2. Investment Securities

The amortized cost, fair values, and unrealized gains and losses of the securities available-for-sale are as follows (in thousands):

	Amortized		Gross Unrealized				Fair/Book
March 31, 2019	Cost		Gains		Losses		Value
Government Agency & Government-Sponsored Entities	$	3,021	$	6	$	-	$	3,027
US Treasury Notes		164,660		48		34		164,674
US Govt SBA		14,554		5		147		14,412
Mortgage Backed Securities⁽¹⁾		303,895		1,764		1,639		304,020
Other		5,156		-		-		5,156
Total	$	491,286	$	1,823	$	1,820	$	491,289

	Amortized		Gross Unrealized				Fair/Book
December 31, 2018	Cost		Gains		Losses		Value
Government Agency & Government-Sponsored Entities	$	3,033	$	6	$	-	$	3,039
US Treasury Notes		164,672		-		158		164,514
US Govt SBA		15,601		6		160		15,447
Mortgage Backed Securities⁽¹⁾		310,982		1,196		5,133		307,045
Other		5,351		-		-		5,351
Total	$	499,639	$	1,208	$	5,451	$	495,396

	Amortized		Gross Unrealized				Fair/Book
March 31, 2018	Cost		Gains		Losses		Value
Government Agency & Government-Sponsored Entities	$	3,068	$	27	$	-	$	3,095
US Treasury Notes		144,147		3		741		143,409
US Govt SBA		27,786		12		261		27,537
Mortgage Backed Securities⁽¹⁾		324,251		393		5,881		318,763
Other		3,010		-		-		3,010
Total	$	502,262	$	435	$	6,883	$	495,814

⁽¹⁾All Mortgage Backed Securities consist of securities collateralized by residential real estate and were issued by an agency or government sponsored entity of the U.S. government.

The book values, estimated fair values and unrealized gains and losses of investments classified as held-to-maturity are as follows (in thousands):

	Book		Gross Unrealized				Fair
March 31, 2019	Value		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	54,412	$	571	$	1	$	54,982
Total	$	54,412	$	571	$	1	$	54,982

	Book		Gross Unrealized				Fair
December 31, 2018	Value		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	53,566	$	211	$	39	$	53,738
Total	$	53,566	$	211	$	39	$	53,738

	Book		Gross Unrealized				Fair
March 31, 2018	Value		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	53,527	$	274	$	56	$	53,745
Total	$	53,527	$	274	$	56	$	53,745

Fair values are based on quoted market prices or dealer quotes. If a quoted market price or dealer quote is not available, fair value is estimated using quoted market prices for similar securities.

The amortized cost and estimated fair values of investment securities at March 31, 2019 by contractual maturity are shown in the following table (in thousands):

	Available-for-Sale				Held-to-Maturity
March 31, 2019	Amortized Cost		Fair/Book Value		Book Value		Fair Value
Within one year	$	156,785	$	156,762	$	760	$	761
After one year through five years		16,814		16,856		3,329		3,330
After five years through ten years		1,387		1,386		24,797		25,189
After ten years		12,405		12,265		25,526		25,702
		187,391		187,269		54,412		54,982

Investment securities not due at a single maturity date:
Mortgage-backed securities		303,895		304,020		-		-

Total	$	491,286	$	491,289	$	54,412	$	54,982

Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following tables show those investments with gross unrealized losses and their market value aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at the dates indicated (in thousands):

	Less Than 12 Months				12 Months or More				Total
March 31, 2019	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Securities Available-for-Sale
US Treasury Notes	$	149,962	$	28	$	4,909	$	6	$	154,871	$	34
US Govt SBA		1,310		-		10,823		147		12,133		147
Mortgage Backed Securities		5,434		25		190,452		1,614		195,886		1,639
Total	$	156,706	$	53	$	206,184	$	1,767	$	362,890	$	1,820

Securities Held-to-Maturity
Obligations of States and Political Subdivisions	$	229	$	1	$	360	$	-	$	589	$	1
Total	$	229	$	1	$	360	$	-	$	589	$	1

	Less Than 12 Months				12 Months or More				Total
December 31, 2018	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Securities Available-for-Sale
US Treasury Notes	$	124,985	$	7	$	39,529	$	151	$	164,514	$	158
US Govt SBA		3,250		28		8,618		132		11,868		160
Mortgage Backed Securities		52,289		528		207,271		4,605		259,560		5,133
Total	$	180,524	$	563	$	255,418	$	4,888	$	435,942	$	5,451

Securities Held-to-Maturity
Obligations of States and Political Subdivisions	$	6,052	$	23	$	849	$	16	$	6,901	$	39
Total	$	6,052	$	23	$	849	$	16	$	6,901	$	39

	Less Than 12 Months				12 Months or More				Total
March 31, 2018	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Securities Available-for-Sale
US Treasury Notes	$	23,551	$	436	$	59,866	$	305	$	83,417	$	741
US Govt SBA		10,848		82		11,737		179		22,585		261
Mortgage Backed Securities		259,314		4,606		41,230		1,275		300,544		5,881
Total	$	293,713	$	5,124	$	112,833	$	1,759	$	406,546	$	6,883

Securities Held-to-Maturity
Obligations of States and Political Subdivisions	$	7,654	$	56	$	-	$	-	$	7,654	$	56
Total	$	7,654	$	56	$	-	$	-	$	7,654	$	56

As of March 31, 2019, the Company held 588 investment securities of which 26 were in an unrealized loss position for less than twelve months. 133 securities were in an unrealized position for twelve months or more. Management periodically evaluates each investment security for other-than-temporary impairment relying primarily on industry analyst reports and observations of market conditions and interest rate fluctuations. Management believes it will be able to collect all amounts due according to the contractual terms of the underlying investment securities.

Securities of Government Agency and Government Sponsored Entities – At March 31, 2019, no securities of government agency and government sponsored entities were in an unrealized loss position for less than 12 months. No securities were in an unrealized loss position for 12 months or more. The unrealized losses on the Company's investments in securities of government agency and government sponsored entities were $0 at March 31, 2019, December 31, 2018 and at March 31, 2018.

U.S. Treasury Notes – At March 31, 2019, 15 U.S. Treasury Note security investments were in an unrealized loss position for less than 12 months and 1 was in an unrealized loss position for 12 months or more. The unrealized losses on the Company's investment in U.S. Treasury Notes were $34,000 at March 31, 2019 and $158,000 at December 31, 2018, and $741,000 at March 31, 2018. The unrealized losses were caused by interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2019, December 31, 2018, and March 31, 2018.

U.S. Government SBA – At March 31, 2019, 4 U.S. Government SBA security investments were in an unrealized loss position for less than 12 months and 68 were in an unrealized loss position for 12 months or more. The unrealized losses on the Company's investment in U.S. Government SBA securities were $147,000 at March 31, 2019 and $160,000 at December 31, 2018, and $261,000 at March 31, 2018. The unrealized losses were caused by interest rate fluctuations. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company did not consider these investments to be other-than-temporarily impaired at March 31, 2019, December 31, 2018, and March 31, 2018.

Mortgage Backed Securities – At March 31, 2019, 6 mortgage backed security investments were in an unrealized loss position for less than 12 months and 63 were in an unrealized loss position for 12 months or more. The unrealized losses on the Company's investment in mortgage backed securities were $1.6 million, $5.1 million, and $5.9 million at March 31, 2019, December 31, 2018, and March 31, 2018, respectively. The unrealized losses on the Company’s investment in mortgage backed securities were caused by interest rate fluctuations. The contractual cash flows of these investments are guaranteed by an agency or government sponsored entity of the U.S. government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company's investment. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019, December 31, 2018, and March 31, 2018.

Obligations of States and Political Subdivisions - At March 31, 2019, one obligation of states and political subdivisions were in an unrealized loss position for less than 12 months. One were in an unrealized loss position for 12 months or more. As of March 31, 2019, over ninety-nine percent of the Company’s bank-qualified municipal bond portfolio is rated at either the issue or issuer level, and all of these ratings are “investment grade.” The Company monitors the status of the one percent of the portfolio that is not rated and at the current time does not believe any of them to be exhibiting financial problems that could result in a loss in any individual security.

The unrealized losses on the Company’s investment in obligations of states and political subdivisions were $1,000, $39,000 and $56,000 at March 31, 2019, December 31, 2018 and March 31, 2018, respectively. Management believes that any unrealized losses on the Company's investments in obligations of states and political subdivisions were primarily caused by interest rate fluctuations. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company does not intend to sell the securities and it is more likely than not that the Company will not have to sell the securities before recovery of their cost basis, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019, December 31, 2018, and March 31, 2018.

There were no proceeds from sales and calls of securities for the period ending March 31, 2019 and March 31, 2018.

Pledged Securities

As of March 31, 2019, securities carried at $262.1 million were pledged to secure public deposits, Federal Home Loan Bank (“FHLB”) borrowings, and other government agency deposits as required by law. This amount was $268.8 million at December 31, 2018, and $245.4 million at March 31, 2018.