,459

 
$
3,086,824

 
$
3,106,214

 
$
2,247,645

 
$
2,270,059

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
 
Due in one year or less
$
6,911

 
$
6,942

 
$
6,061

 
$
6,074

 
$
7,748

 
$
7,749

Due in one to five years
21,392

 
21,999

 
28,697

 
28,986

 
28,138

 
28,335

Due in five to ten years
144,468

 
151,175

 
213,104

 
216,957

 
231,021

 
235,138

Due after ten years
387,559

 
395,831

 
886,538

 
886,379

 
828,895

 
833,681

Total held-to-maturity securities
$
560,330

 
$
575,947

 
$
1,134,400

 
$
1,138,396

 
$
1,095,802

 
$
1,104,903

Less: Allowance for credit losses(1)
(63
)
 
 
 
 
 
 
 
 
 
 
Held-to-maturity securities, net of allowance for credit losses
$
560,267

 
 
 
 
 
 
 
 
 
 

(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 as of September 30, 2020 related to lifetime expected credit losses on held-to-maturity investment securities.

Securities having a carrying value of $3.0 billion at September 30, 2020 as well as securities having a carrying value of $1.7 billion and $1.9 billion at December 31, 2019 and September 30, 2019, respectively, were pledged as collateral for public deposits, trust deposits, Federal Home Loan Bank ("FHLB") advances and available lines of credit, securities sold under repurchase agreements and derivatives. At September 30, 2020, there were no securities of a single issuer, other than U.S. Government-sponsored agency securities, which exceeded 10% of shareholders’ equity.