NOTE 3 - SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost and fair value of the securities at December 31, 2017 and 2016 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, 2017
U.S. treasury notes	$	4,046	$	—	$	(22)	$	4,024
U. S. government agencies		41,658		405		(358)		41,705
States and political subdivisions		88,485		1,783		(133)		90,135
Mortgage-backed - residential		132,664		43		(2,330)		130,377
Mortgage-backed - commercial		52,267		18		(689)		51,596
Equity securities		320		20		—		340
Total	$	319,440	$	2,269	$	(3,532)	$	318,177

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		110,085		93		(2,103)		108,075
Mortgage-backed - commercial		38,242		27		(574)		37,695
Equity securities		320		20		—		340
Total	$	275,218	$	2,244	$	(3,692)	$	273,770

The amortized cost and fair value of securities at December 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.


	Amortized		Fair
	Cost		Value
Due in one year or less	$	3,084	$	3,079
Due after one year through five years		30,917		31,186
Due after five years through ten years		33,278		33,577
Due after ten years		66,910		68,022
		134,189		135,864
Mortgage-backed - residential		132,664		130,377
Mortgage-backed - commercial		52,267		51,596
Equity		320		340
Total	$	319,440	$	318,177

Proceeds from sales of securities during 2017, 2016 and 2015 were $27.1. million, $23.9 million and $21.7 million. Gross gains of $115 thousand, $317 thousand, and $425 thousand and gross losses of $63 thousand, $30 thousand and $13 thousand, were realized on those sales, respectively. The tax provision related to these realized gains and losses was $18 thousand, $98 thousand and $140 thousand, respectively.

Securities with an approximate carrying value of $260.4 million and $252.4 million at December 31, 2017 and 2016, 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 2017 and 2016 not recognized in income are as follows:

December 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. treasury notes	$	4,024	$	(22)	$	—	$	—	$	4,024	$	(22)
U.S. government agencies		18,405		(130)		12,692		(228)		31,097		(358)
States and municipals		15,442		(97)		2,769		(36)		18,211		(133)
Mortgage-backed - residential		70,646		(817)		54,760		(1,513)		125,406		(2,330)
Mortgage-backed - commercial		39,394		(409)		7,371		(280)		46,765		(689)
Total temporarily impaired	$	147,911	$	(1,475)	$	77,592	$	(2,057)	$	225,503	$	(3,532)

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		88,167		(1,364)		13,652		(739)		101,819		(2,103)
Mortgage-backed - commercial		31,635		(574)		—		—		31,635		(574)
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, 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, 2017, one U.S. treasury note has an unrealized loss of 0.6% from its amortized cost basis, thirteen U.S. government agency securities have unrealized losses of 1.1% from their amortized cost, eighteen commercial mortgage backed securities have unrealized losses of 1.5% from their amortized cost basis, sixty-four residential mortgage backed securities have unrealized losses of 1.8% from their amortized cost basis, and twenty-three states and municipals have unrealized losses of 0.7% 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.

At December 31, 2017, the Company held no trading assets. However, at December 31, 2016, the Company held $5.6 million in trading assets, which were excluded from securities available for sale, and consisted primarily of municipal securities. These assets were generally held for a mininmal period of time.