4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at March 31, 2018 and December 31, 2017 are summarized as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
March 31, 2018	Cost		Gains		Losses		Value
Available-for-sale:
U.S. Treasury securities	$	25,927	$	7	$	458	$	25,476
U.S. Government-sponsored enterprises		95,268		6		2,777		92,497
State and municipals:
Taxable		14,525		383				14,908
Tax-exempt		97,705		864		875		97,694
Residential Mortgage-backed securities:
U.S. Government agencies		13,135		1		106		13,030
U.S. Government-sponsored enterprises		22,127		3		397		21,733
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		6,303				263		6,040
Total	$	274,990	$	1,264	$	4,876	$	271,378
Held-to-maturity:
Tax-exempt state and municipals	$	6,858	$	24	$	57	$	6,825
Residential Mortgage-backed securities:
U.S. Government agencies		51						51
U.S. Government-sponsored enterprises		2,119		114		5		2,228
Total	$	9,028	$	138	$	62	$	9,104


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017	Cost		Gains		Losses		Value
Available-for-sale:
U.S. Treasury securities	$	20,042			$	228	$	19,814
U.S. Government-sponsored enterprises		95,358	$	30		1,740		93,648
State and municipals:
Taxable		14,559		488				15,047
Tax-exempt		103,199		1,136		502		103,833
Residential Mortgage-backed securities:
U.S. Government agencies		14,517		2		85		14,434
U.S. Government-sponsored enterprises		19,752		10		231		19,531
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		6,315				120		6,195
Equity securities
Common		43		3				46
Total	$	273,785	$	1,669	$	2,906	$	272,548
Held-to-maturity:
Tax-exempt state and municipals	$	6,859	$	152	$	13	$	6,998
Residential Mortgage-backed securities:
U.S. Government agencies		54						54
U.S. Government-sponsored enterprises		2,361		138		4		2,495
Total	$	9,274	$	290	$	17	$	9,547

Equity Securities

Our equity securities portfolio consists of stock of two other financial institutions. At March 31, 2018 and December 31, 2017, we had $189 thousand and $46 thousand, 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 $3 thousand 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 income. 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, 2018 (in thousands):


		Three months ended
March 31, 2018		March 31, 2018
Net gains and (losses) recognized during the period on equity securities	$	(8)
Less: Net gains and (losses) recognized during the period on equity securities sold during the period
Unrealized gains and (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(8)

Restricted Investment In Stock

Restricted investment in stock includes Federal Home Loan Bank of Pittsburgh (FHLB) with a carrying cost of $10,189, Atlantic Community Bankers Bank (ACBB) stock with a carrying cost of $42 and VISA Class B stock with a carry cost of $0 at March 31, 2018. FHLB and ACBB stock was issued to the Bank as a requirement to facilitate the Bank’s participation in borrowing and other banking services. The Bank’s investment in FHLB stock may fluctuate, as it is based on the member banks’ use of FHLB’s services.

The Bank owns 44,982 shares of Visa Class B stock, which was necessary to participate in Visa services in support of the Bank’s credit card, debit card, and related payment programs (permissible activities under banking regulations) as a member institution. Following the resolution of Visa’s covered litigation, shares of Visa’s Class B stock will be converted to Visa Class A shares using a conversion factor (1.6483 as of March 31, 2018), which is periodically adjusted to reflect VISA’s ongoing litigation costs. There is a very limited market for this stock, as only current owners of Class B shares are permitted to transact in Class B. Due to the lack of orderly trades and public information of such trades, Visa Class B’s is difficult to value.

These restricted investments are carried at cost and evaluated for OTTI periodically. As of March 31, 2018, there was no OTTI associated with these shares.

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at March 31, 2018, is summarized as follows:


	Fair
March 31, 2018	Value
Within one year	$	17,927
After one but within five years		164,920
After five but within ten years		32,389
After ten years		15,339
		230,575
Mortgage-backed securities		40,803
Total	$	271,378

The maturity distribution of the amortized cost and fair value, of debt securities classified as held-to-maturity at March 31, 2018, is summarized as follows:


	Amortized		Fair
March 31, 2018	Cost		Value
Within one year
After one but within five years
After five but within ten years
After ten years	$	6,858	$	6,825
		6,858		6,825
Mortgage-backed securities		2,170		2,279
Total	$	9,028	$	9,104

Securities with a carrying value of $156,522 and $163,936 at March 31, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and certain other deposits as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At March 31, 2018 and December 31, 2017, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. Government agencies and sponsored enterprises that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an other-than-temporary impairment (“OTTI”) has not been recognized at March 31, 2018 and December 31, 2017, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:


	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
March 31, 2018	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	19,143	$	366	$	2,429	$	92	$	21,572	$	458
U.S. Government-sponsored enterprises		39,607		950		50,763		1,827		90,370		2,777
State and municipals:
Tax-exempt		61,928		844		4,109		88		66,037		932
Residential Mortgage-backed securities:
U.S. Government agencies		9,190		54		3,592		52		12,782		106
U.S. Government-sponsored enterprises		15,644		257		5,429		145		21,073		402
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		6,303		263						6,303		263
Total	$	151,815	$	2,734	$	66,322	$	2,204	$	218,137	$	4,938


	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2017	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	17,350	$	170	$	2,464	$	58	$	19,814	$	228
U.S. Government-sponsored enterprises		39,096		445		51,365		1,295		90,461		1,740
State and municipals:
Tax-exempt		54,788		454		3,808		61		58,596		515
Residential Mortgage-backed securities:
U.S. Government agencies		9,484		39		3,968		46		13,452		85
U.S. Government-sponsored enterprises		12,537		103		6,504		132		19,041		235
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		6,195		120						6,195		120
Total	$	139,450	$	1,331	$	68,109	$	1,592	$	207,559	$	2,923

The Company had 198 investment securities, consisting of 114 tax-exempt state and municipal obligations, eight U.S. Treasury securities, 36 U.S. Government-sponsored enterprise securities, and 40 mortgage-backed securities that were in unrealized loss positions at March 31, 2018. Of these securities, one U.S. Treasury security, 20 U.S. Government-sponsored enterprise securities, eight tax-exempt state and municipal obligations, and 16 mortgage-backed securities were in a continuous unrealized loss position for twelve months or more. Management does not consider the unrealized losses on the debt securities, as a result of changes in interest rates, to be OTTI based on historical evidence that indicates the cost of these securities is recoverable within a reasonable period of time in relation to normal cyclical changes in the market rates of interest. Moreover, because there has been no material change in the credit quality of the issuers or other events or circumstances that may cause a significant adverse impact on the fair value of these securities, and management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the unrealized losses to be OTTI at March 31, 2018. There was no OTTI recognized for the three months ended March 31, 2018 and 2017.