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Securities
 9 Months Ended
Sep. 30, 2019
Securities [Abstract]  
Securities
3.
Securities

The amortized cost, estimated fair value and unrealized gains (losses) of available for sale (“AFS”) securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of September 30, 2019
                        
Federal agency
  
$
29,998
    
$
-
    
$
167
    
$
29,831
  
State & municipal
    
9
      
-
      
-
      
9
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
433,393
      
4,494
      
292
      
437,595
  
U.S. government agency securities
    
44,912
      
1,021
      
18
      
45,915
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
343,682
      
2,484
      
456
      
345,710
  
U.S. government agency securities
    
72,443
      
887
      
217
      
73,113
  
Total AFS securities
  
$
924,437
    
$
8,886
    
$
1,150
    
$
932,173
  
As of December 31, 2018
                                
Federal agency
  
$
84,982
    
$
10
    
$
693
    
$
84,299
  
State & municipal
    
30,136
      
16
      
237
      
29,915
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
493,225
      
439
      
10,354
      
483,310
  
U.S. government agency securities
    
29,190
      
270
      
475
      
28,985
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
332,409
      
344
      
7,211
      
325,542
  
U.S. government agency securities
    
47,684
      
137
      
1,376
      
46,445
  
Total AFS securities
  
$
1,017,626
    
$
1,216
    
$
20,346
    
$
998,496
  

The components of net realized gains (losses) on AFS securities are as follows. These amounts were reclassified out of accumulated other comprehensive income (loss) (“AOCI”) and into earnings.


  
Three Months Ended
September 30,
  
(In thousands)
  
2019
    
2018
  
Gross realized gains
  
$
20
    
$
-
  
Gross realized (losses)
    
-
      
-
  
Net AFS realized gains
  
$
20
    
$
-
  


 
Nine Months Ended
September 30,
  
(In thousands)
  
2019
    
2018
  
Gross realized gains
  
$
73
    
$
-
  
Gross realized (losses)
    
(152
)
    
-
  
Net AFS realized (losses)
  
$
(79
)
  
$
-
  

Included in net realized gains (losses) on AFS securities, the Company recorded gains from calls of approximately $20 thousand for the three months ended September 30, 2019 and $25 thousand for the nine months ended September 30, 2019. There were no recorded gains from calls on AFS securities included in net realized gains (losses) for the three and nine months ended September 30, 2018.

The amortized cost, estimated fair value and unrealized gains (losses) of held to maturity (“HTM”) securities are as follows:

(In thousands)
  
Amortized
Cost
    
Unrealized
Gains
    
Unrealized
Losses
    
Estimated
Fair Value
  
As of September 30, 2019
                        
Federal agency
  
$
10,000
    
$
6
    
$
-
    
$
10,006
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
154,701
      
3,139
      
127
      
157,713
  
U.S. government agency securities
    
13,679
      
785
      
-
      
14,464
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
213,409
      
2,849
      
365
      
215,893
  
    U.S. government agency securities
    
112,974
      
4,001
      
64
      
116,911
  
State & municipal
    
173,672
      
2,544
      
14
      
176,202
  
Total HTM securities
  
$
678,435
    
$
13,324
    
$
570
    
$
691,189
  
As of December 31, 2018
                                
Federal agency
  
$
19,995
    
$
52
    
$
-
    
$
20,047
  
Mortgage-backed:
                                
Government-sponsored enterprises
    
164,618
      
712
      
2,773
      
162,557
  
U.S. government agency securities
    
15,230
      
403
      
-
      
15,633
  
Collateralized mortgage obligations:
                                
Government-sponsored enterprises
    
257,475
      
1,097
      
3,897
      
254,675
  
   U.S. government agency securities
    
83,148
      
767
      
-
      
83,915
  
State & municipal
    
243,133
      
331
      
1,616
      
241,848
  
Total HTM securities
  
$
783,599
    
$
3,362
    
$
8,286
    
$
778,675
  

Included in net realized gains (losses), the Company recorded gains from calls on HTM securities of approximately $4 thousand for the three and nine months ended September 30, 2019. There were no recorded gains from calls on HTM securities included in net realized gains (losses) for the three and nine months ended September 30, 2018.

AFS and HTM securities with amortized costs totaling $1.4 billion at September 30, 2019 and $1.5 billion at December 31, 2018 were pledged to secure public deposits and for other purposes required or permitted by law. Additionally, at September 30, 2019 and December 31, 2018, AFS and HTM securities with an amortized cost of $186.3 million and $215.3 million, respectively, were pledged as collateral for securities sold under repurchase agreements.

The following table sets forth information with regard to investment securities with unrealized losses segregated according to the length of time the securities had been in a continuous unrealized loss position:


  
Less Than 12 Months
    
12 Months or Longer
    
Total
  
(In thousands)
  
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
    
Fair
Value
    
Unrealized
Losses
    
Number
of
Positions
  
As of September 30, 2019
                                                      
AFS securities:
                                                      
Federal agency
  
$
19,965
    
$
(33
)
    
2
    
$
9,866
    
$
(134
)
    
1
    
$
29,831
    
$
(167
)
    
3
  
Mortgage-backed
    
36,017
      
(69
)
    
18
      
39,394
      
(241
)
    
16
      
75,411
      
(310
)
    
34
  
Collateralized mortgage obligations
    
60,272
      
(170
)
    
11
      
72,528
      
(503
)
    
23
      
132,800
      
(673
)
    
34
  
Total securities with unrealized losses
  
$
116,254
    
$
(272
)
    
31
    
$
121,788
    
$
(878
)
    
40
    
$
238,042
    
$
(1,150
)
    
71
  
                                                                         
HTM securities:
                                                                        
Mortgage-backed
  
$
-
    
$
-
      
-
    
$
26,836
    
$
(127
)
    
2
    
$
26,836
    
$
(127
)
    
2
  
Collateralized mortgage obligations
    
18,656
      
(129
)
    
3
      
23,708
      
(300
)
    
5
      
42,364
      
(429
)
    
8
  
State & municipal
    
5,447
      
(14
)
    
8
      
-
      
-
      
-
      
5,447
      
(14
)
    
8
  
Total securities with unrealized losses
  
$
24,103
    
$
(143
)
    
11
    
$
50,544
    
$
(427
)
    
7
    
$
74,647
    
$
(570
)
    
18
  
                                                                         
As of December 31, 2018
                                                                        
AFS securities:
                                                                        
Federal agency
  
$
-
    
$
-
      
-
    
$
64,294
    
$
(693
)
    
6
    
$
64,294
    
$
(693
)
    
6
  
State & municipal
    
1,715
      
(3
)
    
3
      
22,324
      
(234
)
    
35
      
24,039
      
(237
)
    
38
  
Mortgage-backed
    
18,462
      
(65
)
    
12
      
428,440
      
(10,764
)
    
101
      
446,902
      
(10,829
)
    
113
  
Collateralized mortgage obligations
    
12,118
      
(69
)
    
5
      
320,908
      
(8,518
)
    
62
      
333,026
      
(8,587
)
    
67
  
Total securities with unrealized losses
  
$
32,295
    
$
(137
)
    
20
    
$
835,966
    
$
(20,209
)
    
204
    
$
868,261
    
$
(20,346
)
    
224
  
                                                                         
HTM securities:
                                                                        
Mortgage-backed
  
$
-
    
$
-
      
-
    
$
82,579
    
$
(2,773
)
    
6
    
$
82,579
    
$
(2,773
)
    
6
  
Collateralized mortgage obligations
    
4,386
      
(7
)
    
2
      
145,396
      
(3,890
)
    
26
      
149,782
      
(3,897
)
    
28
  
State & municipal
    
18,907
      
(84
)
    
30
      
58,258
      
(1,532
)
    
86
      
77,165
      
(1,616
)
    
116
  
Total securities with unrealized losses
  
$
23,293
    
$
(91
)
    
32
    
$
286,233
    
$
(8,195
)
    
118
    
$
309,526
    
$
(8,286
)
    
150
  

Declines in the fair value of HTM securities below their amortized cost, less any current period credit loss, that are deemed to be other-than-temporary are reflected in earnings as realized losses or in other comprehensive income (“OCI”). The classification is dependent upon whether the Company intends to sell the security, or whether it is more likely than not, that the Company will be required to sell the security before recovery. The other-than-temporary impairment (“OTTI”) shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be separated into (i) the amount representing the credit loss and (ii) the amount related to all other factors. The amount of the total OTTI related to the credit loss shall be recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in OCI, net of applicable taxes.

In estimating OTTI losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer and (iii) the historical and implied volatility of the fair value of the security.

Management has the intent to hold the securities classified as HTM until they mature, at which time it is believed the Company will receive full value for the securities. The unrealized losses on HTM debt securities are due to increases in market interest rates over yields at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. The fair value is expected to recover as the bond approaches its maturity date or repricing date or if market yields for such investments declines.

Management also has the intent to hold and will not be required to sell, the debt securities classified as AFS for a period of time sufficient for a recovery of cost, which may be until maturity. The unrealized losses on AFS debt securities are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. When necessary, the Company has performed a discounted cash flow analysis to determine whether or not it will receive the contractual principal and interest on certain securities. For AFS debt securities, OTTI losses are recognized in earnings if the Company intends to sell the security. In other cases the Company considers the relevant factors noted above, as well as the Company’s intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery in market value and whether evidence exists to support a realizable value equal to or greater than the cost basis. Any impairment loss on an equity security is equal to the full difference between the cost basis and the fair value of the security.

As of September 30, 2019  and December 31, 2018, management believes the impairments detailed in the table above are temporary. There were no OTTI losses realized in the Company’s unaudited interim consolidated statements of income for the three and nine months ended September 30, 2019, or in the three and nine months ended September 30, 2018.

The following tables set forth information with regard to gains and losses on equity securities:


  
Three Months Ended September 30,
  
(In thousands)
  
2019
    
2018
  
Net gains and losses recognized on equity securities
  
$
4,012
    
$
412
  
Less: Net gains and losses recognized during the period on equity securities sold during the period
    
3,966
      
511
  
Unrealized gains and losses recognized on equity securities still held
  
$
46
    
$
(99
)


 
Nine Months Ended September 30,
  
(In thousands)
  
2019
    
2018
  
Net gains and losses recognized on equity securities
  
$
4,099
    
$
575
  
Less: Net gains and losses recognized during the period on equity securities sold during the period
    
3,966
      
555
  
Unrealized gains and losses recognized on equity securities still held
  
$
133
    
$
20
  

Included in the net realized gains and losses recognized on equity securities during the three and nine months ended September 30, 2019, the Company recorded a $4.0 million gain from the sale of Visa Class B common stock, which had no readily determinable fair value at the time of the sale. As of September 30, 2019 and December 31, 2018, the carrying value of equity securities without readily determinable fair values was $4.0 million. The Company performed a qualitative assessment to determine whether the investments were impaired and identified no areas of concern as of September 30, 2019 and 2018. There were no impairments, downward or upward adjustments recognized for equity securities without readily determinable fair values during the three and nine months ended September 30, 2019 and 2018.

The following tables set forth information with regard to contractual maturities of debt securities at September 30, 2019:

(In thousands)
  
Amortized
Cost
    
Estimated
Fair Value
  
AFS debt securities:
            
Within one year
  
$
37
    
$
37
  
From one to five years
    
30,404
      
30,393
  
From five to ten years
    
171,485
      
173,220
  
After ten years
    
722,511
      
728,523
  
Total AFS debt securities
  
$
924,437
    
$
932,173
  
HTM debt securities:
                
Within one year
  
$
26,940
    
$
26,940
  
From one to five years
    
68,113
      
68,531
  
From five to ten years
    
179,381
      
183,425
  
After ten years
    
404,001
      
412,293
  
Total HTM debt securities
  
$
678,435
    
$
691,189
  

Maturities of mortgage-backed, collateralized mortgage obligations and asset-backed securities are stated based on their estimated average lives. Actual maturities may differ from estimated average lives or contractual maturities because, in certain cases, borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Except for U.S. Government securities, there were no holdings, when taken in the aggregate, of any single issuer that exceeded 10% of consolidated stockholders’ equity at September 30, 2019 and December 31, 2018.