4.	Securities

Equity Securities

The Corporation held equity securities with fair values of

$473,000

and

$1.8

million at

September 30, 2018

and

December 31, 2017,

respectively. Beginning

January 1, 2018,

with the adoption of ASU

2016

01,

changes in the fair value of these securities are included in other income on the consolidated statements of net income as opposed to accumulated other comprehensive loss on the consolidated balance sheets. During the

three

and

nine

months ended

September 30, 2018,

the Corporation recognized a loss of

$1,000

and a gain of

$62,000,

respectively, on the equity securities held at

September 30, 2018.

During the

three

months ended

September 30, 2018,

the Corporation did

not

sell any equity securities. During the

nine

months ended

September 30, 2018,

the Corporation sold

$1.2

million of equity securities with a realized net loss of

$25,000.

Debt Securities - Available for Sale

The following table summarizes the Corporation’s debt securities as of

September

30,

2018

and

December

31,

2017:

(Dollar amounts in thousands)			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Available for sale:
September 30, 2018:
U.S. Treasury and federal agency	$	4,534	$	-	$	(139)	$	4,395
U.S. government sponsored entities and agencies		17,058		-		(508)		16,550
U.S. agency mortgage-backed securities: residential		28,526		-		(862)		27,664
U.S. agency collateralized mortgage obligations: residential		20,171		36		(1,002)		19,205
State and political subdivisions		22,943		3		(686)		22,260
Corporate debt securities		7,520		1		(86)		7,435
Total Securities available-for-sale	$	100,752	$	40	$	(3,283)	$	97,509

December 31, 2017:
U.S. Treasury and federal agency	$	4,541	$	-	$	(69)	$	4,472
U.S. government sponsored entities and agencies		14,136		2		(212)		13,926
U.S. agency mortgage-backed securities: residential		20,904		7		(153)		20,758
U.S. agency collateralized mortgage obligations: residential		22,607		25		(708)		21,924
State and political subdivisions		29,249		87		(96)		29,240
Corporate debt securities		9,009		38		(17)		9,030
Total Securities available-for-sale	$	100,446	$	159	$	(1,255)	$	99,350

The following table summarizes scheduled maturities of the Corporation’s debt securities as of

September

30,

2018.

Expected maturities

may

differ from contractual maturities because issuers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities and collateralized mortgage obligations are

not

due at a single maturity and are shown separately.

(Dollar amounts in thousands)	Available for sale
	Amortized		Fair
	Cost		Value

Due in one year or less	$	1,924	$	1,912
Due after one year through five years		30,077		29,308
Due after five through ten years		15,305		14,803
Due after ten years		4,749		4,617
Mortgage-backed securities: residential		28,526		27,664
Collateralized mortgage obligations: residential		20,171		19,205
Total	$	100,752	$	97,509

Information pertaining to debt securities with gross unrealized losses at

September

30,

2018

and

December

31,

2017,

aggregated by investment category and length of time that individual securities have been in a continuous loss position are included in the table below:

(Dollar amounts in thousands)	Less than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
Description of Securities	Value		Loss		Value		Loss		Value		Loss

September 30, 2018:
U.S. Treasury and federal agency	$	-	$	-	$	4,395	$	(139)	$	4,395	$	(139)
U.S. government sponsored entities and agencies		7,796		(134)		8,754		(374)		16,550		(508)
U.S. agency mortgage-backed securities: residential		21,938		(600)		5,726		(262)		27,664		(862)
U.S. agency collateralized mortgage obligations: residential		1,500		(5)		15,870		(997)		17,370		(1,002)
State and political subdivisions		17,386		(514)		4,325		(172)		21,711		(686)
Corporate debt securities		2,936		(68)		484		(18)		3,420		(86)
Total	$	51,556	$	(1,321)	$	39,554	$	(1,962)	$	91,110	$	(3,283)
December 31, 2017:
U.S. Treasury and federal agency	$	-	$	-	$	4,472	$	(69)	$	4,472	$	(69)
U.S. government sponsored entities and agencies		3,447		(42)		8,975		(170)		12,422		(212)
U.S. agency mortgage-backed securities: residential		9,659		(48)		6,581		(105)		16,240		(153)
U.S. agency collateralized mortgage obligations: residential		954		(16)		19,147		(692)		20,101		(708)
State and political subdivisions		10,510		(60)		3,487		(36)		13,997		(96)
Corporate debt securities		2,992		(16)		999		(1)		3,991		(17)
Total	$	27,562	$	(182)	$	43,661	$	(1,073)	$	71,223	$	(1,255)

Gains/losses on sales of securities for the

three

and

nine

months ended

September 30

were as follows:

(Dollar amounts in thousands)	For the three months				For the nine months
	ended September 30,				ended September 30,
	2018		2017		2018		2017
Proceeds	$	5,888	$	-	$	12,683	$	18,195
(Losses) Gains		(4)		-		(34)		350
Tax provision related to gains		(1)		-		(7)		119

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic, market or other conditions warrant such evaluation. Consideration is given to: (

) the length of time and the extent to which the fair value has been less than cost, (

) the financial condition and near-term prospects of the issuer, (

) whether the market decline was affected by macroeconomic conditions and (

) whether the Corporation has the intent to sell the security or more likely than

not

will be required to sell the security before recovery of its amortized cost basis. If the Corporation intends to sell an impaired security, or if it is more likely than

not

the Corporation will be required to sell the security before its anticipated recovery, the Corporation records an other-than-temporary loss in an amount equal to the entire difference between fair value and amortized cost. Otherwise, only the credit portion of the estimated loss on debt securities is recognized in earnings, with the other portion of the loss recognized in other comprehensive income.

There were

133

debt securities in an unrealized loss position as of

September

30,

2018,

of which

were in an unrealized loss position for more than

months. Of these

securities,

were government-backed collateralized mortgage obligations,

were state and political subdivision securities,

eight

were U.S. government sponsored entity and agency securities,

six

were mortgage-backed securities,

five

were U.S. Treasury securities and

one

was a corporate security. The unrealized losses associated with these securities were

not

due to the deterioration in the credit quality of the issuer that would likely result in the non-collection of contractual principal and interest, but rather have been caused by a rise in interest rates from the time the securities were purchased. Based on that evaluation and other general considerations, and given that the Corporation’s current intention is

not

to sell any impaired securities and it is more likely than

not

it will

not

be required to sell these securities before the recovery of its amortized cost basis, the Corporation does

not

consider these debt securities with unrealized losses as of

September

30,

2018

to be other-than-temporarily impaired.