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
December 31, 2019	Cost		Gains		Losses		Value
US Treasury Notes	$	54,745	$	250	$	-	$	54,995
US Govt SBA		10,902		9		113		10,798
Mortgage Backed Securities⁽¹⁾		436,531		4,646		99		441,078
Other		515		-		-		515
Total	$	502,693	$	4,905	$	212	$	507,386

	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

⁽¹⁾All Mortgage Backed Securities 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
December 31, 2019	Value		Gains		Losses		Value
Obligations of States and Political Subdivisions	$	60,229	$	880	$	12	$	61,097
Total	$	60,229	$	880	$	12	$	61,097

	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

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 December 31, 2019 by contractual maturity are shown in the following tables. (in thousands)

	Available-for-Sale				Held-to-Maturity
December 31, 2019	Amortized Cost		Fair/Book Value		Book Value		Fair Value
Within One Year	$	40,509	$	40,510	$	2,446	$	2,446
After One Year Through Five Years		15,146		15,393		5,902		5,905
After Five Years Through Ten Years		955		955		23,980		24,689
After Ten Years		9,552		9,450		27,901		28,057
		66,162		66,308		60,229		61,097

Investment Securities Not Due at a Single Maturity Date:
Mortgage Backed Securities		436,531		441,078		-		-
Total	$	502,693	$	507,386	$	60,229	$	61,097

Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers 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
December 31, 2019	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

Securities Available-for-Sale
US Govt SBA	$	2,693	$	6	$	5,198	$	107	$	7,891	$	113
Mortgage Backed Securities		131,005		88		713		11		131,718		99
Total	$	133,698	$	94	$	5,911	$	118	$	139,609	$	212

Securities Held-to-Maturity
Obligations of States and Political Subdivisions	$	355	$	12	$	-	$	-	$	355	$	12
Total	$	355	$	12	$	-	$	-	$	355	$	12

	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

As of December 31, 2019, the Company held 595 investment securities of which 29 were in an unrealized loss position for less than twelve months and 74 securities were in an unrealized loss 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 December 31, 2019 and December 31, 2018, no securities of government agency and government sponsored entities were in a loss position.

U.S. Treasury Notes – At December 31, 2019, no U.S. Treasury Note security investments were in a loss position for less than 12 months and none were in a loss position for 12 months or more. The unrealized losses on the Company’s investment in US treasury notes were $0 at December 31, 2019 and $158,000 at December 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 December 31, 2019 and December 31, 2018.

U.S. Government SBA – At December 31, 2019, 18 U.S. Government SBA security investments were in a loss position for less than 12 months and 53 were in a loss position for 12 months or more. The unrealized losses on the Company’s investment in U.S. Government SBA were $113,000 at December 31, 2019 and $160,000 at December 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 December 31, 2019 and December 31, 2018.

Mortgage Backed Securities - At December 31, 2019, 9 mortgage backed security investments were in a loss position for less than 12 months and 21 was in a loss position for 12 months or more. The unrealized losses on the Company’s investment in mortgage-backed securities were $99,000 at December 31, 2019 and $5.1 million at December 31, 2018. The unrealized losses 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 did not consider these investments to be other-than-temporarily impaired at December 31, 2019 or 2018.

Obligations of States and Political Subdivisions - At December 31, 2019, 2 obligations of states and political subdivisions were in a loss position for less than 12 months. None were in a loss position for 12 months or more. As of December 31, 2019, one-hundred percent of the Company’s bank-qualified municipal bond portfolio is rated at either the issue or the issuer level, and all of these ratings are “investment grade.” The Company monitors the status of all municipal investments in the portfolio, 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 obligation of states and political subdivisions were $12,000 at December 31, 2019 and $39,000 at December 31, 2018. Management believes that any unrealized losses on the Company’s investments in obligations of states and political subdivisions were 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 would 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 December 31, 2019 and December 31, 2018.

Proceeds from sales and calls of these securities were as follows:

(in thousands)	Gross Proceeds		Gross Gains		Gross Losses
2019	$	5,300	$	1	$	-
2018	$	99,323	$	78	$	1,338
2017	$	7,831	$	143	$	12

Pledged Securities

As of December 31, 2019, securities carried at $352.5 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.