(4)	Investment Securities

(a) Securities available for sale

The amortized cost and fair value of the securities available for sale are as follows:

(dollars in thousands)	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. government sponsored enterprises	$	165,026		4		2,689		162,341
State and political subdivisions		873		14		-		887
Corporate bonds		40,785		-		173		40,612
Mortgage backed securities and collateralized mortgage obligations - residential		362,665		132		5,114		357,683
Small Business Administration-guaranteed participation securities		77,567		-		2,138		75,429
Mortgage backed securities and collateralized mortgage obligations - commercial		10,045		-		122		9,923
Other		650		-		-		650
Total debt securities		657,611		150		10,236		647,525
Equity securities		35		-		-		35
Total securities available for sale	$	657,646		150		10,236		647,560

(dollars in thousands)	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value

U.S. government sponsored enterprises	$	119,887		-		2,621		117,266
State and political subdivisions		873		13		-		886
Mortgage backed securities and collateralized mortgage obligations - residential		378,068		123		5,883		372,308
Corporate bonds		40,956		-		251		40,705
Small Business Administration-guaranteed participation securities		81,026		-		2,527		78,499
Mortgage backed securities and collateralized mortgage obligations - commercial		10,130		-		119		10,011
Other		650		-		-		650
Total debt securities		631,590		136		11,401		620,325
Equity securities		35		-		-		35
Total securities available for sale	$	631,625		136		11,401		620,360

The following table distributes the debt securities included in the available for sale portfolio as of March 31, 2017, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity date are presented separately:

(dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	30,044		29,980
Due in one year through five years		142,230		140,094
Due after five years through ten years		35,060		34,416
Due after ten years		-		-
Mortgage backed securities and collateralized mortgage obligations - residential		362,665		357,683
Small Business Administration-guaranteed participation securities		77,567		75,429
Mortgage backed securities and collateralized mortgage obligations - commercial		10,045		9,923
	$	657,611		647,525

Gross unrealized losses on securities available for sale and the related fair values aggregated by the length of time that individual securities have been in an unrealized loss position, were as follows:

(dollars in thousands)	March 31, 2017
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss
U.S. government sponsored enterprises	$	142,187		2,689		-		-		142,187		2,689
Mortgage backed securities and collateralized mortgage obligations - residential		345,977		5,004		4,466		110		350,443		5,114
Corporate bonds		40,612		173		-		-		40,612		173
Small Business Administration-guaranteed participation securities		61,474		1,590		13,955		548		75,429		2,138
Mortgage backed securities and collateralized mortgage obligations - commercial		9,923		122		-		-		9,923		122
Total	$	600,173		9,578		18,421		658		618,594		10,236

(dollars in thousands)	December 31, 2016
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss		Fair Value		Gross Unreal. Loss
U.S. government sponsored enterprises	$	102,266		2,621		-		-		102,266		2,621
Mortgage backed securities and collateralized mortgage obligations - residential		359,622		5,766		4,713		117		364,335		5,883
Corporate bonds		40,705		251		-		-		40,705		251
Small Business Administration-guaranteed participation securities		64,560		1,960		13,940		567		78,500		2,527
Mortgage backed securities and collateralized mortgage obligations - commercial		10,011		119		-		-		10,011		119
Total	$	577,164		10,717		18,653		684		595,817		11,401

The proceeds from sales and calls of securities available for sale, gross realized gains and gross realized losses from sales and calls during the three months ended March 31, 2017 and 2016 are as follows:

(dollars in thousands)	Three months ended March 31,
	2017		2016
Proceeds from sales	$	-		-
Proceeds from calls		20,770		48,913
Gross realized gains		-		-
Gross realized losses		-		-

There were no sales of securities available for sale during the three months ended March 31, 2017 and 2016.

(b) Held to maturity securities

The amortized cost and fair value of the held to maturity securities are as follows:

(dollars in thousands)	March 31, 2017
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	33,276		1,557		-		34,833
Corporate bonds		9,994		188		-		10,182
Total held to maturity	$	43,270		1,745		-		45,015

(dollars in thousands)	December 31, 2016
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses		Fair Value

Mortgage backed securities and collateralized mortgage obligations - residential	$	35,500		1,736		-		37,236
Corporate bonds		9,990		300		-		10,290
Total held to maturity	$	45,490		2,036		-		47,526

The following table distributes the debt securities included in the held to maturity portfolio as of March 31, 2017, based on the securities’ final maturity. Actual maturities may differ because of securities prepayments and the right of certain issuers to call or prepay their obligations without penalty. Securities not due at a single maturity date are presented separately:

(dollars in thousands)	Amortized Cost		Fair Value
Due in one year or less	$	9,994		10,182
Mortgage backed securities and collateralized mortgage obligations - residential		33,276		34,833
	$	43,270		45,015

There were no held to maturity securities in an unrecognized loss position as of March 31, 2017 or December 31, 2016.

There were no sales or transfers of held to maturity securities during the three months ended March 31, 2017 and 2016.

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 by type and applying the appropriate OTTI model. Investment securities classified as available for sale or held to maturity are evaluated for OTTI under FASB ASC Topic 320, Investments – Debt and Equity Securities (“ASC 320”).

In determining OTTI under the ASC 320 model, 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 Company 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 any 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 OTTI recognized in earnings depends on whether management intends to sell the security or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis. If management intends to sell or it is more likely than not it will be required to sell the security before recovery of its amortized cost basis, the OTTI shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If management does not intend to sell the security and it is not more likely than not that the entity will be required to sell the security before recovery of its amortized cost basis, the OTTI on debt securities shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total OTTI related to the credit loss is determined based on the present value of cash flows expected to be collected and is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment.

As of March 31, 2017, the Company’s security portfolio included certain securities which were in an unrealized loss position. The declines in fair value are attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2017.