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SECURITIES
 12 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair values of debt securities available for sale and equity securities with a readily determinable fair value as of December 31, 2020, and December 31, 2019, are summarized in the table below, in thousands:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
December 31, 2020    
U.S. treasuries$1,995 $31 $— $2,026 
U.S. agencies167,048 657 (926)166,779 
Obligations of states and political subdivisions1,562,631 75,555 (2,959)1,635,227 
Mortgage-backed securities - agency1,351,964 16,029 (12,723)1,355,270 
Mortgage-backed securities - non-agency1,428,068 22,688 (1,640)1,449,116 
Commercial mortgage-backed securities - agency171,451 3,440 (738)174,153 
Commercial mortgage-backed securities - non-agency253,421 37 (691)252,767 
Asset-backed securities1,064,255 9,421 (4,410)1,069,266 
Corporate bonds3,763 8 (29)3,742 
Total debt securities6,004,596 127,866 (24,116)6,108,346 
Equity securities with a readily determinable fair value19,629 — — 19,629 
Total$6,024,225 $127,866 $(24,116)$6,127,975 
December 31, 2019
U.S. treasuries$8,466 $37 $— $8,503 
U.S. agencies185,566 671 (1,561)184,676 
Obligations of states and political subdivisions704,073 12,516 (9,399)707,190 
Mortgage-backed securities - agency763,733 7,598 (4,605)766,726 
Mortgage-backed securities - non-agency427,315 4,312 (1,130)430,497 
Commercial mortgage-backed securities - agency68,019 989 (143)68,865 
Commercial mortgage-backed securities - non-agency435,195 3,113 (1,983)436,325 
Asset-backed securities700,631 529 (9,581)691,579 
Corporate bonds— — — — 
Total debt securities3,292,998 29,765 (28,402)3,294,361 
Equity securities18,435 — — 18,435 
Total$3,311,433 $29,765 $(28,402)$3,312,796 

The amortized cost, gross unrealized gains and losses and estimated fair values of held to maturity securities as of December 31, 2020, and December 31, 2019, are summarized in the table below, in thousands:
 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
Allowance for Credit Losses
December 31, 2020    
Obligations of states and political subdivisions$88,890 $11,151 $— $100,041 $(51)
Total$88,890 $11,151 $— $100,041 $(51)
December 31, 2019
Obligations of states and political subdivisions$91,324 $9,160 $— $100,484 $— 
Total$91,324 $9,160 $— $100,484 $— 
As of December 31, 2020, Heartland had $20.8 million of accrued interest receivable, which is included in other assets on the consolidated balance sheet. Heartland does not consider accrued interest receivable in the carrying amount of financial assets held at amortized cost basis or in the allowance for credit losses calculation.

The amortized cost and estimated fair value of investment securities carried at fair value at December 31, 2020, by contractual maturity are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.
December 31, 2020
Amortized CostEstimated Fair Value
Due in 1 year or less$3,579 $3,624 
Due in 1 to 5 years26,507 27,252 
Due in 5 to 10 years168,981 173,927 
Due after 10 years1,536,370 1,602,971 
    Total debt securities1,735,437 1,807,774 
Mortgage and asset-backed securities4,269,159 4,300,572 
Equity securities with a readily determinable fair value 19,629 19,629 
Total investment securities$6,024,225 $6,127,975 

The amortized cost and estimated fair value of debt securities held to maturity at December 31, 2020, by contractual maturity are as follows, in thousands. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.
December 31, 2020
Amortized CostEstimated Fair Value
Due in 1 year or less$1,933 $1,963 
Due in 1 to 5 years24,129 25,871 
Due in 5 to 10 years54,329 60,040 
Due after 10 years8,499 12,167 
Total investment securities$88,890 $100,041 

As of December 31, 2020, securities with a carrying value of $2.12 billion were pledged to secure public and trust deposits, short-term borrowings and for other purposes as required and permitted by law.

Gross gains and losses realized related to sales of securities carried at fair value for the years ended December 31, 2020, 2019 and 2018 are summarized as follows, in thousands:
 202020192018
Available for Sale Securities sold:  
Proceeds from sales$1,097,378 $1,628,467 $727,895 
Gross security gains13,208 11,774 3,661 
Gross security losses5,616 4,115 2,576 
The following tables summarize, in thousands, the amount of unrealized losses, defined as the amount by which cost or amortized cost exceeds fair value, and the related fair value of investments with unrealized losses in Heartland's securities portfolio as of December 31, 2020, and December 31, 2019. The investments were segregated into two categories: those that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months. The reference point for determining how long an investment was in an unrealized loss position was December 31, 2020, and December 31, 2019, respectively.
Debt securities available for saleLess than 12 months12 months or longerTotal
 Fair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		CountFair
Value		Unrealized
Losses		Count
December 31, 2020
U.S. agencies$2,981 $(8)5 $99,922 $(918)72 $102,903 $(926)77 
Obligations of states and political subdivisions346,598 (2,959)49 — — — 346,598 (2,959)49 
Mortgage-backed securities - agency653,793 (12,342)35 31,012 (381)3 684,805 (12,723)38 
Mortgage-backed securities - non-agency378,843 (1,639)17 1,622 (1)1 380,465 (1,640)18 
Commercial mortgage-backed securities - agency46,541 (738)6 — — — 46,541 (738)6 
Commercial mortgage-backed securities - non-agency100,042 (15)2 35,428 (676)3 135,470 (691)5 
Asset-backed securities141,824 (643)9 340,452 (3,767)24 482,276 (4,410)33 
Corporate bonds1,908 (29)4 — — — 1,908 (29)4 
Total temporarily impaired securities$1,672,530 $(18,373)127 $508,436 $(5,743)103 $2,180,966 $(24,116)230 
December 31, 2019
U.S. agencies$94,774 $(957)57 $49,555 $(604)24 $144,329 $(1,561)81 
Obligations of states and political subdivisions387,534 (9,399)50 — — — 387,534 (9,399)50 
Mortgage-backed securities - agency182,614 (1,763)36 92,928 (2,842)17 275,542 (4,605)53 
Mortgage-backed securities - non-agency225,807 (1,130)6 251 — 1 226,058 (1,130)7 
Commercial mortgage-backed securities - agency12,509 (128)4 1,842 (15)1 14,351 (143)5 
Commercial mortgage-backed securities - non-agency214,774 (1,544)19 55,896 (439)4 270,670 (1,983)23 
Asset-backed securities501,254 (8,667)28 40,760 (914)11 542,014 (9,581)39 
Corporate bonds— — — — — — — — 
Total temporarily impaired securities$1,619,266 $(23,588)200 $241,232 $(4,814)58 $1,860,498 $(28,402)258 

Heartland had no securities held to maturity with unrealized losses at December 31, 2020, or December 31, 2019.

On January 1, 2020, Heartland adopted the amendments within ASU 2016-13, which replaced the legacy GAAP other-than-temporary impairment ("OTTI") model with a credit loss model. The credit loss model under ASC 326-30, applicable to AFS debt securities, requires the recognition of credit losses through an allowance account, but retains the concept from the OTTI model that credit losses are recognized once securities become impaired. See Note 1, "Basis of Presentation," to the consolidated financial statements included herein for a discussion of the impact of the adoption of ASU 2016-13. Heartland reviews the investment securities portfolio at the security level on a quarterly basis for potential credit losses, which takes into consideration numerous factors, and the relative significance of any single factor can vary by security. Some factors Heartland may consider include changes in security ratings, financial condition of the issuer, as well as security and industry specific economic conditions. In addition, with regard to debt securities, Heartland may also evaluate payment structure, whether there are defaulted payments or expected defaults, prepayment speeds and the value of any underlying collateral. For certain debt
securities in unrealized loss positions, Heartland prepares cash flow analyses to compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security.

The remaining unrealized losses on Heartland's mortgage and asset-backed securities are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. The losses are not related to concerns regarding the underlying credit of the issuers or the underlying collateral. It is expected that the securities will not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates or widening market spreads and not credit quality, and because Heartland has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, no credit losses were recognized on these securities during the year ended December 31, 2020.

The remaining unrealized losses on Heartland's obligations of states and political subdivisions are the result of changes in market interest rates or widening of market spreads subsequent to the initial purchase of the securities. Management monitors the published credit ratings of these securities and the stability of the underlying municipalities. Because the decline in fair value is attributable to changes in interest rates or widening market spreads due to insurance company downgrades and not underlying credit quality, and because Heartland has the intent and ability to hold these investments until a market price recovery or to maturity and does not believe it will be required to sell the securities before maturity, no credit losses were recognized on these securities during the year ended December 31, 2020.

In the third quarter of 2020, Heartland sold two obligations of states and political subdivisions securities from the held to maturity portfolio. Because the underlying credit quality of the individual securities showed significant deterioration, it was unlikely Heartland would recover the remaining basis of the securities prior to maturity and therefore inconsistent with Heartland's original intent upon purchase and classification of these held to maturity securities. The carrying value of these securities was $855,000, and the associated gross gains were $201,000.

The credit loss model under ASC 326-30, applicable to held to maturity debt securities, requires the recognition of lifetime expected credit losses through an allowance account at the time when the security is purchased. The following table presents, in thousands, the activity in the allowance for credit losses for securities held to maturity by major security type for the quarter and year ended December 31, 2020:
Obligations of states and political subdivisions
Balance at December 31, 2019$— 
Impact of ASU 2016-13 adoption on January 1, 2020158 
Adjusted balance at January 1, 2020158 
Provision for credit losses(107)
Balance at December 31, 2020
$51 

The following table summarizes, in thousands, the carrying amount of Heartland's held to maturity debt securities by investment rating as of December 31, 2020, which are updated quarterly and used to monitor the credit quality of the securities:
RatingObligations of states and political subdivisions
AAA$— 
AA, AA+, AA-64,385 
A+, A, A-18,353 
BBB4,208 
Not Rated1,944 
Total $88,890 

Included in other securities were shares of stock in each Federal Home Loan Bank (the "FHLB") of Des Moines, Chicago, Dallas, San Francisco and Topeka at an amortized cost of $19.5 million at December 31, 2020 and $16.8 million at December 31, 2019.
The Heartland banks are required to maintain FHLB stock as members of the various FHLBs as required by these institutions. These equity securities are "restricted" in that they can only be sold back to the respective institutions or another member institution at par. Therefore, they are less liquid than other marketable equity securities and their fair value approximates amortized cost. Heartland considers its FHLB stock as a long-term investment that provides access to competitive products and liquidity. Heartland evaluates impairment in these investments based on the ultimate recoverability of the par value and at December 31, 2020, did not consider the investments to be other than temporarily impaired.