Investment Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

At December 31, 2019 and 2018, securities with a carrying value of $918 million and $925 million, respectively, were pledged to secure public deposits, derivatives and other secured borrowings.

The cost basis, unrealized gains and losses, and fair value of debt securities held-to-maturity as of the dates indicated are as follows (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2019
State and political subdivisions	$	45,479	$	1,574	$	9	$	47,044
Residential mortgage-backed securities, Agency	153,967		2,014		694		155,287
Commercial mortgage-backed, Agency	84,087		1,627		141		85,573
Total	$	283,533	$	5,215	$	844	$	287,904

As of December 31, 2018
State and political subdivisions	$	68,551	$	952	$	2,191	$	67,312
Residential mortgage-backed securities, Agency	176,488		652		5,094		172,046
Commercial mortgage-backed, Agency	29,368		173		96		29,445
Total	$	274,407	$	1,777	$	7,381	$	268,803

The cost basis, unrealized gains and losses, and fair value of debt securities available-for-sale as of the dates indicated are as follows (in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
As of December 31, 2019
U.S. Treasuries	$	152,990	$	1,628	$	—	$	154,618
U.S. Government agencies	2,848		188		1		3,035
State and political subdivisions	214,677		11,813		—		226,490
Residential mortgage-backed securities, Agency	1,030,948		12,022		726		1,042,244
Residential mortgage-backed securities, Non-agency	250,550		6,231		—		256,781
Commercial mortgage-backed, Agency	266,770		2,261		128		268,903
Commercial mortgage-backed, Non-agency	15,395		918		263		16,050
Corporate bonds	202,131		1,178		218		203,091
Asset-backed securities	104,298		743		1,672		103,369
Total	$	2,240,607	$	36,982	$	3,008	$	2,274,581

As of December 31, 2018
U.S. Treasuries	$	150,712	$	767	$	2,172	$	149,307
U.S. Government agencies	25,493		335		275		25,553
State and political subdivisions	234,750		907		1,716		233,941
Residential mortgage-backed securities, Agency	1,125,194		2,448		20,124		1,107,518
Residential mortgage-backed securities, Non-agency	339,186		980		1,774		338,392
Commercial mortgage-backed, Agency	384,222		1		7,339		376,884
Commercial mortgage-backed, Non-agency	15,441		186		594		15,033
Corporate bonds	200,582		502		1,921		199,163
Asset-backed securities	184,683		328		2,335		182,676
Total	$	2,660,263	$	6,454	$	38,250	$	2,628,467

At year-end 2019 and 2018, there were no holdings of debt obligations of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following summarizes debt securities held-to-maturity in an unrealized loss position as of the dates indicated (in thousands):



	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2019
State and political subdivisions	$	10,117	$	9	$	—	$	—	$	10,117	$	9
Residential mortgage-backed securities, Agency	16,049		64		48,237		630		64,286		694
Commercial mortgage-backed, Agency	21,841		87		1,685		54		23,526		141
Total unrealized loss position	$	48,007	$	160	$	49,922	$	684	$	97,929	$	844

As of December 31, 2018
State and political subdivisions	$	7,062	$	46	$	34,146	$	2,145	$	41,208	$	2,191
Residential mortgage-backed securities, Agency	6,579		61		136,376		5,033		142,955		5,094
Commercial mortgage-backed, Agency	—		—		4,290		96		4,290		96
Total unrealized loss position	$	13,641	$	107	$	174,812	$	7,274	$	188,453	$	7,381

The following summarizes debt securities available-for-sale in an unrealized loss position as of the dates indicated (in thousands):



	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
As of December 31, 2019
U.S. Government agencies	$	404	$	1	$	—	$	—	$	404	$	1
Residential mortgage-backed securities, Agency	228,611		576		18,294		150		246,905		726
Commercial mortgage-backed, Agency	—		—		33,517		128		33,517		128
Commercial mortgage-backed, Non-agency	—		—		4,864		263		4,864		263
Corporate bonds	19,742		216		998		2		20,740		218
Asset-backed securities	32,294		625		38,990		1,047		71,284		1,672
Total unrealized loss position	$	281,051	$	1,418	$	96,663	$	1,590	$	377,714	$	3,008

As of December 31, 2018
U.S. Treasuries	$	—	$	—	$	120,391	$	2,172	$	120,391	$	2,172
U.S. Government agencies	—		—		21,519		275		21,519		275
State and political subdivisions	15,160		28		133,500		1,688		148,660		1,716
Residential mortgage-backed securities, Agency	80,202		332		723,094		19,792		803,296		20,124
Residential mortgage-backed securities, Non-agency	154,381		476		52,266		1,298		206,647		1,774
Commercial mortgage-backed, Agency	—		—		355,292		7,339		355,292		7,339
Commercial mortgage-backed, Non-agency	4,552		594		—		—		4,552		594
Corporate bonds	—		—		117,296		1,921		117,296		1,921
Asset-backed securities	74,492		1,879		31,968		456		106,460		2,335
Total unrealized loss position	$	328,787	$	3,309	$	1,555,326	$	34,941	$	1,884,113	$	38,250

At December 31, 2019, there were 51 debt securities available-for-sale and 33 debt securities held-to-maturity that were in an unrealized loss position. Management does not intend to sell nor believes it will be required to sell securities in an unrealized loss position prior to the recovery of its amortized cost basis. Unrealized losses at December 31, 2019 and 2018 were primarily attributable to changes in interest rates.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, among other factors. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analyst’s reports. No impairment charges were recognized during 2019, 2018 or 2017.

Realized gains and losses are derived using the specific identification method for determining the cost of the securities sold. The following summarizes securities sales activities for the years ended December 31 (in thousands):



	2019			2018			2017
Proceeds from sales	$	352,106		$	168,891		$	340,540

Gross gains on sales	$	1,843		$	2,082		$	1,247
Gross losses on sales	(2,864		)	(2,738		)	(1,205		)
Net (losses) gains on sales of securities	$	(1,021	)	$	(656	)	$	42

Income tax (benefit) expense attributable to sales	$	(247	)	$	(132	)	$	14

The amortized cost and fair value of debt available-for-sale and held-to-maturity securities at December 31, 2019, by contractual maturity, are presented in the following table (in thousands):



	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
US Treasuries:
Within 1 year	$	29,877	$	29,962	$	—	$	—
1 to 5 years	123,113		124,656		—		—
	152,990		154,618		—		—
US Government agencies:
1 to 5 years	405		404		—		—
More than 10 years	2,443		2,631		—		—
	2,848		3,035		—		—
State and political subdivisions:
Within 1 year	935		939		1,350		1,369
1 to 5 years	54,102		55,491		11,761		12,370
5 to 10 years	22,585		23,766		6,202		6,866
More than 10 years	137,055		146,294		26,166		26,439
	214,677		226,490		45,479		47,044
Corporate bonds:
Within 1 year	170,007		170,380		—		—
1 to 5 years	27,624		28,171		—		—
5 to 10 years	3,500		3,542		—		—
More than 10 years	1,000		998		—		—
	202,131		203,091		—		—
Asset-backed securities:
1 to 5 years	1,585		1,578		—		—
More than 10 years	102,713		101,791		—		—
	104,298		103,369		—		—
Total securities other than mortgage-backed securities:
Within 1 year	200,819		201,281		1,350		1,369
1 to 5 years	206,829		210,300		11,761		12,370
5 to 10 years	26,085		27,308		6,202		6,866
More than 10 years	243,211		251,714		26,166		26,439
Residential mortgage-backed securities	1,281,498		1,299,025		153,967		155,287
Commercial mortgage-backed securities	282,165		284,953		84,087		85,573
	$	2,240,607	$	2,274,581	$	283,533	$	287,904

Expected maturities may differ from contractual maturities because issuers and borrowers may have the right to call or prepay obligations.