SECURITIES AVAILABLE FOR SALE

At June 30, 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 June 30, 2016 and December 31, 2015 were:



(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2016
U.S. Government Agencies	$	43,330	$	199	$	135	$	43,394
States and political subdivisions	123,818		8,478		113		132,183
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	126,213		2,662		0		128,875
GSE residential collateralized mortgage obligations (CMOs)	12,363		383		9		12,737
Private label CMOs	7,349		0		73		7,276
Total debt securities	313,073		11,722		330		324,465
Equity securities	50		25		0		75
Totals	$	313,123	$	11,747	$	330	$	324,540
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 June 30, 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
June 30, 2016
U.S. Government Agencies	$	5,261	$	22	$	15,098	$	113	$	20,359	$	135
States and political subdivisions	0		0		5,553		113		5,553		113
GSE residential collateralized mortgage obligations (CMOs)	0		0		798		9		798		9
Private label CMOs	7,276		73		0		0		7,276		73
Total temporarily impaired securities	$	12,537	$	95	$	21,449	$	235	$	33,986	$	330
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 10 securities and 53 securities at June 30, 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, two of which are in the less than 12 months category, and four had amortized costs which exceed their fair value for more than 12 months at June 30, 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 of which 25 GSE securities have had amortized costs which exceeded their fair values for less than 12 months, and four have had 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 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 June 30, 2016 or at December 31, 2015.

State and Political Subdivisions. One state and political subdivision security had an amortized cost which exceeded its fair value in the more than 12 months category at June 30, 2016. At December 31, 2015, 21 state and political subdivision securities have an amortized cost which exceeded their fair value, 16 of which are in the less than 12 months category, and five are in the more than 12 months category. 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 June 30, 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 June 30, 2016. At December 31, 2015, three private label securities have an amortized cost which exceeded 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 June 30, 2016 or at December 31, 2015.

The amortized cost and fair values of securities available for sale at June 30, 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	$	0	$	0
Due after one year through five years	3,221		3,397
Due after five years through ten years	70,993		75,677
Due after ten years	92,934		96,503
Mortgage-backed securities and collateralized mortgage obligations	145,925		148,888
Total debt securities	313,073		324,465
Equity securities	50		75
	$	313,123	$	324,540

Gross gains on the sales of securities were $0 and $353,000 for the three months ended June 30, 2016 and 2015.

Gross gains on the sales of securities were $1,468,000 and $1,906,000 for the six months ended June 30, 2016 and 2015. Gross losses on securities available for sale were $48,000 and $24,000 for the six months ended June 30, 2016 and 2015.

Securities with a fair value of $278,202,000 and $250,397,000 at June 30, 2016 and December 31, 2015 were pledged to secure public funds and for other purposes as required or permitted by law.