4. INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses, and fair value of investment securities at December 31, 2019 and 2018 were as follows (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2019	Cost		Gains		Losses			Value
Available-for-sale securities:
U.S. Agency securities	$	83,410	$	1,523	$	(70	)	$	84,863
U.S. Treasuries		27,394		267		-			27,661
Obligations of state and
political subdivisions		60,667		865		(77	)		61,455
Corporate obligations		3,250		78		-			3,328
Mortgage-backed securities in
government sponsored entities		63,086		468		(155	)		63,399
Total available-for-sale securities	$	237,807	$	3,201	$	(302	)	$	240,706

				Gross		Gross
		Amortized		Unrealized		Unrealized			Fair
December 31, 2018		Cost		Gains		Losses			Value
Available-for-sale securities:
U.S. Agency securities	$	106,516	$	509	$	(640	)	$	106,385
U.S. Treasuries		33,813		-		(455	)		33,358
Obligations of state and
political subdivisions		52,074		150		(177	)		52,047
Corporate obligations		3,000		34		-			3,034
Mortgage-backed securities in
government sponsored entities		46,839		59		(712	)		46,186
Total available-for-sale securities	$	242,242	$	752	$	(1,984	)	$	241,010

The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at December 31, 2019 and 2018 (in thousands). As of December 31, 2019, the Company owned 46 securities each of whose fair value was less than its cost basis.

	Less than Twelve Months					Twelve Months or Greater					Total
			Gross					Gross					Gross
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
2019	Value		Losses			Value		Losses			Value		Losses
U.S. agency securities	$	14,587	$	(63	)	$	13,094	$	(7	)	$	27,681	$	(70	)
U.S. Treasuries		-		-			-		-			-		-
Obligations of states and
political subdivisions		7,508		(75	)		1,507		(2	)		9,015		(77	)
Corporate obligations		-		-			-		-			-		-
Mortgage-backed securities in
government sponsored entities		27,737		(97	)		9,559		(58	)		37,296		(155	)
Total securities	$	49,832	$	(235	)	$	24,160	$	(67	)	$	73,992	$	(302	)

2018
U.S. agency securities	$	5,981	$	(5	)	$	52,673	$	(635	)	$	58,654	$	(640	)
U.S. Treasuries		4,948		(31	)		28,410		(424	)		33,358		(455	)
Obligations of states and
political subdivisions		8,979		(22	)		12,441		(155	)		21,420		(177	)
Corporate obligations		-		-			-		-			-		-
Mortgage-backed securities in
government sponsored entities		5,272		(18	)		32,570		(694	)		37,842		(712	)
Total securities	$	25,180	$	(76	)	$	126,094	$	(1,908	)	$	151,274	$	(1,984	)

As of December 31, 2019, the Company’s investment securities portfolio contained unrealized losses on agency securities issued or backed by the full faith and credit of the United States government or are generally viewed as having the implied guarantee of the U.S. government, obligations of states and political subdivisions and mortgage backed securities in government sponsored entities. For fixed maturity available for sale investments management considers whether the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference defined as the credit loss), the magnitude and duration of the decline, the reasons underlying the decline and the Company’s intent to sell the security or whether it is more likely than not that the Company would be required to sell the security before its anticipated recovery in market value, to determine whether the loss in value is other than temporary. Once a decline in value is determined to be other than temporary, if the Company does not intend to sell the security, and it is more-likely-than-not that it will not be required to sell the security, before recovery of the security’s amortized cost basis, the charge to earnings is limited to the amount of credit loss. Any remaining difference between fair value and amortized cost (the difference defined as the non-credit portion) is recognized in other comprehensive income, net of applicable taxes. Otherwise, the entire difference between fair value and amortized cost is charged to earnings. As of December 31, 2019 and 2018, the Company had concluded that any impairment of its investment securities portfolio outlined in the above table is not other than temporary and is the result of interest rate changes, sector credit rating changes, or company-specific rating changes that are not expected to result in the non-collection of principal and interest during the period.

Proceeds from sales of securities available-for-sale during 2019, 2018 and 2017 were $10,489,000, $27,149,000 and $58,177,000, respectively. The gross gains realized during 2019 consisted of $1,000 and $24,000 from the sales of two agency securities and four treasury securities, respectively. The gross losses realized during 2019 consisted of $1,000 from the sale of one agency security. The gross gains realized during 2018 consisted of $160,000 from the sale of fourteen municipal securities. The gross losses realized during 2018 consisted of $179,000 from the sale of seven agency securities. The gross gains realized during 2017 consisted of $23,000, $20,000, $13,000 and $1,149,000 from the sales of ten agency securities, one mortgage backed security, thirteen interest bearing time deposits with other banks and five equity security positions, respectively. The gross losses realized during 2017 consisted of $170,000 from the sale of fourteen agency securities. Gross gains and gross losses were realized as follows on available for sale securities (in thousands):

	2019			2018			2017
Gross gains	$	25		$	160		$	1,205
Gross losses		(1	)		(179	)		(170	)
Net (losses) gains	$	24		$	(19	)	$	1,035

The following table presents the net gains on the Company’s equity investments recognized in earnings during 2019 and 2018 and the portion of unrealized gains for the period that relates to equity investments held at December 31, 2019 and 2018 (in thousands):

Equity Securities	2019		2018
Net gains recognized in equity securities during the period	$	120	$	-
Less: Net gains realized on the sale of equity securities during the period		-		-
Net unrealized gains	$	120	$	-

Investment securities with an approximate carrying value of $209,096,000 and $221,191,000 at December 31, 2019 and 2018, respectively, were pledged to secure public funds and certain other deposits as provided by law and certain borrowing arrangements of the Company.

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost and fair value of debt securities at December 31, 2019, by contractual maturity are shown below (in thousands). Municipal securities that have been refunded and will therefore pay-off on the call date are reflected in the table below utilizing the call date as the date of repayment as payment is guaranteed on that day:

	Amortized
	Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	24,612	$	24,626
Due after one year through five years		79,537		81,217
Due after five years through ten years		42,306		42,728
Due after ten years		91,352		92,135
Total	$	237,807	$	240,706