NOTE

— SECURITIES

Equity Securities

The Company held equity securities with fair values of

$3,106,000

and

$3,112,000

December 31, 2018

and

December 31, 2017,

respectively. There were

sales of equity securities during the year ended

December 31, 2018.

Consistent with ASU

2016

01,

these securities are carried at fair value with the changes in fair value recognized in the consolidated statement of income. Accordingly, the Company recognized an unrealized loss of

$90,000

during the year ended

December 31, 2018.

Debt Securities

Debt securities have been classified in the financial statements as available for sale. The amortized cost and estimated fair values of debt securities as of

December 31, 2018

are as follows:

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value

Available-for-sale securities:
U.S. agencies	$	44,474	$	135	$	(503	)	$	44,106
Collateralized mortgage obligations		2,071		0		(59	)		2,012
Municipalities		92,257		1,404		(424	)		93,237
SBA pools		8,707		13		(47	)		8,673
Corporate debt		21,426		62		(901	)		20,587
Asset backed securities		38,395		119		(417	)		38,097
	$	207,330	$	1,733	$	(2,351	)	$	206,712

The following tables detail the gross unrealized losses and fair values aggregated of debt securities by investment category and length of time that individual securities have been in a continuous unrealized loss position at

December

31,

2018.

(dollars in thousands)	Less than 12 months					12 months or more					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. agencies	$	22,007	$	(230	)	$	11,972	$	(273	)	$	33,979	$	(503	)
Collateralized mortgage obligations		93		(1	)		1,917		(60	)		2,010		(61	)
Municipalities		9,630		(55	)		26,559		(367	)		36,189		(422	)
SBA pools		3,284		(8	)		3,726		(40	)		7,010		(48	)
Corporate debt		3,999		(59	)		11,645		(842	)		15,644		(901	)
Asset backed securities		23,604		(412	)		1,853		(4	)		25,457		(416	)
Total temporarily impaired securities	$	62,617	$	(765	)	$	57,672	$	(1,586	)	$	120,289	$	(2,351	)

December 31, 2018,

thirty-four

municipalities,

eleven

U.S. agencies,

nine

corporate debts,

four

Small Business Administration pools,

three

collateralized mortgage obligations and

two

asset backed securities make up the total debt securities in an unrealized loss position for greater than

months. At

December 31, 2018,

eighteen

U.S. agencies,

fourteen

municipalities,

twelve

asset backed securities,

three

SBA pools,

two

corporate debts,

one

collateralized mortgage obligation make up the total debt securities in a loss position for less than

months. Management periodically evaluates each available-for-sale investment security in an unrealized loss position to determine if the impairment is temporary or other than temporary. This evaluation encompasses various factors including, the nature of the investment, the cause of the impairment, the severity and duration of the impairment, credit ratings and other credit related factors such as

third

party guarantees and the volatility of the security’s fair value. Management has determined that

investment security is other than temporarily impaired. The unrealized losses are due primarily to interest rate changes and the Company does

not

intend to sell the securities and it is

not

likely that the Company will be required to sell the securities before the earlier of the forecasted recovery or the maturity of the underlying investment security.

The amortized cost and estimated fair value of debt securities at

December

31,

2018,

by contractual maturity or call date, are shown below. 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.

(dollars in thousands)	Amortized		Fair
	Cost		Value
Available-for-sale securities:
Due in one year or less	$	36,972	$	36,940
Due after one year through five years		55,017		55,259
Due after five years through ten years		46,406		46,084
Due after ten years		68,935		68,429
	$	207,330	$	206,712

The amortized cost and estimated fair values of debt securities as of

December

31,

2017,

are as follows:

(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value

Available-for-sale securities:
U.S. agencies	$	29,741	$	374	$	(143	)	$	29,972
Collateralized mortgage obligations		2,628		1		(36	)		2,593
Municipalities		91,201		2,174		(308	)		93,067
SBA pools		11,818		46		(14	)		11,850
Corporate debt		19,358		112		(681	)		18,789
Asset backed securities		22,866		125		(14	)		22,977
	$	177,612	$	2,832	$	(1,196	)	$	179,248

The following tables detail the gross unrealized losses and fair values of debt securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at

December

31,

2017.

(dollars in thousands)	Less than 12 months					12 months or more					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. agencies	$	10,588	$	(46	)	$	5,437	$	(97	)	$	16,025	$	(143	)
Collateralized mortgage obligations		1,090		(11	)		921		(26	)		2,011		(37	)
Municipalities		28,779		(236	)		5,611		(72	)		34,390		(308	)
SBA pools		1,998		(4	)		703		(9	)		2,701		(13	)
Corporate debt		1,994		(6	)		13,815		(675	)		15,809		(681	)
Asset backed securities		6,154		(13	)		333		(1	)		6,487		(14	)
Total temporarily impaired securities	$	50,603	$	(316	)	$	26,820	$	(880	)	$	77,423	$	(1,196	)

The Company recognized gross realized gains of

$11,000

and

$395,000

during

2018

and

2017,

respectively, on certain available-for-sale securities that were called. During

2018,

there was

one

sale of a municipality security resulting in a gross gain of

$70,000

and there were

sales of securities during

2017.

Securities carried at

$118,771,000

and

$109,158,000

December

31,

2018

and

2017,

respectively, were pledged to secure deposits of public funds.