AFS Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:


	September 30, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
States and political subdivisions	$	142,547	$	5,854	$	—	$	148,401
Auction rate money market preferred	3,200		—		6		3,194
Mortgage-backed securities	100,984		3,181		—		104,165
Collateralized mortgage obligations	102,231		5,063		—		107,294
Total	$	348,962	$	14,098	$	6	$	363,054


	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
States and political subdivisions	$	165,005	$	4,747	$	—	$	169,752
Auction rate money market preferred	3,200		—		81		3,119
Mortgage-backed securities	139,831		933		560		140,204
Collateralized mortgage obligations	115,944		1,007		187		116,764
Total	$	423,980	$	6,687	$	828	$	429,839

The amortized cost and fair value of AFS securities by contractual maturity at September 30, 2020 are as follows:


	Maturing								Securities with Variable Monthly Payments or Noncontractual Maturities
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years				Total
States and political subdivisions	$	22,709	$	66,180	$	27,441	$	26,217	$	—	$	142,547
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		100,984		100,984
Collateralized mortgage obligations	—		—		—		—		102,231		102,231
Total amortized cost	$	22,709	$	66,180	$	27,441	$	26,217	$	206,415	$	348,962
Fair value	$	22,891	$	68,188	$	29,293	$	28,029	$	214,653	$	363,054

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations.

As the auction rate money market preferred investments have continual call dates, they are not reported by a specific maturity group. Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group.

A summary of the sales activity of AFS securities was as follows for the:


	Three Months Ended September 30				Nine Months Ended September 30
	2020		2019		2020		2019
Proceeds from sales of AFS securities	$	—	$	33,840	$	26,855	$	33,840
Realized gains (losses)	$	—	$	6	$	71	$	6
Applicable income tax expense (benefit)	$	—	$	1	$	15	$	1

The following information pertains to AFS securities with gross unrealized losses at September 30, 2020 and December 31, 2019, aggregated by investment category and length of time that individual securities have been in a continuous loss position.


	September 30, 2020
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Auction rate money market preferred	$	—	$	—	$	6	$	3,194	$	6
Number of securities in an unrealized loss position:			—				2		2


	December 31, 2019
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Auction rate money market preferred	$	—	$	—	$	81	$	3,119	$	81
Mortgage-backed securities	3		3,974		557		49,701		560
Collateralized mortgage obligations	43		20,262		144		13,309		187
Total	$	46	$	24,236	$	782	$	66,129	$	828
Number of securities in an unrealized loss position:			9				19		28

The reduction in unrealized losses on our AFS securities portfolio resulted from recent decreases in intermediate-term and long-term benchmark interest rates.

As of September 30, 2020 and December 31, 2019, we conducted an analysis to determine whether any AFS securities currently in an unrealized loss position should be identified as other-than-temporarily impaired. Such analyses considered, among other factors, the following criteria:

•Has the value of the investment declined more than what is deemed to be reasonable based on a risk and maturity adjusted discount rate?

•Is the investment credit rating below investment grade?

•Is it probable the issuer will be unable to pay the amount when due?

•Is it more likely than not that we will have to sell the security before recovery of its cost basis?

•Has the duration of the investment been extended?

Based on our analysis, which included the criteria outlined above and the fact that we have asserted that we do not have to sell any AFS securities in an unrealized loss position, we do not believe that the values of any AFS securities are other-than-temporarily impaired as of September 30, 2020 or December 31, 2019, with the exception of one municipal bond previously identified which had no activity during the period.