6. INVESTMENT SECURITIES

The cost basis and fair values of investment securities are summarized as follows:

Investment securities available for sale:


	AT DECEMBER 31, 2019
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	5,084	$	32	$	—	$	5,116
Municipal		14,678		509		(17)		15,170
Corporate bonds		39,769		342		(281)		39,830
U.S. Agency mortgage-backed securities		80,046		1,681		(94)		81,633
Total	$	139,577	$	2,564	$	(392)	$	141,749

Investment securities held to maturity:


	AT DECEMBER 31, 2019
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency mortgage-backed securities	$	9,466	$	251	$	(4)	$	9,713
Municipal		24,438		941		(53)		25,326
Corporate bonds and other securities		6,032		58		(47)		6,043
Total	$	39,936	$	1,250	$	(104)	$	41,082

Investment securities available for sale:


	AT DECEMBER 31, 2018
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency	$	7,685	$	4	$	(160)	$	7,529
Municipal		13,301		114		(234)		13,181
Corporate bonds		37,359		131		(996)		36,494
U.S. Agency mortgage-backed securities		90,169		516		(1,158)		89,527
Total	$	148,514	$	765	$	(2,548)	$	146,731

Investment securities held to maturity:


	AT DECEMBER 31, 2018
			GROSS		GROSS
			UNREALIZED		UNREALIZED		FAIR
	COST BASIS		GAINS		LOSSES		VALUE
	(IN THOUSANDS)
U.S. Agency mortgage-backed securities	$	9,983	$	78	$	(132)	$	9,929
Municipal		24,740		131		(404)		24,467
Corporate bonds and other securities		6,037		13		(122)		5,928
Total	$	40,760	$	222	$	(658)	$	40,324

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 Investors Service or Standard & Poor’s rating of A. At December 31, 2019, 53.4% of the portfolio was rated AAA as compared to 57.5% at December 31, 2018. Approximately 9.1% and 10.0% of the portfolio was rated below A or unrated on December 31, 2019 and 2018, respectively. The Company and its subsidiaries, collectively, did not hold securities of any single issuer, excluding U.S. treasury and U.S. agencies, that exceeded 10% of shareholders’ equity at December 31, 2019.

The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $117,076,000 at December 31, 2019 and $115,536,000 at December 31, 2018.

The Company realized $118,000 of gross investment security gains in 2019, $15,000 of gross investment security gains and $454,000 of gross investment security losses in 2018, and $115,000 of gross investment security gains in 2017. On a net basis, the realized gain for 2019 was $93,000 after factoring in tax expense of $25,000, the realized loss for 2018 was $347,000 after factoring in a tax benefit of $92,000, and the realized gain for 2017 was $76,000 after factoring in tax expense of $39,000. Proceeds from sales of investment securities available for sale were $3.4 million for 2019, $9.5 million for 2018, and $8.1 million during 2017.

The following table sets forth the contractual maturity distribution of the investment securities, cost basis and fair market values, and the weighted average yield for each type and range of maturity as of December 31, 2019. Yields are not presented on a tax-equivalent basis, but are based upon the cost basis and are weighted for the scheduled maturity. The Company’s consolidated investment securities portfolio had an effective duration of approximately 3.07 years. The weighted average expected maturity for available for sale securities at December 31, 2019 for U.S. agency, U.S. agency mortgage-backed, corporate bond, and municipal securities was 10.19, 4.36, 4.05, and 5.19 years, respectively. The weighted average expected maturity for held to maturity securities at December 31, 2019 for U.S. agency mortgage-backed, corporate bond/other securities, and municipal securities 4.62, 3.21, and 5.92 years, respectively.

Investment securities available for sale:


	AT DECEMBER 31, 2019
																	TOTAL
													U.S. AGENCY				INVESTMENT
													MORTGAGE-				SECURITIES
									CORPORATE				BACKED				AVAILABLE FOR
	U. S. AGENCY				MUNICIPAL				BONDS				SECURITIES				SALE
	(IN THOUSANDS, EXCEPT YIELDS)
COST BASIS
Within 1 year	$	—	—	%	$	500	2.25	%	$	1,500	3.10	%	$	—	—	%	$	2,000	2.89	%
After 1 year but within 5 years		—	—			3,121	3.09			18,695	3.43			1,200	2.46			23,016	3.33
After 5 years but within 10 years		2,557	2.93			11,057	3.26			19,574	4.11			7,882	2.99			41,070	3.59
After 10 years but within15 years		—	—			—	—			—	—			23,018	2.83			23,018	2.83
Over 15 years		2,527	2.68			—	—			—	—			47,946	2.90			50,473	2.89
Total	$	5,084	2.81		$	14,678	3.19		$	39,769	3.75		$	80,046	2.88		$	139,577	3.16
FAIR VALUE
Within 1 year	$	—			$	500			$	1,503			$	—			$	2,003
After 1 year but within 5 years		—				3,179				18,755				1,213				23,147
After 5 years but within 10 years		2,570				11,491				19,572				8,075				41,708
After 10 years but within15 years		—				—				—				23,538				23,538
Over 15 years		2,546				—				—				48,807				51,353
Total	$	5,116			$	15,170			$	39,830			$	81,633			$	141,749

Investment securities held to maturity:



	AT DECEMBER 31, 2019
	U.S. AGENCY
	MORTGAGE-												TOTAL INVESTMENT
	BACKED								CORPORATE				SECURITIES
	SECURITIES				MUNICIPAL				BONDS AND OTHER				HELD TO MATURITY
	(IN THOUSANDS, EXCEPT YIELDS)
COST BASIS
Within 1 year	$	—	—	%	$	—	—	%	$	—	—	%	$	—	—	%
After 1 year but within 5 years		1,977	2.50			2,567	3.33			3,000	2.95			7,544	2.96
After 5 years but within 10 years		—	—			16,506	3.37			3,032	4.40			19,538	3.53
After 10 years but within15 years		2,232	3.62			5,050	4.10			—	—			7,282	3.95
Over 15 years		5,257	3.30			315	3.50			—	—			5,572	3.31
Total	$	9,466	3.21		$	24,438	3.52		$	6,032	3.68		$	39,936	3.47
FAIR VALUE
Within 1 year	$	—			$	—			$	—			$	—
After 1 year but within 5 years		2,009				2,644				2,953				7,606
After 5 years but within 10 years		—				17,153				3,090				20,243
After 10 years but within15 years		2,353				5,209				—				7,562
Over 15 years		5,351				320				—				5,671
Total	$	9,713			$	25,326			$	6,043			$	41,082

The following table presents information concerning investments with unrealized losses as of December 31, 2019 (in thousands):


Total investment securities:	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Agency mortgage-backed securities		7,084		(23)		8,562		(75)		15,646		(98)
Municipal		2,269		(18)		1,123		(52)		3,392		(70)
Corporate bonds and other securities		7,797		(85)		11,783		(243)		19,580		(328)
Total	$	17,150	$	(126)	$	21,468	$	(370)	$	38,618	$	(496)

The following table presents information concerning investments with unrealized losses as of December 31, 2018 (in thousands):


Total investment securities:	LESS THAN 12 MONTHS				12 MONTHS OR LONGER				TOTAL
	FAIR		UNREALIZED		FAIR		UNREALIZED		FAIR		UNREALIZED
	VALUE		LOSSES		VALUE		LOSSES		VALUE		LOSSES
U.S. Agency	$	244	$	(6)	$	5,631	$	(154)	$	5,875	$	(160)
U.S. Agency mortgage-backed securities		17,718		(177)		39,983		(1,113)		57,701		(1,290)
Municipal		6,601		(71)		15,880		(567)		22,481		(638)
Corporate bonds and other securities		15,221		(440)		17,038		(678)		32,259		(1,118)
Total	$	39,784	$	(694)	$	78,532	$	(2,512)	$	118,316	$	(3,206)

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 54 positions that are considered temporarily impaired at December 31, 2019. 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 or mature.

As of December 31, 2019, the Company reported $366,000 of equity securities within Other assets on the Consolidated Balance Sheets. These equity securities are held within a nonqualified deferred compensation plan in which a select group of executives of the Company can participate. An eligible executive can defer a certain percentage of their current salary to be placed into the plan and held within a rabbi trust. The assets of the rabbi trust are invested in various publicly listed mutual funds. The gain or loss on the equity securities (both realized and unrealized) is reported within Other income on the Consolidated Statements of Operations. In 2019, the Company recorded a realized gain of $13,000 and an unrealized loss of $5,000 was recognized in income on these equity securities. Additionally, the Company has recognized a deferred compensation liability, which is equal to the balance of the equity securities and is reported within Other liabilities on the Consolidated Balance Sheets.