NOTE 3 - SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost and fair value of the securities at December 31, 2016 and 2015 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for Sale
December 31, 2016
U. S. government agencies	$	36,454	$	373	$	(299)	$	36,528
States and political subdivisions		90,117		1,731		(716)		91,132
Mortgage-backed - residential		148,327		120		(2,677)		145,770
Equity securities		320		20		—		340
Total	$	275,218	$	2,244	$	(3,692)	$	273,770

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 December 31, 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.


	Amortized		Fair
	Cost		Value

Due in one year or less	$	3,300	$	3,299
Due after one year through five years		22,097		22,486
Due after five years through ten years		55,715		55,829
Due after ten years		45,459		46,046
		126,571		127,660
Mortgage-backed - residential		148,327		145,770
Equity		320		340
Total	$	275,218	$	273,770

Trading assets totaling $5.6 million are excluded from securities available for sale and consist primarily of municipal securities which are generally held for a minimal period of time.

Proceeds from sales of securities during 2016, 2015 and 2014 were $23.9 million, $21.7 million and $74.0 million. Gross gains of $317 thousand, $425 thousand, and $1.4 million and gross losses of $30 thousand, $13 thousand and $400 thousand, were realized on those sales, respectively. The tax provision related to these realized gains and losses was $98 thousand, $140 thousand and $328 thousand, respectively.

Securities with an approximate carrying value of $252.4 million and $246.2 million at December 31, 2016 and 2015, were pledged to secure public deposits, trust funds, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

Securities with unrealized losses at year end 2016 and 2015 not recognized in income are as follows:

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	$	28,202	$	(299)	$	—	$	—	$	28,202	$	(299)
States and municipals		27,834		(716)		—		—		27,834		(716)
Mortgage-backed - residential		119,802		(1,938)		13,652		(739)		133,454		(2,677)
Total temporarily impaired	$	175,838	$	(2,953)	$	13,652	$	(739)	$	189,490	$	(3,692)

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, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

Unrealized losses on securities have not been recognized into income because the issues are of high credit quality, management does not intend to sell and it is more likely than not that management would be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates. The fair value is expected to recover as the securities approach maturity.

At December 31, 2016, eleven U.S. government agency securities have unrealized losses of 1.1% from their amortized cost, seventy mortgage-backed securities have unrealized losses of 1.6% from their amortized cost basis, and fifty two states and municipals have unrealized losses of 1.8% from their amortized cost basis. Management believes the declines in fair value from these and other securities are largely due to changes in interest rates. The Company believes there is no other than temporary impairment and does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery.