4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at December 31, 2013 and 2012 are summarized as follows:


December 31, 2013	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:
U.S. Government agencies	$	207			$	3	$	204
U.S. Government-sponsored enterprises		113,221	$	296		472		113,045
State and municipals:
Taxable		16,664		160		126		16,698
Tax-exempt		96,194		2,267		380		98,081
Corporate debt securities		4,433		32		78		4,387
Mortgage-backed securities:
U.S. Government agencies		20,179		113		63		20,229
U.S. Government-sponsored enterprises		45,251		763		40		45,974
Common equity securities		756		351		10		1,097

Total	$	296,905	$	3,982	$	1,172	$	299,715

Held-to-maturity:
U.S. Government-sponsored enterprises
State and municipals:
Taxable
Tax-exempt	$	7,372	$	11	$	777	$	6,606
Corporate debt securities
Mortgage-backed securities:
U.S. Government agencies		117		2				119
U.S. Government-sponsored enterprises		9,806		644				10,450
Common equity securities

Total	$	17,295	$	657	$	777	$	17,175


December 31, 2012	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:
U.S. Government agencies
U.S. Government-sponsored enterprises	$	83,927	$	757	$	2	$	84,682
State and municipals:
Taxable
Tax-exempt		53,846		4,991				58,837
Corporate debt securities
Mortgage-backed securities:
U.S. Government agencies
U.S. Government-sponsored enterprises		15,962		839				16,801
Common equity securities		801		281		11		1,071

Total	$	154,536	$	6,868	$	13	$	161,391

Held-to-maturity:
U.S. Government agencies
U.S. Government-sponsored enterprises
State and municipals:
Taxable
Tax-exempt	$	1,083	$	16			$	1,099
Corporate debt securities
Mortgage-backed securities:
U.S. Government agencies		136		4				140
U.S. Government-sponsored enterprises		14,683		852				15,535
Common equity securities

Total	$	15,902	$	872			$	16,774

The Company had net unrealized gains of $1,826, net of deferred income taxes of $984 at December 31, 2013, and $4,524, net of deferred income taxes of $2,331, at December 31, 2012. Proceeds from the sale of investment securities available-for-sale amounted to $4,573 in 2013, $5,821 in 2012 and $15,318 in 2011. Gross gains of $163, $317 and $666 were realized on the sale of securities in 2013, 2012 and 2011, respectively. There were no gross losses realized on the sale of securities in 2013, 2012 and 2011, respectively. The income tax provision applicable to net realized gains amounted to $55, $108 and $226 in 2013, 2012 and 2011, respectively.

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at December 31, 2013, is summarized as follows:


December 31, 2013	Fair Value
Within one year	$	22,544
After one but within five years		104,683
After five but within ten years		29,066
After ten years		76,122

		232,415
Mortgage-backed securities		66,203

Total	$	298,618

The maturity distribution of the amortized cost and fair value, of debt securities classified as held-to-maturity at December 31, 2013, is summarized as follows:


December 31, 2013	Amortized Cost		Fair Value
Within one year
After one but within five years	$	157	$	160
After five but within ten years		342		350
After ten years		6,873		6,096

		7,372		6,606
Mortgage-backed securities		9,923		10,569

Total	$	17,295	$	17,175

Securities with a carrying value of $202,407 and $150,620 at December 31, 2013 and 2012, respectively, were pledged to secure public deposits and repurchase agreements as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At December 31, 2013 and 2012, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. Government agencies and sponsored enterprises that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an OTTI has not been recognized at December 31, 2013 and 2012, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:


	Less Than 12 Months				12 Months or More				Total
December 31, 2013	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies	$	204	$	3					$	204	$	3
U.S. Government-sponsored enterprises		66,391		468	$	3,114	$	4		69,505		472
State and municipals:
Taxable		10,621		126						10,621		126
Tax-exempt		36,471		1,157						36,471		1,157
Corporate debt securities		1,095		78						1,095		78
Mortgage-backed securities:
U.S. Government agencies		12,774		63						12,774		63
U.S. Government-sponsored enterprises		5,624		40						5,624		40
Common equity securities		137		10						137		10

Total	$	133,317	$	1,945	$	3,114	$	4	$	136,431	$	1,949


	Less Than 12 Months				12 Months or More				Total
December 31, 2012	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Government agencies
U.S. Government-sponsored enterprises	$	3,169	$	2					$	3,169	$	2
State and municipals:
Taxable
Tax-exempt
Corporate debt securities
Mortgage-backed securities:
U.S. Government agencies
U.S. Government-sponsored enterprises
Common equity securities		141		9	$	48	$	2		189		11

Total	$	3,310	$	11	$	48	$	2	$	3,358	$	13

The Company had 153 investment securities, consisting of 79 tax-exempt state and municipal obligations, 16 taxable state and municipal obligations, 39 U.S. Government-sponsored enterprise securities, 15 mortgage-backed securities, one corporate debt security, one U.S. Government agency and two common equity securities that were in unrealized loss positions at December 31, 2013. Of these securities, one U.S. Government-sponsored enterprise security was in continuous unrealized loss positions for 12 months or more. The unrealized losses on the common equity securities were a direct reflection of reductions from historical levels in stock values in the financial industry sector, as a whole, and was not a result of credit or other issues that would cause the Company to realize an OTTI charge. Management does not consider the unrealized losses on the debt securities, as a result of changes in interest rates, to be OTTI based on historical evidence that indicates the cost of these securities is recoverable within a reasonable period of time in relation to normal cyclical changes in the market rates of interest. Moreover, because there has been no material change in the credit quality of the issuers or other events or circumstances that may cause a significant adverse impact on the fair value of these securities, and management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the unrealized losses to be OTTI at December 31, 2013. There was no OTTI recognized for the year ended December 31, 2013.

The Company had 5 investment securities, consisting of one U.S. Government-sponsored enterprise security and four common equity securities that were in unrealized loss positions at December 31, 2012. Of these securities, one common equity security was in continuous unrealized loss positions for 12 months or more. There was no OTTI recognized for the year ended December 31, 2012.

OTTI of $78 was recognized for the year ended December 31, 2011. The impairment was the result of writing down certain common equity securities based on quoted market prices. In reaching the determination to record the impairment, management reviewed the facts and circumstances available surrounding the securities, including the duration and amount of the unrealized loss, the financial condition of the issuers and the prospects for a change in market value within a reasonable period of time. Based on its assessment, management determined that the impairments were other-than-temporary and that a charge to operating results was appropriate for the securities. The charges were recognized based entirely on the assessment of the credit quality deterioration of the underlying companies.