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Investment Securities Available-for-Sale | 9 Months Ended
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Sep. 30, 2020
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 |  | Allowance |  | Estimated
September 30, 2020 |  | Amortized |  | Unrealized |  | Unrealized |  | for Credit |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Losses |  | Value
U.S. agency securities |  | $ | 130,313 |  |  | $ | 1,638 |  |  | $ | (665) |  |  | $ | — |  |  | $ | 131,286 |
Residential mortgage backed securities |  | 702,655 |  |  | 14,578 |  |  | (590) |  |  | — |  |  | 716,643 |
Municipal bonds |  | 90,292 |  |  | 4,551 |  |  | (114) |  |  | (16) |  |  | 94,713 |
Corporate bonds |  | 33,345 |  |  | 1,596 |  |  | (71) |  |  | (140) |  |  | 34,730 |
Other equity investments |  | 198 |  |  | — |  |  | — |  |  | — |  |  | 198 |
|  | $ | 956,803 |  |  | $ | 22,363 |  |  | $ | (1,440) |  |  | $ | (156) |  |  | $ | 977,570 |
|  |  |  | Gross |  | Gross |  | Estimated
December 31, 2019 |  | Amortized |  | Unrealized |  | Unrealized |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Value
U.S. agency securities |  | $ | 180,228 |  |  | $ | 621 |  |  | $ | (1,055) |  |  | $ | 179,794 |
Residential mortgage backed securities |  | 541,490 |  |  | 4,337 |  |  | (1,975) |  |  | 543,852 |
Municipal bonds |  | 71,902 |  |  | 2,034 |  |  | (5) |  |  | 73,931 |
Corporate bonds |  | 10,530 |  |  | 203 |  |  | — |  | 10,733 |
U.S. Treasury |  | 34,844 |  |  | 11 |  |  | — |  | 34,855 |
Other equity investments |  | 198 |  |  | — |  | — |  | 198 |
|  | $ | 839,192 |  |  | $ | 7,206 |  |  | $ | (3,035) |  |  | $ | 843,363 |
In addition, at September 30, 2020 and December 31, 2019 the Company held $40.1 million and $35.2 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. Accrued interest on available-for-sale securities totaled $3.1 million and $3.2 million at September 30, 2020 and December 31, 2019, respectively, and was included in other assets in the Consolidated Balance Sheets. Gross unrealized losses and fair value of available-for-sale securities for which an allowance for credit losses has not been recorded, by length of time that individual securities have been in a continuous unrealized loss position are as follows:
|  |  |  | Less than |  | 12 Months |  |  |  |
|  |  |  | 12 Months |  | or Greater |  | Total
|  |  |  | Estimated |  |  |  | Estimated |  |  |  | Estimated |  |
September 30, 2020 |  | Number of |  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
U. S. agency securities |  | 25 |  |  | $ | 20,762 |  |  | $ | 32 |  |  | $ | 43,607 |  |  | $ | 633 |  |  | $ | 64,369 |  |  | $ | 665 |
Residential mortgage backed securities |  | 33 |  |  | 139,848 |  |  | 549 |  |  | 7,334 |  |  | 41 |  |  | 147,182 |  |  | 590 |
Municipal bonds |  | 4 |  |  | 14,086 |  |  | 114 |  |  | — |  |  | — |  |  | 14,086 |  |  | 114 |
Corporate bonds |  | 1 |  |  | 2,954 |  |  | 71 |  |  | — |  | — |  | 2,954 |  |  | 71 |
|  | 63 |  |  | $ | 177,650 |  |  | $ | 766 |  |  | $ | 50,941 |  |  | $ | 674 |  |  | $ | 228,591 |  |  | $ | 1,440 |
|  |  |  | Less than |  | 12 Months |  |  |  |
|  |  |  | 12 Months |  | or Greater |  | Total
|  |  |  | Estimated |  |  |  | Estimated |  |  |  | Estimated |  |
December 31, 2019 |  | Number of |  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
U. S. agency securities |  | 36 |  |  | $ | 75,159 |  |  | $ | 439 |  |  | $ | 51,481 |  |  | $ | 616 |  |  | $ | 126,640 |  |  | $ | 1,055 |
Residential mortgage backed securities |  | 111 |  |  | 197,794 |  |  | 1,148 |  |  | 90,742 |  |  | 827 |  |  | 288,536 |  |  | 1,975 |
Municipal bonds |  | 1 |  |  | 1,994 |  |  | 5 |  |  | — |  | — |  | 1,994 |  |  | 5 |
|  | 148 |  |  | $ | 274,947 |  |  | $ | 1,592 |  |  | $ | 142,223 |  |  | $ | 1,443 |  |  | $ | 417,170 |  |  | $ | 3,035 |
The majority of the AFS debt securities in an unrealized loss position as of September 30, 2020, consisted of debt securities issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. As of September 30, 2020, total gross unrealized losses were primarily attributable to changes in interest rates, relative to when the investment securities were purchased, and not due to the credit quality of the investment securities. However, as of September 30, 2020, the Company determined that part of the unrealized loss positions in AFS corporate and municipal securities could be the result of credit losses, and therefore, an allowance for credit losses of $156 thousand was recorded. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 3.1 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 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 September 30, 2020 and December 31, 2019 by contractual maturity are shown in the table below. Expected maturities for residential mortgage backed securities (“MBS”) will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | September 30, 2020 |  | December 31, 2019
|  | Amortized |  | Estimated |  | Amortized |  | Estimated
(dollars in thousands) |  | Cost |  | Fair Value |  | Cost |  | Fair Value
U. S. agency securities maturing: |  |  |  |  |  |  |  |
One year or less |  | $ | 38,000 |  |  | $ | 38,111 |  |  | $ | 96,332 |  |  | $ | 96,226 |
After one year through five years |  | 81,181 |  |  | 82,057 |  |  | 76,121 |  |  | 75,821 |
Five years through ten years |  | 11,132 |  |  | 11,224 |  |  | 7,775 |  |  | 7,747 |
Residential mortgage backed securities |  | 702,655 |  |  | 716,643 |  |  | 541,490 |  |  | 543,852 |
Municipal bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 4,834 |  |  | 4,868 |  |  | 5,897 |  |  | 5,969 |
After one year through five years |  | 26,677 |  |  | 27,912 |  |  | 21,416 |  |  | 21,953 |
Five years through ten years |  | 56,781 |  |  | 59,771 |  |  | 42,589 |  |  | 44,015 |
After ten years |  | 2,000 |  |  | 2,072 |  |  | 2,000 |  |  | 1,994 |
Corporate bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 5,214 |  |  | 5,257 |  |  | 502 |  |  | 508 |
After one year through five years |  | 21,156 |  |  | 22,124 |  |  | 8,528 |  |  | 8,725 |
After ten years |  | 6,975 |  |  | 7,489 |  |  | 1,500 |  |  | 1,500 |
U.S. treasury |  | — |  |  | — |  |  | 34,844 |  |  | 34,855 |
Other equity investments |  | 198 |  |  | 198 |  |  | 198 |  |  | 198 |
Allowance for Credit Losses |  | — |  |  | (156) |  |  | — |  | —
|  | $ | 956,803 |  |  | $ | 977,570 |  |  | $ | 839,192 |  |  | $ | 843,363 |
For the nine months ended September 30, 2020, gross realized gains on sales of investments securities were $1.7 million and there were no gross realized losses on sales of investment securities. For the nine months ended September 30, 2019, gross realized gains on sales of investments securities were $1.6 million, of which $829 thousand was recognized during March 2019 on interest rate swap terminations, and there were no gross realized losses on sales of investment securities. Proceeds from sales and calls of investment securities for the nine months ended September 30, 2020 were $130.3 million compared to $83.0 million for the same period in 2019. 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 September 30, 2020 and December 31, 2019 was $320 million and $378 million, respectively, which is well in excess of required amounts in order to operationally provide significant reserve amounts for new business. As of September 30, 2020 and December 31, 2019, 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.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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