INVESTMENT SECURITIES

6 Months Ended

Jun. 30, 2020

INVESTMENT SECURITIES

INVESTMENT SECURITIES

NOTE E - INVESTMENT SECURITIES

The amortized cost and fair value of available for sale (“AFS”) investments, with gross unrealized gains and losses, follow:

	June 30, 2020
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
	(dollars in thousands)
Securities available for sale:
U.S. government agencies – GSE’s	$	8,811	$	278	$	(3)	$	9,086
Mortgage-backed securities – GSE’s		37,916		1,620		(3)		39,533
Corporate bonds		2,193		13		—		2,206
Municipal bonds		11,887		271		(25)		12,133
	$	60,807	$	2,182	$	(31)	$	62,958

As of June 30, 2020, accumulated other comprehensive income included net unrealized gains totaling $2.2 million. Deferred tax assets resulting from these net unrealized losses totaled $495,000.

The amortized cost and fair value of “AFS” investments, with gross unrealized gains and losses, follow:

	December 31, 2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
	(dollars in thousands)
Securities available for sale:
U.S. government agencies – GSE’s	$	9,839	$	159	$	(2)	$	9,996
Mortgage-backed securities – GSE’s		46,926		830		(13)		47,743
Corporate bonds		2,282		17		—		2,299
Municipal bonds		12,152		177		—		12,329
	$	71,199	$	1,183	$	(15)	$	72,367

As of December 31, 2019, accumulated other comprehensive income included net unrealized gains totaling $1.2 million. Deferred tax liabilities resulting from these net unrealized gains totaled $269,000.

The amortized cost and fair value of  securities available for sale, with gross unrealized gains and losses, follow:

	June 30, 2020
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
	(dollars in thousands)
Securities available for sale:
Due within one year	$	6,289	$	11	$	(3)	$	6,297
Due after one but within five years		12,209		360		(1)		12,568
Due after five but within ten years		25,383		1,047		(2)		26,428
Due after ten years		16,926		764		(25)		17,665
	$	60,807	$	2,182	$	(31)	$	62,958

	December 31, 2019
			Gross		Gross
	Amortized		unrealized		unrealized		Fair
	cost		gains		losses		value
	(dollars in thousands)
Securities available for sale:
Due within one year	$	8,901	$	19	$	(6)	$	8,914
Due after one but within five years		40,954		695		(7)		41,642
Due after five but within ten years		4,568		94		(1)		4,661
Due after ten years		16,776		375		(1)		17,150
	$	71,199	$	1,183	$	(15)	$	72,367

Securities with a carrying value of $37.8 million and $18.4 million at June 30, 2020 and December 31, 2019, respectively, were pledged to secure public monies on deposit as required by law, customer repurchase agreements, and access to the Federal Reserve Discount Window.

None of the unrealized losses relate to the liquidity of the securities or the issuer’s ability to honor redemption obligations.  The Company has the intent and ability to hold these securities to recovery.  No other than temporary impairments were identified for these investments having unrealized losses for the periods ended June 30, 2020 and December 31, 2019. The Company has not incurred any losses related to securities sales in the first six months of 2020 or during the year ended December 31, 2019.

The following tables show the gross unrealized losses and fair value of the Company’s investment securities, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, at June 30, 2020 and December 31, 2019.

	June 30, 2020
	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
	(dollars in thousands)
Securities available for sale:
U.S. government agencies – GSE’s	$	—	$	—	$	524	$	(3)	$	524	$	(3)
Mortgage-backed securities–GSE’s		1,703		(1)		1,999		(2)		3,702		(3)
Corporate bonds		758		—		—		—		758		—
Municipal bonds		3,029		(25)		—		—		3,029		(25)
Total temporarily impaired securities	$	5,490	$	(26)	$	2,523	$	(5)	$	8,013	$	(31)

At June 30, 2020, the Company had three securities with an unrealized loss for more than twelve months of $5,000 which consisted of two U.S. government agencies-GSEs and one mortgage-backed GSE bond.  Four securities had unrealized losses for less than twelve months totaling $26,000 at June 30, 2020, which consisted of two Municipal bonds, one corporate bond and one mortgage-backed GSE bond . All unrealized losses are attributable to the general trend of interest rates.

	December 31, 2019
	Less Than 12 Months				12 Months or More				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	value		losses		value		losses		value		losses
	(dollars in thousands)
Securities available for sale:
U.S. government agencies – GSE’s	$	872	$	—	$	621	$	(2)	$	1,493	$	(2)
Mortgage-backed securities–GSE’s		2,672		(3)		3,774		(10)		6,446		(13)
Corporate bonds		—		—		—		—		—		—
Municipal bonds		—		—		—		—		—		—
Total temporarily impaired securities	$	3,544	$	(3)	$	4,395	$	(12)	$	7,939	$	(15)

At December 31, 2019, the Company had two mortgage-backed GSE’s and one U.S Government agency – GSE with an unrealized loss for twelve or more consecutive months totaling $12,000. The Company had three securities with a loss for twelve months or less at December 31, 2019. One U.S. government agency GSE and two mortgage-backed GSE’s had unrealized losses for less than twelve months totaling $3,000 at December 31, 2019. All unrealized losses are attributable to the general trend of interest rates.