Securities

9 Months Ended

Sep. 30, 2018

Note 2:

Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)

Available-for-sale Securities:
September 30, 2018:
U.S. government agencies	$	45,250	$	—	$	(820	)	$	44,430
State and political subdivisions		42,433		10		(407	)		42,036

	$	87,683	$	10	$	(1,227	)	$	86,466

Available-for-sale Securities:
December 31, 2017:
U.S. government agencies	$	45,249	$	—		(290	)	$	44,959

	$	45,249	$	—	$	(290	)	$	44,959

The amortized cost and fair value of available-for-sale securities at September 30, 2018, by contractual maturity, are shown below. 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.

	Available-for-sale
	Amortized Cost		Fair Value
	(In thousands)

Within one year	$	—	$	—
One to five years		45,250		44,430
Five to ten year		—		—
Due after ten years		42,433		42,036

Totals	$	87,683	$	86,466

The carrying value of securities pledged to secure public deposits and for other purpose, was $43.3 million and $41.5 million at September 30, 2018 and December 31, 2017, respectively.

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. The total fair value of these investments at September 30, 2018 and December 31, 2017, was $84.4 million and $44.9 million, which represented approximately 97.6% and 100.0%, respectively, of the Company’s available-for-sale investment portfolio.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these securities are temporary and are a result on an general increase in longer term interest rates.

Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The following tables show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2018 and December 31, 2017:

September 30, 2018
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
(In thousands)

U.S. Government agencies	$	8,830	$	(171	)	$	35,601	$	(649	)	$	44,431	$	(820	)
State and Political Subdivisions		39,938		(407	)		—		—			39,938		(407	)

Total	$	48,768	$	(578	)	$	35,601	$	(649	)	$	84,369	$	(1,227	)

December 31, 2017
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
(In thousands)

U.S. Government agencies	$	12,190	$	(59	)	$	32,769	$	(231	)	$	44,959	$	(290	)

The unrealized losses on the Company’s investments in U.S. Government agencies were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. Because the Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2018 and December 31, 2017.

There were no investment sales for the nine months ended September 30, 2018 and 2017.