Quarterly report pursuant to Section 13 or 15(d)

Investment Securities

v3.8.0.1
Investment Securities
3 Months Ended
Mar. 31, 2018
Investments Debt And Equity Securities [Abstract]  
Investment Securities

NOTE 2. INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses and approximate fair values of securities available for sale are as follows:

 

 

 

Amortized

 

 

Unrealized

 

 

Fair

 

March 31, 2018

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

 

 

(Dollars in thousands)

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

2,011

 

 

$

 

 

$

104

 

 

$

1,907

 

Residential mortgage-backed securities

 

 

29,371

 

 

 

 

 

 

1,005

 

 

 

28,366

 

Corporate bonds and other debt securities

 

 

5,700

 

 

 

 

 

 

171

 

 

 

5,529

 

Total available for sale

 

$

37,082

 

 

$

 

 

$

1,280

 

 

$

35,802

 

 

 

 

Amortized

 

 

Unrealized

 

 

Fair

 

December 31, 2017

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

 

 

(Dollars in thousands)

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

2,010

 

 

$

 

 

$

61

 

 

$

1,949

 

Residential mortgage-backed securities

 

 

30,156

 

 

 

 

 

 

527

 

 

 

29,629

 

Corporate bonds and other debt securities

 

 

5,711

 

 

 

 

 

 

46

 

 

 

5,665

 

Total available for sale

 

$

37,877

 

 

$

 

 

$

634

 

 

$

37,243

 

 

There were no securities pledged at March 31, 2018 or December 31, 2017, respectively.

The amortized cost and estimated fair value of securities available for sale, by contractual maturity, are as follows:

 

 

 

Amortized

 

 

Fair

 

March 31, 2018

 

Cost

 

 

Value

 

 

 

(Dollars in thousands)

 

Available for sale:

 

 

 

 

 

 

 

 

Due in one year or less

 

$

 

 

$

 

Due after one year through five years

 

 

4,133

 

 

 

4,017

 

Due after five years through ten years

 

 

3,102

 

 

 

2,965

 

Due after ten years

 

 

476

 

 

 

454

 

Residential mortgage-backed securities

 

 

29,371

 

 

 

28,366

 

Total available for sale

 

$

37,082

 

 

$

35,802

 

 

For purposes of the maturity table, residential mortgage-backed securities, the principal of which are repaid periodically, are presented as a single amount. The expected lives of these securities will differ from contractual maturities because borrowers may have the right to prepay the underlying loans with or without prepayment penalties.

The following tables present the estimated fair values and gross unrealized losses on investment securities available for sale, aggregated by investment category and length of time individual securities have been in a continuous unrealized loss position as of the periods presented:

 

 

 

Less than 12 Months

 

 

12 Months or More

 

 

Total

 

March 31, 2018

 

Fair

Value

 

 

Unrealized

Loss

 

 

Fair

Value

 

 

Unrealized

Loss

 

 

Fair

Value

 

 

Unrealized

Loss

 

 

 

(Dollars in thousands)

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

1,907

 

 

$

104

 

 

$

 

 

$

 

 

$

1,907

 

 

$

104

 

Residential mortgage-backed securities

 

 

24,399

 

 

 

865

 

 

 

3,967

 

 

 

140

 

 

 

28,366

 

 

 

1,005

 

Corporate bonds and other debt securities

 

 

5,529

 

 

 

171

 

 

 

 

 

 

 

 

 

5,529

 

 

 

171

 

Total available for sale

 

$

31,835

 

 

$

1,140

 

 

$

3,967

 

 

$

140

 

 

$

35,802

 

 

$

1,280

 

 

 

 

Less than 12 Months

 

 

12 Months or More

 

 

Total

 

December 31, 2017

 

Fair

Value

 

 

Unrealized

Loss

 

 

Fair

Value

 

 

Unrealized

Loss

 

 

Fair

Value

 

 

Unrealized

Loss

 

 

 

(Dollars in thousands)

 

Available for sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Government agencies

 

$

1,949

 

 

$

61

 

 

$

 

 

$

 

 

$

1,949

 

 

$

61

 

Residential mortgage-backed securities

 

 

29,627

 

 

 

527

 

 

 

 

 

 

 

 

 

29,627

 

 

 

527

 

Corporate bonds and other debt securities

 

 

5,665

 

 

 

46

 

 

 

 

 

 

 

 

 

5,665

 

 

 

46

 

Total available for sale

 

$

37,241

 

 

$

634

 

 

$

 

 

$

 

 

$

37,241

 

 

$

634

 

 

At March 31, 2018, the Company’s security portfolio consisted of 50 securities, all of which were in an unrealized loss position. 44 of the 50 securities in an unrealized loss position at March 31, 2018 were in an unrealized loss position for less than 12 months. The unrealized losses for these securities resulted primarily from changes in interest rates and spreads.

The Company monitors its investment securities for other-than-temporary-impairment (“OTTI”). Impairment is evaluated on an individual security basis considering numerous factors, and its relative significance. The Company has evaluated the nature of unrealized losses in the investment securities portfolio to determine if OTTI exists. The unrealized losses relate to changes in market interest rates and specific market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell nor is it more likely than not that it will be required to sell these investments before the recovery of their amortized cost basis. Management has completed an assessment of each security in an unrealized loss position for credit impairment and has determined that no individual security was other-than-temporarily impaired at March 31, 2018. The following describes the basis under which the Company has evaluated OTTI:

U.S. Government Agencies and Residential Mortgage-Backed Securities (“MBS”):

The unrealized losses associated with U.S. Government agencies and residential MBS are primarily driven by changes in interest rates. These securities have either an explicit or implicit U.S. government guarantee.

Corporate Bonds & Other Debt Securities:

Securities were generally underwritten in accordance with the Company’s investment standards prior to the decision to purchase, without relying on a bond issuer’s guarantee in making the investment decision. These investments are investment grade and will continue to be monitored as part of the Company’s ongoing impairment analysis, but are expected to perform in accordance with their terms.

There were no securities sold for the three months ended March 31, 2018 or 2017.