SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale:



(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2019
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	344,547	$	5,924	$	1,328	$	349,143
US Government agency	116,912		2,130		217		118,825
Private label	20,268		75		389		19,954
Obligations of states and political subdivisions thereof	107,854		3,519		147		111,226
Corporate bonds	75,652		1,554		679		76,527
Total securities available for sale	$	665,233	$	13,202	$	2,760	$	675,675

December 31, 2018
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	413,492	$	904	$	9,444	$	404,952
US Government agency	111,938		509		1,935		110,512
Private label	20,353		113		84		20,382
Obligations of states and political subdivisions thereof	133,260		1,081		2,076		132,265
Corporate bonds	58,098		264		636		57,726
Total securities available for sale	$	737,141	$	2,871	$	14,175	$	725,837

The amortized cost and estimated fair value of available for sale (“AFS”) securities segregated by contractual maturity at September 30, 2019 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.



	Available for sale
(in thousands)	Amortized Cost		Fair Value
Within 1 year	$	190	$	191
Over 1 year to 5 years	33,984		34,856
Over 5 years to 10 years	56,882		57,482
Over 10 years	92,451		95,224
Total bonds and obligations	183,507		187,753
Mortgage-backed securities	481,726		487,922
Total securities available for sale	$	665,233	$	675,675

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:



	Less Than Twelve Months				Over Twelve Months				Total
(In thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
September 30, 2019
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	140	$	30,711	$	1,188	$	60,174	$	1,328	$	90,885
US Government agency	117		10,691		100		9,767		217		20,458
Private label	385		19,573		4		39		389		19,612
Obligations of states and political subdivisions thereof	20		4,138		127		1,692		147		5,830
Corporate bonds	493		14,506		186		7,186		679		21,692
Total securities available for sale	$	1,155	$	79,619	$	1,605	$	78,858	$	2,760	$	158,477

December 31, 2018
Debt securities:
Mortgage-backed securities:
US Government-sponsored enterprises	$	155	$	19,367	$	9,289	$	297,569	$	9,444	$	316,936
US Government agency	16		2,570		1,919		68,266		1,935		70,836
Private label	79		10,393		5		47		84		10,440
Obligations of states and political subdivisions thereof	43		6,784		2,033		47,930		2,076		54,714
Corporate bonds	224		11,759		412		14,460		636		26,219
Total securities available for sale	$	517	$	50,873	$	13,658	$	428,272	$	14,175	$	479,145

Securities Impairment: As a part of the Company’s ongoing security monitoring process, the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For the three and nine months ended September 30, 2019 and 2018 the Company did not record any other-than-temporary impairment (“OTTI”) losses.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Estimated credit losses as of prior year-end	$	1,697	$	1,697	$	1,697	$	1,697
Reductions for securities paid off during the period	—		—		—		—
Estimated credit losses at end of the period	$	1,697	$	1,697	$	1,697	$	1,697

The Company expects to recover its amortized cost basis on all securities in its AFS portfolio. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of September 30, 2019, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

The following summarizes, by investment security type, the basis for the conclusion that securities in an unrealized loss position were not other-than-temporarily impaired at September 30, 2019:

US Government-sponsored enterprises

172 out of the total 702 securities in the Company’s portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 1.4% of the amortized cost of securities in unrealized loss positions. The FNMA and FHLMC guarantee the contractual cash flows of all of the Company’s US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

US Government agency

46 out of the total 190 securities in the Company’s portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 1.0% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association (“GNMA”) guarantees the contractual cash flows of all of the Company’s US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

Private label

Nine of the total 20 securities in the Company’s portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 1.9% of the amortized cost of securities in unrealized loss positions. Based upon the expectation that the Company will receive all of the future contractual cash flows related to the amortized cost on these securities, the Company does not consider there to be any additional other-than-temporary impairment with respect to these securities.

Obligations of states and political subdivisions thereof

Nine of the total 219 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.5% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. All securities are performing.

Corporate bonds

Seven out of the total 26 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 3.0% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.