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AFS Securities | 9 Months Ended
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Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract] |
AFS Securities | AFS Securities The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows at:
| September 30, 2018
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Government sponsored enterprises | $ | 184 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 180 |
States and political subdivisions | 193,195 |  |  | 1,328 |  |  | 566 |  |  | 193,957 |
Auction rate money market preferred | 3,200 |  |  | — |  |  | 92 |  |  | 3,108 |
Mortgage-backed securities | 196,194 |  |  | 21 |  |  | 8,079 |  |  | 188,136 |
Collateralized mortgage obligations | 120,096 |  |  | 17 |  |  | 4,355 |  |  | 115,758 |
Total | $ | 512,869 |  |  | $ | 1,366 |  |  | $ | 13,096 |  |  | $ | 501,139 |
| 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 September 30, 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 | $ | — |  |  | $ | 184 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 184 |
States and political subdivisions | 22,802 |  |  | 80,091 |  |  | 61,348 |  |  | 28,954 |  |  | — |  |  | 193,195 |
Auction rate money market preferred | — |  |  | — |  |  | — |  |  | — |  |  | 3,200 |  |  | 3,200 |
Mortgage-backed securities | — |  |  | — |  |  | — |  |  | — |  |  | 196,194 |  |  | 196,194 |
Collateralized mortgage obligations | — |  |  | — |  |  | — |  |  | — |  |  | 120,096 |  |  | 120,096 |
Total amortized cost | $ | 22,802 |  |  | $ | 80,275 |  |  | $ | 61,348 |  |  | $ | 28,954 |  |  | $ | 319,490 |  |  | $ | 512,869 |
Fair value | $ | 22,850 |  |  | $ | 80,589 |  |  | $ | 61,855 |  |  | $ | 28,843 |  |  | $ | 307,002 |  |  | $ | 501,139 |
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. A summary of the sales activity of AFS securities was as follows for the:
| Three Months Ended September 30 |  | Nine Months Ended September 30
| 2018 |  | 2017 |  | 2018 |  | 2017
Proceeds from sales of AFS securities | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 12,827 |
Gross realized gains (losses) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 142 |
Applicable income tax expense (benefit) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 48 |
The following information pertains to AFS securities with gross unrealized losses at September 30, 2018 and December 31, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position.
| September 30, 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 | $ | 4 |  |  | $ | 180 |  |  | $ | — |  |  | $ | — |  |  | $ | 4 |
States and political subdivisions | 566 |  |  | 41,972 |  |  | — |  |  | — |  |  | 566 |
Auction rate money market preferred | — |  |  | — |  |  | 92 |  |  | 3,108 |  |  | 92 |
Mortgage-backed securities | 2,780 |  |  | 89,602 |  |  | 5,299 |  |  | 96,985 |  |  | 8,079 |
Collateralized mortgage obligations | 2,198 |  |  | 72,074 |  |  | 2,157 |  |  | 39,948 |  |  | 4,355 |
Total | $ | 5,548 |  |  | $ | 203,828 |  |  | $ | 7,548 |  |  | $ | 140,041 |  |  | $ | 13,096 |
Number of securities in an unrealized loss position: |  |  | 164 |  |  |  |  | 37 |  |  | 201 |
| 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 |
Unrealized losses on our AFS securities portfolio are the result of recent increases in intermediate-term and long-term benchmark interest rates and not credit issues. As of September 30, 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 recognize an OTTI of $770 in earnings for the year ended December 31, 2016. Based on internal analysis of this bond as of September 30, 2018, there was no additional OTTI recognized as of September 30, 2018 and the carrying value of this bond remained at $230. 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 September 30, 2018 or December 31, 2017, with the exception of the one municipal bond discussed above.

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