NOTE 3 - SECURITIES AVAILABLE-FOR-SALE

The following tables present the amortized costs, unrealized gains, unrealized losses, and estimated fair values of securities available-for-sale at December 31, 2019 and 2018:


	December 31, 2019
							Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Values
SECURITIES AVAILABLE-FOR-SALE
U.S. agency securities	$	8,986	$	95	$	(15)	$	9,066
Corporate securities		10,525		52		(7)		10,570
Municipal bonds		20,516		604		—		21,120
Mortgage-backed securities		62,745		405		(300)		62,850
U.S. Small Business Administration securities		22,281		191		(21)		22,451
Total securities available-for-sale	$	125,053	$	1,347	$	(343)	$	126,057


	December 31, 2018
							Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Values
SECURITIES AVAILABLE-FOR-SALE
U.S. agency securities	$	16,052	$	32	$	(197)	$	15,887
Corporate securities		7,074		—		(209)		6,865
Municipal bonds		14,446		23		(275)		14,194
Mortgage-backed securities		45,827		83		(1,074)		44,836
U.S. Small Business Administration securities		15,690		—		(267)		15,423
Total securities available-for-sale	$	99,089	$	138	$	(2,022)	$	97,205

At December 31, 2019, the Bank pledged seven securities held at the FHLB of Des Moines with a carrying value of $7.4 million to secure Washington State public deposits of $10.3 million with a $4.0 million collateral requirement by the Washington Public Deposit Protection Commission. At December 31, 2018, the Bank pledged 11 securities held at the FHLB of Des Moines with a carrying value of $13.7 million to secure Washington State public deposits of $19.9 million with an $8.4 million minimum collateral requirement by the Washington Public Deposit Protection Commission.

Investment securities that were in an unrealized loss position at December 31, 2019 and 2018 are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position. Management believes that these securities are only temporarily impaired due to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of the securities, and not due to concerns regarding the underlying credit of the issuers or the underlying collateral.


	December 31, 2019
	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
SECURITIES AVAILABLE-FOR-SALE
U.S. agency securities	$	2,977	$	(15)	$	—	$	—	$	2,977	$	(15)
Corporate securities		1,993		(7)		—		—		1,993		(7)
Mortgage-backed securities		12,345		(154)		11,459		(146)		23,804		(300)
U.S. Small Business Administration securities		4,395		(21)		—		—		4,395		(21)
Total	$	21,710	$	(197)	$	11,459	$	(146)	$	33,169	$	(343)


	December 31, 2018
	Less than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
SECURITIES AVAILABLE-FOR-SALE
U.S. agency securities	$	6,018	$	(25)	$	4,822	$	(172)	$	10,840	$	(197)
Corporate securities		975		(25)		5,890		(184)		6,865		(209)
Municipal bonds		2,098		(22)		8,787		(253)		10,885		(275)
Mortgage-backed securities		6,266		(40)		32,537		(1,034)		38,803		(1,074)
U.S. Small Business Administration securities		1,958		(11)		13,465		(256)		15,423		(267)
Total	$	17,315	$	(123)	$	65,501	$	(1,899)	$	82,816	$	(2,022)

There were 13 investments with unrealized losses of less than one year and 10 investments with unrealized losses of more than one year at December 31, 2019. There were 14 investments with unrealized losses of less than one year and 48 investments with unrealized losses of more than one year at December 31, 2018. The unrealized losses associated with these investments are believed to be caused by changing market conditions that are considered to be temporary and the Company does not intend to sell these securities, and it is not likely to be required to sell these securities prior to maturity. Based on the Company’s evaluation of these securities, no OTTI was recorded for the years ended December 31, 2019 and 2018.

The contractual maturities of securities available-for-sale at December 31, 2019 and 2018 are listed below. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations; therefore, these securities are classified separately with no specific maturity date.


	December 31, 2019				December 31, 2018
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
U.S. agency securities
Due after one year through five years	$	996	$	1,036	$	1,043	$	1,040
Due after five years through ten years		3,997		4,027		10,011		9,941
Due after ten years		3,993		4,003		4,998		4,906
Subtotal		8,986		9,066		16,052		15,887
Corporate securities
Due in one year or less		5,034		5,044		—		—
Due after one year through five years		3,491		3,532		6,077		5,947
Due after five years through ten years		2,000		1,994		997		918
Subtotal		10,525		10,570		7,074		6,865
Municipal bonds
Due after one year through five years		3,774		3,833		2,659		2,570
Due after five years through ten years		3,162		3,307		2,610		2,592
Due after ten years		13,580		13,980		9,177		9,032
Subtotal		20,516		21,120		14,446		14,194
Mortgage-backed securities
Federal National Mortgage Association (“FNMA”)		42,131		42,333		30,554		30,026
Federal Home Loan Mortgage Corporation (“FHLMC”)		15,250		15,179		10,301		9,961
Government National Mortgage Association (“GNMA”)		5,364		5,338		4,972		4,849
Subtotal		62,745		62,850		45,827		44,836
U.S. Small Business Administration securities
Due after one year through five years		1,546		1,555		—		—
Due after five years through ten years		11,500		11,598		13,828		13,581
Due after ten years		9,235		9,298		1,862		1,842
Subtotal		22,281		22,451		15,690		15,423
Total	$	125,053	$	126,057	$	99,089	$	97,205

The proceeds and resulting gains and losses, computed using specific identification from sales of securities available-for-sale for the years ended December 31, 2019 and 2018 were as follows:


	December 31, 2019
	Proceeds		Gross Gains		Gross Losses
Securities available-for-sale	$	10,554	$	91	$	(59)


	December 31, 2018
	Proceeds		Gross Gains		Gross Losses
Securities available-for-sale	$	24,312	$	185	$	(14)