XML 31 R11.htm IDEA: XBRL DOCUMENT v3.19.3
INVESTMENT SECURITIES
 9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES
NOTE 3 – INVESTMENT SECURITIES
 
The amortized cost and estimated fair value of investment securities available for sale, along with unrealized gains and losses, are summarized as follows:
(dollars in thousands)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
September 30, 2019
 
 
 
 
 
 
 
 
U.S. government sponsored agencies
 
$
22,265

 
$
95

 
$
—

 
$
22,360

State, county and municipal securities
 
113,607

 
2,742

 
—

 
116,349

Corporate debt securities
 
51,740

 
1,211

 
(33
)
 
52,918

Mortgage-backed securities
 
1,283,846

 
18,776

 
(3,042
)
 
1,299,580

Total debt securities
 
$
1,471,458

 
$
22,824

 
$
(3,075
)
 
$
1,491,207

 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
State, county and municipal securities
 
$
149,670

 
$
1,367

 
$
(304
)
 
$
150,733

Corporate debt securities
 
67,123

 
718

 
(527
)
 
67,314

Mortgage-backed securities
 
982,183

 
4,172

 
(11,979
)
 
974,376

Total debt securities
 
$
1,198,976

 
$
6,257

 
$
(12,810
)
 
$
1,192,423



The amortized cost and estimated fair value of available for sale securities at September 30, 2019 by contractual maturity are summarized in the table below. Expected maturities for mortgage-backed securities may differ from contractual maturities because in certain cases borrowers can prepay obligations without prepayment penalties. Therefore, these securities are shown separately.
(dollars in thousands)
 
Amortized
Cost
 
Estimated
Fair
Value
Due in one year or less
 
$
16,799

 
$
16,858

Due from one year to five years
 
74,218

 
75,228

Due from five to ten years
 
67,248

 
69,498

Due after ten years
 
29,347

 
30,043

Mortgage-backed securities
 
1,283,846

 
1,299,580

 
 
$
1,471,458

 
$
1,491,207


 
Securities with a carrying value of approximately $513.7 million serve as collateral to secure public deposits, securities sold under agreements to repurchase and for other purposes required or permitted by law at September 30, 2019, compared with $510.0 million at December 31, 2018.
 
The following table details the gross unrealized losses and estimated fair value of securities aggregated by category and duration of continuous unrealized loss position at September 30, 2019 and December 31, 2018.
 
 
Less Than 12 Months
 
12 Months or More
 
Total
(dollars in thousands)
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
September 30, 2019
 
 

 
 

 
 

 
 

 
 

 
 

State, county and municipal securities
 
$
559

 
$
—

 
$
—

 
$
—

 
$
559

 
$
—

Corporate debt securities
 
1,470

 
(30
)
 
2,090

 
(3
)
 
3,560

 
(33
)
Mortgage-backed securities
 
345,451

 
(1,828
)
 
81,039

 
(1,214
)
 
426,490

 
(3,042
)
Total debt securities
 
$
347,480

 
$
(1,858
)
 
$
83,129

 
$
(1,217
)
 
$
430,609

 
$
(3,075
)
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 

 
 

 
 

 
 

 
 

 
 

State, county and municipal securities
 
$
23,784

 
$
(52
)
 
$
33,873

 
$
(252
)
 
$
57,657

 
$
(304
)
Corporate debt securities
 
17,291

 
(111
)
 
17,952

 
(416
)
 
35,243

 
(527
)
Mortgage-backed securities
 
119,745

 
(580
)
 
435,749

 
(11,399
)
 
555,494

 
(11,979
)
Total debt securities
 
$
160,820

 
$
(743
)
 
$
487,574

 
$
(12,067
)
 
$
648,394

 
$
(12,810
)

 
As of September 30, 2019, the Company’s securities portfolio consisted of 568 securities, 136 of which were in an unrealized loss position. The majority of unrealized losses are related to the Company’s mortgage-backed securities, as discussed below.
 
At September 30, 2019, the Company held 133 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2019.

At September 30, 2019, the Company held one state, county and municipal security and two corporate debt securities that were in an unrealized loss position. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2019.
 
The Company’s investments in corporate debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at September 30, 2019 or December 31, 2018.
 
Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. While the majority of the unrealized losses on debt securities relate to changes in interest rates, corporate debt securities have also been affected by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination regarding the status of impairment. The Company believes that each investment poses minimal credit risk. Furthermore, the Company does not intend to sell these investment securities at an unrealized loss position at September 30, 2019, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Therefore, at September 30, 2019, these investments are not considered impaired on an other-than-temporary basis.
 
At September 30, 2019 and December 31, 2018, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.
 
The following table is a summary of sales activities in the Company’s investment securities available for sale for the nine months ended September 30, 2019 and 2018:
(dollars in thousands)
 
September 30,
2019
 
September 30,
2018
Gross gains on sales of securities
 
$
522

 
$
390

Gross losses on sales of securities
 
(464
)
 
(301
)
Net realized gains on sales of securities available for sale
 
$
58

 
$
89

 
 
 
 
 
Sales proceeds
 
$
64,995

 
$
68,727



Total gain on securities reported on the consolidated statements of income and comprehensive income is comprised of the following for the nine months ended September 30, 2019 and 2018:
(dollars in thousands)
 
September 30,
2019
 
September 30,
2018
Net realized gains on sales of securities available for sale
 
$
58

 
$
89

Unrealized holding gains (losses) on equity securities
 
19

 
(127
)
Net realized gains on sales of other investments
 
62

 
—

Total gain (loss) on securities
 
$
139

 
$
(38
)