Note 2.

Securities

The Company invests in U.S. agency and mortgage-backed securities, obligations of state and political subdivisions and corporate equity securities. Amortized costs and fair values of securities available for sale at June 30, 2014 and December 31, 2013 were as follows (in thousands):


	June 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. agency and mortgage-backed securities	$	87,515	$	961	$	(1,410	)	$	87,066
Obligations of states and political subdivisions		21,716		374		(278	)		21,812
Corporate equity securities		1		5		—			6

	$	109,232	$	1,340	$	(1,688	)	$	108,884


	December 31, 2013
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
U.S. agency and mortgage-backed securities	$	86,365	$	670	$	(2,138	)	$	84,897
Obligations of states and political subdivisions		18,647		350		(598	)		18,399
Corporate equity securities		1		4		—			5

	$	105,013	$	1,024	$	(2,736	)	$	103,301

At June 30, 2014 and December 31, 2013, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):


	June 30, 2014
	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
U.S. agency and mortgage-backed securities	$	16,702	$	(255	)	$	36,372	$	(1,155	)	$	53,074	$	(1,410	)
Obligations of states and political subdivisions		2,795		(21	)		6,999		(257	)		9,794		(278	)

	$	19,497	$	(276	)	$	43,371	$	(1,412	)	$	62,868	$	(1,688	)


	December 31, 2013
	Less than 12 months					12 months or more					Total
	Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)			Fair Value		Unrealized (Loss)
U.S. agency and mortgage-backed securities	$	49,810	$	(1,755	)	$	10,180	$	(383	)	$	59,990	$	(2,138	)
Obligations of states and political subdivisions		7,165		(422	)		2,663		(176	)		9,828		(598	)

	$	56,975	$	(2,177	)	$	12,843	$	(559	)	$	69,818	$	(2,736	)

The tables above provide information about securities that have been in an unrealized loss position for less than twelve consecutive months and securities that have been in an unrealized loss position for twelve consecutive months or more. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Impairment is considered to be other-than-temporary if the Company (1) intends to sell the security, (2) more likely than not will be required to sell the security before recovering its cost, or (3) does not expect to recover the security’s entire amortized cost basis. Presently, the Company does not intend to sell any of these securities, does not expect to be required to sell these securities, and expects to recover the entire amortized cost of all the securities.

At June 30, 2014, there were thirty-three U.S. agency and mortgage-backed securities and eighteen obligations of state and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio is considered investment grade. The weighted-average re-pricing term of the portfolio was 4.2 years at June 30, 2014. At December 31, 2013, there were forty U.S. agency and mortgage-backed securities and twenty-one obligations of states and political subdivisions in an unrealized loss position. One hundred percent of the Company’s investment portfolio was considered investment grade at December 31, 2013. The weighted-average re-pricing term of the portfolio was 4.5 years at December 31, 2013. The unrealized losses at June 30, 2014 in the U.S. agency and mortgage-backed securities portfolio and the obligation of states and political subdivisions portfolio were related to changes in market interest rates and not credit concerns of the issuers.

Federal Home Loan Bank, Federal Reserve Bank and Community Bankers’ Bank stock are generally viewed as long-term investments and as restricted securities, which are carried at cost, because there is a minimal market for the stock. Therefore, when evaluating restricted securities for impairment, their value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider these investments to be other-than-temporarily impaired at June 30, 2014, and no impairment has been recognized. Restricted securities are not part of the available for sale securities portfolio.

The composition of restricted securities at June 30, 2014 and December 31, 2013 was as follows (in thousands):


	June 30, 2014		December 31, 2013
Federal Home Loan Bank stock	$	740	$	908
Federal Reserve Bank stock		846		846
Community Bankers’ Bank stock		50		50

	$	1,636	$	1,804