CHFC 2018 Annual Report

be measured at fair value with changes in fair value recognized in net income.At January 1, 2018, the Corporation's equity securities consisted of $1.8 million in preferred stocks. The Corporation recognized a cumulative effect adjustment in the amount of $344 thousand as of January 1, 2018 to reclassify the fair value position into retained earnings. Beginning January 1, 2018, the fair value changes on equity securities are recognized in net income, rather than in accumulated other comprehensive income. The Corporation sold its remaining position in equity securities during the year ended December 31, 2018. Held-to-maturity securities are carried at amortized cost, adjusted for amortization of premiums or accretion of discounts. The majority of the Corporation's residential mortgage-backed securities and collateralized mortgage obligations are backed by a U.S. government agency (Government National MortgageAssociation) or a government sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association). Proceeds from sales of investment securities carried at fair value and the associated gains and losses recorded in earnings are listed below: For the years ended December 31, (Dollars in thousands) 2018 2017 2016 Proceeds $ 4,215 $ 409,220 $ 41,446 Gross gains 263 178 325 Gross losses (39) (7,566) (196) The following is a summary of the amortized cost and fair value of investment securities at December 31, 2018, by maturity, for both carried at fair value and held-to-maturity. The maturities of residential mortgage-backed securities and collateralized mortgage obligations are based on scheduled principal payments. The maturities of all other debt securities are based on final contractual maturity. December 31, 2018 (Dollars in thousands) Amortized Cost Fair Value Investment Securities Carried at Fair Value: Due in one year or less $ 51,523 $ 51,244 Due after one year through five years 109,918 108,051 Due after five years through ten years 515,050 498,612 Due after ten years 2,393,154 2,363,925 Total $ 3,069,645 $ 3,021,832 Investment Securities Held-to-Maturity: Due in one year or less $ 55,840 $ 55,728 Due after one year through five years 230,154 228,528 Due after five years through ten years 164,325 162,764 Due after ten years 173,780 171,652 Total $ 624,099 $ 618,672 Securities with a carrying value of $1.05 billion and $937.2 million were pledged at December 31, 2018 and 2017, respectively, to secure borrowings and deposits. At December 31, 2018 and 2017, there were no holdings of securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders' equity. The following schedule summarizes information for debt securities both carried at fair value and held-to-maturity with gross unrealized losses at December 31, 2018 and 2017, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position. As of December 31, 2018, the Corporation's securities portfolio consisted of 2,096 securities, 1,408 of which were in an unrealized loss position. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 114