Note 3.

Securities

The amortized cost and fair value of securities available-for-sale at December 31, 2015 and 2014 are summarized as follow (in thousands):

	December 31, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

U.S. Government-sponsored enterprises (GSEs)	$	22,745	$	48	$	(50)	$	22,743

Municipal securities		7,614		52		(17)		7,649

Mortgage-backed securities		136,625		375		(979)		136,021

	$	166,984	$	475	$	(1,046)	$	166,413

	December 31, 2014
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

U.S. Government-sponsored enterprises (GSEs)	$	21,267	$	45	$	(205)	$	21,107

Municipal securities		2,012		19		-		2,031

Mortgage-backed securities		76,089		394		(745)		75,738

	$	99,368	$	458	$	(950)	$	98,876

The amortized cost and estimated market value of securities at December 31, 2015, by contractual maturity, are shown below (in thousands). 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.

	Amortized		Fair
	Cost		Value
Due in one year or less	$	1,961	$	1,967
Due from one year to five years		14,911		14,960
Due from five years to ten years		8,370		8,319
Due after ten years		5,117		5,146
		30,359		30,392
Mortgage-backed securities		136,625		136,021

	$	166,984	$	166,413

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available-for-sale have been in a continuous unrealized loss position, as of December 31, 2015 and 2014 (in thousands):

	As of December 31, 2015
	Less than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

U.S. Government- sponsored enterprises (GSEs)	$	8,464	$	(50)	$	-	$	-	$	8,464	$	(50)

Municipal securities		2,456		(17)		-		-		2,456		(17)

Mortgage-backed securities		72,641		(470)		16,325		(509)		88,966		(979)
	$	83,561	$	(537)	$	16,325	$	(509)	$	99,886	$	(1,046)

	As of December 31, 2014
	Less than 12 Months				12 Months or Greater				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses

U.S. Government- sponsored enterprises (GSEs)	$	3,305	$	(10)	$	9,795	$	(195)	$	13,100	$	(205)

Municipal securities		-		-		-		-		-		-

Mortgage-backed securities		-		-		36,726		(745)		36,726		(745)
	$	3,305	$	(10)	$	46,521	$	(940)	$	49,826	$	(950)

At December 31, 2015, the categories of temporarily impaired securities, and management’s evaluation of those securities, are as follows:

U.S. Government-sponsored enterprises: At December 31, 2015, five investments in U.S. GSE securities had unrealized losses. These unrealized losses related principally to changes in market interest rates. The contractual terms of the investments does not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Banks do not intend to sell the investments and it is more likely than not that the Banks will not be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Banks do not consider these investments to be other-than temporarily impaired at December 31, 2015.

Municipal securities: At December 31, 2015, seven investments in obligations of municipal securities had unrealized losses. The Banks believes the unrealized losses on those investments were caused by the interest rate environment and do not relate to the underlying credit quality of the issuers. Because the Banks do not intend to sell the investments and it is not more likely than not that the Banks will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Banks do not consider these investments to be other-than-temporarily impaired at December 31, 2015.

Mortgage-backed securities: At December 31, 2015, fifty-four investments in residential mortgage-backed securities had unrealized losses. This impairment is believed to be caused by the current interest rate environment. The contractual cash flows of those investments are guaranteed by an agency of the U.S. Government. Because the decline in market value is attributable to the current interest rate environment and not credit quality, and because the Banks do not intend to sell the investments and it is not more likely than not that the Banks will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Banks do not consider these investments to be other-than-temporarily impaired at December 31, 2015.

Sales of available for sale securities for the years ended December 31, 2015 and 2014, were as follows (in thousands):

	2015		2014
Proceeds	$	7,304	$	9,004
Gains realized		52		212
Losses realized		-		96

Securities with a carrying value of approximately $124,517,000 and $92,647,000 at December 31, 2015 and 2014, respectively, were pledged to secure various deposits, securities sold under agreements to repurchase, as collateral for federal funds purchased from other financial institutions and serve as collateral for borrowings at the Federal Home Loan Bank.