AFS Securities

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



	September 30, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
States and political subdivisions	$	170,897	$	4,679	$	1	$	175,575
Auction rate money market preferred	3,200		—		111		3,089
Mortgage-backed securities	149,843		975		698		150,120
Collateralized mortgage obligations	115,452		1,501		208		116,745
Total	$	439,392	$	7,155	$	1,018	$	445,529



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Government sponsored enterprises	$	172	$	—	$	2	$	170
States and political subdivisions	188,992		2,125		251		190,866
Auction rate money market preferred	3,200		—		646		2,554
Mortgage-backed securities	189,688		76		5,280		184,484
Collateralized mortgage obligations	119,193		71		2,504		116,760
Total	$	501,245	$	2,272	$	8,683	$	494,834

The amortized cost and fair value of AFS securities by contractual maturity at September 30, 2019 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
States and political subdivisions	$	29,273	$	70,436	$	44,018	$	27,170	$	—	$	170,897
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		149,843		149,843
Collateralized mortgage obligations	—		—		—		—		115,452		115,452
Total amortized cost	$	29,273	$	70,436	$	44,018	$	27,170	$	268,495	$	439,392
Fair value	$	29,378	$	71,963	$	45,538	$	28,696	$	269,954	$	445,529

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 investments 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
	2019		2018		2019		2018
Proceeds from sales of AFS securities	$	33,840	$	—	$	33,840	$	—
Gross realized gains (losses)	$	6	$	—	$	6	$	—
Applicable income tax expense (benefit)	$	1	$	—	$	1	$	—

The following information pertains to AFS securities with gross unrealized losses at September 30, 2019 and December 31, 2018, aggregated by investment category and length of time that individual securities have been in a continuous loss position.



	September 30, 2019
	Less Than Twelve Months				Twelve Months or More
	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Total Unrealized Losses
States and political subdivisions	$	1	$	797	$	—	$	—	$	1
Auction rate money market preferred	—		—		111		3,089		111
Mortgage-backed securities	4		5,943		694		66,703		698
Collateralized mortgage obligations	47		11,312		161		17,043		208
Total	$	52	$	18,052	$	966	$	86,835	$	1,018
Number of securities in an unrealized loss position:			10				23		33



	December 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	$	—	$	—	$	2	$	170	$	2
States and political subdivisions	83		14,732		168		15,090		251
Auction rate money market preferred	—		—		646		2,554		646
Mortgage-backed securities	896		43,485		4,384		124,253		5,280
Collateralized mortgage obligations	199		21,886		2,305		87,929		2,504
Total	$	1,178	$	80,103	$	7,505	$	229,996	$	8,683
Number of securities in an unrealized loss position:			66				102		168

The reduction in unrealized losses on our AFS securities portfolio resulted from recent decreases in intermediate-term and long-term benchmark interest rates.

As of September 30, 2019 and December 31, 2018, we conducted an analysis to determine whether any AFS securities currently in an unrealized loss position should be identified as 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?

Based on our analysis, which included the criteria outlined above and the fact that we have asserted that we do not have to sell AFS securities in an unrealized loss position, we do not believe that the values of any AFS securities are other-than-temporarily impaired as of September 30, 2019 or December 31, 2018, with the exception of one municipal bond previously identified which had no activity during the period.