Note 2:

Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
	(In thousands)
Available-for-sale Securities:
June 30, 2016:
U.S. government agencies	$	30,000	$	9	$	(18)	$	29,991
State and political subdivisions		1,813		8		—		1,821
	$	31,813	$	17	$	(18)	$	31,812

Available-for-sale Securities:
December 31, 2015:
U.S. government agencies	$	32,000	$	11	$	(50)	$	31,961
State and political subdivisions		2,637		25		—		2,662

	$	34,637	$	36	$	(50)	$	34,623

The amortized cost and fair value of available-for-sale securities at June 30, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Available-for-sale
	Amortized Cost		Fair Value
	(In thousands)

Within one year	$	250	$	251
One to five years		31,563		31,561

Totals	$	31,813	$	31,812

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at June 30, 2016 and December 31, 2015, was $18.0 million and $24.0 million, which represented approximately 56.5% and 69.2%, respectively, of the Company’s available-for-sale and held-to-maturity investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary and are a result on an general increase in longer term interest rates.

Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables show the Company’s investments’ gross unrealized losses and fair value, 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:

			June 30, 2016
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
			(In thousands)

U.S. Government agencies	$	17,981	$	(18)	$	—	$	—	$	17,981	$	(18)

			December 31, 2015
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
			(In thousands)

U.S. Government agencies	$	23,950	$	(50)	$	—	$	—	$	23,950	$	(50)

The unrealized losses on the Company’s investments in U.S. Government agencies were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2016 and December 31, 2015.

For the six months ended June 30, 2015, proceeds from the sale of investment securities available-for-sale were $383,000, with gross realized gains of $31,000, and gross realized losses of zero. The gain is included in realized gains on sales of available-for-sale securities, net in the noninterest income section of the statement of income. There were no investment sales for the six months ended June 30, 2016.

For the three months ended June 30, 2015, proceeds from the sale of investment securities available-for-sale were $13,000, with gross realized gains of $11,000, and gross realized losses of zero. The gain is included in realized gains on sales of available-for-sale securities, net in the noninterest income section of the statement of income. The Company recorded tax expense of approximately on the sale of available-for-sale securities of $3,000 and $4,000 for the three and six months ended June 30, 2015. There were no investment sales for the three months ended June 30, 2016.