Note 2. Securities

Amortized cost and fair values of securities held‑to‑maturity and securities available‑for‑sale as of June 30, 2019 and December 31, 2018, are as follows:


	June 30, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		(Losses)		Value
Held-to-maturity
Securities of state and local municipalities tax exempt	$	264	$	5	$	—	$	269
Securities of U.S. government and federal agencies		1,497		3		—		1,500
Total Held-to-maturity Securities	$	1,761	$	8	$	—	$	1,769
Available-for-sale
Securities of U.S. government and federal agencies	$	1,000	$	—	$	(6)	$	994
Securities of state and local municipalities tax exempt		3,671		62		—		3,733
Securities of state and local municipalities taxable		2,309		1		(28)		2,282
Corporate bonds		5,000		60		(89)		4,971
Certificates of deposit		245		—		—		245
SBA pass-through securities		179		—		(4)		175
Mortgage-backed securities		94,362		851		(501)		94,712
Collateralized mortgage obligations		27,354		271		(266)		27,359
Total Available-for-sale Securities	$	134,120	$	1,245	$	(894)	$	134,471


	December 31, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		(Losses)		Value
Held-to-maturity
Securities of state and local municipalities tax exempt	$	264	$	—	$	(6)	$	258
Securities of U.S. government and federal agencies		1,497		—		(20)		1,477
Total Held-to-maturity Securities	$	1,761	$	—	$	(26)	$	1,735
Available-for-sale
Securities of U.S. government and federal agencies	$	1,000	$	—	$	(44)	$	956
Securities of state and local municipalities tax exempt		3,678		—		(39)		3,639
Securities of state and local municipalities taxable		2,378		—		(70)		2,308
Corporate bonds		5,000		92		(79)		5,013
Certificates of deposit		245		—		(1)		244
SBA pass-through securities		200		—		(5)		195
Mortgage-backed securities		90,234		94		(2,291)		88,037
Collateralized mortgage obligations		23,945		10		(810)		23,145
Total Available-for-sale Securities	$	126,680	$	196	$	(3,339)	$	123,537

The Company had no securities pledged with the Federal Reserve Bank at June 30, 2019 and December 31, 2018, respectively. Securities of $4.5 million were pledged with the Treasury Board of Virginia at the Community Bankers’ Bank at June 30, 2019. There was $8.1 million in such securities pledged as of December 31, 2018.

The following table shows fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2019 and December 31, 2018, respectively. The reference point for determining when securities are in an unrealized loss position is month‑end. Therefore, it is possible that a security’s market value exceeded its amortized cost on other days during the past twelve‑month period. Available‑for‑sale and held-to-maturity securities that have been in a continuous unrealized loss position are as follows:


	Less Than 12 Months				12 Months or Longer				Total
(In thousands)	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
At June 30, 2019	Value		Losses		Value		Losses		Value		Losses
Securities of U.S. government and federal agencies	$	—	$	—	$	994	$	(6)	$	994	$	(6)
Securities of state and local municipalities taxable		—		—		1,531		(28)		1,531		(28)
Corporate bonds		—		—		911		(89)		911		(89)
SBA pass-through securities		—		—		175		(4)		175		(4)
Mortgage-backed securities		—		—		52,081		(501)		52,081		(501)
Collateralized mortgage obligations		—		—		14,155		(266)		14,155		(266)
Total	$	—	$	—	$	69,847	$	(894)	$	69,847	$	(894)


	Less Than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
At December 31, 2018	Value		Losses		Value		Losses		Value		Losses
Securities of U.S. government and federal agencies	$	—	$	—	$	2,433	$	(64)	$	2,433	$	(64)
Securities of state and local municipalities tax exempt		263		(1)		3,634		(44)		3,897		(45)
Securities of state and local municipalities taxable		757		(1)		1,551		(69)		2,308		(70)
Corporate bonds		988		(12)		933		(67)		1,921		(79)
Certificates of deposit		—		—		244		(1)		244		(1)
SBA pass-through securities		—		—		195		(5)		195		(5)
Mortgage-backed securities		12,743		(59)		60,656		(2,232)		73,399		(2,291)
Collateralized mortgage obligations		—		—		16,790		(810)		16,790		(810)
Total	$	14,751	$	(73)	$	86,436	$	(3,292)	$	101,187	$	(3,365)

Securities of U.S. government and federal agencies: The unrealized loss on one available‑for‑sale security was caused by interest rate increases. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments.

Securities of state and local municipalities: The unrealized losses on the Company's investment in securities of state and local municipalities were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Five of the nine investments carry an S&P investment grade rating of AA+ or above, one has a rating of AA-, one has an AA rating, while the remaining two do not carry a rating.

Corporate bonds: The unrealized losses on the investments in corporate bonds were caused by interest rate increases. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. One of these investments carries an S&P investment grade rating of A-. The remaining four investments do not carry a rating.

SBA pass‑through securities: The unrealized loss on the Company’s single investment in SBA pass‑through securities was caused by interest rate increases. Repayment of the principal on those investments is guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider that investments to be other‑than‑temporarily impaired at June 30, 2019.

Mortgage‑backed securities: The unrealized losses on the Company’s investment in forty-two mortgage‑backed securities were caused by interest rate increases. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other‑than‑temporarily impaired at June 30, 2019.

Collateralized mortgage obligations (CMOs): The unrealized loss associated with twenty-four CMOs was caused by interest rate increases. The contractual cash flows of these investments are guaranteed by an agency of the U.S. Government. Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost basis of the Company’s investments. Because the decline in market value is attributable to changes in interest rates and not credit quality, the Company does not consider those investments to be other‑than‑temporarily impaired at June 30, 2019.

The amortized cost and fair value of securities as of June 30, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties.


	June 30, 2019
	Held-to-maturity				Available-for-sale
	Amortized		Fair		Amortized		Fair
(In thousands)	Cost		Value		Cost		Value
Less than 1 year	$	—	$	—	$	745	$	745
After 5 years through 10 years		1,761		1,769		21,035		21,054
After 10 years		—		—		112,340		112,672
Total	$	1,761	$	1,769	$	134,120	$	134,471

For the six months ended June 30, 2019 and June 30, 2018, proceeds from maturities, calls and principal repayments of securities were $8.9 million and $8.1 million, respectively. During the six months ended June 30, 2019 and June 30, 2018, there were no proceeds from sales of securities available-for-sale, no gross realized gains, and no realized losses.