5. INVESTMENT SECURITIES

3 Months Ended

Mar. 31, 2017

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, 2017
U.S. Government Agencies	$	24,611	$	77	$	218	$	24,470
Taxable municipals		2,332	3		48		2,287
Corporate bonds		3,600	189		-		3,789
Mortgage backed securities		42,069	26		631		41,464
Total Securities AFS	$	72,612	$	295	$	897	$	72,010
December 31, 2016
U.S. Government Agencies	$	24,821	$	80	$	269	$	24,632
Taxable municipals		2,340	2		50		2,292
Corporate bonds		3,600	149		-		3,749
Mortgage backed securities		39,941	25		628		39,338
Total Securities AFS	$	70,702	$	256	$	947	$	70,011

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, 2017 and December 31, 2016.

	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, 2017
U.S. Government Agencies	$	12,661	$	204	$	2,461	$	14	$	15,122	$	218
Taxable municipals		1,559		48		—		—		1,559		48
Corporate bonds		—		—		—		—		—		—
Mtg. backed securities		29,695		541		5,195		90		34,890		631
Total Securities AFS	$	43,915	$	793	$	7,656	$	104	$	51,571	$	897
December 31, 2016
U.S. Government Agencies	$	12,081	$	250	$	2,449	$	19	$	14,530	$	269
Taxable municipals		1,561		50		—		—		1,561		50
Corporate bonds		500		—		—		—		500		—
Mtg. backed securities		28,680		543		4,655		85		33,335		628
Total Securities AFS	$	42,822	$	843	$	7,104	$	104	$	49,926	$	947

At March 31, 2017, the available-for-sale portfolio included 112 investments for which the fair market value was less than amortized cost. At December 31, 2016, the available-for-sale portfolio included 107 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.

There were no sales of investment securities during the three months ended March 31, 2017. 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.

The amortized cost and fair value of investment securities at March 31, 2017, 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	$	-	$	-		-%
Due after one year through five years	2,184		2,177		2.04%
Due after five years through ten years		14,026		14,149		2.64%
Due after ten years		56,402		55,684		2.04%
Total	$	72,612	$	72,010		2.16%

Investment securities with a carrying value of $9.4 million and $11.3 million at March 31, 2017 and December 31, 2016, respectively, were pledged as collateral to secure public deposits 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 $2.6 million and $2.8 million as of March 31, 2017 and December 31, 2016, respectively.