CHFC 2018 Annual Report

Note 4: Investment Securities The following is a summary of the amortized cost and fair value of investment securities carried at fair value and investment securities held-to-maturity at December 31, 2018 and 2017: Investment Securities Carried at Fair Value (Dollars in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2018 Debt securities Government and government-sponsored enterprises $ 354,342 $ 713 $ 3,355 $ 351,700 State and political subdivisions 523,178 1,141 8,033 516,286 Residential mortgage-backed securities 216,990 261 3,823 213,428 Collateralized mortgage obligations 1,623,415 2,903 25,020 1,601,298 Corporate bonds 304,243 259 11,439 293,063 Trust preferred securities 47,477 324 1,744 46,057 Total $ 3,069,645 $ 5,601 $ 53,414 $ 3,021,832 December 31, 2017 Debt securities Government and government-sponsored enterprises $ 203,099 $ 765 $ 948 $ 202,916 State and political subdivisions 350,088 310 4,428 345,970 Residential mortgage-backed securities 151,752 5 1,626 150,131 Collateralized mortgage obligations 1,042,240 89 8,484 1,033,845 Corporate bonds 193,230 1,156 1,592 192,794 Trust preferred securities 34,848 1,280 62 36,066 Total debt securities available-for-sale 1,975,257 3,605 17,140 1,961,722 Equity securities Preferred stock 1,389 435 — 1,824 Total equity securities 1,389 435 — 1,824 Total $ 1,976,646 $ 4,040 $ 17,140 $ 1,963,546 Investment Securities Held-to-Maturity (Dollars in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value December 31, 2018 State and political subdivisions $ 623,599 $ 2,548 $ 7,915 $ 618,232 Trust preferred securities 500 — 60 440 Total $ 624,099 $ 2,548 $ 7,975 $ 618,672 December 31, 2017 State and political subdivisions $ 676,593 $ 3,856 $ 17,933 $ 662,516 Trust preferred securities 500 — 110 390 Total $ 677,093 $ 3,856 $ 18,043 $ 662,906 Investment securities are classified at the time they are acquired as either available-for-sale, held-to-maturity or carried at fair value based upon various factors, including asset/liability management strategies, liquidity and profitability objectives and regulatory requirements. Debt securities classified as available-for-sale and equity securities are recorded at fair value. Investment securities carried at fair value may be sold prior to maturity based upon asset/liability management decisions. Unrealized gains or losses on available-for-sale debt securities are recorded as part of accumulated other comprehensive income in stockholders’equity. Unrealized gains or losses on equity securities were recorded as part of accumulated other comprehensive income in stockholders' equity throughDecember 31, 2017. Effective January 1, 2018, the amendments withinASU2016-01, require that equity investments Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 113