2.SECURITIES

SECURITIES AVAILABLE FOR SALE

Period-end securities are as follows:

(in thousands)

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for Sale

June 30, 2015
U.S. government agencies	$	55,817	$	27	$	(766	)	$	55,078
States and political subdivisions	87,055		2,105		(965		)	88,195
Mortgage-backed - residential	94,988		176		(1,256		)	93,908
Equity securities	270		25		—			295

Total	$	238,130	$	2,333	$	(2,987	)	$	237,476


December 31, 2014
U.S. government agencies	$	61,721	$	1	$	(1,136	)	$	60,586
States and political subdivisions	86,322		3,234		(275		)	89,281
Mortgage-backed - residential	97,349		267		(918		)	96,698
Equity securities	270		26		—			296

Total	$	245,662	$	3,528	$	(2,329	)	$	246,861

The amortized cost and fair value of securities at June 30, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity are shown separately. Further discussion concerning Fair Value Measurements can be found in Note 8.

(in thousands)

	Amortized		Fair
	Cost		Value
Due in one year or less	$	40	$	40
Due after one year through five years	17,392		17,299
Due after five years through ten years	75,717		75,588
Due after ten years	49,723		50,346

	142,872		143,273
Mortgage-backed - residential	94,988		93,908
Equity	270		295

Total	$	238,130	$	237,476

Proceeds from sales of securities during the first six months of 2015 and 2014 were $9.1 million and $40.0 million. Gross gains of $251 thousand and $785 thousand and gross losses of $0 and $352 thousand were realized on those sales, respectively. The tax provision related to these realized net gains was $85 and $147 thousand, respectively.

Proceeds from sales of securities during the three months ending June 30, 2015 and June 30, 2014 were $9.1 million and $23.5 million. Gross gains of $243 thousand and $477 thousand and gross losses of $0 and $232 were realized on those sales, respectively. The tax provision related to these realized gains and losses was $83 thousand for both periods, respectively.

Securities with unrealized losses June 30, 2015 and at December 31, 2014 not recognized in income are as follows:

June 30, 2015

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss

U.S. Government agencies	$	8,873	$	(66	)	$	36,854	$	(700	)	$	45,727	$	(766	)
States and municipals	19,875		(414		)	9,126		(551		)	29,001		(965		)
Mortgage-backed - residential	59,964		(772		)	14,788		(484		)	74,752		(1,256		)


Total temporarily impaired	$	88,712	$	(1,252	)	$	60,768	$	(1,735	)	$	149,480	$	(2,987	)

December 31, 2014

	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
Description of Securities	Value		Loss			Value		Loss			Value		Loss

U.S. Government agencies	$	12,528	$	(176	)	$	45,066	$	(960	)	$	57,594	$	(1,136	)
States and municipals	5,011		(27		)	9,738		(248		)	14,749		(275		)
Mortgage-backed - residential	46,685		(572		)	18,747		(346		)	65,432		(918		)


Total temporarily impaired	$	64,224	$	(775	)	$	73,551	$	(1,554	)	$	137,775	$	(2,329	)

The Company evaluates securities for other than temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In analyzing an issuer’s financial condition, we may consider many factors including, (1) whether the securities are issued by the federal government or its agencies, (2) whether downgrades by bond rating agencies have occurred, (3) the results of reviews of the issuer’s financial condition and near-term prospects, (4) the length of time and the extent to which the fair value has been less than cost, and (5) whether we intend to sell the investment security or more likely than not will be required to sell the investment security before its anticipated recovery.

Unrealized losses on securities included in the tables above have not been recognized into income because (1) all rated securities are investment grade and are of high credit quality, (2) management does not intend to sell and it is more likely than not that management would not be required to sell the securities prior to their anticipated recovery, (3) management believes the decline in fair value is largely due to changes in interest rates and (4) management believes the declines in fair value are temporary. The Company believes the fair value is expected to recover as the securities approach maturity.

TRADING ASSETS

The trading assets of $5.4 million are primarily comprised of municipal securities which are held for a minimal period of time.