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, 2018 and December 31, 2017 (amounts in thousands):


		September 30, 2018
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$3,703	$ -	$(309)	$3,394

Available-for-Sale
US Treasuries	1,960	-	(180)	1,780
US agency obligations	24,747	5	(2,040)	22,712
Mortgage-backed securities	12,941	-	(716)	12,225
Municipals	12,448	-	(597)	11,851
Corporates	4,106	-	(341)	3,765
	$56,202	$5	$(3,874)	$52,333

		December 31, 2017
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$5,713	$8	$(102)	$5,619

Available-for-Sale
US Treasuries	1,956	-	(98)	1,858
US 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

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, 2018 and December 31, 2017 (amounts in thousands):


	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
September 30, 2018	Value	Losses	Value	Losses	Value	Losses
Description of securities
Held-to-maturity
US agency obligations	$2,435	$200	$1,268	$109	$3,703	$309

Available-for-sale
US Treasuries	-	-	1,780	180	1,780	180
US agency obligations	6,241	379	16,471	1,661	22,712	2,040
Mortgage-backed securities	949	41	11,276	675	12,225	716
Municipals	-	-	11,851	597	11,851	597
Corporates	-	-	3,765	341	3,765	341
Total	$7,190	$420	$45,143	$3,454	$52,333	$3,874

	Less than 12 months		More than 12 months		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
December 31, 2017	Value	Losses	Value	Losses	Value	Losses
Description of securities
Held-to-maturity
US agency obligations	$2,367	$70	$1,243	$32	$3,610	$102

Available-for-sale
US Treasuries	-	-	1,858	98	1,858	98
US 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	$19,090	$282	$33,535	$1,601	$52,625	$1,883

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).

Note 7 – Securities (continued)

At September 30, 2018, 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, 2018, the Bank owned 60 securities in an unrealized loss position that were being evaluated for other than temporary impairment. Ten of these securities were S&P rated AAA, 47 were rated AA, two were rated A, and one was rated BBB+. As of September 30, 2018, 34 of these securities were direct obligations of the U.S. government or government sponsored entities, 21 were municipal issues, and five 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 management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to change in interest rates and other market conditions, no declines currently are deemed to be other-than-temporary.

There were no gross gains on sales of available-for-sale securities during the three and nine month periods ended September 30, 2018 compared to $51 and $113 for the same respective periods in 2017. There were no losses on sales of available-for-sale securities and no sales of held-to-maturity securities during the three and nine month periods ended September 30, 2018 and 2017.