NOTE 3 - 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 December 31, 2018 and December 31, 2017 (in thousands):


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2018	Cost		Gains		Losses		Value
Investment securities available-for-sale:
U.S. Treasury debt	$	250	$	—	$	—	$	250
Government National Mortgage Association (“GNMA”) mortgage-backed securities – residential		35,591		8		(1,597)		34,002
Federal National Mortgage Association (“FNMA”) mortgage-backed securities – residential		4,076		2		(208)		3,870
Securities issued by U.S. government sponsored entities and agencies		4,525		—		(223)		4,302
Corporate collateralized mortgage obligations ("CMO") and mortgage-backed securities ("MBS")		1,281		1		(11)		1,271
Small Business Investment Company		1,206		—		—		1,206
Total securities available-for-sale	$	46,929	$	11	$	(2,039)	$	44,901


			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
FNMA mortgage-backed securities – residential		4,530		13		(144)		4,399
Securities issued by U.S. government sponsored entities and agencies		5,206		—		(152)		5,054
Corporate CMO and MBS		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

Net amortization of premiums and discounts related to mortgage securities during the years ended December 31, 2018 and 2017 was $0.2 million and $0.4 million, which are included with interest income.

In 2014 the Company began investing in a small business investment company ("SBIC") fund administered by the Small Business Administration. During 2018 and 2017, the Company invested $0.3 million and $0.2 million in SBIC. The Company may invest up to an additional $1.8 million in SBIC through 2019.

At December 31, 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.


	Amortized		Fair
December 31, 2018	Cost		Value
Due after one year through five years	$	250	$	251
Securities (agency and CMO)		45,473		43,444
Total	$	45,723	$	43,695

At December 31, 2018 and December 31, 2017, securities with carrying values totaling $5.4 million and $23.7 million, respectively, were pledged to secure various public deposits and credit facilities of the Company.

At December 31, 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 December 31, 2018 and December 31, 2017, thirty-three securities and twenty‑eight securities were in an unrealized loss position, with unrealized losses totaling $2.0 million and $1.6 million, respectively. Twenty-six of the securities in an unrealized loss position at December 31, 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 December 31, 2018.

The following table summarizes securities with unrealized losses at December 31, 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
December 31, 2018	Value		Losses		Value		Losses		Value		Losses
U.S. Treasury debt	$	—	$	—	$	—	$	—	$	—	$	—
GNMA mortgage-backed securities – residential		201		—		32,696		(1,597)		32,897		(1,597)
FNMA mortgage-backed securities – residential		436		(3)		3,215		(205)		3,651		(208)
Securities issued by U.S. government sponsored entities and agencies		—		—		4,302		(223)		4,302		(223)
Corporate CMO and MBS		1,145		(9)		63		(2)		1,208		(11)
Total	$	1,782	$	(12)	$	40,276	$	(2,027)	$	42,058	$	(2,039)


	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)
FNMA mortgage-backed securities – residential		—		—		3,591		(144)		3,591		(144)
Securities issued by U.S. government sponsored entities and agencies		677		(2)		4,377		(150)		5,054		(152)
Corporate CMO and MBS		—		—		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 year ended December 31, 2018. The Company sold $58.6 million of securities and realized $0.2 million of gains and realized $0.1 million of losses, from the sale of securities using the specific identification method for the year ended December 31, 2017.