Note 7 - Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of September 30, 2016 and December 31, 2015 (amounts in thousands):


		September 30, 2016
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$3,304	$121	$ -	$3,425

Available-for-Sale
US agency obligations	14,372	10	(286)	14,096
Mortgage-backed securities	12,809	125	(7)	12,927
Municipals	10,078	256	(52)	10,282
Corporates	2,627	2	(12)	2,617
	$39,886	$393	$(357)	$39,922

		December 31, 2015
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$2,519	$130	$ -	$2,649

Available-for-Sale
US agency obligations	19,606	3	(799)	18,810
Mortgage-backed securities	10,778	4	(135)	10,647
Municipals	4,984	84	(34)	5,034
Corporates	1,521	-	(16)	1,505
	$36,889	$91	$(984)	$35,996

Note 7 – Securities (continued)

The following tables show the gross unrealized losses and fair value of the Bank’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2016 and December 31, 2015 (amounts in thousands):


	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
September 30, 2016	Value	Losses	Value	Losses	Value	Losses
Description of securities
U.S. agency obligations	$13,077	$286	$ -	$ -	$13,077	$286
Mortgage-backed securities	3,461	7	-	-	3,461	7
Municipals	3,964	52	-	-	3,964	52
Corporates	2,087	12	-	-	2,087	12
Total	$22,589	$357	$ -	$ -	$22,589	$357

	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
December 31, 2015	Value	Losses	Value	Losses	Value	Losses
Description of securities
U.S. agency obligations	$7,160	$353	$10,650	$446	$17,810	$799
Mortgage-backed securities	6,726	77	1,979	58	8,705	135
Municipals	2,341	25	503	9	2,844	34
Corporates	1,505	16	-	-	1,505	16
Total	$17,732	$471	$13,132	$513	$30,864	$984

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and may do so more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) the intent of Financial, if any, to sell the security; (4) whether Financial more likely than not will be required to sell the security before recovering its cost; and (5) whether Financial does not expect to recover the security’s entire amortized cost basis (even if Financial does not intend to sell the security).

At September 30, 2016, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of September 30, 2016, the Bank owned 18 securities that were being evaluated for other than temporary impairment. Six of these securities were S&P rated AAA, 11 were rated AA and one was rated A. As of September 30, ten of these securities were direct obligations of the U.S. government or government sponsored entities, six were municipal issues, and two were investments in domestic corporate issued securities.

Based on the analysis performed by management as mandated by the Bank’s investment policy, management believes the default risk to be minimal. Because the Bank expects to recover the entire amortized cost basis, no declines currently are deemed to be other-than-temporary.