AFS Securities

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:



	March 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Government sponsored enterprises	$	205	$	—	$	3	$	202
States and political subdivisions	209,788		2,240		395		211,633
Auction rate money market preferred	3,200		—		188		3,012
Mortgage-backed securities	212,713		103		5,955		206,861
Collateralized mortgage obligations	129,095		73		3,114		126,054
Total	$	555,001	$	2,416	$	9,655	$	547,762



	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Government sponsored enterprises	$	217	$	—	$	1	$	216
States and political subdivisions	204,131		4,486		143		208,474
Auction rate money market preferred	3,200		—		151		3,049
Mortgage-backed securities	210,757		390		2,350		208,797
Collateralized mortgage obligations	129,607		160		1,573		128,194
Total	$	547,912	$	5,036	$	4,218	$	548,730

The amortized cost and fair value of AFS securities by contractual maturity at March 31, 2018 are as follows:



	Maturing								Securities with Variable Monthly Payments or Noncontractual Maturities
	Due in One Year or Less		After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years				Total
Government sponsored enterprises	$	—	$	205	$	—	$	—	$	—	$	205
States and political subdivisions	24,933		79,352		71,772		33,731		—		209,788
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		212,713		212,713
Collateralized mortgage obligations	—		—		—		—		129,095		129,095
Total amortized cost	$	24,933	$	79,557	$	71,772	$	33,731	$	345,008	$	555,001
Fair value	$	24,968	$	80,351	$	72,692	$	33,824	$	335,927	$	547,762

Expected maturities for government sponsored enterprises and states and political subdivisions may differ from contractual maturities because issuers may have the right to call or prepay obligations.

As the auction rate money market preferred stocks have continual call dates, they are not reported by a specific maturity group. Because of their variable monthly payments, mortgage-backed securities and collateralized mortgage obligations are not reported by a specific maturity group.

The following information pertains to AFS securities with gross unrealized losses at March 31, 2018 and December 31, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position.



	March 31, 2018
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Government sponsored enterprises	$	3	$	202	$	—	$	—	$	3
States and political subdivisions	395		32,838		—		150		395
Auction rate money market preferred	—		—		188		3,012		188
Mortgage-backed securities	2,756		121,210		3,199		71,928		5,955
Collateralized mortgage obligations	1,998		96,415		1,116		23,922		3,114
Total	$	5,152	$	250,665	$	4,503	$	99,012	$	9,655
Number of securities in an unrealized loss position:			151				24		175



	December 31, 2017
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
Government sponsored enterprises	$	1	$	216	$	—	$	—	$	1
States and political subdivisions	142		16,139		1		188		143
Auction rate money market preferred	—		—		151		3,049		151
Mortgage-backed securities	454		72,007		1,896		76,065		2,350
Collateralized mortgage obligations	701		76,435		872		25,308		1,573
Total	$	1,298	$	164,797	$	2,920	$	104,610	$	4,218
Number of securities in an unrealized loss position:			81				24		105

As of March 31, 2018 and December 31, 2017, we conducted an analysis to determine whether any AFS securities currently in an unrealized loss position should be other-than-temporarily impaired. Such analyses considered, among other factors, the following criteria:


•	Has the value of the investment declined more than what is deemed to be reasonable based on a risk and maturity adjusted discount rate?


•	Is the investment credit rating below investment grade?


•	Is it probable the issuer will be unable to pay the amount when due?


•	Is it more likely than not that we will have to sell the security before recovery of its cost basis?


•	Has the duration of the investment been extended?

During the fourth quarter of 2016, we identified one municipal bond as other-than-temporarily impaired. While management estimated the OTTI to be realized, we also engaged the services of an independent investment valuation firm to estimate the amount of impairment as of December 31, 2016. The valuation calculated the estimated market value utilizing two different approaches:

1) Market - Appraisal and Comparable Investments

2) Income - Discounted Cash Flow Method

The two methods were then weighted, with a higher weighting applied to the Market approach, to determine the estimated impairment. As a result of this analysis, we reduced the carrying value to $230 which required us to recognized an OTTI of $770 in earnings for the year ended December 31, 2016. Based on internal analysis of this bond as of March 31, 2018, there was no additional OTTI recognized as of March 31, 2018 and the carrying value of this bond remained at $230.

The following table provides a roll-forward of credit related impairment recorded in earnings for the:



	Three Months Ended March 31
	2018		2017
Balance at beginning of the period	$	770	$	770
Additions to credit losses for which no previous OTTI was recognized	—		—
Reductions for credit losses realized on securities sold during the period	—		—
Balance at end of the period	$	770	$	770

Based on our analysis which included the criteria outlined above, the fact that we have asserted that we do not have the intent to sell AFS securities in an unrealized loss position, and considering it is unlikely that we will have to sell any AFS securities in an unrealized loss position before recovery of their cost basis, we do not believe that the values of any other AFS securities are other-than-temporarily impaired as of March 31, 2018 or December 31, 2017, with the exception of the one municipal bond discussed above.