Securities

Securities available-for-sale at December 31, 2018 and 2017 are as follows:



	December 31, 2018									December 31, 2017
	Amortized		Unrealized					Fair		Amortized		Unrealized					Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value
U.S. Gov’t sponsored entities	$	134,010	$	254	$	(1,570	)	$	132,694	$	108,578	$	478	$	(908	)	$	108,148
State & political subdivisions	134,662		1,942		(573		)	136,031		134,428		3,609		(314		)	137,723
Residential & multi-family mortgage	209,126		500		(3,573		)	206,053		111,214		304		(1,882		)	109,636
Corporate notes & bonds	12,356		22		(601		)	11,777		17,610		52		(462		)	17,200
Pooled SBA	30,163		135		(924		)	29,374		36,260		355		(575		)	36,040
Other	1,020		0		(86		)	934		1,020		0		(58		)	962
Total	$	521,337	$	2,853	$	(7,327	)	$	516,863	$	409,110	$	4,798	$	(4,199	)	$	409,709

At December 31, 2018 and 2017, there were no holdings of securities by any one issuer, other than U.S. Government sponsored entities, in an amount greater than 10% of shareholders’ equity. The Corporation’s residential and multi-family mortgage securities are issued by government sponsored entities, and the Corporation holds one commercial mortgage security that is private label.

Trading securities at December 31, 2018 and 2017 are as follows:



	2018		2017
Corporate equity securities	$	5,828	$	5,125
Mutual Funds	1,058		1,499
Certificates of deposit	268		220
Corporate notes and bonds	581		254
U.S. Government sponsored entities	51		52
Total	$	7,786	$	7,150

Securities with unrealized losses at December 31, 2018 and 2017, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:



December 31, 2018	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Gov’t sponsored entities	$	14,786	$	(41	)	$	70,676	$	(1,529	)	$	85,462	$	(1,570	)
State & political subdivisions	13,834		(62		)	21,080		(511		)	34,914		(573		)
Residential & multi-family mortgage	69,015		(656		)	87,286		(2,917		)	156,301		(3,573		)
Corporate notes & bonds	0		0			9,759		(601		)	9,759		(601		)
Pooled SBA	760		(7		)	20,795		(917		)	21,555		(924		)
Other	0		0			934		(86		)	934		(86		)
	$	98,395	$	(766	)	$	210,530	$	(6,561	)	$	308,925	$	(7,327	)



December 31, 2017	Less than 12 Months			12 Months or More			Total
Description of Securities	Fair Value	Unrealized Loss		Fair Value	Unrealized Loss		Fair Value	Unrealized Loss
U.S. Gov’t sponsored entities	55,696	(540	)	34,754	(368	)	90,450	(908	)
State & political subdivisions	15,890	(69	)	4,104	(245	)	19,994	(314	)
Residential and multi-family mortgage	30,144	(153	)	63,699	(1,729	)	93,843	(1,882	)
Corporate notes & bonds	5,005	(9	)	9,042	(453	)	14,047	(462	)
Pooled SBA	0	0		22,270	(575	)	22,270	(575	)
Other	0	0		962	(58	)	962	(58	)
	106,735	(771	)	134,831	(3,428	)	241,566	(4,199	)

The Corporation evaluates securities for other-than-temporary impairment on a quarterly basis, or more frequently when economic or market conditions warrant such an evaluation.

During 2017, two structured pooled trust preferred securities with an adjusted amortized cost of $800 were sold, resulting in a gain of $1,383. During 2016, two structured pooled trust preferred securities with an adjusted amortized cost of $0 were sold, resulting in a gain of $922.

A roll-forward of the other-than-temporary impairment amount related to credit losses for the years ended December 31, 2018, 2017, and 2016 is as follows:



	2018		2017			2016
Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, beginning of period	$	0	$	2,071		$	4,054
Credit losses previously recognized on securities sold during the period	0		(2,071		)	(1,983		)
Additional credit loss for which other-than-temporary impairment was not previously recognized	0		0			0
Additional credit loss for which other-than-temporary impairment was previously recognized	0		0			0
Balance of credit losses on debt securities for which a portion of other-than-temporary impairment was recognized in earnings, end of period	$	0	$	0		$	2,071

For the securities that comprise corporate notes and bonds and the securities that are issued by state and political subdivisions, management monitors publicly available financial information, such as filings with the Securities and Exchange Commission, in order to evaluate the securities for other-than-temporary impairment. For financial institution issuers, management monitors information from quarterly “call” report filings that are used to generate Uniform Bank Performance Reports. All other securities that were in an unrealized loss position at the balance sheet date were reviewed by management, and issuer-specific documents were reviewed, as appropriate given the following considerations. When reviewing securities for other-than-temporary impairment, management considers the financial condition and near-term prospects of the issuer and whether downgrades by bond rating agencies have occurred. Management also considers the length of time and extent to which fair value has been less than cost, and whether management does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.

As of December 31, 2018 and 2017, management concluded that the securities described in the previous paragraph were not other-than-temporarily impaired for the following reasons:


•	There is no indication of any significant deterioration of the creditworthiness of the institutions that issued the securities.


•	All contractual interest payments on the securities have been received as scheduled, and no information has come to management’s attention through the processes previously described which would lead to a conclusion that future contractual payments will not be timely received.

The Corporation does not intend to sell and it is not "more likely than not" that it will be required to sell the securities in an unrealized loss position before recovery of its amortized cost basis.

On December 31, 2018 and 2017, securities carried at $290,717 and $319,575, respectively, were pledged to secure public deposits and for other purposes as provided by law.

The following is a schedule of the contractual maturity of securities available for sale, excluding other securities, at December 31, 2018:



	December 31, 2018
	Amortized Cost		Fair Value
1 year or less	$	58,509	$	58,003
1 year – 5 years	146,605		146,111
5 years – 10 years	70,984		71,451
After 10 years	4,930		4,937
	281,028		280,502
Residential and multi-family mortgage	209,126		206,053
Pooled SBA	30,163		29,374
Other	1,020		934
Total debt securities	$	521,337	$	516,863

Mortgage securities and pooled SBA securities are not due at a single date; periodic payments are received based on the payment patterns of the underlying collateral.

Information pertaining to security sales is as follows:



Year ended December 31	Proceeds		Gross Gains		Gross Losses
2018	$	0	$	0	$	0
2017	16,340		1,614		71
2016	4,420		1,005		0

The tax provision related to these net realized gains at December 31, 2018, 2017 and 2016 was $0, $540, and $352, respectively.

During 2018, 2017, and 2016, the Corporation sold trading securities. Proceeds were $455 in 2018, $1,091 in 2017 and $540 in 2016, resulting in net realized gains of $151 in 2018, $93 in 2017, and $70 in 2016.