AFS Securities

The amortized cost and fair value of AFS securities, with gross unrealized gains and losses, are as follows as of December 31:



	2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
States and political subdivisions	$	165,005	$	4,747	$	—	$	169,752
Auction rate money market preferred	3,200		—		81		3,119
Mortgage-backed securities	139,831		933		560		140,204
Collateralized mortgage obligations	115,944		1,007		187		116,764
Total	$	423,980	$	6,687	$	828	$	429,839



	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 December 31, 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	$	28,932	$	70,795	$	38,342	$	26,936	$	—	$	165,005
Auction rate money market preferred	—		—		—		—		3,200		3,200
Mortgage-backed securities	—		—		—		—		139,831		139,831
Collateralized mortgage obligations	—		—		—		—		115,944		115,944
Total amortized cost	$	28,932	$	70,795	$	38,342	$	26,936	$	258,975	$	423,980
Fair value	$	29,091	$	72,332	$	39,875	$	28,454	$	260,087	$	429,839

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 during the years ended December 31 is displayed in the following table.



	2019		2018		2017
Proceeds from sales of AFS securities	$	33,840	$	—	$	12,827
Realized gains (losses)	$	6	$	—	$	142
Applicable income tax expense (benefit) ⁽¹⁾	$	1	$	—	$	48

⁽¹⁾ Calculations are based on a federal income tax rate of 21% in 2019 and 2018 and 34% in 2017.

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



	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	$	—	$	—	$	—	$	—	$	—
Auction rate money market preferred	—		—		81		3,119		81
Mortgage-backed securities	3		3,974		557		49,701		560
Collateralized mortgage obligations	43		20,262		144		13,309		187
Total	$	46	$	24,236	$	782	$	66,129	$	828
Number of securities in an unrealized loss position:			9				19		28



	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 December 31, 2019 and 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 any 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 December 31, 2019 and 2018, with the exception of one municipal bond previously identified which had no activity during the period.