Note 2. Securities

The amortized cost and fair value of securities available for sale, with unrealized gains and losses follows:

	June 30, 2017
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Obligations of U.S. Government, corporations and agencies	$	45,774	$	397	$	(160	)	$	46,011
Obligations of states and political subdivisions		13,979		325		(3	)		14,301
Corporate bonds		3,780		-		(479	)		3,301
Mutual funds		382		-		(2	)		380
	$	63,915	$	722	$	(644	)	$	63,993

	December 31, 2016
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Obligations of U.S. Government, corporations and agencies	$	40,781	$	182	$	(459	)	$	40,504
Obligations of states and political subdivisions		6,228		100		(18	)		6,310
Corporate bonds		3,743		-		(958	)		2,785
Mutual funds		378		-		(4	)		374
	$	51,130	$	282	$	(1,439	)	$	49,973

The amortized cost and fair value of securities available for sale, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without penalties.

	June 30, 2017
(In thousands)	Amortized Cost		Fair Value
Due in one year or less	$	1,344	$	1,351
Due after one year through five years		6,909		6,904
Due after five years through ten years		19,046		19,342
Due after ten years		36,234		36,016
Equity securities		382		380
	$	63,915	$	63,993

There were no impairment losses on securities during the six months ended June 30, 2017 and 2016.

During the six months ended June 30, 2017, no securities were sold and five securities totaling $2.3 million were called. Over the same period, 24 securities totaling $20.0 million were purchased. During the six months ended June 30, 2016, no securities were sold, two securities totaling $2.0 million were called and two securities totaling $3.1 million were purchased.

The following table shows the Company securities with gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2017 and December 31, 2016, respectively.

(In thousands)	Less than 12 Months					12 Months or More					Total
June 30, 2017	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)

Obligations of U.S. Government, corporations and agencies	$	12,830	$	(115	)	$	1,393	$	(45	)	$	14,223	$	(160	)
Obligations of states and political subdivisions		615		(3	)		-		-			615		(3	)
Corporate bonds		640		(9	)		2,660		(470	)		3,300		(479	)
Mutual funds		382		(2	)		-		-			382		(2	)
Total temporary impaired securities	$	14,467	$	(129	)	$	4,053	$	(515	)	$	18,520	$	(644	)

(In thousands)	Less than 12 Months					12 Months or More					Total
December 31, 2016	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)

Obligations of U.S. Government, corporations and agencies	$	18,942	$	(400	)	$	1,507	$	(59	)	$	20,449	$	(459	)
Obligations of states and political subdivisions		293		(18	)		-		-			293		(18	)
Corporate bonds		503		(136	)		2,283		(822	)		2,786		(958	)
Mutual funds		374		(4	)		-		-			374		(4	)
Total temporary impaired securities	$	20,112	$	(558	)	$	3,790	$	(881	)	$	23,902	$	(1,439	)

At June 30, 2017 there were 18 securities that were in a loss position due to market conditions, primarily interest rates, and not due to credit concerns.

The nature of securities which were temporarily impaired at June 30, 2017 consisted of three corporate bonds with a cost basis net of other-than-temporary impairment ("OTTI") totaling $3.8 million and a temporary loss of approximately $479,000. The value of these corporate bonds is based on quoted market prices for similar assets. They are the "Class B" or subordinated "mezzanine" tranche of pooled trust preferred securities. The trust preferred securities are collateralized by the interest and principal payments made on trust preferred capital offerings by a geographically diversified pool of approximately 57 different financial institutions per bond. They have an estimated maturity of 17 years. These bonds could have been called at par on the five year anniversary date of issuance, which has already passed for all the bonds. The bonds reprice every three months at a fixed rate index above the three-month London Interbank Offered Rate ("LIBOR"). These bonds have sufficient collateralization and cash flow projections to satisfy their valuation based on the cash flow portion of the OTTI test under authoritative accounting guidance as of June 30, 2017. The bonds, totaling $3.3 million at fair value, are projected to repay the full outstanding interest and principal and are now classified as performing corporate bond investments. During the six months ended June 30, 2017, $67,000 of interest income was recorded.

Additional information regarding each of the pooled trust preferred securities as of June 30, 2017 follows:

(Dollars in thousands)

Cost, net of OTTI loss		Fair Value (1)		Percent of Underlying Collateral Performing			Percent of Underlying Collateral in Deferral			Percent of Underlying Collateral in Default			Cumulative Amount of OTTI Loss		Cumulative Other Comprehensive Loss, net of tax benefit
$	1,683	$	1,300		81.0	%		2.9	%		16.1	%	$	275	$	253
	1,448		1,360		87.1	%		3.7	%		9.2	%		552		58
	649		641		91.3	%		2.0	%		6.7	%		351		6
$	3,780	$	3,301										$	1,178	$	317

(1)	Current Moody's Ratings range from Ba2 to B2.

The following roll forward reflects the amount related to credit losses recognized in earnings (in accordance with FASB Accounting Standards Codification ("ASC") 320-10-35-34D):

(In thousands)

Beginning balance as of December 31, 2016	$	1,215
Add: Amount related to the credit loss for which an other-than-temporary impairment was not previously recognized		-
Add: Increases to the amount related to the credit loss for which an other-than temporary impairment was previously recognized		-
Less: Realized losses for securities sold		-
Less: Securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis		-
Less: Increases in cash flows expected to be collected that are recognized over the remaining life of the security (See FASB ASC 320-10-35-35)		(37	)
Ending balance as of June 30, 2017	$	1,178

The carrying value of securities pledged to secure deposits and for other purposes amounted to $45.7 million and $41.9 million at June 30, 2017 and December 31, 2016, respectively.