Note 3. Investment Securities

The following tables present the amortized cost and aggregate fair value of available-for-sale securities, including gross unrealized gains and losses, as of the dates indicated:


	September 30, 2016
	Amortized		Unrealized		Unrealized			Fair
(Amounts in thousands)	Cost		Gains		Losses			Value
U.S. Agency securities	$	1,371	$	4	$	—		$	1,375
Municipal securities		116,910		5,171		(7	)		122,074
Single issue trust preferred securities		51,292		—		(2,772	)		48,520
Corporate securities		15,027		—		(5	)		15,022
Mortgage-backed Agency securities		33,578		294		(80	)		33,792
Equity securities		55		18		—			73

Total securities available for sale	$	218,233	$	5,487	$	(2,864	)	$	220,856


	December 31, 2015
	Amortized		Unrealized		Unrealized			Fair
(Amounts in thousands)	Cost		Gains		Losses			Value
U.S. Agency securities	$	31,414	$	39	$	(751	)	$	30,702
Municipal securities		124,880		4,155		(357	)		128,678
Single issue trust preferred securities		55,882		—		(8,050	)		47,832
Corporate securities		70,571		—		(238	)		70,333
Certificates of deposit		5,000		—		—			5,000
Mortgage-backed Agency securities		84,576		155		(1,175	)		83,556
Equity securities		66		6		—			72

Total securities available for sale	$	372,389	$	4,355	$	(10,571	)	$	366,173

The following tables present the amortized cost and aggregate fair value of held-to-maturity securities, including gross unrealized gains and losses, as of the dates indicated:


	September 30, 2016
	Amortized		Unrealized		Unrealized			Fair
(Amounts in thousands)	Cost		Gains		Losses			Value
U.S. Agency securities	$	61,766	$	317	$	—		$	62,083
Corporate securities		10,416		108		—			10,524

Total securities held to maturity	$	72,182	$	425	$	—		$	72,607


	December 31, 2015
	Amortized		Unrealized		Unrealized			Fair
(Amounts in thousands)	Cost		Gains		Losses			Value
U.S. Agency securities	$	61,863	$	75	$	(106	)	$	61,832
Municipal securities		190		3		—			193
Corporate securities		10,488		—		(23	)		10,465

Total securities held to maturity	$	72,541	$	78	$	(129	)	$	72,490

The following table presents the amortized cost and aggregate fair value of available-for-sale securities and held-to-maturity securities, by contractual maturity, as of the date indicated. Actual maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without penalties.


	September 30, 2016
	Amortized
(Amounts in thousands)	Cost		Fair Value
Available-for-sale securities
Due within one year	$	16,747	$	16,753
Due after one year but within five years		2,131		2,178
Due after five years but within ten years		87,281		91,586
Due after ten years		78,441		76,474

		184,600		186,991
Mortgage-backed securities		33,578		33,792
Equity securities		55		73

Total securities available for sale	$	218,233	$	220,856

Held-to-maturity securities
Due within one year	$	46,867	$	46,909
Due after one year but within five years		25,315		25,698
Due after five years but within ten years		—		—
Due after ten years		—		—

Total securities held to maturity	$	72,182	$	72,607

The following tables present the fair values and unrealized losses for available-for-sale securities in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of the dates indicated:


	September 30, 2016
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. Agency securities	$	—	$	—		$	—	$	—		$	—	$	—
Municipal securities		—		—			767		(7	)		767		(7	)
Single issue trust preferred securities		—		—			19,323		(2,772	)		19,323		(2,772	)
Corporate securities		—		—			15,022		(5	)		15,022		(5	)
Mortgage-backed Agency securities		1,167		(1	)		13,589		(79	)		14,756		(80	)

Total	$	1,167	$	(1	)	$	48,701	$	(2,863	)	$	49,868	$	(2,864	)


	December 31, 2015
	Less than 12 Months					12 Months or Longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(Amounts in thousands)	Value		Losses			Value		Losses			Value		Losses
U.S. Agency securities	$	4,441	$	(5	)	$	23,922	$	(746	)	$	28,363	$	(751	)
Municipal securities		8,126		(48	)		10,393		(309	)		18,519		(357	)
Single issue trust preferred securities		—		—			47,832		(8,050	)		47,832		(8,050	)
Corporate securities		70,333		(238	)		—		—			70,333		(238	)
Mortgage-backed Agency securities		27,050		(253	)		37,291		(922	)		64,341		(1,175	)

Total	$	109,950	$	(544	)	$	119,438	$	(10,027	)	$	229,388	$	(10,571	)

There were no unrealized losses on held-to-maturity securities as of September 30, 2016. The following table presents the fair values and unrealized losses for held-to-maturity securities in a continuous unrealized loss position for less than 12 months and for 12 months or longer as of December 31, 2015.


	December 31, 2015
	Less than 12 Months					12 Months or Longer				Total
	Fair		Unrealized			Fair		Unrealized		Fair		Unrealized
(Amounts in thousands)	Value		Losses			Value		Losses		Value		Losses
U.S. Agency securities	$	43,723	$	(106	)	$	—	$	—	$	43,723	$	(106	)
Corporate securities		6,851		(23	)		—		—		6,851		(23	)

Total	$	50,574	$	(129	)	$	—	$	—	$	50,574	$	(129	)

There were 20 individual securities in an unrealized loss position as of September 30, 2016, and their combined depreciation in value represented 0.98% of the investment securities portfolio. There were 107 individual securities in an unrealized loss position as of December 31, 2015, and their combined depreciation in value represented 2.44% of the investment securities portfolio.

The following table presents gross realized gains and losses from the sale of available-for-sale securities for the periods indicated:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Amounts in thousands)	2016			2015			2016			2015
Gross realized gains	$	203		$	26		$	344		$	292
Gross realized losses		(178	)		(65	)		(397	)		(141	)

Net gain (loss) on sale of securities	$	25		$	(39	)	$	(53	)	$	151

The carrying amount of securities pledged for various purposes totaled $151.82 million as of September 30, 2016, and $236.73 million as of December 31, 2015.

The Company reviews its investment portfolio quarterly for indications of other-than-temporary impairment (“OTTI”). Debt securities owned by the Company include securities issued from the U.S. Department of the Treasury (“Treasury”), municipal securities, single issue trust preferred securities, corporate securities, and certificates of deposit. For debt securities owned, the Company analyzes factors such as the impairment’s severity and duration, adverse conditions within the issuing industry, prospects for the issuer, ability to hold until recovery, security performance, changes in rating by rating agencies, and other qualitative factors to determine if the impairment will be recovered. If the evaluation suggests that the impairment will not be recovered, OTTI is recorded as a charge to earnings through noninterest income. Temporary impairment on these securities is primarily due to changes in benchmark interest rates, changes in pricing in the credit markets, destabilization in foreign markets, and other current economic factors. During the three and nine months ended September 30, 2016, the Company incurred OTTI charges on debt securities owned of $4.64 million related to the Company’s change in intent to hold certain securities to recovery. The intent was changed to sell specific trust preferred securities in the Company’s investment portfolio primarily to reduce credit concentrations with two issuers. During the three and nine months ended September 30, 2015, the Company incurred no OTTI charges on debt securities owned.

For equity securities, the Company considers its intent to hold or sell the security before recovery, the severity and duration of the decline in fair value of the security below its cost, the financial condition and near-term prospects of the issuer, and whether the decline appears related to issuer, general market, or industry conditions to determine if the impairment will be recovered. If the Company deems the impairment other-than-temporary in nature, the security is written down to its current present value and the OTTI loss is charged to earnings. During the three months ended September 30, 2016, the Company incurred no OTTI charges related to certain equity holdings. During the nine months ended September 30, 2016, the Company incurred OTTI charges related to certain equity holdings of $11 thousand. During the three and nine months ended September 30, 2015, the Company incurred no OTTI charges on equity holdings.