Securities

9 Months Ended

Sep. 30, 2019

Investments Debt And Equity Securities [Abstract]

Note 4—Securities

The following tables summarize the amortized cost and fair values of securities available-for-sale, securities held-to-maturity and equity and other securities as of the dates shown and the corresponding amounts of gross unrealized gains and losses:

September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale
U.S. Treasury Notes	$	42,381	$	461	$	—		$	42,842
U.S. Government agencies		177,082		1,048		(272	)		177,858
Obligations of states, municipalities, and political subdivisions		96,564		2,269		(231	)		98,602
Residential mortgage-backed securities
Agency		329,145		2,178		(2,313	)		329,010
Non-agency		119,661		644		(245	)		120,060
Commercial mortgage-backed securities
Agency		150,891		1,698		(556	)		152,033
Non-agency		31,224		276		—			31,500
Corporate securities		46,821		415		(42	)		47,194
Other securities		32,955		—		(121	)		32,834
Total	$	1,026,724	$	8,989	$	(3,780	)	$	1,031,933

September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity
Obligations of states, municipalities, and political subdivisions	$	4,417	$	85	$	—	$	4,502
Total	$	4,417	$	85	$	—	$	4,502

December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale
U.S. Treasury Notes	$	52,775	$	81	$	(189	)	$	52,667
U.S. Government agencies		187,427		367		(1,296	)		186,498
Obligations of states, municipalities, and political subdivisions		60,686		133		(586	)		60,233
Residential mortgage-backed securities
Agency		284,038		101		(11,176	)		272,963
Non-agency		84,998		199		(1,576	)		83,621
Commercial mortgage-backed securities
Agency		93,543		55		(3,164	)		90,434
Non-agency		31,458		—		(1,000	)		30,458
Corporate securities		34,716		67		(610	)		34,173
Other securities		4,613		2,127		(131	)		6,609
Total	$	834,254	$	3,130	$	(19,728	)	$	817,656

December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Held-to-maturity
Obligations of states, municipalities, and political subdivisions	$	23,835	$	40	$	(210	)	$	23,665
Residential mortgage-backed securities
Agency		40,082		93		(531	)		39,644
Non-agency		35,349		—		(919	)		34,430
Total	$	99,266	$	133	$	(1,660	)	$	97,739

The Company did not classify securities as trading during the three or nine months ended September 30, 2019 or during 2018.

The Company adopted the provisions of ASU No. 2016-01 as of January 1, 2019. The adoption of this ASU resulted in the reclassification of available-for-sale equity securities, at fair value to a separate line item on the Company’s Consolidated Statements of Financial Condition, and the reclassification of $1.4 million from other comprehensive income to retained earnings, representing the net unrealized gain, net of tax, on available-for-sale for sale equity securities at the date of adoption. At December 31, 2018, the Company held $6.6 million of available-for-sale equity investment securities which were reported as available-for-sale securities, at fair value, and are now reported as equity and other securities, at fair value. Additionally, the Company adopted the provisions of ASU No. 2017-12 on January 1, 2019, and elected to reclassify $94.8 million of securities held-to-maturity to securities available-for-sale, which did not have an impact on the Consolidated Statements of Operations.

Gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2019 and December 31, 2018, are summarized as follows:

			Less than 12 Months					12 Months or Longer					Total
September 30, 2019	# of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale
U.S. Government agencies		5	$	14,834	$	(163	)	$	20,266	$	(109	)	$	35,100	$	(272	)
Obligations of states, municipalities and political subdivisions		4		9,960		(226	)		1,417		(5	)		11,377		(231	)
Residential mortgage-backed securities
Agency		40		32,436		(179	)		204,649		(2,134	)		237,085		(2,313	)
Non-agency		11		36,826		(62	)		28,142		(183	)		64,968		(245	)
Commercial mortgage-backed securities
Agency		8		38,571		(256	)		33,769		(300	)		72,340		(556	)
Corporate securities		5		9,276		(42	)		—		—			9,276		(42	)
Other securities		1		32,834		(121	)		—		—			32,834		(121	)
Total		74	$	174,737	$	(1,049	)	$	288,243	$	(2,731	)	$	462,980	$	(3,780	)

			Less than 12 Months					12 Months or Longer					Total
December 31, 2018	# of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Available-for-sale
U.S. Treasury Notes		18	$	23,835	$	(52	)	$	9,865	$	(137	)	$	33,700	$	(189	)
U.S. Government agencies		25		43,487		(80	)		50,101		(1,216	)		93,588		(1,296	)
Obligations of states, municipalities and political subdivisions		56		13,926		(97	)		18,563		(489	)		32,489		(586	)
Residential mortgage-backed securities
Agency		42		4,288		(45	)		254,121		(11,131	)		258,409		(11,176	)
Non-agency		8		59,107		(1,378	)		4,009		(198	)		63,116		(1,576	)
Commercial mortgage-backed securities
Agency		9		21,356		(447	)		52,640		(2,717	)		73,996		(3,164	)
Non-agency		5		—		—			30,458		(1,000	)		30,458		(1,000	)
Corporate securities		15		25,762		(342	)		4,642		(268	)		30,404		(610	)
Other securities		1		—		—			2,844		(131	)		2,844		(131	)
Total		179	$	191,761	$	(2,441	)	$	427,243	$	(17,287	)	$	619,004	$	(19,728	)

			Less than 12 Months					12 Months or Longer					Total
December 31, 2018	# of Securities		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Held-to-maturity
Obligations of states, municipalities, and political subdivisions		23	$	8,127	$	(58	)	$	8,792	$	(152	)	$	16,919	$	(210	)
Residential mortgage-backed securities
Agency		16		6,625		(150	)		21,139		(381	)		27,764		(531	)
Non-agency		7		21,499		(503	)		12,931		(416	)		34,430		(919	)
Total		46	$	36,251	$	(711	)	$	42,862	$	(949	)	$	79,113	$	(1,660	)

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. The Company evaluated the securities which had an unrealized loss for other than temporary impairment and determined all declines in value to be temporary. There were 74 securities available-for-sale with unrealized losses at September 30, 2019. There were no securities held-to-maturity with unrealized losses at September 30, 2019. The Company anticipates full recovery of amortized cost with respect to these securities by maturity, or sooner, in the event of a more favorable market interest rate environment. The Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell them before recovery of their amortized cost basis, which may be at maturity.

The proceeds from all sales of securities available-for-sale, and the associated gains and losses, for the three and nine months ended September 30, 2019 and 2018 are listed below:

	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Proceeds	$	32,509	$	—	$	92,103	$	544
Gross gains		225		—		1,274		4
Gross losses		47		—		123		—

There were $178,000 in net gains reclassified from accumulated other comprehensive income into earnings for the three months ended September 30, 2019. There were no net gains reclassified from accumulated other comprehensive income into earnings for the three months ended September 30, 2018. There were $1.2 million and $4,000 in net gains reclassified from accumulated other comprehensive income into earnings for the nine months ended September 30, 2019 and 2018, respectively.

Securities pledged at September 30, 2019 and December 31, 2018 had carrying amounts of $306.9 million and $244.7 million, respectively. At September 30, 2019 and December 31, 2018, of those pledged, the carrying amounts of securities pledged as collateral for public fund deposits were $263.3 million and $197.8 million, respectively, and for customer repurchase agreements of $43.6 million and $46.9 million, respectively. At September 30, 2019 and December 31, 2018, there were no securities pledged for advances from the Federal Home Loan Bank. Other securities were pledged for derivative positions, letters of credit and for purposes required or permitted by law. At September 30, 2019 and December 31, 2018, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

At September 30, 2019, the amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Amortized Cost		Fair Value
Equity and other securities, at fair value
Due after ten years	$	697	$	697
No defined maturity		6,951		6,951
Total	$	7,648	$	7,648
Available-for-sale
Due in one year or less	$	59,697	$	59,875
Due from one to five years		123,941		125,158
Due from five to ten years		136,438		137,993
Due after ten years		75,727		76,304
Mortgage-backed securities		630,921		632,603
Total	$	1,026,724	$	1,031,933
Held-to-maturity
Due from one to five years	$	3,805	$	3,873
Due from five to ten years		612		629
Total	$	4,417	$	4,502