Securities

The carrying values, unrealized gains, unrealized losses, and approximate fair values of available-for-sale and held-to-maturity investment securities at December 31, 2014 and December 31, 2013 are shown in the tables below. As of December 31, 2014, investments and restricted equity securities with amortized costs and fair values of $123,742 and $123,048 respectively, were pledged as collateral for public deposits, a line of credit available from the Federal Home Loan Bank, customer sweep accounts, and for other purposes as required or permitted by law.

The amortized costs, gross unrealized gains and losses, and approximate fair values of securities available-for-sale (“AFS”) as of December 31, 2014 and December 31, 2013 were as follows:



	Amortized		Unrealized		Unrealized
December 31, 2014	Cost		Gains		Losses			Fair Values
U.S. Government and federal agency	$	14,031	$	146	$	(221	)	$	13,956
Government-sponsored enterprises *	28,571		0		(833		)	27,738
Mortgage-backed securities	90,554		542		(481		)	90,615
Collateralized mortgage obligations	12,974		47		(78		)	12,943
States and political subdivisions	32,323		428		(266		)	32,485
	$	178,453	$	1,163	$	(1,879	)	$	177,737



December 31, 2013
U.S. Government and federal agency	$	10,844	$	13	$	(550	)	$	10,307
Government-sponsored enterprises *	33,580		0		(2,269		)	31,311
Mortgage-backed securities	74,375		132		(2,118		)	72,389
Collateralized mortgage obligations	9,261		40		(107		)	9,194
States and political subdivisions	38,896		0		(2,236		)	36,660
	$	166,956	$	185	$	(7,280	)	$	159,861

* Such as FNMA, FHLMC and FHLB.

There were no securities classified as held-to-maturity (“HTM”) as of December 31, 2014. On May 30, 2014, the Company transferred all of its investment and mortgage-backed securities classified as held to maturity to available for sale. Based on changes in the current rate environment, management elected this change in an effort to more effectively manage the investment portfolio, including subsequently selling some securities that were formerly classified as held to maturity. The amortized cost of the securities that were transferred totaled $21,482 and the net unrealized gain related to these securities totaled $961 on the date of the transfer. As a result of the transfer and subsequent sales, the Company believes it has tainted its held to maturity classification and judgment will be required in the future in determining when circumstances have changed such that management can assert with a great degree of credibility that it has the intent and ability to hold debt securities to maturity. Based on this guidance, the Company does not expect to classify any securities as held to maturity within the near future.

The amortized costs, gross unrealized gains and losses, and approximate fair values of securities held-to-maturity ("HTM") at December 31, 2013 were as follows:



	Amortized		Unrealized		Unrealized
December 31, 2013	Cost		Gains		Losses		Fair Values
U.S. Government and federal agency	$	7,470	$	161	(76	)	$	7,555
Mortgage-backed securities	147		9		0		156
Collateralized mortgage obligations	93		5		0		98
States and political subdivisions	14,282		407		(27	)	14,662
	$	21,992	$	582	(103	)	$	22,471

The following tables present the maturity ranges of securities available-for-sale as of December 31, 2014 and the weighted average yields of such securities. Maturities may differ from scheduled maturities on mortgage-backed securities and collateralized mortgage obligations because the mortgages underlying the securities may be repaid prior to the scheduled maturity date. Maturities on all other securities are based on the contractual maturity. The weighted average yields are calculated on the basis of the cost and effective yields weighted for the scheduled maturity of each security. Weighted average yields on tax-exempt obligations have been computed on a taxable equivalent basis using a tax rate of 34%.




	Available-for-Sale
	Amortized		Fair
In thousands	Costs		Value		Yield
U.S. Government and federal agency:
After five but within ten years	$	8,490	$	8,444	2.58	%
After ten years	5,541		5,512		2.71	%
Government-sponsored enterprises:
After one but within five years	10,550		10,399		1.36	%
After five but within ten years	13,041		12,641		1.93	%
After ten years	4,980		4,698		2.79	%
Obligations of states and subdivisions:
After one but within five years	3,635		3,629		2.34	%
After five but within ten years	13,035		13,055		2.64	%
After ten years	15,653		15,801		3.62	%
Mortgage-backed securities	90,554		90,615		2.13	%
Collateralized mortgage obligations	12,974		12,943		2.08	%
Total	$	178,453	$	177,737

Total Securities by Maturity Period
After one but within five years	14,185		14,028
After five but within ten years	34,566		34,140
After ten years	26,174		26,011
Mortgage-backed securities*	90,554		90,615
Collateralized mortgage obligations*	12,974		12,943
Total by Maturity Period	$	178,453	$	177,737

* Maturities on mortgage-backed securities and collateralized mortgage obligations are not presented in this table because maturities may differ substantially from contractual terms due to early repayments of principal.

The following tables detail unrealized losses and related fair values in the Company’s available-for-sale and held-to-maturity investment securities portfolios. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2014 and December 31, 2013, respectively.



	Temporarily Impaired Securities in AFS Portfolio
In thousands	Less than 12 months					Greater than 12 months					Total
			Unrealized					Unrealized					Unrealized
December 31, 2014	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
U.S. Government and federal agency	$	0	$	0		$	7,511	$	(221	)	$	7,511	$	(221	)
Government-sponsored enterprises	5,917		(33		)	21,821		(800		)	27,738		(833		)
Mortgage-backed securities	9,833		(23		)	32,745		(458		)	42,578		(481		)
Collateralized mortgage obligations	3,653		(38		)	1,756		(40		)	5,409		(78		)
States and political subdivisions	1,508		(19		)	12,116		(247		)	13,624		(266		)
	$	20,911	$	(113	)	$	75,949	$	(1,766	)	$	96,860	$	(1,879	)



December 31, 2013
U.S. Government and federal agency	$	9,287	$	(550	)	$	0	$	0		$	9,287	$	(550	)
Government-sponsored enterprises	16,797		(1,236		)	11,064		(1,033		)	27,861		(2,269		)
Mortgage-backed securities	62,336		(2,019		)	1,777		(99		)	64,113		(2,118		)
Collateralized mortgage obligations	5,050		(107		)	5		0			5,055		(107		)
States and political subdivisions	30,950		(1,744		)	4,838		(492		)	35,788		(2,236		)
	$	124,420	$	(5,656	)	$	17,684	$	(1,624	)	$	142,104	$	(7,280	)



	Temporarily Impaired Securities in HTM Portfolio
In thousands	Less than 12 months					Greater than 12 months				Total
			Unrealized					Unrealized				Unrealized
December 31, 2013	Fair Value		Losses			Fair Value		Losses		Fair Value		Losses
U.S. Government and federal agency	2,387		(76		)	0		0		2,387		(76		)
States and political subdivisions	1,842		(27		)	0		0		1,842		(27		)
	$	4,229	$	(103	)	$	0	$	0	$	4,229	$	(103	)

Management considers the nature of the investment, the underlying causes of the decline in the market value and the severity and duration of the decline in market value in determining if impairment is other than temporary. 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, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At December 31, 2014, there were forty-seven securities in the portfolio with an unrealized loss for a period greater than 12 months totaling $1,766. As of December 31, 2014, management believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe such securities are other-than-temporarily impaired due to reasons of credit quality. Accordingly, as of December 31, 2014, management believes the impairments detailed in the table above are temporary and no impairment loss has been realized in the Company's consolidated income statement.

Gross proceeds on the sale of securities were $33,430 in 2014, with $929 of gross gains realized and $199 of gross losses realized. Gross proceeds on the sale of securities were $26,019 in 2013, with $140 of gross gains realized and $95 of gross losses realized.