INVESTMENT SECURITIES

9 Months Ended

Sep. 30, 2017

Investment Securities Activity

INVESTMENT SECURITIES

NOTE 5 INVESTMENT SECURITIES:

The amortized cost and estimated fair value of securities (all available-for-sale (“AFS”)) are as follows:

				Gross		Gross		Approximate
		Amortized		Unrealized		Unrealized		Fair
(Dollars are in thousands)		Cost		Gains		Losses		Value
September 30, 2017
U.S. Government Agencies	$	24,363	$	103	$	155	$	24,311
Taxable municipals		2,318	7		32		2,293
Corporate bonds		3,906	191		-		4,097
Mortgage backed securities		37,944	23		437		37,530
Total Securities AFS	$	68,531	$	324	$	624	$	68,231
December 31, 2016
U.S. Government Agencies	$	24,821	$	80	$	269	$	24,632
Taxable municipals		2,340	2		50		2,292
Corporate bonds		3,600	149		-		3,749
Mortgage backed securities		39,941	25		628		39,338
Total Securities AFS	$	70,702	$	256	$	947	$	70,011

The following table details unrealized losses and related fair values in the available-for-sale portfolio. This information is aggregated by the length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2017 and December 31, 2016.

	Less than 12 Months				12 Months or More				Total
(Dollars are in thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2017
U.S. Government Agencies	$	12,043	$	134	$	1,681	$	21	$	13,724	$	155
Taxable municipals		1,055		28		262		4		1,317		32
Corporate bonds		—		—		—		—		—		—
Mtg. backed securities		21,749		230		9,980		207		31,729		437
Total Securities AFS	$	34,847	$	392	$	11,923	$	232	$	46,770	$	624
December 31, 2016
U.S. Government Agencies	$	12,081	$	250	$	2,449	$	19	$	14,530	$	269
Taxable municipals		1,561		50		—		—		1,561		50
Corporate bonds		500		—		—		—		500		—
Mtg. backed securities		28,680		543		4,655		85		33,335		628
Total Securities AFS	$	42,822	$	843	$	7,104	$	104	$	49,926	$	947

At September 30, 2017, the available-for-sale portfolio included 107 investments for which the fair market value was less than amortized cost. At December 31, 2016, the available-for-sale portfolio included 107 investments for which the fair market value was less than amortized cost. Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and 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 conditions and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Based on the Company’s analysis, the Company concluded that no securities had an other-than-temporary impairment.

Investment securities with a carrying value of $10.6 million and $11.3 million at September 30, 2017 and December 31, 2016, respectively, were pledged as collateral to secure public deposits and for other purposes required by law.

Gross proceeds on the sale of investment securities were $3.2 million and $24.8 million, respectively, for the nine months ended September 30, 2017 and 2016. Gross realized gains and losses pertaining to the sale of investment securities available for sale are detailed as follows:

	For the three months ended September 30,					For the nine months ended September 30,
(Dollars are in thousands)	2017			2016		2017			2016
Gross gains realized	$	30		$	—	$	30		$	275
Gross losses realized		(30	)		—		(30	)		(35	)
Net realized gains	$	—		$	—	$	—		$	240

The amortized cost and fair value of investment securities at September 30, 2017, by contractual maturity, are shown in the following schedule. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

						Weighted
(Dollars are in thousands)		Amortized		Fair		Average
Securities Available-for-Sale		Cost		Value		Yield
Due in one year or less	$	11	$	11		1.57%
Due after one year through five years	3,636		3,622		2.03%
Due after five years through ten years		14,853		14,977		3.03%
Due after ten years		50,031		49,621		2.14%
Total	$	68,531	$	68,231		2.32%

The Bank, as a member of the Federal Reserve Bank and the Federal Home Loan Bank, is required to hold stock in each. The Bank also owns stock in CBB Financial Corp., which is a correspondent of the Bank. These equity securities are restricted from trading and are recorded at a cost of $2.6 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively.