(4) Investment Securities

Available for sale securities

The amortized cost and fair value of debt securities classified as available-for-sale at March 31, 2019 and December 31, 2018 were as follows:


	Total
	Amortized		Gross Unrealized				Fair
(in thousands)	Cost		Gains		Losses		Value
March 31, 2019
U.S. Treasury	$	2,666	$	—	$	(11)	$	2,655
U.S. government and federal agency obligations		9,745		—		(230)		9,515
Government sponsored enterprises		39,790		43		(279)		39,554
Obligations of states and political subdivisions		38,408		67		(239)		38,236
Mortgage-backed securities		126,072		125		(1,954)		124,243
Other debt securities (a)		3,000		—		(1)		2,999
Bank issued trust preferred securities (a)		1,486		—		(149)		1,337
Total available-for-sale securities	$	221,167	$	235	$	(2,863)	$	218,539

December 31, 2018
U.S. Treasury	$	1,984	$	—	$	(32)	$	1,952
U.S. government and federal agency obligations		10,235		—		(269)		9,966
Government sponsored enterprises		43,784		23		(472)		43,335
Obligations of states and political subdivisions		40,859		28		(501)		40,386
Mortgage-backed securities		121,230		72		(3,110)		118,192
Other debt securities (a)		3,000		—		—		3,000
Bank issued trust preferred securities (a)		1,486		—		(112)		1,374
Total available-for-sale securities	$	222,578	$	123	$	(4,496)	$	218,205

(a) Certain hybrid instruments possessing characteristics typically associated with debt obligations.

The Company’s investment securities are classified as available for sale. Agency bonds and notes, Small Business Administration guaranteed loan certificates (SBA), residential and commercial agency mortgage-backed securities, and agency collateralized mortgage obligations (CMO) include securities issued by the Government National Mortgage Association (GNMA), a U.S. government agency, and the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC), and the Federal Home Loan Bank (FHLB), which are U.S. government-sponsored enterprises.

Debt securities with carrying values aggregating approximately $176.0 million and $153.0 million at March 31, 2019 and December 31, 2018, respectively, were pledged to secure public funds, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.

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


	Amortized		Fair
(in thousands)	Cost		Value
Due in one year or less	$	21,449	$	21,361
Due after one year through five years		53,793		53,389
Due after five years through ten years		11,409		11,285
Due after ten years		8,444		8,261
Total		95,095		94,296
Mortgage-backed securities		126,072		124,243
Total available-for-sale securities	$	221,167	$	218,539

Other securities

Other investment securities include equity securities with readily determinable fair values and other investment securities that do not have readily determinable fair values. Investments in Federal Home Loan Bank (FHLB) stock, and Midwest Independent Bank (MIB) bankers bank stock, that do not have readily determinable fair values, are required for membership in those organizations.


(in thousands)	March 31, 2019		December 31, 2018
Other securities:
FHLB stock	$	5,571	$	5,512
MIB stock		151		151
Equity securities with readily determinable fair values		13		12
Total other investment securities	$	5,735	$	5,675

Gross unrealized losses on debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at March 31, 2019 and December 31, 2018 were as follows:


	Less than 12 months				12 months or more				Total		Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(in thousands)	Value		Losses		Value		Losses		Value		Losses
At March 31, 2019
U.S. Treasury	$	—	$	—	$	1,974	$	(11)	$	1,974	$	(11)
U.S. government and federal agency obligations		—		—		9,515		(230)		9,515		(230)
Government sponsored enterprises		500		—		32,036		(279)		32,536		(279)
Obligations of states and political subdivisions		4,042		(14)		21,790		(225)		25,832		(239)
Mortgage-backed securities		11,589		(72)		93,328		(1,882)		104,917		(1,954)
Other debt securities		2,999		(1)		—		—		2,999		(1)
Bank issued trust preferred securities		—		—		1,337		(149)		1,337		(149)
Total	$	19,130	$	(87)	$	159,980	$	(2,776)	$	179,110	$	(2,863)

(in thousands)
At December 31, 2018
U.S. Treasury	$	—	$	—	$	1,952	$	(32)	$	1,952	$	(32)
U.S. government and federal agency obligations		—		—		9,966		(269)		9,966		(269)
Government sponsored enterprises		1,997		(3)		33,346		(469)		35,343		(472)
Obligations of states and political subdivisions		5,851		(16)		28,832		(485)		34,683		(501)
Mortgage-backed securities		10,085		(61)		99,321		(3,049)		109,406		(3,110)
Bank issued trust preferred securities		—		—		1,374		(112)		1,374		(112)
Total	$	17,933	$	(80)	$	174,791	$	(4,416)	$	192,724	$	(4,496)

The total available for sale portfolio consisted of approximately 353 securities at March 31, 2019. The portfolio included 258 securities having an aggregate fair value of $179.1 million that were in a loss position at March 31, 2019. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer totaled $160.0 million at fair value. The $2.9 million aggregate unrealized loss included in accumulated other comprehensive income at March 31, 2019 was caused by interest rate fluctuations.

The total available for sale portfolio consisted of approximately 366 securities at December 31, 2018. The portfolio included 317 securities having an aggregate fair value of $192.7 million that were in a loss position at December 31, 2018. Securities identified as temporarily impaired which had been in a loss position for 12 months or longer had a fair value of $174.8 million at December 31, 2018. The $4.5 million aggregate unrealized loss included in accumulated other comprehensive loss at December 31, 2018 was caused by interest rate fluctuations.

Because the decline in fair value is attributable to changes in interest rates and not credit quality, these investments were not considered other-than-temporarily impaired at March 31, 2019 and December 31, 2018, respectively. In the absence of changes in credit quality of these investments, the fair value is expected to recover on all debt securities as they approach their maturity date or re-pricing date, or if market yields for such investments decline. In addition, the Company does not have the intent to sell these investments over the period of recovery, and it is not more likely than not that the Company will be required to sell such investment securities.

The table presents the components of investment securities gains and losses, which have been recognized in earnings:


	Three Months Ended March 31,
(in thousands)	2019		2018
Investment securities gains, net
Available for sale securities:
Gains realized on sales	$	—	$	98
Losses realized on sales		—		—
Other-than-temporary impairment recognized		—		—
Other investment securities:
Fair value adjustments, net		1		—
Investment securities gains, net	$	1	$	98

During the three months ended March 31, 2018, the Company received $25.7 million from proceeds from a series of short-term sales of U.S. Treasury securities purchased with repurchase agreements and recognized gains of $98,000 in order to generate capital gains to offset capital losses that were to expire during 2018 and 2019. There were no security sales during the three months ended March 31, 2019.