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INVESTMENT SECURITIES | 9 Months Ended
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Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | 3. INVESTMENT SECURITIES A summary of our available-for-sale investment securities is as follows:
(dollars in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Available-for-sale: |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions | $ | 122,171 |  |  | $ | 2,593 |  |  | $ | (53 | ) |  | $ | 124,711 |
Corporate securities | 30,436 |  |  | 277 |  |  | — |  |  | 30,713 |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 43,213 |  |  | 17 |  |  | (333 | ) |  | 42,897 |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities | 721,081 |  |  | 5,796 |  |  | (3,233 | ) |  | 723,644 |
Commercial - U.S. Government agencies and sponsored entities | 86,697 |  |  | 1,431 |  |  | (386 | ) |  | 87,742 |
Residential - Non-government agencies | 38,140 |  |  | 969 |  |  | — |  |  | 39,109 |
Commercial - Non-government agencies | 134,724 |  |  | 3,335 |  |  | — |  |  | 138,059 |
Total available-for-sale securities | $ | 1,176,462 |  |  | $ | 14,418 |  |  | $ | (4,005 | ) |  | $ | 1,186,875 |
(dollars in thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities | $ | 83,436 |  |  | $ | 19 |  |  | $ | (3,174 | ) |  | $ | 80,281 |
Commercial - U.S. Government-sponsored entities | 65,072 |  |  | — |  |  | (1,081 | ) |  | 63,991 |
Total held-to-maturity 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. Government-sponsored entities | 736,175 |  |  | 369 |  |  | (19,492 | ) |  | 717,052 |
Commercial - U.S. Government agencies and sponsored entities | 53,014 |  |  | — |  |  | (1,531 | ) |  | 51,483 |
Residential - Non-government agencies | 41,245 |  |  | 337 |  |  | (464 | ) |  | 41,118 |
Commercial - Non-government agencies | 134,867 |  |  | 1,013 |  |  | (1,152 | ) |  | 134,728 |
Total available-for-sale securities | $ | 1,227,931 |  |  | $ | 2,754 |  |  | $ | (25,207 | ) |  | $ | 1,205,478 |
The amortized cost and fair value of our equity investment securities is as follows:
(dollars in thousands) | Amortized Cost |  | Fair Value
September 30, 2019 |  |  |
Equity securities | $ | 898 |  |  | $ | 1,058 |
December 31, 2018 |  |  |
Equity securities | 826 |  |  | 826 |
As discussed in Note 2 - Recent Accounting Pronouncements, on January 1, 2019 in connection with the adoption of ASU 2017-12, the Company transferred all of its held-to-maturity investment securities with an amortized cost of $148.5 million and fair value of $144.3 million to its available-for-sale investment securities portfolio. The amortized cost and estimated fair value of our available-for-sale investment securities at September 30, 2019 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers may 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.
| September 30, 2019
(dollars in thousands) | Amortized Cost |  | Fair Value
Available-for-sale: |  |  |  |  |
Due in one year or less | $ | 32,455 |  |  | $ | 32,658 |
Due after one year through five years | 60,696 |  |  | 61,195 |
Due after five years through ten years | 63,661 |  |  | 64,715 |
Due after ten years | 39,008 |  |  | 39,753 |
Mortgage-backed securities: |  |  |
Residential - U.S. Government-sponsored entities | 721,081 |  |  | 723,644 |
Commercial - U.S. Government agencies and sponsored entities | 86,697 |  |  | 87,742 |
Residential - Non-government agencies | 38,140 |  |  | 39,109 |
Commercial - Non-government agencies | 134,724 |  |  | 138,059 |
Total available-for-sale securities | $ | 1,176,462 |  |  | $ | 1,186,875 |
For the three and nine months ended September 30, 2019, proceeds from the sale of available-for-sale investment securities were $53.9 million and resulted in a gross realized gain of $36 thousand. We did not sell any available-for-sale securities during the three and nine months ended September 30, 2018. Investment securities of $662.2 million and $980.2 million at September 30, 2019 and December 31, 2018, respectively, were pledged to secure public funds on deposit and other short-term borrowings. Provided below is a summary of the 98 and 336 investment securities which were in an unrealized or unrecognized loss position at September 30, 2019 and December 31, 2018, respectively, 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
(dollars in thousands) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
September 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions | $ | 7,007 |  |  | $ | (26 | ) |  | $ | 1,253 |  |  | $ | (27 | ) |  | $ | 8,260 |  |  | $ | (53 | )
Corporate securities | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 16,815 |  |  | (122 | ) |  | 20,507 |  |  | (211 | ) |  | 37,322 |  |  | (333 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities | 103,254 |  |  | (631 | ) |  | 247,482 |  |  | (2,602 | ) |  | 350,736 |  |  | (3,233 | )
Residential - Non-government agencies | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial - U.S. Government agencies and sponsored entities | 36,068 |  |  | (386 | ) |  | — |  |  | — |  |  | 36,068 |  |  | (386 | )
Commercial - Non-government agencies | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total temporarily impaired securities | $ | 163,144 |  |  | $ | (1,165 | ) |  | $ | 269,242 |  |  | $ | (2,840 | ) |  | $ | 432,386 |  |  | $ | (4,005 | )
| Less Than 12 Months |  | 12 Months or Longer |  | Total
(dollars in thousands) | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
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 | 88,957 |  |  | (1,229 | ) |  | 666,685 |  |  | (21,437 | ) |  | 755,642 |  |  | (22,666 | )
Residential - Non-government agencies | — |  |  | — |  |  | 24,515 |  |  | (464 | ) |  | 24,515 |  |  | (464 | )
Commercial - U.S. Government-sponsored entities | 13,973 |  |  | (247 | ) |  | 101,500 |  |  | (2,365 | ) |  | 115,473 |  |  | (2,612 | )
Commercial - Non-government agencies | 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 | )
Visa and MasterCard Class B Common Stock As of September 30, 2019, the Company owns 34,631 shares of Class B common stock of Visa, Inc. ("Visa"). These shares were received in 2008 as part of Visa's initial public offering ("IPO"). These shares are transferable only under limited circumstances until they can be converted into shares of the publicly traded Class A common stock. This conversion will not occur until the resolution of certain litigation, which is indemnified by Visa members. Since its IPO, Visa has funded a litigation reserve to settle these litigation claims. At its discretion, Visa may continue to increase the litigation reserve based upon a change in the conversion ratio of each member bank’s restricted Class B common stock to unrestricted Class A common stock. Due to the existing transfer restriction and the uncertainty of the outcome of the Visa litigation, the Company has determined that the Visa Class B common stock does not have a readily determinable fair value and chooses to carry the shares on the Company's consolidated balance sheets at zero cost basis. During the first quarter of 2019, the Company converted the 11,170 shares of Class B common stock of MasterCard, Inc. ("MasterCard") it received during their initial public offering to an equal number of Class A common stock and sold the shares for $2.6 million. The shares were carried on the Company's consolidated balance sheets at zero cost basis and the proceeds received were recorded as a gain in other operating income - other in the Company's consolidated statements of income. The Company no longer owns any shares of MasterCard Class B common stock.

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