The Bank started in 2018 and continued in 2019 the planned balance sheet rotation strategy to re-deploy lower-yielding securities into higher-yielding assets. In 2019 the Bank reduced the combined securities portfolio by $500,153, or 43.4%.

The following table summarizes the amortized cost and fair value of the AFS securities portfolio at December 31, 2019 and 2018 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2019
Mortgage-backed securities: residential	$	374,923	$	1,876	$	(856)	$	375,943
Mortgage-backed securities: commercial	17,858		56		(134)		17,780
Corporate Notes	32,825		539		(3)		33,361
State and political subdivisions	222,624		2,566		(142)		225,048
Total	$	648,230	$	5,037	$	(1,135)	$	652,132
December 31, 2018
U.S. Treasury securities	$	253,015	$	59	$	(60)	$	253,014
U.S. government sponsored entities and agencies	21,999		1		(112)		21,888
Mortgage-backed securities: residential	596,766		27		(16,094)		580,699
Asset-backed securities	25,744		—		(900)		24,844
Corporate Notes	12,480		21		(77)		12,424
State and political subdivisions	141,432		863		(4,496)		137,799
Total	$	1,051,436	$	971	$	(21,739)	$	1,030,668

Due to the continued decline in interest rates, during the third quarter of 2019, the Company elected to transfer its HTM securities portfolio to the AFS portfolio to provide more opportunities to reposition the portfolio. At the time of transfer, the securities had an amortized cost of $117,409 and a fair value of $121,964. In 2018 there, were 16 bonds transferred under a new accounting pronouncement that, upon adoption, permitted a one-time opportunity to transfer eligible securities without affecting the status of other HTM securities.

There were no HTM securities at December 31, 2019. There were no calls of HTM securities during 2019, or 2018. The amortized cost and fair value of the HTM securities portfolio at December 31, 2018 and the corresponding amounts of gross unrecognized gains and losses were as follows:


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value
December 31, 2018
Mortgage backed securities: residential	$	75,944	$	34	$	(3,072)	$	72,906
State and political subdivisions	45,673		466		(90)		46,049
Total	$	121,617	$	500	$	(3,162)	$	118,955

The mortgage backed securities in which the Company has invested, both AFS and HTM, are either issued by or guaranteed by Federal Home Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA), or Government National Mortgage Association (GNMA).

The amortized cost and fair value of the investment securities portfolio are shown by contractual maturity. Securities not due at a single maturity date, primarily mortgage-backed securities, and asset-backed securities are shown separately.


	December 31, 2019
	Amortized Cost		Fair Value
Available for sale
Three months or less	$	—	$	—
Over three months through one year	—		—
Over one year through five years	1,609		1,641
Over five years through ten years	37,406		37,918
Over ten years	216,434		218,850
Mortgage-backed securities: residential	374,923		375,943
Mortgage-backed securities: commercial	17,858		17,780
Total	$	648,230	$	652,132

Securities pledged at December 31, 2019 and 2018 had a carrying amount of $294,585 and $939,440, respectively, and were pledged to secure public deposits and repurchase agreements.

At December 31, 2019 and 2018, there were no holdings of securities of any one issuer, other than the U.S. government-sponsored entities and agencies, in an amount greater than 10% of stockholders’ equity.

ASU 2017-12 was early adopted in the fourth quarter of 2018, and subsequently, 40 bonds were transferred from the HTM intention to the AFS intention under a one-time exemption granted under the pronouncement.

The following table summarizes the securities with unrealized and unrecognized losses at December 31, 2019 and 2018, aggregated by major security type and length of time in a continuous unrealized loss position:


	Less Than 12 Months						12 Months or Longer						Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2019
Available for sale


Mortgage-backed securities: residential	$	49,390	$	(172)	$	91,644	$	(684)	$	141,034	$	(856)
Mortgage-backed securities: commercial	4,436		(29)		7,286		(105)		11,722		(134)
Corporate notes	997		(3)		—		—		997		(3)
State and political subdivisions	29,843		(142)		—		—		29,843		(142)
Total available for sale	$	84,666	$	(346)	$	98,930	$	(789)	$	183,596	$	(1,135)


	Less Than 12 Months						12 Months or Longer						Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2018
Available for sale
U.S. Treasury securities	$	163,722	$	(60)	$	—	$	—	$	163,722	$	(60)
U.S. government sponsored entities and agencies	1,355		(12)		19,937		(100)		21,292		(112)
Mortgage-backed securities: residential	83,203		(755)		490,752		(15,339)		573,955		(16,094)
Mortgage-backed securities: commercial	24,845		(900)		—		—		24,845		(900)
Corporate Notes	9,839		(77)		—		—		9,839		(77)
State and political subdivisions	10,446		(106)		69,238		(4,390)		79,684		(4,496)
Total available for sale	$	293,410	$	(1,910)	$	579,927	$	(19,829)	$	873,337	$	(21,739)


	Less Than 12 Months						12 Months or Longer						Total
December 31, 2018	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses
Held to maturity
Mortgage-backed securities: residential	$	2,239	$	(40)	$	68,067	$	(3,032)	$	70,306	$	(3,072)
State and political subdivisions	8,362		(39)		3,675		(51)		12,037		(90)
Total held to maturity	$	10,601	$	(79)	$	71,742	$	(3,083)	$	82,343	$	(3,162)

Unrealized losses on debt securities have not been recognized into income because the issuers' bonds are of high credit quality. As of December 31, 2019, management does not intend to sell, and it is more likely than not, that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to converge to par as the bonds approach maturity.

At December 31, 2019, the Company had 56 AFS securities in an unrealized loss position and no HTM securities in an unrecognized loss position compared to 163 AFS securities in an unrealized loss position and 33 HTM securities in an unrecognized loss position at December 31, 2018.