Investment Securities Held-to-Maturity

3 Months Ended

Mar. 31, 2019

Note 4. Investment Securities Held-to-Maturity

	March 31, 2019								December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	9,960	$	—	$	2	$	9,958
U.S. Government Sponsored Enterprises		201,327		453		417		201,363		234,228		336		803		233,761
SBA Backed Securities		50,797		—		1,295		49,502		52,051		—		2,065		49,986
U.S. Government Agency and Sponsored Enterprises Mortgage-Backed Securities		1,858,431		5,306		40,159		1,823,578		1,750,408		2,324		55,016		1,697,716
Total	$	2,110,555	$	5,759	$	41,871	$	2,074,443	$	2,046,647	$	2,660	$	57,886	$	1,991,421

Included in U.S. Government and Agency Securities are securities pledged to secure public deposits and repurchase agreements at fair value amounting to $1,499,836,000 and $1,441,059,000 at March 31, 2019 and December 31, 2018, respectively. Also included are securities pledged for borrowing at the Federal Home Loan Bank of Boston at fair value amounting to $305,776,000 and $291,190,000 at March 31, 2019 and December 31, 2018, respectively. There were no sales of held-to-maturity securities for the three months ended March 31, 2019 and March 31, 2018 respectively.

At March 31, 2019 and December 31, 2018, all mortgage-backed securities are obligations of U.S. Government Agencies and Government Sponsored Enterprises. Debt securities of U.S. Government Sponsored Enterprises and U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities primarily refer to debt securities of Fannie Mae and Freddie Mac.

The following table shows the maturity distribution of the Company’s securities held-to-maturity at March 31, 2019.

	Amortized Cost		Fair Value
	(in thousands)
Within one year	$	37,216	$	37,070
After one but within five years		1,723,841		1,696,173
After five but within ten years		336,847		328,635
More than ten years		12,651		12,565
Total	$	2,110,555	$	2,074,443

The weighted average remaining life of investment securities held-to-maturity at March 31, 2019 was 4.0 years. Included in the weighted average remaining life calculation at March 31, 2019 were $116,160,000 of U.S. Government Sponsored Enterprises obligations that are callable at the discretion of the issuer. The contractual maturities, which were used in the table above, of mortgage-backed securities, will differ from the actual maturities, due to the ability of the issuers to prepay underlying obligations. Also $120,000 of the securities are floating rate or adjustable rate and reprice prior to maturity.

As of March 31, 2019 and December 31, 2018, management concluded that the unrealized losses of its investment securities are temporary in nature since they are not related to the underlying credit quality of the issuers, and the Company does not intend to sell these debt securities and it is not more likely than not that it will be required to sell these debt securities before the anticipated recovery of their remaining amortized costs. In making its other-than-temporary impairment evaluation, the Company considered the fact that the principal and interest on these securities are from issuers that are investment grade.

The unrealized loss on U.S. Government Sponsored Enterprises, SBA Backed Securities, and U.S. Government Sponsored Enterprises Mortgage-Backed Securities related primarily to interest rates and not credit quality, and because the Company does not intend to sell any of these securities and it is not more likely than not that it will be required to sell these securities before the anticipated recovery of the remaining amortized cost, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019 or December 31, 2018.

In evaluating the underlying credit quality of a security, management considers several factors such as the credit rating of the obligor and the issuer, if applicable. Internal reviews of issuer financial statements are performed as deemed necessary.

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio March 31, 2019. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for 12 months or less and a continuous loss position for 12 months or longer. There are 12 and 304 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 487 holdings at March 31, 2019.

	March 31, 2019
	Less Than 12 Months				12 Months or Longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Treasury	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Government Sponsored Enterprises		—		—		74,876		417		74,876		417
SBA Backed Securities		—		—		49,502		1,295		49,502		1,295
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		59,831		439		1,237,048		39,720		1,296,879		40,159
Total temporarily impaired securities	$	59,831	$	439	$	1,361,426	$	41,432	$	1,421,257	$	41,871

The following table shows the temporarily impaired securities of the Company’s held-to-maturity portfolio at December 31, 2018. This table shows the unrealized market loss of securities that have been in a continuous unrealized loss position for less than 12 months and a continuous loss position for 12 months or longer. There are 56 and 315 securities that are temporarily impaired for less than 12 months and for 12 months or longer, respectively, out of a total of 475 holdings at December 31, 2018.

	December 31, 2018
	Less Than 12 Months				12 Months or Longer				Total
Temporarily Impaired Investments	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(in thousands)
U.S. Treasury	$	9,958	$	2	$	—	$	—	$	9,958	$	2
U.S. Government Sponsored Enterprises		9,849		42		69,499		761		79,348		803
SBA Backed Securities		—		—		49,987		2,065		49,987		2,065
U.S. Government Agency and Sponsored Enterprise Mortgage-Backed Securities		188,125		2,032		1,249,689		52,984		1,437,814		55,016
Total temporarily impaired securities	$	207,932	$	2,076	$	1,369,175	$	55,810	$	1,577,107	$	57,886