2.SECURITIES

SECURITIES AVAILABLE FOR SALE

Period-end securities are as follows:

(in thousands)


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for Sale
September 30, 2019
U.S. treasury notes	$	2,986	$	1	$	—	$	2,987
U.S. government agencies		22,154		76		(37)		22,193
States and political subdivisions		35,223		887		(37)		36,073
Mortgage-backed - residential		94,876		623		(184)		95,315
Mortgage-backed - commercial		53,606		645		(137)		54,114
Asset-backed		35,974		58		(172)		35,860
Total	$	244,819	$	2,290	$	(567)	$	246,542

December 31, 2018
U.S. treasury notes	$	4,032	$	—	$	(57)	$	3,975
U.S. government agencies		41,122		515		(459)		41,178
States and political subdivisions		64,196		503		(495)		64,204
Mortgage-backed - residential		150,704		159		(3,614)		147,249
Mortgage-backed - commercial		49,484		—		(921)		48,563
Asset-backed		10,234		56		(90)		10,200
Total	$	319,772	$	1,233	$	(5,636)	$	315,369

The amortized cost and fair value of securities as of September 30, 2019 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately. Further discussion concerning Fair Value Measurements can be found in Note 9.


	Amortized		Fair
	Cost		Value
Due in one year or less	$	7,360	$	7,355
Due after one year through five years		15,872		15,880
Due after five years through ten years		14,715		14,936
Due after ten years		22,416		23,082
		60,363		61,253
Mortgage-backed - residential		94,876		95,315
Mortgage-backed - commercial		53,606		54,114
Asset-backed		35,974		35,860
Total	$	244,819	$	246,542

Proceeds from the sale of available for sale securities for the nine months ended September 30, 2019 and September 30, 2018 were $75.1 million and $16.7 million. Gross gains of $732 thousand and $138 thousand and gross losses of $41 thousand and $146 were realized on those sales, respectively. The tax provision related to these realized net gains or losses was $145 thousand and $(2) thousand, respectively.

Proceeds from the sale of available for sale securities for the three months ended September 30, 2019 and September 30, 2018 were $45.3 million and $2.0 million. Gross gains of $578 thousand and $72 thousand and gross losses of $1 thousand and $6 thousand were realized on those sales, respectively. The tax provision related to these realized net gains or losses was $121 thousand and $(1) thousand, respectively.

Securities with unrealized losses at September 30, 2019 and at December 31, 2018 not recognized in income are as follows:

September 30, 2019


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
U.S. government agencies		3,411		(7)		4,653		(30)		8,064		(37)
States and political subdivisions		2,420		(9)		1,192		(28)		3,612		(37)
Mortgage-backed - residential		10,925		(42)		16,263		(142)		27,188		(184)
Mortgage-backed - commercial		7,683		(25)		11,270		(112)		18,953		(137)
Asset-backed		22,040		(172)		—		—		22,040		(172)
Total temporarily impaired	$	46,479	$	(255)	$	33,378	$	(312)	$	79,857	$	(567)

December 31, 2018


	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss
U.S. treasury notes	$	—	$	—	$	3,975	$	(57)	$	3,975	$	(57)
U.S. government agencies		—		—		21,102		(459)		21,102		(459)
States and political subdivisions		8,007		(125)		25,540		(370)		33,547		(495)
Mortgage-backed - residential		19,250		(144)		112,369		(3,470)		131,619		(3,614)
Mortgage-backed - commercial		—		—		45,949		(921)		45,949		(921)
Asset-backed		1,920		(90)		—		—		1,920		(90)
Total temporarily impaired	$	29,177	$	(359)	$	208,935	$	(5,277)	$	238,112	$	(5,636)

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In analyzing an issuer’s financial condition, we may consider many factors including, (1) whether the securities are issued by the federal government or its agencies, (2) whether downgrades by bond rating agencies have occurred, (3) the results of reviews of the issuer’s financial condition and near-term prospects, (4) the length of time and the extent to which the fair value has been less than cost, and (5) whether we intend to sell the investment security or more likely than not will be required to sell the investment security before its anticipated recovery.

Unrealized losses on securities included in the tables above have not been recognized into income because (1) all rated securities are investment grade and are of high credit quality, (2) management does not intend to sell and it is more likely than not that management would not be required to sell the securities prior to their anticipated recovery, (3) management believes the decline in fair value is largely due to changes in interest rates and (4) management believes the declines in fair value are temporary. The Company believes the fair value will recover as the securities approach maturity.