Investment Securities

AFS securities as of the balance sheet dates consisted of the following:



September 30, 2019	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available-for-sale
Debt securities:
U.S. Government-sponsored enterprises	$	6,610	$	60	$	(58	)	$	6,612
Agency mortgage-backed	46,403		687		(56		)	47,034
State and political subdivisions	22,987		547		(7		)	23,527
Corporate	7,801		383		(83		)	8,101
Total	$	83,801	$	1,677	$	(204	)	$	85,274



December 31, 2018	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available-for-sale
Debt securities:
U.S. Government-sponsored enterprises	$	6,528	$	1	$	(208	)	$	6,321
Agency mortgage-backed	36,851		84		(683		)	36,252
State and political subdivisions	23,527		130		(486		)	23,171
Corporate	7,792		18		(149		)	7,661
Total	$	74,698	$	233	$	(1,526	)	$	73,405

There were no investment securities HTM at September 30, 2019 or December 31, 2018. There were no investment securities pledged as collateral at September 30, 2019. At December 31, 2018, investment securities AFS with a carrying amount of $2.5 million were pledged as collateral for public deposits and for other purposes as required or permitted by law.

The amortized cost and estimated fair value of debt securities by contractual scheduled maturity as of September 30, 2019 were as follows:



	Amortized Cost		Fair Value
Available-for-sale	(Dollars in thousands)
Due in one year or less	$	90	$	90
Due from one to five years	3,998		4,126
Due from five to ten years	17,193		17,608
Due after ten years	16,117		16,416
	37,398		38,240
Agency mortgage-backed	46,403		47,034
Total debt securities available-for-sale	$	83,801	$	85,274

Actual maturities may differ for certain debt securities that may be called by the issuer prior to the contractual maturity. Actual maturities usually differ from contractual maturities on agency MBS because the mortgages underlying the securities may be prepaid, usually without any penalties. Therefore, these agency MBS are shown separately and are not included in the contractual maturity categories in the above maturity summary.

Information pertaining to all investment securities with gross unrealized losses as of the balance sheet dates, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:



September 30, 2019	Less Than 12 Months						12 Months and over						Total
	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
		(Dollars in thousands)
Debt securities:
U.S. Government- sponsored enterprises	2	$	1,185	$	(4	)	9	$	2,997	$	(54	)	11	$	4,182	$	(58	)
Agency mortgage-backed	7	8,272		(19		)	8	5,165		(37		)	15	13,437		(56		)
State and political subdivisions	2	752		(6		)	1	305		(1		)	3	1,057		(7		)
Corporate	—	—		—			3	1,417		(83		)	3	1,417		(83		)
Total	11	$	10,209	$	(29	)	21	$	9,884	$	(175	)	32	$	20,093	$	(204	)



December 31, 2018	Less Than 12 Months						12 Months and over						Total
	Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses			Number of Securities	Fair Value		Gross Unrealized Losses
		(Dollars in thousands)
Debt securities:
U.S. Government- sponsored enterprises	2	$	1,184	$	(11	)	12	$	4,854	$	(197	)	14	$	6,038	$	(208	)
Agency mortgage-backed	5	3,516		(21		)	40	26,198		(662		)	45	29,714		(683		)
State and political subdivisions	4	1,301		(16		)	36	15,067		(470		)	40	16,368		(486		)
Corporate	5	2,424		(12		)	5	2,285		(137		)	10	4,709		(149		)
Total	16	$	8,425	$	(60	)	93	$	48,404	$	(1,466	)	109	$	56,829	$	(1,526	)

The Company evaluates all investment securities on a quarterly basis, and more frequently when economic conditions warrant, to determine if an OTTI exists. A security is considered impaired if the fair value is lower than its amortized cost basis at the report date. If impaired, management then assesses whether the unrealized loss is OTT.

An unrealized loss on a debt security is generally deemed to be OTT and a credit loss is deemed to exist if the present value of the expected future cash flows is less than the amortized cost basis of the debt security. The credit loss component of OTTI write-down is recorded, net of tax effect, through net income as a component of net OTTI losses in the consolidated statements of income, while the remaining portion of the impairment loss is recognized in OCI, provided the Company does not intend to sell the underlying debt security and it is "more likely than not" that the Company will not have to sell the debt security prior to recovery.

Management considers the following factors in determining whether OTTI exists and the period over which the security is expected to recover:


•	The length of time, and extent to which, the fair value has been less than the amortized cost;


•	Adverse conditions specifically related to the security, industry, or geographic area;


•	The historical and implied volatility of the fair value of the security;


•	The payment structure of the debt security and the likelihood of the issuer being able to make payments that may increase in the future;


•	Failure of the issuer of the security to make scheduled interest or principal payments;


•	Any changes to the rating of the security by a rating agency;


•	Recoveries or additional declines in fair value subsequent to the balance sheet date; and


•	The nature of the issuer, including whether it is a private company, public entity or government-sponsored enterprise, and the existence or likelihood of any government or third party guaranty.

The Company has the ability to hold the investment securities that had unrealized losses at September 30, 2019 and December 31, 2018 for the foreseeable future and no declines were deemed by management to be OTT.

There were no sales of AFS securities during the three and nine months ended September 30, 2018. The following table presents the proceeds, gross realized gains and gross realized losses from the sale of AFS securities for the three and nine months ended September 30, 2019:



	For The Three Months Ended September 30, 2019		For The Nine Months Ended September 30, 2019
	(Dollars in thousands)
Proceeds	$	—	$	8,785

Gross gains	—		45
Gross losses	—		(37		)
Net gains on sales of investment securities AFS	$	—	$	8