Note 4 - Securities

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


	December 31, 2017
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$5,713	$8	$(102)	$5,619

Available-for-sale
U.S. Treasuries	$1,956	$ -	$(98)	$1,858
U.S. agency obligations	24,881	5	(1,036)	23,850
Mortgage-backed securities	13,662	2	(276)	13,388
Municipals	12,556	16	(298)	12,274
Corporates	4,117	-	(175)	3,942

	$57,172	$23	$(1,883)	$55,312



	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

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

Note 4 –Securities (continued)

of time that individual securities have been in a continuous unrealized loss position, at December 31, 2017 and 2016:


December 31, 2017	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	$2,367	$70	$1,243	$32	$3,610	$102

Available-for-sale
U.S. Treauries	-	-	1,858	98	1,858	98
U.S. agency obligations	11,465	215	12,379	821	23,844	1,036
Mortgage-backed securities	2,802	26	9,712	250	12,514	276
Municipals	4,823	41	5,644	257	10,467	298
Corporates	-	-	3,942	175	3,942	175

Total temporarily impaired securities	$19,090	$282	$33,535	$1,601	$52,625	$1,883


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

Note 4 –Securities (continued)

U.S. Treasuries. The unrealized losses on these two investments in U.S. Treasuries at December 31, 2017 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, 2017. Each of these two investments carries a Moody’s investment grade rating of AA.

U.S. agency obligations. The unrealized losses on the 21 investments in U.S. agency obligations at December 31, 2017 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, 2017. Each of these 21 investments carries an S&P investment grade rating of AA.

Mortgage-backed securities. The unrealized loss on the 11 investments in U.S. government agency mortgage-backed securities at December 31, 2017 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, 2017. Each of these 11 investments carries an S&P investment grade rating of AA.

Municipals. The unrealized losses on the 17 investments in municipal obligations at December 31, 2017 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, 2017. Each of these 17 investments carries an S&P investment grade rating of A or above.

Corporates. The unrealized losses on the five investments in domestic corporate issued securities at December 31, 2017 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, 2017. Each of these five investments carries an S&P investment grade rating of A or above.

The amortized costs and fair values of securities at December 31, 2017, 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	$2,002	$2,009	$ -	$ -
Due after one year through five years	-	-	1,287	1,274
Due after five years through ten years	-	-	25,224	24,387
Due after ten years	3,711	3,610	30,660	29,651

	$5,713	$5,619	$57,171	$55,312

The Bank received $9,940 in proceeds from sales of securities available-for-sale in 2017. Gross realized gains amounted to $113 and gross realized losses amounted to $0. 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.

At December 31, 2017 and 2016, securities with a carrying value of $12,123 and $11,756, respectively, were pledged as collateral for public deposits and for other purposes as required or permitted by law.