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SECURITIES
 12 Months Ended
Dec. 31, 2019
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
Trading Securities
The Company had trading securities of $2.2 million and $1.5 million as of December 31, 2019 and 2018, respectively. These securities are held in a rabbi trust and will be used for future payments associated with the Company's non-qualified 401(k) Restoration Plan and Non-qualified Deferred Compensation Plan.
Equity Securities
The Company had equity securities of $21.3 million and $19.5 million as of December 31, 2019 and 2018, respectively. These securities consist primarily of mutual funds held in a rabbi trust and will be used for future payments associated with the Company’s supplemental executive retirement plans.
The following table represents a summary of the gains and losses that relates to equity securities for the periods indicated:
 
Years Ended December 31
 
2019
 
2018
 
2017
Net gains (losses) recognized during the period on equity securities
$
1,566

 
$
(1,225
)
 
n/a
Less: net gains recognized during the period on equity securities sold during the period
18

 
874

 
n/a
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
$
1,548

 
$
(2,099
)
 
n/a


























Available for Sale and Held to Maturity Securities
The following table presents a summary of the amortized cost, gross unrealized holding gains and losses and fair value of securities available for sale and securities held to maturity as of the dates indicated:
 
December 31, 2019
 
December 31, 2018
 
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized
Losses
Fair
Value
 
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized
Losses
Fair
Value
 
(Dollars in thousands)
Available for sale securities
 
 
 
 
 
 
 
 
 
U.S. government agency securities
$
32,473

$
642

$
—

$
33,115

 
$
32,477

$
—

$
(439
)
$
32,038

Agency mortgage-backed securities
243,548

3,456

(4
)
247,000

 
222,491

1,020

(3,406
)
220,105

Agency collateralized mortgage obligations
87,305

1,225

(19
)
88,511

 
138,149

197

(3,435
)
134,911

State, county, and municipal securities
1,377

19

—

1,396

 
1,719

16

—

1,735

Single issuer trust preferred securities issued by banks
488

5

—

493

 
717

—

(10
)
707

Pooled trust preferred securities issued by banks and insurers
1,488

—

(374
)
1,114

 
1,678

—

(349
)
1,329

Small business administration pooled securities
54,024

771

—

54,795

 
53,317

—

(1,390
)
51,927

Total available for sale securities
420,703

6,118

(397
)
426,424

 
450,548

1,233

(9,029
)
442,752

Held to maturity securities
 
 
 
 
 
 
 
 
 
U.S. government agency securities
12,874

123

—

12,997

 
—

—

—

—

U.S. treasury securities
4,032

21

—

4,053

 
1,004

11

—

1,015

Agency mortgage-backed securities
397,414

8,445

(57
)
405,802

 
252,484

1,548

(3,104
)
250,928

Agency collateralized mortgage obligations
293,662

4,501

(849
)
297,314

 
332,775

869

(6,920
)
326,724

Single issuer trust preferred securities issued by banks
1,500

—

(10
)
1,490

 
1,500

—

(10
)
1,490

Small business administration pooled securities
31,324

338

(55
)
31,607

 
23,727

105

(349
)
23,483

Total held to maturity securities
740,806

13,428

(971
)
753,263

 
611,490

2,533

(10,383
)
603,640

Total
$
1,161,509

$
19,546

$
(1,368
)
$
1,179,687

 
$
1,062,038

$
3,766

$
(19,412
)
$
1,046,392



When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.
The actual maturities of certain securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. A schedule of the contractual maturities of securities available for sale and securities held to maturity as of December 31, 2019 is presented below:
 
Due in one year or less
 
Due after one year to five years
 
Due after five to ten years
 
Due after ten years
 
Total
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
 
(Dollars in thousands)
Available for sale securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency securities
$
10,000

 
$
10,003

 
$
10,002

 
$
10,154

 
$
12,471

 
$
12,958

 
$
—

 
$
—

 
$
32,473

 
$
33,115

Agency mortgage-backed securities
—

 
—

 
70,945

 
71,305

 
54,798

 
56,181

 
117,805

 
119,514

 
243,548

 
247,000

Agency collateralized mortgage obligations
—

 
—

 
—

 
—

 
—

 
—

 
87,305

 
88,511

 
87,305

 
88,511

State, county, and municipal securities
—

 
—

 
1,188

 
1,193

 
189

 
203

 
—

 
—

 
1,377

 
1,396

Single issuer trust preferred securities issued by banks
—

 
—

 
—

 
—

 
—

 
—

 
488

 
493

 
488

 
493

Pooled trust preferred securities issued by banks and insurers
—

 
—

 
—

 
—

 
—

 
—

 
1,488

 
1,114

 
1,488

 
1,114

Small business administration pooled securities
—

 
—

 
—

 
—

 
—

 
—

 
54,024

 
54,795

 
54,024

 
54,795

Total available for sale securities
$
10,000

 
$
10,003

 
$
82,135

 
$
82,652

 
$
67,458

 
$
69,342

 
$
261,110

 
$
264,427

 
$
420,703

 
$
426,424

Held to maturity securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency securities
$
4,962

 
$
4,989

 
$
7,912

 
$
8,008

 
$
—

 
$
—

 
$
—

 
$
—

 
$
12,874

 
$
12,997

U.S. Treasury securities
—

 
—

 
4,032

 
4,053

 
—

 
—

 
—

 
—

 
4,032

 
4,053

Agency mortgage-backed securities
—

 
—

 
10,812

 
10,818

 
35,656

 
36,151

 
350,946

 
358,833

 
397,414

 
405,802

Agency collateralized mortgage obligations
—

 
—

 
—

 
—

 
—

 
—

 
293,662

 
297,314

 
293,662

 
297,314

Single issuer trust preferred securities issued by banks
—

 
—

 
—

 
—

 
1,500

 
1,490

 
—

 
—

 
1,500

 
1,490

Small business administration pooled securities
—

 
—

 
—

 
—

 
—

 
—

 
31,324

 
31,607

 
31,324

 
31,607

Total held to maturity securities
4,962

 
4,989

 
22,756

 
22,879


37,156

 
37,641

 
675,932

 
687,754

 
740,806

 
753,263

Total
$
14,962

 
$
14,992

 
$
104,891

 
$
105,531

 
$
104,614

 
$
106,983

 
$
937,042

 
$
952,181

 
$
1,161,509

 
$
1,179,687

Included in the table above is $17.4 million of callable securities at December 31, 2019.
The carrying value of securities pledged to secure public funds, trust deposits, repurchase agreements and for other purposes, as required or permitted by law, was $375.5 million and $361.1 million at December 31, 2019 and 2018, respectively.
At December 31, 2019 and 2018, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of stockholders’ equity.
Other-Than-Temporary Impairment
The Company continually reviews investment securities for the existence of OTTI, taking into consideration current market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, the credit worthiness of the obligor of the security, volatility of earnings, current analysts’ evaluations, the Company’s intent to sell the security, whether it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, as well as other qualitative factors. The term "other-than-temporary" is not intended to indicate that the decline is permanent, but indicates that the prospects for a near-term recovery of value are not necessarily favorable, or that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment.
The following tables show the gross unrealized losses and fair value of the Company’s investments in an unrealized loss position, which the Company has not deemed to be OTTI, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
 
 
 
December 31, 2019
 
 
 
Less than 12 months
 
12 months or longer
 
Total
Description of securities
# of
holdings
 
Fair Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
 
 
(Dollars in thousands)
Agency mortgage-backed securities
12

 
$
34,009

 
$
(59
)
 
$
243

 
$
(2
)
 
$
34,252

 
$
(61
)
Agency collateralized mortgage obligations
17

 
48,476

 
(215
)
 
37,382

 
(653
)
 
85,858

 
(868
)
Single issuer trust preferred securities issued by banks and insurers
1

 
—

 
—

 
1,490

 
(10
)
 
1,490

 
(10
)
Pooled trust preferred securities issued by banks and insurers
1

 
—

 
—

 
1,114

 
(374
)
 
1,114

 
(374
)
Small business administration pooled securities
1

 
7,349

 
(55
)
 
—

 
—

 
7,349

 
(55
)
Total temporarily impaired securities
32

 
$
89,834

 
$
(329
)
 
$
40,229

 
$
(1,039
)
 
$
130,063

 
$
(1,368
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
Less than 12 months
 
12 months or longer
 
Total
Description of securities
# of
holdings
 
Fair Value
 
Unrealized
Losses
 
Fair
Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
 
 
(Dollars in thousands)
U.S. government agency securities
3

 
$
9,960

 
$
(43
)
 
$
22,078

 
$
(396
)
 
$
32,038

 
$
(439
)
Agency mortgage-backed securities
144

 
104,616

 
(1,363
)
 
222,850

 
(5,147
)
 
327,466

 
(6,510
)
Agency collateralized mortgage obligations
48

 
57,871

 
(398
)
 
279,229

 
(9,957
)
 
337,100

 
(10,355
)
Single issuer trust preferred securities issued by banks and insurers
2

 
2,197

 
(20
)
 
—

 
—

 
2,197

 
(20
)
Pooled trust preferred securities issued by banks and insurers
1

 
—

 
—

 
1,329

 
(349
)
 
1,329

 
(349
)
Small business administration pooled securities
7

 
28,257

 
(662
)
 
40,621

 
(1,077
)
 
68,878

 
(1,739
)
Total temporarily impaired securities
205

 
$
202,901

 
$
(2,486
)
 
$
566,107

 
$
(16,926
)
 
$
769,008

 
$
(19,412
)
The Company does not intend to sell these investments and has determined, based upon available evidence, that it is more likely than not that the Company will not be required to sell each security before the recovery of its amortized cost basis. As a result, the Company does not consider these investments to be OTTI and accordingly, there was no OTTI recorded and no cumulative credit related component of OTTI for the years ended December 31, 2019, 2018 or 2017. The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.
As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category are as follows at December 31, 2019:
•
Agency Mortgage-Backed Securities, Agency Collateralized Mortgage Obligations and Small Business Administration Pooled Securities: These portfolios have contractual terms that generally do not permit the issuer to settle the securities at a price less than the current par value of the investment. The decline in market value of these securities is attributable to changes in interest rates and not credit quality. Additionally, these securities are implicitly guaranteed by the U.S. government or one of its agencies.
•
Single Issuer Trust Preferred Securities: This portfolio consists of one security, which is investment grade. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic environment. Management evaluates various financial metrics for the issuers, including regulatory capital ratios of the issuers.
•
Pooled Trust Preferred Securities: This portfolio consists of one below investment grade security which is performing. The unrealized loss on this security is attributable to the illiquid nature of the trust preferred market in the current economic and regulatory environment. Management evaluates collateral credit and instrument structure, including current and expected deferral and default rates and timing. In addition, discount rates are determined by evaluating comparable spreads observed currently in the market for similar instruments.