Investments

6 Months Ended

Jun. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The amortized cost and fair value of securities available for sale are as follows:

	June 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Mortgage-backed securities	$	233,210	$	1,196	$	(1,445	)	$	232,961
Utah Housing Corporation bonds	21,136		181		(70		)	21,247
U.S. government-sponsored enterprises	77,173		160		—			77,333
Total	$	331,519	$	1,537	$	(1,515	)	$	331,541
	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Available for sale:
Mortgage-backed securities	$	159,937	$	155	$	(5,517	)	$	154,575
Utah Housing Corporation bonds	22,388		23		(741		)	21,670
Total	$	182,325	$	178	$	(6,258	)	$	176,245

The following table summarizes the amount of gross unrealized losses for our available for sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:

	Less than 12 months					12 months or more					Total
	Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value
As of June 30, 2019:
Mortgage-backed securities	$	(6	)	$	10,815	$	(1,439	)	$	101,969	$	(1,445	)	$	112,784
Utah Housing Corporation bonds	—			—		(70		)	11,955		(70		)	11,955
U.S. government-sponsored enterprises	—			—		—			—		—			—
Total	$	(6	)	$	10,815	$	(1,509	)	$	113,924	$	(1,515	)	$	124,739
As of December 31, 2018:
Mortgage-backed securities	$	(228	)	$	16,948	$	(5,289	)	$	125,537	$	(5,517	)	$	142,485
Utah Housing Corporation bonds	—			—		(741		)	16,647		(741		)	16,647
Total	$	(228	)	$	16,948	$	(6,030	)	$	142,184	$	(6,258	)	$	159,132

Our investment portfolio is comprised primarily of mortgage-backed securities issued by Ginnie Mae, Fannie Mae and Freddie Mac, with amortized costs of $62 million, $110 million, and $60 million, respectively, at June 30, 2019. We own these securities to meet our requirements under the Community Reinvestment Act. As of June 30, 2019, 47 of the 101 separate mortgage-backed securities in our investment portfolio had unrealized losses, and 19 of the 47 securities in a net loss position were issued under Ginnie Mae programs that carry a full faith and credit guarantee from the U.S. Government. The remaining securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. We have the ability and the intent to hold each of these securities for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. As of December 31, 2018, 74 of the 86 separate mortgage-backed securities in our investment portfolio had unrealized losses, and 34 of the 74 securities in a net loss position were issued under Ginnie Mae programs that carry a full faith and credit guarantee from the U.S. Government. The remainder carried a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively.

We also invest in Utah Housing Corporation bonds for the purpose of complying with the Community Reinvestment Act. These bonds are rated Aa3 by Moody’s Investors Service. As of June 30, 2019, one of the three separate bonds was in a net loss position. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security.

In the second quarter of 2018, we elected to sell nine securities totaling $41 million to better align the portfolio with the Community Reinvestment Act requirements, and we recognized a $2 million loss upon the sale of those securities.

Beginning in the second quarter of 2019, we began investing in U.S. government-sponsored enterprise securities issued by the Federal Home Loan Bank (“FHLB”) and Freddie Mac. These bonds are rated AA+ by Moody’s Investors Services and are currently in an unrealized gain position.

As of June 30, 2019, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.

Year of Maturity	Amortized Cost		Estimated Fair Value
2020	$	39,484	$	39,545
2021	37,689		37,787
2038	262		282
2039	2,907		3,065
2042	8,021		7,800
2043	13,727		13,776
2044	20,078		20,090
2045	22,915		22,728
2046	35,609		35,195
2047	53,183		52,759
2048	15,159		15,511
2049	82,485		83,003
Total	$	331,519	$	331,541

The mortgage-backed securities have been pledged to the Federal Reserve Bank (the “FRB”) as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $233 million and $147 million par value of mortgage-backed securities pledged to this borrowing facility at June 30, 2019 and December 31, 2018, respectively, as discussed further in Note 6, “Borrowings.”