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 March 31, 2018 and December 31, 2017 are summarized as follows:



	March 31, 2018
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)*	$	74,692	$	—	$	3,576	$	71,116
Mortgage-backed:
GSE residential	196,569		341		5,985		190,925
Asset-backed:
SBAP	25,261		10		1,149		24,122
Obligations of states and political subdivisions	40,244		—		1,827		38,417
	$	336,766	$	351	$	12,537	$	324,580



	March 31, 2018
	Securities Held-to-Maturity
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Mortgage-backed:
Government-sponsored enterprises (GSEs)* residential	$	9,532	$	12	$	374	$	9,170
Obligations of states and political subdivisions	21,958		42		568		21,432
	$	31,490	$	54	$	942	$	30,602



	December 31, 2017
	Securities Available-For-Sale
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
U.S. Government-sponsored enterprises (GSEs)*	$	74,690	$	4	$	1,714	$	72,980
Mortgage-backed:
GSE residential	200,175		302		2,551		197,926
Asset-backed:
SBAP	26,387		—		789		25,598
Obligations of states and political subdivisions	37,197		7		992		36,212
	$	338,449	$	313	$	6,046	$	332,716



	December 31, 2017
	Securities Held-To-Maturity
	In Thousands
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Mortgage-backed:
Government-sponsored enterprises (GSEs)* residential	$	9,886	$	31	$	156	$	9,761
Obligations of states and political subdivisions	22,594		66		310		22,350
	$	32,480	$	97	$	466	$	32,111


*	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 March 31, 2018, 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	$	3,698	$	3,696	$	—	$	—
Due after one year through five years	6,496		6,501		23,881		23,219
Due after five years through ten years	10,255		9,855		130,640		124,982
Due after ten years	11,041		10,550		182,245		176,379
	$	31,490	$	30,602	$	336,766	$	324,580

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 March 31, 2018 and December 31, 2017.



	In Thousands, Except Number of Securities
	Less than 12 Months					12 Months or More					Total
March 31, 2018	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	$	4,179	$	126	6	$	4,769	$	248	5	$	8,948	$	374
Obligations of states and political subdivisions	9,277		61		26	7,028		507		18	16,305		568
	$	13,456	$	187	32	$	11,797	$	755	23	$	25,253	$	942
Available-for-Sale Securities:
GSEs	$	16,821	$	619	9	$	54,295	$	2,957	21	$	71,116	$	3,576
Mortgage-backed:
GSE residential	92,250		2,648		43	76,041		3,337		55	168,291		5,985
Asset-backed: SBAP	7,246		276		6	15,773		873		8	23,019		1,149
Obligations of states and political subdivisions	17,279		380		28	21,138		1,447		56	38,417		1,827
	$	133,596	$	3,923	86	$	167,247	$	8,614	140	$	300,843	$	12,537



	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, 2017	Value		Losses		Included	Value		Losses		Included	Value		Losses
Held-to-Maturity Securities:
Mortgage-backed:
Government-sponsored enterprises (GSEs) residential	$	3,316	$	21	4	$	5,206	$	135	5	$	8,522	$	156
Obligations of states and political subdivisions	10,137		46		27	7,278		264		18	17,415		310
	$	13,453	$	67	31	$	12,484	$	399	23	$	25,937	$	466
Available-for-Sale Securities:
GSEs	$	16,099	$	190	8	$	55,726	$	1,524	21	$	71,825	$	1,714
Mortgage-backed:
GSE residential	92,180		769		43	81,434		1,782		54	173,614		2,551
Asset-backed: SBAP	9,087		181		7	16,510		608		8	25,597		789
Obligations of states and political subdivisions	12,128		113		22	21,762		879		56	33,890		992
	$	129,494	$	1,253	80	$	175,432	$	4,793	139	$	304,926	$	6,046

Unrealized losses on securities have not been recognized into income because the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2018, as the issuers’ securities are of high credit quality, management does not intend to sell the securities and it is not more likely than not that management will 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 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.