NOTE 2 – Investment Securities

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


	March 31, 2019
	Amortized		Gross Unrealized			Fair
(dollars in thousands)	Cost			Gains	Losses	Value
Available for sale
US government agencies	$	8,970		1	75	8,896
SBA securities		3,441		-	52	3,389
State and political subdivisions		8,061		127	13	8,175
Asset-backed securities		9,504		-	78	9,426
Mortgage-backed securities
FHLMC		11,873		147	135	11,885
FNMA		27,777		45	364	27,458
GNMA		4,154		3	86	4,071
Total mortgage-backed securities		43,804		195	585	43,414
Total investment securities available for sale	$	73,780		323	803	73,300

	December 31, 2018
		Amortized	Gross Unrealized			Fair
		Cost		Gains	Losses	Value
Available for sale
US government agencies	$	8,975		1	194	8,782
SBA securities		3,628		-	103	3,525
State and political subdivisions		8,371		48	63	8,356
Asset-backed securities		9,595		12	49	9,558
Mortgage-backed securities
FHLMC		12,258		87	242	12,103
FNMA		29,068		25	551	28,542
GNMA		4,170		1	132	4,039
Total mortgage-backed securities		45,496		113	925	44,684
Total	$	76,065		174	1,334	74,905

Contractual maturities and yields on the Company’s investment securities at March 31, 2019 and December 31, 2018 are shown in the following table. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


	March 31, 2019
	Less than one year			One to five years		Five to ten years		Over ten years			Total
(dollars in thousands)	Amount		Yield	Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield
Available for sale
US government agencies	$	-	-	3,418	2.06%	5,478	2.90%	-	-	8,896	2.58%
SBA securities		-	-	-	-	-	-	3,389	2.78%	3,389	2.78%
State and political subdivisions		-	-	1,130	2.96%	4,145	6.74%	2,900	2.87%	8,175	4.84%
Asset-backed securities		-	-	-	-	1,776	3.21%	7,651	3.26%	9,426	3.25%
Mortgage-backed securities		-	-	4,864	1.92%	9,396	2.22%	29,153	2.78%	43,414	2.61%
Total	$	-	-	9,412	2.10%	20,795	3.11%	43,093	2.92%	73,300	2.94%

	December 31, 2018
	Less than one year			One to five years		Five to ten years		Over ten years			Total
(dollars in thousands)	Amount		Yield	Amount	Yield	Amount	Yield	Amount	Yield	Amount	Yield
Available for sale
US government agencies	$	-	-	2,665	2.12%	6,117	2.77%	-	-	8,782	2.57%
SBA securities		-	-	-	-	-	-	3,525	2.72%	3,525	2.72%
State and political subdivisions		-	-	819	2.60%	4,637	3.04%	2,900	2.88%	8,356	2.94%
Asset-backed securities		-	-	-	-	1,862	3.22%	7,696	3.29%	9,558	3.27%
Mortgage-backed securities		-	-	5,094	1.89%	9,763	2.22%	29,827	2.70%	44,684	2.50%
Total	$	-	-	8,578	2.03%	22,379	2.62%	43,948	2.81%	74,905	2.67%

The tables below summarize gross unrealized losses on investment securities and the fair market value of the related securities at March 31, 2019 and December 31, 2018, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.


	March 31, 2019
	Less than 12 months					12 months or longer					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
Available for sale
US government agencies	1	$	499	$	1	8	$	7,147	$	74	9	$	7,646	$	75
SBA securities	-		-		-	2		3,389		52	2		3,389		52
State and political subdivisions	-		-		-	4		1,561		13	4		1,561		13
Asset-backed securities	5		7,651		70	1		1,775		8	6		9,426		78
Mortgage-backed securities
FHLMC	-		-		-	10		7,218		135	10		7,218		135
FNMA	1		887		7	22		20,143		357	23		21,030		364
GNMA	-		-		-	3		2,947		86	3		2,947		86
Total	7	$	9,037	$	78	50	$	44,180	$	725	57	$	53,217	$	803

	December 31, 2018
	Less than 12 months					12 months or longer					Total
		Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
(dollars in thousands)	#	value		losses		#	value		losses		#	value		losses
Available for sale
US government agencies	1	$	1,246	$	3	8	$	7,035	$	191	9	$	8,281	$	194
SBA securities	-		-		-	2		3,525		103	2		3,525		103
State and political subdivisions	-		-		-	7		2,829		63	7		2,829		63
Asset-backed securities	4		6,707		49	-		-		-	4		6,707		49
Mortgage-backed securities
FHLMC	-		-		-	10		7,402		242	10		7,402		242
FNMA	2		2,689		6	23		22,814		545	25		25,503		551
GNMA	1		1,104		6	3		2,919		126	4		4,023		132
Total	8	$	11,746	$	64	53	$	46,524	$	1,270	61	$	58,270	$	1,334

At March 31, 2019, the Company had seven individual investments with a fair market value of $9.0 million that were in an unrealized loss position for less than 12 months and 50 individual investments with a fair market value of $44.2 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 are not other-than-temporarily impaired. The Company also considers 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, the Company has concluded that these 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.


(dollars in thousands)	March 31, 2019		December 31, 2018
Federal Home Loan Bank stock	$	2,774	3,587
Other investments		132	131
Investment in Trust Preferred securities		403	403
Total other investments	$	3,309	4,121

The Company has evaluated the Federal Home Loan Bank (“FHLB”) stock for impairment and determined that the investment in the FHLB stock is not other than temporarily impaired as of March 31, 2019 and that ultimate recoverability of the par value of this investment is probable. All of the FHLB stock is used to collateralize advances with the FHLB.