Note 5. Investment Securities

The following tables set forth the amortized cost and fair values of the Company's investment securities, all of which are reported as available for sale at December 31, 2016 and 2015:

	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
		(dollars in thousands)
Obligations of U.S. government agencies	$	61,119	$	105	$	(581	)	$	60,643
Mortgage backed securities
U.S. government sponsored entities and agencies		242,203		857		(3,725	)		239,335
Non-agency		24,224		46		(33	)		24,237
State and municipal securities		125,911		2,154		(2,234	)		125,831
Asset backed securities		8,956		–		(185	)		8,771

Total available for sale securities	$	462,413	$	3,162	$	(6,758	)	$	458,817

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
		(dollars in thousands)
Obligations of U.S. government agencies	$	47,478	$	269	$	(429	)	$	47,318
Mortgage backed securities
U.S. government sponsored entities and agencies		246,561		986		(2,312	)		245,235
Non-agency		34,645		–		(328	)		34,317
State and municipal securities		105,164		3,486		(244	)		108,406
Asset backed securities		16,183		–		(556	)		15,627
Other investments		100		–		(68	)		32

Total available for sale securities	$	450,131	$	4,741	$	(3,937	)	$	450,935

Those investment securities available for sale which have an unrealized loss position at December 31, 2016 and 2015 are detailed below:

	December 31, 2016
	Less Than Twelve Months					Twelve Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
		(dollars in thousands)
Obligations of U.S. government agencies	$	21,704	$	(78	)	$	29,879	$	(503	)	$	51,583	$	(581	)
Mortgage backed securities
U.S. government sponsored entities and agencies		142,895		(3,098	)		20,733		(627	)		163,628		(3,725	)
Non-agency		9,433		(29	)		634		(4	)		10,067		(33	)
State and municipal securities		54,527		(2,234	)		–		–			54,527		(2,234	)
Asset backed securities		–		–			8,771		(185	)		8,771		(185	)

Total	$	228,559	$	(5,439	)	$	60,017	$	(1,319	)	$	288,576	$	(6,758	)

	December 31, 2015
	Less Than Twelve Months					Twelve Months or More					Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
		(dollars in thousands)
Obligations of U.S. government agencies	$	34,533	$	(429	)	$	–	$	–		$	34,533	$	(429	)
Mortgage backed securities
U.S. government sponsored entities and agencies		131,570		(1,485	)		31,558		(827	)		163,128		(2,312	)
Non-agency		31,400		(317	)		2,917		(11	)		34,317		(328	)
State and municipal securities		15,660		(243	)		235		(1	)		15,895		(244	)
Asset backed securities		–		–			15,626		(556	)		15,626		(556	)
Other investments		32		(68	)		–		–			32		(68	)

Total	$	213,195	$	(2,542	)	$	50,336	$	(1,395	)	$	263,531	$	(3,937	)

A total of 138 and 104 securities were in an unrealized loss position as of December 31, 2016 and 2015, respectively. As of December 31, 2016, the Company believes that unrealized losses on its investment securities are not attributable to credit quality, but rather fluctuations in market prices. In the case of the agency mortgage related securities, contractual cash flows are guaranteed by agencies of the U.S. Government. While the Company's investment security holdings have contractual maturity dates that range from 1 to 40 years, they have a much shorter effective duration dependent on the instrument's priority in the overall cash flow structure and the characteristics of the loans underlying the investment security.

Management does not intend to sell and it is unlikely that management will be required to sell the securities prior to their anticipated recovery. As of December 31, 2016, the Company does not believe unrealized losses related to any of its securities are other than temporary.

The proceeds from the sales and calls of securities and the associated gains and losses are listed below for the years ended December 31, 2016, 2015 and 2014:

	For the Years Ended December 31,
	2016			2015			2014
		(dollars in thousands)
Proceeds	$	107,566		$	55,184		$	129,074
Gross gains		1,305			815			1,050
Gross losses		(414	)		(174	)		(404	)

The income tax expense related to these net realized gains was $0.4 million, $0.3 million, and $0.3 million, during the years ended December 31, 2016, 2015 and 2014 respectively.

The table below provides a maturity distribution of available for sale investment securities at December 31, 2016 and 2015. The table reflects the expected lives of mortgage-backed securities, based on the Company's historical prepayment experience, because borrowers have the right to prepay obligations without prepayment penalties. Contractual maturities are reflected for all other security types. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2016				December 31, 2015
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
		(dollars in thousands)
Due one year or less	$	43,127	$	43,015	$	51,049	$	50,978
Due after one year through five years		147,891		147,201		153,444		152,916
Due after five years through ten years		187,652		186,296		182,996		184,870
Due after ten years		83,743		82,305		62,642		62,171

Total	$	462,413	$	458,817	$	450,131	$	450,935

Securities having an amortized cost and a fair value of $184.8 million and $183.8 million, respectively at December 31, 2016, and $153.9 million and $155.2 million, respectively at December 31, 2015 were pledged to secure public deposits. At December 31, 2016 and 2015, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of total securities.

The following table summarizes earnings on investment securities, both taxable, and those that are exempt from federal taxation:

	For the Years Ended December 31,
	2016		2015		2014
		(dollars in thousands)
Taxable earnings on investment securities
Mortgage backed securities	$	4,695	$	3,675	$	4,433
Obligations of U.S. government agencies		915		645		348
State and municipal securities		621		527		85
Asset backed securities		123		147		353
Corporate debt securities		–		–		6
Earnings on investment securities exempt from federal taxation
State and municipal securities		2,550		2,317		2,013

Total	$	8,904	$	7,311	$	7,238