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Securities | 9 Months Ended
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Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract] |
Securities | Securities The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity at September 30, 2019, and December 31, 2018, are as follows (in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
At September 30, 2019 |  |  |  |  |  |  |
Debt securities available-for-sale: |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 124,050 |  |  | $ | 1,520 |  |  | $ | (119 | ) |  | $ | 125,451 |
State and municipal obligations | 1,250 |  |  | 1 |  |  | — |  |  | 1,251 |
Total investment securities | 125,300 |  |  | 1,521 |  |  | (119 | ) |  | 126,702 |
Mortgage-backed securities - FNMA | 601 |  |  | 5 |  |  | — |  |  | 606 |
Total debt securities available-for-sale | $ | 125,901 |  |  | $ | 1,526 |  |  | $ | (119 | ) |  | $ | 127,308 |
Debt securities held-to-maturity: |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 9,981 |  |  | $ | 2 |  |  | $ | (2 | ) |  | $ | 9,981 |
State and municipal obligations | 134,626 |  |  | 1,247 |  |  | (259 | ) |  | 135,614 |
Corporate debt securities | 81,233 |  |  | 915 |  |  | (3,369 | ) |  | 78,779 |
Total investment securities | 225,840 |  |  | 2,164 |  |  | (3,630 | ) |  | 224,374 |
Mortgage-backed securities: |  |  |  |  |  |  |
FHLMC | 219,047 |  |  | 2,194 |  |  | (569 | ) |  | 220,672 |
FNMA | 259,192 |  |  | 2,566 |  |  | (503 | ) |  | 261,255 |
GNMA | 116,730 |  |  | 1,268 |  |  | (169 | ) |  | 117,829 |
SBA | 2,908 |  |  | — |  |  | (74 | ) |  | 2,834 |
Total mortgage-backed securities | 597,877 |  |  | 6,028 |  |  | (1,315 | ) |  | 602,590 |
Total debt securities held-to-maturity | $ | 823,717 |  |  | $ | 8,192 |  |  | $ | (4,945 | ) |  | $ | 826,964 |
Total debt securities | $ | 949,618 |  |  | $ | 9,718 |  |  | $ | (5,064 | ) |  | $ | 954,272 |
At December 31, 2018 |  |  |  |  |  |  |
Debt securities available-for-sale: |  |  |  |  |  |  |
Investment securities - U.S. government and agency obligations | $ | 100,524 |  |  | $ | 163 |  |  | $ | (963 | ) |  | $ | 99,724 |
Mortgage-backed securities - FNMA | 998 |  |  | — |  |  | (5 | ) |  | 993 |
Total debt securities available-for-sale | $ | 101,522 |  |  | $ | 163 |  |  | $ | (968 | ) |  | $ | 100,717 |
Debt securities held-to-maturity: |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |
U.S. government and agency obligations | $ | 14,975 |  |  | $ | — |  |  | $ | (130 | ) |  | $ | 14,845 |
State and municipal obligations | 123,987 |  |  | 67 |  |  | (1,697 | ) |  | 122,357 |
Corporate debt securities | 66,834 |  |  | 126 |  |  | (4,984 | ) |  | 61,976 |
Total investment securities | 205,796 |  |  | 193 |  |  | (6,811 | ) |  | 199,178 |
Mortgage-backed securities: |  |  |  |  |  |  |
FHLMC | 237,703 |  |  | 159 |  |  | (5,110 | ) |  | 232,752 |
FNMA | 277,266 |  |  | 753 |  |  | (6,030 | ) |  | 271,989 |
GNMA | 127,611 |  |  | 198 |  |  | (2,360 | ) |  | 125,449 |
SBA | 3,527 |  |  | — |  |  | (80 | ) |  | 3,447 |
Total mortgage-backed securities | 646,107 |  |  | 1,110 |  |  | (13,580 | ) |  | 633,637 |
Total debt securities held-to-maturity | $ | 851,903 |  |  | $ | 1,303 |  |  | $ | (20,391 | ) |  | $ | 832,815 |
Total debt securities | $ | 953,425 |  |  | $ | 1,466 |  |  | $ | (21,359 | ) |  | $ | 933,532 |
During the third quarter 2013, the Bank transferred $536.0 million of previously designated available-for-sale securities to a held-to-maturity designation at estimated fair value. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer which continues to be reflected in accumulated other comprehensive loss on the consolidated balance sheet, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the debt securities held-to-maturity at September 30, 2019, and December 31, 2018, is as follows (in thousands):
| September 30, 2019 |  | December 31, 2018
Amortized cost | $ | 823,717 |  |  | $ | 851,903 |
Net loss on date of transfer from available-for-sale | (13,347 | ) |  | (13,347 | )
Accretion of net unrealized loss on securities reclassified as held-to-maturity | 8,883 |  |  | 8,254 |
Carrying value | $ | 819,253 |  |  | $ | 846,810 |
There were no realized gains or losses for the three and nine months ended September 30, 2019 and there were realized gains of $0 and $248,000 on the sale of securities for the three and nine months ended September 30, 2018. The amortized cost and estimated fair value of investment securities at September 30, 2019 by contractual maturity are shown below (in thousands). Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At September 30, 2019, corporate debt securities with an amortized cost of $61.0 million and estimated fair value of $58.3 million were callable prior to the maturity date.
September 30, 2019 | Amortized Cost |  | Estimated Fair Value
Less than one year | $ | 71,705 |  |  | $ | 71,726 |
Due after one year through five years | 190,181 |  |  | 192,486 |
Due after five years through ten years | 75,453 |  |  | 72,747 |
Due after ten years | 13,801 |  |  | 14,117 |
| $ | 351,140 |  |  | $ | 351,076 |
Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments. The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $488.7 million and $563.1 million, at September 30, 2019 and December 31, 2018, respectively, including $65.1 million and $74.1 million at September 30, 2019 and December 31, 2018, respectively, pledged as collateral for securities sold under agreements to repurchase. The estimated fair value and unrealized losses of debt securities available-for-sale and held-to-maturity at September 30, 2019 and December 31, 2018, segregated by the duration of the unrealized losses, are as follows (in thousands):
| At September 30, 2019
| Less than 12 months |  | 12 months or longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Investment securities - U.S. government and agency obligations | $ | 5,011 |  |  | $ | (9 | ) |  | $ | 32,363 |  |  | $ | (110 | ) |  | $ | 37,374 |  |  | $ | (119 | )
Total debt securities available-for-sale | 5,011 |  |  | (9 | ) |  | 32,363 |  |  | (110 | ) |  | 37,374 |  |  | (119 | )
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | — |  |  | — |  |  | 4,999 |  |  | (2 | ) |  | 4,999 |  |  | (2 | )
State and municipal obligations | 22,526 |  |  | (71 | ) |  | 18,348 |  |  | (188 | ) |  | 40,874 |  |  | (259 | )
Corporate debt securities | — |  |  | — |  |  | 42,660 |  |  | (3,369 | ) |  | 42,660 |  |  | (3,369 | )
Total investment securities | 22,526 |  |  | (71 | ) |  | 66,007 |  |  | (3,559 | ) |  | 88,533 |  |  | (3,630 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
FHLMC | 13,132 |  |  | (32 | ) |  | 41,799 |  |  | (537 | ) |  | 54,931 |  |  | (569 | )
FNMA | 13,475 |  |  | (31 | ) |  | 43,134 |  |  | (472 | ) |  | 56,609 |  |  | (503 | )
GNMA | 22,261 |  |  | (56 | ) |  | 24,936 |  |  | (113 | ) |  | 47,197 |  |  | (169 | )
SBA | — |  |  | — |  |  | 2,834 |  |  | (74 | ) |  | 2,834 |  |  | (74 | )
Total mortgage-backed securities | 48,868 |  |  | (119 | ) |  | 112,703 |  |  | (1,196 | ) |  | 161,571 |  |  | (1,315 | )
Total debt securities held-to-maturity | 71,394 |  |  | (190 | ) |  | 178,710 |  |  | (4,755 | ) |  | 250,104 |  |  | (4,945 | )
Total debt securities | $ | 76,405 |  |  | $ | (199 | ) |  | $ | 211,073 |  |  | $ | (4,865 | ) |  | $ | 287,478 |  |  | $ | (5,064 | )
| At December 31, 2018
| Less than 12 months |  | 12 months or longer |  | Total
| Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses |  | Estimated Fair Value |  | Unrealized Losses
Debt securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Investment securities - U.S. government and agency obligations | $ | 985 |  |  | $ | (3 | ) |  | $ | 66,438 |  |  | $ | (960 | ) |  | $ | 67,423 |  |  | $ | (963 | )
Mortgage-backed securities - FNMA | 993 |  |  | (5 | ) |  | — |  |  | — |  |  | 993 |  |  | (5 | )
Total debt securities available-for-sale | 1,978 |  |  | (8 | ) |  | 66,438 |  |  | (960 | ) |  | 68,416 |  |  | (968 | )
Debt securities held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
Investment securities: |  |  |  |  |  |  |  |  |  |  |
U.S. government and agency obligations | — |  |  | — |  |  | 14,845 |  |  | (130 | ) |  | 14,845 |  |  | (130 | )
State and municipal obligations | 2,856 |  |  | (4 | ) |  | 106,073 |  |  | (1,693 | ) |  | 108,929 |  |  | (1,697 | )
Corporate debt securities | 2,470 |  |  | (21 | ) |  | 43,059 |  |  | (4,963 | ) |  | 45,529 |  |  | (4,984 | )
Total investment securities | 5,326 |  |  | (25 | ) |  | 163,977 |  |  | (6,786 | ) |  | 169,303 |  |  | (6,811 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
FHLMC | 46,615 |  |  | (159 | ) |  | 147,763 |  |  | (4,951 | ) |  | 194,378 |  |  | (5,110 | )
FNMA | 27,594 |  |  | (125 | ) |  | 185,328 |  |  | (5,905 | ) |  | 212,922 |  |  | (6,030 | )
GNMA | 35,221 |  |  | (535 | ) |  | 59,468 |  |  | (1,825 | ) |  | 94,689 |  |  | (2,360 | )
SBA | 3,447 |  |  | (80 | ) |  | — |  |  | — |  |  | 3,447 |  |  | (80 | )
Total mortgage-backed securities | 112,877 |  |  | (899 | ) |  | 392,559 |  |  | (12,681 | ) |  | 505,436 |  |  | (13,580 | )
Total debt securities held-to-maturity | 118,203 |  |  | (924 | ) |  | 556,536 |  |  | (19,467 | ) |  | 674,739 |  |  | (20,391 | )
Total debt securities | $ | 120,181 |  |  | $ | (932 | ) |  | $ | 622,974 |  |  | $ | (20,427 | ) |  | $ | 743,155 |  |  | $ | (21,359 | )
At September 30, 2019, the amortized cost, estimated fair value and credit rating of the individual corporate debt securities in an unrealized loss position for greater than one year are as follows (in thousands):
Security Description | Amortized Cost |  | Estimated Fair Value |  | Credit Rating Moody’s/ S&P
Chase Capital | $ | 10,000 |  |  | $ | 9,200 |  |  | Baa1/BBB-
Wells Fargo Capital | 5,000 |  |  | 4,625 |  |  | A1/BBB
Huntington Capital | 5,000 |  |  | 4,450 |  |  | Baa2/BB+
Keycorp Capital | 5,000 |  |  | 4,525 |  |  | Baa2/BB+
PNC Capital | 5,000 |  |  | 4,600 |  |  | Baa1/BBB-
State Street Capital | 5,000 |  |  | 4,613 |  |  | A3/BBB
SunTrust Capital | 5,000 |  |  | 4,625 |  |  | Not Rated/BB+
Celgene | 1,511 |  |  | 1,508 |  |  | Baa2/BBB+
Southern Company | 1,507 |  |  | 1,505 |  |  | Baa2/BBB+
BB&T | 1,506 |  |  | 1,505 |  |  | A2/A-
AT&T Inc. | 1,505 |  |  | 1,504 |  |  | Baa2/BBB
| $ | 46,029 |  |  | $ | 42,660 |  |  |
At September 30, 2019, the estimated fair value of each of the above corporate debt securities was below cost. The Company concluded that these corporate debt securities were only temporarily impaired at September 30, 2019. In concluding that the impairments were only temporary, the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not intend to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. Historically, the Company has not utilized securities sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio. The mortgage-backed securities are issued and guaranteed by either the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”), or the Small Business Administration (“SBA”), corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were only temporarily impaired at September 30, 2019.

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