NOTE 4 – SECURITIES AVAILABLE FOR SALE

The following table presents the amortized cost and fair value of the available-for-sale investment securities portfolio and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of the dates indicated:


			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
March 31, 2014:
Available-for-sale
SBA loan pools securities	$	1,749	$	—	$	(47	)	$	1,702
U.S. government-sponsored entities and agency securities		1,930		28		—			1,958
Private label residential mortgage-backed securities		5,086		10		(29	)		5,067
Agency mortgage-backed securities		99,731		31		(964	)		98,798

Total securities available for sale	$	108,496	$	69	$	(1,040	)	$	107,525

December 31, 2013:
Available-for-sale
SBA loan pools securities	$	1,794	$	—	$	(58	)	$	1,736
U.S. government-sponsored entities and agency securities		1,928		—		(8	)		1,920
Private label residential mortgage-backed securities		14,653		135		(36	)		14,752
Agency mortgage-backed securities		153,134		299		(1,819	)		151,614

Total securities available for sale	$	171,509	$	434	$	(1,921	)	$	170,022

The following table presents amortized cost and fair value of the available-for-sale securities portfolio by expected maturity. In the case of residential mortgage-backed securities and SBA loan pool securities, expected maturities may differ from contractual maturities because borrowers generally have the right to call or prepay obligations with or without call or prepayment penalties. For that reason, mortgage-backed securities and SBA loan pool securities are not included in the maturity categories.


	March 31, 2014
	Amortized
	Cost		Fair Value
	(In thousands)
Maturity:
Available-for-sale
Within one year	$	—	$	—
One to five years		—		—
Five to ten years		1,930		1,958
Greater than ten years		—		—
SBA loan pools, private label residential mortgage backed and agency mortgage-backed securities		106,566		105,567

Total	$	108,496	$	107,525

At March 31, 2014 and December 31, 2013, there were no holdings of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10 percent of shareholders’ equity.

The following table summarizes the investment securities with unrealized losses at March 31, 2014 and December 31, 2013, respectively, by security type and length of time in a continuous unrealized loss position:


	Less Than 12 Months					12 Months or Longer					Total
			Gross					Gross					Gross
			Unrealized			Fair		Unrealized			Fair		Unrealized
	Fair Value		Losses			Value		Losses			Value		Losses
	(In thousands)
March 31, 2014:
Available-for-sale
SBA loan pools securities	$	1,702	$	(47	)	$	—	$	—		$	1,702	$	(47	)
U.S. government-sponsored entities and agency securities		—		—			—		—			—		—
Private label residential mortgage-backed securities		1,219		(15	)		2,931		(14	)		4,150		(29	)
Agency mortgage-backed securities		86,795		(950	)		1,798		(14	)		88,593		(964	)

Total available-for-sale	$	89,716	$	(1,012	)	$	4,729	$	(28	)	$	94,445	$	(1,040	)

December 31, 2013:
Available-for-sale
SBA loan pools securities	$	1,736	$	(58	)	$	—	$	—		$	1,736	$	(58	)
U.S. government-sponsored entities and agency securities		1,920		(8	)		—		—			1,920		(8	)
Private label residential mortgage-backed securities		2,064		(11	)		3,913		(25	)		5,977		(36	)
Agency mortgage-backed securities		114,104		(1,790	)		1,821		(29	)		115,925		(1,819	)

Total available-for-sale	$	119,824	$	(1,867	)	$	5,734	$	(54	)	$	125,558	$	(1,921	)

The Company recorded no other-than-temporary impairment (OTTI) for securities available for sale for the three months ended March 31, 2014 and 2013.

At March 31, 2014, the Company’s securities available for sale portfolio consisted of 80 securities, 67 of which were in an unrealized loss position. The unrealized losses are related to an overall increase in interest rates and a decrease in prepayment speeds of the agency mortgage-backed securities.

The Company’s private label residential mortgage-backed securities in unrealized loss positions had fair values of $4.2 million with unrealized losses of $29 thousand at March 31, 2014. The Company’s agency residential mortgage-backed securities in unrealized loss positions had fair values of $88.6 million with unrealized losses of $964 thousand at March 31, 2014. The Company’s private label residential mortgage-backed securities in unrealized loss positions had fair values of $6.0 million with unrealized losses of $36 thousand at December 31, 2013. The Company’s agency residential mortgage-backed securities in unrealized loss positions had fair values of $115.9 million with unrealized losses of $1.8 million at December 31, 2013.

The Company monitors to ensure it has adequate credit support and as of March 31, 2014, the Company does not have the intent to sell these securities and it is not likely that it will be required to sell the securities before their anticipated recoveries. Of the Company’s $107.5 million securities portfolio, $107.3 million were rated AAA, AA or A, and $231 thousand were rated BBB based on the most recent credit rating from the rating agencies as of March 31, 2014. The Company considers the lowest credit rating for identification of potential OTTI.