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2. Investment Securities

9 Months Ended

Sep. 30, 2015

Investments, Debt and Equity Securities [Abstract]

2. Investment Securities

Investment securities available for sale at September 30, 2015 and December 31, 2014 are as follows:

(Dollars in thousands)
		September 30, 2015
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	75,386				2,098				18				77,466
U.S. Government
sponsored enterprises			38,793				505				129				39,169
State and political subdivisions			143,094				5,566				338				148,322
Corporate bonds			1,937				4				1				1,940
Trust preferred securities			750				-				-				750
Equity securities			748				426				-				1,174
Total		$	260,708				8,599				486				268,821

(Dollars in thousands)
		December 31, 2014
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	88,496				1,766				52				90,210
U.S. Government
sponsored enterprises			33,766				418				136				34,048
State and political subdivisions			145,938				6,534				226				152,246
Corporate bonds			2,469				16				18				2,467
Trust preferred securities			750				-				-				750
Equity securities			748				630				-				1,378
Total		$	272,167				9,364				432				281,099

The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2015 and December 31, 2014 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)
		September 30, 2015
		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Mortgage-backed securities		$	2,278				18				-				-				2,278				18
U.S. Government
sponsored enterprises			2,319				20				9,064				109				11,383				129
State and political subdivisions			15,762				170				6,668				168				22,430				338
Corporate bonds			-				-				526				1				526				1
Total		$	20,359				208				16,258				278				36,617				486

(Dollars in thousands)
		December 31, 2014
		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Mortgage-backed securities		$	436				1				2,963				51				3,399				52
U.S. Government
sponsored enterprises			2,996				4				9,850				132				12,846				136
State and political subdivisions			567				1				14,998				225				15,565				226
Corporate bonds			-				-				525				18				525				18
Total		$	3,999				6				28,336				426				32,335				432

At September 30, 2015, unrealized losses in the investment securities portfolio relating to debt securities totaled $486,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2015 tables above, 26 out of 173 securities issued by state and political subdivisions contained unrealized losses, seven out of 79 securities issued by U.S. Government sponsored enterprises, including mortgage-backed securities, contained unrealized losses, and one out of three securities issued by corporations contained unrealized losses. These unrealized losses are considered temporary because of acceptable financial condition and results of operations of entities that issued each security and the repayment sources of principal and interest on U.S. Government sponsored enterprises, including mortgage-backed securities, are government backed.

The amortized cost and estimated fair value of investment securities available for sale at September 30, 2015, by contractual maturity, are shown below. Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

September 30, 2015
(Dollars in thousands)
	Amortized Cost			Estimated Fair Value
Due within one year	$	4,431		4,440
Due from one to five years		57,499		60,100
Due from five to ten years		107,022		109,524
Due after ten years		15,622		16,117
Mortgage-backed securities		75,386		77,466
Equity securities		748		1,174
Total	$	260,708		268,821

No securities available for sale were sold during the nine months ended September 30, 2015. Proceeds from sales of securities available for sale during the nine months ended September 30, 2014 totaled $20.2 million and resulted in gross gains of $291,000 and gross losses of $25,000.

Securities with a fair value of approximately $88.9 million and $89.9 million at September 30, 2015 and December 31, 2014, respectively, were pledged to secure public deposits and for other purposes as required by law.