NOTE 2 - INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of the available-for-sale and held-to-maturity investment securities portfolio as of March 31, 2015 and December 31, 2014 and the corresponding amounts of unrealized gains and losses recognized in accumulated other comprehensive income (loss):

(Dollars in thousands)	Amortized Cost			Unrealized Gains			Unrealized Losses				Fair Value
March 31, 2015
Available-for-sale:
U.S. government-sponsored entities and agencies		$	6,806		$	157		$	(5	)		$	6,958
State and political subdivisions			6,238			502			-				6,740
Mortgage-backed securities - residential			28,742			1,025			(12	)			29,755
Collateralized mortgage obligations			26,894			118			(253	)			26,759
Corporate bonds			3,022			72			-				3,094
Total available-for-sale securities		$	71,702		$	1,874		$	(270	)		$	73,306

	Amortized Cost			Unrealized Gains			Unrealized Losses				Fair Value
December 31, 2014
Available-for-sale:
U.S. government-sponsored entities and agencies		$	7,019		$	161		$	(23	)		$	7,157
State and political subdivisions			6,535			525			-				7,060
Mortgage-backed securities - residential			30,454			928			(22	)			31,360
Collateralized mortgage obligations			29,306			94			(438	)			28,962
Corporate bonds			3,025			69			-				3,094
Total available-for-sale securities		$	76,339		$	1,777		$	(483	)		$	77,633

As of March 31, 2015 and December 31, 2014, the Company’s investment securities portfolio did not include any held-to-maturity securities.

The amortized cost and fair value of the investment securities portfolio are presented below in order of contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities – residential and collateralized mortgage obligations, are shown separately.

(Dollars in thousands) March 31, 2015	Amortized Cost		Fair Value
Available-for-sale:
Within one year	$	500	$	501
One to five years		1,897		1,964
Five to ten years		4,435		4,542
Beyond ten years		9,234		9,785
Mortgage-backed securities – residential		28,742		29,755
Collateralized mortgage obligations		26,894		26,759
Total	$	71,702	$	73,306

The following table summarizes the investment securities with unrealized losses as of March 31, 2015 and December 31, 2014 listed by aggregated major security type and length of time in a continuous unrealized loss position:

	Less Than 12 Months							12 Months or Longer							Total
(Dollars in thousands) March 31, 2015	Fair Value			Unrealized losses				Fair Value			Unrealized losses				Fair Value			Unrealized losses
Available-for-sale:
U.S. government-sponsored entities and agencies		$	-		$	-			$	995		$	(5	)		$	995		$	(5	)
State and political subdivisions			-			-				-			-				-			-
Mortgage backed securities – residential			6			-				1,191			(12	)			1,197			(12	)
Collateralized mortgage obligations			2,197			(13	)			10,895			(240	)			13,092			(253	)
Corporate bonds			-			-				-			-				-			-
Total available-for-sale securities		$	2,203		$	(13	)		$	13,081		$	(257	)		$	15,284		$	(270	)

	Less Than 12 Months							12 Months or Longer							Total
December 31, 2014	Fair Value			Unrealized losses				Fair Value			Unrealized losses				Fair Value			Unrealized losses
Available-for-sale:
U.S. government-sponsored entities and agencies		$	-		$	-			$	977		$	(23	)		$	977		$	(23	)
State and political subdivisions			-			-				-			-				-			-
Mortgage backed securities – residential			1,849			(1	)			1,192			(21	)			3,041			(22	)
Collateralized mortgage obligations			6,599			(40	)			11,258			(398	)			17,857			(438	)
Corporate bonds			-			-				-			-				-			-
Total available-for-sale securities		$	8,448		$	(41	)		$	13,427		$	(442	)		$	21,875		$	(483	)

As of March 31, 2015 and December 31, 2014, the Company’s security portfolio consisted of $73,306 and $77,633, respectively, in available-for-sale securities, of which $15,284 and $21,875 were in an unrealized loss position for the related periods. The unrealized losses as of March 31, 2015 and December 31, 2014 were related to all securities types held by the Company, as discussed below.

U.S. Government-Sponsored Entities and Agency Securities (“U.S. Agency Securities”):

All of the U.S. Agency Securities held by the Company were issued by U.S. government-sponsored entities and agencies. As of March 31, 2015 and December 31, 2014, the number of U.S. Agency Securities with unrealized losses were one and one, respectively. As of March 31, 2015 and December 31, 2014, these securities had depreciated 0.53% and 2.30%, respectively, from the Company’s amortized cost basis. The decline in fair value was attributable to changes in interest rates, not credit quality.

Mortgage-backed Securities – Residential (“Mortgage-backed Securities”):

All of the Mortgage-backed Securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Ginnie Mae and Fannie Mae, institutions which have the full faith and credit of the U.S. government. As of March 31, 2015 and December 31, 2014, Mortgage-backed Securities with unrealized losses were two and three, respectively. As of March 31, 2015 and December 31, 2014, these securities had depreciated 0.99% and 0.71%, respectively, from the Company’s amortized cost basis. The decline in fair value was attributable to changes in interest rates, not credit quality.

Collateralized Mortgage Obligations:

All of the collateralized mortgage obligation securities held by the Company were issued by U.S. government-sponsored entities and agencies, primarily Ginnie Mae, an institution which has the full faith and credit of the U.S. government. As of March 31, 2015 and December 31, 2014, collateralized mortgage obligations with unrealized losses were thirteen and eighteen, respectively. As of March 31, 2015 and December 31, 2014, these securities had depreciated 1.89% and 2.40%, respectively, from the Company’s amortized cost basis. The decline in fair value was attributable to changes in interest rates, not credit quality.

Other-Than-Temporary Impairment

Because the Company 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, the Company does not consider these to be other-than-temporarily impaired as of March 31, 2015 and December 31, 2014.

For the three months ended March 31, 2015 and 2014, there were no credit losses recognized in earnings related to investment securities.