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
March 31, 2017
U. S. government agencies	$	46,077	$	386	$	(265)	$	46,198
States and political subdivisions		91,389		1,928		(381)		92,936
Mortgage-backed - residential		164,475		149		(2,171)		162,453
Equity securities		320		20		—		340
Total	$	302,261	$	2,483	$	(2,817)	$	301,927

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

The amortized cost and fair value of securities at March 31, 2017 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	$	300	$	301
Due after one year through five years		34,432		34,951
Due after five years through ten years		49,420		49,811
Due after ten years		53,314		54,071
		137,466		139,134
Mortgage-backed - residential		164,475		162,453
Equity		320		340
Total	$	302,261	$	301,927

Proceeds from sales of securities during the first three months of 2017 and 2016 were $0 and $9.3 million. Gross gains of $0 and $126 thousand and gross losses of $0 and $0 were realized on those sales, respectively. The tax provision related to these realized net gains was $0 and $43 thousand, respectively.

Securities with unrealized losses March 31, 2017 and at December 31, 2016 not recognized in income are as follows:

March 31, 2017


	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	$	24,754	$	(265)	$	—	$	—	$	24,754	$	(265)
States and municipals		21,189		(381)		—		—		21,189		(381)
Mortgage-backed - residential		125,783		(1,600)		13,366		(571)		139,149		(2,171)
Total temporarily impaired	$	171,726	$	(2,246)	$	13,366	$	(571)	$	185,092	$	(2,817)

December 31, 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)

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 will recover as the securities approach maturity.

TRADING ASSETS

The trading assets, which totaled $5.6 million at March 31, 2017 and $5.6 million at December 31, 2016, are primarily comprised of cash and cash equivalents and municipal securities which are generally held for 60 days or less.