3. SECURITIES AVAILABLE-FOR-SALE

The amortized cost and fair value of the securities available-for-sale are as follows (dollars in thousands):


	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	12,125	$	124	$	(104)	$	12,145
Mortgage-backed securities		398,353		3,354		(1,318)		400,389
State and political subdivisions		181,900		6,478		(113)		188,265
Total securities	$	592,378	$	9,956	$	(1,535)	$	600,799


	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	15,553	$	12	$	(353)	$	15,212
Mortgage-backed securities		414,208		398		(9,873)		404,733
State and political subdivisions		140,181		1,206		(853)		140,534
Total securities	$	569,942	$	1,616	$	(11,079)	$	560,479

For the years ended December 31, 2019, 2018, and 2017, proceeds from sales of securities available-for-sale were $60.5 million, $6.8 million, and $40.2 million, respectively. Gains and losses on the sale of investment securities are recorded on the trade date and are determined using the specific identification method.

Gross gains and losses from the sales and calls of securities for the years ended were as follows (dollars in thousands):


	December 31,
	2019		2018		2017
Gross gains on sales and calls of securities	$	230	$	21	$	1,024
Gross losses on sales and calls of securities		(428)		(19)		(524)
Net (losses) gains on sales and calls of securities	$	(198)	$	2	$	500

The Company has reviewed all sectors and securities in the portfolio for impairment. During the year ended December 31, 2019 the Company realized gains through earnings from the sale and call of 74 debt securities for $230,000. The securities were sold with 108 other debt securities, for which a $428,000 loss was realized, to improve the structure of the portfolio at year end. During the year ended December 31, 2018, the Company realized gains through earnings from the sale and call of 11 debt securities for $21,000. The securities were sold with 8 other debt securities, for which a $19,000 loss was realized, to improve the structure of the portfolio at year-end.

At December 31, 2019 and 2018, the Company had 198 and 552 securities with unrealized gross losses, respectively. Information pertaining to these securities aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows (dollars in thousands):


	December 31, 2019
	Less than twelve months				Twelve months or longer
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	(32)	$	3,240	$	(72)	$	2,689
Mortgage-backed securities		(494)		100,518		(824)		78,538
State and political subdivisions		(113)		19,762		—		—
Total	$	(639)	$	123,520	$	(896)	$	81,227


	December 31, 2018
	Less than twelve months				Twelve months or longer
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
U.S. government agencies	$	(54)	$	2,815	$	(299)	$	10,764
Mortgage-backed securities		(717)		69,686		(9,156)		273,230
State and political subdivisions		(249)		33,864		(604)		22,213
Total	$	(1,020)	$	106,365	$	(10,059)	$	306,207

The Company has concluded as of December 31, 2019 that all remaining securities, currently in an unrealized loss position, are not other-than-temporarily-impaired. This assessment was based on the following factors: 1) the Company has the ability to hold the securities, 2) the Company does not intend to sell the securities, 3) the Company does not anticipate it will be required to sell the securities before recovery, 4) and the Company expects to eventually recover the entire amortized cost basis of the securities.

The amortized cost and estimated fair value of securities available-for-sale at December 31, 2019 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without penalties (dollars in thousands):


	Amortized Cost		Fair Value
Maturing within one year	$	7,155	$	7,244
Maturing after one year through five years		17,008		17,171
Maturing after five years through ten years		33,805		34,881
Maturing after ten years		136,057		141,114
Mortgage-backed securities		189,554		190,488
Collateralized mortgage obligations		208,799		209,901
	$	592,378	$	600,799

Securities available-for-sale with amortized costs totaling $232,969,000 and estimated fair values totaling $234,787,000 were pledged to secure other contractual obligations and short-term borrowing arrangements at December 31, 2019 (see Note 10).

Securities available-for-sale with amortized costs totaling $222,548,000 and estimated fair values totaling $217,421,000 were pledged to secure other contractual obligations and short-term borrowing arrangements at December 31, 2018 (see Note 10).

At December 31, 2019, the Company’s investment portfolio included securities issued by 298 different government municipalities and agencies located within 31 states with a fair value of $188,265,000. The largest exposure to any single municipality or agency was $2.2 million (fair value) in five bonds issued for the renovation, modernization and construction of various school facilities by the Lindsay Unified School District, to be repaid by future tax revenues.

The Company’s investments in bonds issued by states, municipalities and political subdivisions are evaluated in accordance with Supervision and Regulation Letter 12‑15 (SR 12‑15) issued by the Board of Governors of the Federal Reserve System, “Investing in Securities without Reliance on Nationally Recognized Statistical Rating Organization Ratings”, and other regulatory guidance. Credit ratings are considered in our analysis only as a guide to the historical default rate associated with similarly-rated bonds. There have been no significant differences in our internal analyses compared with the ratings assigned by the third party credit rating agencies.

The following table summarizes the amortized cost and fair values of general obligation and revenue bonds in the Company’s investment securities portfolio at the indicated dates, identifying the state in which the issuing municipality or agency operates for our largest geographic concentrations (dollars in thousands):


	December 31, 2019				December 31, 2018
General obligation bonds	Amortized Cost		Fair Value		Amortized Cost		Fair Value
State of Issuance:
Texas	$	59,439	$	61,519	$	36,331	$	36,199
Washington		23,392		24,313		16,036		16,062
California		23,882		25,030		26,928		27,357
Ohio		7,144		7,271		8,639		8,601
Other (23 and 22 states, respectively)		42,182		43,454		28,357		28,414
Total general obligation bonds		156,039		161,587		116,291		116,633

Revenue bonds
State of Issuance:
Texas		6,035		6,298		7,526		7,506
Washington		1,737		1,856		1,751		1,780
California		365		380		367		374
Ohio		2,069		2,066		—		—
Other (12 and 12 states, respectively)		15,655		16,078		14,246		14,241
Total revenue bonds		25,861		26,678		23,890		23,901
Total obligations of states and political subdivisions	$	181,900	$	188,265	$	140,181	$	140,534

The following table summarizes the amortized cost and fair value of revenue bonds in the Company’s investment securities portfolio at the indicated dates, identifying the revenue source of repayment for our largest source concentrations (dollars in thousands):


	December 31, 2019				December 31, 2018
Revenue bonds	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Revenue Source:
Water	$	7,515	$	7,775	$	6,942	$	6,946
Sewer		4,760		4,811		1,392		1,398
College & university		1,997		2,019		2,583		2,604
Sales tax		1,949		1,995		2,932		2,901
Electric & power		1,421		1,521		1,027		1,047
Lease		3,596		3,678		2,053		2,068
Other (9 and 12 sources, respectively)		4,623		4,879		6,961		6,937
Total revenue bonds	$	25,861	$	26,678	$	23,890	$	23,901