NOTE 2 - INVESTMENT SECURITIES

The following presents the amortized cost and fair value of securities available‑for‑sale, with gross unrealized gains and losses recognized in accumulated other comprehensive income as of September 30, 2018 and December 31, 2017 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
September 30, 2018	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(1)	$	249
Government National Mortgage
Association (“GNMA”) mortgage-backed securities – residential		36,792		4		(2,274)		34,522
Securities issued by U.S. government sponsored entities and agencies		8,775		—		(494)		8,281
Corporate collateralized mortgage obligations and mortgage-backed securities		1,423		2		(2)		1,423
Small Business Investment Company		1,017		—		—		1,017
Total securities available-for-sale	$	48,257	$	6	$	(2,771)	$	45,492


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2017	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	(1)	$	249
GNMA mortgage-backed securities – residential		42,001		27		(1,192)		40,836
Securities issued by U.S. government sponsored entities and agencies		9,736		13		(296)		9,453
Corporate collateralized mortgage obligations and mortgage-backed securities		1,529		—		(50)		1,479
Small Business Investment Company		930		—		—		930
Equity mutual funds		750		—		(47)		703
Total securities available-for-sale	$	55,196	$	40	$	(1,586)	$	53,650

At September 30, 2018, the amortized cost and estimated fair value of available‑for‑sale securities, excluding SBIC (“Small Business Investment Company”) have contractual maturity dates shown in the table below (in thousands). 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. Securities not due at a single maturity date are shown separately. As of September 30, 2018, equity mutual funds have been recorded at fair value within the other assets line item in the consolidated balance sheet with changes recorded in the other line item in the consolidated statement of income (in thousands).


	Amortized		Fair
September 30, 2018	Cost		Value
Due after one year through five years	$	557	$	554
Securities (agency and collateralized mortgage obligations)		46,683		43,921
	$	47,240	$	44,475

At September 30, 2018 and December 31, 2017, securities with carrying values totaling $5.5 million and $23.7 million, respectively, were pledged to secure various public deposits and credit facilities of the Company.

At September 30, 2018 and December 31, 2017, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

At September 30, 2018 and December 31, 2017, thirty-five securities and twenty‑eight securities were in an unrealized loss position, with unrealized losses totaling $2.8 million and $1.6 million, respectively. Twenty-one of the securities in an unrealized loss position at September 30, 2018 have been in a continuous unrealized loss position for more than twelve months, the remaining securities in a loss position have been in a continuous unrealized loss position for less than 12 months. The unrealized loss positions were caused primarily by interest rate changes and market assumptions about prepayments of principal and interest on the underlying mortgages. Because the decline in market value is attributable to market conditions, not credit quality, and because the Company has the ability and intent to hold these investments until a recovery of fair value, which may be near or at maturity, the Company does not consider these investments to be other‑than‑temporarily impaired at September 30, 2018.

The following table summarizes securities with unrealized losses at September 30, 2018 and December 31, 2017, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands, before tax):


	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
September 30, 2018	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	249	$	(1)	$	—	$	—	$	249	$	(1)
GNMA mortgage-backed securities – residential		1,874		(38)		31,998		(2,236)		33,872		(2,274)
Securities issued by U.S. government sponsored entities and agencies		741		(9)		7,321		(485)		8,062		(494)
Corporate collateralized mortgage obligations and mortgage-backed securities		63		(2)		—		—		63		(2)
Total	$	2,927	$	(50)	$	39,319	$	(2,721)	$	42,246	$	(2,771)


	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2017	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	—	$	—	$	249	$	(1)	$	249	$	(1)
GNMA mortgage-backed securities – residential		11,621		(237)		27,480		(955)		39,101		(1,192)
Securities issued by U.S. government sponsored entities and agencies		677		(2)		7,968		(294)		8,645		(296)
Corporate collateralized mortgage obligations and mortgage-backed securities		—		—		1,316		(50)		1,316		(50)
Equity mutual funds		—		—		703		(47)		703		(47)
Total	$	12,298		(239)		37,716		(1,347)		50,014		(1,586)

The Company did not sell any securities during the three and nine months ended September 30, 2018. The Company sold $29.6 million of securities and realized $0.1 million of gains and realized an immaterial amount of losses, from the sale of securities using the specific identification method for the three months ended September 30, 2017. The Company sold $52.1 million of securities and realized $0.2 million of gains and realized an immaterial amount of losses, from the sale of securities using the specific identification method for the nine months ended September 30, 2017.