Note 4 - Securities

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


	December 31, 2018
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$3,700	$ -	$(185)	$3,515

Available-for-sale
U.S. Treasuries	$1,961	$ -	$(116)	$1,845
U.S. agency obligations	24,701	-	(1,434)	23,267
Mortgage-backed securities	12,390	-	(514)	11,876
Municipals	12,412	3	(406)	12,009
Corporates	4,102	-	(372)	3,730

	$55,566	$3	$(2,842)	$52,727



	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

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, 2018 and 2017:


December 31, 2018	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	$ -	$ -	$3,515	$185	$3,515	$185

Available-for-sale
U.S. Treasuries	-	-	1,845	116	1,845	116
U.S. agency obligations	-	-	23,267	1,434	23,267	1,434
Mortgage-backed securities	966	20	10,910	494	11,876	514
Municipals	-	-	10,994	406	10,994	406
Corporates	-	-	3,730	372	3,730	372

Total temporarily impaired securities	$966	$20	$50,746	$2,822	$51,712	$2,842


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. Treasuries	-	-	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

Note 4 –Securities (continued)

U.S. Treasuries. The unrealized losses on these two investments in U.S. Treasuries at December 31, 2018 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, 2018. 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, 2018 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, 2018. Each of these 21 investments carries an S&P investment grade rating of AA or better.

Mortgage-backed securities. The unrealized loss on the 12 investments in U.S. government agency mortgage-backed securities at December 31, 2018 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, 2018. Each of these 12 investments carries an S&P investment grade rating of AA.

Municipals. The unrealized losses on the 19 investments in municipal obligations at December 31, 2018 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, 2018. Each of these 19 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, 2018 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, 2018. Each of these five investments carries an S&P investment grade rating of BBB+ or above.

The amortized costs and fair values of securities at December 31, 2018, 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	-	-	4,969	4,802
Due after five years through ten years	-	-	29,041	27,412
Due after ten years	3,700	3,515	21,556	20,513

	$3,700	$3,515	$55,566	$52,727

The Bank sold no securities in 2018. 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.

At December 31, 2018 and 2017, securities with a carrying value of $19,401 and $12,123, respectively, were pledged as collateral for public deposits and for other purposes as required or permitted by law.