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:

2016	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	177,105	$	245	$	(3,173	)	$	174,177
U. S. sponsored agency CMO's - residential		73,163		761		(657	)		73,267
Total mortgage-backed securities of government sponsored agencies		250,268		1,006		(3,830	)		247,444
U. S. government sponsored agency securities		24,652		23		(174	)		24,501
Obligations of states and political subdivisions		16,645		111		(94	)		16,662
Total available for sale	$	291,565	$	1,140	$	(4,098	)	$	288,607

2015	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Available for sale
Mortgage-backed securities
U. S. sponsored agency MBS - residential	$	132,661	$	540	$	(854	)	$	132,347
U. S. sponsored agency CMO's - residential		104,530		1,330		(738	)		105,122
Total mortgage-backed securities of government sponsored agencies		237,191		1,870		(1,592	)		237,469
U. S. government sponsored agency securities		10,401		29		(1	)		10,429
Obligations of states and political subdivisions		7,387		184		(3	)		7,568
Total available for sale	$	254,979	$	2,083	$	(1,596	)	$	255,466

In 2016, a gain of $4 was recognized upon the sale (including calls) of securities. There were no sales of securities during 2015, while in 2014, a gain of $29 was recognized upon the sale (including calls) of securities. The tax expense related to the gains in 2016 and 2014 was $1 and $10, 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 $207,832 and $179,626 at December 31, 2016 and 2015 were pledged to secure public deposits, trust funds, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

The amortized cost and fair value of securities at December 31, 2016 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	$	8,270	$	8,307
Due after one year through five years		25,762		25,656
Due after five years through ten years		6,701		6,649
Due after ten years		564		551
Mortgage-backed securities of government sponsored agencies		250,268		247,444
Total available for sale	$	291,565	$	288,607

Securities with unrealized losses at year-end 2016 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	$	17,207	$	(174	)	$	-	$	-		$	17,207	$	(174	)
U.S government sponsored agency MBS – residential		157,022		(3,173	)		-		-			157,022		(3,173	)
U.S government sponsored agency CMO's – residential		18,374		(373	)		8,750		(284	)		27,124		(657	)
Obligations of states and political subdivisions		7,961		(94	)		-		-			7,961		(94	)

Total temporarily impaired	$	200,564	$	(3,814	)	$	8,750	$	(284	)	$	209,314	$	(4,098	)

Securities with unrealized losses at year-end 2015 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	$	2,016	$	(1	)	$	-	$	-		$	2,016	$	(1	)
U.S government sponsored agency MBS – residential		94,311		(854	)		-		-			94,311		(854	)
U.S government sponsored agency CMO's – residential		11,604		(161	)		19,755		(577	)		31,359		(738	)
Obligations of states and political subdivisions		571		(3	)		-		-			571		(3	)

Total temporarily impaired	$	108,502	$	(1,019	)	$	19,755	$	(577	)	$	128,257	$	(1,596	)

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, 2016 and December 31, 2015 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.