Investment Securities Held-to-Maturity

12 Months Ended

Dec. 31, 2019

4.	Investment Securities Held-to-Maturity


	December 31, 2019								December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
(dollars in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	9,960	$	—	$	2	$	9,958
U.S. Government Sponsored Enterprises		98,867		527		96		99,298		234,228		336		803		233,761
SBA Backed Securities		44,379		182		303		44,258		52,051		—		2,065		49,986
U.S. Government Sponsored Enterprises Mortgage-Backed Securities		2,207,874		20,720		10,846		2,217,748		1,750,408		2,324		55,016		1,697,716

Total	$	2,351,120	$	21,429	$	11,245	$	2,361,304	$	2,046,647	$	2,660	$	57,886	$	1,991,421

Included in U.S. Government Sponsored Enterprises and U.S. Government Sponsored Enterprise Mortgage-Backed Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,776,399,000 and $1,441,059,000 at December 31, 2019, and 2018, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank at fair value amounting to $399,646,000 and $291,190,000 at December 31, 2019, and 2018, respectively. The Company realized gains on sales of securities of $48,000 from the proceeds of sales of

held-to-maturity

securities of $1,193,000. The sales from securities

held-to-maturity

relate to certain mortgage-backed securities for which the Company had previously collected a substantial portion of its principal investment.

The Company did not realize any gains of sales of securities for the year ending December 31, 2018 and 2017.

At December 31, 2019 and 2018, all mortgage-backed securities are obligations of U.S. Government Sponsored Enterprises. Government Sponsored Enterprises primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities

held-to-maturity

at December 31, 2019.


	Amortized Cost		Fair Value
(dollars in thousands)
Within one year	$	73,576	$	73,841
After one but within five years		1,891,043		1,900,050
After five but within ten years		374,071		374,688
More than ten years		12,430		12,725

Total	$	2,351,120	$	2,361,304

The weighted average remaining life of investment securities

held-to-maturity

at December 31, 2019, was 3.7 years. Included in the weighted average remaining life calculation at December 31, 2019, were $33,491,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities due to the ability of the issuers to prepay underlying obligations. Also, $107,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of December 31, 2019 and December 31, 2018, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Sponsored Enterprises, SBA Backed Securities and U.S. Government Sponsored Enterprises Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company does not intend to sell any of these securities and it is not more likely than not that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2019 and December 31, 2018.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary.

The following table shows the temporarily impaired securities of the Company’s

held-to-maturity

portfolio at December 31, 2019. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 114 and 103 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 531 holdings at December 31, 2019.


Temporarily Impaired Investments	December 31, 2019
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(dollars in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Enterprises		24,420		72		9,976		24		34,396		96
SBA Backed Securities		25,251		303		—		—		25,251		303
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		613,905		3,949		389,919		6,897		1,003,824		10,846

Total temporarily impaired securities	$	663,576	$	4,324	$	399,895	$	6,921	$	1,063,471	$	11,245

The following table shows the temporarily impaired securities of the Company’s

held-to-maturity

portfolio at December 31, 2018.This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months and longer. There are 56 and 315 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 475 holdings at December 31, 2018.


Temporarily Impaired Investments	December 31, 2018
	Less Than 12 Months				12 Months or Longer				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(dollars in thousands)
U.S. Treasury	$	9,958	$	2	$	—	$	—	$	9,958	$	2
U.S. Government Sponsored Enterprises		9,849		42		69,499		761		79,348		803
SBA Backed Securities		—		—		49,987		2,065		49,987		2,065
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		188,125		2,032		1,249,689		52,984		1,437,814		55,016

Total temporarily impaired securities	$	207,932	$	2,076	$	1,369,175	$	55,810	$	1,577,107	$	57,886