SECURITIES

The amortized cost, unrealized gains, unrealized losses and estimated fair values of securities at March 31, 2017, December 31, 2016, and March 31, 2016 are summarized as follows:



	March 31, 2017
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	14,001	$	618	$	55	$	14,564
Residential mortgage-backed securities:
Government-sponsored agencies	132,920		1,332		1,277		132,975
Nongovernment-sponsored entities	3,972		42		16		3,998
State and political subdivisions
General obligations	785		—		6		779
Other revenues	4,217		31		7		4,241
Corporate debt securities	18,363		39		93		18,309
Total taxable debt securities	174,258		2,062		1,454		174,866
Tax-exempt debt securities
State and political subdivisions
General obligations	57,545		689		1,174		57,060
Water and sewer revenues	12,074		101		88		12,087
Lease revenues	9,011		20		167		8,864
Electric revenues	3,236		15		74		3,177
Transit revenues	3,404		29		41		3,392
Other revenues	22,624		154		333		22,445
Total tax-exempt debt securities	107,894		1,008		1,877		107,025
Equity securities	137		—		—		137
Total available for sale securities	$	282,289	$	3,070	$	3,331	$	282,028



	December 31, 2016
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
Taxable debt securities
U.S. Government and agencies and corporations	$	14,580	$	642	$	48	$	15,174
Residential mortgage-backed securities:
Government-sponsored agencies	138,451		1,554		1,159		138,846
Nongovernment-sponsored entities	4,631		44		22		4,653
Corporate debt securities	18,295		23		148		18,170
Total taxable debt securities	175,957		2,263		1,377		176,843
Tax-exempt debt securities
State and political subdivisions
General obligations	49,449		569		1,388		48,630
Water and sewer revenues	9,087		63		149		9,001
Lease revenues	9,037		7		201		8,843
Electric revenues	3,247		10		48		3,209
Sales tax revenues	2,870		—		34		2,836
Other revenues	17,321		93		371		17,043
Total tax-exempt debt securities	91,011		742		2,191		89,562
Equity securities	137		—		—		137
Total available for sale securities	$	267,105	$	3,005	$	3,568	$	266,542



	March 31, 2016
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value
Available for Sale
Taxable debt securities:
U.S. Government and agencies and corporations	$	19,757	$	1,231	$	49	$	20,939
Residential mortgage-backed securities:
Government-sponsored agencies	151,895		2,594		596		153,893
Nongovernment-sponsored agencies	7,162		58		56		7,164
State and political subdivisions:
Water and sewer revenues	250		—		—		250
Corporate debt securities	14,539		38		662		13,915
Total taxable debt securities	193,603		3,921		1,363		196,161
Tax-exempt debt securities:
State and political subdivisions:
General obligations	40,103		1,926		45		41,984
Water and sewer revenues	7,547		216		—		7,763
Lease revenues	6,284		223		—		6,507
Special tax revenues	3,022		64		—		3,086
Sales tax revenues	2,899		72		—		2,971
Other revenues	12,588		381		3		12,966
Total tax-exempt debt securities	72,443		2,882		48		75,277
Equity securities	77		—		—		77
Total available for sale securities	$	266,123	$	6,803	$	1,411	$	271,515

The below information is relative to the five states where issuers with the highest volume of state and political subdivision securities held in our portfolio are located. We own no such securities of any single issuer which we deem to be a concentration.



	March 31, 2017
	Amortized		Unrealized				Estimated
Dollars in thousands	Cost		Gains		Losses		Fair Value

Michigan	$	15,807	$	33	$	492	$	15,348
Texas	11,981		73		169		11,885
California	11,741		111		251		11,601
Illinois	10,073		231		97		10,207
West Virginia	8,352		27		52		8,327

Management performs pre-purchase and ongoing analysis to confirm that all investment securities meet applicable credit quality standards. Prior to July 1, 2013, we principally used credit ratings from Nationally Recognized Statistical Rating Organizations (“NRSROs”) to support analyses of our portfolio of securities issued by state and political subdivisions, as we generally do not purchase securities that are rated below the six highest NRSRO rating categories. Beginning July 1, 2013, in addition to considering a security’s NRSRO rating, we now also assess or confirm through an internal review of an issuer’s financial information and other applicable information that: 1) the issuer’s risk of default is low; 2) the characteristics of the issuer’s demographics and economic environment are satisfactory; and 3) the issuer’s budgetary position and stability of tax or other revenue sources are sound.

The maturities, amortized cost and estimated fair values of securities at March 31, 2017, are summarized as follows:



Dollars in thousands	Amortized Cost		Estimated Fair Value
Due in one year or less	$	50,098	$	50,397
Due from one to five years	89,853		90,143
Due from five to ten years	23,326		23,263
Due after ten years	118,875		118,088
Equity securities	137		137
	$	282,289	$	282,028

The proceeds from sales, calls and maturities of available for sale securities, including principal payments received on mortgage-backed obligations, and the related gross gains and losses realized, for the three months ended March 31, 2017 and 2016 are as follows:



		Proceeds from						Gross realized
Dollars in thousands		Sales		Calls and Maturities		Principal Payments		Gains		Losses
For the Three Months Ended March 31,
2017
	Securities available for sale	$	3,154	$	600	$	7,686	$	61	$	119

2016
	Securities available for sale	$	33,787	$	55	$	8,170	$	562	$	169

We held 121 available for sale securities having an unrealized loss at March 31, 2017. We do not intend to sell these securities, and it is more likely than not that we will not be required to sell these securities before recovery of their amortized cost bases. We believe that this decline in value is primarily attributable to the lack of market liquidity and to changes in market interest rates and not due to credit quality. Accordingly, no other-than-temporary impairment charge to earnings is warranted at this time.

Provided below is a summary of securities available for sale which were in an unrealized loss position at March 31, 2017 and December 31, 2016.



	March 31, 2017
	Less than 12 months					12 months or more					Total
Dollars in thousands	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss
Temporarily impaired securities
Taxable debt securities
U.S. Government agencies and corporations	$	—	$	—		$	3,091	$	(55	)	$	3,091	$	(55	)
Residential mortgage-backed securities:
Government-sponsored agencies	59,339		(1,073		)	9,015		(204		)	68,354		(1,277		)
Nongovernment-sponsored entities	—		—			1,636		(16		)	1,636		(16		)
State and political subdivisions:
General obligations	779		(6		)	—		—			779		(6		)
Other revenues	2,196		(7		)	—		—			2,196		(7		)
Corporate debt securities	955		(45		)	1,563		(48		)	2,518		(93		)
Tax-exempt debt securities
State and political subdivisions:
General obligations	33,618		(1,174		)	—		—			33,618		(1,174		)
Water and sewer revenues	5,376		(88		)	—		—			5,376		(88		)
Lease revenues	4,390		(167		)	—		—			4,390		(167		)
Electric revenues	1,939		(74		)	—		—			1,939		(74		)
Transit revenues	1,118		(41		)	—		—			1,118		(41		)
Other revenues	11,394		(333		)	—		—			11,394		(333		)
Total temporarily impaired securities	121,104		(3,008		)	15,305		(323		)	136,409		(3,331		)
Total	$	121,104	$	(3,008	)	$	15,305	$	(323	)	$	136,409	$	(3,331	)



	December 31, 2016
	Less than 12 months					12 months or more					Total
Dollars in thousands	Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss			Estimated Fair Value		Unrealized Loss
Temporarily impaired securities
Taxable debt securities
U.S. Government agencies and corporations	$	763	$	(5	)	$	2,575	$	(43	)	$	3,338	$	(48	)
Residential mortgage-backed securities:
Government-sponsored agencies	55,388		(985		)	8,389		(174		)	63,777		(1,159		)
Nongovernment-sponsored entities	97		—			3,013		(22		)	3,110		(22		)
Corporate debt securities	968		(31		)	3,136		(117		)	4,104		(148		)
Tax-exempt debt securities
State and political subdivisions:
General obligations	33,115		(1,388		)	—		—			33,115		(1,388		)
Water and sewer revenues	4,761		(149		)	—		—			4,761		(149		)
Lease revenues	7,011		(201		)	—		—			7,011		(201		)
Electric revenues	1,973		(48		)	—		—			1,973		(48		)
Sales tax revenues	2,836		(34		)	—		—			2,836		(34		)
Other revenues	8,445		(371		)	—		—			8,445		(371		)
Total temporarily impaired securities	115,357		(3,212		)	17,113		(356		)	132,470		(3,568		)
Total	$	115,357	$	(3,212	)	$	17,113	$	(356	)	$	132,470	$	(3,568	)