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Investment Securities
 12 Months Ended
Dec. 31, 2019
Investments Debt And Equity Securities [Abstract]  
Investment Securities

NOTE 4 - INVESTMENT SECURITIES

The following table summarizes the amortized cost and fair value of available for sale (“AFS”) securities and held to maturity (“HTM”) securities at December 31, 2019 and 2018, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

(dollars in thousands)

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

December 31, 2019

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency securities

 

$

1,591

 

 

$

—

 

 

$

(19

)

 

$

1,572

 

SBA agency securities

 

 

4,671

 

 

 

42

 

 

 

(22

)

 

 

4,691

 

Mortgage-backed securities- Government sponsored agencies

 

 

19,126

 

 

 

74

 

 

 

(29

)

 

 

19,171

 

Collateralized mortgage obligations

 

 

11,641

 

 

 

38

 

 

 

(25

)

 

 

11,654

 

Corporate debt securities

 

 

88,700

 

 

 

281

 

 

 

—

 

 

 

88,981

 

Total

 

$

125,729

 

 

$

435

 

 

$

(95

)

 

$

126,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal taxable securities

 

$

3,505

 

 

$

147

 

 

$

—

 

 

$

3,652

 

Municipal securities

 

 

4,827

 

 

 

153

 

 

 

—

 

 

 

4,980

 

Total

 

$

8,332

 

 

$

300

 

 

$

—

 

 

$

8,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency securities

 

$

1,873

 

 

$

—

 

 

$

(58

)

 

$

1,815

 

SBA agency securities

 

 

5,354

 

 

 

—

 

 

 

(185

)

 

 

5,169

 

Mortgage-backed securities- Government sponsored agencies

 

 

23,125

 

 

 

—

 

 

 

(584

)

 

 

22,541

 

Collateralized mortgage obligations

 

 

12,696

 

 

 

1

 

 

 

(631

)

 

 

12,066

 

Corporate debt securities

 

 

32,615

 

 

 

105

 

 

 

(549

)

 

 

32,171

 

Total

 

$

75,663

 

 

$

106

 

 

$

(2,007

)

 

$

73,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal taxable securities

 

$

4,290

 

 

$

142

 

 

$

—

 

 

$

4,432

 

Municipal securities

 

 

5,671

 

 

 

1

 

 

 

(164

)

 

 

5,508

 

Total

 

$

9,961

 

 

$

143

 

 

$

(164

)

 

$

9,940

 

 

During 2019 and 2018 the Company sold $6.1 million and $44.6 million of securities, recognizing gross gains of $7,000 and $5,000, respectively. The Company did not sell any securities in 2017.

One security with a fair value of $627,000 and $697,000 was pledged to secure a local agency deposit at December 31, 2019 and December 31, 2018, respectively.

The amortized cost and fair value of the investment securities portfolio as of December 31, 2019 are shown by expected maturity below.  Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.  

 

 

 

Less than

One Year

 

 

More than One Year

to Five Years

 

 

More than Five Years

to Ten Years

 

 

More than

Ten Years

 

 

Total

 

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

 

Amortized

 

 

Estimated

 

(dollars in thousands)

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency securities

 

$

—

 

 

$

—

 

 

$

1,591

 

 

$

1,572

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,591

 

 

$

1,572

 

SBA securities

 

 

—

 

 

 

—

 

 

 

714

 

 

 

725

 

 

 

3,957

 

 

 

3,966

 

 

 

—

 

 

 

—

 

 

 

4,671

 

 

 

4,691

 

Mortgage-backed securities-

   Government sponsored agencies

 

 

3,663

 

 

 

3,679

 

 

 

13,027

 

 

 

13,059

 

 

 

2,436

 

 

 

2,433

 

 

 

—

 

 

 

—

 

 

 

19,126

 

 

 

19,171

 

Collateralized mortgage obligations

 

 

—

 

 

 

—

 

 

 

9,288

 

 

 

9,265

 

 

 

2,353

 

 

 

2,389

 

 

 

—

 

 

 

—

 

 

 

11,641

 

 

 

11,654

 

Corporate debt securities

 

 

70,914

 

 

 

70,919

 

 

 

2,002

 

 

 

2,008

 

 

 

11,772

 

 

 

12,024

 

 

 

4,012

 

 

 

4,030

 

 

 

88,700

 

 

 

88,981

 

Total available for sale

 

$

74,577

 

 

$

74,598

 

 

$

26,622

 

 

$

26,629

 

 

$

20,518

 

 

$

20,812

 

 

$

4,012

 

 

$

4,030

 

 

$

125,729

 

 

$

126,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal taxable securities

 

$

285

 

 

$

289

 

 

$

2,716

 

 

$

2,784

 

 

$

504

 

 

$

579

 

 

$

—

 

 

$

—

 

 

$

3,505

 

 

$

3,652

 

Municipal securities

 

 

—

 

 

 

—

 

 

 

40

 

 

 

40

 

 

 

366

 

 

 

379

 

 

 

4,421

 

 

 

4,561

 

 

 

4,827

 

 

 

4,980

 

Total held to maturity

 

$

285

 

 

$

289

 

 

$

2,756

 

 

$

2,824

 

 

$

870

 

 

$

958

 

 

$

4,421

 

 

$

4,561

 

 

$

8,332

 

 

$

8,632

 

 

 

The following table summarizes investment securities with unrealized losses at December 31, 2019 and December 31, 2018, aggregated by major security type and length of time in a continuous unrealized loss position:

 

 

 

Less than Twelve Months

 

 

Twelve Months or More

 

 

Total

 

(dollars in thousands)

 

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

No. of

Issuances

 

 

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

No. of

Issuances

 

 

Unrealized

Losses

 

 

Estimated

Fair Value

 

 

No. of

Issuances

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency securities

 

$

(19

)

 

$

1,572

 

 

 

2

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

(19

)

 

$

1,572

 

 

 

2

 

SBA securities

 

 

(22

)

 

 

1,469

 

 

 

2

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(22

)

 

 

1,469

 

 

 

2

 

Mortgage-backed securities- Government

   sponsored agencies

 

 

(5

)

 

 

2,631

 

 

 

4

 

 

 

(24

)

 

 

3,912

 

 

 

6

 

 

 

(29

)

 

 

6,543

 

 

 

10

 

Collateralized mortgage obligations

 

 

(10

)

 

 

5,738

 

 

 

3

 

 

 

(15

)

 

 

953

 

 

 

2

 

 

 

(25

)

 

 

6,691

 

 

 

5

 

Corporate debt securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total available for sale

 

$

(56

)

 

$

11,410

 

 

 

11

 

 

$

(39

)

 

$

4,865

 

 

 

8

 

 

$

(95

)

 

$

16,275

 

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government agency securities

 

$

—

 

 

$

—

 

 

 

—

 

 

$

(58

)

 

$

1,815

 

 

 

2

 

 

$

(58

)

 

$

1,815

 

 

 

2

 

SBA securities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(185

)

 

 

5,169

 

 

 

4

 

 

 

(185

)

 

 

5,169

 

 

 

4

 

Mortgage-backed securities- Government

   sponsored agencies

 

 

(12

)

 

 

1,640

 

 

 

1

 

 

 

(572

)

 

 

20,901

 

 

 

23

 

 

 

(584

)

 

 

22,541

 

 

 

24

 

Collateralized mortgage obligations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(631

)

 

 

12,065

 

 

 

8

 

 

 

(631

)

 

 

12,065

 

 

 

8

 

Corporate debt securities

 

 

(61

)

 

 

4,600

 

 

 

4

 

 

 

(488

)

 

 

6,548

 

 

 

4

 

 

 

(549

)

 

 

11,148

 

 

 

8

 

Total available for sale

 

$

(73

)

 

$

6,240

 

 

 

5

 

 

$

(1,934

)

 

$

46,498

 

 

 

41

 

 

$

(2,007

)

 

$

52,738

 

 

 

46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal securities

 

$

(104

)

 

$

2,468

 

 

 

6

 

 

$

(60

)

 

$

2,174

 

 

 

4

 

 

$

(164

)

 

$

4,642

 

 

 

10

 

Total held to maturity

 

$

(104

)

 

$

2,468

 

 

 

6

 

 

$

(60

)

 

$

2,174

 

 

 

4

 

 

$

(164

)

 

$

4,642

 

 

 

10

 

 

Unrealized losses have not been recognized into income because the issuer bonds are of high credit quality, management does not intend to sell, it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery and the decline in fair value is largely due to changes in interest rates.  The fair value is expected to recover as the bonds approach maturity.

 

Management evaluates securities for other-than-temporary impairment (“OTTI”) on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis.  If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.