
	December 31, 2020
	Amortized		Gross Unrealized		Gross Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	1,475,030	$	105,601	$	37	$	1,580,594
Other stocks and bonds	77,224		1,053		22		78,255

MBS: (1)
Residential	771,409		38,674		73		810,010
Commercial	113,850		4,746		150		118,446
Total	$	2,437,513	$	150,074	$	282	$	2,587,305

HELD TO MATURITY
Investment securities:
State and political subdivisions	$	907	$	13	$	—	$	920
MBS: (1)
Residential	47,948		4,187		—		52,135
Commercial	60,143		5,000		—		65,143
Total	$	108,998	$	9,200	$	—	$	118,198


	December 31, 2019
	Amortized		Gross Unrealized		Gross Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	780,376	$	23,832	$	1,406	$	802,802
Other stocks and bonds	10,000		137		—		10,137

MBS: (1)
Residential	1,286,110		25,662		1,130		1,310,642
Commercial	230,255		4,795		34		235,016
Total	$	2,306,741	$	54,426	$	2,570	$	2,358,597


HELD TO MATURITY
Investment securities:
State and political subdivisions	$	2,888	$	30	$	—	$	2,918
MBS: (1)
Residential	59,701		2,586		139		62,148
Commercial	72,274		1,622		83		$	73,813
Total	$	134,863	$	4,238	$	222	$	138,879

Investment securities and MBS with carrying values of $1.56 billion and $1.12 billion were pledged as of December 31, 2020 and December 31, 2019, respectively, to collateralize FHLB borrowings, borrowings from the FRDW, repurchase agreements and public fund deposits, for potential liquidity needs or other purposes as required by law.

The following tables represent the fair value and unrealized losses on AFS investment and MBS for which an allowance for credit losses has not been recorded as of December 31, 2020 and AFS and HTM investment and MBS as of December 31, 2019, segregated by major security type and length of time in a continuous loss position (in thousands):


	December 31, 2020
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	17,305	$	37	$	—	$	—	$	17,305	$	37
Other stocks and bonds	11,562		22		—		—		11,562		22

MBS:
Residential	6,287		73		—		—		6,287		73
Commercial	4,744		150		—		—		4,744		150
Total	$	39,898	$	282	$	—	$	—	$	39,898	$	282









	December 31, 2019
	Less Than 12 Months				More Than 12 Months				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
AVAILABLE FOR SALE
Investment securities:


State and political subdivisions	$	158,629	$	1,270	$	7,555	$	136	$	166,184	$	1,406


MBS:
Residential	101,779		980		21,696		150		123,475		1,130
Commercial	13,555		32		1,446		2		15,001		34
Total	$	273,963	$	2,282	$	30,697	$	288	$	304,660	$	2,570

HELD TO MATURITY


MBS:
Residential	$	272	$	9	$	2,304	$	130	$	2,576	$	139
Commercial	12,781		67		1,788		16		14,569		83
Total	$	13,053	$	76	$	4,092	$	146	$	17,145	$	222

With the adoption of ASU 2016-13, for those AFS debt securities in an unrealized loss position where management (i) has the intent to sell or (ii) where it will more-likely-than-not be required to sell the security before the recovery of its amortized cost basis, we write the security down to fair value with an adjustment to earnings. For those AFS debt securities in an unrealized loss position that do not meet either of these criteria, management assesses whether the decline in fair value has resulted from credit-related factors, using both qualitative and quantitative criteria. Determining the allowance under the credit loss method requires the use of a discounted cash flow method to assess the credit losses. Any credit-related impairment will be recognized in allowance for credit losses on the balance sheet with a corresponding adjustment to earnings. Noncredit-related impairment, the portion of the impairment relating to factors other than credit (such as changes in market interest rates), is recognized in other comprehensive income, net of tax.

Based on our consideration of the qualitative factors associated with each security type in our AFS portfolio, we did not recognize any unrealized losses in income on our AFS securities during the year ended December 31, 2020. Our state and political subdivisions are highly rated municipal securities with a long history of no credit losses. Our AFS MBS are highly rated securities which are either explicitly or implicitly backed by the U.S. Government through its agencies which are highly rated by major ratings agencies and also have a long history of no credit losses. Our other stocks and bonds as of December 31, 2020 consist of highly rated investment grade bonds. Management does not intend to sell and it is likely we will not be required to sell those securities in an unrealized loss position prior to the anticipated recovery of the amortized cost basis. These unrealized losses on our investment and MBS are largely due to changes in interest rates and spreads and other market conditions impacted by COVID-19. As of December 31, 2020, we did not have an allowance for credit losses on our AFS securities. There were no impairment charges on our AFS securities during the year ended December 31, 2019.

We assess the likelihood of default and the potential amount of default when assessing our HTM securities for credit losses. We utilize term structures and, due to no prior loss exposure on our state and political subdivision securities, we currently apply a third-party average loss given default rate to model our securities. Due to a small number of HTM municipal securities in our portfolio as of December 31, 2020, we elected to use the specific identification method to model these securities which aligns with our third-party fair value measurement process. The model determined any expected credit loss over the life of these securities to be remote. Management further evaluated the remote expectation of loss along with the qualitative factors associated with these securities and concluded that, due to the securities being highly rated municipals with a long history of no credit losses, no credit loss should be recognized for these securities for the year ended December 31, 2020.

From time to time, we have transferred securities from AFS to HTM due to overall balance sheet strategies. The remaining net unamortized, unrealized loss on the transferred securities included in AOCI in the accompanying balance sheets totaled $2.9 million ($2.3 million, net of tax) at December 31, 2020 and $3.7 million ($2.9 million, net of tax) at December 31, 2019. Any net unrealized gain or loss on the transferred securities included in AOCI at the time of transfer will be amortized over the remaining life of the underlying security as an adjustment to the yield on those securities. Securities transferred with losses included in AOCI continue to be included in management’s assessment for impairment for each individual security. There were no securities transferred from AFS to HTM during the years ended December 31, 2020 or 2019.

The accrued interest receivable on our debt securities is excluded from the credit loss estimate and is included in interest receivable on our consolidated balance sheets. As of December 31, 2020, accrued interest receivable on AFS and HTM debt securities totaled $22.0 million and $298,000, respectively. No HTM debt securities were past-due or on nonaccrual status as of December 31, 2020.


	Years Ended December 31,
	2020		2019		2018
U.S. Treasury	$	—	$	—	$	218
U.S. government agency debentures	—		—		89
State and political subdivisions	36,393		16,885		24,960
Other stocks and bonds	1,195		138		110

MBS	34,319		50,486		41,584
Total interest income on securities	$	71,907	$	67,509	$	66,961

There was a $8.3 million net realized gain from the AFS securities portfolio for the year ended December 31, 2020, which consisted of $8.4 million in realized gains and $129,000 in realized losses. There was a $756,000 net realized gain from the AFS securities portfolio for the year ended December 31, 2019, which consisted of $5.7 million in realized gains and $4.9 million in realized losses. There was a $1.8 million net realized loss from the AFS securities portfolio for the year ended December 31, 2018, which consisted of $3.8 million in realized losses and $2.0 million in realized gains. There were no sales from the HTM portfolio during the years ended December 31, 2020, 2019 or 2018. We calculate realized gains and losses on sales of securities under the specific identification method.

Expected maturities on our securities may differ from contractual maturities because issuers may have the right to call or prepay obligations. MBS are presented in total by category since MBS are typically issued with stated principal amounts and are backed by pools of mortgages that have loans with varying maturities. The characteristics of the underlying pool of mortgages, such as fixed rate or adjustable rate, as well as prepayment risk, are passed on to the security holder. The term of a mortgage-backed pass-through security thus approximates the term of the underlying mortgages and can vary significantly due to prepayments.


	December 31, 2020
	Amortized Cost		Fair Value
AVAILABLE FOR SALE
Investment securities:
Due in one year or less	$	2,185	$	2,223
Due after one year through five years	32,972		33,953
Due after five years through ten years	90,751		93,430
Due after ten years	1,426,346		1,529,243
	1,552,254		1,658,849
MBS:	885,259		928,456
Total	$	2,437,513	$	2,587,305


	December 31, 2020
	Amortized Cost		Fair Value
HELD TO MATURITY
Investment securities:
Due in one year or less	$	120	$	121
Due after one year through five years	509		516
Due after five years through ten years	278		283
Due after ten years	—		—
	907		920
MBS:	108,091		117,278
Total	$	108,998	$	118,198

Equity investments on our consolidated balance sheets include CRA funds with a readily determinable fair value as well as equity investments without readily determinable fair values. At December 31, 2020 and 2019, we had equity investments recorded in our consolidated balance sheets of $11.9 million and $12.3 million, respectively.


	Years Ended December 31,
	2020		2019
Net (loss) gain recognized during the period on equity investments	$	(427)	$	66
Less: Net (loss) gain recognized during the period on equity investments sold during the period	—		—
Unrealized (loss) gain recognized during the reporting period on equity investments still held at the reporting date	$	(427)	$	66

Our FHLB stock, which has limited marketability, is carried at cost and is assessed quarterly for other-than-temporary impairment. Based upon evaluation by management at December 31, 2020, our FHLB stock was not impaired and thus was not considered to be other-than-temporarily impaired.