Note 4 - Securities

A summary of the amortized cost and fair value of securities, with gross unrealized gains and losses, follows:


	December 31, 2016
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$3,299	$65	$(91)	$3,273

Available-for-sale
U.S. Treasuries	$1,952	$ -	$(119)	$1,833
U.S. agency obligations	14,332	5	(1,224)	13,113
Mortgage-backed securities	12,358	-	(353)	12,005
Municipals	10,426	55	(534)	9,947
Corporates	4,132	-	(254)	3,878

	$43,200	$60	$(2,484)	$40,776



	December 31, 2015
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$2,519	$130	$ -	$2,649

Available-for-sale
U.S. 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

Temporarily Impaired Securities

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 December 31, 2016 and 2015:

Note 4 –Securities (continued)


December 31, 2016	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
Held-to-maturity
U.S. agency obligations	$1,193	$91	$ -	$ -	$1,193	$91

Available-for-sale
U.S. Treauries	1,833	119	-	-	1,833	119
U.S. agency obligations	13,109	1,224	-	-	13,109	1,224
Mortgage-backed securities	11,331	353	-	-	11,331	353
Municipals	7,170	534	-	-	7,170	534
Corporates	3,878	254	-	-	3,878	254

Total temporarily impaired securities	$38,514	$2,575	$ -	$ -	$38,514	$2,575


December 31, 2015	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
Available-for-sale
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 temporarily impaired securities	$17,732	$471	$13,132	$513	$30,864	$984

U.S. Treasuries. The unrealized losses on these two investments in U.S. Treasuries at December 31, 2016 were caused by an increase in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2016. Each of these two investments carries a Moody’s investment grade rating of A.

U.S. agency obligations. The unrealized losses on the 10 investments in U.S. agency obligations at December 31, 2016 were caused by an increase in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2016. Each of these 10 investments carries an S&P investment grade rating of AA.

Mortgage-backed securities. The unrealized loss on the seven investments in U.S. government agency mortgage-backed securities at December 31, 2016 was caused by an increase in interest rates. The contractual terms of those investments does not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of the amortized cost basis, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2016. Each of these seven investments carries an S&P investment grade rating of AA.

Municipals. The unrealized losses on the 13 investments in municipal obligations at December 31, 2016 were caused by an increase in interest rates. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2016. Each of these 13 investments carries an S&P investment grade rating of AA or above.

Corporates. The unrealized losses on the five investments in domestic corporate issued securities at December 31, 2016 were caused by an increase in interest rates. The contractual terms of those investments does not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. Because the Bank does not intend to sell the investments and it is not more likely than not that the Bank will be required to sell the investments before recovery of the amortized cost basis, which may be maturity, the Bank does not consider those investments to be other-than-temporarily impaired at December 31, 2016. Each of these five investments carries an S&P investment grade rating of AA.

The amortized costs and fair values of securities at December 31, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


Note 4 –Securities (continued)
	Held-to-Maturity		Available-for-Sale
	Amortized	Fair	Amortized	Fair
	Cost	Values	Cost	Values

Due in one year or less	$ -	$ -	$ -	$ -
Due after one year through five years	2,015	2,080	551	535
Due after five years through ten years	-	-	14,874	14,318
Due after ten years	1,284	1,193	27,775	25,923

	$3,299	$3,273	$43,200	$40,776

The Bank received $24,637 in proceeds from sales of securities available-for-sale in 2016. Gross realized gains amounted to $487 and gross realized losses amounted to $0. The Bank received $13,440 in proceeds from sales of securities available-for-sale in 2015. Gross realized gains amounted to $52 and gross realized losses amounted to $3.

At December 31, 2016 and 2015, securities with a carrying value of $11,756 and $11,582, respectively, were pledged as collateral for public deposits and for other purposes as required or permitted by law.