Investment Securities

The following table shows the amortized cost and the estimated fair value of the held-to-maturity securities and available-for-sale securities at September 30, 2018 and December 31, 2017, by contractual maturity within each type:



	At September 30, 2018									At December 31, 2017
(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Held-to-Maturity
U.S. government corporations and agencies:
After 1 year to 5 years	$	6,996	$	—	$	(214	)	$	6,782	$	6,995	$	—	$	(77	)	$	6,918
	6,996		—		(214		)	6,782		6,995		—		(77		)	6,918
Residential mortgage-backed securities:
After 5 years to 10 years	12,190		—		(279		)	11,911		8,944		—		(51		)	8,893
Over 10 years	88,956		—		(2,007		)	86,949		39,625		44		(160		)	39,509
	101,146		—		(2,286		)	98,860		48,569		44		(211		)	48,402
Total	$	108,142	$	—	$	(2,500	)	$	105,642	$	55,564	$	44	$	(288	)	$	55,320
Securities Available-for-Sale
U.S. government corporations and agencies:
Within 1 year	$	15,153	$	—	$	(131	)	$	15,022	$	1,499	$	—	$	(3	)	$	1,496
After 1 year to 5 years	303		—		(9		)	294		15,590		—		(125		)	15,465
	15,456		—		(140		)	15,316		17,089		—		(128		)	16,961
State and political subdivisions:
Within 1 year	5,943		—		(11		)	5,932		2,721		1		(6		)	2,716
After 1 year to 5 years	12,569		15		(97		)	12,487		16,787		33		(44		)	16,776
After 5 years to 10 years	46,803		303		(631		)	46,475		54,846		897		(73		)	55,670
Over 10 years	3,120		—		(122		)	2,998		3,120		15		—			3,135
	68,435		318		(861		)	67,892		77,474		946		(123		)	78,297
Residential mortgage-backed securities:
After 1 year to 5 years	4,887		—		(102		)	4,785		3,913		12		(26		)	3,899
After 5 years to 10 years	53,041		6		(2,231		)	50,816		51,428		5		(852		)	50,581
Over 10 years	105,808		22		(5,017		)	100,813		133,237		87		(2,383		)	130,941
	163,736		28		(7,350		)	156,414		188,578		104		(3,261		)	185,421
Collateralized mortgage obligations:
After 5 years to 10 years	1,772		—		(108		)	1,664		2,103		—		(82		)	2,021
Over 10 years	1,347		—		(30		)	1,317		1,567		14		—			1,581
	3,119		—		(138		)	2,981		3,670		14		(82		)	3,602
Corporate bonds:
Within 1 year	2,506		—		(10		)	2,496		10,006		—		(5		)	10,001
After 1 year to 5 years	23,824		21		(442		)	23,403		24,885		20		(147		)	24,758
After 5 years to 10 years	16,152		2		(537		)	15,617		16,669		71		(296		)	16,444
Over 10 years	60,000		—		(7,186		)	52,814		60,000		—		(4,027		)	55,973
	102,482		23		(8,175		)	94,330		111,560		91		(4,475		)	107,176
Equity securities:*
No stated maturity	N/A		N/A		N/A			N/A		6,395		667		(1		)	7,061
	N/A		N/A		N/A			N/A		6,395		667		(1		)	7,061
Total	$	353,228	$	369	$	(16,664	)	$	336,933	$	404,766	$	1,822	$	(8,070	)	$	398,518

* Equity securities at December 31, 2017 include $6.0 million of money market mutual funds and $1.1 million of financial services equity securities. In accordance with ASU 2016-01, beginning January 1, 2018, such amounts were reclassified from investment securities available-for-sale to investments in equity securities on the Corporation's Condensed Consolidated Balance Sheets.

Expected maturities may differ from contractual maturities because debt issuers may have the right to call or prepay obligations without call or prepayment penalties and mortgage-backed securities typically prepay at a rate faster than contractually due.

Securities with a carrying value of $362.0 million and $345.1 million at September 30, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and other contractual obligations. In addition, securities of $295 thousand and $1.8 million were pledged to secure credit derivatives and interest rate swaps at September 30, 2018 and December 31, 2017, respectively. See Note 11, "Derivative Instruments and Hedging Activities" for additional information.

The following table presents information related to sales of securities available-for-sale during the nine months ended September 30, 2018 and 2017:



	Nine Months Ended September 30,
(Dollars in thousands)	2018		2017
Securities available-for-sale:
Proceeds from sales	$	1,010	$	3,538
Gross realized gains on sales	10		43
Tax expense related to net realized gains on sales	2		15

At September 30, 2018 and December 31, 2017, there were no investments in any single non-federal issuer representing more than 10% of shareholders’ equity.

The following table shows the fair value of securities that were in an unrealized loss position at September 30, 2018 and December 31, 2017 by the length of time those securities were in a continuous loss position. For the investment securities in an unrealized loss position, the Corporation has concluded, based on its analysis, that the unrealized losses are primarily caused by the movement of interest rates and current market conditions. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investment. It is more likely than not that the Corporation will not be required to sell the investments before a recovery of carrying value.



	Less than Twelve Months					Twelve Months or Longer					Total
(Dollars in thousands)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
At September 30, 2018
Securities Held-to-Maturity
U.S. government corporations and agencies	$	—	$	—		$	6,782	$	(214	)	$	6,782	$	(214	)
Residential mortgage-backed securities	89,833		(1,963		)	9,027		(323		)	98,860		(2,286		)
Total	$	89,833	$	(1,963	)	$	15,809	$	(537	)	$	105,642	$	(2,500	)
Securities Available-for-Sale
U.S. government corporations and agencies	$	—	$	—		$	15,316	$	(140	)	$	15,316	$	(140	)
State and political subdivisions	33,509		(777		)	7,476		(84		)	40,985		(861		)
Residential mortgage-backed securities	27,331		(972		)	127,441		(6,378		)	154,772		(7,350		)
Collateralized mortgage obligations	1,317		(30		)	1,664		(108		)	2,981		(138		)
Corporate bonds	21,162		(467		)	69,644		(7,708		)	90,806		(8,175		)
Total	$	83,319	$	(2,246	)	$	221,541	$	(14,418	)	$	304,860	$	(16,664	)
At December 31, 2017
Securities Held-to-Maturity
U.S. government corporations and agencies	$	6,919	$	(77	)	$	—	$	—		$	6,919	$	(77	)
Residential mortgage-backed securities	40,881		(211		)	—		—			40,881		(211		)
Total	$	47,800	$	(288	)	$	—	$	—		$	47,800	$	(288	)
Securities Available-for-Sale
U.S. government corporations and agencies	$	5,213	$	(38	)	$	11,749	$	(90	)	$	16,962	$	(128	)
State and political subdivisions	18,457		(91		)	6,332		(32		)	24,789		(123		)
Residential mortgage-backed securities	32,217		(210		)	141,371		(3,051		)	173,588		(3,261		)
Collateralized mortgage obligations	—		—			2,021		(82		)	2,021		(82		)
Corporate bonds	18,464		(1,016		)	71,957		(3,459		)	90,421		(4,475		)
Equity securities	—		(1		)	4		—			4		(1		)
Total	$	74,351	$	(1,356	)	$	233,434	$	(6,714	)	$	307,785	$	(8,070	)

At September 30, 2018, gross unrealized losses for securities available-for-sale in an unrealized loss position for twelve months or longer, totaled $14.4 million. Four federal agency bonds, sixteen investment grade corporate bonds, 114 federal agency residential mortgage securities, nine investment grade municipal bonds and one collateralized mortgage obligation bond had respective unrealized loss positions of $140 thousand, $7.7 million, $6.4 million, $84 thousand and $108 thousand, respectively. The fair value of these 114 securities fluctuate with changes in market conditions which for these underlying securities is primarily due to changes in the interest rate environment. The Corporation does not intend to sell the securities in an unrealized loss position and is unlikely to be required to sell these securities before a recovery of fair value, which may be maturity. Upon review of the attributes of the individual securities, the Corporation concluded these securities were not other-than-temporarily impaired. The Corporation did not recognize any other-than-temporary impairment charges on debt securities for the nine months ended September 30, 2018 and 2017.

In conjunction with the adoption of ASU 2016-01, the Corporation recognized a $26 thousand net gain on equity securities during the nine months ended September 30, 2018 in other noninterest income and the net unrealized gain on equity securities held at September 30, 2018 was $26 thousand. See Note 1, "Summary of Significant Accounting Policies - Accounting Pronouncements Adopted in 2018" for additional information.