4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at September 30, 2019 and December 31, 2018 are summarized as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2019	Cost		Gains		Losses		Value
Available-for-sale:
U.S. Treasury securities	$	23,963	$	120	$	17	$	24,066
U.S. Government-sponsored enterprises		92,223		107		340		91,990
State and municipals:
Taxable		21,392		346		238		21,500
Tax-exempt		60,794		920		31		61,683
Residential Mortgage-backed securities:
U.S. Government agencies		9,536		95		18		9,613
U.S. Government-sponsored enterprises		45,284		820		63		46,041
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		13,694		236				13,930
Total	$	266,886	$	2,644	$	707	$	268,823
Held-to-maturity:
Tax-exempt state and municipals	$	6,853	$	182			$	7,035
Residential Mortgage-backed securities:
U.S. Government agencies		33						33
U.S. Government-sponsored enterprises		922		27	$	1		948
Total	$	7,808	$	209	$	1	$	8,016


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2018	Cost		Gains		Losses		Value
Available-for-sale:
U.S. Treasury securities	$	25,948		9	$	365	$	25,592
U.S. Government-sponsored enterprises		94,999	$	2		2,183		92,818
State and municipals:
Taxable		13,544		309				13,853
Tax-exempt		86,361		338		745		85,954
Residential Mortgage-backed securities:
U.S. Government agencies		12,663		50		84		12,629
U.S. Government-sponsored enterprises		33,149		49		401		32,797
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises		6,269				230		6,039
Total	$	272,933	$	757	$	4,008	$	269,682
Held-to-maturity:
Tax-exempt state and municipals	$	6,855	$	12	$	43	$	6,824
Residential Mortgage-backed securities:
U.S. Government agencies		42						42
U.S. Government-sponsored enterprises		1,464		55		5		1,514
Total	$	8,361	$	67	$	48	$	8,380

Equity Securities

Our equity securities portfolio consists of stock of two other financial institutions. At September 30, 2019 and December 31, 2018, we had $297 and $291 respectively, in equity securities recorded at fair value. At September 30, 2019, the fair value of our equity portfolio exceeded the cost basis by $20. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three and nine months ended September 30, 2019 (in thousands):



Three Months Ended September 30,		2019		2018
Net gains recognized during the period on equity securities	$	14	$	14
Less: Net gains recognized during the period on equity securities sold during the period
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date	$	14	$	14


For the Nine Months Ended September 30,		2019		2018
Net gains recognized during the period on equity securities	$	6	$	14
Less: Net gains recognized during the period on equity securities sold during the period
Unrealized gains recognized during the reporting period on equity securities still held at the reporting date	$	6	$	14

Restricted Investment In Stock

Restricted investment in stock includes FHLB with a carrying cost of $4,428 and $7,420 at September 30, 2019 and December 31, 2018, respectively, Atlantic Community Bankers Bank (“ACBB”) stock with a carrying cost of $42, and VISA Class B stock with a carrying cost of $0 at September 30, 2019 and December 31, 2018, are included in other assets in the consolidated balance sheets. FHLB and ACBB stock was issued as a requirement to facilitate participation in borrowing and other banking services. The investment in FHLB stock may fluctuate, as it is based on the member bank’s use of FHLB’s services. The decrease in FHLB stock from December 31, 2018 is due to lower borrowings.

The Company owns 44,982 shares of Visa Class B stock, which was necessary to participate in Visa services in support of the Company’s credit card, debit card, and related payment programs (permissible activities under banking regulations) as a member institution. Following the resolution of Visa’s litigation, shares of Visa’s Class B stock will be converted to Visa Class A shares using a conversion factor (1.6228 as of September 30, 2019), 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 stock. Due to the lack of orderly trades and public information of such trades, Visa Class B stock has no readily determinable fair value.

These restricted investments are carried at cost and evaluated for other-than-temporary impairment (“OTTI”) periodically. As of September 30, 2019, there was no OTTI associated with these investments.

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at September 30, 2019, is summarized as follows:


	Fair
September 30, 2019	Value
Within one year	$	33,989
After one but within five years		121,112
After five but within ten years		11,846
After ten years		28,871
		195,818
Mortgage-backed and other amortizing securities		73,005
Total	$	268,823

The maturity distribution of the amortized cost and fair value, of debt securities classified as held-to-maturity at September 30, 2019, is summarized as follows:


	Amortized		Fair
September 30, 2019	Cost		Value
Within one year
After one but within five years
After five but within ten years
After ten years	$	6,853	$	7,035
		6,853		7,035
Mortgage-backed securities		955		981
Total	$	7,808	$	8,016

Securities with a carrying value of $142,963 and $161,647 at September 30, 2019 and December 31, 2018, 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 September 30, 2019 and December 31, 2018, 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 OTTI has not been recognized at September 30, 2019 and December 31, 2018, 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
September 30, 2019	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	4,524	$	2	$	5,482	$	15	$	10,006	$	17
U.S. Government-sponsored enterprises		29,242		129		38,468		211		67,710		340
State and municipals:
Taxable		8,970		238						8,970		238
Tax-exempt		6,139		29		1,101		2		7,240		31
Residential Mortgage-backed securities:
U.S. Government agencies		423		1		4,346		17		4,769		18
U.S. Government-sponsored enterprises		3,997		12		5,502		52		9,499		64
Total	$	53,295	$	411	$	54,899	$	297	$	108,194	$	708


	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2018	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury securities	$	1,995	$	2	$	19,671	$	363	$	21,666	$	365
U.S. Government-sponsored enterprises		2,037		1		89,729		2,182		91,766		2,183
State and municipals:
Tax-exempt		9,022		74		52,352		714		61,374		788
Residential Mortgage-backed securities:
U.S. Government agencies						7,800		84		7,800		84
U.S. Government-sponsored enterprises		12,851		55		13,881		351		26,732		406
Commercial Mortgage-backed securities:
U.S. Government-sponsored enterprises						6,039		230		6,039		230
Total	$	25,905	$	132	$	189,472	$	3,924	$	215,377	$	4,056

The Company had 72 investment securities, consisting of 10 tax-exempt and 9 taxable state and municipal obligations, 4 U.S. Treasury securities, 25 U.S. Government-sponsored enterprise securities, and 24 mortgage-backed securities that were in unrealized loss positions at September 30, 2019. Of these securities, 2 U.S. Treasury securities, 17 U.S. Government-sponsored enterprise securities, 2 tax-exempt state and municipal obligations, and 20 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 September 30, 2019. There was no OTTI recognized for the three or nine months ended September 30, 2019 and 2018.