Securities

6 Months Ended

Jun. 30, 2021

Note 6 – Securities

The following tables summarize the Bank’s holdings for both securities held-to-maturity and securities available-for-sale as of June 30, 2021 and December 31, 2020 (amounts in thousands):


	June 30, 2021
	Amortized		Gross Unrealized
	Costs		Gains		(Losses)		Fair Value
Held-to-Maturity
US agency obligations	$	3,663	$	393	$	—	$	4,056

Available-for-Sale
US Treasuries		2,000		15		—		2,015
US agency obligations		55,339		900		(852)		55,387
Mortgage-backed securities		25,948		147		(198)		25,897
Municipals		40,995		560		(401)		41,154
Corporates		6,257		254		—		6,511
	$	130,539	$	1,876	$	(1,451)	$	130,964


	December 31, 2020
	Amortized		Gross Unrealized
	Costs		Gains		(Losses)		Fair Value
Held-to-Maturity
US agency obligations	$	3,671	$	521	$	—	$	4,192

Available-for-Sale
US Treasuries		2,000		27		—		2,027
US agency obligations		40,111		1,544		(335)		41,320
Mortgage-backed securities		15,461		241		(6)		15,696
Municipals		24,275		594		(96)		24,773
Corporates		6,070		299		—		6,369
	$	87,917	$	2,705	$	(437)	$	90,185

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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 June 30, 2021 and December 31, 2020 (amounts in thousands):


	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
June 30, 2021	Value		Losses		Value		Losses		Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$	—	$	—	$	—	$	—	$	—	$	—

Available-for-sale
US Treasuries		—		—		—		—		—		—
US agency obligations		28,600		852		—		—		28,600		852
Mortgage-backed securities		20,696		198		—		—		20,696		198
Municipals		17,597		401		—		—		17,597		401
Corporates		—		—		—		—		—		—
Total	$	66,893	$	1,451	$	—	$	—	$	66,893	$	1,451


	Less than 12 months				More than 12 months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2020	Value		Losses		Value		Losses		Value		Losses
Description of securities
Held-to-maturity
US agency obligations	$	—	$	—	$	—	$	—	$	—	$	—

Available-for-sale
US Treasuries		—		—		—		—		—		—
US agency obligations		15,808		335		—		—		15,808		335
Mortgage-backed securities		8,201		6		—		—		8,201		6
Municipals		8,202		96		—		—		8,202		96
Corporates		—		—		—		—		—		—
Total	$	32,211	$	437	$	—	$	—	$	32,211	$	437

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 June 30, 2021, the Company did not consider the unrealized losses as other-than-temporary losses due to the nature of the securities involved. As of June 30, 2021, the Bank owned 35 securities in an unrealized loss position that were being evaluated for other than temporary impairment. Thirteen of these securities were S&P rated AAA and 22 were rated AA. As of June 30, 2021, 16 of these securities were municipal issues and 19 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.

There were no sales of available-for-sale securities during the six months ended June 30, 2021 as compared to $17,813 in sales during the same period in 2020. In 2020, there were gross gains on sales of available-for-sale securities of $644 during the six month period ended June 30, 2020. There were no sales of held-to-maturity securities during the six month periods ended June 30, 2021 and 2020.