Note 2. Securities

The Company invests in U.S. agency and mortgage-backed securities, obligations of states and political subdivisions, corporate equity securities, and corporate debt securities. Amortized costs and fair values of securities at December 31, 2016 and 2015 were as follows (in thousands):


	2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available for sale:
U.S. agency and mortgage-backed securities	$	81,451	$	177	$	(1,457	)	$	80,171
Obligations of states and political subdivisions		14,654		146		(180	)		14,620
Corporate equity securities		1		10		—			11

Total securities available for sale	$	96,106	$	333	$	(1,637	)	$	94,802

Securities held to maturity:
U.S. agency and mortgage-backed securities	$	37,269	$	1	$	(483	)	$	36,787
Obligations of states and political subdivisions		14,629		18		(211	)		14,436
Corporate debt securities		1,500		—		(14	)		1,486

Total securities held to maturity	$	53,398	$	19	$	(708	)	$	52,709

Total securities	$	149,504	$	352	$	(2,345	)	$	147,511


	2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Securities available for sale:
U.S. agency and mortgage-backed securities	$	89,919	$	261	$	(843	)	$	89,337
Obligations of states and political subdivisions		15,931		333		(50	)		16,214
Corporate equity securities		1		7		—			8

Total securities available for sale	$	105,851	$	601	$	(893	)	$	105,559

Securities held to maturity:
U.S. agency and mortgage-backed securities	$	49,662	$	36	$	(326	)	$	49,372
Obligations of states and political subdivisions		15,357		228		(19	)		15,566
Corporate debt securities		1,500		—		—			1,500

Total securities held to maturity	$	66,519	$	264	$	(345	)	$	66,438

Total securities	$	172,370	$	865	$	(1,238	)	$	171,997

At December 31, 2016 and 2015, investments in an unrealized loss position that were temporarily impaired were as follows (in thousands):


	2016
	Less than 12 months					12 months or more					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		(Loss)			Fair Value		(Loss)			Fair Value		(Loss)
Securities available for sale:
U.S. agency and mortgage-backed securities	$	60,943	$	(1,249	)	$	5,499	$	(208	)	$	66,442	$	(1,457	)
Obligations of states and political subdivisions		5,130		(180	)		—		—			5,130		(180	)

Total securities available for sale	$	66,073	$	(1,429	)	$	5,499	$	(208	)	$	71,572	$	(1,637	)

Securities held to maturity:
U.S. agency and mortgage-backed securities	$	34,770	$	(483	)	$	—	$	—		$	34,770	$	(483	)
Obligations of states and political subdivisions		12,724		(211	)		—		—			12,724		(211	)
Corporate debt securities		1,486		(14	)		—		—			1,486		(14	)

Total securities held to maturity	$	48,980	$	(708	)	$	—	$	—		$	48,980	$	(708	)

Total securities	$	115,053	$	(2,137	)	$	5,499	$	(208	)	$	120,552	$	(2,345	)


	2015
	Less than 12 months					12 months or more					Total
			Unrealized					Unrealized					Unrealized
	Fair Value		(Loss)			Fair Value		(Loss)			Fair Value		(Loss)
Securities available for sale:
U.S. agency and mortgage-backed securities	$	50,185	$	(464	)	$	13,409	$	(379	)	$	63,594	$	(843	)
Obligations of states and political subdivisions		2,395		(15	)		1,053		(35	)		3,448		(50	)

Total securities available for sale	$	52,580	$	(479	)	$	14,462	$	(414	)	$	67,042	$	(893	)

Securities held to maturity:
U.S. agency and mortgage-backed securities	$	32,791	$	(326	)	$	—	$	—		$	32,791	$	(326	)
Obligations of states and political subdivisions		3,052		(19	)		—		—			3,052		(19	)

Total securities held to maturity	$	35,843	$	(345	)	$	—	$	—		$	35,843	$	(345	)

Total securities	$	88,423	$	(824	)	$	14,462	$	(414	)	$	102,885	$	(1,238	)

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 December 31, 2016, there were sixty-four U.S. agency and mortgage-backed securities, fifty obligations of states and political subdivisions, and one corporate debt security 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 4.7 years at December 31, 2016. At December 31, 2015, there were fifty-two U.S. agency and mortgage-backed securities and thirteen 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, 2015. The weighted-average re-pricing term of the portfolio was 4.6 years at December 31, 2015. The unrealized losses at December 31, 2016 in the U.S. agency and mortgage-backed securities portfolio, the obligations of states and political subdivisions portfolio, and the corporate debt securities portfolio were related to changes in market interest rates and not credit concerns of the issuers.

The amortized cost and fair value of securities at December 31, 2016 by contractual maturity are shown below (in thousands). Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties. Corporate equity securities are not included in the maturity categories in the following maturity summary because they do not have a stated maturity date.


	Available for Sale				Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
Due within one year	$	471	$	473	$	—	$	—
Due after one year through five years		10,550		10,520		1,776		1,771
Due after five years through ten years		13,984		13,825		18,174		18,029
Due after ten years		71,100		69,973		33,448		32,909
Corporate equity securities		1		11		—		—

	$	96,106	$	94,802	$	53,398	$	52,709

Proceeds from maturities, calls, principal payments, and sales of securities available for sale during 2016 and 2015 were $22.8 million and $17.7 million, respectively. Gross gains of $22 thousand were realized on calls and sales during 2016. There were no gross gains realized on calls and sales during 2015. Gross losses of $14 thousand and $55 thousand were realized on calls and sales during 2016 and 2015, respectively.

Proceeds from maturities, calls, and principal payments, and sales of securities held to maturity during 2016 and 2015 were $12.8 million and $2.3 million. For the year ended December 31, 2016, the Company sold one security from the held to maturity portfolio. The Company recognized no gain or loss related to the sale as the carrying value of the security sold equaled the proceeds from the sale of $657 thousand. The sale of this security was in response to credit deterioration of the issuer. There were no sales of securities from the held to maturity portfolio for the year ended December 31, 2015. The Company did not realize any gross gains or gross losses on held to maturity securities during 2016 or 2015.

Securities having a fair value of $27.7 million and $26.9 million at December 31, 2016 and 2015 were pledged to secure public deposits and for other purposes required by law.

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 December 31, 2016, and no impairment has been recognized.

The composition of restricted securities at December 31, 2016 and 2015 was as follows (in thousands):


	2016		2015
Federal Home Loan Bank stock	$	623	$	466
Federal Reserve Bank stock		875		875
Community Bankers’ Bank stock		50		50

	$	1,548	$	1,391