Investments

A summary of investment securities available-for-sale is as follows:

	As of September 30, 2016
			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
(Dollars in thousands)	cost		gains		losses		fair value

U. S. treasury securities	$	6,008	$	22	$	-	$	6,030
U. S. federal agency obligations		27,188		167		(6)		27,349
Municipal obligations, tax-exempt		160,122		3,907		(181)		163,848
Municipal obligations, taxable		71,680		1,949		(1)		73,628
Agency mortgage-backed securities		91,331		1,580		(42)		92,869
Common stocks		458		544		-		1,002
Certificates of deposit		9,700		-		-		9,700
Total	$	366,487	$	8,169	$	(230)	$	374,426

	As of December 31, 2015
			Gross		Gross
	Amortized		unrealized		unrealized		Estimated
(Dollars in thousands)	cost		gains		losses		fair value

U. S. treasury securities	$	6,517	$	1	$	(1)	$	6,517
U. S. federal agency obligations		30,064		43		(187)		29,920
Municipal obligations, tax-exempt		135,341		2,671		(71)		137,941
Municipal obligations, taxable		81,999		472		(581)		81,890
Agency mortgage-backed securities		85,829		391		(235)		85,985
Common stocks		580		906		-		1,486
Certificates of deposit		9,699		-		-		9,699
Total	$	350,029	$	4,484	$	(1,075)	$	353,438

The tables above show that some of the securities in the available-for-sale investment portfolio had unrealized losses, or were temporarily impaired, as of September 30, 2016 and December 31, 2015. This temporary impairment represents the estimated amount of loss that would be realized if the securities were sold on the valuation date. Securities which were temporarily impaired are shown below, along with the length of time in a continuous unrealized loss position.

			As of September 30, 2016
(Dollars in thousands)			Less than 12 months				12 months or longer				Total
	No. of		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	securities		value		losses		value		losses		value		losses
U.S. federal agency obligations		3	$	6,198	$	(6)	$	-	$	-	$	6,198	$	(6)
Municipal obligations, tax-exempt		78		27,441		(181)		-		-		27,441		(181)
Municipal obligations, taxable		2		567		(1)		-		-		567		(1)
Agency mortgage-backed securities		19		10,936		(42)		-		-		10,936		(42)
Total		102	$	45,142	$	(230)	$	-	$	-	$	45,142	$	(230)

			As of December 31, 2015
(Dollars in thousands)			Less than 12 months				12 months or longer				Total
	No. of		Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	securities		value		losses		value		losses		value		losses
U.S. treasury securities		2	$	3,542	$	(1)	$	-	$	-	$	3,542	$	(1)
U. S. federal agency obligations		18		23,015		(163)		1,976		(24)		24,991		(187)
Municipal obligations, tax-exempt		47		11,328		(53)		2,132		(18)		13,460		(71)
Municipal obligations, taxable		105		38,605		(494)		5,068		(87)		43,673		(581)
Agency mortgage-backed securities		40		29,814		(166)		2,925		(69)		32,739		(235)
Total		212	$	106,304	$	(877)	$	12,101	$	(198)	$	118,405	$	(1,075)

The Company’s U.S. federal agency portfolio consists of securities issued by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Bank (“FHLB”). The receipt of principal and interest on U.S. federal agency obligations is guaranteed by the respective government-sponsored agency guarantor, such that the Company believes that its U.S. federal agency obligations do not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and its belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the U.S. federal agency obligations identified in the tables above were temporarily impaired as of the date of the respective table.

The Company’s portfolio of municipal obligations consists of both tax-exempt and taxable general obligations securities issued by various municipalities. As of September 30, 2016, the Company did not intend to sell and it was more likely than not that the Company will not be required to sell its municipal obligations in an unrealized loss position until the recovery of their costs. Due to the issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and the expectation that they will continue to do so, the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company believed that the municipal obligations identified in the tables above were temporarily impaired as of the date of the respective table.

The Company’s agency mortgage-backed securities portfolio consists of securities underwritten to the standards of and guaranteed by the government-sponsored agencies of FHLMC, FNMA and the Government National Mortgage Association (“GNMA”). The receipt of principal, at par, and interest on agency mortgage-backed securities is guaranteed by the respective government-sponsored agency guarantor, such that the Company believed that its agency mortgage-backed securities did not expose the Company to credit-related losses. Based on these factors, along with the Company’s intent to not sell the securities and the Company’s belief that it was more likely than not that the Company will not be required to sell the securities before recovery of their cost basis, the Company believed that the agency mortgage-backed securities identified in the tables above were temporarily impaired as of the date of the respective table.

The table below of the amortized cost and estimated fair value of investment securities includes scheduled principal payments and estimated prepayments, based on observable market inputs, for agency mortgage-backed securities. Actual maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties. The amortized cost and fair value of investment securities at September 30, 2016 are as follows:

(Dollars in thousands)	Amortized		Estimated
	cost		fair value
Due in less than one year	$	25,963	$	26,067
Due after one year but within five years		182,604		184,791
Due after five years but within ten years		89,280		92,434
Due after ten years		68,182		70,132
Common stocks		458		1,002
Total	$	366,487	$	374,426

Sales proceeds and gross realized gains and losses on sales of available-for-sale securities are as follows for the periods indicated:

(Dollars in thousands)	Three months ended				Nine months ended
	September 30,				September 30,
	2016		2015		2016		2015

Sales proceeds	$	708	$	11,541	$	14,326	$	30,610

Realized gains	$	261	$	206	$	573	$	230
Realized losses		-		(71)		(15)		(349)
Net realized gains (losses)	$	261	$	135	$	558	$	(119)

Securities with carrying values of $204.5 million and $171.6 million were pledged to secure public funds on deposit, repurchase agreements and as collateral for borrowings at September 30, 2016 and December 31, 2015, respectively. Except for U.S. federal agency obligations, no investment in a single issuer exceeded 10% of consolidated stockholders’ equity.