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2. Investment Securities

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

2. Investment Securities

Investment securities available for sale at September 30, 2016 and December 31, 2015 are as follows:

(Dollars in thousands)
		September 30, 2016
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	71,359				2,083				49				73,393
U.S. Government
sponsored enterprises			38,575				743				240				39,078
State and political subdivisions			138,672				8,481				11				147,142
Corporate bonds			1,505				20				-				1,525
Trust preferred securities			750				-				-				750
Equity securities			264				271				-				535
Total		$	251,125				11,598				300				262,423

(Dollars in thousands)
		December 31, 2015
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	76,406				1,526				45				77,887
U.S. Government
sponsored enterprises			38,173				399				155				38,417
State and political subdivisions			141,500				6,817				72				148,245
Corporate bonds			1,928				-				22				1,906
Trust preferred securities			750				-				-				750
Equity securities			748				577				-				1,325
Total		$	259,505				9,319				294				268,530

The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2016 and December 31, 2015 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, 2016
		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Mortgage-backed securities		$	5,795				49				-				-				5,795				49
U.S. Government
sponsored enterprises			7,517				66				9,685				174				17,202				240
State and political subdivisions			426				1				582				10				1,008				11
Total		$	13,738				116				10,267				184				24,005				300

(Dollars in thousands)
		December 31, 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		$	7,891				45				-				-				7,891				45
U.S. Government
sponsored enterprises			3,074				13				10,828				142				13,902				155
State and political subdivisions			2,198				4				3,930				68				6,128				72
Corporate bonds			1,500				22				-				-				1,500				22
Total		$	14,663				84				14,758				210				29,421				294

At September 30, 2016, unrealized losses in the investment securities portfolio relating to debt securities totaled $300,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2016 tables above, two out of 170 securities issued by state and political subdivisions contained unrealized losses, 10 out of 82 securities issued by U.S. Government sponsored enterprises contained unrealized losses, and no 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, 2016, 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, 2016
(Dollars in thousands)
		Amortized Cost				Estimated Fair Value
Due within one year		$	8,444				8,500
Due from one to five years			76,972				81,294
Due from five to ten years			83,725				87,937
Due after ten years			10,361				10,764
Mortgage-backed securities			71,359				73,393
Equity securities			264				535
Total		$	251,125				262,423

Proceeds from sales of securities available for sale during the nine months ended September 30, 2016 were $804,000 and resulted in gross gains of $324,000. No securities available for sale were sold during the three months ended September 30, 2016, or the three and nine months ended September 30, 2015.

Securities with a fair value of approximately $85.2 million and $91.0 million at September 30, 2016 and December 31, 2015, respectively, were pledged to secure public deposits and for other purposes as required by law.