The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolio at December 31 and the corresponding amounts of unrealized gains and losses therein:

	Amortized		Unrealized		Unrealized			Fair
(dollars in thousands)	Cost		Gains		Losses			Value
December 31, 2019
Available-for-Sale
U.S. Treasury	$	17,567	$	117	$	(2	)	$	17,682
U.S. government-sponsored entities and agencies		596,595		1,027		(4,638	)		592,984
Mortgage-backed securities - Agency		3,151,550		41,363		(9,052	)		3,183,861
States and political subdivisions		1,232,497		44,193		(1,047	)		1,275,643
Pooled trust preferred securities		13,811		—		(5,589	)		8,222
Other securities		301,189		6,842		(1,332	)		306,699
Total available-for-sale securities	$	5,313,209	$	93,542	$	(21,660	)	$	5,385,091

December 31, 2018
Available-for-Sale
U.S. Treasury	$	5,332	$	—	$	(31	)	$	5,301
U.S. government-sponsored entities and agencies		639,458		35		(11,342	)		628,151
Mortgage-backed securities - Agency		2,243,774		9,738		(44,217	)		2,209,295
States and political subdivisions		932,757		11,113		(3,441	)		940,429
Pooled trust preferred securities		13,861		—		(5,366	)		8,495
Other securities		337,435		486		(6,176	)		331,745
Total available-for-sale securities	$	4,172,617	$	21,372	$	(70,573	)	$	4,123,416

Held-to-Maturity
U.S. government-sponsored entities and agencies	$	73,986	$	—	$	(1,627	)	$	72,359
Mortgage-backed securities - Agency		127,120		39		(2,750	)		124,409
States and political subdivisions		305,228		6,208		(2,101	)		309,335
Total held-to-maturity securities	$	506,334	$	6,247	$	(6,478	)	$	506,103

During the fourth quarter of 2019, Old National inadvertently sold six held-to-maturity classified municipal bond investment securities valued at $9.7 million for a gain of $0.3 million. After the trade settled, Old National determined the sale of the held-to-maturity investment securities was not one of the permissible sale exceptions afforded by the current accounting guidance. Accordingly, Old National reclassified the entire held-to-maturity portfolio totaling $382.0 million into the available-for-sale portfolio, which increased capital by $19.4 million. The increase in capital included $13.0 million of unrealized holding gains at the date of transfer, net of tax, which is included on the consolidated statement of comprehensive income in unrealized holding gains (losses) on available-for-sale debt securities of $93.5 million for the year ended December 31, 2019. Management does not expect to use the held-to-maturity category for at least the next two years.

Proceeds from sales or calls of available-for-sale investment securities, the resulting realized gains and realized losses, and other securities gains or losses were as follows for the years ended December 31:

	Years Ended December 31,
(dollars in thousands)	2019			2018			2017
Proceeds from sales of available-for-sale debt securities	$	424,140		$	139,364		$	342,233
Proceeds from calls of available-for-sale debt securities		441,851			32,437			88,233
Total	$	865,991		$	171,801		$	430,466

Realized gains on sales of available-for-sale debt securities	$	4,620		$	3,259		$	8,710
Realized gains on calls of available-for-sale debt securities		93			283			29
Realized losses on sales of available-for-sale debt securities		(2,760	)		(1,469	)		(263	)
Realized losses on calls of available-for-sale debt securities		(30	)		(63	)		(8	)
Other securities gains (losses) (1)		—			50			667
Net debt securities gains (losses)	$	1,923		$	2,060		$	9,135

Investment securities pledged to secure public and other funds had a carrying value of $2.104 billion at December 31, 2019 and $2.404 billion at December 31, 2018.

At December 31, 2019, Old National had a concentration of investment securities issued by certain states and their political subdivisions with the following aggregate market values: $400.2 million by Indiana, which represented 14.0% of shareholders’ equity, and $165.7 million by Texas, which represented 5.8% of shareholders’ equity. Of the Indiana municipal bonds, 99% are rated “A” or better, and the remaining 1% generally represent non-rated local interest bonds where Old National has a market presence. All of the Texas municipal bonds are rated “A” or better, and the majority of issues are backed by the “AAA” rated State of Texas Permanent School Fund Guarantee Program.

All of the mortgage-backed securities in the investment portfolio are residential mortgage-backed securities. The amortized cost and fair value of the investment securities portfolio are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Weighted average yield is based on amortized cost.

	At December 31, 2019
(dollars in thousands)					Weighted
	Amortized		Fair		Average
Maturity	Cost		Value		Yield
Available-for-Sale
Within one year	$	356,218	$	357,345		2.28	%
One to five years		2,714,931		2,747,339		2.81
Five to ten years		1,016,686		1,033,597		3.11
Beyond ten years		1,225,374		1,246,810		3.35
Total	$	5,313,209	$	5,385,091		2.96	%

The following table summarizes the available-for-sale investment securities with unrealized losses at December 31 by aggregated major security type and length of time in a continuous unrealized loss position:

	Less than 12 months					12 months or longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	Value		Losses			Value		Losses			Value		Losses
December 31, 2019
Available-for-Sale
U.S. Treasury	$	999	$	(2	)	$	—	$	—		$	999	$	(2	)
U.S. government-sponsored entities and agencies		357,647		(4,638	)		—		—			357,647		(4,638	)
Mortgage-backed securities - Agency		786,245		(6,122	)		212,056		(2,930	)		998,301		(9,052	)
States and political subdivisions		120,166		(1,016	)		7,006		(31	)		127,172		(1,047	)
Pooled trust preferred securities		—		—			8,222		(5,589	)		8,222		(5,589	)
Other securities		30,765		(182	)		87,066		(1,150	)		117,831		(1,332	)
Total available-for-sale	$	1,295,822	$	(11,960	)	$	314,350	$	(9,700	)	$	1,610,172	$	(21,660	)

December 31, 2018
Available-for-Sale
U.S. Treasury	$	3,829	$	(12	)	$	1,472	$	(19	)	$	5,301	$	(31	)
U.S. government-sponsored entities and agencies		54,701		(594	)		519,911		(10,748	)		574,612		(11,342	)
Mortgage-backed securities - Agency		82,289		(742	)		1,172,984		(43,475	)		1,255,273		(44,217	)
States and political subdivisions		99,162		(1,340	)		151,097		(2,101	)		250,259		(3,441	)
Pooled trust preferred securities		—		—			8,495		(5,366	)		8,495		(5,366	)
Other securities		94,607		(1,965	)		143,842		(4,211	)		238,449		(6,176	)
Total available-for-sale	$	334,588	$	(4,653	)	$	1,997,801	$	(65,920	)	$	2,332,389	$	(70,573	)

The following table summarizes the held-to-maturity investment securities with unrecognized losses at December 31 by aggregated major security type and length of time in a continuous unrecognized loss position:

	Less than 12 months					12 months or longer					Total
	Fair		Unrecognized			Fair		Unrecognized			Fair		Unrecognized
(dollars in thousands)	Value		Losses			Value		Losses			Value		Losses
December 31, 2018
Held-to-Maturity
U.S. government-sponsored entities and agencies	$	—	$	—		$	72,359	$	(4,642	)	$	72,359	$	(4,642	)
Mortgage-backed securities - Agency		4,335		(24	)		119,207		(8,006	)		123,542		(8,030	)
States and political subdivisions		24,533		(983	)		70,022		(3,556	)		94,555		(4,539	)
Total held-to-maturity	$	28,868	$	(1,007	)	$	261,588	$	(16,204	)	$	290,456	$	(17,211	)

The unrecognized losses on held-to-maturity investment securities presented in the table above include unrecognized losses on securities that were transferred from available-for-sale to held-to-maturity totaling $10.7 million at December 31, 2018. There were no held-to-maturity investment securities with unrecognized losses at December 31, 2019.

Management evaluates debt securities for OTTI at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the OTTI recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If an entity intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the OTTI shall be recognized in

earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. Otherwise, the OTTI shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors shall be recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings shall become the new amortized cost basis of the investment.

As of December 31, 2019, Old National’s securities portfolio consisted of 1,892 securities, 249 of which were in an unrealized loss position. The unrealized losses attributable to our U.S. Treasury, U.S. government-sponsored entities and agencies, agency mortgage-backed securities, states and political subdivisions, and other securities are the result of fluctuations in interest rates. Our pooled trust preferred securities are discussed below. At December 31, 2019, we had no intent to sell any securities that were in an unrealized loss position nor is it expected that we would be required to sell the securities prior to their anticipated recovery.

At December 31, 2019, our securities portfolio contained two pooled trust preferred securities with a fair value of $8.2 million and unrealized losses of $5.6 million. These securities are evaluated using collateral-specific assumptions to estimate the expected future interest and principal cash flows. For the years ended December 31, 2019 and 2018, our analysis indicated no OTTI on these securities.

The table below summarizes the relevant characteristics of our pooled trust preferred securities as well as our single issuer trust preferred securities that are included in the “other securities” category in this footnote. Each of the pooled trust preferred securities support a more senior tranche of security holders. Both pooled trust preferred securities have experienced credit defaults. However, these securities have excess subordination and are not other-than-temporarily impaired as a result of their class hierarchy, which provides more loss protection.

Trust preferred securities													Actual	Expected	Excess
December 31, 2019													Deferrals	Defaults as	Subordination
(dollars in thousands)												# of Issuers	and Defaults	a % of	as a % of
		Lowest					Unrealized			Realized		Currently	as a % of	Remaining	Current
		Credit	Amortized		Fair		Gain/			Losses		Performing/	Original	Performing	Performing
	Class	Rating (1)	Cost		Value		(Loss)			2019		Remaining	Collateral	Collateral	Collateral
Pooled trust preferred securities:
Pretsl XXVII LTD	B	B		4,287		2,510		(1,777	)	$	—	32/41	14.6%	9.9%	34.8%
Trapeza Ser 13A	A2A	BBB		9,524		5,712		(3,812	)		—	39/41	4.5%	6.6%	51.5%
				13,811		8,222		(5,589	)		—
Single Issuer trust preferred securities:
JP Morgan Chase Cap XIII		BBB-		4,798		4,475		(323	)		—
				4,798		4,475		(323	)		—

Total			$	18,609	$	12,697	$	(5,912	)	$	—

(1)Lowest rating for the security provided by any nationally recognized credit rating agency.

Equity securities are recorded at fair value and totaled $6.8 million at December 31, 2019 and $5.6 million at December 31, 2018. There were gains on equity securities of $0.7 million during 2019, $0.1 million during 2018, and $0.7 million during 2017. Old National also has equity securities without readily determinable fair values that are included in other assets that totaled $91.4 million at December 31, 2019 and $79.2 million at December 31, 2018. These are illiquid investments that consist of partnerships, limited liability companies, and other ownership interests that support affordable housing, economic development, and community revitalization initiatives in low-to-moderate income neighborhoods. There have been no impairments or downward adjustments on these securities in 2019 or 2018.