SECURITIES AVAILABLE FOR SALE

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



(Dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2016
U.S. Government Agencies	$	41,748	$	203	$	82	$	41,869
States and political subdivisions	123,698		6,903		202		130,399
U.S. Government Sponsored Enterprises (GSE) residential mortgage-backed securities	121,489		2,392		0		123,881
GSE residential collateralized mortgage obligations (CMOs)	74,106		378		1,786		72,698
Private label CMOs	6,029		0		52		5,977
Total debt securities	367,070		9,876		2,122		374,824
Equity securities	50		28		0		78
Totals	$	367,120	$	9,904	$	2,122	$	374,902
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 September 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
September 30, 2016
U.S. Government Agencies	$	5,875	$	12	$	14,233	$	70	$	20,108	$	82
States and political subdivisions	0		0		5,452		202		5,452		202
GSE residential collateralized mortgage obligations (CMOs)	63,107		1,779		712		7		63,819		1,786
Private label CMOs	5,976		52		0		0		5,976		52
Total temporarily impaired securities	$	74,958	$	1,843	$	20,397	$	279	$	95,355	$	2,122
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 18 securities and 53 securities at September 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). Fourteen U.S. Agencies and GSE securities, including mortgage-backed securities and collateralized mortgage obligations, have amortized costs which exceed their fair values, 11 of which are in the less than 12 months category, and three had amortized costs which exceed their fair value for more than 12 months at September 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 September 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 September 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 September 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 September 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 September 30, 2016 or at December 31, 2015.

The amortized cost and fair values of securities available for sale at September 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	3,210		3,358
Due after five years through ten years	71,653		75,769
Due after ten years	90,583		93,141
Mortgage-backed securities and collateralized mortgage obligations	201,624		202,556
Total debt securities	367,070		374,824
Equity securities	50		78
	$	367,120	$	374,902

Gross gains on the sales of securities were $0 and $29,000 for the three months ended September 30, 2016 and 2015. Gross gains on the sales of securities were $1,468,000 and $1,935,000 for the nine months ended September 30, 2016 and 2015. Gross losses on securities available for sale were $48,000 and $24,000 for the nine months ended September 30, 2016 and 2015.

Securities with a fair value of $279,270,000 and $250,397,000 at September 30, 2016 and December 31, 2015 were pledged to secure public funds and for other purposes as required or permitted by law.