XML 27 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities
 12 Months Ended
Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
NOTE 3 – INVESTMENT SECURITIES
The following tables present the amortized cost and estimated fair values of investment securities, as of December 31:
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
 
(in thousands)
2018
 
 
 
 
 
 
 
Available for Sale
 
 
 
 
 
 
 
U.S. Government sponsored agency securities
$
31,586

 
$
185

 
$
(139
)
 
$
31,632

State and municipal securities
282,383

 
2,178

 
(5,466
)
 
279,095

Corporate debt securities
111,454

 
1,432

 
(3,353
)
 
109,533

Collateralized mortgage obligations
841,294

 
2,758

 
(11,972
)
 
832,080

Residential mortgage-backed securities
476,973

 
1,583

 
(15,212
)
 
463,344

Commercial mortgage-backed securities
264,165

 
524

 
(3,073
)
 
261,616

Auction rate securities
107,410

 
—

 
(4,416
)
 
102,994

   Total
$
2,115,265

 
$
8,660

 
$
(43,631
)
 
$
2,080,294

 
 
 
 
 
 
 
 
Held to Maturity
 
 
 
 
 
 
 
State and municipal securities
$
156,134

 
$
1,166

 
$
(93
)
 
$
157,207

Residential mortgage-backed securities
450,545

 
3,667

 
—

 
454,212

   Total
$
606,679

 
$
4,833

 
$
(93
)
 
$
611,419

 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
Available for Sale
 
 
 
 
 
 
 
U.S. Government sponsored agency securities
$
5,962

 
$
2

 
$
(26
)
 
$
5,938

State and municipal securities
405,860

 
5,638

 
(2,549
)
 
408,949

Corporate debt securities
96,353

 
2,832

 
(1,876
)
 
97,309

Collateralized mortgage obligations
611,927

 
491

 
(9,795
)
 
602,623

Residential mortgage-backed securities
1,132,080

 
3,957

 
(15,241
)
 
1,120,796

Commercial mortgage-backed securities
215,351

 
—

 
(2,596
)
 
212,755

Auction rate securities
107,410

 
—

 
(8,742
)
 
98,668

   Total debt securities
2,574,943

 
12,920

 
(40,825
)
 
2,547,038

Equity securities
776

 
142

 
—

 
918

   Total
$
2,575,719

 
$
13,062

 
$
(40,825
)
 
$
2,547,956



On August 1, 2018, the Corporation transferred debt securities with an amortized cost of $665.5 million and an estimated fair value of $641.7 million from the available for sale classification to the held to maturity classification. These securities consisted of residential mortgage-backed securities ($505.5 million amortized cost and $485.3 million estimated fair value) and state and municipal securities ($160.0 million amortized cost and $156.4 million estimated fair value) and were transferred as the Corporation has the positive intent and ability to hold these securities to maturity. The transfer of debt securities into the held to maturity category from the available for sale category was recorded at fair value on the date of transfer. The net unrealized gains or losses at the transfer date are included in AOCI and are being amortized over the remaining lives of the securities. This amortization is expected to offset the amortization of the related premium or discount created by the investment securities transfer into the held to maturity classification, with no expected impact on future net income.

Securities carried at $973.4 million at December 31, 2018 and $1.8 billion at December 31, 2017, were pledged as collateral to secure public and trust deposits and customer repurchase agreements.
The amortized cost and estimated fair values of debt securities as of December 31, 2018, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Available for Sale
 
Held to Maturity
 
Amortized
Cost
 
Estimated
Fair Value
 
Amortized
Cost
 
Estimated
Fair Value
 
(in thousands)
 
 
 
 
 
 
Due in one year or less
$
6,738

 
$
6,740

 
$
—

 
$
—

Due from one year to five years
69,672

 
70,182

 
—

 
—

Due from five years to ten years
108,091

 
106,709

 
—

 
—

Due after ten years
348,332

 
339,623

 
156,134

 
157,207

 
532,833

 
523,254

 
156,134

 
157,207

Residential mortgage-backed securities(1)
476,973

 
463,344

 
450,545

 
454,212

Commercial mortgage-backed securities(1)
841,294

 
832,080

 
—

 
—

Collateralized mortgage obligations (1)
264,165

 
261,616

 
—

 
—

Total
$
2,115,265

 
$
2,080,294

 
$
606,679

 
$
611,419



(1)
Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments on the underlying loans.

The following table presents information related to gross gains and losses on the sales of equity and debt securities:
 
Gross
Realized
Gains
 
Gross
Realized
Losses
 
Net
Gains (Losses)
 
(in thousands)
2018:
 
 
 
 
 
Equity securities
$
9

 
$
—

 
$
9

Debt securities
1,656

 
(1,628
)
 
28

Total
$
1,665

 
$
(1,628
)
 
$
37

2017:
 
 
 
 
 
Equity securities
$
13,558

 
$
—

 
$
13,558

Debt securities
315

 
(4,802
)
 
(4,487
)
Total
$
13,873

 
$
(4,802
)
 
$
9,071

2016:
 
 
 
 
 
Equity securities
$
2,005

 
$
(10
)
 
$
1,995

Debt securities
581

 
(26
)
 
555

Total
$
2,586

 
$
(36
)
 
$
2,550




The cumulative balance of credit-related other-than-temporary impairment charges, previously recognized as components of earnings, for debt securities held by the Corporation at December 31, 2018, 2017 and 2016 was $11.5 million. There were no other-than-temporary impairment charges recognized for the years ended December 31, 2018, 2017 and 2016.

The following table presents the gross unrealized losses and estimated fair values of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2018.

 
Less Than 12 months
 
12 Months or Longer
 
Total
 
Number of Securities
 
Estimated
Fair Value
 
Unrealized
Losses
 
Number of Securities
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
 
(in thousands)
Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government sponsored agency securities
1

 
$
4,961

 
$
(31
)
 
1

 
$
5,770

 
$
(108
)
 
$
10,731

 
$
(139
)
State and municipal securities
33

 
72,950

 
(1,292
)
 
38

 
83,770

 
(4,174
)
 
156,720

 
(5,466
)
Corporate debt securities
8

 
24,419

 
(227
)
 
14

 
25,642

 
(3,126
)
 
50,061

 
(3,353
)
Collateralized mortgage obligations
39

 
136,563

 
(1,050
)
 
89

 
388,173

 
(10,922
)
 
524,736

 
(11,972
)
Residential mortgage-backed securities
17

 
18,220

 
(222
)
 
110

 
402,779

 
(14,990
)
 
420,999

 
(15,212
)
Commercial mortgage-backed securities
1

 
9,778

 
(35
)
 
25

 
197,326

 
(3,038
)
 
207,104

 
(3,073
)
Auction rate securities
—

 
—

 
—

 
177

 
102,994

 
(4,416
)
 
102,994

 
(4,416
)
Total available for sale
99

 
$
266,891

 
$
(2,857
)
 
454

 
$
1,206,454

 
$
(40,774
)
 
$
1,473,345

 
$
(43,631
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal securities
6

 
$
20,601

 
$
(93
)
 
—

 
$
—

 
$
—

 
$
20,601

 
$
(93
)
Total held to maturity
6

 
$
20,601

 
$
(93
)
 
—

 
$
—

 
$
—

 
$
20,601

 
$
(93
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


For comparative purposes, the following table presents gross unrealized losses and the estimated fair value of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2017.
 
Less Than 12 months
 
 
 
12 Months or Longer
 
Total
 
Number of Securities
 
Estimated
Fair Value
 
Unrealized
Losses
 
Number of Securities
 
Estimated
Fair Value
 
Unrealized
Losses
 
Estimated
Fair Value
 
Unrealized
Losses
 
(in thousands)
Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Government sponsored agency securities
2

 
$
5,830

 
$
(26
)
 
—

 
$
—

 
$
—

 
$
5,830

 
$
(26
)
State and municipal securities
4

 
11,650

 
(50
)
 
48

 
118,297

 
(2,499
)
 
129,947

 
(2,549
)
Corporate debt securities
1

 
4,544

 
(48
)
 
19

 
32,163

 
(1,828
)
 
36,707

 
(1,876
)
Collateralized mortgage obligations
60

 
303,932

 
(2,408
)
 
57

 
187,690

 
(7,387
)
 
491,622

 
(9,795
)
Residential mortgage-backed securities
116

 
511,378

 
(4,348
)
 
89

 
500,375

 
(10,893
)
 
1,011,753

 
(15,241
)
Commercial mortgage-backed securities
22

 
190,985

 
(2,118
)
 
3

 
21,770

 
(478
)
 
212,755

 
(2,596
)
Auction rate securities
—

 
—

 
—

 
177

 
98,668

 
(8,742
)
 
98,668

 
(8,742
)
Total
205

 
$
1,028,319

 
$
(8,998
)
 
393

 
$
958,963

 
$
(31,827
)
 
$
1,987,282

 
$
(40,825
)


The Corporation’s collateralized mortgage obligations and mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the decline in fair value of these securities is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation did not consider these investments to be other-than-temporarily impaired as of December 31, 2018.
As of December 31, 2018, all auction rate certificates ("ARCs") were rated above investment grade. All of the loans underlying the ARCs have principal payments which are guaranteed by the federal government. All of the loans were current and making scheduled payments and, based on management’s evaluations, were not subject to any other-than-temporary impairment charges as of December 31, 2018. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.

Based on management’s evaluations, no corporate debt securities were subject to any other-than-temporary impairment charges
as of December 31, 2018. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be at maturity.