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SECURITIES | 3 Months Ended
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Mar. 31, 2020
SECURITIES |
SECURITIES | NOTE 2 – SECURITIES The carrying balances of the securities were as follows:
|  | March 31, |  | December 31,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Debt securities available-for-sale |  | $ | 615,565 |  | $ | 592,404
Debt securities held-to-maturity |  |  | 79,741 |  |  | 88,477
Equity securities: |  |  |  |  |  |
Readily determinable fair value |  |  | 3,207 |  |  | 3,241
No readily determinable fair value |  |  | 1,552 |  |  | 1,148
Total securities |  | $ | 700,065 |  | $ | 685,270
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 three months ended March 31, 2020 and 2019, there were no adjustments to the carrying balance of equity securities with no readily determinable fair value based on an observable price change of an identical investment. As of March 31, 2020 and December 31, 2019, the carrying balance of equity securities with no readily determinable fair value reflect cumulative downward adjustments based on observable price changes of $165,000. There have been no impairments or upward adjustments based on observable price changes to equity securities with no readily determinable fair value. The amortized cost and fair values of debt securities, with gross unrealized gains and losses, are as follows:
March 31, 2020 |  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
U.S. government agency |  | $ | 48,983 |  | $ | 2,192 |  | $ | — |  | $ | 51,175
Municipal |  |  | 164,853 |  |  | 3,577 |  |  | (185) |  |  | 168,245
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 184,507 |  |  | 5,015 |  |  | (904) |  |  | 188,618
Agency commercial |  |  | 128,583 |  |  | 4,050 |  |  | (116) |  |  | 132,517
Corporate |  |  | 73,140 |  |  | 1,928 |  |  | (58) |  |  | 75,010
Total available-for-sale |  |  | 600,066 |  |  | 16,762 |  |  | (1,263) |  |  | 615,565
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |
Municipal |  |  | 32,780 |  |  | 1,198 |  |  | — |  |  | 33,978
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 17,989 |  |  | 471 |  |  | (16) |  |  | 18,444
Agency commercial |  |  | 28,972 |  |  | 2,173 |  |  | (3) |  |  | 31,142
Total held-to-maturity |  |  | 79,741 |  |  | 3,842 |  |  | (19) |  |  | 83,564
Total debt securities |  | $ | 679,807 |  | $ | 20,604 |  | $ | (1,282) |  | $ | 699,129
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 available-for-sale |  |  | 584,507 |  |  | 8,508 |  |  | (611) |  |  | 592,404
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |
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 held-to-maturity |  |  | 88,477 |  |  | 2,276 |  |  | (224) |  |  | 90,529
Total debt securities |  | $ | 672,984 |  | $ | 10,784 |  | $ | (835) |  | $ | 682,933
As of March 31, 2020 and December 31, 2019, the Banks had debt securities with a carrying value of $286,716,000 and $284,895,000, 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 42% of the obligations of local municipalities portfolio consists of debt securities issued by municipalities located in Illinois as of March 31, 2020. Approximately 87% of such debt securities were general obligation issues as of March 31, 2020. The amortized cost and fair value of debt securities by contractual maturity, as of March 31, 2020, 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 |  | $ | 47,084 |  | $ | 47,237 |  | $ | 750 |  | $ | 755
Due after 1 year through 5 years |  |  | 93,864 |  |  | 95,997 |  |  | 17,243 |  |  | 17,745
Due after 5 years through 10 years |  |  | 120,398 |  |  | 124,689 |  |  | 13,896 |  |  | 14,551
Due after 10 years |  |  | 25,630 |  |  | 26,507 |  |  | 891 |  |  | 927
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | 184,507 |  |  | 188,618 |  |  | 17,989 |  |  | 18,444
Agency commercial |  |  | 128,583 |  |  | 132,517 |  |  | 28,972 |  |  | 31,142
Total |  | $ | 600,066 |  | $ | 615,565 |  | $ | 79,741 |  | $ | 83,564
There were no sales of securities were as follows during the three months ended March 31, 2020 and 2019. Gains (losses) on securities were as follows during the three months ended March 31:
| Three Months Ended March 31, |
| 2020 |  | 2019 |
| (dollars in thousands) |
Net realized gains (losses) on sales | $ | — |  | $ | — |
Net unrealized gains (losses) on equities: |  |  |  |  |  |
Readily determinable fair value |  | (52) |  |  | 79 |
No readily determinable fair value |  | — |  |  | — |
Gains (losses) on securities | $ | (52) |  | $ | 79 |
The following tables present gross unrealized losses and fair value of debt securities, aggregated by category and length of time that individual debt securities have been in a continuous unrealized loss position, as of March 31, 2020 and December 31, 2019:
|  | Investments in a Continuous Unrealized Loss Position
|  | Less than 12 Months |  | 12 Months or More |  | Total
March 31, 2020 |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value |  | Unrealized Loss |  | Fair Value
Available-for-sale: |  | (dollars in thousands)
Municipal |  | $ | (185) |  | $ | 5,049 |  | $ | — |  | $ | — |  | $ | (185) |  | $ | 5,049
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | (648) |  |  | 34,061 |  |  | (256) |  |  | 8,442 |  |  | (904) |  |  | 42,503
Agency commercial |  |  | — |  |  | — |  |  | (116) |  |  | 14,322 |  |  | (116) |  |  | 14,322
Corporate |  |  | (58) |  |  | 6,942 |  |  | — |  |  | — |  |  | (58) |  |  | 6,942
Total available-for-sale |  |  | (891) |  |  | 46,052 |  |  | (372) |  |  | 22,764 |  |  | (1,263) |  |  | 68,816
Held-to-maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Agency residential |  |  | — |  |  | — |  |  | (16) |  |  | 1,549 |  |  | (16) |  |  | 1,549
Agency commercial |  |  | — |  |  | — |  |  | (3) |  |  | 534 |  |  | (3) |  |  | 534
Total held-to-maturity |  |  | — |  |  | — |  |  | (19) |  |  | 2,083 |  |  | (19) |  |  | 2,083
Total debt securities |  | $ | (891) |  | $ | 46,052 |  | $ | (391) |  | $ | 24,847 |  | $ | (1,282) |  | $ | 70,899
|  | 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 available-for-sale |  | $ | (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 held-to-maturity |  |  | (77) |  |  | 9,532 |  |  | (147) |  |  | 9,601 |  |  | (224) |  |  | 19,133
Total debt securities |  | $ | (317) |  | $ | 74,910 |  | $ | (518) |  | $ | 54,599 |  | $ | (835) |  | $ | 129,509
As of March 31, 2020, there were 17 debt securities in an unrealized loss position for a period of twelve months or more, and 53 debt securities in an unrealized loss position for a period of less than twelve months. These unrealized losses are primarily a result of fluctuations in market interest rates. In analyzing an issuer’s financial condition, management considers whether the debt 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 debt securities are deemed to be temporary.

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