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SECURITIES | 12 Months Ended
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Dec. 31, 2019
SECURITIES |
SECURITIES | NOTE 3 – SECURITIES The carrying balances of the securities were as follows:
|  | December 31, |  | December 31,
|  | 2019 |  | 2018
|  | (dollars in thousands)
Securities available-for-sale |  | $ | 592,404 |  | $ | 679,526
Securities held-to-maturity |  |  | 88,477 |  |  | 121,715
Equity securities: |  |  |  |  |  |
Readily determinable fair value |  |  | 3,241 |  |  | 3,081
No readily determinable fair value |  |  | 1,148 |  |  | 180
Total securities |  | $ | 685,270 |  | $ | 804,502
The Company has elected to measure the equity securities with no readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes for identical or similar securities of the same issuer. During the year ended December 31, 2019, the Company recognized losses of $165,000 on equity securities with no readily determinable fair value based on observable price changes of an identical investment. The amortized cost and fair values of securities available-for-sale, with gross unrealized gains and losses, are as follows:
December 31, 2019 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
U.S. government agency |  | $ | 49,113 |  | $ | 529 |  | $ | (27) |  | $ | 49,615
Municipal |  |  | 131,241 |  |  | 2,503 |  |  | (6) |  |  | 133,738
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 198,184 |  |  | 2,780 |  |  | (286) |  |  | 200,678
Agency commercial |  |  | 133,730 |  |  | 1,516 |  |  | (292) |  |  | 134,954
Corporate |  |  | 72,239 |  |  | 1,180 |  |  | — |  |  | 73,419
Total |  | $ | 584,507 |  | $ | 8,508 |  | $ | (611) |  | $ | 592,404
December 31, 2018 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
U.S. government agency |  | $ | 46,977 |  | $ | 250 |  | $ | (361) |  | $ | 46,866
Municipal |  |  | 161,957 |  |  | 761 |  |  | (1,268) |  |  | 161,450
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 235,903 |  |  | 788 |  |  | (2,388) |  |  | 234,303
Agency commercial |  |  | 151,878 |  |  | 285 |  |  | (2,082) |  |  | 150,081
Private-label |  |  | 254 |  |  | 2 |  |  | — |  |  | 256
Corporate |  |  | 87,118 |  |  | 207 |  |  | (755) |  |  | 86,570
Total |  | $ | 684,087 |  | $ | 2,293 |  | $ | (6,854) |  | $ | 679,526
The amortized cost and fair value of securities held-to-maturity, with gross unrealized gains and losses, are as follows:
December 31, 2019 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Held-to-maturity: |  | (dollars in thousands)
Municipal |  | $ | 45,239 |  | $ | 1,340 |  | $ | — |  | $ | 46,579
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 19,072 |  |  | 161 |  |  | (170) |  |  | 19,063
Agency commercial |  |  | 24,166 |  |  | 775 |  |  | (54) |  |  | 24,887
Total |  | $ | 88,477 |  | $ | 2,276 |  | $ | (224) |  | $ | 90,529
December 31, 2018 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Held-to-maturity: |  | (dollars in thousands)
Municipal |  | $ | 73,176 |  | $ | 1,149 |  | $ | (42) |  | $ | 74,283
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 23,192 |  |  | — |  |  | (998) |  |  | 22,194
Agency commercial |  |  | 25,347 |  |  | 177 |  |  | (495) |  |  | 25,029
Total |  | $ | 121,715 |  | $ | 1,326 |  | $ | (1,535) |  | $ | 121,506
As of December 31, 2019 and 2018, the Banks had securities with a carrying value of $284,895,000 and $291,404,000, respectively, which were pledged to secure public and trust deposits, securities sold under agreements to repurchase, and for other purposes required or permitted by law. The Company has no direct exposure to the State of Illinois, but approximately 51% of the obligations of local municipalities portfolio consists of securities issued by municipalities located in Illinois as of December 31, 2019. Approximately 88% of such securities were general obligation issues as of December 31, 2019. The amortized cost and fair value of securities available-for-sale and securities held-to-maturity, as of December 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Available-for-Sale |  | Held-to-Maturity
|  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
|  | (dollars in thousands)
Due in 1 year or less |  | $ | 49,357 |  | $ | 49,527 |  | $ | 752 |  | $ | 758
Due after 1 year through 5 years |  |  | 115,487 |  |  | 117,484 |  |  | 31,309 |  |  | 32,238
Due after 5 years through 10 years |  |  | 81,515 |  |  | 83,392 |  |  | 11,504 |  |  | 11,799
Due after 10 years |  |  | 6,234 |  |  | 6,369 |  |  | 1,674 |  |  | 1,784
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 198,184 |  |  | 200,678 |  |  | 19,072 |  |  | 19,063
Agency commercial |  |  | 133,730 |  |  | 134,954 |  |  | 24,166 |  |  | 24,887
Total |  | $ | 584,507 |  | $ | 592,404 |  | $ | 88,477 |  | $ | 90,529
Sales of securities available-for-sale were as follows during the years ended December 31:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
|  | (dollars in thousands)
Proceeds from sales |  | $ | — |  |  | 104,303 |  | $ | 51,500
Gross realized gains |  |  | — |  |  | 281 |  |  | —
Gross realized losses |  |  | — |  |  | (2,822) |  |  | (1,275)
Gains (losses) on securities were as follows during the years ended December 31:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
|  | (dollars in thousands)
Net realized losses on sales |  | $ | — |  |  | (2,541) |  | $ | (1,275)
Net unrealized gains (losses) on equities: |  |  |  |  |  |  |  |  |
Readily determinable fair value |  |  | 160 |  |  | (122) |  |  | —
No readily determinable fair value |  |  | (165) |  |  | — |  |  | —
Gains (losses) on securities |  | $ | (5) |  |  | (2,663) |  | $ | (1,275)
The following tables present gross unrealized losses and fair value of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31:
|  | Investments in a Continuous Unrealized Loss Position
|  | Less than 12 Months |  | 12 Months or More |  | Total
December 31, 2019 |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
U.S. government agency |  | $ | (26) |  | $ | 18,865 |  | $ | (1) |  | $ | 1,998 |  | $ | (27) |  | $ | 20,863
Municipal |  |  | (6) |  |  | 894 |  |  | — |  |  | — |  |  | (6) |  |  | 894
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | (108) |  |  | 25,563 |  |  | (178) |  |  | 27,296 |  |  | (286) |  |  | 52,859
Agency commercial |  |  | (100) |  |  | 20,056 |  |  | (192) |  |  | 15,704 |  |  | (292) |  |  | 35,760
Total |  | $ | (240) |  | $ | 65,378 |  | $ | (371) |  | $ | 44,998 |  | $ | (611) |  | $ | 110,376
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  | $ | (30) |  | $ | 2,516 |  | $ | (140) |  | $ | 9,002 |  | $ | (170) |  | $ | 11,518
Agency commercial |  |  | (47) |  |  | 7,016 |  |  | (7) |  |  | 599 |  |  | (54) |  |  | 7,615
Total |  | $ | (77) |  | $ | 9,532 |  | $ | (147) |  | $ | 9,601 |  | $ | (224) |  | $ | 19,133
|  | Investments in a Continuous Unrealized Loss Position
|  | Less than 12 Months |  | 12 Months or More |  | Total
December 31, 2018 |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
U.S. government agency |  | $ | (302) |  | $ | 19,079 |  | $ | (59) |  | $ | 7,938 |  | $ | (361) |  | $ | 27,017
Municipal |  |  | (230) |  |  | 31,034 |  |  | (1,038) |  |  | 59,702 |  |  | (1,268) |  |  | 90,736
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | (299) |  |  | 40,864 |  |  | (2,089) |  |  | 99,967 |  |  | (2,388) |  |  | 140,831
Agency commercial |  |  | (262) |  |  | 35,462 |  |  | (1,820) |  |  | 81,899 |  |  | (2,082) |  |  | 117,361
Corporate |  |  | (263) |  |  | 20,734 |  |  | (492) |  |  | 39,054 |  |  | (755) |  |  | 59,788
Total |  | $ | (1,356) |  | $ | 147,173 |  | $ | (5,498) |  | $ | 288,560 |  | $ | (6,854) |  | $ | 435,733
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Municipal |  | $ | (32) |  | $ | 4,166 |  | $ | (10) |  | $ | 1,856 |  | $ | (42) |  | $ | 6,022
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | (59) |  |  | 4,046 |  |  | (939) |  |  | 17,564 |  |  | (998) |  |  | 21,610
Agency commercial |  |  | (67) |  |  | 8,910 |  |  | (428) |  |  | 10,413 |  |  | (495) |  |  | 19,323
Total |  | $ | (158) |  | $ | 17,122 |  | $ | (1,377) |  | $ | 29,833 |  | $ | (1,535) |  | $ | 46,955
As of December 31, 2019, there were 59 securities in an unrealized loss position for a period of twelve months or more, and 35 securities in an unrealized loss position for a period of less than twelve months. These unrealized losses are primarily a result of fluctuations in interest rates in the bond market. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts’ reports. Management believes that all declines in value of these securities are deemed to be temporary.

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