Investment Securities

The amortized cost, gross unrealized gains and losses, and fair values of our investment securities portfolio at March 31, 2019 and December 31, 2018 are as follows:



	March 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In Thousands)	Cost		Gains		Losses			Value
Available for sale (AFS):
Mortgage-backed securities	$	6,120	$	9	$	(149	)	$	5,980
State and political securities	85,456		1,632		(130		)	86,958
Other debt securities	49,937		69		(1,182		)	48,824
Total debt securities	$	141,513	$	1,710	$	(1,461	)	$	141,762

Investment equity securities:
Financial institution equity securities	$	328	$	252	$	—		$	580
Other equity securities	1,300		—		(61		)	1,239
Investment equity securities	$	1,628	$	252	$	(61	)	$	1,819

Trading:
Other equity securities	$	50	$	—	$	(8	)	$	42



	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
(In Thousands)	Cost		Gains		Losses			Value
Available for sale (AFS):
Mortgage-backed securities	$	6,385	$	8	$	(240	)	$	6,153
State and political securities	79,358		609		(426		)	79,541
Other debt securities	50,264		17		(1,690		)	48,591
Total debt securities	$	136,007	$	634	$	(2,356	)	$	134,285

Investment equity securities:
Financial institution equity securities	$	328	$	224	$	—		$	552
Other equity securities	1,300		—		(76		)	1,224
Investment equity securities	$	1,628	$	224	$	(76	)	$	1,776

Trading:
Other equity securities	$	49	$	—	$	(13	)	$	36

Total net trading gains of $10,000 for the three months ended March 31, 2019 along with net trading gains of $3,000 for the three months ended March 31, 2018 are included in the Consolidated Statement of Income.

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual debt securities have been in a continuous unrealized loss position, at March 31, 2019 and December 31, 2018.



	March 31, 2019
	Less than Twelve Months					Twelve Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands)	Value		Losses			Value		Losses			Value		Losses
Available for sale (AFS):
Mortgage-backed securities	$	1,168	$	(9	)	$	4,612	$	(140	)	$	5,780	$	(149	)
State and political securities	2,409		(1		)	6,559		(129		)	8,968		(130		)
Other debt securities	5,765		(14		)	36,588		(1,168		)	42,353		(1,182		)
Total debt securities	$	9,342	$	(24	)	$	47,759	$	(1,437	)	$	57,101	$	(1,461	)



	December 31, 2018
	Less than Twelve Months					Twelve Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(In Thousands)	Value		Losses			Value		Losses			Value		Losses
Available for sale (AFS):
Mortgage-backed securities	$	3,023	$	(75	)	$	2,930	$	(165	)	$	5,953	$	(240	)
State and political securities	14,819		(128		)	13,648		(298		)	28,467		(426		)
Other debt securities	10,133		(153		)	34,776		(1,537		)	44,909		(1,690		)
Total debt securities	$	27,975	$	(356	)	$	51,354	$	(2,000	)	$	79,329	$	(2,356	)

At March 31, 2019, there were a total of 6 securities in a continuous unrealized loss position for less than twelve months and 36 individual securities that were in a continuous unrealized loss position for twelve months or greater.

The Company reviews its position quarterly and has determined that, at March 31, 2019, the declines outlined in the above table represent temporary declines and the Company does not intend to sell and does not believe it will be required to sell these securities before recovery of their cost basis, which may be at maturity. The Company has concluded that the unrealized losses disclosed above are not other than temporary but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period.

The amortized cost and fair value of debt securities at March 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



(In Thousands)	Amortized Cost		Fair Value
Due in one year or less	$	3,708	$	3,713
Due after one year to five years	45,818		45,010
Due after five years to ten years	69,669		70,352
Due after ten years	22,318		22,687
Total	$	141,513	$	141,762

Total gross proceeds from sales of debt securities available for sale for the three months ended March 31, 2019 was $6,986,000, an increase from the 2018 total $3,363,000.

The following table represents gross realized gains and losses from the sales of debt securities available for sale:



	Three Months Ended March 31,
(In Thousands)	2019		2018
Available for sale (AFS):
Gross realized gains:
State and political securities	$	15	$	—
Other debt securities	4		—
Total gross realized gains	$	19	$	—

Gross realized losses:
State and political securities	$	2	$	9
Other debt securities	4		—
Total gross realized losses	$	6	$	9

There were no impairment charges included in gross realized losses for the three months ended March 31, 2019 and 2018, respectively.

Investment securities with a carrying value of approximately $81,179,000 and $73,327,000 at March 31, 2019 and December 31, 2018, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.

At March 31, 2019 and December 31, 2018, we had $1,819,000 and $1,776,000, respectively, in equity securities recorded at fair value. Prior to January 1, 2018, equity securities were stated at fair value with unrealized gains and losses reported as a separate component of AOCI, net of tax. At December 31, 2017, net unrealized gains of $537,000 had been recognized in AOCI. On January 1, 2018, these unrealized gains and losses were reclassified out of AOCI and into retained earnings with subsequent changes in fair value being recognized in net equity securities gains (losses). The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2019 and 2018:



	Three Months Ended March 31,
(In Thousands)	2019		2018
Net gains (losses) recognized in equity securities during the period	$	43	$	(34	)
Less: Net gains (losses) realized on the sale of equity securities during the period	—		—
Unrealized gains (losses) recognized in equity securities held at reporting date	$	43	(34		)

Net gains and losses on trading account securities are as follows for the three months ended March 31, 2019 and 2018:



	Three Months Ended March 31,
(In Thousands)	2019		2018
Net gains (losses) on sale transactions	$	5	$	(15	)
Net mark-to-market gains (losses)	5		18
Net gain (loss) on trading account securities	$	10	$	3