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Investments
 6 Months Ended
Jun. 30, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments INVESTMENTS

The following table presents the amortized cost, gross unrealized gains and losses, allowance of credit losses and fair value of securities available for sale and held to maturity:
 
 
June 30, 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
$
9,966

 
$
275

 
$
—

 
$
—

 
$
10,241

Obligations of states and political subdivisions
245,961

 
8,450

 
(133
)
 
—

 
254,278

Agency mortgage-backed securities
693,082

 
27,915

 
(6
)
 
—

 
720,991

U.S. Treasury bills
9,975

 
591

 
—

 
—

 
10,566

Corporate debt securities
2,000

 
28

 
—

 
—

 
2,028

          Total securities available for sale
$
960,984

 
$
37,259

 
$
(139
)
 
$
—

 
$
998,104

Held-to-maturity securities:
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
96,547

 
$
336

 
$
(122
)
 
$
(16
)
 
$
96,745

Agency mortgage-backed securities
127,353

 
2,469

 
(28
)
 
—

 
129,794

Corporate debt securities
122,536

 
7,693

 
—

 
(629
)
 
129,600

          Total securities held-to-maturity
$
346,436

 
$
10,498


$
(150
)

$
(645
)
 
$
356,139

Less: Allowance for credit losses
645

 
 
 
 
 
 
 
 
          Total securities held-to-maturity, net
$
345,791

 
 
 
 
 
 
 
 


 
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



During the second quarter of 2020, the Company transferred municipal securities and agency mortgage-backed securities with a book value of $163.6 million and fair value of $175.1 million from available-for-sale to held-to-maturity. The Company believes the held- to-maturity category is more consistent with the Company’s intent for these securities. The transfer of securities was made at fair value at the time of transfer. The unamortized portion of the $11.5 million unrealized holding gain at the time of transfer is retained in accumulated other comprehensive income and in the carrying value of held-to-maturity securities. Such amounts are amortized over the remaining life of the securities.

At June 30, 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 $449.9 million and $484.8 million at June 30, 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 June 30, 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
$
2,313

 
$
2,345

 
$
—

 
$
—

Due after one year through five years
25,981

 
27,058

 
10,207

 
10,597

Due after five years through ten years
9,455

 
9,915

 
126,285

 
133,206

Due after ten years
230,153

 
237,795

 
82,591

 
82,542

Agency mortgage-backed securities
693,082

 
720,991

 
127,353

 
129,794

 
$
960,984

 
$
998,104


$
346,436


$
356,139



The following table represents a summary of available-for-sale investment securities that had an unrealized loss:
 
June 30, 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
$
33,821

 
$
133

 
$
—

 
$
—

 
$
33,821

 
$
133

Agency mortgage-backed securities
8,366

 
5

 
66

 
1

 
8,432

 
6

 
$
42,187

 
$
138


$
66


$
1


$
42,253


$
139

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 June 30, 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 June 30, 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 $3.6 million at June 30, 2020 and is excluded from the estimate of credit losses.

Accrued interest receivable on held-to-maturity debt securities totaled $2.3 million at June 30, 2020 and is excluded from the estimate of expected credit losses. The estimate of expected credit losses considers historical credit loss information adjusted for current conditions and reasonable and supportable forecasts. At June 30, 2020, the ACL on held-to-maturity securities was $0.6 million.