NOTE D – SECURITIES

The following table summarizes the amortized cost and fair value of securities available-for-sale and securities held-to-maturity at December 31, 2019 and 2018 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value
Available-for-sale securities:
U.S Treasury	$	4,967	$	—	$	73	$	4,894
Obligations of U.S. government agencies and sponsored entities		76,699		1,475		224		77,950
Tax-exempt and taxable obligations of states and municipal subdivisions		253,527		5,602		147		258,982
Mortgage-backed securities – residential		263,229		4,726		107		267,848
Mortgage-backed securities – commercial		125,292		2,398		223		127,467
Corporate obligations		27,877		218		149		27,946
Total available-for-sale	$	751,591	$	14,419	$	923	$	765,087


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
($ in thousands)	Cost		Gains		Losses		Value
Available-for-sale securities:
Obligations of U.S. government agencies and sponsored entities	$	47,212	$	405	$	275	$	47,342
Tax-exempt and taxable obligations of states and municipal subdivisions		150,215		1,070		1,221		150,064
Mortgage-backed securities – residential		250,132		727		3,407		247,452
Mortgage-backed securities – commercial		39,613		444		39		40,018
Corporate obligations		7,518		15		185		7,348
Total available-for-sale	$	494,690	$	2,661	$	5,127	$	492,224

Held-to-maturity securities:

Taxable obligations of states and municipal subdivisions	$	6,000	$	1,028	$	—	$	7,028
Total held-to-maturity	$	6,000	$	1,028	$	—	$	7,028

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


($ in thousands)	December 31, 2019
	Amortized		Fair
Available-for-Sale	Cost		Value

Within one year	$	30,141	$	30,303
One to five years		80,119		81,372
Five to ten years		143,811		148,085
Beyond ten years		108,999		110,012
Mortgage-backed securities: residential		263,229		267,848
Mortgage-backed securities: commercial		125,292		127,467
Total	$	751,591	$	765,087

The proceeds from sales and calls of securities and the associated gains and losses are listed below:


($ in thousands)	2019		2018		2017
Gross gains	$	147	$	880	$	5
Gross losses		25		546		21
Realized net gain (loss)	$	122	$	334	$	(16)

Securities with a carrying value of $447.0 million and $411.9 million at December 31, 2019 and 2018, respectively, were pledged to secure public deposits, repurchase agreements, and for other purposes as required or permitted by law.

The following table summarizes available-for-sale securities with unrealized and unrecognized losses at December 31, 2019 and December 31, 2018, aggregated by major security type and length of time in a continuous unrealized or unrecognized loss position:


	2019
	Less than 12 Months				12 Months or Longer				Total

	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
($ in thousands)	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury	$	—	$	—	$	4,894	$	73	$	4,894	$	73
Obligations of U.S. government agencies and sponsored entities		—		—		22,987		224		22,987		224
Tax-exempt and taxable obligations of states and municipal subdivisions		—		—		28,235		147		28,235		147
Mortgage-backed securities: residential		—		—		29,930		107		29,930		107
Mortgage-backed securities: commercial		9,306		16		19,130		207		28,436		223
Corporate obligations		500		—		10,572		149		11,072		149
Total available-for-sale	$	9,806	$	16	$	115,748	$	907	$	125,554	$	923


	2018
	Less than 12 Months				12 Months or Longer				Total

	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Obligations of U.S. government agencies and sponsored entities	$	11,034	$	52	$	7,838	$	223	$	18,872	$	275
Tax-exempt and taxable obligations of states and municipal subdivisions		38,200		311		42,102		910		80,302		1,221
Mortgage-backed securities		93,294		843		101,005		2,603		194,299		3,446
Corporate obligations		1,962		40		4,969		145		6,931		185
Total available-for-sale	$	144,490	$	1,246	$	155,914	$	3,881	$	300,404	$	5,127

At December 31, 2019 and December 31, 2018, the Company’s security portfolio consisted of 156 and 427 securities, respectively, that were in an unrealized loss position. The Company reviews its investment portfolio quarterly for indications of other-than-temporary impairment (“OTTI”), with attention given to securities in a continuous loss position of at least ten percent for over twelve months. Management believes that none of the losses on available-for-sale securities noted above constitute an OTTI and does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The noted losses are considered temporary due to market fluctuations in available interest rates. Management considers the issuers of the securities to be financially sound, the corporate bonds are investment grade, and the collectability of all contractual principal and interest payments is reasonably expected. No OTTI losses were recognized at December 31, 2019 and 2018.

On January 1, 2018, the Company adopted the new accounting standard for Financial Instruments, which requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with the changes in fair value recognized in net income. The adoption of this guidance in 2018 resulted in a $348 thousand decrease to retained earnings.