NOTE 2 – Investment Securities

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


	December 31, 2019
	Amortized		Gross Unrealized		Fair
(dollars in thousands)	Cost		Gains	Losses	Value
Available for sale
US government agencies	$	500	-	1	499
SBA securities		550	-	19	531
State and political subdivisions		4,205	3	24	4,184
Asset-backed securities		13,351	-	184	13,167
Mortgage-backed securities
FHLMC		10,609	14	15	10,608
FNMA		35,275	34	169	35,140
GNMA		3,581	5	21	3,565
Total mortgage-backed securities		49,465	53	205	49,313
Total	$	68,071	56	433	67,694


	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

During 2019, approximately $34.9 million of investment securities were either sold or called, subsequently resulting in a gain on sale of investment securities of $727,000.

The amortized costs and fair values of investment securities available for sale at December 31, 2019 and 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers have the right to prepay the obligations.


	December 31,
			2019		2018
	Amortized		Fair	Amortized	Fair
(dollars in thousands)	Cost		Value	Cost	Value
Available for sale
Due within one year	$	-	-	-	-
Due after one through five years		4,699	4,675	8,681	8,578
Due after five through ten years		10,454	10,414	22,796	22,379
Due after ten years		52,918	52,605	44,588	43,948
	$	68,071	67,694	76,065	74,905

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, 2019 and 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
As of December 31, 2019
Available for sale
US government agencies	1	$	499	$	1	-	$	-	$	-	1	$	499	$	1
SBA securities	-		-		-	1		531		19	1		531		19
State and political subdivisions	2		2,093		24	-		-		-	2		2,093		24
Asset-backed	5		5,921		68	5		7,246		116	10		13,167		184
Mortgage-backed
FHLMC	4		3,842		2	4		2,323		13	8		6,165		15
FNMA	14		15,500		67	11		9,462		102	25		24,962		169
GNMA	2		2,240		6	1		734		15	3		2,974		21
	28	$	30,095	$	168	22	$	20,296	$	265	50	$	50,391	$	433


	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, 2018
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	4		6,707		49	-		-		-	4		6,707		49
Mortgage-backed
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
	8	$	11,746	$	64	53	$	46,524	$	1,270	61	$	58,270	$	1,334

At December 31, 2019, the Company had 28 individual investments with a fair market value of $30.1 million that were in an unrealized loss position for less than 12 months and 22 individual investments with a fair market value of $20.3 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)	2019		2018
Federal Home Loan Bank stock	$	6,386	3,587
Other investments		159	131
Investment in Trust Preferred subsidiaries		403	403
	$	6,948	4,121

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, 2019 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, 2019 and 2018, there were no securities pledged as collateral for repurchase agreements from brokers.