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Investment Securities
6 Months Ended
Jun. 30, 2017
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities
 
The amortized cost, gross unrealized gains and losses, and fair values of investment securities available for sale at June 30, 2017 and December 31, 2016 are as follows:
 
 
June 30, 2017
 
 
 
 
Gross
 
Gross
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
(In Thousands)
 
Cost
 
Gains
 
Losses
 
Value
Available for sale (AFS):
 
 

 
 

 
 

 
 

Mortgage-backed securities
 
$
4,649

 
$
83

 
$
(106
)
 
$
4,626

State and political securities
 
69,091

 
1,006

 
(130
)
 
69,967

Other debt securities
 
53,671

 
135

 
(1,650
)
 
52,156

Total debt securities
 
127,411

 
1,224

 
(1,886
)
 
126,749

Financial institution equity securities
 
9,818

 
679

 

 
10,497

Non-financial institution equity securities
 
1,300

 

 
(42
)
 
1,258

Total equity securities
 
11,118

 
679

 
(42
)
 
11,755

Total investment securities AFS
 
$
138,529

 
$
1,903

 
$
(1,928
)
 
$
138,504


 
 
December 31, 2016
 
 
 
 
Gross
 
Gross
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
(In Thousands)
 
Cost
 
Gains
 
Losses
 
Value
Available for sale (AFS):
 
 

 
 

 
 

 
 

Mortgage-backed securities
 
$
9,295

 
$
182

 
$
(164
)
 
$
9,313

Asset-backed securities
 
109

 

 

 
109

State and political securities
 
60,777

 
666

 
(509
)
 
60,934

Other debt securities
 
53,046

 
137

 
(2,065
)
 
51,118

Total debt securities
 
123,227

 
985

 
(2,738
)
 
121,474

Financial institution equity securities
 
9,566

 
969

 

 
10,535

Non-financial institution equity securities
 
1,667

 

 
(184
)
 
1,483

Total equity securities
 
11,233

 
969

 
(184
)
 
12,018

Total investment securities AFS
 
$
134,460

 
$
1,954

 
$
(2,922
)
 
$
133,492


 
The amortized cost and fair values of trading investment securities at June 30, 2017 and December 31, 2016 are as follows.

 
 
June 30, 2017
 
 
 
 
Gross
 
Gross
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
(In Thousands)
 
Cost
 
Gains
 
Losses
 
Value
Trading:
 
 
 
 
 
 
 
 
Financial institution equity securities
 
$
61

 
$
1

 
$

 
$
62

Non-financial institution equity securities
 
157

 

 
(6
)
 
151

Total trading securities
 
$
218

 
$
1

 
$
(6
)
 
$
213


 
 
December 31, 2016
 
 
 
 
Gross
 
Gross
 
 
 
 
Amortized
 
Unrealized
 
Unrealized
 
Fair
(In Thousands)
 
Cost
 
Gains
 
Losses
 
Value
Trading:
 
 
 
 
 
 
 
 
Financial institution equity securities
 
$

 
$

 
$

 
$

Non-financial institution equity securities
 
$
56

 
$
2

 
$

 
$
58

Total trading securities
 
$
56

 
$
2

 
$

 
$
58



Total net trading gains of $0 and $2,000 for the three and six month periods ended June 30, 2017 compared to net trading gains of $6,000 and $46,000 for the three and six month periods ended June 30, 2016 were included in the Consolidated Statement of Income.

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual securities have been in a continuous unrealized loss position, at June 30, 2017 and December 31, 2016.

 
 
June 30, 2017
 
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
 
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
(In Thousands)
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
Available for sale (AFS):
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
3,415

 
$
(106
)
 
$

 
$

 
$
3,415

 
$
(106
)
State and political securities
 
12,175

 
(130
)
 

 

 
12,175

 
(130
)
Other debt securities
 
30,906

 
(914
)
 
11,297

 
(736
)
 
42,203

 
(1,650
)
Total debt securities
 
46,496

 
(1,150
)
 
11,297

 
(736
)
 
57,793

 
(1,886
)
Financial institution equity securities
 

 

 

 

 

 

Non-financial institution equity securities
 
1,258

 
(42
)
 

 

 
1,258

 
(42
)
Total equity securities
 
1,258

 
(42
)
 

 

 
1,258

 
(42
)
Total investment securities AFS
 
$
47,754

 
$
(1,192
)
 
$
11,297

 
$
(736
)
 
$
59,051

 
$
(1,928
)

 
 
December 31, 2016
 
 
Less than Twelve Months
 
Twelve Months or Greater
 
Total
 
 
 
 
Gross
 
 
 
Gross
 
 
 
Gross
 
 
Fair
 
Unrealized
 
Fair
 
Unrealized
 
Fair
 
Unrealized
(In Thousands)
 
Value
 
Losses
 
Value
 
Losses
 
Value
 
Losses
Available for sale (AFS):
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
$
3,572

 
$
(106
)
 
$
3,627

 
$
(58
)
 
$
7,199

 
$
(164
)
State and political securities
 
26,113

 
(509
)
 

 

 
26,113

 
(509
)
Other debt securities
 
28,140

 
(1,179
)
 
12,240

 
(886
)
 
40,380

 
(2,065
)
Total debt securities
 
57,825

 
(1,794
)
 
15,867

 
(944
)
 
73,692

 
(2,738
)
Financial institution equity securities
 

 

 

 

 

 

Non-financial institution equity securities
 
727

 
(140
)
 
756

 
(44
)
 
1,483

 
(184
)
Total equity securities
 
727

 
(140
)
 
756

 
(44
)
 
1,483

 
(184
)
Total investment securities AFS
 
$
58,552

 
$
(1,934
)
 
$
16,623

 
$
(988
)
 
$
75,175

 
$
(2,922
)

 
At June 30, 2017 there were a total of 54 securities in a continuous unrealized loss position for less than twelve months and 7 individual securities that were in a continuous unrealized loss position for twelve months or greater.

The Company reviews its position quarterly and has determined that, at June 30, 2017, the declines outlined in the above table represent temporary declines and the Company does not intend to sell and does not believe it will be required to sell these securities before recovery of their cost basis, which may be at maturity.  The Company has concluded that the unrealized losses disclosed above are not other than temporary but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period.

The amortized cost and fair value of debt securities at June 30, 2017, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In Thousands)
 
Amortized Cost
 
Fair Value
Due in one year or less
 
$
2,140

 
$
2,140

Due after one year to five years
 
46,434

 
45,944

Due after five years to ten years
 
63,600

 
63,222

Due after ten years
 
15,237

 
15,443

Total
 
$
127,411

 
$
126,749



Total gross proceeds from sales of securities available for sale for the three and six months ended June 30, 2017 were $6,478,000 and $9,130,000, a decrease from the 2016 totals of $16,168,000 and $36,007,000.

The following table represents gross realized gains and losses within the available for sale portfolio:
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands)
 
2017
 
2016
 
2017
 
2016
Gross realized gains:
 
 

 
 

 
 

 
 

Mortgage-backed securities
 
$
24

 
$
6

 
69

 
6

State and political securities
 
15

 
339

 
29

 
638

Other debt securities
 

 
226

 

 
258

Financial institution equity securities
 

 

 
288

 
82

  Non-financial institution equity securities
 

 

 

 
144

Total gross realized gains
 
$
39

 
$
571

 
$
386

 
$
1,128

 
 
 
 
 
 
 
 
 
Gross realized losses:
 
 

 
 

 
 

 
 

U.S. Government and agency securities
 
$

 
$
3

 
$

 
$
3

Mortgage-backed securities
 

 

 

 

Asset-backed securities
 

 

 

 

State and political securities
 

 

 

 

Other debt securities
 
51

 
82

 
51

 
163

Financial institution equity securities
 

 

 

 

  Non-financial institution equity securities
 

 

 
150

 
41

Total gross realized losses
 
$
51

 
$
85

 
$
201

 
$
207













The following table represents gross realized gains and losses within the trading portfolios:

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In Thousands)
 
2017
 
2016
 
2017
 
2016
Gross realized gains:
 
 

 
 

 
 

 
 

Financial institution equity securities
 
$

 
$

 
$

 
$
6

  Non-financial institution equity securities
 
6

 
9

 
8

 
68

Total gross realized gains
 
$
6

 
$
9

 
$
8

 
$
74

 
 
 
 
 
 
 
 
 
Gross realized losses:
 
 

 
 

 
 

 
 

Financial institution equity securities
 
$

 
$
3

 
$

 
$
16

  Non-financial institution equity securities
 
6

 

 
6

 
12

Total gross realized losses
 
$
6

 
$
3

 
$
6

 
$
28



There were no impairment charges included in gross realized losses for the three and six months ended June 30, 2017 and 2016, respectively.

Investment securities with a carrying value of approximately $103,864,000 and $95,199,000 at June 30, 2017 and December 31, 2016, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.