Investment Securities Available-for-Sale

12 Months Ended

Dec. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities Available-for-Sale

Note 3 - Investment Securities Available-for-Sale

 Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:

			Gross		Gross		Estimated
December 31, 2017	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. agency securities	$	198,115	$	283	$	2,414	$	195,984
Residential mortgage backed securities	322,067		187		4,418		317,836
Municipal bonds	60,976		1,295		214		62,057
Corporate bonds	13,010		163		—		13,173
Other equity investments	218		—		—		218
	$	594,386	$	1,928	$	7,046	$	589,268

			Gross		Gross		Estimated
December 31, 2016	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. agency securities	$	107,425	$	519	$	1,802	$	106,142
Residential mortgage backed securities	329,606		324		3,691		326,239
Municipal bonds	94,607		1,723		400		95,930
Corporate bonds	9,508		82		11		9,579
Other equity investments	218		—		—		218
	$	541,364	$	2,648	$	5,904	$	538,108

In addition, at December 31, 2017 and December 31, 2016, the Company held $36.3 million and $21.6 million in equity securities in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost.

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.6 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of December 31, 2017 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity.

Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2017 and 2016 are as follows:

		Less than				12 Months
		12 Months				or Greater				Total
		Estimated				Estimated				Estimated
December 31, 2017	Number of	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Securities	Value		Losses		Value		Losses		Value		Losses
U. S. agency securities	38	$	102,264	$	1,073	$	55,093	$	1,341	$	157,357	$	2,414
Residential mortgage backed securities	137	152,350		1,306		147,953		3,112		300,303		4,418
Municipal bonds	8	17,446		214		—		—		17,446		214
	183	$	272,060	$	2,593	$	203,046	$	4,453	$	475,106	$	7,046

		Less than				12 Months
		12 Months				or Greater				Total
		Estimated				Estimated				Estimated
December 31, 2016	Number of	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Securities	Value		Losses		Value		Losses		Value		Losses
U. S. agency securities	27	$	88,991	$	1,764	$	3,768	$	38	$	92,759	$	1,802
Residential mortgage backed securities	112	232,347		3,110		19,402		581		251,749		3,691
Municipal bonds	16	34,743		400		—		—		34,743		400
Corporate bonds	2	4,998		11		—		—		4,998		11
	157	$	361,079	$	5,285	$	23,170	$	619	$	384,249	$	5,904

The amortized cost and estimated fair value of investments available-for-sale at December 31, 2017 and 2016 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2017				December 31, 2016
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. agency securities maturing:
One year or less	$	109,893	$	108,198	$	83,885	$	82,548
After one year through five years	74,106		73,916		20,736		20,897
Five years through ten years	14,116		13,870		2,804		2,697
Residential mortgage backed securities	322,067		317,836		329,606		326,239
Municipal bonds maturing:
One year or less	5,068		5,171		1,056		1,070
After one year through five years	19,405		19,879		45,808		46,865
Five years through ten years	35,432		35,846		46,668		46,839
After ten years	1,071		1,161		1,075		1,156
Corporate bonds
After one year through five years	11,510		11,673		8,008		8,079
After ten years	1,500		1,500		1,500		1,500
Other equity investments	218		218		218		218
	$	594,386	$	589,268	$	541,364	$	538,108

In 2017, gross realized gains on sales of investment securities were $796 thousand and gross realized losses on sales of investment securities were $254 thousand.  In 2016, gross realized gains on sales of investment securities were $1.4 million and gross realized losses on sales of investment securities were $188 thousand.  In 2015, gross realized gains on sales of investment securities were $2.7 million and gross realized losses on sales of investment securities were $475 thousand.

Proceeds from sales and calls of investment securities for 2017, 2016 and 2015 were $73.1 million, $94.3 million, and $111.7 million, respectively.

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at December 31, 2017 was $465.4 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of December 31, 2017 and December 31, 2016, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity.