Securities

12 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 2 - Securities

The amortized cost and estimated fair value of securities with gross unrealized gains and losses at December 31, 2016 and 2015 are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2016:	(In Thousands)
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
U.S. Government and agency obligations		-		-		-			-
State and municipal securities		6,675		25		(74	)		6,626
	$	7,420	$	38	$	(74	)	$	7,384
December 31, 2015:
Available-for-Sale:
U.S. Government and agency obligations	$	6,000	$	-	$	(32	)	$	5,968
Mortgage-backed securities - residential		13,974		101		(75	)		14,000
	$	19,974	$	101	$	(107	)	$	19,968
Held-to-Maturity:
Mortgage-backed securities - residential	$	1,535	$	39	$	-		$	1,574
U.S. Government and agency obligations		6,793		129		-			6,922
State and municipal securities		4,651		76		(1	)		4,726
	$	12,979	$	244	$	(1	)	$	13,222

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, 2016 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	$	-	$	-	$	755	$	756
Due after one year through five years		6,106		6,022		3,643		3,637
Due after five years through ten years		1,000		1,003		2,277		2,233
Due after ten years		1,000		974		-		-
Mortgage-backed securities - residential		9,769		9,748		745		758
	$	17,875	$	17,747	$	7,420	$	7,384

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. There were $64,000 of gross realized gains on sales of securities available-for-sale and $42,000 of gross realized gains on sales of securities held-to-maturity in 2015 resulting from proceeds of $3,430,000. In accordance with accounting guidance, the Company was able to sell securities classified as held-to-maturity in 2016 and 2015 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, 2016 and 2015.

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, 2016 and 2015:

	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)
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
2015:
Available-for-Sale
U.S. Government and agency obligations	$	5,968	$	32	$	-	$	-	$	5,968	$	32
Mortgage-backed securities - residential		6,283		61		821		14		7,104		75
	$	12,251	$	93	$	821	$	14	$	13,072	$	107
2015:
Held-to-Maturity
Mortgage-backed securities - residential(1)	$	-	$	-	$	-	$	-	$	-	$	-
State and municipal Securities(1)		455		-		126		1		581		1
	$	455	$	-	$	126	$	1	$	581	$	1

(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 2016 and 2015, the Company did not record an other-than-temporary impairment charge.

At December 31, 2016, six U.S. Government and agency obligations, four residential mortgage-backed securities and 14 state and municipal securities were in a continuous unrealized loss position for less than twelve months. At December 31, 2016, two residential mortgage-backed securities and one state and municipal security 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.