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Investment Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment Securities
Investment Securities

Following is a comparison of the amortized cost and fair value of securities available-for-sale, as of June 30, 2019 and December 31, 2018:
(in 000's)
 Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value (Carrying Amount)
June 30, 2019
 
 
 
Securities available-for-sale:
 
 
 
U.S. Government agencies
$
33,384

 
$
163

 
$
(167
)
 
$
33,380

U.S. Government sponsored entities & agencies collateralized by mortgage obligations
26,443

 
162

 
(122
)
 
26,483

Total securities available for sale
$
59,827

 
$
325

 
$
(289
)
 
$
59,863

(in 000's)
 Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value (Carrying Amount)
December 31, 2018
 
 
 
Securities available-for-sale:
 
 
 
U.S. Government agencies
$
36,665

 
$
117

 
$
(255
)
 
$
36,527

U.S. Government sponsored entities & agencies collateralized by mortgage obligations
30,289

 
51

 
(441
)
 
29,899

Total securities available for sale
$
66,954

 
$
168

 
$
(696
)
 
$
66,426


 
The amortized cost and fair value of securities available for sale at June 30, 2019, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay obligations with or without call or prepayment penalties. Contractual maturities on collateralized mortgage obligations cannot be anticipated due to allowed paydowns.
 
June 30, 2019
 
Amortized Cost
 
Fair Value (Carrying Amount)
(in 000's)
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
—

 
—

Due after five years through ten years
4,263

 
4,263

Due after ten years
29,121

 
29,117

Collateralized mortgage obligations
26,443

 
26,483

 
$
59,827

 
$
59,863



There were no realized gains or losses on sales of available-for-sale securities for the three and six month periods ended June 30, 2019 and June 30, 2018. There were no other-than-temporary impairment losses for the three and six month periods ended June 30, 2019 and June 30, 2018.

At June 30, 2019, available-for-sale securities with an amortized cost of approximately $52,747,000 (fair value of $52,704,000) were pledged as collateral for FHLB borrowings, securitized deposits, and public funds balances.


The following summarizes temporarily impaired investment securities:
(in 000's)
Less than 12 Months
 
12 Months or More
 
Total
June 30, 2019
Fair Value (Carrying Amount)
 
 Unrealized Losses
 
Fair Value (Carrying Amount)
 
 Unrealized Losses
 
Fair Value (Carrying Amount)
 
 Unrealized Losses
Securities available for sale:
 
 
 
 
 
U.S. Government agencies
$
4,938

 
$
(51
)
 
13,665

 
(116
)
 
$
18,603

 
$
(167
)
U.S. Government sponsored entities & agencies collateralized by mortgage obligations
—

 
—

 
13,784

 
(122
)
 
13,784

 
(122
)
Total impaired securities
$
4,938

 
$
(51
)
 
$
27,449

 
$
(238
)
 
$
32,387

 
$
(289
)
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 

 
 

 
 

 
 

 
 

 
 

Securities available for sale:
 

 
 

 
 

 
 

 
 

 
 

U.S. Government agencies
$
19,085

 
$
(148
)
 
$
6,874

 
$
(107
)
 
$
25,959

 
$
(255
)
U.S. Government sponsored entities & agencies collateralized by mortgage obligations
—

 
—

 
16,681

 
(441
)
 
16,681

 
(441
)
Total impaired securities
$
19,085

 
$
(148
)
 
$
23,555

 
$
(548
)
 
$
42,640

 
$
(696
)

 
Temporarily impaired securities at June 30, 2019, were comprised of seven U.S. government agency securities, and ten U.S. government sponsored entities and agencies collateralized by mortgage obligations securities.

The Company evaluates investment securities for other-than-temporary impairment (OTTI) at least quarterly, and more frequently when economic or market conditions warrant such an evaluation. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available-for-sale or held-to-maturity are generally evaluated for OTTI under ASC Topic 320, Investments – Debt and Equity Instruments.

The Company considers many factors in determining OTTI, including: (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) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to the Company at the time of the evaluation.
 
Additionally, OTTI occurs when the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss. If the Company intends to sell or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, the other-than-temporary-impairment shall be recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis less any current-period loss, the other-than-temporary-impairment shall be separated into the amount representing the credit loss and the amount related to all other factors. The amount of the total other-than-temporary-impairment related to the credit loss is recognized in earnings, and is determined based on the difference between the present value of cash flows expected to be collected and the current amortized cost of the security. The amount of the total other-than-temporary-impairment related to other factors shall be recognized in other comprehensive (loss) income, net of applicable taxes. The previous amortized cost basis less the other-than-temporary-impairment recognized in earnings shall become the new amortized cost basis of the investment.

Management periodically evaluates each available-for-sale investment security in an unrealized loss position to determine if the impairment is temporary or other-than-temporary.

At June 30, 2019, the decline in fair value of the seven U.S. government agency securities, and the ten U.S. government sponsored entities and agencies collateralized by mortgage obligations securities is attributable to changes in interest rates, and not credit quality. Because the Company does not have the intent to sell these impaired securities, and it is not more likely than not that it will be required to sell these securities before its anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at June 30, 2019.

During the six months ended June 30, 2019, the Company recognized $110,000 of unrealized gains related to equity securities held at June 30, 2019 in the consolidated statements of income. During the six months ended June 30, 2018, the Company recognized $78,000 of unrealized losses related to equity securities held at June 30, 2018 in the consolidated statements of income. For the quarter ended June 30, 2019, the Company recognized $53,000 of unrealized gains related to equity securities held at June 30, 2019 in the consolidated statements of income. For the quarter ended June 30, 2018, the Company recognized $18,000 of unrealized losses related to equity securities held at June 30, 2018 in the consolidated statements of income.

The Company had no held-to-maturity or trading securities at June 30, 2019 or December 31, 2018.