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2. Investment Securities

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

2. Investment Securities

Investment securities available for sale at September 30, 2017 and December 31, 2016 are as follows:

(Dollars in thousands)
		September 30, 2017
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	55,947				1,142				196				56,893
U.S. Government
sponsored enterprises			40,815				290				151				40,954
State and political subdivisions			130,175				5,954				20				136,109
Corporate bonds			1,500				30				-				1,530
Trust preferred securities			250				-				-				250
Total		$	228,687				7,416				367				235,736

(Dollars in thousands)
		December 31, 2016
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
Mortgage-backed securities		$	66,654				1,221				290				67,585
U.S. Government
sponsored enterprises			38,188				308				274				38,222
State and political subdivisions			137,832				4,176				152				141,856
Corporate bonds			1,500				33				-				1,533
Trust preferred securities			750				-				-				750
Total		$	244,924				5,738				716				249,946

The current fair value and associated unrealized losses on investments in securities with unrealized losses at September 30, 2017 and December 31, 2016 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, 2017
		Less than 12 Months								12 Months or More								Total
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Mortgage-backed securities		$	10,540				95				4,792				101				15,332				196
U.S. Government
sponsored enterprises			5,424				47				10,762				104				16,186				151
State and political subdivisions			545				2				986				18				1,531				20
Total		$	16,509				144				16,540				223				33,049				367

(Dollars in thousands)

		December 31, 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		$	15,594				290				-				-				15,594				290
U.S. Government
sponsored enterprises			10,120				94				9,562				180				19,682				274
State and political subdivisions			10,441				123				561				29				11,002				152
Total		$	36,155				507				10,123				209				46,278				716

At September 30, 2017, unrealized losses in the investment securities portfolio relating to debt securities totaled $367,000. The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary. From the September 30, 2017 tables above, three out of 160 securities issued by state and political subdivisions contained unrealized losses, 17 out of 78 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, 2017, 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, 2017
(Dollars in thousands)
		Amortized Cost				Estimated Fair Value
Due within one year		$	13,299				13,397
Due from one to five years			95,096				99,142
Due from five to ten years			55,333				57,069
Due after ten years			8,762				8,985
Mortgage-backed securities			55,947				56,893
Trust preferred securities			250				250
Total		$	228,687				235,736

No securities available for sale were sold during the nine months ended September 30, 2017. 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.

Securities with a fair value of approximately $88.2 million and $95.6 million at September 30, 2017 and December 31, 2016, respectively, were pledged to secure public deposits and for other purposes as required by law.