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Securities | 6 Months Ended
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Jun. 30, 2018
Investments Debt And Equity Securities [Abstract] |
Securities | NOTE 3 SECURITIES The amortized cost and fair value of securities, with gross unrealized gains and losses at June 30, 2018 and December 31, 2017, follows:
|  | (In Thousands) |
|  | June 30, 2018 |
|  | Amortized |  |  | Gross Unrealized |  |  | Gross Unrealized |  |  | Fair |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury |  | $ | 21,168 |  |  | $ | - |  |  | $ | (377 | ) |  | $ | 20,791 |
U.S. Government agencies |  |  | 79,169 |  |  |  | - |  |  |  | (2,859 | ) |  |  | 76,310 |
Mortgage-backed securities |  |  | 36,416 |  |  |  | 21 |  |  |  | (1,601 | ) |  |  | 34,836 |
State and local governments |  |  | 55,865 |  |  |  | 313 |  |  |  | (1,079 | ) |  |  | 55,099 |
Total available-for-sale securities |  | $ | 192,618 |  |  | $ | 334 |  |  | $ | (5,916 | ) |  | $ | 187,036 |
|  | (In Thousands) |
|  | December 31, 2017 |
|  | Amortized |  |  | Gross Unrealized |  |  | Gross Unrealized |  |  | Fair |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury |  | $ | 21,219 |  |  | $ | - |  |  | $ | (241 | ) |  | $ | 20,978 |
U.S. Government agencies |  |  | 82,198 |  |  |  | - |  |  |  | (1,732 | ) |  |  | 80,466 |
Mortgage-backed securities |  |  | 40,236 |  |  |  | 64 |  |  |  | (790 | ) |  |  | 39,510 |
State and local governments |  |  | 55,512 |  |  |  | 437 |  |  |  | (505 | ) |  |  | 55,444 |
Total available-for-sale securities |  | $ | 199,165 |  |  | $ | 501 |  |  | $ | (3,268 | ) |  | $ | 196,398 |
Investment securities will at times depreciate to an unrealized loss position. The Company utilizes the following criteria to assess whether impairment is other than temporary. No one item by itself will necessarily signal that a security should be recognized as an other than temporary impairment.
| 1. | The fair value of the security has significantly declined from book value.
| 2. | A downgrade has occurred that lowered the credit rating to below investment grade (below Baa3 by Moody and BBB – by Standard and Poors.)
| 3. | Dividends have been reduced or eliminated or scheduled interest payments have not been made.
| 4. | The underwater security has longer than 10 years to maturity and the loss position had existed for more than 3 years.
| 5. | Management does not possess both the intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value.
If the impairment is judged to be other than temporary, the cost basis of the individual security shall be written down to fair value, thereby establishing a new cost basis. The new cost basis shall not be changed for subsequent recoveries in fair value. The amount of the write down shall be included in current earnings as a realized loss. The recovery in fair value, if any, shall be recognized in earnings when the security is sold. The table below is presented by category of security and length of time in a continuous loss position. The Company currently does not hold any securities with other than temporary impairment. Information pertaining to securities with gross unrealized losses at June 30, 2018 and December 31, 2017, aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:
|  | (In Thousands) |
|  | June 30, 2018 |
|  | Less Than Twelve Months |  |  | Twelve Months & Over |
|  | Gross Unrealized |  |  | Fair |  |  | Gross Unrealized |  |  | Fair |
|  | Losses |  |  | Value |  |  | Losses |  |  | Value |
U.S. Treasury |  | $ | (104 | ) |  | $ | 6,864 |  |  | $ | (273 | ) |  | $ | 13,927 |
U.S. Government agencies |  |  | (469 | ) |  |  | 14,664 |  |  |  | (2,390 | ) |  |  | 61,646 |
Mortgage-backed securities |  |  | (94 | ) |  |  | 5,640 |  |  |  | (1,507 | ) |  |  | 27,975 |
State and local governments |  |  | (472 | ) |  |  | 30,386 |  |  |  | (607 | ) |  |  | 12,002 |
Total available-for-sale securities |  | $ | (1,139 | ) |  | $ | 57,554 |  |  | $ | (4,777 | ) |  | $ | 115,550 |
|  | (In Thousands) |
|  | December 31, 2017 |
|  | Less Than Twelve Months |  |  | Twelve Months & Over |
|  | Gross Unrealized |  |  | Fair |  |  | Gross Unrealized |  |  | Fair |
|  | Losses |  |  | Value |  |  | Losses |  |  | Value |
U.S. Treasury |  | $ | (36 | ) |  | $ | 6,924 |  |  | $ | (205 | ) |  | $ | 14,054 |
U.S. Government agencies |  |  | (314 | ) |  |  | 27,328 |  |  |  | (1,418 | ) |  |  | 53,139 |
Mortgage-backed securities |  |  | (70 | ) |  |  | 7,149 |  |  |  | (720 | ) |  |  | 28,080 |
State and local governments |  |  | (205 | ) |  |  | 24,999 |  |  |  | (300 | ) |  |  | 11,567 |
Total available-for-sale securities |  | $ | (625 | ) |  | $ | 66,400 |  |  | $ | (2,643 | ) |  | $ | 106,840 |
Unrealized losses on securities have not been recognized into income because the issuers’ bonds are of high credit quality, values have only been impacted by rate changes, and the Company has the intent and ability to hold the securities for the foreseeable future. Additionally, the decline in value is primarily due to changes in interest rates since the securities were purchased. The fair value is expected to recover as the bonds approach the maturity date. Below are the gross realized gains and losses for the three and six months ended June 30, 2018 and June 30, 2017.
|  | Three Months |  |  | Six Months |
|  | (In Thousands) |  |  | (In Thousands) |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Gross realized gains |  | $ | - |  |  | $ | 27 |  |  | $ | - |  |  | $ | 58 |
Gross realized losses |  |  | - |  |  |  | (11 | ) |  |  | - |  |  |  | (11 | )
Net realized gains |  | $ | - |  |  | $ | 16 |  |  | $ | - |  |  | $ | 47 |
Tax expense related to net realized gains |  | $ | - |  |  | $ | 5 |  |  | $ | - |  |  | $ | 16 |
The net realized gains on sales and related tax expense is a reclassification out of accumulated other comprehensive income (loss). The net realized gain is included in net gain on sale of available-for-sale securities and the related tax expense is included in income taxes in the condensed consolidated statements of income and comprehensive income. The amortized cost and fair value of debt securities at June 30, 2018, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | (In Thousands) |
|  | Amortized |  |  |  |  |
|  | Cost |  |  | Fair Value |
One year or less |  | $ | 22,734 |  |  | $ | 22,674 |
After one year through five years |  |  | 79,589 |  |  |  | 78,096 |
After five years through ten years |  |  | 50,835 |  |  |  | 48,566 |
After ten years |  |  | 3,044 |  |  |  | 2,864 |
Total |  | $ | 156,202 |  |  | $ | 152,200 |
Mortgage-backed securities |  |  | 36,416 |  |  |  | 34,836 |
Total |  | $ | 192,618 |  |  | $ | 187,036 |
Investments with a carrying value of $83.2 million and $82.9 million at June 30, 2018 and December 31, 2017, respectively, were pledged to secure public deposits and securities sold under repurchase agreements. Other securities include Federal Home Loan Bank of Cincinnati and Farmer Mac stock as of June 30, 2018 and December 31, 2017.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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