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INVESTMENT SECURITIES | 12 Months Ended
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Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract] |
INVESTMENT SECURITIES | 3. INVESTMENT SECURITIES A summary of our available-for-sale investment securities as of December 31, 2019 and 2018 are as follows:
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
| (Dollars in thousands)
December 31, 2019 |  |  |  |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |
States and political subdivisions | $ | 119,755 |  |  | $ | 2,303 |  |  | $ | (40 | ) |  | $ | 122,018 |
Corporate securities | 30,277 |  |  | 252 |  |  | — |  |  | 30,529 |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 40,769 |  |  | 10 |  |  | (398 | ) |  | 40,381 |
Mortgage-backed securities: |  |  |  |  |  |  |
Residential - U.S. GSEs | 673,918 |  |  | 6,003 |  |  | (2,099 | ) |  | 677,822 |
Residential - Non-government sponsored entities ("Non-GSEs") | 36,377 |  |  | 830 |  |  | (16 | ) |  | 37,191 |
Commercial - U.S. GSEs and agencies | 80,773 |  |  | 1,198 |  |  | (746 | ) |  | 81,225 |
Commercial - Non-GSEs | 134,676 |  |  | 3,141 |  |  | — |  |  | 137,817 |
Total available-for-sale investment securities | $ | 1,116,545 |  |  | $ | 13,737 |  |  | $ | (3,299 | ) |  | $ | 1,126,983 |
| 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 |
The amortized cost and fair value of our equity investment securities is as follows:
(dollars in thousands) | Amortized Cost |  | Fair Value
December 31, 2019 |  |  |
Equity securities | 935 |  |  | 1,127 |
December 31, 2018 |  |  |
Equity securities | 826 |  |  | 826 |
As discussed in Note 1 - Summary of Significant Accounting Policies, on January 1, 2019 in conjunction 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 investment securities at December 31, 2019 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, 2019
| Amortized Cost |  | Fair Value
| (Dollars in thousands)
Available-for-Sale: |  |  |
Due in one year or less | $ | 50,356 |  |  | $ | 50,681 |
Due after one year through five years | 46,846 |  |  | 47,258 |
Due after five years through ten years | 62,562 |  |  | 63,695 |
Due after ten years | 31,037 |  |  | 31,294 |
Mortgage-backed securities |  |  |
Residential - U.S. GSEs | 673,918 |  |  | 677,822 |
Residential - Non-government sponsored entities ("Non-GSEs") | 36,377 |  |  | 37,191 |
Commercial - U.S. GSEs and agencies | 80,773 |  |  | 81,225 |
Commercial - Non-GSEs | 134,676 |  |  | 137,817 |
Total available-for-sale investment securities | $ | 1,116,545 |  |  | $ | 1,126,983 |
In the third quarter of 2019, we sold six available-for-sale securities totaling $53.9 million at a net realized gain on sale of $36 thousand. In the fourth quarter of 2018, we sold two available-for-sale corporate securities totaling $10.0 million at a net realized loss on sale of $0.3 million. Investment securities of $0.72 billion and $0.98 billion at December 31, 2019 and 2018, respectively, were pledged to secure public funds on deposit and other long-term and short-term borrowings. At December 31, 2019 and 2018, 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 81 and 336 securities in an unrealized or unrecognized loss position at December 31, 2019 and 2018, respectively. The following table summarizes securities which were in an unrealized or unrecognized loss position at December 31, 2019 and 2018, 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, 2019 |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |
States and political subdivisions | $ | 1,754 |  |  | $ | (9 | ) |  | $ | 801 |  |  | $ | (31 | ) |  | $ | 2,555 |  |  | $ | (40 | )
Corporate securities | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
U.S. Treasury obligations and direct obligations of U.S Government agencies | 18,882 |  |  | (143 | ) |  | 19,031 |  |  | (255 | ) |  | 37,913 |  |  | (398 | )
Mortgage-backed securities: |  |  |  |  |  |  |  |  |  |  |
Residential - U.S. Government-sponsored entities ("GSEs") | 54,335 |  |  | (283 | ) |  | 214,295 |  |  | (1,816 | ) |  | 268,630 |  |  | (2,099 | )
Residential - Non-government sponsored entities ("Non-GSEs"). | 8,206 |  |  | (16 | ) |  | — |  |  | — |  |  | 8,206 |  |  | (16 | )
Commercial - U.S. GSEs and agencies | 32,067 |  |  | (746 | ) |  | — |  |  | — |  |  | 32,067 |  |  | (746 | )
Total temporarily impaired securities | $ | 115,244 |  |  | $ | (1,197 | ) |  | $ | 234,127 |  |  | $ | (2,102 | ) |  | $ | 349,371 |  |  | $ | (3,299 | )
| 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 | )
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, 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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