Securities

9 Months Ended

Sep. 30, 2019

Investments Debt And Equity Securities [Abstract]

Securities

Note 3. Securities

The following table summarizes the amortized cost, fair value, and the corresponding amounts of gross unrealized gains and losses for available for sale securities as of September 30, 2019 and December 31, 2018:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of September 30, 2019:	(Dollars in thousands)
Available for sale:
U.S. Government sponsored agency securities	$	5,998	$	—	$	(6	)	$	5,992
Mortgage-backed securities: residential		12,160		61		(24	)		12,197
Collateralized mortgage obligations: residential		33,757		395		(46	)		34,106
Total available for sale	$	51,915	$	456	$	(76	)	$	52,295

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
As of December 31, 2018:	(Dollars in thousands)
Available for sale:
U.S. Government sponsored agency securities	$	6,994	$	—	$	(88	)	$	6,906
Mortgage-backed securities: residential		14,465		—		(336	)		14,129
Collateralized mortgage obligations: residential		34,655		156		(510	)		34,301
Total available for sale	$	56,114	$	156	$	(934	)	$	55,336

There were no sales of securities available for sale in the three or nine months ended September 30, 2019 or 2018. The amortized cost and estimated fair value of securities available for sale at September 30, 2019, by contractual maturity, are shown below. Securities without a contractual maturity are shown separately.

	Amortized Cost		Fair Value
As of September 30, 2019:	(Dollars in thousands)
Available for sale:
Within one year	$	3,998	$	3,995
One to five years		2,000		1,997
Mortgage-backed securities: residential		12,160		12,197
Collateralized mortgage obligations		33,757		34,106
Total available for sale	$	51,915	$	52,295

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. At September 30, 2019 and December 31, 2018, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity.

The following table summarizes securities with unrealized losses as of September 30, 2019 and December 31, 2018, aggregated by length of time in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
As of September 30, 2019:	(Dollars in thousands)
Available for sale:
U.S. Government sponsored agency securities	$	1,000	$	—		$	3,992	$	(6	)	$	4,992	$	(6	)
Mortgage-backed securities: residential		1,176		—			3,442		(24	)		4,618		(24	)
Collateralized mortgage obligations		2,140		(14	)		4,014		(32	)		6,154		(46	)
Total available for sale	$	4,316	$	(14	)	$	11,448	$	(62	)	$	15,764	$	(76	)

	Less Than 12 Months					12 Months or Longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
As of December 31, 2018:	(Dollars in thousands)
Available for sale:
U.S. Government sponsored agency securities	$	—	$	—		$	6,906	$	(88	)	$	6,906	$	(88	)
Mortgage-backed securities: residential		3,209		(23	)		10,920		(313	)		14,129		(336	)
Collateralized mortgage obligations		3,348		(26	)		14,544		(484	)		17,892		(510	)
Total available for sale	$	6,557	$	(49	)	$	32,370	$	(885	)	$	38,927	$	(934	)

The Company believes that the unrealized losses are temporary, arising mainly from fluctuations in interest rates and do not reflect a deterioration of credit quality of the issuers. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. The fair value is expected to recover as the securities approach maturity. Management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least 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. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement, and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. As of September 30, 2019, management believes no securities with unrealized losses were OTTI.

There were no securities pledged as collateral as of September 30, 2019 or December 31, 2018.

Other investments as of September 30, 2019 and December 31, 2018, consisted of the following:

	September 30, 2019		December 31, 2018
	(Dollars in thousands)
FHLB stock	$	5,358	$	4,582
PCBB stock		190		190
Mutual fund - CRA qualified		3,625		2,488
Total other investments	$	9,173	$	7,260