Note 2 – Securities

The amortized cost and fair values of securities available for sale as of December 31, 2015 and December 31, 2014 are as follows:

December 31, 2015	Amortized		Gross Unrealized		Gross Unrealized		Fair
	Cost		Gains		(Losses)		Value
U.S. Government agencies	$	11,260	$	137	$	(19)	$	11,378
Corporate bonds		6,027		-		(63)		5,964
Mortgage-backed securities/CMOs		37,077		60		(450)		36,687
Municipal bonds		20,615		250		(93)		20,772
	$	74,979	$	447	$	(625)	$	74,801

December 31, 2014	Amortized		Gross Unrealized		Gross Unrealized		Fair
	Cost		Gains		(Losses)		Value
U.S. Government agencies	$	31,189	$	395	$	(56)	$	31,528
Corporate bonds		21,373		21		(118)		21,276
Asset-backed securities		2,133		-		(28)		2,105
Mortgage-backed securities/CMOs		63,327		297		(404)		63,220
Municipal bonds		23,727		157		(197)		23,687
	$	141,749	$	870	$	(803)	$	141,816

All mortgage-backed securities included in the above tables were issued by U.S. government agencies and corporations. At December 31, 2015, the securities issued by political subdivisions or agencies were highly rated with 79% of the municipal bonds having AA or higher ratings. Approximately 74% of the municipal bonds are general obligation bonds with issuers that are geographically diverse.

There were no securities classified as held to maturity as of December 31, 2015 or December 31, 2014.

Restricted securities are securities with limited marketability and consist of stock in the FRB, FHLB and CBBFC totaling $1.7 million as of December 31, 2015 and $1.6 million as of December 31, 2014. These restricted securities are carried at cost as they are not permitted to be traded.

For the year ended December 31, 2015, proceeds from the sales of securities amounted to $46.5 million and gross realized gains on these securities were $44,000. An additional $25.9 million in calls of securities accounted for the additional gross realized gains of $60,000. For the year ended December 31, 2014, proceeds from the sales and calls of securities amounted to $7.5 million and gross realized gains on these securities were $24,000.

Securities pledged to secure deposits, and for other purposes required by law, had carrying values of $42.2 million at December 31, 2015 and $23.8 million at December 31, 2014. The increase in the amount of pledged securities during 2015 resulted from increased balances in the overnight repurchase agreement program and in public funds deposit accounts.

Year-end securities with unrealized losses, segregated by length of time in a continuous unrealized loss position, were as follows:

December 31, 2015

	Less than 12 Months				12 Months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Government agencies	$	-	$	-	$	980	$	(19)	$	980	$	(19)
Corporate bonds		5,964		(63)		-		-		5,964		(63)
Mortgage-backed/CMOs		21,003		(212)		9,504		(238)		30,507		(450)
Municipal bonds		2,788		(31)		1,908		(62)		4,696		(93)
	$	29,755	$	(306)	$	12,392	$	(319)	$	42,147	$	(625)

December 31, 2014

	Less than 12 Months				12 Months or more				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		(Losses)
U.S. Government agencies	$	6,375	$	(21)	$	966	$	(35)	$	7,341	$	(56)
Corporate bonds		13,213		(102)		3,032		(16)		16,245		(118)
Asset-backed securities		98		-		2,007		(28)		2,105		(28)
Mortgage-backed/CMOs		6,276		(35)		25,081		(369)		31,357		(404)
Municipal bonds		1,769		(19)		10,330		(178)		12,099		(197)
	$	27,731	$	(177)	$	41,416	$	(626)	$	69,147	$	(803)

As of December 31, 2015, there were $42.1 million, or forty-two issues, of individual securities in a loss position. These securities have an unrealized loss of $625,000 and consisted of twenty-seven mortgage-backed/CMOs, nine municipal bonds, five corporate bonds, and one Agency note.

The Company's securities portfolio is primarily made up of fixed rate bonds, whose prices move inversely with interest rates. Any unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. At the end of any accounting period, the portfolio may have both unrealized gains and losses. Management does not believe any of the securities in an unrealized loss position are impaired due to credit quality. Accordingly, as of December 31, 2015, management believes the impairments detailed in the table above are temporary, and no impairment loss has been realized in the Company's consolidated income statement.

The amortized cost and fair value of available for sale securities at December 31, 2015 are presented below based upon contractual maturities, by major investment categories. Expected maturities may differ from contractual maturities because issuers have the right to call or prepay obligations.

	Amortized Cost		Fair Value
U.S. Government agencies
One year or less	$	5,007	$	5,028
After one year to five years		3,309		3,367
After five years to ten years		2,944		2,983
	$	11,260	$	11,378
Corporate bonds
After one year to five years	$	4,040	$	4,012
After five years to ten years		1,987		1,952
	$	6,027	$	5,964
Mortgage-backed securities/CMOs
After one year to five years	$	555	$	548
After five years to ten years		9,969		9,892
Ten years or more		26,553		26,247
	$	37,077	$	36,687
Municipal bonds
One year or less	$	105	$	105
After one year to five years		2,097		2,110
After five years to ten years		11,286		11,427
Ten years or more		7,127		7,130
	$	20,615	$	20,772
Total Securities Available for Sale	$	74,979	$	74,801