XML 27 R10.htm IDEA: XBRL DOCUMENT

Investment Securities Available-for-Sale

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Investment Securities Available-for-Sale

Note 3 – Investment Securities Available-for-Sale

Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:

						Gross				Gross				Estimated
December 31, 2018		Amortized				Unrealized				Unrealized				Fair
(dollars in thousands)		Cost				Gains				Losses				Value
U. S. agency securities		$	260,150			$	228			$	4,033			$	256,345
Residential mortgage backed securities			477,949				1,575				7,293				472,231
Municipal bonds			45,814				439				484				45,769
Corporate bonds			9,503				79				6				9,576
Other equity investments			218				—				—				218
		$	793,634			$	2,321			$	11,816			$	784,139

December 31, 2017			Amortized				Unrealized				Unrealized				Fair
(dollars in thousands)			Cost				Gains				Losses				Value
U. S. agency securities		$	198,115			$	283			$	2,414			$	195,984
Residential mortgage backed securities			322,067				187				4,418				317,836
Municipal bonds			60,976				1,295				214				62,057
Corporate bonds			13,010				163				—				13,173
Other equity investments			218				—				—				218
		$	594,386			$	1,928			$	7,046			$	589,268

In addition, at December 31, 2018 and December 31, 2017, the Company held $23.5 million and $36.3 million in equity securities, respectively, in a combination of Federal Reserve Bank (“FRB”) and Federal Home Loan Bank (“FHLB”) stocks, which are required to be held for regulatory purposes and which are not marketable, and therefore are carried at cost.

The unrealized losses that exist are generally the result of changes in market interest rates and interest spread relationships since original purchases. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.6 years. If quoted prices are not available, fair value is measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions and other factors such as credit loss assumptions. The Company does not believe that the investment securities that were in an unrealized loss position as of December 31, 2018 represent an other-than-temporary impairment. The Company does not intend to sell the investments and it is more likely than not that the Company will not have to sell the securities before recovery of its amortized cost basis, which may be at maturity.

Gross unrealized losses and fair value by length of time that the individual available-for-sale securities have been in a continuous unrealized loss position as of December 31, 2018 and 2017 are as follows:

						Less than								12 Months
						12 Months								or Greater								Total
						Estimated								Estimated								Estimated
December 31, 2018		Number of				Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(dollars in thousands)		Securities				Value				Losses				Value				Losses				Value				Losses
U. S. agency securities			58			$	72,679			$	533			$	144,636			$	3,500			$	217,315			$	4,033
Residential mortgage backed securities			151				61,199				527				225,995				6,766				287,194				7,293
Municipal bonds			11				4,299				50				17,041				434				21,340				484
Corporate bonds			1				1,494				6				—				—				1,494				6
			221			$	139,671			$	1,116			$	387,672			$	10,700			$	527,343			$	11,816

						Less than								12 Months
						12 Months								or Greater								Total
						Estimated								Estimated								Estimated
December 31, 2017		Number of				Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
(dollars in thousands)		Securities				Value				Losses				Value				Losses				Value				Losses
U. S. agency securities			38			$	102,264			$	1,073			$	55,093			$	1,341			$	157,357			$	2,414
Residential mortgage backed securities			137				152,350				1,306				147,953				3,112				300,303				4,418
Municipal bonds			8				17,446				214				—				—				17,446				214
			183			$	272,060			$	2,593			$	203,046			$	4,453			$	475,106			$	7,046

The amortized cost and estimated fair value of investments available-for-sale at December 31, 2018 and 2017 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities will 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				Estimated				Amortized				Estimated
(dollars in thousands)		Cost				Fair Value				Cost				Fair Value
U. S. agency securities maturing:
One year or less		$	128,148			$	125,545			$	109,893			$	108,198
After one year through five years			119,856				118,883				74,106				73,916
Five years through ten years			12,146				11,917				14,116				13,870
Residential mortgage backed securities			477,949				472,231				322,067				317,836
Municipal bonds maturing:
One year or less			8,097				8,167				5,068				5,171
After one year through five years			15,025				15,081				19,405				19,879
Five years through ten years			21,626				21,385				35,432				35,846
After ten years			1,066				1,136				1,071				1,161
Corporate bonds maturing:
After one year through five years			8,003				8,076				11,510				11,673
After ten years			1,500				1,500				1,500				1,500
Other equity investments			218				218				218				218
		$	793,634			$	784,139			$	594,386			$	589,268

In 2018, gross realized gains on sales of investment securities were $391 thousand and gross realized losses on sales of investment securities were $294 thousand. In 2017, gross realized gains on sales of investment securities were $796 thousand and gross realized losses on sales of investment securities were $254 thousand. In 2016, gross realized gains on sales of investment securities were $1.4 million and gross realized losses on sales of investment securities were $188 thousand.

Proceeds from sales and calls of investment securities for 2018, 2017 and 2016 were $36.3 million, $73.1 million, and $94.3 million, respectively.

The carrying value of securities pledged as collateral for certain government deposits, securities sold under agreements to repurchase, and certain lines of credit with correspondent banks at December 31, 2018 was $528.2 million, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of December 31, 2018 and December 31, 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and U.S. agency securities, which exceeded ten percent of shareholders’ equity.