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Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
The amortized cost and estimated fair value of debt securities available-for-sale and held-to-maturity at June 30, 2019, and December 31, 2018, are as follows (in thousands):
 
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Estimated
Fair
Value
At June 30, 2019
 
 
 
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
$
118,747

 
$
1,386

 
$
(204
)
 
$
119,929

State and municipal obligations
1,952

 
1

 
—

 
1,953

Corporate debt securities
1,000

 
—

 
—

 
1,000

Mortgage-backed securities - FNMA
723

 
5

 
—

 
728

Total debt securities available-for-sale
$
122,422

 
$
1,392

 
$
(204
)
 
$
123,610

Debt securities held-to-maturity:
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
U.S. government and agency obligations
$
9,979

 
$
—

 
$
(11
)
 
$
9,968

State and municipal obligations
146,500

 
1,147

 
(311
)
 
147,336

Corporate debt securities
82,231

 
1,147

 
(3,755
)
 
79,623

Total investment securities
238,710

 
2,294

 
(4,077
)
 
236,927

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC
232,379

 
1,826

 
(864
)
 
233,341

FNMA
273,933

 
2,140

 
(789
)
 
275,284

GNMA
120,071

 
723

 
(521
)
 
120,273

SBA
3,419

 
—

 
(77
)
 
3,342

Total mortgage-backed securities
629,802

 
4,689

 
(2,251
)
 
632,240

Total debt securities held-to-maturity
$
868,512

 
$
6,983

 
$
(6,328
)
 
$
869,167

Total debt securities
$
990,934

 
$
8,375

 
$
(6,532
)
 
$
992,777

At December 31, 2018
 
 
 
 
 
 
 
Debt securities available-for-sale:
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
$
100,524

 
$
163

 
$
(963
)
 
$
99,724

Mortgage-backed securities - FNMA
998

 
—

 
(5
)
 
993

Total debt securities available-for-sale
$
101,522

 
$
163

 
$
(968
)
 
$
100,717

Debt securities held-to-maturity:
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
U.S. government and agency obligations
$
14,975

 
$
—

 
$
(130
)
 
$
14,845

State and municipal obligations
123,987

 
67

 
(1,697
)
 
122,357

Corporate debt securities
66,834

 
126

 
(4,984
)
 
61,976

Total investment securities
205,796

 
193

 
(6,811
)
 
199,178

Mortgage-backed securities:
 
 
 
 
 
 
 
FHLMC
237,703

 
159

 
(5,110
)
 
232,752

FNMA
277,266

 
753

 
(6,030
)
 
271,989

GNMA
127,611

 
198

 
(2,360
)
 
125,449

SBA
3,527

 
—

 
(80
)
 
3,447

Total mortgage-backed securities
646,107

 
1,110

 
(13,580
)
 
633,637

Total debt securities held-to-maturity
$
851,903

 
$
1,303

 
$
(20,391
)
 
$
832,815

Total debt securities
$
953,425

 
$
1,466

 
$
(21,359
)
 
$
933,532



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 debt securities held-to-maturity at June 30, 2019, and December 31, 2018, is as follows (in thousands):
 
 
June 30, 2019
 
December 31, 2018
Amortized cost
$
868,512

 
$
851,903

Net loss on date of transfer from available-for-sale
(13,347
)
 
(13,347
)
Accretion of net unrealized loss on securities reclassified as held-to-maturity
8,673

 
8,254

Carrying value
$
863,838

 
$
846,810


There were no realized gains or losses for the three and six months ended June 30, 2019 and there were realized gains of $246,000 and $248,000 on the sale of securities for the three and six months ended June 30, 2018.
The amortized cost and estimated fair value of investment securities at June 30, 2019 by contractual maturity are shown below (in thousands). Actual maturities may differ from contractual maturities in instances where issuers have the right to call or prepay obligations with or without call or prepayment penalties. At June 30, 2019, corporate debt securities with an amortized cost of $61.0 million and estimated fair value of $58.2 million were callable prior to the maturity date.
 
June 30, 2019
Amortized
Cost
 
Estimated
Fair Value
Less than one year
$
70,039

 
$
69,999

Due after one year through five years
185,985

 
187,643

Due after five years through ten years
90,088

 
87,249

Due after ten years
14,297

 
14,918

 
$
360,409

 
$
359,809


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 $512.1 million and $563.1 million, at June 30, 2019 and December 31, 2018, respectively, including $68.8 million and $74.1 million at June 30, 2019 and December 31, 2018, respectively, pledged as collateral for securities sold under agreements to repurchase.
The estimated fair value and unrealized losses of debt securities available-for-sale and held-to-maturity at June 30, 2019 and December 31, 2018, segregated by the duration of the unrealized losses, are as follows (in thousands):
 
At June 30, 2019
 
Less than 12 months
 
12 months or longer
 
Total
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
$
—

 
$
—

 
$
42,287

 
$
(204
)
 
$
42,287

 
$
(204
)
Total debt securities available-for-sale
—

 
—

 
42,287

 
(204
)
 
42,287

 
(204
)
Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
—

 
—

 
9,968

 
(11
)
 
9,968

 
(11
)
State and municipal obligations
4,898

 
(22
)
 
44,556

 
(289
)
 
49,454

 
(311
)
Corporate debt securities
2,511

 
(15
)
 
42,298

 
(3,740
)
 
44,809

 
(3,755
)
Total investment securities
7,409

 
(37
)
 
96,822

 
(4,040
)
 
104,231

 
(4,077
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
—

 
—

 
73,099

 
(864
)
 
73,099

 
(864
)
FNMA
2,362

 
(3
)
 
78,954

 
(786
)
 
81,316

 
(789
)
GNMA
16,116

 
(15
)
 
47,920

 
(506
)
 
64,036

 
(521
)
SBA
—

 
—

 
3,342

 
(77
)
 
3,342

 
(77
)
Total mortgage-backed securities
18,478

 
(18
)
 
203,315

 
(2,233
)
 
221,793

 
(2,251
)
Total debt securities held-to-maturity
25,887

 
(55
)
 
300,137

 
(6,273
)
 
326,024

 
(6,328
)
Total debt securities
$
25,887

 
$
(55
)
 
$
342,424

 
$
(6,477
)
 
$
368,311

 
$
(6,532
)
 
 
 
 
 
 
 
 
 
 
 
 
 
At December 31, 2018
 
Less than 12 months
 
12 months or longer
 
Total
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
 
Estimated
Fair
Value
 
Unrealized
Losses
Debt securities available-for-sale:
 
 
 
 
 
 
 
 
 
 
 
Investment securities - U.S. government and agency obligations
$
985

 
$
(3
)
 
$
66,438

 
$
(960
)
 
$
67,423

 
$
(963
)
Mortgage-backed securities - FNMA
993

 
(5
)
 
—

 
—

 
993

 
(5
)
Total debt securities available-for-sale
1,978

 
(8
)
 
66,438

 
(960
)
 
68,416

 
(968
)
Debt securities held-to-maturity:
 
 
 
 
 
 
 
 
 
 
 
Investment securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
—

 
—

 
14,845

 
(130
)
 
14,845

 
(130
)
State and municipal obligations
2,856

 
(4
)
 
106,073

 
(1,693
)
 
108,929

 
(1,697
)
Corporate debt securities
2,470

 
(21
)
 
43,059

 
(4,963
)
 
45,529

 
(4,984
)
Total investment securities
5,326

 
(25
)
 
163,977

 
(6,786
)
 
169,303

 
(6,811
)
Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
FHLMC
46,615

 
(159
)
 
147,763

 
(4,951
)
 
194,378

 
(5,110
)
FNMA
27,594

 
(125
)
 
185,328

 
(5,905
)
 
212,922

 
(6,030
)
GNMA
35,221

 
(535
)
 
59,468

 
(1,825
)
 
94,689

 
(2,360
)
SBA
3,447

 
(80
)
 
—

 
—

 
3,447

 
(80
)
Total mortgage-backed securities
112,877

 
(899
)
 
392,559

 
(12,681
)
 
505,436

 
(13,580
)
Total debt securities held-to-maturity
118,203

 
(924
)
 
556,536

 
(19,467
)
 
674,739

 
(20,391
)
Total debt securities
$
120,181

 
$
(932
)
 
$
622,974

 
$
(20,427
)
 
$
743,155

 
$
(21,359
)


At June 30, 2019, 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):
Security Description
Amortized
Cost
 
Estimated
Fair Value
 
Credit Rating
Moody’s/
S&P
Chase Capital
$
10,000

 
$
9,100

 
Baa1/BBB-
Wells Fargo Capital
5,000

 
4,600

 
A1/BBB
Huntington Capital
5,000

 
4,425

 
Baa2/BB+
Keycorp Capital
5,000

 
4,500

 
Baa2/BB+
PNC Capital
5,000

 
4,504

 
Baa1/BBB-
State Street Capital
5,000

 
4,591

 
A3/BBB
SunTrust Capital
5,000

 
4,563

 
Not Rated/BB+
Celgene
1,515

 
1,508

 
Baa2/BBB+
Southern Company
1,509

 
1,505

 
Baa2/BBB+
BB&T
1,508

 
1,503

 
A2/A-
AT&T Inc.
1,506

 
1,499

 
Baa2/BBB
 
$
46,038

 
$
42,298

 
 

 
At June 30, 2019, 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 June 30, 2019. 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 intend 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 June 30, 2019.