SECURITIES AVAILABLE FOR SALE

At September 30, 2015 and December 31, 2014, the investment securities portfolio was comprised exclusively 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 September 30, 2015 and December 31, 2014 were:



(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2015
U.S. Government Agencies	$	48,826	$	265	$	81	$	49,010
States and political subdivisions	123,136		2,184		507		124,813
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	135,498		1,457		10		136,945
GSE residential collateralized mortgage obligations (CMOs)	17,973		238		39		18,172
GSE commercial CMOs	63,834		1,426		22		65,238
Total debt securities	389,267		5,570		659		394,178
Equity securities	50		23		0		73
Totals	$	389,317	$	5,593	$	659	$	394,251
December 31, 2014
U.S. Government Agencies	$	23,910	$	71	$	23	$	23,958
States and political subdivisions	52,578		819		996		52,401
GSE residential mortgage-backed securities	174,220		1,573		197		175,596
GSE residential 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

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 the individual securities have been in a continuous unrealized loss position at September 30, 2015 and December 31, 2014:



	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2015
U.S. Government Agencies	$	17,330	$	81	$	0	$	0	$	17,330	$	81
States and political subdivisions	16,469		85		14,317		422		30,786		507
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	17,343		10		0		0		17,343		10
GSE residential collateralized mortgage obligations (CMOs)	0		0		5,281		39		5,281		39
GSE commercial CMOs	8,424		22		0		0		8,424		22
Total temporarily impaired securities	$	59,566	$	198	$	19,598	$	461	$	79,164	$	659
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
GSE residential mortgage-backed securities	65,474		197		0		0		65,474		197
GSE residential 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

The Company had 24 securities and 37 securities at September 30, 2015 and December 31, 2014 in which the amortized cost exceed their values, as discussed below.

U.S. Agencies and Government Sponsored Enterprises (GSE). Eleven U.S. Agencies and GSE securities, including mortgage-backed securities and collateralized mortgage obligations, have amortized costs which exceed their fair values, 7 of which are in the less than 12 months category at September 30, 2015. At December 31, 2014, the Company had 21 U.S. Government Agencies and GSE securities, including mortgage-backed and collateralized mortgage obligations with 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. These unrealized losses have been caused by a rise in interest rates or widening of spreads 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 basis of the investments. Because the Company did 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 basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2015 or at December 31, 2014.

State and Political Subdivisions. Thirteen state and political subdivision securities have amortized costs which exceeded their fair values, 8 of which are in the less than 12 months category at September 30, 2015. At December 31, 2014, 16 state and political subdivision securities have an amortized cost which exceeds their fair value for more 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 did 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 basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2015 or at December 31, 2014.

The amortized cost and fair values of securities available for sale at September 30, 2015 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.



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

Due in one year or less	$	365	$	366
Due after one year through five years	510		541
Due after five years through ten years	62,671		63,677
Due after ten years	108,416		109,239
Mortgage-backed securities and collateralized mortgage obligations	217,305		220,355
Total debt securities	389,267		394,178
Equity securities	50		73
	$	389,317	$	394,251

Gross gains on the sales of securities were $29,000 and $515,000 for the three months ended September 30, 2015 and 2014. Gross losses on securities available for sale were $0 and $46,000 for the three months ended September 30, 2015 and 2014.

Gross gains on the sales of securities were $1,935,000 and $2,034,000 for the nine months ended September 30, 2015 and 2014. Gross losses on securities available for sale were $24,000 and $366,000 for the nine months ended September 30, 2015 and 2014.

Securities with a fair value of $257,835,000 and $261,034,000 at September 30, 2015 and December 31, 2014 were pledged to secure public funds and for other purposes as required or permitted by law.