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, 2016
U. S. government agencies	$	35,736	$	588	$	—	$	36,324
States and political subdivisions		90,751		4,659		—		95,410
Mortgage-backed - residential		133,245		1,703		(310)		134,638
Equity securities		320		30		—		350
Total	$	260,052	$	6,980	$	(310)	$	266,722

December 31, 2015
U. S. government agencies	$	49,012	$	51	$	(200)	$	48,863
States and political subdivisions		89,501		2,644		(183)		91,962
Mortgage-backed - residential		124,834		210		(2,001)		123,043
Equity securities		320		24		—		344
Total	$	263,667	$	2,929	$	(2,384)	$	264,212

The amortized cost and fair value of securities at June 30, 2016 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 9.


	Amortized		Fair
	Cost		Value

Due in one year or less	$	—	$	—
Due after one year through five years		23,522		24,190
Due after five years through ten years		56,998		58,900
Due after ten years		45,967		48,644
		126,487		131,734
Mortgage-backed - residential		133,245		134,638
Equity		320		350
Total	$	260,052	$	266,722

Proceeds from sales of securities during the first six months of 2016 and 2015 were $21.4 million and $9.1 million. Gross gains of $277 thousand and $251 thousand and gross losses of $0 and $0 were realized on those sales, respectively. The tax provision related to these realized net gains was $94 thousand and $85 thousand, respectively.

Proceeds from sales of securities during the three months ended June 30, 2016 and June 30, 2015 were $12.1 million and $9.1 million. Gross gains of $151 thousand and $243 thousand and gross losses of $0 and $0 were realized on those sales, respectively. The tax provision related to these realized net gains was $51 thousand and $83 thousand, respectively.

Securities with unrealized losses June 30, 2016 and at December 31, 2015 not recognized in income are as follows:

June 30, 2016


	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	$	—	$	—	$	—	$	—	$	—	$	—
States and municipals		—		—		—		—		—		—
Mortgage-backed - residential		22,211		(168)		10,390		(142)		32,601		(310)
Total temporarily impaired	$	22,211	$	(168)	$	10,390	$	(142)	$	32,601	$	(310)

December 31, 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	$	15,243	$	(56)	$	30,293	$	(144)	$	45,536	$	(200)
States and municipals		10,938		(102)		4,065		(81)		15,003		(183)
Mortgage-backed - residential		77,898		(1,231)		23,488		(770)		101,386		(2,001)
Total temporarily impaired	$	104,079	$	(1,389)	$	57,846	$	(995)	$	161,925	$	(2,384)

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 $5.7 million are primarily comprised of cash and cash equivalents and municipal securities which are generally held for 60 days or less.