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 March 31, 2016 and December 31, 2015 are as follows:

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
March 31, 2016	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,460	$	1,508	$	—		$	91,968
Mortgage-backed securities, residential		26,667		510		—			27,177
Asset backed securities		13,239		—		(396	)		12,843
State and municipal		1,298		29		—			1,327
Corporate bonds		27,786		239		(2	)		28,023
SBA pooled securities		177		2		—			179
Total available for sale securities	$	159,627	$	2,288	$	(398	)	$	161,517

			Gross		Gross
	Amortized		Unrecognized		Unrecognized			Fair
	Cost		Gains		Losses			Value
Held to maturity securities:
CLO securities	$	25,796	$	337	$	—		$	26,133

			Gross		Gross
(Dollars in thousands)	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
Available for sale securities:
U.S. Government agency obligations	$	90,533	$	518	$	(17	)	$	91,034
Mortgage-backed securities, residential		28,006		361		(27	)		28,340
Asset backed securities		17,957		24		(455	)		17,526
State and municipal		1,509		17		—			1,526
Corporate bonds		24,542		74		(57	)		24,559
SBA pooled securities		183		1		—			184
Total available for sale securities	$	162,730	$	995	$	(556	)	$	163,169

The amortized cost and estimated fair value of securities at March 31, 2016, 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 Securities				Held to Maturity Securities
	Amortized		Fair		Amortized		Fair
(Dollars in thousands)	Cost		Value		Cost		Value
Due in one year or less	$	20,707	$	20,757	$	—	$	—
Due from one year to five years		96,606		98,273		—		—
Due from five years to ten years		1,562		1,575		—		—
Due after ten years		669		713		25,796		26,133
		119,544		121,318		25,796		26,133
Mortgage-backed securities, residential		26,667		27,177		—		—
Asset backed securities		13,239		12,843		—		—
SBA pooled securities		177		179		—		—
	$	159,627	$	161,517	$	25,796	$	26,133

During the three months ended March 31, 2016, securities were sold resulting in proceeds of $4,345,000, gross gains of $5,000, and no losses. There were no sales of securities during the three months ended March 31, 2015.

Securities with a carrying amount of approximately $82,826,000 and $100,034,000 at March 31, 2016 and December 31, 2015, 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 March 31, 2016 and December 31, 2015, 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
March 31, 2016	Value		Losses			Value		Losses			Value		Losses
Available for sale securities:
U.S. Government agency obligations	$	—	$	—		$	—	$	—		$	—	$	—
Mortgage-backed securities, residential		—		—			—		—			—		—
Asset backed securities		12,843		(396	)		—		—			12,843		(396	)
State and municipal		—		—			—		—			—		—
Corporate bonds		2,704		(2	)		—		—			2,704		(2	)
SBA pooled securities		—		—			—		—			—		—
	$	15,547	$	(398	)	$	—	$	—		$	15,547	$	(398	)

	Less than 12 Months					12 Months or More					Total
(Dollars in thousands)	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2015	Value		Losses			Value		Losses			Value		Losses
Available for sale securities:
U.S. Government agency obligations	$	10,029	$	(17	)	$	—	$	—		$	10,029	$	(17	)
Mortgage-backed securities, residential		4,948		(27	)		—		—			4,948		(27	)
Asset backed securities		8,031		(416	)		4,605		(39	)		12,636		(455	)
State and municipal		—		—			—		—			—		—
Corporate bonds		10,434		(57	)		—		—			10,434		(57	)
SBA pooled securities		—		—			—		—			—		—
	$	33,442	$	(517	)	$	4,605	$	(39	)	$	38,047	$	(556	)

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 March 31, 2016, 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 bonds 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 March 31, 2016, 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.