Note 3: Securities

Trading Securities

Securities that are held principally for resale in the near term are recorded as trading securities at fair value. Trading securities include FHA and conventional Fannie Mae and Freddie Mac participation certificates. The unrealized gains included in earnings for trading securities totaled $3.1 million and $870,000 at December 31, 2019 and 2018, respectively.

Securities Available-For-Sale

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:


	December 31, 2019
			Gross		Gross		Approximate
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
Available-for-sale securities:
Treasury notes	$	4,744	$	21	$	—	$	4,765
Federal agencies		244,986		24		37		244,973
Municipals		5,577		360		—		5,937
Mortgage-backed - Government-sponsored entity (GSE) - residential		34,357		213		2		34,568
Total available-for-sale securities	$	289,664	$	618	$	39	$	290,243


	December 31, 2018
			Gross		Gross		Approximate
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In thousands)
Available-for-sale securities:
Treasury notes	$	11,928	$	26	$	13	$	11,941
Federal agencies		237,894		8		972		236,930
Municipals		21,014		336		18		21,332
Mortgage-backed - Government-sponsored entity (GSE) - residential		60,693		254		79		60,868
Total available-for-sale securities	$	331,529	$	624	$	1,082	$	331,071

The amortized cost and fair value of available‑for‑sale securities at December 31, 2019 by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.


	December 31, 2019
	Amortized		Fair
	Cost		Value
Contractual Maturity	(In thousands)
Within one year	$	23,250	$	23,233
After one through five years		226,748		226,783
After five through ten years		—		—
After ten years		5,309		5,659
		255,307		255,675
Mortgage-backed - Government-sponsored entity (GSE) - residential		34,357		34,568
	$	289,664	$	290,243

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, 2019 and 2018 was $95.8 million and $240.2 million, respectively, which is approximately 33%, and 73%, respectively, of the Company’s available‑for‑sale investment portfolio.

The following tables show the Company’s gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other‑than‑temporarily impaired, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2019, and 2018:


	December 31, 2019
					12 Months or
	Less than 12 Months				Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Available-for-sale securities:
Treasury notes	$	—	$	—	$	—	$	—	$	—	$	—
Federal agencies		94,963		37		—		—		94,963		37
Municipals		—		—		—		—		—		—
Mortgage-backed - Government-sponsored entity (GSE) - residential		809		2		—		—		809		2
	$	95,772	$	39	$	—	$	—	$	95,772	$	39


	December 31, 2018
					12 Months or
	Less than 12 Months				Longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Available-for-sale securities:
Treasury notes	$	1,990	$	8	$	995	$	5	$	2,985	$	13
Federal agencies		28,296		97		191,280		875		219,576		972
Municipals		2,051		18		—		—		2,051		18
Mortgage-backed - Government-sponsored entity (GSE) - residential		15,543		79		—		—		15,543		79
	$	47,880	$	202	$	192,275	$	880	$	240,155	$	1,082

Unrealized losses on securities have not been recognized to income because the Company has the intent and ability to hold the securities for the foreseeable future, and the decline in fair value is primarily due to increased market interest rates. The fair value is expected to recover as the bonds approach the maturity date.

During the year ended December 31, 2019, proceeds from the sale of securities available for sale were $37.8 million, and a net gain of $476,000 was recognized, consisting of gross gains of $713,000 and gross losses of $237,000. During the year ended December 31, 2018, proceeds from the sale of securities available for sale were $6.4 million, and no gains or losses were recognized. There were no sales of securities available for sale during the year ended December 31, 2017.

The carrying value of securities pledged as collateral, to secure borrowings, pubic deposits and for other purposes, was $290.2 million, and $281.2 million at December 31, 2019 and 2018, respectively.