Debt Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

The following tables present the amortized cost, the gross unrealized gains and losses and the fair value of the Company’s debt securities:


	December 31, 2019
	Amortized Cost		Gross Unrealized					Fair Value
(Dollars in thousands)				Gains		Losses
Available-for-sale
U.S. government and federal agency	$	20,061	48		(65)		20,044
U.S. government sponsored enterprises	42,724		953		—		43,677
State and local governments	679,784		22,694		(80)		702,398
Corporate bonds	155,665		1,938		(1)		157,602
Residential mortgage-backed securities	731,766		7,507		(549)		738,724
Commercial mortgage-backed securities	891,374		22,825		(1,392)		912,807
Total available-for-sale	2,521,374		55,965		(2,087)		2,575,252
Held-to-maturity
State and local governments	224,611		9,785		—		234,396
Total held-to-maturity	224,611		9,785		—		234,396
Total debt securities	$	2,745,985	65,750		(2,087)		2,809,648


	December 31, 2018
	Amortized Cost		Gross Unrealized					Fair Value
(Dollars in thousands)				Gains		Losses
Available-for-sale
U.S. government and federal agency	$	23,757	54		(162)		23,649
U.S. government sponsored enterprises	120,670		52		(514)		120,208
State and local governments	844,636		18,936		(11,322)		852,250
Corporate bonds	292,052		378		(1,613)		290,817
Residential mortgage-backed securities	808,537		628		(16,250)		792,915
Commercial mortgage-backed securities	490,868		3,312		(2,356)		491,824
Total available-for-sale	2,580,520		23,360		(32,217)		2,571,663
Held-to-maturity
State and local governments	297,915		1,380		(11,039)		288,256
Total held-to-maturity	297,915		1,380		(11,039)		288,256
Total debt securities	$	2,878,435	24,740		(43,256)		2,859,919

In November 2018, the Company adopted FASB ASU 2017-12, Derivatives and Hedging, and in doing so redesignated state and local government securities with a carrying value of $270,331,000, from held-to-maturity classification to available-for-sale classification. The Company considers the available-for-sale classification of these debt securities to be appropriate since it no longer had the intent to hold them to maturity. No gain or loss was recorded at the time of transfer.

The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by contractual maturity at December 31, 2019. Actual maturities may differ from expected or contractual maturities since issuers have the right to prepay obligations with or without prepayment penalties.


	December 31, 2019
	Available-for-Sale				Held-to-Maturity
(Dollars in thousands)	Amortized Cost		Fair Value	Amortized Cost	Fair Value
Due within one year	$	62,317	62,555	—	—
Due after one year through five years	170,631		174,195	12,841	13,383
Due after five years through ten years	206,056		214,517	71,708	75,771
Due after ten years	459,230		472,454	140,062	145,242
	898,234		923,721	224,611	234,396
Mortgage-backed securities ¹	1,623,140		1,651,531	—	—
Total	$	2,521,374	2,575,252	224,611	234,396

______________________________

¹ Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their prepayment speeds.

Proceeds from sales and calls of debt securities and the associated gains and losses that have been included in earnings are listed below:


	Years ended
(Dollars in thousands)	December 31, 2019		December 31, 2018	December 31, 2017
Available-for-sale
Proceeds from sales and calls of debt securities	$	928,710	265,587	280,783
Gross realized gains ¹	18,936		443	3,369
Gross realized losses ¹	(4,513)		(455)	(4,005)
Held-to-maturity
Proceeds from calls of debt securities	58,750		79,000	23,020
Gross realized gains ¹	2		101	204
Gross realized losses ¹	(10)		(1,202)	(228)

______________________________

¹ The gain or loss on the sale or call of each debt security is determined by the specific identification method.

At December 31, 2019 and 2018, the Company had debt securities with carrying values of $1,475,752,000 and $1,333,455,000, respectively, pledged as collateral for FHLB advances, FRB discount window borrowings, securities sold under agreements to repurchase (“repurchase agreements”), interest rate swap agreements and deposits of several local government units.

Debt securities with an unrealized loss position are summarized as follows:


	December 31, 2019
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss	Fair Value	Unrealized Loss	Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	464	—	9,902	(65)	10,366	(65)

State and local governments	19,044		(80)	—	—	19,044	(80)
Corporate bonds	7,378		(1)	—	—	7,378	(1)
Residential mortgage-backed securities	85,562		(234)	29,038	(315)	114,600	(549)
Commercial mortgage-backed securities	177,051		(1,293)	7,697	(99)	184,748	(1,392)
Total available-for-sale	$	289,499	(1,608)	46,637	(479)	336,136	(2,087)


	December 31, 2018
	Less than 12 Months				12 Months or More			Total
(Dollars in thousands)	Fair Value		Unrealized Loss	Fair Value	Unrealized Loss	Fair Value	Unrealized Loss
Available-for-sale
U.S. government and federal agency	$	4,287	(27)	10,519	(135)	14,806	(162)
U.S. government sponsored enterprises	43,400		(103)	35,544	(411)	78,944	(514)
State and local governments	72,080		(922)	232,244	(10,400)	304,324	(11,322)
Corporate bonds	119,111		(937)	114,800	(676)	233,911	(1,613)
Residential mortgage-backed securities	132,405		(833)	537,202	(15,417)	669,607	(16,250)
Commercial mortgage-backed securities	73,118		(402)	86,504	(1,954)	159,622	(2,356)
Total available-for-sale	$	444,401	(3,224)	1,016,813	(28,993)	1,461,214	(32,217)
Held-to-maturity
State and local governments	$	87,392	(2,778)	126,226	(8,261)	213,618	(11,039)
Total held-to-maturity	$	87,392	(2,778)	126,226	(8,261)	213,618	(11,039)

Based on an analysis of its debt securities with unrealized losses as of December 31, 2019 and 2018, the Company determined that none of such securities had other-than-temporary impairment and the unrealized losses were primarily the result of interest rate changes and market spreads subsequent to acquisition. The fair value of the debt securities is expected to recover as payments are received and the securities approach maturity. At December 31, 2019, management determined that it did not intend to sell debt securities with unrealized losses, and there was no expected requirement to sell any of its debt securities with unrealized losses before recovery of their amortized cost.