Investment Securities

The carrying values and approximate fair values of investment securities at the periods indicated are presented below:



(In Thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2014
Securities available for sale
U.S. Treasury and government sponsored entities		$178,773		$94		$165		$178,702
Municipal securities	14,893		333		3		15,223
U.S. Agency mortgage-backed securities	1,094		8		8		1,094
Corporate bonds	38,745		656		—		39,401
Preferred stock	2,999		143		—		3,142
Total securities available for sale		$236,504		$1,234		$176		$237,562
Securities held to maturity
Municipal securities		$2,202		$125		$—		$2,327
Total securities held to maturity		$2,202		$125		$—		$2,327
December 31, 2013
Securities available for sale
U.S. Treasury and government sponsored entities		$168,922		$103		$323		$168,702
Municipal securities	19,825		378		54		20,149
U.S. Agency mortgage-backed securities	25		—		—		25
Corporate bonds	55,798		1,000		20		56,778
Preferred stock	2,999		35		—		3,034
Total securities available for sale		$247,569		$1,516		$397		$248,688
Securities held to maturity
Municipal securities		$2,208		$153		$—		$2,361
Total securities held to maturity		$2,208		$153		$—		$2,361

Gross unrealized losses on investment securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2014 and December 31, 2013 were as follows:



	Less Than 12 Months				More Than 12 Months				Total
(In Thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2014:
Securities Available for Sale
U.S. Treasury and government sponsored entities		$110,947		$165		$—		$—		$110,947		$165
U.S. Agency mortgage-backed securities	390		8		—		—		390		8
Municipal Securities	323		3		—		—		323		3
Total		$111,660		$176		$—		$—		$111,660		$176

December 31, 2013:
Securities Available for Sale
U.S. Treasury and government sponsored entities		$122,560		$323		$—		$—		$122,560		$323
Municipal Securities	5,613		54		—		—		5,613		54
Corporate Bonds	6,051		20		—		—		6,051		20
Total		$134,224		$397		$—		$—		$134,224		$397

There were twenty-one and twenty-six available-for-sale securities with unrealized losses as of September 30, 2014 and December 31, 2013, respectively, that have been in a loss position for less than twelve months. There were no securities as of September 30, 2014 and December 31, 2013 that have been in an unrealized loss position for more than twelve months. The contractual terms of the investments in a loss position do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the Company does not intend to sell, nor is it required to sell these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

At September 30, 2014, $53.4 million in securities, or 22%, of the investment portfolio was pledged for deposits and borrowings, as compared to $46.8 million, or 19%, at December 31, 2013. We held no securities of any single issuer (other than government sponsored entities) that exceeded 10% of our shareholders’ equity at September 30, 2014 and December 31, 2013.

The amortized cost and fair values of debt securities at September 30, 2014, are distributed by contractual maturity as shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Although preferred stock has no stated maturity, it is aggregated in the calculation of weighted average yields presented below in the category of investments that mature in ten years or more.



(In Thousands)	Amortized Cost		Fair Value		Weighted Average Yield
US Treasury and government sponsored entities
1-5 years		$178,294		$178,219	1.07	%
5-10 years	479		483		2.27	%
Total		$178,773		$178,702	1.07	%
U.S. Agency mortgage-backed securities
Within 1 year		$245		$240	1.85	%
1-5 years	81		84		2.40	%
5-10 years	328		328		3.43	%
Over 10 years	440		442		3.64	%
Total		$1,094		$1,094	3.08	%
Corporate bonds
Within 1 year		$736		$741	0.87	%
1-5 years	36,009		36,641		1.46	%
5-10 years	2,000		2,019		1.04	%
Total		$38,745		$39,401	1.42	%
Preferred stock
Over 10 years		$2,999		$3,142	5.61	%
Total		$2,999		$3,142	5.61	%
Municipal securities
Within 1 year		$6,571		$6,583	0.88	%
1-5 years	4,311		4,445		3.05	%
5-10 years	6,213		6,522		4.43	%
Total		$17,095		$17,550	2.72	%

The proceeds and resulting gains and losses, computed using specific identification, from sales of investment securities for the three months ending September 30, 2014 and 2013 respectively, are as follows:



(In Thousands)	Proceeds		Gross Gains		Gross Losses
2014
Available for sale securities		$24,102		$465		$4
2013
Available for sale securities		$22,013		$318		$—

A summary of interest income for the nine months ending September 30, 2014 and 2013 on available for sale investment securities is as follows:



(In Thousands)	2014		2013
US Treasury and government sponsored entities		$1,186		$638
U.S. Agency mortgage-backed securities	17		1
Other	671		856
Total taxable interest income		$1,874		$1,495
Municipal securities		$302		$429
Total tax-exempt interest income		$302		$429
Total		$2,176		$1,924