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Securities
 12 Months Ended
Dec. 31, 2017
Investments, Debt and Equity Securities [Abstract]  
Securities

Note 3 - Securities

 

The amortized cost and estimated fair value of securities with gross unrealized gains and losses at December 31, 2017 and 2016 are as follows:

 

    Amortized
Cost		     Gross
Unrealized
Gains		     Gross
Unrealized
Losses		     Fair
Value		  
    (In Thousands)  
December 31, 2017:                                
Available-for-Sale:                                
U.S. Government and agency obligations   $ 10,612     $ -     $ (142 )   $ 10,470  
Mortgage-backed securities - residential     7,909       19       (85 )     7,843  
                                 
    $ 18,521     $ 19     $ (227 )   $ 18,313  
Held-to-Maturity:                                
Mortgage-backed securities - residential   $ 637     $ 9     $ -     $ 646  
State and municipal securities     5,938       41       (37 )     5,942  
                                 
    $ 6,575     $ 50     $ (37 )   $ 6,588  
                                 
December 31, 2016:                                
Available-for-Sale:                                
U.S. Government and agency obligations   $ 8,106     $ 3     $ (110 )   $ 7,999  
Mortgage-backed securities - residential     9,769       42       (63 )     9,748  
                                 
    $ 17,875     $ 45     $ (173 )   $ 17,747  
                                 
Held-to-Maturity:                                
Mortgage-backed securities - residential   $ 745     $ 13     $ -     $ 758  
State and municipal securities     6,675       25       (74 )     6,626  
                                 
    $ 7,420     $ 38     $ (74 )   $ 7,384  

 

Mortgage-backed securities consist of securities that are issued by Fannie Mae (“FNMA”), Freddie Mac (“FHLMC”), Ginnie Mae (“GNMA”), and are collateralized by residential mortgages. U.S. Government and agency obligations include notes and bonds with both fixed and variable rates. State and municipal securities consist of government obligation and revenue bonds.

 

The amortized cost and estimated fair value by contractual maturity of debt securities at December 31, 2017 are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations.

 

    Available-for-Sale     Held-to-Maturity  
    Amortized
Cost		     Estimated
Fair Value		     Amortized
Cost		     Estimated
Fair Value		  
    (In Thousands)  
                         
Due in one year or less   $ -     $ -     $ 839     $ 837  
Due after one year through five years     8,607       8,489       3,302       3,294  
Due after five years through ten years     1,005       1,001       1,797       1,811  
Due after ten years     1,000       980       -       -  
Mortgage-backed securities - residential     7,909       7,843       637       646  
    $ 18,521     $ 18,313     $ 6,575     $ 6,588  

 

There were no realized gains on sales of securities in 2017. There were $24,000 of gross realized gains on sales of securities available-for-sale and $12,000 of gross realized gains on sales of securities held-to-maturity in 2016 resulting from proceeds of $2,606,000. In accordance with accounting guidance, the Company was able to sell securities classified as held-to-maturity in 2016 after the Company had already collected a substantial portion (at least 85%) of the principal outstanding at acquisition due either to prepayments or to scheduled principal and interest payments on debt securities.

 

No securities were pledged to secure public deposits or for any other purpose required or permitted by law at December 31, 2017 and 2016.

 

Management has reviewed its loan and mortgage-backed securities portfolios and determined that, to the best of its knowledge, little or no exposure exists to sub-prime or other high-risk residential mortgages. The Company is not in the practice of investing in, or originating, these types of investments or loans.

 

The following table shows gross unrealized losses and fair value, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position, at December 31, 2017 and 2016:

 

    Less than 12 Months     12 Months or More     Total  
    Fair
Value		     Gross 
Unrealized
Losses		     Fair
Value		     Gross 
Unrealized 
Losses		     Fair
Value		     Gross 
Unrealized
Losses		  
    (In Thousands)  
2017:                                                
Available-for-Sale                                                
U.S. Government and agency obligations   $ 4,472     $ 34     $ 5,999     $ 108     $ 10,471     $ 142  
Mortgage-backed securities - residential     2,459       23       3,435       62       5,894       85  
    $ 6,931     $ 57     $ 9,434     $ 170     $ 16,365     $ 227  
2017:                                                
Held-to-Maturity                                                
Mortgage-backed securities – residential(1)   $ -     $ -     $ 171     $ -     $ 171     $ -  
State and municipal Securities     1,574       16       1,331       21       2,905       37  
    $ 1,574     $ 16     $ 1,502     $ 21     $ 3,076     $ 37  
                                                 
2016:                                                
Available-for-Sale                                                
U.S. Government and agency obligations   $ 6,996     $ 110     $ -     $ -     $ 6,996     $ 110  
Mortgage-backed securities - residential     4,441       49       987       14       5,428       63  
    $ 11,437     $ 159     $ 987     $ 14     $ 12,424     $ 173  
2016:                                                
Held-to-Maturity                                                
Mortgage-backed securities – residential(1)   $ 178     $ -     $ -     $ -     $ 178     $ -  
State and municipal Securities(1)     4,275       74       45       -       4,320       74  
    $ 4,453     $ 74     $ 45     $ -     $ 4,498     $ 74  

 

(1) Aggregate unrealized loss position of these securities is less than $500.

 

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. In 2017 and 2016, the Company did not record an other-than-temporary impairment charge.

 

At December 31, 2017, four U.S. Government and agency obligations, four residential mortgage-backed securities and 10 state and municipal securities were in a continuous unrealized loss position for less than twelve months. At December 31, 2017, five U.S. Government and agency obligations, five residential mortgage-backed securities and five state and municipal securities were in a continuous unrealized loss position for more than twelve months. The debt securities and residential mortgage-backed securities were issued by U.S. Government sponsored agencies.

 

All are paying in accordance with their terms with no deferrals of interest or defaults. Because the decline in fair value is attributable to changes in interest rates, not credit quality, and because management does not intend to sell and will not be required to sell these securities prior to recovery or maturity, no declines are deemed to be other-than-temporary. The state and municipal securities are general obligation (G.O.) bonds backed by the full faith and credit of local municipalities. There has never been a default of a New York G.O. in the history of the state. Historical performance does not guarantee future performance, but it does indicate that the risk of loss on default of a G.O. municipal bond for the Company is relatively low. All are paying in accordance with their terms and with no deferrals of interest or defaults. Because the decline in fair value is attributable to changes in interest rates, not credit quality, and because management does not intend to sell and will not be required to sell these securities prior to recovery or maturity, no declines are deemed to be other-than-temporary.