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Investment Securities
 12 Months Ended
Dec. 31, 2019
Investment Securities [Abstract]  
Investment Securities NOTE B – INVESTMENT SECURITIES

The following tables set forth the amortized cost and estimated fair values of the Bank’s investment securities at December 31, 2019 and 2018.

2019

(in thousands)

Amortized
‎Cost

Gross
‎Unrealized
‎Gains

Gross 
‎Unrealized
‎Losses

Fair
‎Value

Available-for-Sale Securities:

State and municipals

$

372,113

$

10,269

$

(239)

$

382,143

Pass-through mortgage securities

60,307

1,104

(39)

61,372

Collateralized mortgage obligations

136,211

2,247

(259)

138,199

Corporate bonds

119,000

—

(3,170)

115,830

$

687,631

$

13,620

$

(3,707)

$

697,544

2018

Held-to-Maturity Securities:

State and municipals

$

5,142

$

36

$

—

$

5,178

Pass-through mortgage securities

267

11

—

278

Collateralized mortgage obligations

95

1

—

96

$

5,504

$

48

$

—

$

5,552

Available-for-Sale Securities:

State and municipals

$

422,235

$

3,220

$

(5,417)

$

420,038

Pass-through mortgage securities

66,631

24

(1,169)

65,486

Collateralized mortgage obligations

154,378

886

(363)

154,901

Corporate bonds

119,000

—

(1,410)

117,590

$

762,244

$

4,130

$

(8,359)

$

758,015

As described in “Note A- Summary of Significant Accounting Policies” the Corporation adopted ASU 2019-04 in the fourth quarter of 2019. Upon implementation the Bank transferred $3,949,000 of held-to-maturity securities to available-for-sale. The transfer occurred at amortized cost. Any gain or loss was de minimis.

At December 31, 2019 and 2018, investment securities with a carrying value of $382,963,000 and $342,712,000, respectively, were pledged as collateral to secure public deposits and borrowed funds.

There were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity at December 31, 2019 and 2018.

Securities With Unrealized Losses. The following tables set forth securities with unrealized losses at December 31, 2019 and 2018 presented by length of time the securities had been in a continuous unrealized loss position.

2019

Less than
‎12 Months

12 Months
‎or More

Total

(in thousands)

Fair
‎Value

Unrealized
‎Loss

Fair
‎Value

Unrealized
‎Loss

Fair
‎Value

Unrealized
‎Loss

State and municipals

$

6,662

$

(83)

$

5,084

$

(156)

$

11,746

$

(239)

Pass-through mortgage securities

5,287

(14)

4,084

(25)

9,371

(39)

Collateralized mortgage obligations

30,886

(259)

—

—

30,886

(259)

Corporate bonds

51,020

(980)

64,810

(2,190)

115,830

(3,170)

Total temporarily impaired

$

93,855

$

(1,336)

$

73,978

$

(2,371)

$

167,833

$

(3,707)

2018

State and municipals

$

102,882

$

(1,639)

$

62,995

$

(3,778)

$

165,877

$

(5,417)

Pass-through mortgage securities

38,421

(142)

23,425

(1,027)

61,846

(1,169)

Collateralized mortgage obligations

32,577

(89)

7,342

(274)

39,919

(363)

Corporate bonds

97,590

(1,410)

—

—

97,590

(1,410)

Total temporarily impaired

$

271,470

$

(3,280)

$

93,762

$

(5,079)

$

365,232

$

(8,359)

Because the unrealized losses reflected in the preceding tables are deemed by management to be attributable to changes in interest rates and not credit losses, and because management does not have the intent to sell these securities and it is not more likely than not that it will be required to sell these securities before their anticipated recovery, the Bank does not consider these securities to be other-than-temporarily impaired at December 31, 2019.

Sales of Available-for-Sale Securities. Sales of available-for-sale securities were as follows:

 

(in thousands)

2019

2018

2017

Proceeds

$

21,983

$

263,994

$

135,695

Gains

$

138

$

300

$

382

Losses

(124)

(10,706)

(2,249)

Net gain (loss)

$

14

$

(10,406)

$

(1,867)

The income tax expense (benefit) related to these net realized gains (losses) was $4,000, ($2,907,000) and ($782,000) in 2019, 2018 and 2017, respectively, and is included in the consolidated statements of income in the line item “Income tax expense.”

Sales of Held-to-Maturity Securities. During 2019 and 2018, the Bank did not sell any securities that were classified as held-to-maturity.

During 2017, the Bank sold one municipal security that was classified as held-to-maturity. The sale was in response to a deterioration in the creditworthiness of the issuer. The security sold had a carrying value of $354,000 at the time of sale and the Bank realized a gain upon sale of $1,000.

Maturities. The following table sets forth by maturity the amortized cost and fair value of the Bank’s state and municipal securities and corporate bonds at December 31, 2019 based on the earlier of their stated maturity or, if applicable, their pre-refunded date. The remaining securities in the Bank’s investment securities portfolio are mortgage-backed securities, consisting of pass-through mortgage securities and collateralized mortgage obligations. Although these securities are expected to have substantial periodic repayments they are reflected in the table below in aggregate amounts.

(in thousands)

Amortized
‎Cost

Fair Value

Available-for-Sale Securities:

Within one year

$

9,084

$

9,144

After 1 through 5 years

66,698

68,040

After 5 through 10 years

267,448

268,203

After 10 years

147,883

152,586

Mortgage-backed securities

196,518

199,571

$

687,631

$

697,544