Securities

The following table summarizes the Corporation’s securities as of March 31, 2017 and December 31, 2016:



(Dollar amounts in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available for sale:
March 31, 2017:
U.S. Treasury and federal agency	$	4,547	$	—	$	(40	)	$	4,507
U.S. government sponsored entities and agencies	9,176		—		(156		)	9,020
U.S. agency mortgage-backed securities: residential	24,841		99		(192		)	24,748
U.S. agency collateralized mortgage obligations: residential	25,423		19		(656		)	24,786
State and political subdivisions	26,406		107		(76		)	26,437
Corporate debt securities	7,511		23		(79		)	7,455
Equity securities	1,829		337		(23		)	2,143
	$	99,733	$	585	$	(1,222	)	$	99,096
December 31, 2016:
U.S. Treasury and federal agency	4,550		—		(50		)	4,500
U.S. government sponsored entities and agencies	9,186		—		(188		)	8,998
U.S. agency mortgage-backed securities: residential	25,790		32		(196		)	25,626
U.S. agency collateralized mortgage obligations: residential	25,367		23		(684		)	24,706
State and political subdivisions	27,853		17		(262		)	27,608
Corporate debt securities	8,012		5		(85		)	7,932
Equity securities	1,829		373		(12		)	2,190
	$	102,587	$	450	$	(1,477	)	$	101,560

The following table summarizes scheduled maturities of the Corporation’s debt securities as of March 31, 2017. 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 Cost		Fair Value
Due in one year or less	$	2,002	$	1,999
Due after one year through five years	23,925		23,864
Due after five through ten years	20,701		20,568
Due after ten years	1,012		988
Mortgage-backed securities: residential	24,841		24,748
Collateralized mortgage obligations: residential	25,423		24,786
	$	97,904	$	96,953


4.	Securities (continued)

Information pertaining to securities with gross unrealized losses at March 31, 2017 and December 31, 2016, 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
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
March 31, 2017:
U.S. Treasury and federal agency	$	4,507	$	(40	)	$	—	$	—		$	4,507	$	(40	)
U.S. government sponsored entities and agencies	9,020		(156		)	—		—			9,020		(156		)
U.S. agency mortgage-backed securities: residential	13,386		(192		)	—		—			13,386		(192		)
U.S. agency collateralized mortgage obligations: residential	9,888		(225		)	13,080		(431		)	22,968		(656		)
State and political subdivisions	7,815		(76		)	—		—			7,815		(76		)
Corporate debt securities	3,932		(79		)	—		—			3,932		(79		)
Equity securities	—		—			227		(23		)	227		(23		)
	$	48,548	$	(768	)	$	13,307	$	(454	)	$	61,855	$	(1,222	)

December 31, 2016:
U.S. Treasury and federal agency	$	4,500	$	(50	)	$	—	$	—		$	4,500	$	(50	)
U.S. government sponsored entities and agencies	8,998		(188		)	—		—			8,998		(188		)
U.S. agency mortgage-backed securities: residential	23,279		(196		)	—		—			23,279		(196		)
U.S. agency collateralized mortgage obligations: residential	13,568		(438		)	9,317		(246		)	22,885		(684		)
State and political subdivisions	21,924		(262		)	—		—			21,924		(262		)
Corporate debt securities	3,927		(85		)	—		—			3,927		(85		)
Equity securities	—		—			237		(12		)	237		(12		)
	$	76,196	$	(1,219	)	$	9,554	$	(258	)	$	85,750	$	(1,477	)

Gains on sales of available for sale securities for the three months ended March 31 were as follows:



(Dollar amounts in thousands)	For the three months ended March 31,
	2017		2016
Proceeds	$	—	$	3,679
Gains	—		2
Tax provision related to gains	—		1

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: (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 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. For equity securities determined to be other-than-temporarily impaired, the entire amount of impairment is recognized through earnings.


4.	Securities (continued)

There was one equity security in an unrealized loss position for more than 12 months as of March 31, 2017. Equity securities owned by the Corporation consist of common stock of various financial service providers. This investment security is in an unrealized loss position as a result of the illiquid nature of the stock. The Corporation does not invest in these securities with the intent to sell them for a profit in the near term. For investments in equity securities, in addition to the general factors mentioned above for determining whether the decline in market value is other-than-temporary, the analysis of whether an equity security is other-than-temporarily impaired includes a review of the profitability, capital adequacy and other relevant information available to determine the financial position and near term prospects of each issuer. The results of analyzing the aforementioned metrics and financial fundamentals suggest recovery of amortized cost in the near future. Based on that evaluation, and given that the Corporation’s current intention is not to sell any impaired security and it is more likely than not it will not be required to sell this security before the recovery of its amortized cost basis, the Corporation does not consider the equity security with an unrealized loss as of March 31, 2017 to be other-than-temporarily impaired.

There were 81 debt securities in an unrealized loss position as of March 31, 2017, of which 13 were in an unrealized loss position for more than 12 months. Of these 81 securities, 25 were government-backed collateralized mortgage obligations, 25 were state and political subdivision securities, 11 were mortgage-backed securities, 8 were U.S. government sponsored entity and agency securities, 7 were corporate securities, and 5 were U.S. Treasury securities. 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 March 31, 2017 to be other-than-temporarily impaired. In addition, there was one corporate debt security which on May 1, 2017, the Corporation identified as other-than temporarily impaired due to deterioration in the credit quality of the issuer that would likely result in the non-collection of contractual principal and interest. The difference between the fair value and amortized cost at March 31, 2017 was immaterial. The Corporation will record an other-than-temporary charge during the second quarter of 2017 related to this security (see Note 12).