8. Investment Securities

The cost basis and fair values of investment securities are summarized as follows (in thousands):

Investment securities available for sale (AFS):

	March 31, 2018
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency	$	6,821	$	—	$	(166	)	$	6,655
US Agency mortgage-backed securities		82,648		396		(1,498	)		81,546
Taxable municipal		8,929		8		(347	)		8,590
Corporate bonds		35,922		254		(577	)		35,599
Total	$	134,320	$	658	$	(2,588	)	$	132,390

Investment securities held to maturity (HTM):

	March 31, 2018
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency mortgage-backed securities	$	8,809	$	99	$	(157	)	$	8,751
Taxable municipal		23,813		69		(590	)		23,292
Corporate bonds and other securities		6,041		33		(76	)		5,998
Total	$	38,663	$	201	$	(823	)	$	38,041

Investment securities available for sale (AFS):

	December 31, 2017
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency	$	6,612	$	—	$	(40	)	$	6,572
US Agency mortgage-backed securities		79,854		611		(719	)		79,746
Taxable municipal		7,198		27		(189	)		7,036
Corporate bonds		35,886		322		(424	)		35,784
Total	$	129,550	$	960	$	(1,372	)	$	129,138

Investment securities held to maturity (HTM):

	December 31, 2017
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency mortgage-backed securities	$	9,740	$	149	$	(45	)	$	9,844
Taxable municipal		22,970		203		(238	)		22,935
Corporate bonds and other securities		6,042		38		(48	)		6,032
Total	$	38,752	$	390	$	(331	)	$	38,811

Maintaining investment quality is a primary objective of the Company's investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody's Investor's Service or Standard & Poor's rating of “A.” At March 31, 2018, 57.4% of the portfolio was rated “AAA” as compared to 57.8% at December 31, 2017. Approximately 9.4% of the portfolio was either rated below “A” or unrated at March 31, 2018 as compared to 9.7% at December 31, 2017.

The Company sold $4.5 million AFS securities in the first quarter of 2018 resulting in $148,000 of gross investment security losses and sold $5.7 million AFS securities in the first three months of 2017 resulting in $27,000 of gross investment security gains.

The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $115,980,000 at March 31, 2018 and $117,181,000 at December 31, 2017.

The following tables present information concerning investments with unrealized losses as of March 31, 2018 and December 31, 2017 (in thousands):

Total investment securities:

	March 31, 2018
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
US Agency	$	6,005	$	(165	)	$	400	$	(1	)	$	6,405	$	(166	)
US Agency mortgage-backed securities		51,033		(985	)		17,925		(670	)		68,958		(1,655	)
Taxable municipal		18,562		(412	)		8,431		(525	)		26,993		(937	)
Corporate bonds and other securities		15,181		(233	)		13,635		(420	)		28,816		(653	)
Total	$	90,781	$	(1,795	)	$	40,391	$	(1,616	)	$	131,172	$	(3,411	)

Total investment securities:

	December 31, 2017
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
US Agency	$	5,923	$	(39	)	$	399	$	(1	)	$	6,322	$	(40	)
US Agency mortgage-backed securities		36,783		(253	)		22,625		(511	)		59,408		(764	)
Taxable municipal		8,657		(109	)		7,727		(318	)		16,384		(427	)
Corporate bonds and other securities		7,123		(71	)		13,655		(401	)		20,778		(472	)
Total	$	58,486	$	(472	)	$	44,406	$	(1,231	)	$	102,892	$	(1,703	)

The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 190 positions that are considered temporarily impaired at March 31, 2018. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value.

Contractual maturities of securities at March 31, 2018 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at March 31, 2018 is 46.9 months and is higher than the duration at December 31, 2017 which was 44.3 months. The duration remains within our internal established guideline range of 24 to 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability.

Total investment securities:

	March 31, 2018
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	400	$	400	$	2,000	$	1,983
After 1 year but within 5 years		14,019		13,920		2,671		2,610
After 5 years but within 10 years		47,258		46,766		14,441		14,200
After 10 years but within 15 years		26,940		26,332		14,789		14,556
Over 15 years		45,703		44,972		4,762		4,692
Total	$	134,320	$	132,390	$	38,663	$	38,041