Investment securities available for sale

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 2. Investment securities available for sale

 

The amortized cost and estimated fair value of investment securities available for sale as of December 31, 2016 and 2015 are as follows (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
December 31, 2016
U.S. Government agencies	$	32,475	$	-	$	(229)	$	32,246
Mortgage-backed securities		11,694		1		(47)		11,648
	$	44,169	$	1	$	(276)	$	43,894
December 31, 2015
U.S. Government agencies	$	34,286	$	-	$	(573)	$	33,713
Mortgage-backed securities		3,043		1		(43)		3,001
Municipals		1,255		-		(50)		1,205
	$	38,584	$	1	$	(666)	$	37,919

Investment securities with book values of approximately $1,050,000 and $5,968,000 at December 31, 2016 and 2015, respectively, were pledged to secure deposit repurchase agreements.

Gross realized gains and losses pertaining to available for sale securities are detailed as follows for the years ending December 31, 2016, 2015 and 2014 (in thousands):

	2016		2015		2014
Gross realized gains	$	162	$	13	$	218
Gross realized losses		-		(7)		(428)
	$	162	$	6	$	(210)

The Company sold approximately $22 million, $8 million and $22 million of investment securities available for sale at a gain of $162,000 and $6,000 in 2016 and 2015, respectively and a loss of $210,000 in 2014. The sale of these securities, which had fixed interest rates, allowed the Company to decrease its exposure to the anticipated upward movement in interest rates that would result in unrealized losses being recognized in shareholders’ equity. In 2014, approximately $15 million of the proceeds from the sale of these securities were used to purchase rehabilitated student loans that have variable interest rates that will increase as interest rates in general increase.

Investment securities available for sale that have an unrealized loss position at December 31, 2016 and December 31, 2015 are detailed below (in thousands):

	Securities in a loss				Securities in a loss
	position for less than				position for more than
	12 Months				12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
December 31, 2016
US Government Agencies	$	27,291	$	(213)	$	2,852	$	(16)	$	30,143	$	(229)
Mortgage-backed securities		9,450		(47)		-		-		9,450		(47)
	$	36,741	$	(260)	$	2,852	$	(16)	$	39,593	$	(276)
December 31, 2015
US Government Agencies	$	18,598	$	(329)	$	15,115	$	(244)	$	33,713	$	(573)
Municipals		707		(14)		497		(36)		1,204		(50)
Mortgage-backed securities		2,899		(43)		-		-		2,899		(43)
	$	22,204	$	(386)	$	15,612	$	(280)	$	37,816	$	(666)

All of the unrealized losses are attributable to increases in interest rates and not to credit deterioration. Currently, the Company believes that it is probable that the Company will be able to collect all amounts due according to the contractual terms of the investments. Because the decline in market value is attributable to changes in interest rates and not to credit quality, and because it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider these investments to be other than temporarily impaired at December 31, 2016.

The amortized cost and estimated fair value of investment securities available for sale as of December 31, 2016, by contractual maturity, are as follows (in thousands):

	Amortized		Estimated
	Cost		Fair Value
One to five years	$	33,131	$	32,885
More than ten years		11,038		11,009
Total	$	44,169	$	43,894