At March 31, 2020, the Company had $989.8 million and $445.4 million in available for sale debt securities and held to maturity debt securities, respectively. Many factors, including lack of liquidity in the secondary market for certain securities, variations in pricing information, regulatory actions, changes in the business environment or any changes in the competitive marketplace could have an adverse effect on the Company’s investment portfolio. The total number of available for sale and held to maturity debt securities in an unrealized loss position at March 31, 2020 totaled 41, compared with 85 at December 31, 2019.

On January 1, 2020, the Company adopted CECL which replaces the incurred loss methodology with an expected loss methodology. The adoption of the new standard resulted in the Company recording a $70,000 increase to the allowance for credit losses on held to maturity debt securities with a corresponding cumulative effect adjustment to decrease retained earnings by $52,000, net of income taxes. (See Adoption of CECL table below for additional detail.)

Management measures expected credit losses on held to maturity debt securities on a collective basis by security type. Management classifies the held-to-maturity debt securities portfolio into the following security types:

All of the agency obligations held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. The majority of the state and municipal, and corporate obligations carry no lower than A ratings. At March 31, 2020, the Company had one security rated with a triple-B by Moody’s Investors Service.

The Company adopted CECL using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2020. As a result, the amortized cost basis remains the same before and after the effective date of CECL.

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and the fair value for available for sale debt securities at March 31, 2020 and December 31, 2019 (in thousands):


	March 31, 2020
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value



Mortgage-backed securities	$	926,561	34,130	(514)	960,177
State and municipal obligations	3,894		155	—	4,049
Corporate obligations	25,030		614	(37)	25,607

	$	955,485	34,899	(551)	989,833


	December 31, 2019
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Fair value



Mortgage-backed securities	$	936,196	12,367	(1,133)	947,430
State and municipal obligations	3,907		172	—	4,079
Corporate obligations	25,032		393	(15)	25,410

	$	965,135	12,932	(1,148)	976,919

The amortized cost and fair value of available for sale debt securities at March 31, 2020, by contractual maturity, are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.


	March 31, 2020
	Amortized cost		Fair value
Due in one year or less	$	—	—
Due after one year through five years	3,002		3,040
Due after five years through ten years	25,922		26,616
Due after ten years	—		—
	$	28,924	29,656

Mortgage-backed securities totaling $926.6 million at amortized cost and $960.2 million at fair value are excluded from the table above as their expected lives are anticipated to be shorter than the contractual maturity date due to principal prepayments.

For the three month periods ended March 31, 2020 and 2019, no securities were sold or called from the available for sale debt securities portfolio.

The following tables present the fair values and gross unrealized losses for available for sale debt securities in an unrealized loss position at March 31, 2020 and December 31, 2019 (in thousands):


	March 31, 2020
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses


Mortgage-backed securities	$	45,567	(510)	14	(4)	45,581	(514)

Corporate obligations	1,990		(37)	—	—	1,990	(37)
	$	47,557	(547)	14	(4)	47,571	(551)


	December 31, 2019
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses



Mortgage-backed securities	$	136,270	(629)	46,819	(504)	183,089	(1,133)

Corporate obligations	2,013		(15)	—	—	2,013	(15)
	$	138,283	(644)	46,819	(504)	185,102	(1,148)

The number of available for sale debt securities in an unrealized loss position at March 31, 2020 totaled 14, compared with 50 at December 31, 2019. The decrease in the number of securities in an unrealized loss position at March 31, 2020 was due to lower current market interest rates compared to rates at December 31, 2019. At March 31, 2020, there was one private label mortgage-backed security in an unrealized loss position, with an amortized cost of $18,000 and an unrealized loss of $4,000.

The following tables present the amortized cost, gross unrealized gains, gross unrealized losses, allowance for credit losses and the estimated fair value for held to maturity debt securities at March 31, 2020 and December 31, 2019 (in thousands):


	March 31, 2020
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Allowance for credit losses	Fair value
Agency obligations	$	7,417	15	—	—	7,432
Mortgage-backed securities	104		4	—	—	108
State and municipal obligations	428,691		13,876	(121)	(80)	442,366
Corporate obligations	9,319		45	(39)	(7)	9,318
Total held to maturity debt securities	$	445,531	13,940	(160)	(87)	459,224


	December 31, 2019
	Amortized cost		Gross unrealized gains	Gross unrealized losses	Allowance for credit losses	Fair value
Agency obligations	$	6,599	11	(9)	—	6,601
Mortgage-backed securities	118		4	—	—	122
State and municipal obligations	437,074		14,394	(115)	—	451,353
Corporate obligations	9,838		58	(6)	—	9,890
Total held to maturity debt securities	$	453,629	14,467	(130)	—	467,966

The Company generally purchases securities for long-term investment purposes, and differences between amortized cost and fair values may fluctuate during the investment period. There were no sales of securities from the held to maturity debt securities portfolio for the three months ended March 31, 2020 and 2019. For the three months ended March 31, 2020, proceeds from calls on securities in the held to maturity debt securities portfolio totaled $13.3 million with gross gains of $11,000 and no gross losses. For the three months ended March 31, 2019, proceeds from calls of securities in the held to maturity debt securities portfolio totaled $9.3 million with no gross gains and no gross losses.

The gross amortized cost and gross fair value of investment securities in the held to maturity debt securities portfolio at March 31, 2020 by contractual maturity are shown below (in thousands). Expected maturities may differ from contractual maturities due to prepayment or early call privileges of the issuer.


	March 31, 2020
	Amortized cost		Fair value
Due in one year or less	$	9,461	9,477
Due after one year through five years	115,043		117,204
Due after five years through ten years	240,321		248,418
Due after ten years	80,602		84,104
	$	445,427	459,203

Mortgage-backed securities totaling $104,000 at amortized cost and $108,000 at fair value are excluded from the table above as their expected lives are anticipated to be shorter than the contractual maturity date due to principal prepayments. Additionally, allowance for credit losses totaling $87,000 is excluded from the table above.


	January 1, 2020
	As reported under CECL		Prior to CECL	Impact of CECL adoption
Held to Maturity Debt Securities

Allowance for credit losses on corporate securities	$	6	—	6
Allowance for credit losses on municipal securities	64		—	64
Allowance for credit losses on held to maturity securities	$	70	—	70

The following tables present the fair value and gross unrealized losses for held to maturity debt securities in an unrealized loss position at March 31, 2020 and December 31, 2019 (in thousands):


	March 31, 2020
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses

State and municipal obligations	$	10,143	(103)	407	(18)	10,550	(121)
Corporate obligations	3,516		(39)	—	—	3,516	(39)
	$	13,659	(142)	407	(18)	14,066	(160)


	December 31, 2019
	Less than 12 months				12 months or longer			Total
	Fair value		Gross unrealized losses	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses
Agency obligations	$	3,601	(9)	—	—	3,601	(9)
State and municipal obligations	7,675		(42)	2,093	(73)	9,768	(115)
Corporate obligations	3,254		(6)	—	—	3,254	(6)
	$	14,530	(57)	2,093	(73)	16,623	(130)

The number of held to maturity debt securities in an unrealized loss position at March 31, 2020 totaled 27, compared with 35 at December 31, 2019. The decrease in the number of securities in an unrealized loss position at March 31, 2020 was due to lower current market interest rates compared to rates at December 31, 2019.

Credit Quality Indicators. The following table provides the amortized cost of held to maturity debt securities by credit rating as of March 31, 2020 (in thousands):


	March 31, 2020
Total Portfolio	AAA		AA	A	BBB	Not Rated	Total
Agency obligations	$	7,417	—	—	—	—	7,417
Mortgage-backed securities	104		—	—	—	—	104
State and municipal obligations	46,868		326,291	54,414	1,118	—	428,691
Corporate obligations	—		3,121	5,423	750	25	9,319
	$	54,389	329,412	59,837	1,868	25	445,531

	December 31, 2019
Total Portfolio	AAA		AA	A	BBB	Not Rated	Total
Agency obligations	$	6,599	—	—	—	—	6,599
Mortgage-backed securities	118		—	—	—	—	118
State and municipal obligations	49,316		330,322	56,317	1,119	—	437,074
Corporate obligations	—		3,128	6,335	350	25	9,838
	$	56,033	333,450	62,652	1,469	25	453,629

Credit quality indicators are metrics that provide information regarding the relative credit risk of debt securities. At March 31, 2020, the held to maturity debt securities portfolio was comprised of 12% rated triple-A, 74% rated double-A, 13% rated single-A, and less than 1% either below a single-A rating or not rated by Moody’s Investors Service or Standard and Poor’s. Securities not explicitly rated were grouped where possible under the credit rating of the issuer of the security.