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.

	March 31, 2017
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	291,278	$	584	$	4,649	$	287,213
State s and political subdivisions		9,977		185		---		10,162
Mortgage-backed securities		782		82		---		864
Corporate debt securities		6,015		69		127		5,957
Other securities		189		---		9		180
Total securities available for sale	$	308,241	$	920	$	4,785	$	304,376

	December 31, 201 6
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	291,271	$	492	$	6,165	$	285,598
States and political subdivisions		11,482		211		---		11,693
Mortgage-backed securities		845		85		---		930
Corporate debt securities		6,015		20		137		5,898
Other securities		189		---		26		163
Total securities available for sale	$	309,842	$	808	$	6,328	$	304,282

The amortized cost and fair value of single maturity securities available for sale at

March

31,

2017,

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.

	March 31, 2017
	Amortized Cost		Fair Value
Available for S ale:
Due in one year or less	$	4,160	$	4,169
Due after one year through five years		204,152		201,752
Due after give years through ten years		75,541		73,852
Due after ten years		24,199		24,423
No maturity		189		180
Total securities available for sale	$	308,241	$	304,376

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

	March 31, 2017
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	3,934	$	220	$	---	$	4,154
State s and political subdivisions		128,437		3,834		558		131,713
Mortgage-backed securities		248		28		---		276
Corporate debt securities		977		14		---		991
Total securities held to maturity	$	133,596	$	4,096	$	558	$	137,134

	December 31, 201 6
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	3,934	$	201	$	---	$	4,135
States and political subdivisions		129,783		3,579		1,082		132,280
Mortgage-backed securities		265		30		---		295
Corporate debt securities		975		7		---		982
Total securities held to maturity	$	134,957	$	3,817	$	1,082	$	137,692

The amortized cost and fair value of single maturity securities held to maturity at

March

31,

2017,

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.

	March 31, 2017
	Amortized Cost		Fair Value
Held to maturity :
Due in one year or less	$	7,620	$	7,778
Due after one year through five years		26,018		27,490
Due after give years through ten years		20,849		21,558
Due after ten years		79,109		80,308
Total securities held to maturity	$	133,596	$	137,134

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.

	March 31, 2017
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily I mpaired S ecurities:
U.S. Gove rnment agencies and corporations	$	264,648	$	4,645	$	1,995	$	4
State s and political subdivisions		21,505		483		1,389		75
Corporate debt securities		2,890		127		---		---
Other securities		---		---		180		9
Total	$	289,043	$	5,255	$	3,564	$	88

	December 31, 201 6
	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	$	260,150	$	6,161	$	996	$	4
States and political subdivisions		31,257		934		1,316		148
Corporate debt securities		3,888		137		---		---
Other securities		---		---		163		26
Total	$	295,295	$	7,232	$	2,475	$	178

The Company had

314

securities with a fair value of

$292,607

that were temporarily impaired at

March

31,

2017.

The total unrealized loss on these securities was

$5,343.

Of the temporarily impaired total,

securities with a fair value of

$3,564

and an unrealized loss of

$88

have been in a continuous loss position for

twelve

months or more. The Company has determined that these securities are temporarily impaired at

March

31,

2017

for the reasons set out below.

U.S. Government agencies

. The unrealized losses of

on US Government agency securities stemmed from

securities with a fair value of

$1,995.

The unrealized loss was caused by interest rate and market fluctuations. The contractual term of the investments do not permit the issuers to settle the securities at a price less than the cost basis of the investments. The Company is monitoring bond market trends to develop strategies to address unrealized losses. Because the Company does not intend to sell the investments and it is not likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which

may

be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

States and political subdivisions.

This category’s unrealized losses of

$75

securities with a fair value of

$1,389

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

$180

has an unrealized loss of

$9.

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.

The Company held restricted stock of

$1,200

as of

March

31,

2017

and

$1,170

as of

December

31,

2016.

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 ownership amounts are determined by the correspondent banks based upon NBB’s capital and percentage of qualifying assets. 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.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB

may

declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling

$478,903

March

31,

2017.

Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at

March

31,

2017,

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.