Note

Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities available for sale by major

security type are as follows.

	September 30, 2017
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	294,609	$	825	$	3,205	$	292,229
State s and political subdivisions		10,047		142		4		10,185
Mortgage-backed securities		646		65		---		711
Corporate debt securities		6,016		208		26		6,198
Total securities available for sale	$	311,318	$	1,240	$	3,235	$	309,323

	December 31, 201 6
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Available for S ale:
U.S. Government agencies and corporations	$	291,271	$	492	$	6,165	$	285,598
States and political subdivisions		11,482		211		---		11,693
Mortgage-backed securities		845		85		---		930
Corporate debt securities		6,015		20		137		5,898
Other securities		189		---		26		163
Total securities available for sale	$	309,802	$	808	$	6,328	$	304,282

The amortized cost and fair value of single maturity securities available for sale at

September 30, 2017,

by contractual maturity, are shown below. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

	September 30 , 2017
	Amortized Cost		Fair Value
Available for S ale:
Due in one year or less	$	11,256	$	11,231
Due after one year through five years		211,312		209,270
Due after give years through ten years		61,843		61,033
Due after ten years		26,907		27,789
Total securities available for sale	$	311,318	$	309,323

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities held to maturity by major security type are as follows.

	September 30, 2017
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	3,934	$	215	$	---	$	4,149
State s and political subdivisions		124,611		3,923		68		128,466
Mortgage-backed securities		225		24		---		249
Corporate debt securities		980		15		---		995
Total securities held to maturity	$	129,750	$	4,177	$	68	$	133,859

	December 31, 201 6
	Amortized Costs		Gross Unrealized Gains		Gross Unrealized Losses		Fair Values
Held to M aturity:
U.S. Government agencies and corporations	$	3,934	$	201	$	---	$	4,135
States and political subdivisions		129,783		3,579		1,082		132,280
Mortgage-backed securities		265		30		---		295
Corporate debt securities		975		7		---		982
Total securities held to maturity	$	134,957	$	3,817	$	1,082	$	137,692

The amortized cost and fair value of single maturity securities held to maturity at

September 30, 2017,

by contractual maturity, are shown below. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage-backed securities included in these totals are categorized by final maturity.

	September 30 , 2017
	Amortized Cost		Fair Value
Held to maturity :
Due in one year or less	$	11,646	$	11,907
Due after one year through five years		25,962		27,339
Due after give years through ten years		23,388		24,207
Due after ten years		68,754		70,406
Total securities held to maturity	$	129,750	$	133,859

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that

individual securities have been in a continuous loss position, follows.

	September 30, 2017
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily I mpaired S ecurities:
U.S. Gove rnment agencies and corporations	$	176,979	$	1,692	$	87,469	$	1,513
State s and political subdivisions		6,314		32		1,560		40
Corporate debt securities		951		26		---		---
Total	$	184,244	$	1,750	$	89,029	$	1,553

	December 31, 201 6
	Less Than 12 Months				12 Months or More
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Temporarily I mpaired S ecurities:
U.S. Government agencies and corporations	$	260,150	$	6,161	$	996	$	4
States and political subdivisions		31,257		934		1,316		148
Corporate debt securities		3,888		137		---		---
Other securities		---		---		163		26
Total	$	295,295	$	7,232	$	2,475	$	178

The Company had

283

securities with a fair value of

$273,273

that were temporarily impaired at

September 30, 2017.

The total unrealized loss on these securities was

$3,303.

Of the temporarily impaired total,

securities with a fair value of

$89,029

and an unrealized loss of

$1,553

have been in a continuous loss position for

twelve

months or more. The Company has determined that these securities are temporarily impaired at

September 30, 2017

for the reasons set out below.

U.S. Government agencies

. The unrealized losses of

$1,513

on US Government agency securities stemmed from

securities with a fair value of

$87,469.

The unrealized loss was caused by interest rate and market fluctuations. The contractual term of the investments do

not

permit the issuers to settle the securities at a price less than the cost basis of the investments. The Company is monitoring bond market trends to develop strategies to address unrealized losses. Because the Company does

not

intend to sell the investments and it is

not

likely that the Company will be required to sell the investments before recovery of their amortized cost basis, which

may

be at maturity, the Company does

not

consider these investments to be other-than-temporarily impaired.

States and political subdivisions.

This category’s unrealized loss of

$40

securities with a fair value of

$1,560

is primarily the result of interest rate and market fluctuations. The contractual terms of the investments do

not

permit the issuer to settle the security at a price less than the cost basis of the investment. The Company purchases only investment-grade bonds with a Moody or Standard and Poor’s rating of A or better, and that comply with regulatory requirements. Bond ratings are monitored on an ongoing basis. Municipal obligations that experience a decline in credit rating are analyzed to determine appropriate action and accounting treatment. The company performs an analysis each quarter to determine whether any investments are other-than-temporarily impaired. Because the Company does

not

intend to sell any of the investments and it is

not

likely that the Company will be required to sell any of the investments before recovery of its amortized cost basis, which

may

be at maturity, the Company does

not

consider these investments to be other-than-temporarily impaired.

Restricted stock.

The Company held restricted stock of

$1,200

as of

September 30, 2017

and

$1,170

as of

December 31, 2016.

Restricted stock is reported separately from available-for-sale securities and held-to-maturity securities. As a member of the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Atlanta, NBB is required to maintain certain minimum investments in the common stock of those entities. Required ownership amounts are determined by the correspondent banks based upon NBB’s capital and percentage of qualifying assets. The Company purchases stock from or sells stock back to the correspondents based on their calculations. The stock is held by member institutions only and is

not

actively traded.

Redemption of FHLB stock is subject to certain limitations and conditions. At its discretion, the FHLB

may

declare dividends on the stock. In addition to dividends, NBB also benefits from its membership with FHLB through eligibility to borrow from the FHLB, using as collateral NBB’s capital stock investment in the FHLB and qualifying NBB real estate mortgage loans totaling

$490,534

September 30, 2017.

Management reviews for impairment based upon the ultimate recoverability of the cost basis of the FHLB stock, and at

September 30, 2017,

management did

not

determine any impairment.

Management regularly monitors the credit quality of the investment portfolio. Changes in ratings are noted and follow-up research on the issuer is undertaken when warranted. Management intends to carefully

monitor any changes in bond quality.