Note

Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities available for sale by major security type are as follows.

	September 30, 2016
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	268,925	$	2,038	$	253	$	270,710
States and political subdivisions		12,572		352		---		12,924
Mortgage-backed securities		932		103		---		1,035
Corporate debt securities		6,016		440		---		6,456
Other securities		189		---		37		152
Total securities available for sale	$	288,634	$	2,933	$	290	$	291,277

	December 31, 2015
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	216,897	$	519	$	4,952	$	212,464
States and political subdivisions		15,934		541		---		16,475
Mortgage-backed securities		1,199		120		---		1,319
Corporate debt securities		6,015		22		291		5,746
Other securities		189		---		62		127
Total securities available for sale	$	240,234	$	1,202	$	5,305	$	236,131

The amortized cost and fair value of single maturity securities available for sale at September 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

	September 30 , 201 6
	Amortized Cost		Fair Value
Available for S ale:
Due in one year or less	$	1,980	$	2,009
Due after one year through five years		192,986		193,116
Due after give years through ten years		67,113		67,335
Due after ten years		26,366		28,665
No maturity		189		152
Total securities available for sale	$	288,634	$	291,277

The Company holds restricted stock with the Federal Home Loan Bank and the Federal Reserve. Required ownership amounts are determined by the correspondent banks and the Company purchases stock from or sells stock back to the correspondents based on their calculations. The stock is held by member institutions only and is not actively traded. The Company held restricted stock of $1,170 as of September 30, 2016 and $1,129 as of December 31, 2015.

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities held to maturity by major security type are as follows.

	September 30, 2016
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	3,934	$	401	$	---	$	4,335
States and political subdivisions		132,409		6,781		25		139,165
Mortgage-backed securities		281		35		---		316
Corporate debt securities		1,423		39		---		1,462
Total securities held to maturity	$	138,047	$	7,256	$	25	$	145,278

	December 31, 2015
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	13,909	$	288	$	177	$	14,020
States and political subdivisions		136,373		6,179		330		142,222
Mortgage-backed securities		327		36		---		363
Corporate debt securities		1,419		10		2		1,427
Total securities held to maturity	$	152,028	$	6,513	$	509	$	158,032

The amortized cost and fair value of single maturity securities held to maturity at September 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

	September 30 , 201 6
	Amortized Cost		Fair Value
Held to maturity :
Due in one year or less	$	2,813	$	2,871
Due after one year through five years		24,020		25,525
Due after give years through ten years		16,370		17,264
Due after ten years		94,844		99,618
Total securities held to maturity	$	138,047	$	145,278

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows.

	September 30, 2016
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily I mpaired S ecurities:
U.S. Government agencies and corporations	$	90,723	$	253	$	---	$	---
States and political subdivisions		780		1		1,440		24
Other securities		---		---		152		37
Total	$	91,503	$	254	$	1,592	$	61

	December 31, 2015
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily I mpaired S ecurities:
U.S. Government agencies and corporations	$	88,255	$	1,800	$	84,959	$	3,329
States and political subdivisions		3,449		24		10,161		306
Corporate debt securities		4,974		292		200		1
Other securities		---		---		127		62
Total	$	96,678	$	2,116	$	95,447	$	3,698

The Company had 95 securities with a fair value of $93,095 that were temporarily impaired at September 30, 2016. The total unrealized loss on these securities was $315. Of the temporarily impaired total, 3

securities with a fair value of $1,592 and an unrealized loss of $61 have been in a continuous loss position for twelve months or more. The Company has determined that these securities are temporarily impaired at September 30, 2016 for the reasons set out below.

States and political subdivisions.

This category’s unrealized losses of $24 on 2 securities with a fair value of $1,440 are primarily the result of interest rate and market fluctuations. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. The Company purchases only investment-grade bonds with a Moody or Standard and Poor’s rating of A or better, and that comply with regulatory requirements. Bond ratings are monitored on an ongoing basis. Municipal obligations that experience a decline in credit rating are analyzed to determine appropriate action and accounting treatment. The company performs an analysis each quarter to determine whether any investments are other-than-temporarily impaired. Because the Company does not intend to sell any of the investments and it is not likely that the Company will be required to sell any of the investments before recovery of its amortized cost basis, which may be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Other securities.

The Company holds a small investment in community bank stock. One security with a fair value of $152 has an unrealized loss of $37. The value of this investment has been negatively affected by market conditions. Because the Company does not intend to sell this investment before recovery of its amortized cost basis, the Company does not consider this investment to be other-than-temporarily impaired.

Restricted stock.

Restricted stock is reported separately from available-for-sale securities and held-to-maturity securities. As a member of the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Atlanta, NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital and a percentage of qualifying assets. In addition, NBB is eligible to borrow from the FHLB with borrowings collateralized by qualifying assets, primarily residential mortgage loans and NBB’s capital stock investment in the FHLB. Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB may declare dividends on the stock. Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at September 30, 2016, management did not determine any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully monitor any changes in bond quality.