Securities

6 Months Ended

Jun. 30, 2020

Securities

Securities

4) Securities

The amortized cost and estimated fair value of securities were as follows for the periods indicated:

			Gross		Gross		Allowance		Estimated
	Amortized		Unrealized		Unrealized		for Credit		Fair
June 30, 2020	Cost		Gains		(Losses)		Losses		Value
	(Dollars in thousands)
Securities available-for-sale:
Agency mortgage-backed securities	$	225,429	$	6,906	$	—	$	—	$	232,335
U.S. Treasury		89,476		1,754		—		—		91,230
Total	$	314,905	$	8,660	$	—	$	—	$	323,565
			Gross		Gross		Estimated		Allowance
	Amortized		Unrecognized		Unrecognized		Fair		for Credit
June 30, 2020	Cost		Gains		(Losses)		Value		Losses
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	249,070	$	7,895	$	(1)	$	256,964	$	—
Municipals - exempt from Federal tax		73,662		1,826		—		75,488		(55)
Total	$	322,732	$	9,721	$	(1)	$	332,452	$	(55)

			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gains		(Losses)		Value
	(Dollars in thousands)
Securities available-for-sale:
Agency mortgage-backed securities	$	283,598	$	934	$	(171)	$	284,361
U.S. Treasury		118,939		1,525		—		120,464
Total	$	402,537	$	2,459	$	(171)	$	404,825
			Gross		Gross		Estimated
	Amortized		Unrecognized		Unrecognized		Fair
December 31, 2019	Cost		Gains		(Losses)		Value
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	285,344	$	1,206	$	(968)	$	285,582
Municipals - exempt from Federal tax		81,216		1,313		(4)		82,525
Total	$	366,560	$	2,519	$	(972)	$	368,107

Securities with unrealized losses at June 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2020	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities held-to-maturity:
Agency mortgage-backed securities	$	512	$	(1)	$	—	$	—	$	512	$	(1)
Total	$	512	$	(1)	$	—	$	—	$	512	$	(1)

	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2019	Value		(Losses)		Value		(Losses)		Value		(Losses)
	(Dollars in thousands)
Securities available-for-sale:
Agency mortgage-backed securities	$	100,816	$	(105)	$	27,534	$	(66)	$	128,350	$	(171)
Total	$	100,816	$	(105)	$	27,534	$	(66)	$	128,350	$	(171)
Securities held-to-maturity:
Agency mortgage-backed securities	$	50,060	$	(178)	$	88,128	$	(790)	$	138,188	$	(968)
Municipals - exempt from Federal tax		1,556		(4)		—		—		1,556		(4)
Total	$	51,616	$	(182)	$	88,128	$	(790)	$	139,744	$	(972)

There were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders’ equity. At June 30, 2020, the Company held 425 securities (122 available-for-sale and 303 held-to-maturity), of which one had fair value below amortized cost. At June 30, 2020, there were $512,000 of agency mortgage-backed securities held-to-maturity, carried with an unrealized loss for less than 12 months. The total unrealized loss for securities less than 12 months was $1,000 at June 30, 2020. The unrealized loss was due to higher interest rates in comparison to when the security was purchased. The issuer is of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. Therefore, the Company does not consider these debt securities to have credit related losses as of June 30, 2020.

The agency mortgage-backed securities and U.S. Treasury securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses.Therefore, for those securities, we do not record expected credit losses.

The proceeds from sales of securities and the resulting gains and losses were as follows for the periods indicated:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
	(Dollars in thousands)
Proceeds	$	30,085	$	59,878	$	56,598	$	59,878
Gross gains		170		608		270		608
Gross losses		—		(60)		—		(60)

The amortized cost and estimated fair values of securities as of June 30, 2020 are shown by contractual maturity below. The expected maturities will differ from contractual maturities if borrowers have the right to call or pre-pay obligations with or without call or pre-payment penalties. Securities not due at a single maturity date are shown separately.

	Available-for-sale
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due after 3 months through one year	$	74,608		75,861
Due after one through five years		14,868		15,369
Agency mortgage-backed securities		225,429		232,335
Total	$	314,905	$	323,565

	Held-to-maturity
	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
Due 3 months or less	$	530	$	531
Due after 3 months through one year		914		917
Due after one through five years		7,283		7,537
Due after five through ten years		33,354		34,201
Due after ten years		31,581		32,302
Agency mortgage-backed securities		249,070		256,964
Total	$	322,732	$	332,452

Securities with amortized cost of $43,398,000 and $32,773,000 as of June 30, 2020 and December 31, 2019 were pledged to secure public deposits and for other purposes as required or permitted by law or contract.

The table below presents a rollforward by major security type for the six months ended June 30, 2020 of the allowance for credit losses on debt securities held-to-maturity held at period end:

		Municipals
		(Dollars in thousands)
Beginning balance January 1, 2020	$	-
Impact of adopting Topic 326		58
Provision (credit) for credit loss		(3)
Ending balance June 30, 2020	$	55