5. INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2016

Investment securities activity

5. INVESTMENT SECURITIES

NOTE 5 INVESTMENT SECURITIES:

The amortized cost and estimated fair value of securities (all available-for-sale (“AFS”)) are as follows:

	Gross		Gross		Approximate
	Amortized		Unrealized		Unrealized		Fair
(Dollars are in thousands)	Cost		Gains		Losses		Value
March 31, 2016
U.S. Government Agencies	$	34,827	$	356	$	58	$	35,125
Taxable municipals		2,421		21		10		2,432
Corporate bonds		2,045		15		44		2,016
Mortgage backed securities		45,233		115		211		45,137
Total Securities AFS	$	84,526	$	507	$	323	$	84,710
December 31, 2015
U.S. Government Agencies	$	41,488	$	244	$	209	$	41,523
Taxable municipals		3,337		5		61		3,281
Corporate bonds		1,944		15		20		1,939
Mortgage backed securities		55,369		41		511		54,899
Total Securities AFS	$	102,138	$	305	$	801	$	101,642

The following table details unrealized losses and related fair values in the available-for-sale portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2016 and December 31, 2015.

	Less than 12 Months				12 Months or More				Total
(Dollars are in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
March 31, 2016
U.S. Government Agencies	$	7,243	$	23	$	3,855	$	35	$	11,098	$	58
Taxable municipals		549		8		276		2		825		10
Corporate bonds		901		44		—		—		901		44
Mtg. backed securities		14,946		101		9,376		110		24,322		211
Total Securities AFS	$	23,639	$	176	$	13,507	$	147	$	37,146	$	323
December 31, 2015
U.S. Government Agencies	$	14,995	$	81	$	7,708	$	128	$	22,073	$	209
Taxable municipals		2,136		57		278		4		2,414		61
Corporate bonds		923		20		—		—		923		20
Mtg. backed securities		38,945		354		8,719		157		47,664		511
Total Securities AFS	$	56,999	$	512	$	16,705	$	289	$	73,074	$	801

At March 31, 2016, the available-for-sale portfolio included seventy four investments for which the fair market value was less than amortized cost. At December 31, 2015, the available-for-sale portfolio included one hundred and thirty four investments for which the fair market value was less than amortized cost. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial conditions and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Based on the Company’s analysis, the Company concluded that no securities had an other-than-temporary impairment.

Gross proceeds on the sale of investment securities were $12.9 million for the three months ended March 31, 2016, with $119 thousand of gross gains realized and $14 thousand of gross losses realized. Gross proceeds on the sale of investment securities were $7.1 million for the three months ended March 31, 2015, with $62 thousand of gross gains realized and $27 thousand of gross losses realized.

The amortized cost and fair value of investment securities at March 31, 2016, by contractual maturity, are shown in the following schedule. 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.

					Weighted
(Dollars are in thousands)	Amortized		Fair		Average
Securities Available-for-Sale	Cost		Value		Yield
Due in one year or less	$	1,243	$	1,246		0.91	%
Due after one year through five years		1,338		1,342		1.61	%
Due after five years through ten years		13,667		13,714		2.08	%
Due after ten years		68,278		68,408		1.96	%
Total	$	84,526	$	84,710		1.96	%

Investment securities with a carrying value of $15.5 million and $15.4 million at March 31, 2016 and December 31, 2015, respectively, were pledged as collateral to secure public deposits, overnight payment processing and for other purposes required by law.

The Bank, as a member of the Federal Reserve Bank and the Federal Home Loan Bank, is required to hold stock in each. The Bank also owns stock in CBB Financial Corp., which is a correspondent of the Bank. These equity securities are restricted from trading and are recorded at a cost of $2.8 million and $2.4 million as of March 31, 2016 and December 31, 2015, respectively.