Debt and Equity Securities

Debt and equity securities have been classified in the consolidated balance sheet according to management’s intent. Debt and equity securities at September 30, 2016 and December 31, 2015 are summarized as follows:



	September 30, 2016
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)*	$	70,658	$	199	$	76	$	70,781
Mortgage-backed:
GSE residential	190,813		1,639		329		192,123
Asset-backed:
SBAP	39,294		562		101		39,755
Obligations of states and political subdivisions	56,609		729		157		57,181
	$	357,374	$	3,129	$	663	$	359,840



	September 30, 2016
	Securities Held-to-Maturity
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Mortgage-backed:
Government-sponsored enterprises (GSEs)* residential	$	11,931	$	175	$	30	$	12,076
Obligations of states and political subdivisions	24,819		341		9		25,151
	$	36,750	$	516	$	39	$	37,227


*	Such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank, Federal Farm Credit Bank, and Government National Mortgage Association.



	December 31, 2015
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)*	$	77,177	$	215	$	483	$	76,909
Mortgage-backed:
GSE residential	192,983		430		1,498		191,915
Asset-backed:
SBAP	31,253		54		273		31,034
Obligations of states and political subdivisions	31,093		274		97		31,270
	$	332,506	$	973	$	2,351	$	331,128



	December 31, 2015
	Securities Held-To-Maturity
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Mortgage-backed:
Government-sponsored enterprises (GSEs)* residential	$	9,375	$	60	$	169	$	9,266
Obligations of states and political subdivisions	18,820		288		9		19,099
	$	28,195	$	348	$	178	$	28,365


*	Such as Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Home Loan Bank, Federal Farm Credit Bank, and Government National Mortgage Association.

The amortized cost and estimated market value of debt securities at September 30, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Held-to-Maturity				Available-for-sale
	In Thousands
	Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
Due in one year or less	$	2,010	$	2,027	$	1	$	1
Due after one year through five years	9,702		9,821		25,277		25,468
Due after five years through ten years	9,928		10,048		116,503		117,218
Due after ten years	15,110		15,331		215,593		217,153
	$	36,750	$	37,227	$	357,374	$	359,840

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2016 and December 31, 2015.



	In Thousands, Except Number of Securities
	Less than 12 Months					12 Months or More					Total
September 30, 2016	Fair Value		Unrealized Losses		Number of Securities Included	Fair Value		Unrealized Losses		Number of Securities Included	Fair Value		Unrealized Losses
Held-to-Maturity Securities:
Mortgage-backed:
Government-sponsored enterprises (GSEs) residential	$	1,501	$	9	1	$	1,772	$	21	1	$	3,273	$	30
Obligations of states and political subdivisions	1,542		9		4	—		—		—	1,542		9
	$	3,043	$	18	5	$	1,772	$	21	1	$	4,815	$	39
Available-for-Sale Securities:
GSEs	$	32,705	$	76	11	$	—	$	—	—	$	32,705	$	76
Mortgage-backed:
GSE residential	45,160		292		22	4,116		37		6	49,276		329
Asset-backed: SBAP	12,418		101		5	—		—		—	12,418		101
Obligations of states and political subdivisions	17,407		157		40	—		—		—	17,407		157
	$	107,690	$	626	78	$	4,116	$	37	6	$	111,806	$	663



	In Thousands, Except Number of Securities
	Less than 12 Months					12 Months or More					Total
	Fair		Unrealized		Number of Securities	Fair		Unrealized		Number of Securities	Fair		Unrealized
December 31, 2015	Value		Losses		Included	Value		Losses		Included	Value		Losses
Held-to-Maturity Securities:
Mortgage-backed:
Government-sponsored enterprises (GSEs) residential	$	4,339	$	45	3	$	2,717	$	124	3	$	7,056	$	169
Obligations of states and political subdivisions	3,461		9		10	—		—		—	3,461		9
	$	7,800	$	54	13	$	2,717	$	124	3	$	10,517	$	178
Available-for-Sale Securities:
GSEs	$	33,369	$	232	12	$	17,829	$	251	6	$	51,198	$	483
Mortgage-backed:
GSE residential	142,251		1,407		66	4,521		91		7	146,772		1,498
Asset-backed: SBAP	22,811		273		12	—		—		—	22,811		273
Obligations of states and political subdivisions	7,925		60		18	3,350		37		9	11,275		97
	$	206,356	$	1,972	108	$	25,700	$	379	22	$	232,056	$	2,351

Unrealized losses on securities have not been recognized into income because the issuers’ securities are of high credit quality, management does not intend to sell the securities and 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. The issuers continue to make timely principal and interest payment on the securities. The fair value is expected to recover as the securities approach maturity. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2016.

The carrying values of the Company’s investment securities could decline in the future if the financial condition of issuers deteriorates and management determines it is probable that the Company will not recover the entire amortized cost bases of the securities. As a result, there is a risk that other-than-temporary impairment charges may occur in the future given the current economic environment.