Investment Securities

3 Months Ended

Mar. 31, 2019

(4.)INVESTMENT SECURITIES

The amortized cost and fair value of investment securities are summarized below (in thousands):

	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
March 31, 2019
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	145,072	$	113	$	809	$	144,376
Mortgage-backed securities:
Federal National Mortgage Association		240,973		202		2,366		238,809
Federal Home Loan Mortgage Corporation		38,903		86		634		38,355
Government National Mortgage Association		5,103		22		5		5,120
Collateralized mortgage obligations:
Federal National Mortgage Association		127		—		1		126
Federal Home Loan Mortgage Corporation		36		—		—		36
Privately issued		—		723		—		723
Total mortgage-backed securities		285,142		1,033		3,006		283,169
Total available for sale securities	$	430,214	$	1,146	$	3,815	$	427,545
Securities held to maturity:
State and political subdivisions	$	232,160	$	2,236	$	225	$	234,171
Mortgage-backed securities:
Federal National Mortgage Association		11,276		69		114		11,231
Federal Home Loan Mortgage Corporation		4,167		27		109		4,085
Government National Mortgage Association		39,844		50		520		39,374
Collateralized mortgage obligations:
Federal National Mortgage Association		59,584		31		1,474		58,141
Federal Home Loan Mortgage Corporation		75,029		6		1,624		73,411
Government National Mortgage Association		16,924		—		363		16,561
Total mortgage-backed securities		206,824		183		4,204		202,803
Total held to maturity securities	$	438,984	$	2,419	$	4,429	$	436,974
December 31, 2018
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	155,102	$	—	$	3,074	$	152,028
Mortgage-backed securities:
Federal National Mortgage Association		258,984		44		6,325		252,703
Federal Home Loan Mortgage Corporation		35,962		13		1,275		34,700
Government National Mortgage Association		5,364		21		76		5,309
Collateralized mortgage obligations:
Federal National Mortgage Association		133		—		—		133
Federal Home Loan Mortgage Corporation		37		—		—		37
Privately issued		—		767		—		767
Total mortgage-backed securities		300,480		845		7,676		293,649
Total available for sale securities	$	455,582	$	845	$	10,750	$	445,677

(4.)INVESTMENT SECURITIES (Continued)

	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
December 31, 2018 (continued)
Securities held to maturity:
State and political subdivisions	$	234,845	$	876	$	1,211	$	234,510
Mortgage-backed securities:
Federal National Mortgage Association		11,602		8		261		11,349
Federal Home Loan Mortgage Corporation		4,583		—		193		4,390
Government National Mortgage Association		37,450		14		923		36,541
Collateralized mortgage obligations:
Federal National Mortgage Association		62,103		1		2,179		59,925
Federal Home Loan Mortgage Corporation		78,200		—		2,597		75,603
Government National Mortgage Association		17,798		—		535		17,263
Total mortgage-backed securities		211,736		23		6,688		205,071
Total held to maturity securities	$	446,581	$	899	$	7,899	$	439,581

Investment securities with a total fair value of $702.5 million and $751.0 million at March 31, 2019 and December 31, 2018, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

Sales of securities available for sale were as follows (in thousands):

	Three months ended March 31,
	2019		2018
Proceeds from sales	$	4,948	$	—
Gross realized gains		—		—
Gross realized losses		53		—

The scheduled maturities of securities available for sale and securities held to maturity at March 31, 2019 are shown below (in thousands). Actual expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

	Amortized		Fair
	Cost		Value
Debt securities available for sale:
Due in one year or less	$	28,200	$	28,009
Due from one to five years		137,192		136,577
Due after five years through ten years		183,515		182,284
Due after ten years		81,307		80,675
Total available for sale securities	$	430,214	$	427,545
Debt securities held to maturity:
Due in one year or less	$	49,502	$	49,598
Due from one to five years		147,735		149,579
Due after five years through ten years		74,536		73,735
Due after ten years		167,211		164,062
Total held to maturity securities	$	438,984	$	436,974

(4.)INVESTMENT SECURITIES (Continued)

Unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows (in thousands):

	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
March 31, 2019
Securities available for sale:
U.S. Government agency and government sponsored enterprises	$	—	$	—	$	112,425	$	809	$	112,425	$	809
Mortgage-backed securities:
Federal National Mortgage Association		—		—		224,846		2,366		224,846		2,366
Federal Home Loan Mortgage Corporation		—		—		31,365		634		31,365		634
Government National Mortgage Association		—		—		4,522		5		4,522		5
Collateralized mortgage obligations:
Federal National Mortgage Association		70		1		19		—		89		1
Federal Home Loan Mortgage Corporation		—		—		6		—		6		—
Total mortgage-backed securities		70		1		260,758		3,005		260,828		3,006
Total available for sale securities		70		1		373,183		3,814		373,253		3,815
Securities held to maturity:
State and political subdivisions		2,717		1		24,312		224		27,029		225
Mortgage-backed securities:
Federal National Mortgage Association		—		—		7,696		114		7,696		114
Federal Home Loan Mortgage Corporation		—		—		2,619		109		2,619		109
Government National Mortgage Association		6,518		16		21,908		504		28,426		520
Collateralized mortgage obligations:
Federal National Mortgage Association		—		—		56,114		1,474		56,114		1,474
Federal Home Loan Mortgage Corporation		—		—		72,277		1,624		72,277		1,624
Government National Mortgage Association		—		—		16,561		363		16,561		363
Total mortgage-backed securities		6,518		16		177,175		4,188		183,693		4,204
Total held to maturity securities		9,235		17		201,487		4,412		210,722		4,429
Total temporarily impaired securities	$	9,305	$	18	$	574,670	$	8,226	$	583,975	$	8,244
December 31, 2018
Securities available for sale:
U.S. Government agencies and government sponsored enterprises	$	—	$	—	$	152,028	$	3,074	$	152,028	$	3,074
Mortgage-backed securities:
Federal National Mortgage Association		251		1		247,615		6,324		247,866		6,325
Federal Home Loan Mortgage Corporation		—		—		33,918		1,275		33,918		1,275
Government National Mortgage Association		—		—		4,667		76		4,667		76
Collateralized mortgage obligations:
Federal National Mortgage Association		—		—		56		—		56		—
Federal Home Loan Mortgage Corporation		—		—		6		—		6		—
Total mortgage-backed securities		251		1		286,262		7,675		286,513		7,676
Total available for sale securities		251		1		438,290		10,749		438,541		10,750

(4.)INVESTMENT SECURITIES (Continued)

	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
December 31, 2018 (continued)
Securities held to maturity:
State and political subdivisions		35,751		91		49,534		1,120		85,285		1,211
Mortgage-backed securities:
Federal National Mortgage Association		1,518		3		8,695		258		10,213		261
Federal Home Loan Mortgage Corporation		1,467		5		2,923		188		4,390		193
Government National Mortgage Association		11,783		82		22,516		841		34,299		923
Collateralized mortgage obligations:
Federal National Mortgage Association		—		—		57,973		2,179		57,973		2,179
Federal Home Loan Mortgage Corporation		—		—		75,603		2,597		75,603		2,597
Government National Mortgage Association		—		—		17,263		535		17,263		535
Total mortgage-backed securities		14,768		90		184,973		6,598		199,741		6,688
Total held to maturity securities		50,519		181		234,507		7,718		285,026		7,899
Total temporarily impaired securities	$	50,770	$	182	$	672,797	$	18,467	$	723,567	$	18,649

The total number of security positions in the investment portfolio in an unrealized loss position at March 31, 2019 was 323 compared to 571 at December 31, 2018. At March 31, 2019, the Company had positions in 314 investment securities with a fair value of $574.7 million and a total unrealized loss of $8.2 million that have been in a continuous unrealized loss position for more than 12 months. At March 31, 2019, there were a total of nine securities positions in the Company’s investment portfolio with a fair value of $9.3 million and a total unrealized loss of $18 thousand that had been in a continuous unrealized loss position for less than 12 months. At December 31, 2018, the Company had positions in 435 investment securities with a fair value of $672.8 million and a total unrealized loss of $18.5 million that had been in a continuous unrealized loss position for more than 12 months. At December 31, 2018, there were a total of 136 securities positions in the Company’s investment portfolio with a fair value of $50.8 million and a total unrealized loss of $182 thousand that had been in a continuous unrealized loss position for less than 12 months. The unrealized loss on investment securities was predominantly caused by changes in market interest rates subsequent to purchase. The fair value of most of the investment securities in the Company’s portfolio fluctuates as market interest rates change.

The Company reviews investment securities on an ongoing basis for the presence of other than temporary impairment (“OTTI”) with formal reviews performed quarterly. When evaluating debt securities for OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intention to sell the debt security or whether it is more likely than not that it will be required to sell the debt security before its anticipated recovery. The assessment of whether OTTI exists involves a high degree of subjectivity and judgment and is based on the information then available to management. There was no impairment recorded during the three months ended March 31, 2019 and 2018.

Based on management’s review and evaluation of the Company’s debt securities as of March 31, 2019, the debt securities with unrealized losses were not considered to be OTTI. As of March 31, 2019, the Company did not intend to sell any of the securities in a loss position and believes that it is not likely that it will be required to sell any such securities before the anticipated recovery of amortized cost. Accordingly, as of March 31, 2019, management has concluded that unrealized losses on its investment securities are temporary and no further impairment loss has been realized in the Company’s consolidated statements of income.