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Securities
 3 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Securities Securities
The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale and held-to-maturity at March 31, 2020 and December 31, 2019 are summarized as follows:
 
March 31, 2020
(In thousands)
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross Unrealized
Losses
 
Fair
Value
Debt securities available-for-sale
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government agencies
$
9,296

 
$
287

 
$
—

 
$
9,583

Mortgage-backed securities and collateralized mortgage obligations of U.S. government sponsored entities
608,711

 
26,760

 
(252
)
 
635,219

Private mortgage-backed securities and collateralized mortgage obligations
52,868

 
111

 
(2,410
)
 
50,569

Collateralized loan obligations
205,238

 
—

 
(19,509
)
 
185,729

Obligations of state and political subdivisions
27,909

 
1,306

 
(4
)
 
29,211

Totals
$
904,022

 
$
28,464


$
(22,175
)

$
910,311

 
 
 
 
 
 
 
 
Debt securities held-to-maturity
 
 
 
 
 
 
 
Mortgage-backed securities of U.S. government sponsored entities
$
252,373

 
$
9,447

 
$
(602
)
 
$
261,218

Totals
$
252,373


$
9,447


$
(602
)

$
261,218

 
December 31, 2019
(In thousands)
Amortized
Cost
 
Gross Unrealized
Gains
 
Gross Unrealized
Losses
 
Fair
Value
Debt securities available-for-sale
 

 
 

 
 

 
 

U.S. Treasury securities and obligations of U.S. government agencies
$
9,914

 
$
204

 
$
(4
)
 
$
10,114

Mortgage-backed securities and collateralized mortgage obligations of U.S. government sponsored entities
604,934

 
5,784

 
(1,511
)
 
609,207

Private mortgage-backed securities and collateralized mortgage obligations
56,005

 
1,561

 
(5
)
 
57,561

Collateralized loan obligations
239,364

 
7

 
(1,153
)
 
238,218

Obligations of state and political subdivisions
30,548

 
1,208

 
(1
)
 
31,755

Totals
$
940,765

 
$
8,764

 
$
(2,674
)
 
$
946,855

 
 
 
 
 
 
 
 
Debt securities held-to-maturity
 
 
 
 
 
 
 
Mortgage-backed securities of U.S. government sponsored entities
$
261,369

 
$
2,717

 
$
(1,873
)
 
$
262,213

Totals
$
261,369

 
$
2,717

 
$
(1,873
)
 
$
262,213


Proceeds from sales of securities during the three months ended March 31, 2020 and 2019 were $27.8 million and $35.0 million, respectively. Included in "Securities gains (losses), net" for the three months ended March 31, 2020 are gross gains of $0.1 million and gross losses of $0.2 million, and gross gains of $0.2 million and gross losses of $0.3 million for the three months ended March 31, 2019. Also included in “Securities gains (losses), net” is an increase of $0.1 million for each of the three months ended March 31, 2020 and 2019 in the value of an investment in shares of a mutual fund that invests primarily in CRA-qualified debt securities.
At March 31, 2020, debt securities with a fair value of $319.2 million were pledged primarily as collateral for public deposits and secured borrowings.
The amortized cost and fair value of debt securities held-to-maturity and available-for-sale at March 31, 2020, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
 
Held to Maturity
 
Available-for-Sale
(In thousands)
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due in less than one year
$
—

 
$
—

 
$
2,068

 
$
2,091

Due after one year through five years
—

 
—

 
8,374

 
8,585

Due after five years through ten years
—

 
—

 
9,040

 
9,546

Due after ten years
—

 
—

 
17,723

 
18,572

 
—

 
—

 
37,205

 
38,794

Mortgage-backed securities and collateralized mortgage obligations of U.S. government sponsored entities
252,373

 
261,218

 
608,711

 
635,219

Private mortgage-backed securities and collateralized mortgage obligations
—

 
—

 
52,868

 
50,569

Collateralized loan obligations
—

 
—

 
205,238

 
185,729

Totals
$
252,373

 
$
261,218

 
$
904,022

 
$
910,311


The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flows analyses, or using observable market data. The tables below indicate, at March 31, 2020, the fair value of available-for-sale debt securities with unrealized losses for which no allowance for credit losses has been recorded, and at December 31, 2019, the fair value of available-for-sale and held-to-maturity debt securities with unrealized losses for which no allowance has been recorded.
 
March 31, 2020
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(In thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
Mortgage-backed securities and collateralized mortgage obligations of U.S. government sponsored entities
37,338

 
(239
)
 
363

 
(13
)
 
37,701

 
(252
)
Private mortgage-backed securities and collateralized mortgage obligations
37,775

 
(2,410
)
 
—

 
—

 
37,775

 
(2,410
)
Collateralized loan obligations
70,314

 
(6,465
)
 
115,415

 
(13,044
)
 
185,729

 
(19,509
)
Obligations of state and political subdivisions
1,239

 
(4
)
 
—

 
—

 
1,239

 
(4
)
Totals
$
146,666

 
$
(9,118
)
 
$
115,778

 
$
(13,057
)
 
$
262,444

 
$
(22,175
)
 
December 31, 2019
 
Less Than 12 Months
 
12 Months or Longer
 
Total
(In thousands)
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
U.S. Treasury securities and obligations of U.S. government agencies
$
758

 
$
(4
)
 
$
—

 
$
—

 
$
758

 
$
(4
)
Mortgage-backed securities and collateralized mortgage obligations of U.S. government sponsored entities
220,057

 
(1,461
)
 
104,184

 
(1,923
)
 
324,241

 
(3,384
)
Private mortgage-backed securities and collateralized mortgage obligations
2,978

 
(5
)
 
—

 
—

 
2,978

 
(5
)
Collateralized loan obligations
88,680

 
(570
)
 
110,767

 
(583
)
 
199,447

 
(1,153
)
Obligations of state and political subdivisions
515

 
(1
)
 
—

 
—

 
515

 
(1
)
Totals
$
312,988

 
$
(2,041
)
 
$
214,951

 
$
(2,506
)
 
$
527,939

 
$
(4,547
)

At March 31, 2020, the Company had $19.5 million in unrealized losses in uncapped 3-month LIBOR floating rate collateralized loan obligations ("CLOs") having a fair value of $185.7 million. CLOs are special purpose vehicles and those in which the Company has invested acquire nearly all first lien, broadly syndicated corporate loans across a diversified band of industries while providing support to senior tranche investors. As of March 31, 2020, the Company held 29 total positions of which 23 positions with a fair value of $164.6 million, or 88%, are in AAA/AA tranches, and six positions with a fair value of $21.1 million, or 12%, are in A rated tranches, with average credit support of 31% and 18%, respectively. The Company evaluates the securities for potential credit losses by modeling expected loan level defaults, recoveries, and prepayments for each CLO security. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2020, no allowance for credit losses has been recorded.
At March 31, 2020, the Company had $2.4 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $37.8 million. The collateral underlying these mortgage investments is primarily residential real estate. The securities have average credit support of 16% and low loan to value ratios. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2020, no allowance for credit losses has been recorded.
All HTM debt securities are issued by government sponsored entities, which are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. In addition, the credit rating on all HTM debt securities is AA+. While the potential for default on these securities may be something greater than zero, the long history with no credit losses, the implied government guarantee of principal and interest payments and the high credit rating of the HTM portfolio provide sufficient basis for the current expectation that there is no risk of loss if default were to occur. Despite the emergence of significant market changes and increasing degrees of uncertainty in the U.S. economy late in the first quarter of 2020, there has to date been no specific impact on the agencies or changes in the nature or quality of the guarantee they provide. As a result, as of March 31, 2020, no allowance for credit losses has been recorded.
Included in other assets at March 31, 2020 is $42.8 million of Federal Home Loan Bank and Federal Reserve Bank stock stated at par value. The Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities. Also included in other assets is a $6.5 million investment in a CRA-qualified mutual fund carried at fair value. Accrued interest receivable on AFS and HTM debt securities of $3.4 million and $0.6 million at March 31, 2020, respectively, and $3.8 million and $0.6 million at December 31, 2019, respectively, is also included in other assets.
The Company holds 11,330 shares of Visa Class B stock, which following resolution of Visa litigation will be converted to Visa Class A shares. Under the current conversion ratio that became effective September 27, 2019, the Company would receive 1.6228 shares of Class A stock for each share of Class B stock for a total of 18,386 shares of Visa Class A stock. The ownership of Visa stock is related to prior ownership in Visa's network, while Visa operated as a cooperative and is recorded on the Company's financial records at zero basis.