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Investment Securities Available-for-Sale | 6 Months Ended
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Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Investment Securities Available-for-Sale | Investment Securities Available-for-Sale Amortized cost and estimated fair value of securities available-for-sale are summarized as follows:
|  |  |  | Gross |  | Gross |  | Allowance |  | Estimated
June 30, 2021 |  | Amortized |  | Unrealized |  | Unrealized |  | for Credit |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Losses |  | Value
U.S. agency securities |  | $ | 359,339 |  |  | $ | 1,539 |  |  | $ | (3,567) |  |  | $ | — |  |  | $ | 357,311 |
Residential mortgage backed securities |  | 1,143,931 |  |  | 9,944 |  |  | (7,553) |  |  | — |  |  | 1,146,322 |
Municipal bonds |  | 95,444 |  |  | 4,925 |  |  | (90) |  |  | (2) |  |  | 100,277 |
Corporate bonds |  | 75,550 |  |  | 1,741 |  |  | (239) |  |  | (130) |  |  | 76,922 |
|  | $ | 1,674,264 |  |  | $ | 18,149 |  |  | $ | (11,449) |  |  | $ | (132) |  |  | $ | 1,680,832 |
|  |  |  | Gross |  | Gross |  |  |  | Estimated
December 31, 2020 |  | Amortized |  | Unrealized |  | Unrealized |  | Allowance for |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Credit Losses |  | Value
U.S. agency securities |  | $ | 181,087 |  |  | $ | 1,461 |  |  | $ | (627) |  |  | $ | — |  |  | $ | 181,921 |
Residential mortgage backed securities |  | 811,328 |  |  | 14,506 |  |  | (833) |  |  | — |  |  | 825,001 |
Municipal bonds |  | 102,259 |  |  | 5,872 |  |  | — |  |  | (18) |  |  | 108,113 |
Corporate bonds |  | 34,383 |  |  | 1,624 |  |  | (8) |  |  | (149) |  |  | 35,850 |
|  | $ | 1,129,057 |  |  | $ | 23,463 |  |  | $ | (1,468) |  |  | $ | (167) |  |  | $ | 1,150,885 |
In addition, at June 30, 2021 and December 31, 2020 the Company held $34.0 million and $40.1 million, respectively, in equity securities in a combination of FRB and 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 $4.3 million and $3.5 million at June 30, 2021 and December 31, 2020, 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 |  |
June 30, 2021 |  | Number of |  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
U. S. agency securities |  | 45 |  |  | $ | 198,756 |  |  | $ | 3,085 |  |  | $ | 43,126 |  |  | $ | 482 |  |  | $ | 241,882 |  |  | $ | 3,567 |
Residential mortgage backed securities |  | 94 |  |  | 693,251 |  |  | 7,500 |  |  | 5,158 |  |  | 53 |  |  | 698,409 |  |  | 7,553 |
Corporate bonds |  | 4 |  |  | 21,375 |  |  | 239 |  |  | — |  |  | — |  |  | 21,375 |  |  | 239 |
Municipal bonds |  | 3 |  |  | 12,532 |  |  | 90 |  |  | — |  |  | — |  |  | 12,532 |  |  | 90 |
|  | 146 |  |  | $ | 925,914 |  |  | $ | 10,914 |  |  | $ | 48,284 |  |  | $ | 535 |  |  | $ | 974,198 |  |  | $ | 11,449 |
|  |  |  | Less than |  | 12 Months |  |  |  |
|  |  |  | 12 Months |  | or Greater |  | Total
|  |  |  | Estimated |  |  |  | Estimated |  |  |  | Estimated |  |
December 31, 2020 |  | Number of |  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Securities |  | Value |  | Losses |  | Value |  | Losses |  | Value |  | Losses
U. S. agency securities |  | 28 |  |  | $ | 46,412 |  |  | $ | 67 |  |  | $ | 41,320 |  |  | $ | 560 |  |  | $ | 87,732 |  |  | $ | 627 |
Residential mortgage backed securities |  | 35 |  |  | 170,178 |  |  | 782 |  |  | 6,419 |  |  | 51 |  |  | 176,597 |  |  | 833 |
Corporate bonds |  | 3 |  |  | 5,764 |  |  | 8 |  |  | — |  |  | — |  |  | 5,764 |  |  | 8 |
|  | 66 |  |  | $ | 222,354 |  |  | $ | 857 |  |  | $ | 47,739 |  |  | $ | 611 |  |  | $ | 270,093 |  |  | $ | 1,468 |
The majority of the AFS debt securities in an unrealized loss position as of June 30, 2021, 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 June 30, 2021, 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 June 30, 2021, 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 $132 thousand was recorded. The weighted average duration of debt securities, which comprise 99.9% of total investment securities, is relatively short at 4.3 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 June 30, 2021 and December 31, 2020 by contractual maturity are shown in the table below. Contractual maturities for residential mortgage backed securities (“MBS”) are not shown as they may differ significantly from expected maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | June 30, 2021 |  | December 31, 2020
|  | Amortized |  | Estimated |  | Amortized |  | Estimated
(dollars in thousands) |  | Cost |  | Fair Value |  | Cost |  | Fair Value
U. S. agency securities maturing: |  |  |  |  |  |  |  |
One year or less |  | $ | 159,698 |  |  | $ | 158,781 |  |  | $ | 53,916 |  |  | $ | 53,906 |
After one year through five years |  | 122,900 |  |  | 122,872 |  |  | 110,083 |  |  | 110,777 |
Five years through ten years |  | 76,741 |  |  | 75,658 |  |  | 17,087 |  |  | 17,240 |
Residential mortgage backed securities |  | 1,143,931 |  |  | 1,146,322 |  |  | 811,328 |  |  | 825,001 |
Municipal bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 2,764 |  |  | 2,796 |  |  | 4,329 |  |  | 4,348 |
After one year through five years |  | 26,121 |  |  | 27,751 |  |  | 26,622 |  |  | 28,272 |
Five years through ten years |  | 66,559 |  |  | 69,732 |  |  | 69,309 |  |  | 73,389 |
After ten years |  | — |  |  | — |  |  | 2,000 |  |  | 2,121 |
Corporate bonds maturing: |  |  |  |  |  |  |  |
One year or less |  | 6,314 |  |  | 6,542 |  |  | 5,218 |  |  | 5,220 |
After one year through five years |  | 48,958 |  |  | 49,744 |  |  | 22,189 |  |  | 23,267 |
Five years through ten years |  | 20,278 |  |  | 20,766 |  |  | — |  |  | — |
After ten years |  | — |  |  | — |  |  | 6,976 |  |  | 7,511 |
Allowance for Credit Losses |  | — |  |  | (132) |  |  | — |  |  | (167) |
|  | $ | 1,674,264 |  |  | $ | 1,680,832 |  |  | $ | 1,129,057 |  |  | $ | 1,150,885 |
For the six months ended June 30, 2021, gross realized gains on sales of investments securities were $726 thousand and there were $187 thousand gross realized losses on sales of investment securities. For the six months ended June 30, 2020, gross realized gains on sales of investments securities were $1.5 million, and there were no gross realized losses on sales of investment securities. Proceeds from sales and calls of investment securities for the six months ended June 30, 2021 were $52.0 million compared to $120.0 million for the same period in 2020. 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, 2021 and December 31, 2020 was $249.6 million and $268.4 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, 2021 and December 31, 2020, 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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