XML 24 R13.htm IDEA: XBRL DOCUMENT v3.10.0.1
Investment Securities
6 Months Ended
Jun. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
 
The amortized cost and fair value of investment securities available for sale as of June 30, 2018 and December 31, 2017 are as follows:
 
As of June 30, 2018
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
 
Fair Value
U.S. Treasury securities
$
100

 
$

 
$

 
$
100

Obligations of the U.S. government and agencies
187,850

 
21

 
(4,615
)
 
183,256

Obligations of state and political subdivisions
17,483

 
11

 
(69
)
 
17,425

Mortgage-backed securities
298,704

 
416

 
(6,557
)
 
292,563

Collateralized mortgage obligations
38,077

 
16

 
(1,459
)
 
36,634

Other investment securities
1,100

 

 
(3
)
 
1,097

Total
$
543,314

 
$
464

 
$
(12,703
)
 
$
531,075

 
As of December 31, 2017
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
 
Fair Value
U.S. Treasury securities
$
200,077

 
$
11

 
$

 
$
200,088

Obligations of the U.S. government and agencies
153,028

 
75

 
(2,059
)
 
151,044

Obligations of state and political subdivisions
21,352

 
11

 
(53
)
 
21,310

Mortgage-backed securities
275,958

 
887

 
(1,855
)
 
274,990

Collateralized mortgage obligations
37,596

 
14

 
(948
)
 
36,662

Other investment securities
4,813

 
318

 
(23
)
 
5,108

Total
$
692,824

 
$
1,316

 
$
(4,938
)
 
$
689,202


 
The following tables present the aggregate amount of gross unrealized losses as of June 30, 2018 and December 31, 2017 on available for sale investment securities classified according to the amount of time those securities have been in a continuous unrealized loss position:
 
As of June 30, 2018
 
Less than 12
Months
 
12 Months
or Longer
 
Total
(dollars in thousands)
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
Obligations of the U.S. government and agencies
$
154,255

 
$
(3,361
)
 
$
28,237

 
$
(1,254
)
 
$
182,492

 
$
(4,615
)
Obligations of state and political subdivisions
5,907

 
(16
)
 
1,563

 
(53
)
 
7,470

 
(69
)
Mortgage-backed securities
228,831

 
(5,183
)
 
37,068

 
(1,374
)
 
265,899

 
(6,557
)
Collateralized mortgage obligations
6,800

 
(130
)
 
23,815

 
(1,329
)
 
30,615

 
(1,459
)
Other investment securities
797

 
(3
)
 

 

 
797

 
(3
)
Total
$
396,590

 
$
(8,693
)
 
$
90,683

 
$
(4,010
)
 
$
487,273

 
$
(12,703
)
 
As of December 31, 2017
 
Less than 12
Months
 
12 Months
or Longer
 
Total
(dollars in thousands)
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
 
Fair
Value
 
Unrealized Losses
Obligations of the U.S. government and agencies
$
114,120

 
$
(1,294
)
 
$
26,726

 
$
(765
)
 
$
140,846

 
$
(2,059
)
Obligations of state and political subdivisions
11,144

 
(29
)
 
2,709

 
(24
)
 
13,853

 
(53
)
Mortgage-backed securities
177,919

 
(1,293
)
 
31,787

 
(562
)
 
209,706

 
(1,855
)
Collateralized mortgage obligations
5,166

 
(47
)
 
26,686

 
(901
)
 
31,852

 
(948
)
Other investment securities
1,805

 
(23
)
 

 

 
1,805

 
(23
)
Total
$
310,154

 
$
(2,686
)
 
$
87,908

 
$
(2,252
)
 
$
398,062

 
$
(4,938
)

 
Management evaluates the Corporation’s investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. The investment portfolio includes debt securities issued by U.S. government agencies, U.S. government-sponsored agencies, state and local municipalities and other issuers. All fixed income investment securities in the Corporation’s investment portfolio are rated as investment-grade or higher. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, interest rates and the bond rating of each security. The unrealized losses presented in the tables above are temporary in nature and are primarily related to market interest rates rather than the underlying credit quality of the issuers or collateral. Management does not believe that these unrealized losses are other-than-temporary. Management does not have the intent to sell these securities prior to their maturity or the recovery of their cost bases and believes that it is more likely than not that it will not have to sell these securities prior to their maturity or the recovery of their cost bases.
 
As of June 30, 2018 and December 31, 2017, securities having a fair value of $127.2 million and $126.2 million, respectively, were specifically pledged as collateral for public funds, trust deposits, the FRB discount window program, FHLB borrowings and other purposes. Advances by the FHLB are collateralized by a blanket lien on non-pledged, mortgage-related loans as part of the Corporation’s borrowing agreement with the FHLB as well as certain securities individually pledged by the Corporation.
 
The amortized cost and fair value of available for sale investment and mortgage-related securities available for sale as of June 30, 2018 and December 31, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
June 30, 2018
 
December 31, 2017
(dollars in thousands)
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Investment securities:
 
 
 
 
 
 
 
Due in one year or less
$
10,137

 
$
10,132

 
$
211,019

 
$
211,019

Due after one year through five years
165,647

 
161,611

 
126,452

 
124,797

Due after five years through ten years
16,539

 
16,099

 
23,147

 
22,804

Due after ten years
14,210

 
14,036

 
15,439

 
15,421

Subtotal
206,533

 
201,878

 
376,057

 
374,041

Mortgage-related securities(1)
336,781

 
329,197

 
313,554

 
311,652

Mutual funds with no stated maturity

 

 
3,213

 
3,509

Total
$
543,314

 
$
531,075

 
$
692,824

 
$
689,202

 
(1) Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 


The amortized cost and fair value of investment securities held to maturity as of June 30, 2018 and December 31, 2017 are as follows:
 
As of June 30, 2018
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
 
Fair Value
Mortgage-backed securities
$
7,838

 
$

 
$
(291
)
 
$
7,547

 
As of December 31, 2017
(dollars in thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
 
Fair Value
Mortgage-backed securities
$
7,932

 
$
5

 
$
(86
)
 
$
7,851


 
The following tables present the aggregate amount of gross unrealized losses as of June 30, 2018 and December 31, 2017 on held to maturity securities classified according to the amount of time those securities have been in a continuous unrealized loss position:
 
As of June 30, 2018
 
Less than 12
Months
 
12 Months
or Longer
 
Total
(dollars in thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Mortgage-backed securities
$
4,900

 
$
(167
)
 
$
2,647

 
$
(124
)
 
$
7,547

 
$
(291
)
 
As of December 31, 2017
 
Less than 12
Months
 
12 Months
or Longer
 
Total
(dollars in thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Mortgage-backed securities
$
2,756

 
$
(25
)
 
$
3,866

 
$
(61
)
 
$
6,622

 
$
(86
)

 
The amortized cost and fair value of held to maturity investment securities as of June 30, 2018 and December 31, 2017, by contractual maturity, are shown below:
 
June 30, 2018
 
December 31, 2017
(dollars in thousands)
Amortized
Cost
 
Fair Value
 
Amortized
Cost
 
Fair Value
Mortgage-backed securities(1)
$
7,838

 
$
7,547

 
$
7,932

 
$
7,851

 
(1) Expected maturities of mortgage-related securities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
As of June 30, 2018 and December 31, 2017, the Corporation’s investment securities held in trading accounts totaled $8.2 million and $4.6 million, respectively, and consisted of deferred compensation trust accounts which are invested in listed mutual funds whose diversification is at the discretion of the deferred compensation plan participants and, as of the first quarter of 2018, a rabbi trust account established to fund certain unqualified pension obligations. During the first quarter of 2018, $3.2 million of investment securities included within the rabbi trust account were reclassified from available for sale to trading. Investment securities held in trading accounts are reported at fair value, with adjustments in fair value reported through income.