Investment Securities

The portfolio of investment securities consisted of the following (in thousands):



	March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:
Obligations of state and political subdivisions	$	23,624	$	625	$	10	$	24,239
GSE mortgage-backed securities	81,030		2,890		24		83,896
Collateralized mortgage obligations: residential	187,859		871		744		187,986
Collateralized mortgage obligations: commercial	3,951		—		43		3,908
Mutual funds	2,100		22		—		2,122
	$	298,564	$	4,408	$	821	$	302,151

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:
Obligations of state and political subdivisions	$	30,750	$	770	$	27	$	31,493
GSE mortgage-backed securities	84,946		2,321		229		87,038
Collateralized mortgage obligations: residential	194,067		297		2,276		192,088
Collateralized mortgage obligations: commercial	5,512		1		65		5,448
Mutual funds	2,100		—		8		2,092
	$	317,375	$	3,389	$	2,605	$	318,159



	March 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity:
Obligations of state and political subdivisions	$	43,430	$	935	$	4	$	44,361
GSE mortgage-backed securities	53,423		1,256		12		54,667
Collateralized mortgage obligations: residential	10,429		—		193		10,236
Collateralized mortgage obligations: commercial	6,341		26		—		6,367
	$	113,623	$	2,217	$	209	$	115,631

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Held-to-maturity:
Obligations of state and political subdivisions	$	43,737	$	697	$	6	$	44,428
GSE mortgage-backed securities	55,696		705		131		56,270
Collateralized mortgage obligations: residential	10,803		—		361		10,442
Collateralized mortgage obligations: commercial	6,556		2		—		6,558
	$	116,792	$	1,404	$	498	$	117,698

With the exception of two private-label collateralized mortgage obligations (“CMOs”) with a combined balance remaining of $23,000 at March 31, 2016, all of the Company’s CMOs are government-sponsored enterprise (“GSE”) securities.

The amortized cost and fair value of debt securities at March 31, 2016 by contractual maturity are shown in the following table (in thousands) with the exception of other asset-backed securities, mortgage-backed securities, CMOs, and the collateralized debt obligation. Expected maturities may differ from contractual maturities for mortgage-backed securities and CMOs because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Fair Value
Available-for-sale:
Due in one year or less	$	2,249	$	2,276
Due after one year through five years	17,887		18,379
Due after five years through ten years	2,871		2,973
Due after ten years	617		611
Mortgage-backed securities and collateralized mortgage obligations:
Residential	268,889		271,882
Commercial	3,951		3,908
Mutual funds	2,100		2,122
	$	298,564	$	302,151

	Amortized Cost		Fair Value
Held-to-maturity:
Due in one year or less	$	479	$	479
Due after one year through five years	3,454		3,501
Due after five years through ten years	11,390		11,691
Due after ten years	28,107		28,690
Mortgage-backed securities and collateralized mortgage obligations:
Residential	63,852		64,903
Commercial	6,341		6,367
	$	113,623	$	115,631

Details concerning investment securities with unrealized losses are as follows (in thousands):



	March 31, 2016
	Securities with losses under 12 months				Securities with losses over 12 months				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Available-for-sale:
Obligations of state and political subdivisions	$	597	$	4	$	610	$	6	$	1,207	$	10
GSE mortgage-backed securities	11,054		24		—		—		11,054		24
Collateralized mortgage obligations: residential	56,918		269		26,003		475		82,921		744
Collateralized mortgage obligations: commercial	1,236		2		2,673		41		3,909		43
	$	69,805	$	299	$	29,286	$	522	$	99,091	$	821



	December 31, 2015
	Securities with losses under 12 months				Securities with losses over 12 months				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Available-for-sale:
Obligations of state and political subdivisions	$	1,192	$	27	$	—	$	—	$	1,192	$	27
GSE mortgage-backed securities	21,607		229		—		—		21,607		229
Collateralized mortgage obligations: residential	140,999		1,207		30,029		1,069		171,028		2,276
Collateralized mortgage obligations: commercial	—		—		2,946		65		2,946		65
Other asset-backed securities	2,092		8		—		—		2,092		8
	$	165,890	$	1,471	$	32,975	$	1,134	$	198,865	$	2,605



	March 31, 2016
	Securities with losses under 12 months				Securities with losses over 12 months				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Held-to-maturity:
Obligations of state and political subdivisions	$	—	$	—	$	505	$	4	$	505	$	4
GSE mortgage-backed securities	6,915		12		—		—		6,915		12
Collateralized mortgage obligations: residential	—		—		10,235		193		10,235		193
	$	6,915	$	12	$	10,740	$	197	$	17,655	$	209

	December 31, 2015
	Securities with losses under 12 months				Securities with losses over 12 months				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
Held-to-maturity:
Obligations of state and political subdivisions	$	541	$	1	$	505	$	5	$	1,046	$	6
GSE mortgage-backed securities	—		—		7,021		131		7,021		131
Collateralized mortgage obligations: residential	—		—		10,442		361		10,442		361
	$	541	$	1	$	17,968	$	497	$	18,509	$	498

Management evaluates each quarter whether unrealized losses on securities represent impairment that is other than temporary. For debt securities, the Company considers its intent to sell the securities or if it is more likely than not the Company will be required to sell the securities. If such impairment is identified, based upon the intent to sell or the more likely than not threshold, the carrying amount of the security is reduced to fair value with a charge to earnings. Upon the result of the aforementioned review, management then reviews for potential other than temporary impairment based upon other qualitative factors. In making this evaluation, management considers changes in market rates relative to those available when the security was acquired, changes in market expectations about the timing of cash flows from securities that can be prepaid, performance of the debt security, and changes in the market’s perception of the issuer’s financial health and the security’s credit quality. If determined that a debt security has incurred other than temporary impairment, then the amount of the credit related impairment is determined. If a credit loss is evident, the amount of the credit loss is charged to earnings and the non-credit related impairment is recognized through other comprehensive income.

As of March 31, 2016, 32 securities had unrealized losses totaling 0.87% of the individual securities’ amortized cost basis and 0.25% of the Company’s total amortized cost basis. Of the 32 securities, 15 had been in an unrealized loss position for over twelve months at March 31, 2016. These 15 securities had an amortized cost basis and unrealized loss of $40.7 million and $719,000, respectively. The unrealized losses on debt securities at March 31, 2016 resulted from changing market interest rates over the yields available at the time the underlying securities were purchased. Management identified no impairment related to credit quality. At March 31, 2016, management had the intent and ability to hold impaired securities and no impairment was evaluated as other than temporary. As a result, no other than temporary impairment losses were recognized during the three months ended March 31, 2016.

During the three months ended March 31, 2016, the Company did not sell any securities. During the three months ended March 31, 2015, the Company sold 18 securities classified as available-for-sale at a net gain of $115,000. Of the 18 securities sold, 8 were sold with gains totaling $250,000 and 10 securities were sold at a loss of $135,000.

Securities with an aggregate carrying value of approximately $321.1 million and $285.4 million at March 31, 2016 and December 31, 2015, respectively, were pledged to secure public funds on deposit and for other purposes required or permitted by law.