Securities

The Company invests in U.S. agency and mortgage-backed securities, obligations of state and political subdivisions, and corporate debt securities. Amortized costs and fair values of securities at March 31, 2019 and December 31, 2018 were as follows (in thousands):



	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available for sale:
U.S. agency and mortgage-backed securities	$	96,345	$	295	$	(1,074	)	$	95,566
Obligations of states and political subdivisions	25,643		153		(160		)	25,636
Total securities available for sale	$	121,988	$	448	$	(1,234	)	$	121,202
Securities held to maturity:
U.S. agency and mortgage-backed securities	$	14,193	$	—	$	(332	)	$	13,861
Obligations of states and political subdivisions	3,796		22		(2		)	3,816
Corporate debt securities	1,500		13		—			1,513
Total securities held to maturity	$	19,489	$	35	$	(334	)	$	19,190
Total securities	$	141,477	$	483	$	(1,568	)	$	140,392



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available for sale:
U.S. agency and mortgage-backed securities	$	86,944	$	44	$	(2,066	)	$	84,922
Obligations of states and political subdivisions	15,203		31		(299		)	14,935
Total securities available for sale	$	102,147	$	75	$	(2,365	)	$	99,857
Securities held to maturity:
U.S. agency and mortgage-backed securities	$	27,420	$	—	$	(869	)	$	26,551
Obligations of states and political subdivisions	14,488		20		(174		)	14,334
Corporate debt securities	1,500		9		—			1,509
Total securities held to maturity	$	43,408	$	29	$	(1,043	)	$	42,394
Total securities	$	145,555	$	104	$	(3,408	)	$	142,251

At March 31, 2019 and December 31, 2018, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):



	March 31, 2019
	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
Securities available for sale:
U.S. agency and mortgage-backed securities	$	369	$	(2	)	$	60,381	$	(1,072	)	$	60,750	$	(1,074	)
Obligations of states and political subdivisions	—		—			8,793		(160		)	8,793		(160		)
Total securities available for sale	$	369	$	(2	)	$	69,174	$	(1,232	)	$	69,543	$	(1,234	)
Securities held to maturity:
U.S. agency and mortgage-backed securities	$	—	$	—		$	13,861	$	(332	)	$	13,861	$	(332	)
Obligations of states and political subdivisions	—		—			761		(2		)	761		(2		)
Total securities held to maturity	$	—	$	—		$	14,622	$	(334	)	$	14,622	$	(334	)
Total securities	$	369	$	(2	)	$	83,796	$	(1,566	)	$	84,165	$	(1,568	)

	December 31, 2018
	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
Securities available for sale:
U.S. agency and mortgage-backed securities	$	26,350	$	(215	)	$	49,652	$	(1,851	)	$	76,002	$	(2,066	)
Obligations of states and political subdivisions	3,761		(25		)	5,127		(274		)	8,888		(299		)
Total securities available for sale	$	30,111	$	(240	)	$	54,779	$	(2,125	)	$	84,890	$	(2,365	)
Securities held to maturity:
U.S. agency and mortgage-backed securities	$	—	$	—		$	26,551	$	(869	)	$	26,551	$	(869	)
Obligations of states and political subdivisions	5,326		(37		)	6,115		(137		)	11,441		(174		)
Total securities held to maturity	$	5,326	$	(37	)	$	32,666	$	(1,006	)	$	37,992	$	(1,043	)
Total securities	$	35,437	$	(277	)	$	87,445	$	(3,131	)	$	122,882	$	(3,408	)

The tables above provide information about securities that have been in an unrealized loss position for less than twelve consecutive months and securities that have been in an unrealized loss position for twelve consecutive months or more. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Impairment is considered to be other-than-temporary if the Company (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security’s entire amortized cost basis. Presently, the Company does not intend to sell any of these securities, does not expect to be required to sell these securities, and expects to recover the entire amortized cost of all the securities.

At March 31, 2019, there were sixty-six out of ninety U.S. agency and mortgage-backed securities and twenty-six out of eighty-two obligations of states and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio is considered investment grade. The weighted-average re-pricing term of the portfolio was 4.2 years at March 31, 2019. At December 31, 2018, there were eighty-three out of ninety U.S. agency and mortgage-backed securities and fifty-six out of eighty-two obligations of states and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio was considered investment grade at December 31, 2018. The weighted-average re-pricing term of the portfolio was 4.6 years at December 31, 2018. The unrealized losses at March 31, 2019 in the U.S. agency and mortgage-backed securities portfolio and the obligations of states and political subdivisions portfolio were related to changes in market interest rates and not credit concerns of the issuers.

The amortized cost and fair value of securities at March 31, 2019 by contractual maturity are shown below (in thousands). Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.



	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	1,836	$	1,844	$	185	$	185
Due after one year through five years	9,009		8,992		4,179		4,159
Due after five years through ten years	27,051		27,048		4,586		4,565
Due after ten years	84,092		83,318		10,539		10,281
	$	121,988	$	121,202	$	19,489	$	19,190

On January 1, 2019, the Company adopted ASU No. 2017-12 and reclassified eligible securities with a fair value of $23.0 million from the held to maturity portfolio to the available for sale portfolio. The unrealized loss associated with the reclassified securities totaled $431 thousand on the date of reclassification. The securities were reclassified to provide the Company with opportunities to maximize asset utilization.

Federal Home Loan Bank, Federal Reserve Bank, and Community Bankers’ Bank stock are generally viewed as long-term investments and as restricted securities, which are carried at cost, because there is a minimal market for the stock. Therefore, when evaluating restricted securities for impairment, their value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019, and no impairment has been recognized.

The composition of restricted securities at March 31, 2019 and December 31, 2018 was as follows (in thousands):



	March 31, 2019		December 31, 2018
Federal Home Loan Bank stock	$	776	$	763
Federal Reserve Bank stock	875		875
Community Bankers’ Bank stock	50		50
	$	1,701	$	1,688