SECURITIES

Components of the available for sale portfolio are as follows:

	March 31, 2017
			Gross		Gross
	Amortized		unrealized		unrealized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities' securities	$	182,855	$	234	$	(1,436	)	$	181,653
States of the U.S. and political subdivisions		59,264		10		(1,410	)		57,864
Mortgage-backed GSE securities: residential		97,045		61		(789	)		96,317
Total	$	339,164	$	305	$	(3,635	)	$	335,834

	December 31, 2016
			Gross		Gross
	Amortized		unrealized		unrealized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Available for Sale
U.S. Treasury and government sponsored entities' securities	$	188,082	$	172	$	(2,221	)	$	186,033
States of the U.S. and political subdivisions		59,415		3		(1,661	)		57,757
Mortgage-backed GSE securities: residential		100,602		50		(1,158	)		99,494
Total	$	348,099	$	225	$	(5,040	)	$	343,284

Components of held to maturity securities portfolio are as follows:

	March 31, 2017
			Gross		Gross
	Amortized		unrecognized		unrecognized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Held to maturity
Mortgage-backed GSE securities: residential	$	82,076	$	—	$	(1,203	)	$	80,873
States of the U.S. and political subdivisions		12,447		17		(40	)		12,424
Total	$	94,523	$	17	$	(1,243	)	$	93,297

	December 31, 2016
			Gross		Gross
	Amortized		unrecognized		unrecognized			Fair
	cost		gains		losses			value
	(Dollars in thousands)
Held to maturity
Mortgage-backed GSE securities: residential	$	85,065	$	—	$	(1,300	)	$	83,765
States of the U.S. and political subdivisions		12,454		17		(86	)		12,385
Total	$	97,519	$	17	$	(1,386	)	$	96,150

Debt securities available for sale by contractual maturity, repricing or expected call date are shown below:

	March 31, 2017
	Amortized cost		Fair value
	(Dollars in thousands)
Due in one year or less	$	—	$	—
Due after one year through five years		—		—
Due after five years through ten years		183,271		182,068
Due after ten years		58,848		57,449
Mortgage-backed GSE securities: residential		97,045		96,317
Total	$	339,164	$	335,834

Debt securities held to maturity by contractual maturity, repricing or expected call date are shown below:

	March 31, 2017
	Amortized cost		Fair value
	(Dollars in thousands)
Due in one year or less	$	3,200	$	3,202
Due after one year through five years		—		—
Due after five years through ten years		5,775		5,761
Due after ten years		3,472		3,461
Mortgage-backed GSE securities: residential		82,076		80,873
Total	$	94,523	$	93,297

Securities pledged for public funds were approximately $143.6 million at March 31, 2017 and approximately $146.5 million at December 31, 2016.

Securities available for sale that have been in an unrealized loss position for less than twelve months or twelve months or more at March 31, 2017 are as follows:

	March 31, 2017
	Less than 12 months					12 months or more				Total
	Fair		Unrealized loss			Fair		Unrealized		Fair		Unrealized
	value		Loss			value		Loss		value		Loss
	(Dollars in thousands)
Description of securities:
U.S. Treasury and government sponsored entities	$	161,215	$	(1,436	)	$	—	$	—	$	161,215	$	(1,436	)
States of the U.S. and political subdivisions		47,500		(1,410	)		—		—		47,500		(1,410	)
Mortgage-backed GSE securities: residential		82,490		(789	)		—		—		82,490		(789	)
Total temporarily impaired securities	$	291,205	$	(3,635	)	$	—	$	—	$	291,205	$	(3,635	)

Securities available for sale that have been in an unrealized loss position for less than twelve months or twelve months or more at December 31, 2016 are as follows:

	December 31, 2016
	Less than 12 months					12 months or more				Total
	Fair		Unrealized loss			Fair		Unrealized		Fair		Unrealized
	value		Loss			value		Loss		value		Loss
	(Dollars in thousands)
Description of securities:
U.S. Treasury and government sponsored entities	$	171,411	$	(2,221	)	$	—	$	—	$	171,411	$	(2,221	)
States of the U.S. and political subdivisions		53,283		(1,661	)		—		—		53,283		(1,661	)
Mortgage-backed GSE securities: residential		98,775		(1,158	)		—		—		98,775		(1,158	)
Total temporarily impaired securities	$	323,469	$	(5,040	)	$	—	$	—	$	323,469	$	(5,040	)

All of the U.S. treasury and government sponsored entities and mortgage-backed securities available for sale that were temporarily impaired at March 31, 2017 and December 31, 2016, were impaired due to the level of interest rates at the time of purchase compared to current interest rates. Unrealized losses on these securities have not been recognized into income during the three months ended March 31, 2017 or 2016 because the issuer’s securities are of high credit quality (rated AA or higher), it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. There is risk that longer term rates could rise further resulting in greater unrealized losses. The Company expects to realize all interest and principal on these securities and has no intent to sell and more than likely will not be required to sell these securities before their anticipated recovery.

All of the obligations of U.S. states and political subdivisions held for sale that were temporarily impaired at March 31, 2017 and December 31, 2016, were impaired due to the level of interest rates at that time. Unrealized losses on these securities have not been recognized into income for the three months ended March 31, 2017 or 2016 because the issuer’s securities are of high credit quality (rated AA or higher), it is likely that management will not be required to sell and has no intent to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions.

Securities held to maturity that have been in an unrecognized loss position for less than twelve months or twelve months or more are as follows:

	March 31, 2017
	Less than 12 months					12 months or more					Total
	Fair		Unrealized loss			Fair		Unrealized			Fair		Unrealized
	value		Loss			value		Loss			value		Loss
	(Dollars in thousands)
Description of securities:
Mortgage-backed GSE securities: residential	$	55,341	$	(1,071	)	$	25,532	$	(1,312	)	$	80,873	$	(2,383	)
States of the U.S. and political subdivisions		6,245		(40	)		—		—			6,245		(40	)
Total temporarily impaired securities	$	61,586	$	(1,111	)	$	25,532	$	(1,312	)	$	87,118	$	(2,423	)

	December 31, 2016
	Less than 12 months					12 months or more					Total
	Fair		Unrealized loss			Fair		Unrealized			Fair		Unrealized
	value		Loss			value		Loss			value		Loss
	(Dollars in thousands)
Description of securities:
Mortgage-backed GSE securities: residential	$	57,340	$	(1,243	)	$	26,426	$	(1,287	)	$	83,766	$	(2,530	)
States of the U.S. and political subdivisions		7,416		(86	)							7,416		(86	)
Total temporarily impaired securities	$	64,756	$	(1,329	)	$	26,426	$	(1,287	)	$	91,182	$	(2,616	)

All of the mortgage-backed securities held to maturity that were temporarily impaired at March 31, 2017 and December 31, 2016, were impaired due to the level of interest rates at the time of purchase compared to current interest rates. Unrealized losses on these securities have not been recognized into income for the three months ended March 31, 2017 or 2016 because the issuer’s securities are of high credit quality (rated AA or higher), it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. There is risk that longer term rates could rise further resulting in greater unrealized losses. The Company expects to realize all interest and principal on these securities and has no intent to sell and more than likely will not be required to sell these securities before their anticipated recovery.

All of the obligations of U.S. states and political subdivisions held to maturity that were temporarily impaired at March 31, 2017 and December 31, 2016, were impaired due to the level of interest rates at the time of purchase compared to current interest rates. Unrealized losses on these securities have not been recognized into income for the three months ended March 31, 2017 or because the issuer’s securities are of high credit quality (rated AA or higher), it is likely that management will not be required to sell and has no intent to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions.

Proceeds from the sale of available for sale securities were $5.0 million and $18.1 million, for the three months ended March 31, 2017 and 2016, respectively. Gross gains of $29,000 and $153,000 were realized on these sales during the three months ended March 31, 2017 and 2016, respectively. Income tax expense related to net realized gains was $10,000 and $54,000 for the three months ended March 31, 2017 and 2016, respectively.