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SECURITIES | 12 Months Ended
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Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES Available for Sale The amortized cost, gross unrealized gains and losses, and estimated fair values of securities available for sale as of December 31, 2018 and 2017 are summarized as follows (dollars in thousands):
| Amortized |  | Gross Unrealized |  | Estimated
| Cost |  | Gains |  | (Losses) |  | Fair Value
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 466,588 |  |  | $ | 3,844 |  |  | $ | (1,941 | ) |  | $ | 468,491 |
Corporate bonds | 167,561 |  |  | 1,118 |  |  | (983 | ) |  | 167,696 |
Mortgage-backed securities | 1,138,034 |  |  | 4,452 |  |  | (12,621 | ) |  | 1,129,865 |
Other securities | 8,769 |  |  | — |  |  | — |  |  | 8,769 |
Total available for sale securities | $ | 1,780,952 |  |  | $ | 9,414 |  |  | $ | (15,545 | ) |  | $ | 1,774,821 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 295,546 |  |  | $ | 6,842 |  |  | $ | (564 | ) |  | $ | 301,824 |
Corporate bonds | 113,625 |  |  | 1,131 |  |  | (876 | ) |  | 113,880 |
Mortgage-backed securities | 552,431 |  |  | 2,596 |  |  | (6,169 | ) |  | 548,858 |
Other securities | 9,737 |  |  | — |  |  | (77 | ) |  | 9,660 |
Total available for sale securities | $ | 971,339 |  |  | $ | 10,569 |  |  | $ | (7,686 | ) |  | $ | 974,222 |
The following table shows the gross unrealized losses and fair value (dollars in thousands) of the Company’s available for sale securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of December 31, 2018 and 2017. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
| Less than 12 months |  | More than 12 months |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 133,513 |  |  | $ | (1,566 | ) |  | $ | 10,145 |  |  | $ | (375 | ) |  | $ | 143,658 |  |  | $ | (1,941 | )
Mortgage-backed securities | 306,038 |  |  | (3,480 | ) |  | 341,400 |  |  | (9,141 | ) |  | 647,438 |  |  | (12,621 | )
Corporate bonds and other securities | 35,478 |  |  | (315 | ) |  | 33,888 |  |  | (668 | ) |  | 69,366 |  |  | (983 | )
Total available for sale | $ | 475,029 |  |  | $ | (5,361 | ) |  | $ | 385,433 |  |  | $ | (10,184 | ) |  | $ | 860,462 |  |  | $ | (15,545 | )
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 25,790 |  |  | $ | (132 | ) |  | $ | 16,934 |  |  | $ | (432 | ) |  | $ | 42,724 |  |  | $ | (564 | )
Mortgage-backed securities | 298,439 |  |  | (3,267 | ) |  | 136,298 |  |  | (2,902 | ) |  | 434,737 |  |  | (6,169 | )
Corporate bonds and other securities | 10,976 |  |  | (99 | ) |  | 44,408 |  |  | (854 | ) |  | 55,384 |  |  | (953 | )
Total available for sale | $ | 335,205 |  |  | $ | (3,498 | ) |  | $ | 197,640 |  |  | $ | (4,188 | ) |  | $ | 532,845 |  |  | $ | (7,686 | )
As of December 31, 2018, there were $385.4 million, or 138 issues, of individual available for sale securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $10.2 million and consisted of municipal obligations, mortgage-backed securities, and other securities. As of December 31, 2017, there were $197.6 million, or 71 issues, of individual securities that had been in a continuous loss position for more than 12 months. These securities had an unrealized loss of $4.2 million and consisted of municipal obligations, mortgage-backed securities, corporate bonds, and other securities. The Company has determined that these securities are temporarily impaired at December 31, 2018 and 2017 for the reasons set out below: Mortgage-backed securities. This category’s unrealized losses are primarily the result of interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not intend to sell the investments, and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired. Also, the majority of the Company’s mortgage-backed securities are agency-backed securities, which have a government guarantee. Obligations of state and political subdivisions. This category’s unrealized losses are primarily the result of interest rate fluctuations and also a certain few ratings downgrades brought about by the impact of the credit crisis on states and political subdivisions. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. Corporate bonds. The Company’s unrealized losses in corporate debt securities are related to both interest rate fluctuations and ratings downgrades for a limited number of securities. The majority of the securities remain investment grade and the Company’s analysis did not indicate the existence of a credit loss. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and the accounting standard of "more likely than not" has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. The following table presents the amortized cost and estimated fair value of AFS securities as of December 31, 2018 and 2017, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| December 31, 2018 |  | December 31, 2017
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
Due in one year or less | $ | 22,653 |  |  | $ | 22,789 |  |  | $ | 25,179 |  |  | $ | 25,326 |
Due after one year through five years | 191,003 |  |  | 188,999 |  |  | 145,276 |  |  | 145,980 |
Due after five years through ten years | 218,211 |  |  | 217,304 |  |  | 223,210 |  |  | 226,251 |
Due after ten years | 1,349,085 |  |  | 1,345,729 |  |  | 577,674 |  |  | 576,665 |
Total securities available for sale | $ | 1,780,952 |  |  | $ | 1,774,821 |  |  | $ | 971,339 |  |  | $ | 974,222 |
For information regarding the estimated fair value of available for sale securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of December 31, 2018 and 2017, see Note 9 "Commitments and Contingencies." Held to Maturity During the second quarter of 2018, the Company adopted ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." As part of this adoption, the Company made a one-time election to transfer eligible HTM securities to the AFS category in order to optimize the investment portfolio management for capital and risk management considerations. These securities had a carrying value of $187.4 million on the date of the transfer. The Company reports HTM securities on the Consolidated Balance Sheets at carrying value. Carrying value is amortized cost which includes any unamortized unrealized gains and losses recognized in accumulated other comprehensive income prior to reclassifying the securities from securities available for sale to securities held to maturity. Investment securities transferred into the HTM category from the AFS category are recorded at fair value at the date of transfer. The unrealized holding gain or loss at the date of transfer is retained in accumulated other comprehensive income and in the carrying value of the HTM securities. Such unrealized gains or losses are accreted over the remaining life of the security with no impact on future net income. The carrying value, gross unrealized gains and losses, and estimated fair values of securities held to maturity as of December 31, 2018 and 2017 are summarized as follows (dollars in thousands):
| Carrying |  | Gross Unrealized |  | Estimated
| Value (1) |  | Gains |  | (Losses) |  | Fair Value
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 492,272 |  |  | $ | 7,375 |  |  | $ | (146 | ) |  | $ | 499,501 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 199,639 |  |  | $ | 4,014 |  |  | $ | (170 | ) |  | $ | 203,483 |
(1) The carrying value includes $119,000 and $3.6 million of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion, as of December 31, 2018 and 2017, respectively. The following table shows the gross unrealized losses and fair value (dollars in thousands) of the Company’s held to maturity securities with unrealized losses that are not deemed to be other-than-temporarily impaired as of December 31, 2018 and 2017. These are aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
| Less than 12 months |  | More than 12 months |  | Total
| Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 43,206 |  |  | $ | (146 | ) |  | $ | — |  |  | $ | — |  |  | $ | 43,206 |  |  | $ | (146 | )
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of states and political subdivisions | $ | 18,896 |  |  | $ | (139 | ) |  | $ | 1,084 |  |  | $ | (31 | ) |  | $ | 19,980 |  |  | $ | (170 | )
As of December 31, 2018, there were no issues of individual HTM securities that had been in a continuous loss position for more than 12 months. As of December 31, 2017, there was $1.1 million, or two issues, of individual HTM securities that had been in a continuous loss position for more than 12 months and had an aggregate unrealized loss of $31,000. These securities are municipal bonds with minimal credit exposure. For this reason, the Company has determined that these securities in a loss position were temporarily impaired as of December 31, 2017. Because the Company did not intend to sell these investments and the accounting standard of "more likely than not" has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired. The following table presents the amortized cost and estimated fair value of HTM securities as of December 31, 2018 and 2017, by contractual maturity (dollars in thousands). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| December 31, 2018 |  | December 31, 2017
| Carrying Value (1) |  | Estimated Fair Value |  | Carrying Value (1) |  | Estimated Fair Value
Due in one year or less | $ | — |  |  | $ | — |  |  | $ | 3,221 |  |  | $ | 3,230 |
Due after one year through five years | 3,893 |  |  | 3,900 |  |  | 44,289 |  |  | 44,601 |
Due after five years through ten years | 3,480 |  |  | 3,507 |  |  | 79,114 |  |  | 80,532 |
Due after ten years | 484,899 |  |  | 492,094 |  |  | 73,015 |  |  | 75,120 |
Total securities held to maturity | $ | 492,272 |  |  | $ | 499,501 |  |  | $ | 199,639 |  |  | $ | 203,483 |
(1) The carrying value includes $119,000 and $3.6 million of net unrealized gains present at the time of transfer from available for sale securities, net of any accretion, as of December 31, 2018 and 2017, respectively. For information regarding the estimated fair value of HTM securities which were pledged to secure public deposits, repurchase agreements, and for other purposes as permitted or required by law as of December 31, 2018 and 2017, see Note 9 "Commitments and Contingencies." Restricted Stock, at cost Due to restrictions placed upon the Bank’s common stock investment in the Federal Reserve Bank and the FHLB, these securities have been classified as restricted equity securities and carried at cost. These restricted securities are not subject to the investment security classifications and are included as a separate line item on the Company’s Consolidated Balance Sheets. At both December 31, 2018 and 2017, the FHLB required the Bank to maintain stock in an amount equal to 4.25% of outstanding borrowings and a specific percentage of the Bank’s total assets. The Federal Reserve Bank required the Bank to maintain stock with a par value equal to 6% of its outstanding capital at both December 31, 2018 and 2017. Restricted equity securities consist of Federal Reserve Bank stock in the amount of $52.6 million and $27.6 million for December 31, 2018 and 2017 and FHLB stock in the amount of $72.0 million and $47.7 million as of December 31, 2018 and 2017, respectively. Other-Than-Temporary Impairment During each quarter and at year end the Company conducts an assessment of the securities portfolio for OTTI consideration. The assessment considers factors such as external credit ratings, delinquency coverage ratios, market price, management’s judgment, expectations of future performance, and relevant industry research and analysis. An impairment is other-than-temporary if any of the following conditions exist: the entity intends to sell the security; it is more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis; or the entity does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell). If a credit loss exists, but an entity does not intend to sell the impaired debt security and is not more likely than not to be required to sell before recovery, the impairment is other-than-temporary and should be separated into a credit portion to be recognized in earnings and the remaining amount relating to all other factors recognized as other comprehensive loss. Based on the assessments during the years ended December 31, 2018 and 2017, and in accordance with the guidance, no OTTI was recognized. Realized Gains and Losses The following table presents the gross realized gains and losses on and the proceeds from the sale of securities during the years ended December 31, 2018, 2017, and 2016 (dollars in thousands).
| 2018 |  | 2017 |  | 2016
Realized gains (losses): |  |  |  |  |  |  |  |
Gross realized gains | $ | 4,221 |  |  | $ | 1,170 |  |  | $ | 302 |
Gross realized losses | (3,838 | ) |  | (370 | ) |  | (97 | )
Net realized gains | $ | 383 |  |  | $ | 800 |  |  | $ | 205 |
Proceeds from sales of securities | $ | 515,764 |  |  | $ | 139,046 |  |  | $ | 69,516 |

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