NOTE 2 – Investment Securities

The amortized costs and fair value of investment securities are as follows:


					December 31, 2017
	Amortized			Gross Unrealized	Fair
(dollars in thousands)	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	8,749	1	97	8,653
SBA securities		4,087	-	24	4,063
State and political subdivisions		11,242	179	25	11,396
Mortgage-backed securities
FHLMC		9,102	-	149	8,953
FNMA		29,383	3	386	29,000
GNMA		5,618	2	82	5,538
Total mortgage-backed securities		44,103	5	617	43,491
Total	$	68,181	185	763	67,603

					December 31, 2016
	Amortized			Gross Unrealized	Fair
	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	6,271	1	113	6,159
SBA securities		1,453	-	16	1,437
State and political subdivisions		20,625	141	292	20,474
Mortgage-backed securities
FHLMC		10,922	-	185	10,737
FNMA		24,827	19	277	24,569
GNMA		1,146	2	44	1,104
Total mortgage-backed securities		36,895	21	506	36,410
Total	$	65,244	163	927	64,480

During 2017, approximately $9.7 million of investment securities were either sold or called, subsequently resulting in a gain on sale of investment securities of $4,500. In comparison, the Company sold $33.5 million of its investment securities during 2016, recording a gain on sale of investment securities of $431,000.

The amortized costs and fair values of investment securities available for sale at December 31, 2017 and 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to prepay the obligations.


					December 31,
			2017		2016
	Amortized		Fair	Amortized	Fair
(dollars in thousands)	Cost		Value	Cost	Value
Available for sale
Due within one year	$	1,435	1,427	-	-
Due after one through five years		2,677	2,666	3,303	3,268
Due after five through ten years		24,796	24,645	26,234	25,976
Due after ten years		39,273	38,865	35,707	35,236
	$	68,181	67,603	65,244	64,480

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2017 and 2016.


		Less than 12 months					12 months or longer							Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
As of December 31, 2017
Available for sale
US government agencies	5	$	4,184	$	22	4	$	3,968	$	75	9	$	8,152	$	97
SBA securities	1		2,936		13	1		1,127		11	2		4,063		24
State and political subdivisions	3		1,214		9	2		792		16	5		2,006		25
Mortgage-backed
FHLMC	3		2,897		26	7		6,056		123	10		8,953		149
FNMA	11		14,345		135	13		14,597		251	24		29,940		386
GNMA	2		2,270		40	1		971		42	3		2,243		82
	25	$	27,846	$	245	28	$	27,511	$	518	53	$	55,357	$	763


		Less than 12 months					12 months or longer							Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	#	value		losses		#	value		losses		#	value		losses
As of December 31, 2016
Available for sale
US government agencies	5	$	5,144	$	113	-	$	-	$	-	5	$	5,144	$	113
SBA securities	1		1,437		16	-		-		-	1		1,437		16
State and political subdivisions	32		13,936		292	-		-		-	32		13,936		292
Mortgage-backed
FHLMC	10		10,737		185	-		-		-	10		10,737		185
FNMA	14		15,478		247	2		3,991		30	16		19,469		277
GNMA	1		1,077		44	-		-		-	1		1,077		44
	63	$	47,809	$	897	2	$	3,991	$	30	65	$	51,800	$	927

At December 31, 2017, the Company had 25 individual investments with a fair market value of $27.8 million that were in an unrealized loss position for less than 12 months and 28 individual investments with a fair market value of $27.5 million that were in an unrealized loss position for 12 months or longer. The unrealized losses were primarily attributable to changes in interest rates, rather than deterioration in credit quality. The individual securities are each investment grade securities. The Company considers the length of time and extent to which the fair value of available-for-sale debt securities have been less than cost to conclude that such securities were not other-than-temporarily impaired. We also consider other factors such as the financial condition of the issuer including credit ratings and specific events affecting the operations of the issuer, volatility of the security, underlying assets that collateralize the debt security, and other industry and macroeconomic conditions. As the Company has no intent to sell securities with unrealized losses and it is not more-likely-than-not that the Company will be required to sell these securities before recovery of amortized cost, we have concluded that the securities are not impaired on an other-than-temporary basis.

Other investments are comprised of the following and are recorded at cost which approximates fair value:


			December 31,
(dollars in thousands)	2017		2016
Federal Home Loan Bank stock	$	3,754	5,173
Other investments		305	166
Investment in Trust Preferred subsidiaries		403	403
	$	4,462	5,742

The Company has evaluated the FHLB stock for impairment and determined that the investment in FHLB stock is not other than temporarily impaired as of December 31, 2017 and ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB.

At December 31, 2017 and 2016, $7.7 million and $21.0 million, respectively, of securities were pledged as collateral for repurchase agreements from brokers. In addition, approximately $21.1 million was pledged to secure client deposits at December 31, 2016.