Note

: Securities

The amortized cost and fair value of securities available for sale, with gross unrealized gains and losses, follows:

	December 31, 2016
Available for sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government agencies and corporations	$	291,271	$	492	$	6,165	$	285,598
States and political subdivisions		11,482		211		---		11,693
Mortgage-backed securities		845		85		---		930
Corporate debt securities		6,015		20		137		5,898
Other securities		189		---		26		163
Total securities available for sale	$	309,802	$	808	$	6,328	$	304,282

	December 31, 2015
Available for sale:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		F air Value
U.S. Government agencies and corporations	$	216,897	$	519	$	4,952	$	212,464
States and political subdivisions		15,934		541		---		16,475
Mortgage-backed securities		1,199		120		---		1,319
Corporate debt securities		6,015		22		291		5,746
Other securities		189		---		62		127
Total securities available for sale	$	240,234	$	1,202	$	5,305	$	236,131

The amortized cost and fair value of single maturity securities available for sale at

December

31,

2016,

by contractual maturity, are shown below. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity at

December

31,

2016.

	December 31, 20 1 6
Available for sale:	Amortized Cost		Fair Value
Due in one year or less	$	3,414	$	3,423
Due after one year through five years		199,430		196,433
Due after five years through ten years		80,548		78,001
Due after ten years		26,221		26,262
No maturity		189		163
	$	309,802	$	304,282

The amortized cost and fair value of securities held to maturity, with gross unrealized gains and losses, follows:

	December 31, 20 1 6
Held to maturity:	Amortized Cost		Gross U nrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government agencies and corporations	$	3,934	$	201	$	---	$	4,135
States and political subdivisions		129,783		3,579		1,082		132,280
Mortgage-backed securities		265		30		---		295
Corporate debt securities		975		7		---		982
Total securities held to maturity	$	134,957	$	3,817	$	1,082	$	137,692

	December 31, 20 1 5
Held to maturity:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government agencies and corporations	$	13,909	$	288	$	177	$	14,020
States and political subdivisions		136,373		6,179		330		142,222
Mortgage-backed securities		327		36		---		363
Corporate debt securities		1,419		10		2		1,427
Total securities held to maturity	$	152,028	$	6,513	$	509	$	158,032

The amortized cost and fair value of single maturity securities held to maturity at

December

31,

2016,

by contractual maturity, are shown below. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity at

December

31,

2016.

	December 31, 20 1 6
Held to maturity:	Amortized Cost		Fair Value
Due in one year or less	$	3,902	$	3,988
Due after one year through five years		28,249		29,761
Due after five years through ten years		16,615		17,155
Due after ten years		86,191		86,788
	$	134,957	$	137,692

Information pertaining to securities with gross unrealized losses at

December

31,

2016

and

2015

aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

	December 31, 2016
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U. S. Government agencies and corporations	$	260,150	$	6,161	$	996	$	4
State and political subdivisions		31,257		934		1,316		148
Corporate debt securities		3,888		137		---		---
Other securities		---		---		163		26
Total temporarily impaired securities	$	295,295	$	7,232	$	2,475	$	178

	December 31, 2015
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U. S. Government agencies and corporations	$	88,255	$	1,800	$	84,959	$	3,329
State and political subdivisions		3,449		24		10,161		306
Corporate debt securities		4,974		292		200		1
Other securities		---		---		127		62
Total temporarily impaired securities	$	96,678	$	2,116	$	95,447	$	3,698

The Company had

325

securities with a fair value of

$297,770

that were temporarily impaired at

December

31,

2016.

The total unrealized loss on these securities was

$7,410.

Of the temporarily impaired total,

securities with a fair value of

$2,475

and an unrealized loss of

$178

have been in a continuous loss position for

twelve

months or more. The Company has determined that these securities are temporarily impaired at

December

31,

2016

for the reasons set out below.

U.S. Government agencies.

The unrealized losses of

on US Government agency securities stemmed from

security with a fair value of

$996.

The unrealized loss was caused by interest rate and market fluctuations. The contractual term of the investment does not permit the issuer to settle the security at a price less than the cost basis of the investment. The Company is monitoring bond market trends to develop strategies to address unrealized losses. Because the Company does not intend to sell the investment and it is not likely that the Company will be required to sell the investment before recovery of its amortized cost basis, which

may

be at maturity, the Company does not consider this investment to be other-than-temporarily impaired.

States and political subdivisions.

This category exhibits unrealized losses of

$148

securities with a fair value of

$1,316.

The Company reviewed financial statements and cash flows for the each of the securities in continuous loss position for more than

months. The Company’s analysis determined that the unrealized losses are primarily the result of interest rate and market fluctuations and not associated with impaired financial status. The contractual terms of the investments do not permit the issuer to settle the securities at a price less than the cost basis of each investment. Because the Company does not intend to sell any of the investments and it is not likely that the Company will be required to sell any of the investments before recovery of its amortized cost basis, which

may

be at maturity, the Company does not consider these investments to be other-than-temporarily impaired.

Other securities.

The Company holds a small investment in community bank stock. One security with a fair value of

$163

has an unrealized loss of

$26.

The value of this investment has been negatively affected by market conditions. Because the Company does not intend to sell this investment before recovery of its amortized cost basis, the Company does not consider this investment to be other-than-temporarily impaired.

Restricted stock

. The Company holds restricted stock of

$1,170

as of

December

31,

2016

and

$1,129

as of

December

31,

2015.

Restricted stock is reported separately from available-for-sale securities and held-to-maturity securities. As a member of the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Atlanta, NBB is required to maintain certain minimum investments in the common stock of those entities. Required levels of investment are based upon NBB’s capital and a percentage of qualifying assets. The Company purchases stock from or sells stock back to the correspondents based on their calculations. The stock is held by member institutions only and is not actively traded.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB

may

declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling

$493,620

December

31,

2016.

Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at

December

31,

2016,

management did not determine any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully monitor any changes in bond quality.

Pledged Securities.

December

31,

2016

and

2015,

securities with a carrying value of

$178,121

and

$156,721,

respectively, were pledged to secure municipal deposits and for other purposes as required or permitted by law.

Realized securities gains and losses.

The Company did not sell any securities during

2016,

2015

2014.

All realized gains and losses resulted from calls of securities. Information pertaining to realized gains and losses on called securities follows:

	For the year ended December 31, 2016
	Proceeds			Book Value		Gross Gain		Gross Loss		Net Gain (Loss)
Available for sale	$	220,520	$	220,334	$	186	$	---	$	186
Held to maturity		16,160		16,114		46		---		46

	For the year ended December 31, 2015
	Proceeds			Book Value		Gross Gain		Gross Loss		Net Gain (Loss)
Available for sale	$	63,775	$	63,742	$	34	$	1	$	33
Held to maturity		7,605		7,605		---		---		---

	For the year ended December 31, 2014
	Proceeds			Book Value		Gross Gain		Gross Loss		Net Gain (Loss)
Available for sale	$	6,919	$	6,917	$	4	$	2	$	2
Held to maturity		7,162		7,162		1		1		---