6. SECURITIES

The amortized cost and fair value of securities as of the dates set forth were as follows:


	March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)

Available-for-sale:
Obligations of the U.S. Treasury and other U.S. government agencies or sponsored enterprises	$	85,008	$	49	$	(1)	$	85,056
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises		122,999		1,629		(15)		124,613
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		49,226		42		(161)		49,107
Corporate debt securities		3,790		4		-		3,794
Obligations of municipal subdivisions		236		10		-		246
Total	$	261,259	$	1,734	$	(177)	$	262,816

Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises	$	14,350	$	314	$	(64)	$	14,600
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		25,672		58		(235)		25,495
Total	$	40,022	$	372	$	(299)	$	40,095


	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)

Available-for-sale:
Obligations of the U.S. Treasury and other U.S. government agencies or sponsored enterprises	$	90,032	$	3	$	(85)	$	89,950
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises		129,752		1,137		(184)		130,705
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		51,569		74		(314)		51,329
Corporate debt securities		3,790		4		(1)		3,793
Obligations of municipal subdivisions		236		8		-		244
Total	$	275,379	$	1,226	$	(584)	$	276,021

Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises	$	15,002	$	320	$	(143)	$	15,179
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		27,128		54		(365)		26,817
Total	$	42,130	$	374	$	(508)	$	41,996

Expected maturities of securities will differ from contractual maturities because the underlying borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The following table sets forth, as of the date indicated, contractual maturities of securities:


	March 31, 2016
	Available-for-sale				Held-to-maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(Dollars in thousands)

Due in one year or less	$	72,020	$	72,039	$	-	$	-
Due after one year through five years		16,778		16,811		-		-
Due after five years through ten years		236		246		-		-
		89,034		89,096		-		-

Mortgage-backed securities and collateralized mortgage obligations		172,225		173,720		40,022		40,095
Total	$	261,259	$	262,816	$	40,022	$	40,095

There were no sales of securities during the three months ended March 31, 2016 or 2015.

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available-for-sale or held-to-maturity are evaluated for OTTI under FASB ASC 320, Investments—Debt and Equity Securities.

In determining OTTI, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

When OTTI occurs, the amount of the other-than-temporary impairment recognized in earnings depends on whether an entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss.

As of March 31, 2016, the Company does not intend to sell any debt securities classified as held-to-maturity and management believes that the Company more likely than not will not be required to sell any debt securities that are in a loss position before their anticipated recovery, at which time the Company will receive full value for the securities. Furthermore, as of March 31, 2016, management does not have the intent to sell any of its securities classified as available-for-sale that are in a loss position and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The 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 securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of March 31, 2016, management believes any impairment in the Company’s securities is temporary and no impairment loss has been realized in the Company’s consolidated statements of income.

Declines in the fair value of individual securities below their cost that are other-than-temporary would result in writedowns, as a realized loss, to their fair value. In evaluating other-than-temporary impairment losses, management considers several factors including the severity and the duration that the fair value has been less than cost, the credit quality of the issuer, and whether it is more likely than not that the Company will be required to sell the security before a recovery in value. The Company has not realized any losses due to other-than-temporary impairment of securities as of March 31, 2016.

Securities with unrealized losses segregated by length of continuous unrealized loss position as of the dates set forth were as follows:


	March 31, 2016
	Less than 12 Months						12 Months or More
	Amortized Cost		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)

Available-for-sale:
Obligations of the U.S. Treasury and other U.S. government agencies or sponsored enterprises	$	50,007	$	(1)	$	50,006	$	-	$	-	$	-
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises		4,689		(15)		4,674		-		-		-
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		38,673		(161)		38,512		-		-		-
Corporate debt securities		-		-		-		-		-
Total	$	93,369	$	(177)	$	93,192	$	-	$	-	$	-

Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises	$	-	$	-	$	-	$	3,744	$	(64)	$	3,680
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		9,688		(32)		9,656		8,843		(203)		8,640
Total	$	9,688	$	(32)	$	9,656	$	12,587	$	(267)	$	12,320


	December 31, 2015
	Less than 12 Months						12 Months or More
	Amortized Cost		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)

Available-for-sale:
Obligations of the U.S. Treasury and other U.S. government agencies or sponsored enterprises	$	85,028	$	(85)	$	84,943	$	-	$	-	$	-
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises		48,830		(184)		48,646		-		-		-
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		33,299		(314)		32,985		-		-		-
Corporate debt securities		2,009		(1)		2,008		-		-		-
Total	$	169,166	$	(584)	$	168,582	$	-	$	-	$	-

Held-to-maturity:
Mortgage-backed securities issued by U.S. government agencies or sponsored enterprises	$	3,220	$	(48)	$	3,172	$	2,571	$	(95)	$	2,476
Collateralized mortgage obligations issued by U.S. government agencies or sponsored enterprises		9,945		(73)		9,872		12,871		(292)		12,579
Total	$	13,165	$	(121)	$	13,044	$	15,442	$	(387)	$	15,055

The average loss on securities in an unrealized loss position was 0.41% and 0.55% of the amortized cost basis at March 31, 2016 and December 31, 2015, respectively. There were six securities in an unrealized loss position of greater than 12 months at both March 31, 2016 and December 31, 2015.

The Company did not own securities of any one issuer (other than the U.S. government and its agencies or sponsored enterprises) for which the aggregate adjusted cost exceeds 10% of the consolidated shareholders’ equity at March 31, 2016 or December 31, 2015.

Securities with an amortized cost of $14.2 million and $14.9 million and fair value of $14.3 million and $15.0 million were pledged and available to be sold under repurchase agreements at March 31, 2016 and December 31, 2015, respectively. Securities with an amortized cost of $106.6 million and $97.3 million and fair value of $106.6 million and $97.1 million were pledged to various Federal Reserve Districts related to deposits of bankruptcy trustees at March 31, 2016 and December 31, 2015, respectively. Securities with an amortization cost and fair value of $2.0 million and $2.2 million at March 31, 2016 and December 31, 2015, respectively, were pledged to collateralize public deposits. In addition, securities with an amortized cost of $2.6 million and $2.8 million and fair value of $2.7 million and $2.9 million were pledged as collateral for the Company’s derivative instruments at March 31, 2016 and December 31, 2015, respectively.