SECURITIES AVAILABLE FOR SALE

At March 31, 2016 and December 31, 2015, 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 March 31, 2016 and December 31, 2015 were:



(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2016
U.S. Government Agencies	$	45,072	$	188	$	121	$	45,139
States and political subdivisions	124,302		5,246		367		129,181
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	129,219		1,556		0		130,775
GSE residential collateralized mortgage obligations (CMOs)	14,040		384		20		14,404
Private label CMOs	8,086		0		68		8,018
Total debt securities	320,719		7,374		576		327,517
Equity securities	50		23		0		73
Totals	$	320,769	$	7,397	$	576	$	327,590
December 31, 2015
U.S. Government Agencies	$	47,209	$	200	$	182	$	47,227
States and political subdivisions	124,421		2,483		943		125,961
GSE residential mortgage-backed securities	132,389		229		269		132,349
GSE residential CMOs	15,668		215		40		15,843
GSE commercial CMOs	63,598		735		563		63,770
Private label CMOs	8,944		0		43		8,901
Total debt securities	392,229		3,862		2,040		394,051
Equity securities	50		23		0		73
Totals	$	392,279	$	3,885	$	2,040	$	394,124

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 March 31, 2016 and December 31, 2015:



	Less Than 12 Months				12 Months or More				Total
(Dollars in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2016
U.S. Government Agencies	$	19,951	$	121	$	0	$	0	$	19,951	$	121
States and political subdivisions	1,205		2		5,313		365		6,518		367
GSE residential collateralized mortgage obligations (CMOs)	0		0		2,555		20		2,555		20
Private label CMOs	8,018		68		0		0		8,018		68
Total temporarily impaired securities	$	29,174	$	191	$	7,868	$	385	$	37,042	$	576
December 31, 2015
U.S. Government Agencies	$	27,640	$	182	$	0	$	0	$	27,640	$	182
States and political subdivisions	30,252		373		14,139		570		44,391		943
GSE residential mortgage-backed securities	82,911		269		0		0		82,911		269
GSE residential CMOs	0		0		4,237		40		4,237		40
GSE commercial CMOs	33,606		563		0		0		33,606		563
Private label CMOs	8,901		43		0		0		8,901		43
Total temporarily impaired securities	$	183,310	$	1,430	$	18,376	$	610	$	201,686	$	2,040

The Company had 11 securities and 53 securities at March 31, 2016 and December 31, 2015 in which the amortized cost exceed their values, as discussed below.

U.S. Agencies and Government Sponsored Enterprises (GSE). Six U.S. Agencies and GSE securities, including mortgage-backed securities and collateralized mortgage obligations, have amortized costs which exceed their fair values, four of which are in the less than 12 months, and two have amortized costs which exceed their fair value for more than 12 months at March 31, 2016. At December 31, 2015, the Company had 29 U.S. Government Agencies and GSE securities, including mortgage-backed and collateralized mortgage obligations with unrealized losses, 25 GSE securities have amortized costs which exceed their fair values for less than 12 months, and four 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 March 31, 2016 or at December 31, 2015.

State and Political Subdivisions. Two state and political subdivision securities have amortized costs which exceeded their fair values, one in the less than 12 months, and one in the more than 12 months category at March 31, 2016. At December 31, 2015, 21 state and political subdivision securities have an amortized cost which exceeds their fair value, 16 of which are in the less than 12 months category, and five have amortized costs which exceed their fair value for more than 12 months. These unrealized losses have been caused by a rise in interest rates or a widening of spreads 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 March 31, 2016 or at December 31, 2015.

Private Label. Three private label collateralized mortgage obligations have unrealized losses, all of which were in the less than 12 months category at March 31, 2016. At December 31, 2015, three private label securities have an amortized cost which exceeds their fair value for less than 12 months. These unrealized losses have been caused by a rise in interest rates from the time the securities were purchased. 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 basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2016 or at December 31, 2015.

The amortized cost and fair values of securities available for sale at March 31, 2016 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	3,232		3,381
Due after five years through ten years	62,821		65,147
Due after ten years	102,956		105,426
Mortgage-backed securities and collateralized mortgage obligations	151,345		153,197
Total debt securities	320,719		327,517
Equity securities	50		73
	$	320,769	$	327,590

Gross gains on the sales of securities were $1,468,000 and $1,553,000 for the three months ended March 31, 2016 and 2015. Gross losses on securities available for sale were $48,000 and $24,000 for the three months ended March 31, 2016 and 2015.

Securities with a fair value of $254,252,000 and $250,397,000 at March 31, 2016 and December 31, 2015 were pledged to secure public funds and for other purposes as required or permitted by law.