XML 25 R11.htm IDEA: XBRL DOCUMENT
v3.19.1

Investment Securities | 12 Months Ended
--- | ---
Dec. 31, 2018
Investment Securities |
Investment Securities | Note 3. Investment Securities A summary of the amortized cost and market value of securities available for sale at December 31, 2018 and 2017 is as follows:
|  | At December 31, 2018
|  |  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | Unrealized |  | Unrealized |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Collaterized mortgage obligations |  | $ | 20,463 |  | $ | 6 |  | $ | (663) |  | $ | 19,806
Agency mortgage-backed securities |  |  | 25,895 |  |  | 6 |  |  | (914) |  |  | 24,987
Municipal securities |  |  | 34,205 |  |  | 78 |  |  | (453) |  |  | 33,830
U.S. Government agency securities |  |  | 1,999 |  |  | — |  |  | (40) |  |  | 1,959
U.S. Treasury securities |  |  | 1,001 |  |  | — |  |  | (11) |  |  | 990
Total securities available for sale |  | $ | 83,563 |  | $ | 90 |  | $ | (2,081) |  | $ | 81,572
|  | At December 31, 2017
|  |  |  |  | Gross |  | Gross |  |  |
|  | Amortized |  | Unrealized |  | Unrealized |  | Fair
(dollars in thousands) |  | Cost |  | Gains |  | Losses |  | Value
Collaterized mortgage obligations |  | $ | 24,063 |  | $ | 20 |  | $ | (569) |  | $ | 23,514
Agency mortgage-backed securities |  |  | 25,725 |  |  | 4 |  |  | (500) |  |  | 25,229
Municipal securities |  |  | 35,453 |  |  | 339 |  |  | (159) |  |  | 35,633
U.S. Government agency securities |  |  | 3,526 |  |  | — |  |  | (46) |  |  | 3,480
U.S. Treasury securities |  |  | 1,501 |  |  | — |  |  | (8) |  |  | 1,493
Total securities available for sale |  | $ | 90,268 |  | $ | 363 |  | $ | (1,282) |  | $ | 89,349
The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018 and 2017:
|  | December 31, 2018
|  | Less than 12 months |  | 12 months or more |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Value |  | Loss |  | Value |  | Loss |  | Value |  | Loss
Collaterized mortgage obligations |  | $ | 1,625 |  | $ | (22) |  | $ | 17,546 |  | $ | (640) |  | $ | 19,171 |  | $ | (662)
Agency mortgage-backed securities |  |  | 3,399 |  |  | (74) |  |  | 21,417 |  |  | (840) |  |  | 24,816 |  |  | (914)
Municipal securities |  |  | 13,162 |  |  | (244) |  |  | 8,415 |  |  | (210) |  |  | 21,577 |  |  | (454)
U.S. Government agency securities |  |  | — |  |  | — |  |  | 1,959 |  |  | (40) |  |  | 1,959 |  |  | (40)
U.S. Treasury securities |  |  | — |  |  | — |  |  | 990 |  |  | (11) |  |  | 990 |  |  | (11)
|  | $ | 18,186 |  | $ | (340) |  | $ | 50,327 |  | $ | (1,741) |  | $ | 68,513 |  | $ | (2,081)
|  | At December 31, 2017
|  | Less than 12 months |  | 12 months or more |  | Total
|  | Fair |  | Unrealized |  | Fair |  | Unrealized |  | Fair |  | Unrealized
(dollars in thousands) |  | Value |  | Loss |  | Value |  | Loss |  | Value |  | Loss
Collaterized mortgage obligations |  | $ | 6,531 |  | $ | (63) |  | $ | 15,678 |  | $ | (507) |  | $ | 22,209 |  | $ | (570)
Agency mortgage-backed securities |  |  | 6,802 |  |  | (80) |  |  | 18,218 |  |  | (420) |  |  | 25,020 |  |  | (500)
Municipal securities |  |  | 2,396 |  |  | (11) |  |  | 6,230 |  |  | (148) |  |  | 8,626 |  |  | (159)
U.S. Government agency securities |  |  | 2,965 |  |  | (37) |  |  | 515 |  |  | (9) |  |  | 3,480 |  |  | (46)
U.S. Treasury securities |  |  | 1,494 |  |  | (7) |  |  | — |  |  | — |  |  | 1,494 |  |  | (7)
|  | $ | 20,188 |  | $ | (198) |  | $ | 40,641 |  | $ | (1,084) |  | $ | 60,829 |  | $ | (1,282)
At December 31, 2018 and 2017, the Company did not have any securities that had impairment charges. The Company's investment securities portfolio consists primarily of debt securities issued by the U.S. Treasury, U.S. Government agencies, U.S. Government-sponsored agencies, state governments and local municipalities. There were no private label mortgage-backed securities ("MBS") or collateralized mortgage obligations ("CMO") held in the investment securities portfolio as of December 31, 2018 and December 31, 2017. The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Net unrealized gains and losses in the available for sale portfolio are included in shareholders' equity as a component of accumulated other comprehensive income or loss, net of tax. An unrealized loss exists when the current fair value of an individual security is less than the amortized cost basis. The Company regularly evaluates investment securities that are in an unrealized loss position in order to determine if the decline in fair value is other than temporary. Factors considered in the evaluation include the current economic climate, the length of time and the extent to which the fair value has been below cost, the current interest rate environment and the rating of each security. An other-than-temporary impairment ("OTTI") loss must be recognized for a debt security in an unrealized loss position if the Company intends to sell the security or it is more likely than not that it will be required to sell the security prior to recovery of the amortized cost basis. The amount of OTTI loss recognized is equal to the difference between the fair value and the amortized cost basis of the security that is attributed to credit deterioration. Accounting standards require the evaluation of the expected cash flows to be received to determine if a credit loss has occurred. In the event of a credit loss, that amount must be recognized against income in the current period. The portion of the unrealized loss related to other factors, such as liquidity conditions in the market or the current interest rate environment, is recorded in accumulated other comprehensive income (loss) for investment securities classified as available for sale. The Company held two U.S. Government agency securities, fifty-two collateralized mortgage obligations, forty-five agency mortgage-backed securities and two U.S. Treasury securities that were in an unrealized loss position at December 31, 2018. Principal and interest payments of the underlying collateral for each of these securities are backed by U.S. Government sponsored agencies and carry minimal credit risk. Management found no evidence of OTTI on any of these securities and believes the unrealized losses are due to fluctuations in fair values resulting from changes in market interest rates and are considered temporary as of December 31, 2018. All municipal securities held in the investment portfolio are reviewed on at least a quarterly basis for impairment. Each bond carries an investment grade rating by either Moody's or Standard & Poor's. In addition the Company periodically conducts its own independent review on each issuer to ensure the financial stability of the municipal entity. The largest geographic concentration was in Pennsylvania, Texas and Maryland and consisted of either general obligation or revenue bonds backed by the taxing power of the issuing municipality. At December 31, 2018, the investment portfolio included forty-one municipal securities that were in an unrealized loss position. Management believes the unrealized losses were the result of movements in long-term interest rates and are not reflective of any credit deterioration. At December 31, 2018 and 2017, investment securities in the amount of approximately $0.8 million and $0.8 million, respectively, were pledged as collateral for interest rate swap contracts. Unrealized losses on securities in the investment portfolio amounted to $2.1 million with a total fair value of $68.5 million as of December 31, 2018 compared to unrealized losses of $1.3 million with a total fair value of $60.8 million as of December 31, 2017. The Company believes the unrealized losses presented in the tables above are temporary in nature and primarily related to market interest rates or limited trading activity in a particular type of security rather than the underlying credit quality of the issuers. The Company does not believe that these losses are other than temporary and does not currently intend to sell or believe it will be required to sell securities in an unrealized loss position prior to maturity or recovery of the amortized cost bases. In 2018 the Company had a credit-related impairment loss on Maryland Financial Bank stock held at December 31, 2018. In the third quarter of 2018 the Board of Directors at Maryland Finanical Bank determined that it was advisable and in the best interests of stockholders to undertake the liquidation and dissolution of Maryland Financial Bank. Their liquidation plan estimated that after the sale of all assets and payment of all liabilities they would be able to make liquidating distributions to their stockholders of approximately $0.25 to $1.00 per share of Maryland Financial Bank common stock. While there was no guarantee of the timing of receipt of the orders and approvals for the dissolution of Maryland Financial Bank, the Bank reduced the dollar amount of the 5,000 shares of Maryland Financial Bank stock that it owns from $30,000 to $5,000, a $25,000 decrease in value. The following table presents investment securities by stated maturity at December 31, 2018. Collateralized mortgage obligations and agency mortgage-backed securities have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties and, therefore, these securities are classified separately with no specific maturity date.
|  | At December 31, 2018
|  | Amortized |  | Fair
(dollars in thousands) |  | Cost |  | Value
Due within one year |  | $ | 932 |  | $ | 927
Due over one to five years |  |  | 1,310 |  |  | 1,297
Due over five to ten years |  |  | 7,192 |  |  | 7,136
Due over ten years |  |  | 27,771 |  |  | 27,419
Collaterized mortgage obligations |  |  | 20,463 |  |  | 19,806
Agency mortgage-backed securities |  |  | 25,895 |  |  | 24,987
Total securities available for sale |  | $ | 83,563 |  | $ | 81,572
Proceeds from sales of available for sale securities prior to maturity totaled $0 and $956,255 for the years ended December 31, 2018 and 2017, respectively. The Bank realized gains of $1,406 and no losses on those sales for 2017. Realized gains and losses were calculated based on the amortized cost of the securities at the date of trade. Income tax expense relating to net gains on sales of investment securities was calculated at a rate of 39.44% and totaled $555 for the year ended December 31, 2017.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration