(4)Investment Securities

The amortized cost and fair values of investment securities are as follows:


	Amortized		Gross Unrealized				Estimated
(Dollars in thousands)	Cost		Gains		Losses		Fair Value
December 31, 2019:
Available-for-sale:
U.S. government-sponsored mortgage-backed securities	$	7,905	$	723	$	—	$	8,628
Total	$	7,905	$	723	$	—	$	8,628

Held-to-maturity:
U.S. government-sponsored mortgage-backed securities	$	363,883	$	8,436	$	(1,014)	$	371,305
Total	$	363,883	$	8,436	$	(1,014)	$	371,305

December 31, 2018:
Available-for-sale:
U.S. government-sponsored mortgage-backed securities	$	2,644	$	—	$	(84)	$	2,560
Total	$	2,644	$	—	$	(84)	$	2,560

Held-to-maturity:
U.S. government-sponsored mortgage-backed securities	$	371,442	$	2,056	$	(9,279)	$	364,219
Trust preferred securities		75		628		—		703
Total	$	371,517	$	2,684	$	(9,279)	$	364,922

The amortized cost and estimated fair value of investment securities by maturity date at December 31, 2019 are shown below. Incorporated in the maturity schedule are mortgage-backed securities, which are allocated using the contractual maturity as a basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized		Estimated
(Dollars in thousands)	Cost		Fair Value
Available-for-sale:
Due within 5 years	$	—	$	—
Due after 5 years through 10 years		—		—
Due after 10 years		7,905		8,628
Total	$	7,905	$	8,628

Held-to-maturity:
Due within 5 years	$	—	$	—
Due after 5 years through 10 years		60		61
Due after 10 years		363,823		371,244
Total	$	363,883	$	371,305

Realized gains and losses and the proceeds from sales of held-to-maturity and available-for-sale securities are shown in the table below.


(Dollars in thousands)	2019		2018
Proceeds from sales	$	8,644	$	4,462
Gross gains		2,910		45
Gross losses		—		—

During 2019, the Company sold its $75,000 investment in its trust preferred security, PreTSL XXIII, and $746,000 of held-to-maturity mortgage-backed securities, and recorded gains of $2.7 million and $40,000, respectively. During 2018, the Company sold $4.4 million of held-to-maturity securities and recorded a gain of $45,000. The sale of the trust preferred security, which had a significant deterioration in the issuer’s credit rating, and the sale of the mortgage-backed securities, for which the company had already collected a substantial portion of the outstanding purchased principal (at least 85%), were in accordance with the Investments – Debt and Equity Securities topic of the FASB ASC and do not taint management’s assertion of its intent to hold remaining securities in the held-to-maturity portfolio to maturity.

During 2019, the Company sold $5.0 million of available-for-sale mortgage-backed securities and recorded a gain of $153,000. The Company did not sell any available-for-sale securities in 2018.

As of January 1, 2019, the Company transferred securities with an amortized cost of $11.4 million from held-to-maturity to available-for-sale with the adoption of ASU 2017-12 on derivatives and hedging.

Investment securities with amortized costs of $188.9 million and $308.8 million at December 31, 2019 and 2018, respectively, were pledged to secure deposits made by state and local governments, securities sold under agreements to repurchase and transaction clearing accounts.

Provided below is a summary of investment securities which were in an unrealized loss position at December 31, 2019 and 2018. The Company does not intend to sell held-to-maturity and available-for-sale securities until such time as the value recovers or the securities mature and it is not more likely than not that the Company will be required to sell the securities prior to recovery of value or the securities mature.


	Less Than 12 Months				12 Months or Longer				Total
			Unrealized				Unrealized		Number of			Unrealized
Description of securities	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
(Dollars in thousands)
December 31, 2019:
Held-to-maturity:
U.S. government-sponsored mortgage-backed securities	$	55,882	$	(302)	$	34,492	$	(712)	30	$	90,374	$	(1,014)

December 31, 2018:
Available-for-sale:
U.S. government-sponsored mortgage-backed securities	$	—	$	—	$	2,560	$	(84)	1	$	2,560	$	(84)

Held-to-maturity:
U.S. government-sponsored mortgage-backed securities	$	57,154	$	(254)	$	220,338	$	(9,025)	81	$	277,492	$	(9,279)

Mortgage-Backed Securities. The unrealized losses on the Company’s investment in mortgage-backed securities were caused by increases in market interest rates subsequent to purchase. All of the mortgage-backed securities are guaranteed by Freddie Mac or Fannie Mae, which are U.S. government-sponsored enterprises, or Ginnie Mae, which is a U.S. government agency. Since the decline in market value is attributable to changes in interest rates and not credit quality, and the Company does not intend to sell these investments until maturity and it is not more likely than not that the Company will be required to sell such investments prior to recovery of its cost basis, the Company does not consider these investments to be other-than-temporarily impaired as of December 31, 2019 and 2018.

During 2019, the Company securitized fixed-rate first mortgage loans with a book value of $36.8 million into Freddie Mac mortgage-backed securities to increase liquidity. The securitization transctions increased investment securities and lowered loans receivable. The securitization transactions were accounted for by recording the mortgage-backed securities at a fair value of $37.9 million in accordance with the FASB ASC. A net gain of $1.5 million on the sale of loans was recognized on the securitization transactions as the fair value of the mortgage-backed securities exceeded the amortized cost of the mortgage loans.