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INVESTMENT SECURITIES | 12 Months Ended
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Dec. 31, 2018
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | 3. INVESTMENT SECURITIES The amortized cost, gross unrealized gains and losses, and fair value of our investment securities portfolio as of December 31, 2018 and 2017 are as follows:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
| (Dollars in thousands)
December 31, 2018 |  |  |  |  |  |  |
Held-to-Maturity: |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | $ | 83,436 |  |  | $ | 19 |  |  | $ | (3,174 | ) |  | $ | 80,281 |
Commercial - U.S. GSEs | 65,072 |  |  | — |  |  | (1,081 | ) |  | 63,991 |
Total held-to-maturity investment securities | $ | 148,508 |  |  | $ | 19 |  |  | $ | (4,255 | ) |  | $ | 144,272 |
Available-for-Sale: |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |
States and political subdivisions | $ | 174,114 |  |  | $ | 1,035 |  |  | $ | (1,475 | ) |  | $ | 173,674 |
Corporate securities | 55,259 |  |  | — |  |  | (410 | ) |  | 54,849 |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 33,257 |  |  | — |  |  | (683 | ) |  | 32,574 |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential - U.S. GSEs | 736,175 |  |  | 369 |  |  | (19,492 | ) |  | 717,052 |
Residential - Non-government sponsored entities ("Non-GSEs") | 41,245 |  |  | 337 |  |  | (464 | ) |  | 41,118 |
Commercial - U.S. GSEs and agencies | 53,014 |  |  | — |  |  | (1,531 | ) |  | 51,483 |
Commercial - Non-GSEs | 134,867 |  |  | 1,013 |  |  | (1,152 | ) |  | 134,728 |
Total available-for-sale investment securities | $ | 1,227,931 |  |  | $ | 2,754 |  |  | $ | (25,207 | ) |  | $ | 1,205,478 |
Equity securities | 826 |  |  | — |  |  | — |  |  | 826 |
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
| (Dollars in thousands)
December 31, 2017 |  |  |  |  |  |  |
Held-to-Maturity: |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | $ | 100,279 |  |  | $ | 106 |  |  | $ | (2,222 | ) |  | $ | 98,163 |
Commercial - U.S. GSEs | 91,474 |  |  | — |  |  | (436 | ) |  | 91,038 |
Total held-to-maturity investment securities | $ | 191,753 |  |  | $ | 106 |  |  | $ | (2,658 | ) |  | $ | 189,201 |
Available-for-Sale: |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |
States and political subdivisions | $ | 178,459 |  |  | $ | 2,041 |  |  | $ | (719 | ) |  | $ | 179,781 |
Corporate securities | 73,772 |  |  | 582 |  |  | (76 | ) |  | 74,278 |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 25,519 |  |  | 60 |  |  | (69 | ) |  | 25,510 |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential - U.S. GSEs | 808,242 |  |  | 2,230 |  |  | (9,789 | ) |  | 800,683 |
Residential - Non-government sponsored entities ("Non-GSEs") | 45,679 |  |  | 1,084 |  |  | — |  |  | 46,763 |
Commercial - U.S. GSEs and agencies | 40,012 |  |  | — |  |  | (287 | ) |  | 39,725 |
Commercial - Non-GSEs | 135,058 |  |  | 2,461 |  |  | (193 | ) |  | 137,326 |
Total available-for-sale investment securities | $ | 1,306,741 |  |  | $ | 8,458 |  |  | $ | (11,133 | ) |  | $ | 1,304,066 |
Equity securities | $ | 825 |  |  | $ | — |  |  | $ | — |  |  | $ | 825 |
As discussed in Note 1 - Summary of Significant Accounting Policies, the Company adopted ASU 2016-01 beginning January 1, 2018, which resulted in a reclassification of the Company's equity investment securities portfolio of $0.8 million and $0.8 million as of December 31, 2018 and December 31, 2017, respectively, from available-for-sale investment securities to equity investment securities on the Company's consolidated balance sheets. During the first quarter of 2018, the Company recorded a cumulative effect adjustment which increased opening retained earnings (or reduced opening accumulated deficit) and decreased AOCI by $0.1 million related to the unrealized gains on the equity investment securities portfolio. Changes in the fair value of the equity investment securities portfolio are now recognized in net income. The amortized cost and estimated fair value of our investment securities at December 31, 2018 by contractual maturity are shown below. Actual maturities may differ from contractual maturities as issuers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
| December 31, 2018
| Amortized Cost |  | Fair Value
| (Dollars in thousands)
Held-to-Maturity: |  |  |
Mortgage-backed securities: |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | $ | 83,436 |  |  | $ | 80,281 |
Commercial - U.S. GSEs | 65,072 |  |  | 63,991 |
Total held-to-maturity investment securities | $ | 148,508 |  |  | $ | 144,272 |
Available-for-Sale: |  |  |
Due in one year or less | $ | 65,470 |  |  | $ | 65,485 |
Due after one year through five years | 95,013 |  |  | 94,653 |
Due after five years through ten years | 48,081 |  |  | 47,809 |
Due after ten years | 54,066 |  |  | 53,150 |
Mortgage-backed securities |  |  |
Residential - U.S. GSEs | 736,175 |  |  | 717,052 |
Residential - Non-government sponsored entities ("Non-GSEs") | 41,245 |  |  | 41,118 |
Commercial - U.S. GSEs and agencies | 53,014 |  |  | 51,483 |
Commercial - Non-GSEs | 134,867 |  |  | 134,728 |
Total available-for-sale investment securities | $ | 1,227,931 |  |  | $ | 1,205,478 |
Equity securities | $ | 826 |  |  | $ | 826 |
In the fourth quarter of 2018, we sold two available-for-sale corporate securities totaling $10.0 million at a gross realized loss on sale of $0.3 million. In the second quarter of 2017, we completed an investment portfolio repositioning strategy designed to enhance potential prospective earnings and improve net interest margin. In connection with the repositioning, we sold $97.7 million in lower-yielding available-for-sale securities, and purchased $97.4 million in higher-yielding, longer duration investment securities. The investment securities sold had an average yield of 1.91%. Gross proceeds of the sale of $96.0 million were immediately reinvested back into investment securities with an average yield of 2.57%. The new securities were classified in the available-for-sale portfolio. There were no gross realized gains on the sale of the investment securities. Gross realized losses on the sale of the investment securities were $1.6 million. The specific identification method was used as the basis for determining the cost of all securities sold. There were no investment security sales in 2016. Investment securities of $0.98 billion and $1.08 billion at December 31, 2018 and 2017, respectively, were pledged to secure public funds on deposit and other long-term and short-term borrowings. At December 31, 2018 and 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders' equity. There were a total of 336 and 223 securities in an unrealized or unrecognized loss position at December 31, 2018 and 2017, respectively. The following table summarizes securities which were in an unrealized or unrecognized loss position at December 31, 2018 and 2017, aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position:
| Less Than 12 Months |  | 12 Months or Longer |  | Total
Description of Securities | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (Dollars in thousands)
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions | $ | 38,099 |  |  | $ | (157 | ) |  | $ | 49,505 |  |  | $ | (1,318 | ) |  | $ | 87,604 |  |  | $ | (1,475 | )
Corporate securities | 49,729 |  |  | (250 | ) |  | 5,120 |  |  | (160 | ) |  | 54,849 |  |  | (410 | )
U.S. Treasury obligations and direct obligations of U.S Government agencies | 30,029 |  |  | (613 | ) |  | 2,545 |  |  | (70 | ) |  | 32,574 |  |  | (683 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | 88,957 |  |  | (1,229 | ) |  | 666,685 |  |  | (21,437 | ) |  | 755,642 |  |  | (22,666 | )
Residential - Non-government sponsored entities ("Non-GSEs"). | — |  |  | — |  |  | 24,515 |  |  | (464 | ) |  | 24,515 |  |  | (464 | )
Commercial - U.S. GSEs and agencies | 13,973 |  |  | (247 | ) |  | 101,500 |  |  | (2,365 | ) |  | 115,473 |  |  | (2,612 | )
Commercial - Non-GSEs | 33,847 |  |  | (233 | ) |  | 46,680 |  |  | (919 | ) |  | 80,527 |  |  | (1,152 | )
Total temporarily impaired securities | $ | 254,634 |  |  | $ | (2,729 | ) |  | $ | 896,550 |  |  | $ | (26,733 | ) |  | $ | 1,151,184 |  |  | $ | (29,462 | )
| Less Than 12 Months |  | 12 Months or Longer |  | Total
Description of Securities | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
| (Dollars in thousands)
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions | $ | 53,811 |  |  | $ | (305 | ) |  | $ | 15,403 |  |  | $ | (414 | ) |  | $ | 69,214 |  |  | $ | (719 | )
Corporate securities | — |  |  | — |  |  | 5,307 |  |  | (76 | ) |  | 5,307 |  |  | (76 | )
U.S. Treasury obligations and direct obligations of U.S Government agencies | 10,740 |  |  | (69 | ) |  | — |  |  | — |  |  | 10,740 |  |  | (69 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | 335,883 |  |  | (3,372 | ) |  | 340,219 |  |  | (8,639 | ) |  | 676,102 |  |  | (12,011 | )
Commercial - U.S. GSEs and agencies | 130,763 |  |  | (723 | ) |  | — |  |  | — |  |  | 130,763 |  |  | (723 | )
Commercial - Non-GSEs | 28,490 |  |  | (193 | ) |  | — |  |  | — |  |  | 28,490 |  |  | (193 | )
Total temporarily impaired securities | $ | 559,687 |  |  | $ | (4,662 | ) |  | $ | 360,929 |  |  | $ | (9,129 | ) |  | $ | 920,616 |  |  | $ | (13,791 | )
The unrealized losses on the Company's investment securities are primarily attributable to changes in interest rates and volatility in the credit and financial markets. Investment securities are evaluated on at least a quarterly basis, and include evaluating the changes in the investment securities' ratings issued by rating agencies and changes in the financial condition of the issuer, and for mortgage related securities, delinquency and loss information with respect to the underlying collateral, changes in levels of subordination for the Company's particular position within the repayment structure, and remaining credit enhancement as compared to projected credit losses of the security. All of these investment securities continue to be investment grade rated by one or more major rating agencies. Because we have no intent to sell securities in an unrealized loss position and it is not more likely than not that we will be required to sell such securities before recovery of its amortized cost basis, we do not consider our investments to be other-than-temporarily impaired. Visa and MasterCard Class B Common Stock As of December 31, 2018, the Company owned 34,631 shares and 11,170 shares of Class B common stock of Visa, Inc. ("Visa") and MasterCard, Inc. ("MasterCard"), respectively. Due to transfer restrictions and the lack of readily determinable fair values of Class B common stock of Visa and MasterCard, the Company chooses to carry the shares on the Company's consolidated balance sheets at zero cost basis.

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