Note 2 - Investment Securities

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

Note 2. Investment Securities

The amortized cost and fair value of available-for-sale securities as of June 30, 2016 and December 31, 2015, are as follows:

(Dollars In Thousands)	June 30, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U. S. Government agency securities	$	13,598	$	300	$	(40	)	$	13,858
Mortgage-backed securities and CMO’s		21,395		211		(28	)		21,578
Corporate securities		2,500		–		–			2,500
Municipal securities		15,887		686		(11	)		16,562
	$	53,380	$	1,197	$	(79	)	$	54,498

(Dollars In Thousands)	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
U. S. Government agency securities	$	16,899	$	227	$	(107	)	$	17,019
Mortgage-backed securities and CMO’s		18,289		75		(174	)		18,190
Municipal securities		16,756		594		(15	)		17,335
	$	51,944	$	896	$	(296	)	$	52,544

U. S. Government and federal agency securities:

The unrealized losses on ten of the Company’s investments in obligations of the U. S. government were caused by increases in market interest rates over the yields available at the time the securities were purchased.  The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired

at June 30, 2016.

Mortgage-backed securities and CMO’s:

The unrealized losses on eight of the Company’s investments in government-sponsored entity mortgage-backed securities and collateralized mortgage obligations (“CMOs”) were caused by increases in market interest rates over the yields available at the time the securities were purchased. Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2016.

Corporate securities

:

The Company had no investments with unrealized losses in corporate securities at June 30, 2016.

Municipal securities:

The unrealized losses on four of the Company’s investments in municipal securities were caused by increases in market interest rates over the yields available at the time the securities were purchased. All municipal securities are investment grade. Because the decline in market value is attributable to changes in interest rates, credit spreads, and not credit quality, and because the Company does not intend to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired

at June 30, 2016.

The following tables demonstrate the unrealized loss position of available-for-sale securities at June 30, 2016 and December 31, 2015. This information summarizes the amount of time individual securities have been in a continuous, unrealized loss position.

	June 30, 2016
	Less than 12 months					12 months or more					Total
(Dollars In Thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U. S. Government agency securities	$	692	$	(1	)	$	3,799	$	(39	)	$	4,491	$	(40	)
Mortgage-backed securities and CMO’s		280		(2	)		1,703		(26	)		1,983		(28	)
Municipal securities		863		(11	)		270		-			1,133		(11	)
	$	1,835	$	(14	)	$	5,772	$	(65	)	$	7,607	$	(79	)

	December 31, 2015
	Less than 12 months					12 months or more					Total
(Dollars In Thousands)	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. Government agency securities	$	1,999	$	(24	)	$	4,924	$	(83	)	$	6,923	$	(107	)
Mortgage-backed securities and CMO’s		10,326		(114	)		3,069		(60	)		13,395		(174	)
Municipal securities		805		(10	)		526		(5	)		1,331		(15	)
	$	13,130	$	(148	)	$	8,519	$	(148	)	$	21,649	$	(296	)

There are twenty-two debt securities with fair values totaling $7.6 million considered temporarily impaired at June 30, 2016.  As of June 30, 2016, the Company does not consider any bond in an unrealized loss position to be other-than-temporarily impaired.

The Company realized gains of $219 thousand and $5 thousand of losses on sales of securities in the first six months of 2016. The Company realized gains of $55 thousand and $15 thousand of losses during the same period last year.

The amortized cost and fair values of investment securities available for sale at June 30, 2016, by contractual maturity are as follows:

(Dollars In Thousands)	Amortized Cost		Fair Value
One year or less	$	132	$	133
Over one through five years		1,213		1,232
Over five through ten years		12,694		12,845
Greater than 10 years		39,341		40,288
	$	53,380	$	54,498