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Investment Securities
 3 Months Ended
Mar. 31, 2019
Investments Schedule [Abstract]  
Investment Securities
Note 3—Investment Securities
The amortized cost and estimated fair values of investments in debt securities are summarized in the following tables:
 
 
 
March 31, 2019
 
 
 
 
 
 
Gross
 
 
Gross
 
 
Estimated
 
 
 
Amortized
 
 
Unrealized
 
 
Unrealized
 
 
Fair
 
 
 
Cost
 
 
Gains
 
 
Losses
 
 
Value
 
 
 
(in thousands)
 
Debt Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
631,914
 
 
$
1,862
 
 
$
(6,676
)
 
$
627,100
 
Obligations of states and political subdivisions
 
 
128,706
 
 
 
1,242
 
 
 
(599
)
 
 
129,349
 
Corporate bonds
 
 
4,394
 
 
 
84
 
 
 
—
 
 
 
4,478
 
Asset backed securities
 
 
356,766
 
 
 
141
 
 
 
(4,318
)
 
 
352,589
 
Total debt securities available for sale
 
$
1,121,780
 
 
$
3,329
 
 
$
(11,593
)
 
$
1,113,516
 
Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
416,418
 
 
$
2,190
 
 
$
(2,581
)
 
$
416,027
 
Obligations of states and political subdivisions
 
 
14,598
 
 
 
173
 
 
 
(25
)
 
 
14,746
 
Total debt securities held to maturity
 
$
431,016
 
 
$
2,363
 
 
$
(2,606
)
 
$
430,773
 
 
 
 
December 31, 2018
 
 
 
 
 
 
Gross
 
 
Gross
 
 
Estimated
 
 
 
Amortized
 
 
Unrealized
 
 
Unrealized
 
 
Fair
 
 
 
Cost
 
 
Gains
 
 
Losses
 
 
Value
 
 
 
(in thousands)
 
Debt Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
647,288
 
 
$
771
 
 
$
(18,078
)
 
$
629,981
 
Obligations of states and political subdivisions
 
 
128,890
 
 
 
294
 
 
 
(3,112
)
 
 
126,072
 
Corporate bonds
 
 
4,381
 
 
 
97
 
 
 
—
 
 
 
4,478
 
Asset backed securities
 
 
355,451
 
 
 
73
 
 
 
(1,019
)
 
 
354,505
 
Total debt securities available for sale
 
$
1,136,010
 
 
$
1,235
 
 
$
(22,209
)
 
$
1,115,036
 
Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
430,343
 
 
$
327
 
 
$
(7,745
)
 
$
422,925
 
Obligations of states and political subdivisions
 
 
14,593
 
 
 
82
 
 
 
(230
)
 
 
14,445
 
Total debt securities held to maturity
 
$
444,936
 
 
$
409
 
 
$
(7,975
)
 
$
437,370
 
There were no sales of investment securities during the three months ended March 31, 2019 and 2018. Investment securities with an aggregate carrying value of $587,233,000 and $597,591,000 at March 31, 2019 and December 31, 2018, respectively, were pledged as collateral for specific borrowings, lines of credit or local agency deposits.
 
The amortized cost and estimated fair value of debt securities at March 31, 2019 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At March 31, 2019, obligations of U.S. government corporations and agencies with a cost basis totaling $1,048,332,000 consist almost entirely of residential real estate mortgage-backed securities whose contractual maturity, or principal repayment, will follow the repayment of the underlying mortgages. For purposes of the following table, the entire outstanding balance of these mortgage-backed securities issued by U.S. government corporations and agencies is categorized based on final maturity date. At March 31, 2019, the Company estimates the average remaining life of these mortgage-backed securities issued by U.S. government corporations and agencies to be approximately 5.5 years. Average remaining life is defined as the time span after which the principal balance has been reduced by half.
 
Debt Securities
 
Available for Sale
 
 
Held to Maturity
 
(In thousands)
 
Amortized
 
 
Estimated
 
 
Amortized
 
 
Estimated
 
 
Cost
 
 
Fair Value
 
 
Cost
 
 
Fair Value
 
Due in one year
 
$
2,413
 
 
$
2,418
 
 
$
—
 
 
$
—
 
Due after one year through five years
 
 
10,584
 
 
 
10,798
 
 
 
1,246
 
 
 
1,260
 
Due after five years through ten years
 
 
18,130
 
 
 
18,624
 
 
 
23,944
 
 
 
23,899
 
Due after ten years
 
 
1,090,653
 
 
 
1,081,676
 
 
 
405,826
 
 
 
405,614
 
Totals
 
$
1,121,780
 
 
$
1,113,516
 
 
$
431,016
 
 
$
430,773
 
Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
 
 
 
Less than 12 months
 
 
12 months or more
 
 
Total
 
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
March 31, 2019
 
(in thousands)
 
Debt Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
481
 
 
$
(2
)
 
$
496,424
 
 
$
(6,674
)
 
$
496,905
 
 
$
(6,676
)
Obligations of states and political subdivisions
 
 
24,644
 
 
 
(598
)
 
 
566
 
 
 
(1
)
 
 
25,210
 
 
 
(599
)
Asset backed securities
 
 
330,078
 
 
 
(4,318
)
 
 
—
 
 
 
—
 
 
 
330,078
 
 
 
(4,318
)
Total debt securities available for sale
 
$
355,203
 
 
$
(4,918
)
 
$
496,990
 
 
$
(6,675
)
 
$
852,193
 
 
$
(11,593
)
Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
—
 
 
$
—
 
 
$
224,551
 
 
$
(2,581
)
 
$
224,551
 
 
$
(2,581
)
Obligations of states and political subdivisions
 
 
—
 
 
 
—
 
 
 
5,891
 
 
 
(25
)
 
 
5,891
 
 
 
(25
)
Total debt securities held to maturity
 
$
—
 
 
$
—
 
 
$
230,442
 
 
$
(2,606
)
 
$
230,442
 
 
$
(2,606
)
 
 
 
Less than 12 months
 
 
12 months or more
 
 
Total
 
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Fair
 
 
Unrealized
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
 
Value
 
 
Loss
 
December 31, 2018
 
(in thousands)
 
Debt Securities Available for Sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
171,309
 
 
$
(3,588
)
 
$
394,630
 
 
$
(14,490
)
 
$
565,939
 
 
$
(18,078
)
Obligations of states and political subdivisions
 
 
63,738
 
 
 
(1,541
)
 
 
20,719
 
 
 
(1,571
)
 
 
84,457
 
 
 
(3,112
)
Asset backed securities
 
 
101,386
 
 
 
(1,019
)
 
 
—
 
 
 
—
 
 
 
101,386
 
 
 
(1,019
)
Total debt securities available for sale
 
$
336,433
 
 
$
(6,148
)
 
$
415,349
 
 
$
(16,061
)
 
$
751,782
 
 
$
(22,209
)
Debt Securities Held to Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Obligations of U.S. government agencies
 
$
223,810
 
 
$
(2,619
)
 
$
158,648
 
 
$
(5,126
)
 
$
382,458
 
 
$
(7,745
)
Obligations of states and political subdivisions
 
 
5,786
 
 
 
(114
)
 
 
4,042
 
 
 
(116
)
 
 
9,828
 
 
 
(230
)
Total debt securities held to maturity
 
$
229,596
 
 
$
(2,733
)
 
$
162,690
 
 
$
(5,242
)
 
$
392,286
 
 
$
(7,975
)
Obligations of U.S. government agencies: Unrealized losses on investments in obligations of U.S. government agencies are caused by interest rate increases. The contractual cash flows of these securities are guaranteed by U.S. Government Sponsored Entities (principally Fannie Mae and Freddie Mac). It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At March 31, 2019,
93
debt securities representing obligations of U.S. government agencies had unrealized losses with aggregate depreciation of
(1.3
%) from the Company’s amortized cost basis.
Obligations of states and political subdivisions: The unrealized losses on investments in obligations of states and political subdivisions were caused by increases in required yields by investors in these types of securities. It is expected that the securities would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At March 31, 2019,
33 
debt securities representing obligations of states and political subdivisions had unrealized losses with aggregate depreciation of
(2.0
%) from the Company’s amortized cost basis.
Asset backed securities: The unrealized losses on investments in asset backed securities were caused by increases in required yields by investors in these types of securities. At the time of purchase, each of these securities was rated AA or AAA and through March 31, 2019 has not experienced any deterioration in credit rating. The Company continues to monitor these securities for changes in credit rating or other indications of credit deterioration. Because management believes the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell and more likely than not will not be required to sell, these investments are not considered other-than-temporarily impaired. At March 31, 2019,
28
asset backed securities had unrealized losses with aggregate depreciation of
(1.3
%) from the Company’s amortized cost basis.
Marketable equity securities: All unrealized losses recognized during the reporting period were for equity securities still held at March 31, 2019.