Investment Securities

Debt and equity securities have been classified in the consolidated balance sheets according to management’s intent. Investment securities at

June 30, 2017

and

December 31, 2016

are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gains		Losses		Value

June 30, 2017
Securities available for sale:
Agency mortgage-backed securities	$	120,676	$	54	$	1,233	$	119,497
Agency CMO		14,623		7		177		14,453
Other debt securities:
Agency notes and bonds		71,457		3		437		71,023
Municipal obligations		70,395		1,652		282		71,765
Subtotal - debt securities		277,151		1,716		2,129		276,738

Mutual funds		424		0		0		424

Total securities available for sale	$	277,575	$	1,716	$	2,129	$	277,162

Securities held to maturity:
Agency mortgage-backed securities	$	2	$	0	$	0	$	2

Total securities held to maturity	$	2	$	0	$	0	$	2

December 31, 2016
Securities available for sale:
Agency mortgage-backed securities	$	110,493	$	93	$	2,349	$	108,237
Agency CMO		16,293		23		288		16,028
Other debt securities:
Agency notes and bonds		69,407		14		759		68,662
Municipal obligations		63,189		783		1,129		62,843
Subtotal - debt securities		259,382		913		4,525		255,770

Mutual funds		74		0		0		74

Total securities available for sale	$	259,456	$	913	$	4,525	$	255,844

Securities held to maturity:
Agency mortgage-backed securities	$	2	$	0	$	0	$	2

Total securities held to maturity	$	2	$	0	$	0	$	2

Agency notes and bonds, agency mortgage-backed securities and agency collateralized mortgage obligations (“CMO”) include securities issued by the Government National Mortgage Association (“GNMA”), a U.S. government agency, and the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”) and the Federal Home Loan Bank (“FHLB”), which are government-sponsored enterprises.

The amortized cost and fair value of debt securities as of

June 30, 2017,

by contractual maturity, are shown below. Expected maturities of mortgage-backed securities and CMO

may

differ from contractual maturities because the mortgages underlying the obligations

may

be prepaid without penalty.

	Securities Available for Sale				Securities Held to Maturity
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
(In thousands)

Due in one year or less	$	1,992	$	1,992	$	0	$	0
Due after one year through five years		75,703		75,373		0		0
Due after five years through ten years		20,555		20,890
Due after ten years		43,602		44,533		0		0
		141,852		142,788		0		0
Mortgage-backed securities and CMO		135,299		133,950		2		2

	$	277,151	$	276,738	$	2	$	2

Information pertaining to investment securities available for sale with gross unrealized losses at

June 30, 2017,

aggregated by investment category and the length of time that individual investment securities have been in a continuous position, follows. At

June 30, 2017,

the Company did

not

have any securities held to maturity with an unrealized loss.

	Number of				Gross
	Investment		Fair		Unrealized
	Positions		Value		Losses
(Dollars in thousands)

Continuous loss position less than twelve months:
Agency notes and bonds		18	$	50,419	$	242
Agency CMO		9		7,385		79
Agency mortgage-backed securities		69		91,621		1,070
Muncipal obligations		25		13,713		234

Total less than twelve months		121		163,138		1,625

Continuous loss position more than twelve months:
Agency notes and bonds		5	$	18,805	$	195
Agency CMO		9		5,735		98
Agency mortgage-backed securities		5		9,930		163
Muncipal obligations		6		2,435		48

Total more than twelve months		25		36,905		504

Total securities available for sale		146	$	200,043	$	2,129

Management evaluates securities for other-than-temporary impairment at least quarterly, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (

) the length of time and the extent to which the fair value has been less than cost, (

) the financial condition and near-term prospects of the issuer, and (

) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recover in fair value.

June 30, 2017,

the U.S. government agency debt securities, including agency notes and bonds, mortgage-backed securities and CMO, and municipal obligations in a loss position had depreciated approximately

1.1%

from the amortized cost basis. All of the U.S. government agency securities and municipal obligations are issued by U.S. government agencies, government-sponsored enterprises and municipal governments, or are secured by

first

mortgage loans and municipal project revenues. These unrealized losses related principally to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government, its agencies or other governments, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. As the Company has the ability to hold the debt securities until maturity, or the foreseeable future if classified as available for sale,

declines are deemed to be other-than-temporary.

While management does

not

anticipate any credit-related impairment losses at

June 30, 2017,

additional deterioration in market and economic conditions

may

have an adverse impact on credit quality in the future.

During the

three

and

six

months ended

June 30, 2017,

the Company realized gross gains on sales of available for sale agency mortgage backed securities and CMO’s of

$58,000

and

$3,000,

respectively. During the

three

and

six

months ended

June 30, 2016,

the Company realized gross gains on sales of available for sale municipal securities of

$176,000.