NOTE 4 –SECURITIES

Amortized cost and fair value of securities available for sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) were as follows:

2014	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	52,006	$	774	$	-		$	52,780
U. S. sponsored agency CMO’s - residential		142,932		2,167		(911	)		144,188
Total mortgage-backed securities of government sponsored agencies		194,938		2,941		(911	)		196,968
U. S. government sponsored agency securities		22,533		30		(57	)		22,506
Obligations of states and political subdivisions		10,015		261		-			10,276
Total available for sale	$	227,486	$	3,232	$	(968	)	$	229,750

2013	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	27,681	$	463	$	(321	)	$	27,823
U. S. sponsored agency CMO’s - residential		178,000		1,167		(2,445	)		176,722
Total mortgage-backed securities of government sponsored agencies		205,681		1,630		(2,766	)		204,545
U. S. government sponsored agency securities		7,058		30		(107	)		6,981
Obligations of states and political subdivisions		6,275		265		-			6,540
Total available for sale	$	219,014	$	1,925	$	(2,873	)	$	218,066

The amortized cost and fair value of securities at December 31, 2014 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, such as mortgage-backed securities, are shown separately.

	Amortized Cost		Fair Value
Available for sale
Due in one year or less	$	1,348	$	1,377
Due after one year through five years		23,086		23,237
Due after five years through ten years		6,917		6,933
Due after ten years		1,197		1,235
Mortgage-backed securities of government sponsored agencies		194,938		196,968
Total available for sale	$	227,486	$	229,750

In 2014, a gain of $29 was recognized upon the sale (including calls) of securities while in 2013, a gain of $1,413 was recognized upon the sale (including calls) of securities. A $545 gain was recognized from calls of securities in 2012. There were no sales of securities in 2012. The tax expense related to these gains was $10, $481 and $185, respectively.

The realized gains, net of tax, were reclassified out of accumulated other comprehensive income (loss) on the statement of comprehensive income. The realized gains are reported on the income statement under the caption “Gain on disposition of securities” and the reclassified provision for income taxes is reported on the income statement under the caption “Provision for income taxes”.

Securities with an approximate carrying value of $166,624 and $168,150 at December 31, 2014 and 2013 were pledged to secure public deposits, trust funds, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

Securities with unrealized losses at year-end 2014 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

U.S government sponsored agency securities	$	9,971	$	(57	)	$	-	$	-		$	9,971	$	(57	)
U.S government sponsored agency CMO’s – residential		5,194		(52	)		26,471		(859	)		31,665		(911	)

Total temporarily impaired	$	15,165	$	(109	)	$	26,471	$	(859	)	$	41,636	$	(968	)

Securities with unrealized losses at year-end 2013 aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows:

	Less than 12 Months					12 Months or More				Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss

U.S government sponsored agency securities	$	3,890	$	(107	)	$	-	$	-	$	3,890	$	(107	)
U.S government sponsored agency MBS’s – residential		13,797		(321	)		-		-		13,797		(321	)
U.S government sponsored agency CMO’s – residential		102,341		(2,445	)		-		-		102,341		(2,445	)

Total temporarily impaired	$	120,028	$	(2,873	)	$	-	$	-	$	120,028	$	(2,873	)

The investment portfolio is predominately high credit quality interest-bearing bonds with defined maturity dates backed by the U.S. Government or Government sponsored entities. The unrealized losses at December 31, 2014 and December 31, 2013 are price changes resulting from changes in the interest rate environment and are considered to be temporary declines in the value of the securities. Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery. Their fair value is expected to recover as the bonds approach their maturity date and/or market conditions improve.