NOTE 3 — SECURITIES

Securities have been classified in the financial statements as available for sale or held to maturity. The amortized cost of securities and their approximate fair values at December 31, 2014 and 2013 are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2014	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	93,150	$	691	$	—		$	93,841
Mortgage-backed securities, residential		28,298		580		—			28,878
Asset backed securities		18,559		129		(90	)		18,598
State and municipal		6,833		28		—			6,861
Corporate bonds		13,492		144		—			13,636
SBA pooled securities		207		3		—			210
Total available for sale securities	$	160,539	$	1,575	$	(90	)	$	162,024

			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
Other - State of Israel bonds	$	745	$	5	$	—		$	750

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2013	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	95,967	$	91	$	(224	)	$	95,834
Mortgage-backed securities, residential		35,931		355		(1	)		36,285
Asset backed securities		18,811		34		(6	)		18,839
State and municipal		8,989		20		(4	)		9,005
Corporate bonds		20,817		62		(36	)		20,843
Trust preferred		3,706		—		(106	)		3,600
SBA pooled securities		244		4		—			248
Total available for sale securities	$	184,465	$	566	$	(377	)	$	184,654

			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
Other - State of Israel bonds	$	743	$	2	$	—		$	745

The amortized cost and estimated fair value of securities at December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	1,390	$	1,392	$	225	$	225
Due from one year to five years		93,217		93,637		520		525
Due from five years to ten years		17,285		17,671		—		—
Due after ten years		1,583		1,638		—		—
		113,475		114,338		745		750
Mortgage-backed securities, residential		28,298		28,878		—		—
Asset backed securities		18,559		18,598		—		—
SBA pooled securities		207		210		—		—

	$	160,539	$	162,024	$	745	$	750

For the year ended December 31, 2014, securities were sold resulting in proceeds of $24,424,000, gross gains of $98,000, and gross losses of $10,000. There were no sales of securities for the years ended December 31, 2013 and 2012.

Securities with a carrying amount of approximately $113,980,000 and $87,434,000 at December 31, 2014 and 2013, respectively, were pledged to secure customer repurchase agreements, Federal Home Loan Bank advances, and for other purposes required or permitted by law.

Information pertaining to securities with gross unrealized losses at December 31, 2014 and 2013, aggregated by investment category and length of time that individual securities have been in a continuous loss position, are summarized as follows:

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2014	Value		Losses			Value		Losses			Value		Losses
U.S. Government agency obligations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities, residential		—		—			—		—			—		—
Asset backed securities		8,703		(82	)		4,959		(8	)		13,662		(90	)
State and municipal		—		—			—		—			—		—
Corporate bonds		—		—			—		—			—		—
SBA pooled securities		—		—			—		—			—		—
	$	8,703	$	(82	)	$	4,959	$	(8	)	$	13,662	$	(90	)

December 31, 2013
U.S. Government agency obligations	$	38,890	$	(222	)	$	1,849	$	(2	)	$	40,739	$	(224	)
Mortgage-backed securities, residential		800		(1	)		—		—			800		(1	)
Asset backed securities		4,913		(6	)		—		—			4,913		(6	)
State and municipal		1,481		(4	)		—		—			1,481		(4	)
Corporate bonds		8,419		(36	)		—		—			8,419		(36	)
Trust preferred		3,600		(106	)		—		—			3,600		(106	)
SBA pooled securities		—		—			—		—			—		—
	$	58,103	$	(375	)	$	1,849	$	(2	)	$	59,952	$	(377	)

At December 31, 2014, the Company had three securities in an unrealized loss position.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the security for a period of time sufficient to allow for any anticipated recovery in fair value.

As of December 31, 2014, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of December 31, 2014, management believes the unrealized losses detailed in the previous table are temporary and no other than temporary impairment loss has been recognized in the Company’s consolidated statements of income.