(4.) INVESTMENT SECURITIES

The amortized cost and fair value of investment securities are summarized below (in thousands):


		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
March 31, 2018
Securities available for sale:
U.S. Government agency and government
sponsored enterprises	$	162,610	$	18	$	3,812	$	158,816
Mortgage-backed securities:
Federal National Mortgage Association		307,972		83		7,922		300,133
Federal Home Loan Mortgage Corporation		40,078		34		1,361		38,751
Government National Mortgage Association		11,258		131		72		11,317
Collateralized mortgage obligations:
Federal National Mortgage Association		186		-		-		186
Federal Home Loan Mortgage Corporation		43		-		-		43
Privately issued		-		951		-		951
Total mortgage-backed securities		359,537		1,199		9,355		351,381
Total available for sale securities	$	522,147	$	1,217	$	13,167	$	510,197
Securities held to maturity:
State and political subdivisions		279,085		1,303		1,721		278,667
Mortgage-backed securities:
Federal National Mortgage Association		9,503		-		289		9,214
Federal Home Loan Mortgage Corporation		3,193		-		193		3,000
Government National Mortgage Association		26,271		-		840		25,431
Collateralized mortgage obligations:
Federal National Mortgage Association		72,584		-		2,649		69,935
Federal Home Loan Mortgage Corporation		89,871		-		3,297		86,574
Government National Mortgage Association		21,398		-		718		20,680
Total mortgage-backed securities		222,820		-		7,986		214,834
Total held to maturity securities	$	501,905	$	1,303	$	9,707	$	493,501


December 31, 2017
Securities available for sale:
U.S. Government agency and government
sponsored enterprises	$	163,025	$	122	$	1,258	$	161,889
Mortgage-backed securities:
Federal National Mortgage Association		311,830		313		3,220		308,923
Federal Home Loan Mortgage Corporation		41,290		76		675		40,691
Government National Mortgage Association		12,051		193		12		12,232
Collateralized mortgage obligations:
Federal National Mortgage Association		217		1		1		217
Federal Home Loan Mortgage Corporation		45		-		-		45
Privately issued		-		976		-		976
Total mortgage-backed securities		365,433		1,559		3,908		363,084
Total available for sale securities	$	528,458	$	1,681	$	5,166	$	524,973

		Amortized		Unrealized		Unrealized		Fair
		Cost		Gains		Losses		Value
December 31, 2017 (continued)
Securities held to maturity:
State and political subdivisions		283,557		2,317		662		285,212
Mortgage-backed securities:
Federal National Mortgage Association		9,732		16		88		9,660
Federal Home Loan Mortgage Corporation		3,213		-		119		3,094
Government National Mortgage Association		26,841		-		330		26,511
Collateralized mortgage obligations:
Federal National Mortgage Association		76,432		-		1,958		74,474
Federal Home Loan Mortgage Corporation		93,810		3		2,165		91,648
Government National Mortgage Association		22,881		5		502		22,384
Total mortgage-backed securities		232,909		24		5,162		227,771
Total held to maturity securities	$	516,466	$	2,341	$	5,824	$	512,983

Investment securities with a total fair value of $898.4 million and $838.4 million at March 31, 2018 and December 31, 2017, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.

Sales and calls of securities available for sale were as follows (in thousands):


	Three months ended
	March 31,
		2018		2017
Proceeds from sales	$	-	$	12,350
Gross realized gains		-		206
Gross realized losses		-		-

The scheduled maturities of securities available for sale and securities held to maturity at March 31, 2018 are shown below (in thousands). Actual expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.


		Amortized		Fair
		Cost		Value
Debt securities available for sale:
Due in one year or less	$	4,996	$	4,969
Due from one to five years		151,747		149,200
Due after five years through ten years		258,466		251,415
Due after ten years		106,938		104,613
	$	522,147	$	510,197
Debt securities held to maturity:
Due in one year or less	$	55,255	$	55,295
Due from one to five years		161,111		162,153
Due after five years through ten years		103,311		100,349
Due after ten years		182,228		175,704
	$	501,905	$	493,501

Unrealized losses on investment 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, were as follows (in thousands):


		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
March 31, 2018
Securities available for sale:
U.S. Government agency and government
sponsored enterprises	$	124,166	$	2,539	$	30,944	$	1,273	$	155,110	$	3,812
Mortgage-backed securities:
Federal National Mortgage Association		226,028		5,855		65,749		2,067		291,777		7,922
Federal Home Loan Mortgage Corporation		22,258		597		14,941		764		37,199		1,361
Government National Mortgage Association		4,688		66		837		6		5,525		72
Collateralized mortgage obligations:
Federal National Mortgage Association		-		-		95		-		95		-
Federal Home Loan Mortgage Corporation		-		-		7		-		7		-
Total mortgage-backed securities		252,974		6,518		81,629		2,837		334,603		9,355
Total available for sale securities		377,140		9,057		112,573		4,110		489,713		13,167
Securities held to maturity:
State and political subdivisions		86,593		1,062		14,294		659		100,887		1,721
Mortgage-backed securities:
Federal National Mortgage Association		6,604		164		2,610		125		9,214		289
Federal Home Loan Mortgage Corporation		-		-		3,000		193		3,000		193
Government National Mortgage Association		15,403		424		10,028		416		25,431		840
Collateralized mortgage obligations:
Federal National Mortgage Association		18,080		426		51,855		2,223		69,935		2,649
Federal Home Loan Mortgage Corporation		21,491		664		65,083		2,633		86,574		3,297
Government National Mortgage Association		11,448		387		9,232		331		20,680		718
Total mortgage-backed securities		73,026		2,065		141,808		5,921		214,834		7,986
Total held to maturity securities		159,619		3,127		156,102		6,580		315,721		9,707
Total temporarily impaired securities	$	536,759	$	12,184	$	268,675	$	10,690	$	805,434	$	22,874

December 31, 2017
Securities available for sale:
U.S. Government agencies and government
sponsored enterprises	$	95,046	$	571	$	31,561	$	687	$	126,607	$	1,258
Mortgage-backed securities:
Federal National Mortgage Association		201,754		1,855		67,383		1,365		269,137		3,220
Federal Home Loan Mortgage Corporation		20,446		192		15,601		483		36,047		675
Government National Mortgage Association		2,432		-		880		12		3,312		12
Collateralized mortgage obligations:
Federal National Mortgage Association		-		-		119		1		119		1
Federal Home Loan Mortgage Corporation		-		-		8		-		8		-
Total mortgage-backed securities		224,632		2,047		83,991		1,861		308,623		3,908
Total available for sale securities		319,678		2,618		115,552		2,548		435,230		5,166

		Less than 12 months				12 months or longer				Total
		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
		Value		Losses		Value		Losses		Value		Losses
December 31, 2017 (continued)
Securities held to maturity:
State and political subdivisions		36,368		295		14,492		367		50,860		662
Mortgage-backed securities:
Federal National Mortgage Association		3,766		29		2,694		59		6,460		88
Federal Home Loan Mortgage Corporation		-		-		3,094		119		3,094		119
Government National Mortgage Association		17,327		136		9,184		194		26,511		330
Collateralized mortgage obligations:
Federal National Mortgage Association		16,830		202		57,645		1,756		74,475		1,958
Federal Home Loan Mortgage Corporation		23,727		337		66,467		1,828		90,194		2,165
Government National Mortgage Association		15,401		340		5,635		162		21,036		502
Total mortgage-backed securities		77,051		1,044		144,719		4,118		221,770		5,162
Total held to maturity securities		113,419		1,339		159,211		4,485		272,630		5,824
Total temporarily impaired securities	$	433,097	$	3,957	$	274,763	$	7,033	$	707,860	$	10,990

The total number of security positions in the investment portfolio in an unrealized loss position at March 31, 2018 was 621 compared to 411 at December 31, 2017. At March 31, 2018, the Company had positions in 175 investment securities with a fair value of $268.7 million and a total unrealized loss of $10.7 million that have been in a continuous unrealized loss position for more than 12 months. At March 31, 2018, there were a total of 446 securities positions in the Company's investment portfolio with a fair value of $536.8 million and a total unrealized loss of $12.2 million that had been in a continuous unrealized loss position for less than 12 months. At December 31, 2017, the Company had positions in 172 investment securities with a fair value of $274.8 million and a total unrealized loss of $7.0 million that had been in a continuous unrealized loss position for more than 12 months. At December 31, 2017, there were a total of 239 securities positions in the Company's investment portfolio with a fair value of $433.1 million and a total unrealized loss of $4.0 million that had been in a continuous unrealized loss position for less than 12 months. The unrealized loss on investment securities was predominantly caused by changes in market interest rates subsequent to purchase. The fair value of most of the investment securities in the Company's portfolio fluctuates as market interest rates change.

The Company reviews investment securities on an ongoing basis for the presence of other than temporary impairment ("OTTI") with formal reviews performed quarterly. When evaluating debt securities for OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intention to sell the debt security or whether it is more likely than not that it will be required to sell the debt security before its anticipated recovery. The assessment of whether OTTI exists involves a high degree of subjectivity and judgment and is based on the information then available to management. There was no impairment recorded during the three months ended March 31, 2018 and 2017.

Based on management's review and evaluation of the Company's debt securities as of March 31, 2018, the debt securities with unrealized losses were not considered to be OTTI. As of March 31, 2018, the Company did not intend to sell any of the securities in a loss position and believes that it is not likely that it will be required to sell any such securities before the anticipated recovery of amortized cost. Accordingly, as of March 31, 2018, management has concluded that unrealized losses on its investment securities are temporary and no further impairment loss has been realized in the Company's consolidated statements of income.