Investments

3 Months Ended

Mar. 31, 2020

Investments, Debt and Equity Securities [Abstract]

Investments

INVESTMENTS

The following table presents the amortized cost, gross unrealized gains and losses and fair value of securities available for sale and held to maturity:

 

	March 31, 2020
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Allowance for Credit Losses			Fair Value
Available-for-sale securities:
Obligations of U.S. Government-sponsored enterprises	$	9,960	$	270	$	—		$	—		$	10,230
Obligations of states and political subdivisions	243,863		10,373		(205		)	—			254,031
Agency mortgage-backed securities	863,698		23,465		(496		)	—			886,667
U.S. Treasury bills	9,973		613		—			—			10,586
Total securities available for sale	$	1,127,494	$	34,721	$	(701	)	$	—		$	1,161,514
Held-to-maturity securities:
Obligations of states and political subdivisions	$	11,688	$	153	$	—		$	(1	)	$	11,840
Agency mortgage-backed securities	44,720		1,924		—			—			46,644
Corporate debt securities	122,827		162		(3,090		)	(302		)	119,597
Total securities held-to-maturity	$	179,235	$	2,239	$	(3,090	)	$	(303	)	$	178,081
Less: Allowance for credit losses	303
Total securities held-to-maturity, net	$	178,932

	December 31, 2019
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale securities:
Obligations of U.S. Government-sponsored enterprises	$	9,954	$	92	$	—		$	10,046
Obligations of states and political subdivisions	207,269		6,118		(363		)	213,024
Agency mortgage-backed securities	888,129		15,083		(1,191		)	902,021
U.S. Treasury Bills	$	9,971	$	255	$	—		$	10,226
Total securities available for sale	$	1,115,323	$	21,548	$	(1,554	)	$	1,135,317
Held-to-maturity securities:
Obligations of states and political subdivisions	$	11,704	$	170	$	—		$	11,874
Agency mortgage-backed securities	46,346		675		—			47,021
Corporate debt securities	123,116		128		(200		)	123,044
Total securities held to maturity	$	181,166	$	973	$	(200	)	$	181,939

At March 31, 2020 and December 31, 2019, there were no holdings of securities of any one issuer in an amount greater than 10% of shareholders’ equity, other than U.S. Government agencies and sponsored enterprises. The agency mortgage-backed securities are all issued by U.S. Government agencies and sponsored enterprises. Securities having a fair value of $431.7 million and $484.8 million at March 31, 2020 and December 31, 2019, respectively, were pledged as collateral to secure deposits of public institutions and for other purposes as required by law or contract provisions.

The amortized cost and estimated fair value of debt securities at March 31, 2020, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The weighted average life of the mortgage-backed securities is approximately 3 years.

	Available for sale				Held to maturity
(in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,018	$	2,054	$	—	$	—
Due after one year through five years	26,301		27,369		4,444		4,503
Due after five years through ten years	10,205		10,576		130,071		126,934
Due after ten years	225,272		234,848		—		—
Agency mortgage-backed securities	863,698		886,667		44,720		46,644
	$	1,127,494	$	1,161,514	$	179,235	$	178,081

The following table represents a summary of available-for-sale investment securities that had an unrealized loss:

	March 31, 2020
	Less than 12 months				12 months or more				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	$	10,475	$	205	$	—	$	—	$	10,475	$	205
Agency mortgage-backed securities	82,614		415		5,198		81		87,812		496
	$	93,089	$	620	$	5,198	$	81	$	98,287	$	701
The following table represents a summary of investment securities that had an unrealized loss:
	December 31, 2019
	Less than 12 months				12 months or more				Total
(in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of states and political subdivisions	56,327		363		—		—		56,327		363
Agency mortgage-backed securities	131,693		756		41,491		435		173,184		1,191
Corporate debt securities	67,964		200		—		—		67,964		200
	$	255,984	$	1,319	$	41,491	$	435	$	297,475	$	1,754

The unrealized losses at both March 31, 2020 and December 31, 2019, were primarily attributable to changes in market interest rates since the securities were purchased. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include among other considerations (1) the present value of the cash flows expected to be collected compared to the amortized cost of the security, (2) duration and magnitude of the decline in value, (3) the financial condition of the issuer or issuers, (4) structure of the security, and (5) the intent to sell the security or whether it is more likely than not the Company would be required to sell the security before its anticipated recovery in market value. At March 31, 2020, management performed its quarterly analysis of all securities with an unrealized loss and concluded no individual securities were other-than-temporarily impaired. Accrued interest receivable on available-for-sale debt securities totaled $4.5 million at March 31, 2020 and is excluded from the estimate of credit losses.

Accrued interest receivable on held-to-maturity debt securities totaled $1.4 million at March 31, 2020 and is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information adjusted for current conditions and reasonable and supportable forecasts. At March 31, 2020, the ACL on held-to-maturity securities was $0.3 million.