Investment Securities Available-for-Sale

6 Months Ended

Jun. 30, 2019

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
June 30, 2019	Amortized		Unrealized		Unrealized		Fair
(dollars in thousands)	Cost		Gains		Losses		Value
U. S. agency securities	$	225,389	$	940	$	659	$	225,670
Residential mortgage backed securities		440,243		5,186		1,884		443,545
Municipal bonds		67,835		1,503		—		69,338
Corporate bonds		6,502		70		—		6,572
Other equity investments		218		—		—		218
	$	740,187	$	7,699	$	2,543	$	745,343

			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

In addition, at June 30, 2019 and December 31, 2018 the Company held $34.0 million and $23.5 million, respectively, in equity securities 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.

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 are as follows:

			Less than				12Months
			12Months				or Greater				Total
			Estimated				Estimated				Estimated
June 30, 2019	Number of		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(dollars in thousands)	Securities		Value		Losses		Value		Losses		Value		Losses
U. S. agency securities		39	$	26,149	$	50	$	99,252	$	609	$	125,401	$	659
Residential mortgage backed securities		103		4,234		13		174,316		1,871		178,550		1,884
Municipal bonds		2		1,500		—		—		—		1,500		—
		144	$	31,883	$	63	$	273,568	$	2,480	$	305,451	$	2,543


			Less than				12Months
			12Months				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

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 comprise99.9 % of total investment securities, is relatively short at3.0 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 June 30, 2019 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.

The amortized cost and estimated fair value of investments available-for-sale at June 30, 2019 and December 31, 2018 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.

	June 30, 2019				December 31, 2018
	Amortized		Estimated		Amortized		Estimated
(dollars in thousands)	Cost		Fair Value		Cost		Fair Value
U. S. agency securities maturing:
Oneyear or less	$	114,260	$	114,564	$	128,148	$	125,545
Afteroneyear throughfiveyears		103,105		103,042		119,856		118,883
Fiveyears throughtenyears		8,024		8,064		12,146		11,917
Residential mortgage backed securities		440,243		443,545		477,949		472,231
Municipal bonds maturing:
Oneyear or less		6,947		6,977		8,097		8,167
Afteroneyear throughfiveyears		13,426		13,694		15,025		15,081
Fiveyears throughtenyears		46,399		47,468		21,626		21,385
Aftertenyears		1,063		1,199		1,066		1,136
Corporate bonds maturing:
Afteroneyear throughfiveyears		5,002		5,072		8,003		8,076
Aftertenyears		1,500		1,500		1,500		1,500
Other equity investments		218		218		218		218
	$	740,187	$	745,343	$	793,634	$	784,139

For thesixmonths ended June 30, 2019, gross realized gains on sales of investments securities were $ 1.5 million, primarily due to $829 thousand of noninterest income recognized during March 2019 on interest rate swap terminations, and there were no gross realized losses on sales of investment securities. For thesixmonths ended June 30, 2018, gross realized gains on sales of investments securities were $93 thousand and gross realized losses on sales of investment securities were $25 thousand.

Proceeds from sales and calls of investment securities for thethreemonths ended June 30, 2019 were $42.1 million compared to $29.0 million for the same period in2018 .

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 June 30, 2019 and December 31, 2018 was $ 460.6 million and $ 528.2 million, respectively, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of June 30, 2019 and December 31, 2018, there were no holdings of securities of anyoneissuer, other than the U.S. Government and U.S. agency securities, which exceededtenpercent of shareholders’ equity.