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Securities
 12 Months Ended
Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]  
Securities
Securities
The amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at December 31, 2017 and 2016 are as follows (in thousands):
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
At December 31, 2017
 
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
82,378

 
$
—

 
$
(797
)
 
$
81,581

Other investments
 
8,947

 
—

 
(247
)
 
8,700

Total available-for-sale
 
$
91,325

 
$
—

 
$
(1,044
)
 
$
90,281

Held-to-maturity:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
14,968

 
$
—

 
$
(65
)
 
$
14,903

State and municipal obligations
 
149,958

 
219

 
(1,475
)
 
148,702

Corporate debt securities
 
76,024

 
312

 
(3,962
)
 
72,374

Total investment securities
 
240,950

 
531

 
(5,502
)
 
235,979

Mortgage-backed securities:
 
 
 
 
 
 
 
 
FHLMC
 
186,921

 
151

 
(2,937
)
 
184,135

FNMA
 
263,103

 
1,193

 
(3,000
)
 
261,296

GNMA
 
75,243

 
64

 
(928
)
 
74,379

SBA
 
5,843

 
28

 
—

 
5,871

Total mortgage-backed securities
 
531,110

 
1,436

 
(6,865
)
 
525,681

Total held-to-maturity
 
$
772,060

 
$
1,967

 
$
(12,367
)
 
$
761,660

Total securities
 
$
863,385

 
$
1,967

 
$
(13,411
)
 
$
851,941

At December 31, 2016
 
 
 
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
12,542

 
$
—

 
$
(318
)
 
$
12,224

Other investments
 
8,778

 
—

 
(227
)
 
8,551

Total available-for-sale
 
$
21,320

 
$
—

 
$
(545
)
 
$
20,775

Held-to-maturity:
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
19,960

 
$
69

 
$
—

 
$
20,029

State and municipal obligations
 
39,155

 
10

 
(856
)
 
38,309

Corporate debt securities
 
77,057

 
85

 
(6,001
)
 
71,141

Total investment securities
 
136,172

 
164

 
(6,857
)
 
129,479

Mortgage-backed securities:
 
 
 
 
 
 
 
 
FHLMC
 
144,016

 
195

 
(2,457
)
 
141,754

FNMA
 
217,445

 
2,209

 
(2,524
)
 
217,130

GNMA
 
92,475

 
119

 
(364
)
 
92,230

SBA
 
8,947

 
28

 
—

 
8,975

Total mortgage-backed securities
 
462,883

 
2,551

 
(5,345
)
 
460,089

Total held-to-maturity
 
$
599,055

 
$
2,715

 
$
(12,202
)
 
$
589,568

Total securities
 
$
620,375

 
$
2,715

 
$
(12,747
)
 
$
610,343


 
During the third quarter 2013, the Bank transferred $536.0 million of previously designated available-for-sale securities to a held-to-maturity designation at estimated fair value. The securities transferred had an unrealized net loss of $13.3 million at the time of transfer which continues to be reflected in accumulated other comprehensive loss on the consolidated balance sheet, net of subsequent amortization, which is being recognized over the life of the securities. The carrying value of the held-to-maturity securities at December 31, 2017 and 2016 are as follows (in thousands):
 
 
December 31,
 
 
2017
 
2016
Amortized cost
 
$
772,060

 
$
599,055

Net loss on date of transfer from available-for-sale
 
(13,347
)
 
(13,347
)
Accretion of unrealized loss on securities reclassified to held-to-maturity
 
5,349

 
4,204

Carrying value
 
$
764,062

 
$
589,912


There were no realized gains or losses on the sale of securities for the year ended December 31, 2017. Realized gains on the sale of securities were $75,000 for the year ended December 31, 2016 and realized losses were $87,000. There were no realized gains or losses on the sale of securities for the year ended December 31, 2015.
The amortized cost and estimated fair value of investment securities at December 31, 2017 by contractual maturity, are shown below (in thousands). Actual maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2017, corporate debt securities with an amortized cost and estimated fair value of $59.9 million and $56.3 million, respectively, were callable prior to the maturity date.
December 31, 2017
 
Amortized
Cost
 
Estimated
Fair  Value
Less than one year
 
$
45,944

 
$
45,867

Due after one year through five years
 
158,397

 
156,862

Due after five years through ten years
 
88,986

 
87,180

Due after ten years
 
30,001

 
27,651

 
 
$
323,328

 
$
317,560


Other investments consist of mutual funds that do not have a contractual maturity date and are excluded from the table above. Mortgage-backed securities are excluded from the above table since their effective lives are expected to be shorter than the contractual maturity date due to principal prepayments.
The estimated fair value of securities pledged as required security for deposits and for other purposes required by law amounted to $466.4 million and $506.0 million, at December 31, 2017 and 2016, respectively. The estimated fair value of securities pledged as collateral for reverse repurchase agreements amounted to $58.0 million and $67.5 million at December 31, 2017 and 2016, respectively.
The estimated fair value and unrealized loss for securities available-for-sale and held-to-maturity at December 31, 2017 and December 31, 2016, segregated by the duration of the unrealized loss, are as follows (in thousands): 
 
 
As of December 31, 2017
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
Estimated
Fair  Value
 
Unrealized
Losses
 
Estimated
Fair  Value
 
Unrealized
Losses
 
Estimated
Fair  Value
 
Unrealized
Losses
Available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
69,375

 
$
(496
)
 
$
12,206

 
$
(301
)
 
$
81,581

 
$
(797
)
Other investments
 
—

 
—

 
8,700

 
(247
)
 
8,700

 
(247
)
Total available-for-sale
 
69,375

 
(496
)
 
20,906

 
(548
)
 
90,281

 
(1,044
)
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agency obligations
 
14,903

 
(65
)
 
—

 
—

 
14,903

 
(65
)
State and municipal obligations
 
104,883

 
(1,153
)
 
14,363

 
(322
)
 
119,246

 
(1,475
)
Corporate debt securities
 
4,035

 
(30
)
 
56,106

 
(3,932
)
 
60,141

 
(3,962
)
Total investment securities
 
123,821

 
(1,248
)
 
70,469

 
(4,254
)
 
194,290

 
(5,502
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
FHLMC
 
98,138

 
(781
)
 
68,238

 
(2,156
)
 
166,376

 
(2,937
)
FNMA
 
132,982

 
(1,058
)
 
65,060

 
(1,942
)
 
198,042

 
(3,000
)
GNMA
 
26,105

 
(223
)
 
45,281

 
(705
)
 
71,386

 
(928
)
Total mortgage-backed securities
 
257,225

 
(2,062
)
 
178,579

 
(4,803
)
 
435,804

 
(6,865
)
Total held-to-maturity
 
381,046

 
(3,310
)
 
249,048

 
(9,057
)
 
630,094

 
(12,367
)
Total securities
 
$
450,421

 
$
(3,806
)
 
$
269,954

 
$
(9,605
)
 
$
720,375

 
$
(13,411
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2016
 
 
Less than 12 months
 
12 months or longer
 
Total
 
 
Estimated
Fair  Value
 
Unrealized
Losses
 
Estimated
Fair  Value
 
Unrealized
Losses
 
Estimated
Fair  Value
 
Unrealized
Losses
Available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. agency obligations
 
$
12,224

 
$
(318
)
 
$
—

 
$
—

 
$
12,224

 
$
(318
)
Other investments
 
8,551

 
(227
)
 
—

 
—

 
8,551

 
(227
)
Total available-for-sale
 
20,775

 
(545
)
 
—

 
—

 
20,775

 
(545
)
Held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
 
State and municipal obligations
 
32,995

 
(856
)
 
—

 
—

 
32,995

 
(856
)
Corporate debt securities
 
12,450

 
(120
)
 
49,119

 
(5,881
)
 
61,569

 
(6,001
)
Total investment securities
 
45,445

 
(976
)
 
49,119

 
(5,881
)
 
94,564

 
(6,857
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
FHLMC
 
102,461

 
(1,665
)
 
26,898

 
(792
)
 
129,359

 
(2,457
)
FNMA
 
124,403

 
(2,185
)
 
8,925

 
(339
)
 
133,328

 
(2,524
)
GNMA
 
79,116

 
(364
)
 
—

 
—

 
79,116

 
(364
)
Total mortgage-backed securities
 
305,980

 
(4,214
)
 
35,823

 
(1,131
)
 
341,803

 
(5,345
)
Total held-to-maturity
 
351,425

 
(5,190
)
 
84,942

 
(7,012
)
 
436,367

 
(12,202
)
Total securities
 
$
372,200

 
$
(5,735
)
 
$
84,942

 
$
(7,012
)
 
$
457,142

 
$
(12,747
)

At December 31, 2017, the amortized cost, estimated fair value and credit rating of the individual corporate debt securities in an unrealized loss position for greater than one year are as follows (in thousands):
 
 
 
As of December 31, 2017
Security Description
 
Amortized
Cost
 
Estimated
Fair  Value
 
Credit Rating
Moody’s/S&P
BankAmerica Capital
 
$
15,000

 
$
14,038

 
Baa3/BBB-
Chase Capital
 
10,000

 
9,350

 
Baa2/BBB-
Wells Fargo Capital
 
5,000

 
4,713

 
A1/BBB+
Huntington Capital
 
5,000

 
4,450

 
Baa2/BB
Keycorp Capital
 
5,000

 
4,675

 
Baa2/BB+
PNC Capital
 
5,000

 
4,675

 
Baa1/BBB-
State Street Capital
 
5,000

 
4,625

 
A3/BBB
SunTrust Capital
 
5,000

 
4,575

 
Not Rated/BB+
Southern Company
 
1,524

 
1,509

 
Baa2/BBB+
AT&T Inc.
 
1,514

 
1,498

 
Baa1/BBB+
MetLife Global Funding
 
1,000

 
999

 
Aa3/AA-
State Street Corporation
 
1,000

 
999

 
A1/A
 
 
$
60,038

 
$
56,106

 
 


At December 31, 2017, the estimated fair value of each of the above corporate debt securities was below cost. The Company concluded that these corporate debt securities were only temporarily impaired at December 31, 2017. In concluding that the impairments were only temporary, the Company considered several factors in its analysis. The Company noted that each issuer made all the contractually due payments when required. There were no defaults on principal or interest payments and no interest payments were deferred. Based on management’s analysis of each individual security, the issuers appear to have the ability to meet debt service requirements over the life of the security. Furthermore, the Company does not have the intent to sell these corporate debt securities and it is more likely than not that the Company will not be required to sell the securities. Historically, the Company has not utilized securities sales as a source of liquidity. The Company’s long range liquidity plans indicate adequate sources of liquidity outside the securities portfolio.
The mortgage-backed securities are issued and guaranteed by either the Federal Home Loan Mortgage Corporation (“FHLMC”), the Federal National Mortgage Association (“FNMA”), the Government National Mortgage Association (“GNMA”), or the Small Business Administration (“SBA”) corporations which are chartered by the United States Government and whose debt obligations are typically rated AA+ by one of the internationally-recognized credit rating services. The Company considers the unrealized losses to be the result of changes in interest rates which over time can have both a positive and negative impact on the estimated fair value of the mortgage-backed securities. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell the securities before recovery of their amortized cost. As a result, the Company concluded that these securities were only temporarily impaired at December 31, 2017.