5. INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 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
September 30, 2016
U.S. Government Agencies	$	26,995	$	314	$	51	$	27,258
Taxable municipals		2,401	73		-		2,474
Corporate bonds		3,100	186		-		3,286
Mortgage backed securities		41,392	239		88		41,543
Total Securities AFS	$	73,888	$	812	$	139	$	74,561
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 September 30, 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
September 30, 2016
U.S. Government Agencies	$	3,724	$	42	$	1,794	$	9	$	5,518	$	51
Mtg. backed securities		7,915		45		4,938		43		12,853		88
Total Securities AFS	$	11,639	$	87	$	6,732	$	52	$	18,371	$	139
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 September 30, 2016, the available-for-sale portfolio included forty two 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, or 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.

Investment securities with a carrying value of $11.8 million and $15.4 million at September 30, 2016 and December 31, 2015, respectively, were pledged as collateral to secure public deposits and for other purposes required by law.

Gross proceeds on the sale of investment securities were $24.8 million and $7.1 million, respectively, for the nine months ended September 30, 2016 and 2015. Gross realized gains and losses pertaining to the sale of investment securities available for sale are detailed as follows:

	For the three months ended September 30,				For the nine months ended September 30,
(Dollars are in thousands)	2016		2015		2016			2015
Gross gains realized	$	—	$	—	$	275		$	62
Gross losses realized		—		—		(35	)		(27	)
Net realized gains	$	—	$	—	$	240		$	35

The amortized cost and fair value of investment securities at September 30, 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	$	1,221	$	1,225		0.91%
Due after one year through five years	656		657		1.84%
Due after five years through ten years		12,836		13,107		2.50%
Due after ten years		59,175		59,572		1.80%
Total	$	73,888	$	74,561		1.91%

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 $2.6 million and $2.4 million as of September 30, 2016 and December 31, 2015, respectively.