INVESTMENT SECURITIES

The following is a summary of the Company's investments in available for sale and held to maturity securities as of June 30, 2016 and December 31, 2015:



As of June 30, 2016	Amortized cost		Gross unrealized gains		Gross unrealized losses		Other-than- temporary impairments in AOCI		Fair value
	(amounts in thousands)
Available for sale:
Corporate debt obligations	$	1,000	$	17	$	—	$	—	$	1,017
Residential mortgage-backed securities	37,593		887		16		—		38,464
Collateralized mortgage obligations	195		9		—		—		204
Collateralized debt obligations	790		—		—		335		455
Total available for sale	$	39,578	$	913	$	16	$	335	$	40,140

Held to maturity:
States and political subdivisions	$	2,202	$	333	$	—	$	—	$	2,535



As of December 31, 2015	Amortized cost		Gross unrealized gains		Gross unrealized losses		Other-than- temporary impairments in AOCI		Fair value
	(amounts in thousands)
Available for sale:
Corporate debt obligations	$	1,000	$	31	$	—	$	—	$	1,031
Residential mortgage-backed securities	40,788		451		418		—		40,821
Collateralized mortgage obligations	246		7		—		—		253
Collateralized debt obligations	806		—		—		344		462
Total available for sale	$	42,840	$	489	$	418	$	344	$	42,567

Held to maturity:
States and political subdivisions	$	2,181	$	290	$	—	$	—	$	2,471

The amortized cost and fair value of debt securities classified as available for sale and held to maturity, by contractual maturity as of June 30, 2016 are as follows:



	Amortized Cost		Fair Value
	(amounts in thousands)
Available for sale:
Due within one year	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	500		500
Due after ten years	1,290		972
Residential mortgage-backed securities and collateralized mortgage obligations	37,789		38,668
Total available for sale	$	39,579	$	40,140

Held to maturity:
Due within one year	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,214		1,283
Due after ten years	988		1,252
Total held to maturity	$	2,202	$	2,535

Expected maturities will differ from contractual maturities for mortgage related securities because the issuers of certain debt securities do have the right to call or prepay their obligations without any penalty.

Securities with a carrying value of $14.8 million and $15.0 million were pledged to secure public deposits at June 30, 2016 and December 31, 2015, respectively.

The following tables show the gross unrealized losses and fair value of the Company's investments with unrealized losses that are not deemed to be other than temporarily impaired (“OTTI”), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2016 and December 31, 2015:



As of June 30, 2016	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(amounts in thousands)
Available for sale:
Residential mortgage-backed securities	$	33	$	3	$	1,247	$	13	$	1,280	$	16
Total available for sale	$	33	$	3	$	1,247	$	13	$	1,280	$	16



As of December 31, 2015	Less Than 12 Months				12 Months or Greater				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(amounts in thousands)
Available for sale:
Residential mortgage-backed securities	$	19,191	$	343	$	3,221	$	75	$	22,412	$	418
Total available for sale	$	19,191	$	343	$	3,221	$	75	$	22,412	$	418

The unrealized losses on the Company’s investment in mortgage-backed securities relates to four securities at June 30, 2016 versus three securities at December 31, 2015. The losses were caused by movement in interest rates. The securities were issued by FNMA, a government sponsored entity. Because the Company does not intend to sell the investment and it is not more likely than not that the Company will be required to sell the investment before recovery of its amortized cost basis, which may be maturity, it does not consider the investment in these securities to be OTTI at June 30, 2016.

Other Than Temporarily Impaired Debt Securities

We assess whether we intend to sell or it is more likely than not that we will be required to sell a security before recovery of its amortized cost basis less any current-period credit losses. For debt securities that are considered OTTI and that we do not intend to sell and will not be required to sell prior to recovery of our amortized cost basis, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the security’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the security’s fair value and the present value of future expected cash flows is due to factors that are not credit related and is recognized in other comprehensive income.

The present value of expected future cash flows is determined using the best estimate of cash flows discounted at the effective interest rate implicit to the security at the date of purchase or the current yield to accrete an asset-backed or floating rate security. The methodology and assumptions for establishing the best estimate cash flows vary depending on the type of security. The asset-backed securities cash flow estimates are based on bond specific facts and circumstances that may include collateral characteristics, expectations of delinquency and default rates, loss severity and prepayment speeds and structural support, including subordination and guarantees. The corporate bond cash flow estimates are derived from scenario-based outcomes of expected corporate restructurings or the disposition of assets using bond specific facts and circumstances including timing, security interests and loss severity.

We have a process in place to identify debt securities that could potentially have a credit impairment that is other than temporary. This process involves monitoring late payments, pricing levels, downgrades by rating agencies, key financial ratios, financial statements, revenue forecasts and cash flow projections as indicators of credit issues. On a quarterly basis, we review all securities to determine whether an OTTI exists and whether losses should be recognized. We consider relevant facts and circumstances in evaluating whether a credit or interest rate-related impairment of a security is other than temporary. Relevant facts and circumstances considered include: (1) the extent and length of time the fair value has been below cost; (2) the reasons for the decline in value; (3) the financial position and access to capital of the issuer, including the current and future impact of any specific events; and (4) for fixed maturity securities, our intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity.

The credit loss component of credit-impaired debt securities was $171,000. This impairment was taken in a prior year and no OTTI was realized in the current year.

The Company did not sell any securities during the six ended June 30, 2016.