INVESTMENT SECURITIES AVAILABLE FOR SALE

3 Months Ended

Mar. 31, 2017

Available for sale

Schedule of Available-for-sale Securities [Line Items]

Investment securities

Note 4 – Investment Securities Available for Sale

Investment securities classified as available for sale as of March 31, 2017 and December 31, 2016 are as follows (in thousands):

	March 31, 2017
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	45,973	$	—	$	67	$	45,906
Government sponsored entity debt securities		7,412		72		7		7,477
Agency mortgage-backed securities		124,459		430		1,028		123,861
State and municipal securities		31,516		77		359		31,234
Corporate securities		50,457		561		164		50,854
Total	$	259,817	$	1,140	$	1,625	$	259,332

	December 31, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
U.S. Treasury securities	$	75,973	$	—	$	72	$	75,901
Government sponsored entity debt securities		7,653		57		22		7,688
Agency mortgage-backed securities		90,629		373		932		90,070
Non-agency mortgage-backed securities		1		—		—		1
State and municipal securities		25,826		15		567		25,274
Corporate securities		47,443		403		441		47,405
Total	$	247,525	$	848	$	2,034	$	246,339

Unrealized losses and fair values for investment securities available for sale as of March 31, 2017 and December 31, 2016, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows (in thousands):

	March 31, 2017
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	45,906	$	67	$	—	$	—	$	45,906	$	67
Government sponsored entity debt securities		1,595		7		—		—		1,595		7
Agency mortgage-backed securities		80,160		1,028		—		—		80,160		1,028
State and municipal securities		18,863		359		—		—		18,863		359
Corporate securities		3,030		41		6,835		123		9,865		164
Total	$	149,554	$	1,502	$	6,835	$	123	$	156,389	$	1,625

	December 31, 2016
	Less than 12 Months				12 Months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		loss		value		loss		value		loss
U.S. Treasury securities	$	75,901	$	72	$	—	$	—	$	75,901	$	72
Government sponsored entity debt securities		4,107		22		—		—		4,107		22
Agency mortgage-backed securities		57,882		930		402		2		58,284		932
State and municipal securities		20,215		567		—		—		20,215		567
Corporate securities		11,111		334		8,312		107		19,423		441
Total	$	169,216	$	1,925	$	8,714	$	109	$	177,930	$	2,034

For all of the above investment securities, the unrealized losses are generally due to changes in interest rates and continued financial market stress, and unrealized losses are considered to be temporary.

We evaluate securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, at a minimum, and more frequently when economic or market concerns warrant such evaluation. In estimating OTTI losses, we consider the severity and duration of the impairment; the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; and the intent and ability of the Company to hold the security for a period of time sufficient for a recovery in value.

At March 31, 2017 and December 31, 2016, 95 and 107 investment securities available for sale, respectively, had unrealized losses with aggregate depreciation of 1.03% and 1.13%, respectively, from their amortized cost basis. The unrealized losses relate principally to the fluctuations in the current interest rate environment. In analyzing an issuer’s financial condition, we consider whether the securities are issued by the federal government or its agencies and whether downgrades by bond rating agencies have occurred. As we have the intent and ability to hold debt securities for a period of time sufficient for a recovery in value, no declines are deemed to be other-than-temporary.

For the three months ended March 31, 2017 and 2016, the Company recognized $0 and $824,000, respectively, of OTTI on its investment securities available for sale.

The following is a summary of the amortized cost and fair value of investment securities available for sale, by maturity, at March 31, 2017 (in thousands). The maturities of agency mortgage-backed securities are based on expected maturities.  Expected maturities may differ from contractual maturities in mortgage‑backed securities because the mortgages underlying the securities may be prepaid without any penalties. The maturities of all other investment securities available for sale are based on final contractual maturity.

	Amortized		Fair
	cost		value
Within one year	$	45,334	$	45,302
After one year through five years		114,365		114,258
After five years through ten years		82,079		82,070
After ten years		18,039		17,702
Subtotal	$	259,817	$	259,332

Gross realized gains from the sale of securities available for sale were $67,000 and $204,000 for the three months ended March 31, 2017 and 2016, respectively. There were no gross realized losses for the three months ended March 31, 2017 or 2016.