
	June 30, 2020
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
Available-for-sale
U.S. government and federal agency	$	42,016	391	(172)	42,235
U.S. government sponsored enterprises	10,788		75	—	10,863
State and local governments	1,198,293		79,406	(147)	1,277,552
Corporate bonds	374,193		14,389	(207)	388,375
Residential mortgage-backed securities	835,036		22,648	(43)	857,641
Commercial mortgage-backed securities	899,167		58,117	—	957,284
Total available-for-sale	$	3,359,493	175,026	(569)	3,533,950
Held-to-maturity
State and local governments	$	203,275	12,608	—	215,883
Total held-to-maturity	$	203,275	12,608	—	215,883


	December 31, 2019
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
Available-for-sale
U.S. government and federal agency	$	20,061	48	(65)	20,044
U.S. government sponsored enterprises	42,724		953	—	43,677
State and local governments	679,784		22,694	(80)	702,398
Corporate bonds	155,665		1,938	(1)	157,602
Residential mortgage-backed securities	731,766		7,507	(549)	738,724
Commercial mortgage-backed securities	891,374		22,825	(1,392)	912,807
Total available-for-sale	$	2,521,374	55,965	(2,087)	2,575,252
Held-to-maturity
State and local governments	$	224,611	9,785	—	234,396
Total held-to-maturity	$	224,611	9,785	—	234,396

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity at June 30, 2020. Actual maturities may differ from expected or contractual maturities since some issuers have the right to prepay obligations with or without prepayment penalties.


	June 30, 2020
	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	144,070	145,977	—	—
Due after one year through five years	269,452		281,526	17,132	18,339
Due after five years through ten years	261,463		275,179	71,471	76,970
Due after ten years	950,305		1,016,343	114,672	120,574
	1,625,290		1,719,025	203,275	215,883
Mortgage-backed securities ¹	1,734,203		1,814,925	—	—
Total	$	3,359,493	3,533,950	203,275	215,883


	Three Months ended				Six Months ended
(Dollars in thousands)	June 30, 2020		June 30, 2019	June 30, 2020	June 30, 2019
Available-for-sale
Proceeds from sales and calls of debt securities	$	37,711	172,323	114,784	476,371
Gross realized gains ¹	142		1,347	1,104	4,284
Gross realized losses ¹	(14)		(1,213)	(114)	(3,929)
Held-to-maturity
Proceeds from calls of debt securities	—		2,630	20,250	32,575
Gross realized gains ¹	—		—	1	2
Gross realized losses ¹	—		—	—	(10)

In assessing whether a credit loss existed on available-for-sale debt securities with unrealized losses, the Company compared the present value of cash flows expected to be collected from the debt securities with the amortized cost basis of the debt securities. In addition, the following factors were evaluated individually and collectively in determining the existence of expected credit losses:

•the overall deal and payment structure of the debt securities, including the investor entity’s position within the structure, underlying obligors, financial condition and near-term prospects of the issuer, including specific events which may affect the issuer’s operations or future earnings, and credit support or enhancements; and

The following table summarizes available-for-sale debt securities that were in an unrealized loss position for which an ACL has not been recorded, based on the length of time the individual securities have been in an unrealized loss position. The number of available-for-sale debt securities in an unrealized position is also disclosed.


	June 30, 2020
	Number of Securities	Less than 12 Months							12 Months or More						Total
(Dollars in thousands)				Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale
U.S. government and federal agency	9	$	4,999		(163)		738		(9)		5,737		(172)

State and local governments	31	21,080			(147)		—		—		21,080		(147)
Corporate bonds	9	20,148			(207)		—		—		20,148		(207)
Residential mortgage-backed securities	15	17,637			(43)		27		—		17,664		(43)

Total available-for-sale	64	$	63,864		(560)		765		(9)		64,629		(569)


	December 31, 2019
	Number of Securities	Less than 12 Months							12 Months or More						Total
(Dollars in thousands)				Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Available-for-sale
U.S. government and federal agency	20	$	464		—		9,902		(65)		10,366		(65)

State and local governments	12	19,044			(80)		—		—		19,044		(80)
Corporate bonds	2	7,378			(1)		—		—		7,378		(1)
Residential mortgage-backed securities	35	85,562			(234)		29,038		(315)		114,600		(549)
Commercial mortgage-backed securities	19	177,051			(1,293)		7,697		(99)		184,748		(1,392)
Total available-for-sale	88	$	289,499		(1,608)		46,637		(479)		336,136		(2,087)

With respect to severity, the majority of available-for-sale debt securities with unrealized loss positions at June 30, 2020 have unrealized losses as a percentage of book value of less than five percent. A substantial portion of such securities were issued by Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”), Government National Mortgage Association (“Ginnie Mae”) and other agencies of the U.S. government or have credit ratings issued by one or more of the NRSRO entities in the four highest credit rating categories. All of the Company’s available-for-sale debt securities with unrealized loss positions at June 30, 2020 have been determined to be investment grade.

As of June 30, 2020, the Company did not have any available-for-sale debt securities past due. Accrued interest receivable on available-for-sale debt securities totaled $18,970,000 at June 30, 2020 and was excluded from the estimate of credit losses.

During the period ended June 30, 2020, the Company acquired available-for-sale debt securities from the secondary market and through the SBAZ acquisition. Such securities were evaluated and it was determined there were no PCD securities, so no allowance for credit losses was recorded.

Based on an analysis of its available-for-sale debt securities with unrealized losses as of June 30, 2020, the Company determined the decline in value was unrelated to credit loss and was primarily the result of changes in interest rates and market spreads subsequent to acquisition. The fair value of the debt securities is expected to recover as payments are received and the debt securities approach maturity. In addition, as of June 30, 2020, management determined it did not intend to sell available-for-sale debt securities with unrealized losses, and there was no expected requirement to sell such securities before recovery of their amortized cost. As a result, no ACL was recorded on available-for-sale debt securities at June 30, 2020. As part of this determination, the Company considered contractual obligations, regulatory constraints, liquidity, capital, asset/liability management and securities portfolio objectives and whether or not any of the Company’s investment securities were managed by third-party investment funds.

The Company measured expected credit losses on held-to-maturity debt securities on a collective basis by major security type and NRSRO credit ratings, which is the Company’s primary credit quality indicator for state and local government securities. The estimate of expected credit losses considered historical credit loss information that was adjusted for current conditions as well as reasonable and supportable forecasts. The following table summarizes the amortized cost of held-to-maturity debt securities aggregated by NRSRO credit rating:


(Dollars in thousands)	June 30, 2020		December 31, 2019
Held-to-maturity
S&P: AAA / Moody’s: Aaa	$	47,360	65,217
S&P: AA+, AA, AA- / Moody’s: Aa1, Aa2, Aa3	128,281		130,316
S&P: A+, A, A- / Moody’s: A1, A2, A3	27,252		28,689

Not rated by either entity	382		389

Total held-to-maturity	$	203,275	224,611

The Company’s held-to-maturity debt securities portfolio is primarily comprised of general obligation and revenue bonds with NRSRO ratings in the four highest credit rating categories. All of the Company’s held-to-maturity debt securities at June 30, 2020 have been determined to be investment grade.

As of June 30, 2020, the Company did not have any held-to-maturity debt securities past due. Accrued interest receivable on held-to-maturity debt securities totaled $1,956,000 at June 30, 2020 and was excluded from the estimate of credit losses.