Note 3. Securities

The book values and approximate fair values of investment securities at December 31, 2014 and 2013 are summarized as follows:

	2014								2013
	Amortized		Fair		Unrealized				Amortized		Fair		Unrealized
($ in thousands)	Cost		Value		Gains		(Losses)		Cost		Value		Gains		(Losses)

Securities available for sale:
Government-sponsored enterprise securities	$	27,546		27,521		33		(58)		18,432		18,245		32		(219)
Mortgage-backed securities		130,073		129,510		751		(1,314)		148,646		147,187		1,415		(2,874)
Corporate bonds		1,000		865		-		(135)		3,999		3,598		44		(445)
Equity securities		6,105		6,138		46		(13)		3,984		4,011		40		(13)
Total available for sale	$	164,724		164,034		830		(1,520)		175,061		173,041		1,531		(3,551)

Securities held to maturity:
Mortgage-backed securities	$	124,924		124,861		45		(108)		-		-		-		-
State and local governments		53,763		57,550		3,787		-		53,995		56,700		2,709		(4)
Total held to maturity	$	178,687		182,411		3,832		(108)		53,995		56,700		2,709		(4)

Included in mortgage-backed securities at December 31, 2014 were collateralized mortgage obligations with an amortized cost of $108,000 and a fair value of $111,000. Included in mortgage-backed securities at December 31, 2013 were collateralized mortgage obligations with an amortized cost of $192,000 and a fair value of $200,000. All of the Company's mortgage-backed securities, including the collateralized mortgage obligations, were issued by government-sponsored corporations.

The Company owned Federal Home Loan Bank (“FHLB”) stock with a cost and fair value of $6,016,000 at December 31, 2014 and $3,894,000 at December 31, 2013, which is included in equity securities above and serves as part of the collateral for the Company's line of credit with the FHLB (see Note 10 for additional discussion). The investment in this stock is a requirement for membership in the FHLB system. Periodically the FHLB recalculates the Company's required level of holdings, and the Company either buys more stock or the FHLB redeems a portion of the stock at cost.

The following table presents information regarding securities with unrealized losses at December 31, 2014:

($ in thousands)	Securities in an Unrealized Loss Position for Less than 12 Months				Securities in an Unrealized Loss Position for More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government-sponsored enterprise securities	$	5,489		11		2,953		47		8,442		58
Mortgage-backed securities		69,985		318		33,557		1,104		103,542		1,422
Corporate bonds		−		−		865		135		865		135
Equity securities		−		−		17		13		17		13
State and local governments		−		−		–		–		–		–
Total temporarily impaired securities	$	75,474		329		37,392		1,299		112,866		1,628

The following table presents information regarding securities with unrealized losses at December 31, 2013:

($ in thousands)	Securities in an Unrealized Loss Position for Less than 12 Months				Securities in an Unrealized Loss Position for More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Government-sponsored enterprise securities	$	12,212		219		–		–		12,212		219
Mortgage-backed securities		64,937		1,675		17,979		1,199		82,916		2,874
Corporate bonds		−		−		555		445		555		445
Equity securities		−		−		22		13		22		13
State and local governments		992		4		–		–		992		4
Total temporarily impaired securities	$	78,141		1,898		18,556		1,657		96,697		3,555

In the above tables, all of the non-equity securities that were in an unrealized loss position at December 31, 2014 and 2013 are bonds that the Company has determined are in a loss position due to interest rate factors, the overall economic downturn in the financial sector, and the broader economy in general. The Company has evaluated the collectability of each of these bonds and has concluded that there is no other-than-temporary impairment. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost.

The Company has concluded that each of the equity securities in an unrealized loss position at December 31, 2014 and 2013 was in such a position due to temporary fluctuations in the market prices of the securities. The Company's policy is to record an impairment charge for any of these equity securities that remains in an unrealized loss position for twelve consecutive months unless the amount is insignificant.

The aggregate carrying amount of cost-method investments was $6,016,000 and $3,894,000 at December 31, 2014 and 2013, respectively, which was the Federal Home Loan Bank stock discussed above. The Company determined that none of its cost-method investments were impaired at either year end.

The book values and approximate fair values of investment securities at December 31, 2014, by contractual maturity, are summarized in the table below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
($ in thousands)	Cost		Value		Cost		Value

Debt securities
Due within one year	$	−		−	$	100		103
Due after one year but within five years		27,546		27,521		10,829		11,539
Due after five years but within ten years		−		−		38,385		41,190
Due after ten years		1,000		865		4,449		4,718
Mortgage-backed securities		130,073		129,510		124,924		124,861
Total debt securities		158,619		157,896		178,687		182,411

Equity securities		6,105		6,138		-		-
Total securities	$	164,724		164,034	$	178,687		182,411

At December 31, 2014 and 2013, investment securities with carrying values of $100,113,000 and $79,838,000, respectively, were pledged as collateral for public deposits.

The Company recorded $47,473,000, $12,908,000, and $9,641,000 in sales of securities in 2014, 2013, and 2012, respectively, which resulted in net gains of $786,000, $525,000, and $439,000 in 2014, 2013, and 2012, respectively. During the twelve months ended December 31, 2013 and 2012, the Company also recorded net gains of $7,000 and $200,000, respectively, related to the call of several municipal and corporate bond securities.