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Available-for-Sale Securities

12 Months Ended

Dec. 31, 2015

Available-for-Sale Securities [Abstract]

Note 3: Available-for-Sale Securities

The amortized cost and appropriate fair values, together with gross unrealized gains and losses, of available-for-sale securities are as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized
($ in thousands)	Cost		Gains		Losses			Fair Value
Available-for-Sale Securities:
December 31, 2015:
U.S. Treasury and Government agencies	$	10,804	$	101	$	-		$	10,905
Mortgage-backed securities		61,459		311		(427	)		61,343
State and political subdivisions		16,519		999		-			17,518
Equity securities		23		-		-			23

	$	88,805	$	1,411	$	(427	)	$	89,789

			Gross		Gross
	Amortized		Unrealized		Unrealized
($ in thousands)	Cost		Gains		Losses			Fair Value
Available-for-Sale Securities:
December 31, 2014:
U.S. Treasury and Government agencies	$	15,187	$	124	$	(4	)	$	15,307
Mortgage-backed securities		50,563		462		(285	)		50,740
State and political subdivisions		18,075		1,095		-			19,170
Equity securities		23		-		-			23

	$	83,848	$	1,681	$	(289	)	$	85,240

The amortized cost and fair value of securities available for sale and held to maturity at December 31, 2015, by contractual maturity, are shown below. Expected maturities differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available for Sale
	Amortized		Fair
($ in thousands)	Cost		Value

Within one year	$	425	$	429
Due after one year through five years		2,044		2,126
Due after five years through ten years		6,079		6,399
Due after ten years		18,775		19,469
		27,323		28,423

Mortgage-backed securities and equity securities		61,482		61,366

Totals	$	88,805	$	89,789

The fair value of securities pledged as collateral, to secure public deposits and for other purposes, was $46.2 million at December 31, 2015, and $44.5 million at December 31, 2014. Securities delivered for repurchase agreements (not included above) were $15.8 million at December 31, 2015 and $16.5 million at December 31, 2014.

There were no realized gains or losses on available-for-sale securities in 2015. Gross gains of $0.17 million and gross losses of $0.01 million were realized from sales of available-for-sale securities in 2014. The net $0.16 million gain on sale in 2014 was a reclassification from accumulated other comprehensive income and is included in the net gain on sales of securities. The related tax expense for net security gains was $0.05 million in 2014 and was a reclassification from accumulated other comprehensive income and is included in the income tax expense line in the income statement.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at December 31, 2015 and 2014, was $37.2 million and $29.0 million, respectively, which was approximately 41% and 34%, respectively, of the Company's available-for-sale investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary.

Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables present securities with unrealized losses at December 31, 2015 and 2014:

($ in thousands)	Less than 12 Months					12 Months or Longer					Total
December 31, 2015	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Mortgage-backed securities		30,184		(253	)		7,061		(174	)		37,245		(427	)

	$	30,184	$	(253	)	$	7,061	$	(174	)	$	37,245	$	(427	)

December 31, 2014	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
U.S. Treasury and Government agencies	$	1,387	$	(4	)	$	-	$	-		$	1,387	$	(4	)
Mortgage-backed securities		20,491		(73	)		7,073		(212	)		27,564		(285	)

	$	21,878	$	(77	)	$	7,073	$	(212	)	$	28,951	$	(289	)

The unrealized loss on the securities portfolio has increased by $0.14 million as of December 31, 2015, from the prior year. Management reviews these securities on a quarterly basis and has determined that no impairment exists. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concern warrants such evaluation. When the Company does not intend to sell a debt security, and it is more likely than not, the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income.