NOTE 2—SECURITIES

The amortized cost and fair value of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive loss were as follows.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2014
U.S. Treasury securities and obligations of U.S. government agencies	$	42,910	$	115	$	(123	)	$	42,902
Obligations of states and political subdivisions		83,215		5,112		(306	)		88,021
Mortgage-back securities in government sponsored entities		65,646		976		(180	)		66,442

Total debt securities		191,771		6,203		(609	)		197,365
Equity securities in financial institutions		481		59		—			540

Total	$	192,252	$	6,262	$	(609	)	$	197,905


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
2013
U.S. Treasury securities and obligations of U.S. government agencies	$	52,229	$	95	$	(764	)	$	51,560
Obligations of states and political subdivisions		79,975		2,327		(1,677	)		80,625
Mortgage-back securities in government sponsored entities		66,409		1,127		(557	)		66,979

Total debt securities		198,613		3,549		(2,998	)		199,164
Equity securities in financial institutions		481		—		(32	)		449

Total	$	199,094	$	3,549	$	(3,030	)	$	199,613

The amortized cost and fair value of securities at year end 2014 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.


	Available for sale
	Amortized Cost		Fair Value
Due in one year or less	$	628	$	629
Due from one to five years		27,702		27,723
Due from five to ten years		34,718		36,191
Due after ten years		63,077		66,380
Mortgage-backed securities in government sponsored entities		65,646		66,442
Equity securities in financial institutions		481		540

Total	$	192,252	$	197,905

Securities with a carrying value of $137,898 and $147,625 were pledged as of December 31, 2014 and 2013, respectively, to secure public deposits, other deposits and liabilities as required or permitted by law.

Proceeds from sales of securities, gross realized gains and gross realized losses were as follows.


	2014			2013
Sale proceeds	$	18,088		$	8,686
Gross realized gains		113			144
Gross realized losses		(1	)		(89	)
Gains from securities called or settled by the issuer		1			149

Debt securities with unrealized losses at year end 2014 and 2013 not recognized in income are as follows.


2014	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of U.S. government agencies	$	7,664	$	(17	)	$	11,888	$	(106	)	$	19,552	$	(123	)
Obligations of states and political subdivisions		853		(11	)		5,647		(295	)		6,500		(306	)
Mortgage-backed securities in gov’t sponsored entities		12,289		(29	)		11,492		(151	)		23,781		(180	)

Total temporarily impaired	$	20,806	$	(57	)	$	29,027	$	(552	)	$	49,833	$	(609	)


2013	12 Months or less					More than 12 months					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Treasury securities and obligations of U.S. government agencies	$	30,800	$	(764	)	$	—	$	—		$	30,800	$	(764	)
Obligations of states and political subdivisions		28,428		(1,556	)		968		(121	)		29,396		(1,677	)
Mortgage-backed securities in gov’t sponsored entities		32,557		(553	)		279		(4	)		32,836		(557	)
Equity securities in financial institutions		449		(32	)		—		—			449		(32	)

Total temporarily impaired	$	92,234	$	(2,905	)	$	1,247	$	(125	)	$	93,481	$	(3,030	)

The Company periodically evaluates securities for other-than-temporary impairment. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses that are determined to be temporary in nature are recorded, net of tax, in accumulated other comprehensive income.

The Company has assessed each available-for-sale security position for credit impairment. Factors considered in determining whether a loss is temporary include:

•

The length of time and the extent to which fair value has been below cost;

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The severity of impairment;

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The cause of the impairment and the financial condition and near-term prospects of the issuer;

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If the Company intends to sell the investment;

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If it’s more-likely-than-not the Company will be required to sell the investment before recovering its amortized cost basis; and

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If the Company does not expect to recover the investment’s entire amortized cost basis (even if the Company does not intend to sell the investment).

The Company’s review for impairment generally entails:

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Identification and evaluation of investments that have indications of impairment;

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Analysis of individual investments that have fair values less than amortized cost, including consideration of length of time each investment has been in unrealized loss position and the expected recovery period;

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Evaluation of factors or triggers that could cause individual investments to qualify as having other-than-temporary impairment; and

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Documentation of these analyses, as required by policy.

At December 31, 2014, the Company owned 41 securities that were considered temporarily impaired. The unrealized losses on these securities have not been recognized into income because the issuers’ bonds are of high credit quality, management has the intent and ability to hold these securities for the foreseeable future, and the decline in fair value is largely due to changes in market interest rates. The Company also considers sector specific credit rating changes in its analysis. The fair value is expected to recover as the securities approach their maturity date or reset date. The Company does not intend to sell until recovery and does not believe selling will be required before recovery.