Note 6 - Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of September 30, 2020 and December 31, 2019 (amounts in thousands):


		September 30, 2020
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$3,675	$608	$ -	$4,283

Available-for-Sale
US Treasuries	2,000	33	-	2,033
US agency obligations	39,201	1,780	(52)	40,929
Mortgage-backed securities	8,190	271	-	8,461
Municipals	18,315	627	(36)	18,906
Corporates	5,074	225	-	5,299
	$72,780	$2,936	$(88)	$75,628

		December 31, 2019
	Amortized	Gross Unrealized		Fair Value
	Costs	Gains	(Losses)
Held-to-Maturity
US agency obligations	$3,688	$173	$ -	$3,861

Available-for-Sale
US Treasuries	1,966	-	(2)	1,964
US 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

Note 6 – 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, 2020 and December 31, 2019 (amounts in thousands):


	Less than 12 months		More than 12 months			Total
	Fair	Unrealized	Fair	Unrealized	Fair		Unrealized
September 30, 2020	Value	Losses	Value	Losses	Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$ -	$ -	$ -	$ -	$ -		$ -

Available-for-sale
US Treasuries	-	-	-	-	-		-
US agency obligations	8,774	52	-	-	8,774		52
Mortgage-backed securities	-	-	-	-	-		-
Municipals	5,553	36	-	-	5,553		36
Corporates	-	-	-	-	-		-
Total	$14,327	$88	$ -	$ -	$14,327		$88

	Less than 12 months		More than 12 months			Total
	Fair	Unrealized	Fair	Unrealized	Fair		Unrealized
December 31, 2019	Value	Losses	Value	Losses	Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$ -	$ -	$ -	$ -	$ -		$ -

Available-for-sale
US Treasuries	-	-	1,964	2	1,964		2
US 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	$12,395	$218	$24,399	$257	$36,794		$475

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

Note 6 – Securities (continued)

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).

At September 30, 2020, 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, 2020, the Bank owned ten securities in an unrealized loss position that were being evaluated for other than temporary impairment. Three of these securities was S&P rated AAA and seven were rated AA. As of September 30, 2020, six of these securities were municipal issues and four were backed by the US government.

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.

Gross gains on sales of available-for-sale securities were $0 and $644 during the three and nine months ended September 30, 2020 as compared to $291 and $291 during the same periods in 2019. There were no gross losses on sales of available-for-sale securities during the three and nine month periods ended September 30, 2020 and 2019. There were no sales of held-to-maturity securities during the three and nine month periods ended September 30, 2020 and 2019.