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SECURITIES
 12 Months Ended
Dec. 31, 2016
SECURITIES  
SECURITIES

5. SECURITIES

 

A summary of securities is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

 

    

Gross

    

Gross

    

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

 

 

Cost

 

Gains

 

Losses

 

Value

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$
2,362

 

$
27

 

$
(4)

 

$
2,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
17,472

 

 
57

 

 
(142)

 

 
17,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities available for sale

 

$
19,834

 

$
84

 

$
(146)

 

$
19,772

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$
570

 

$

 —

 

$
(5)

 

$
565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
1,933

 

 
3

 

 
(11)

 

 
1,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities held to maturity

 

$
2,503

 

$
3

 

$
(16)

 

$
2,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$
2,410

 

$
62

 

$
(2)

 

$
2,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
16,543

 

 
104

 

 
(89)

 

 
16,558

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities available for sale

 

$
18,953

 

$
166

 

$
(91)

 

$
19,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$
573

 

$
12

 

$

 —

 

$
585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
2,539

 

 
4

 

 

 —

 

 
2,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities held to maturity

 

$
3,112

 

$
16

 

$

 —

 

$
3,128

 

 

All residential mortgage-backed securities have been issued by government-sponsored enterprises and government agencies.

 

There were no sales of securities for the year ended December 31, 2016.  For the year ended December 31, 2015, proceeds from the sale of securities amounted to $867,000,  $204,000 from the sale of securities available for sale and $663,000 from the sale of securities held to maturity. The gain realized on the sales amounted to $60,000,  $21,000 from the sale of securities available for sale and $39,000 from the sale of securities held to maturity.  Income tax expense recognized related to the realized gain on sales during the year ended December 31, 2015 was $21,000.  The held to maturity securities sold had a substantial portion, greater than 85%, of their principal balance collected through scheduled payments.  Since a substantial portion of the principal outstanding at acquisition was collected, the sale of the held to maturity securities was considered equivalent to holding the securities to maturity, in accordance with ASC 320-10-25, and did not taint the holding of the other held to maturity securities.

 

 

The scheduled maturities of debt securities at December 31, 2016 are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale

 

Held to Maturity

 

 

    

Amortized

    

Fair

    

Amortized

    

Fair

 

 

 

Cost

 

Value

 

Cost

 

Value

 

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

After five years through ten years

 

$
528

 

$
537

 

$

 —

 

$

 —

 

Over ten years

 

 
1,834

 

 
1,848

 

 
570

 

 
565

 

 

 

 
2,362

 

 
2,385

 

 
570

 

 
565

 

Residential mortgage-backed securities

 

 
17,472

 

 
17,387

 

 
1,933

 

 
1,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
19,834

 

$
19,772

 

$
2,503

 

$
2,490

 

 

Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

 

 

Certain securities are pledged as collateral for FHLB advances.  See Note 9 — Federal Home Loan Bank Advances for further information.

 

Information pertaining to securities with gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous loss position, is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Than Twelve Months

 

Twelve Months Or Longer

 

 

    

Gross

    

 

 

    

Gross

    

 

 

 

 

 

Unrealized

 

Fair

 

Unrealized

 

Fair

 

 

 

Losses

 

Value

 

Losses

 

Value

 

 

 

(In thousands)

 

At December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$
(4)

 

$
512

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
(142)

 

 
8,718

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities available for sale

 

 
(146)

 

 
9,230

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

 
(5)

 

 
565

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
(11)

 

 
1,898

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total securities held to maturity

 

 
(16)

 

 
2,463

 

 

 —

 

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired securities

 

$
(162)

 

$
11,693

 

$

 —

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal

 

$

—

 

$

—

 

$
(2)

 

$
244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed securities

 

 
(20)

 

 
3,946

 

 
(69)

 

 
3,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired securities

 

$
(20)

 

$
3,946

 

$
(71)

 

$
3,473

 

 

The unrealized losses on eleven securities in the December 31, 2016 table above were primarily caused by changes in interest rates and not by credit quality.  Seven of the investments are guaranteed by the U.S. Government or its agencies and the four remaining municipal securities were issued by the city of New York, Washington State, and the school districts of Circleville and Fremont, Ohio.  Management has not decided to sell these securities, nor is it likely that the Company will be required to sell the securities; as such no declines are deemed to be other than temporary.