Note 4 - Securities

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

	December 31, 2019
	Amortized	Gross Unrealized		Fair
	Cost	Gains	Losses	Value
Held-to-maturity
U.S. agency obligations	$3,688	$173	$ -	$3,861

Available-for-sale
U.S. Treasuries	$1,966	$ -	$(2)	$1,964
U.S. agency obligations	32,163	278	(333)	32,108
Mortgage-backed securities	10,328	42	(106)	10,264
Municipals	11,118	117	(13)	11,222
Corporates	4,086	32	(21)	4,097

	$59,661	$469	$(475)	$59,655


	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

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, 2019 and 2018:


December 31, 2019	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	$ -	$ -	$ -	$ -	$ -	$ -

Available-for-sale
U.S. Treasuries	-	-	1,964	2	1,964	2
U.S. agency obligations	12,395	218	12,048	115	24,443	333
Mortgage-backed securities	-	-	6,609	106	6,609	106
Municipals	-	-	2,736	13	2,736	13
Corporates	-	-	1,042	21	1,042	21

Total temporarily impaired securities	$12,395	$218	$24,399	$257	$36,794	$475


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

Note 4 –Securities (continued)

U.S. Treasuries. The unrealized losses on this one investment in U.S. Treasuries at December 31, 2019 was caused by an increase in interest rates. The contractual terms of this investment do not permit the issuer to settle the security at a price less than the amortized cost bases of the investments. Because the Bank does not

intend to sell the investment and it is not more likely than not that the Bank will be required to sell the investment before recovery of their amortized cost basis, which may be maturity, the Bank does not consider this investment to be other-than-temporarily impaired at December 31, 2019. This investment carries a S&P investment grade rating of AA+.

U.S. agency obligations. The unrealized losses on the 14 investments in U.S. agency obligations at December 31, 2019 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, 2019. Each of these 14 investments carries an S&P investment grade rating of AA or better.

Mortgage-backed securities. The unrealized loss on the eight investments in U.S. government agency mortgage-backed securities at December 31, 2019 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, 2019. Each of these eight investments carries an S&P investment grade rating of AA.

Municipals. The unrealized losses on the four investments in municipal obligations at December 31, 2019 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, 2019. Each of these four investments carries an S&P investment grade rating of A or above.

Corporates. The unrealized losses on the one investment in a domestic corporate issued security at December 31, 2019 was caused by an increase in interest rates. The contractual terms of this investment does not permit the issuer to settle the security at a price less than the amortized cost basis of the investment. Because the Bank does not intend to sell the investment and it is not more likely than not that the Bank will be required to sell the investment before recovery of the amortized cost basis, which may be maturity, the Bank does not consider this investment to be other-than-temporarily impaired at December 31, 2019. This investment carries an S&P investment grade rating of BBB+.

The amortized costs and fair values of securities at December 31, 2019, 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	-	-	8,380	8,395
Due after five years through ten years	-	-	28,108	28,238
Due after ten years	3,688	3,861	23,173	23,022

	$3,688	$3,861	$59,661	$59,655

The Bank received $9,733 in proceeds from sales of securities available-for-sale in 2019 and sold no securities in 2018. Gross realized gains in 2019 amounted to $394 and gross realized losses amounted to $0.

At December 31, 2019 and 2018, securities with a carrying value of $22,307 and $19,401, respectively, were pledged as collateral for public deposits and for other purposes as required or permitted by law.