4.	INVESTMENT SECURITIES

Investment securities consisted of the following as of the dates indicated (in thousands):

	June 30, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasuries and government agencies	$	24,176	$	31	$	--		$	24,207
Municipal securities		68,769		1,316		(21	)		70,064
Residential mortgage-backed securities		95,634		1,632		(26	)		97,240

Total available for sale	$	188,579	$	2,979	$	(47	)	$	191,511

Held to maturity
Municipal securities	$	1,038	$	--	$	--		$	1,038

Total held to maturity	$	1,038	$	--	$	--		$	1,038

	December 31, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale
U.S. Treasuries and government agencies	$	49,612	$	5	$	(117	)	$	49,500
Municipal securities		63,276		717		(60	)		63,933
Residential mortgage-backed securities		85,072		647		(567	)		85,152

Total available for sale	$	197,960	$	1,369	$	(744	)	$	198,585

The mortgage-backed portfolios at June 30, 2016 and December 31, 2015 were composed entirely of residential mortgage-backed securities issued or guaranteed by GNMA, FNMA or FHLMC.

The following tables summarize the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other-than-temporarily impaired (“OTTI”), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	June 30, 2016
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

Municipal securities	$	3,243	$	20	$	255	$	1	$	3,498	$	21
Residential mortgage-backed securities		9,143		26		--		--		9,143		26

Total	$	12,386	$	46	$	255	$	1	$	12,641	$	47

	December 31, 201 5
	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

U.S. Treasuries and government agencies	$	46,805	$	117	$	--	$	--	$	46,805	$	117
Municipal securities		4,741		32		2,707		28		7,448		60
Residential mortgage-backed securities		57,561		567		--		--		57,561		567

Total	$	109,107	$	716	$	2,707	$	28	$	111,814	$	744

On a quarterly basis, management conducts a formal review of securities for the presence of OTTI. Management assesses whether an OTTI is present when the fair value of a security is less than its amortized cost basis at the balance sheet date. For such securities, OTTI is considered to have occurred if the Company intends to sell the security, if it is more likely than not the Company will be required to sell the security before recovery of its amortized cost basis or if the present values of expected cash flows is not sufficient to recover the entire amortized cost.

The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Additionally, the unrealized losses are also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount.

The Company has pledged investment securities with carrying values of approximately $107.7 million at June 30, 2016 and $119.1 million at December 31, 2015, as collateral for certain deposits in excess of $250,000 and for other purposes, including investment securities with carrying values of approximately $15.0 million at June 30, 2016 and $12.1 million at December 31, 2015, for securities sold under agreements to repurchase.

The following table sets forth the amount (dollars in thousands) of investment securities that contractually mature during each of the periods indicated and the weighted average yields for each range of maturities at June 30, 2016. Weighted average yields for municipal obligations have not been adjusted to a tax-equivalent basis. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligation without prepayment penalties.

	June 30, 2016
	Available for Sale							Held to Maturity
	Amortized Cost		Fair Value		Weighted Average Rate			Amortized Cost		Fair Value		Weighted Average Rate

Within one year	$	22,691	$	22,715		0.77	%	$	--	$	--		--
Due from one year to five years		22,437		22,633		1.93	%		--		--		--
Due from five years to ten years		16,604		17,096		2.95	%		--		--		--
Due after ten years		31,213		31,827		2.96	%		1,038		1,038		3.00	%
		92,945		94,271		2.18	%		1,038		1,038		3.00	%
Residential mortgage-backed securities		95,634		97,240		2.24	%		--		--		--
Total	$	188,579	$	191,511		2.21	%	$	1,038	$	1,038		3.00	%

As of June 30, 2016 and December 31, 2015, investments with amortized cost totaling approximately $65.9 million and $68.4 million, respectively, have call options held by the issuer, of which approximately $24.9 million and $26.1 million, respectively, are or were callable within one year.

Sales of investment securities available for sale are summarized as follows (in thousands):

	Six Months Ended June 30,
	2016			2015

Sales proceeds	$	8,089		$	2,082

Gross realized gains	$	98		$	88
Gross realized losses		(100	)		--
Net gains (losses) on sales of investment securities	$	(2	)	$	88