SECURITIES AVAILABLE FOR SALE

At December 31, 2014 and 2013 the investment securities portfolio was comprised of securities classified as available for sale, resulting in investment securities being carried at fair value. The amortized cost and fair values of investment securities available for sale at December 31, were:



(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2014
U.S. Government Agencies	$	23,910	$	71	$	23	$	23,958
States and political subdivisions	52,578		819		996		52,401
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	174,220		1,573		197		175,596
GSE residential collateralized mortgage obligations (CMOs)	57,976		857		128		58,705
GSE commercial CMOs	65,041		1,017		586		65,472
Total debt securities	373,725		4,337		1,930		376,132
Equity securities	50		17		0		67
Totals	$	373,775	$	4,354	$	1,930	$	376,199
December 31, 2013
U.S. Government Agencies	$	25,610	$	34	$	193	$	25,451
U.S. Government Sponsored Enterprises (GSE)	14,431		5		722		13,714
States and political subdivisions	75,494		417		4,367		71,544
GSE residential mortgage-backed securities	198,449		895		725		198,619
GSE residential CMOs	40,502		251		221		40,532
GSE commercial CMOs	59,812		0		2,798		57,014
Total debt securities	414,298		1,602		9,026		406,874
Equity securities	50		19		0		69
Totals	$	414,348	$	1,621	$	9,026	$	406,943

The following table shows gross unrealized losses and fair value of the Company’s available for sale securities that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31:



	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2014
U.S. Government Agencies	$	0	$	0	$	9,012	$	23	$	9,012	$	23
States and political subdivisions	0		0		35,833		996		35,833		996
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	65,474		197		0		0		65,474		197
GSE residential collateralized mortgage obligations (CMOs)	11,930		128		0		0		11,930		128
GSE commercial CMOs	0		0		29,969		586		29,969		586
Total temporarily impaired securities	$	77,404	$	325	$	74,814	$	1,605	$	152,218	$	1,930
December 31, 2013
U.S. Government Agencies	$	17,454	$	193	$	0	$	0	$	17,454	$	193
U.S. Government Sponsored Enterprises (GSE)	12,049		722		0		0		12,049		722
States and political subdivisions	53,606		4,367		0		0		53,606		4,367
GSE residential mortgage-backed securities	125,468		716		7,447		9		132,915		725
GSE residential CMOs	14,033		220		44		1		14,077		221
GSE commercial CMOs	38,298		1,248		18,716		1,550		57,014		2,798
Total temporarily impaired securities	$	260,908	$	7,466	$	26,207	$	1,560	$	287,115	$	9,026

The Company has 37 securities and 77 securities at December 31, 2014 and 2013 in which the amortized cost exceeds their values, as discussed below.

U.S. Government Agencies and U.S. Government Sponsored Enterprises (GSE). 21 U.S. Government Agencies and GSE securities, including mortgage-backed and collateralized mortgage obligations have unrealized losses, 13 GSE securities have amortized costs which exceed their fair values for less than 12 months, and eight have amortized costs which exceed their fair values for more than 12 months at December 31, 2014. At December 31, 2013, the Company had 46 GSE securities with unrealized losses, 38 of which were in the less than 12 months category, and eight have amortized costs which exceed their fair values for more than 12 months. These unrealized losses have been caused by a rise in interest rates from the time the securities were purchased. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the par value bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2014 or 2013.

State and Political Subdivisions. 16 state and political subdivision securities have an amortized cost which exceeds its fair value for more than 12 months at December 31, 2014. At December 31, 2013, 31 state and political subdivision security had unrealized losses for less than 12 months. These unrealized losses have been caused by a rise in interest rates from the time the securities were purchased. Management considers the investment rating, the state of the issuer of the security and other credit support in determining whether the security is other-than-temporarily impaired. Because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2014 or 2013.

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

INVESTMENT PORTFOLIO



	Available for Sale
(Dollars in thousands)	Amortized Cost		Fair Value

Due in one year or less	$	0	$	0
Due after one year through five years	380		381
Due after five years through ten years	22,429		22,392
Due after ten years	53,679		53,586
Mortgage-backed securities and collateralized mortgage obligations	297,237		299,773
Total debt securities	373,725		376,132
Equity securities	50		67
	$	373,775	$	376,199

Proceeds from sales of securities available for sale for the years ended December 31, 2014, 2013 and 2012 were $169,573,000, $74,273,000 and $94,099,000. Gross gains on the sales of securities were $2,301,000, $473,000 and $4,986,000 for the years ended December 31, 2014, 2013 and 2012. Gross losses on securities available for sale were $366,000, $141,000 and $162,000 for the years ended December 31, 2014, 2013 and 2012.

Securities with a fair value of $261,034,000 and $241,911,000 at December 31, 2014 and 2013 were pledged to secure public funds and for other purposes as required or permitted by law.