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Securities
 3 Months Ended
Mar. 31, 2016
Securities [Abstract]  
Securities

2. SECURITIES

The amortized cost of securities and their approximate fair value at March  31, 2016 and December 31, 2015 were as follows:





 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

March 31, 2016



 

(in thousands)



 

 

 

 

 

 

 

 



 

Amortized

 

Unrealized

 

Fair



 

Cost

 

Gains

 

Losses

 

Value



 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

 24,835 

 

$

 387 

 

$

 (15)

 

$

 25,207 

States and political subdivisions

 

 

 36,659 

 

 

 1,046 

 

 

 (23)

 

 

 37,682 

Total debt securities

 

$

 61,494 

 

$

 1,433 

 

$

 (38)

 

$

 62,889 



 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$

 18,427 

 

$

 276 

 

$

 (26)

 

$

 18,677 

FHLMC

 

 

 4,393 

 

 

 96 

 

 

 (32)

 

 

 4,457 

GNMA

 

 

 11,044 

 

 

 120 

 

 

 (30)

 

 

 11,134 

CMO

 

 

 17,516 

 

 

 116 

 

 

 (102)

 

 

 17,530 

Total mortgage-backed securities

 

$

 51,380 

 

$

 608 

 

$

 (190)

 

$

 51,798 



 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as available for sale

 

$

 112,874 

 

$

 2,041 

 

$

 (228)

 

$

 114,687 



 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$

 1,607 

 

$

 12 

 

$

 (24)

 

$

 1,595 



 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as held to maturity

 

$

 1,607 

 

$

 12 

 

$

 (24)

 

$

 1,595 







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

December 31, 2015



 

(in thousands)



 

 

 

 

 

 

 

 



 

Amortized

 

Unrealized

 

Fair



 

Cost

 

Gains

 

Losses

 

Value



 

 

 

 

 

 

 

 

 

 

 

 

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

 21,914 

 

$

 166 

 

$

 (234)

 

$

 21,846 

States and political subdivisions

 

 

 36,838 

 

 

 874 

 

 

 (29)

 

 

 37,683 

Total debt securities

 

$

 58,752 

 

$

 1,040 

 

$

 (263)

 

$

 59,529 



 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$

 12,312 

 

$

 168 

 

$

 (25)

 

$

 12,455 

FHLMC

 

 

 4,629 

 

 

 61 

 

 

 (56)

 

 

 4,634 

GNMA

 

 

 7,047 

 

 

 82 

 

 

 (61)

 

 

 7,068 

CMO

 

 

 13,634 

 

 

 24 

 

 

 (203)

 

 

 13,455 

Total mortgage-backed securities

 

$

 37,622 

 

$

 335 

 

$

 (345)

 

$

 37,612 



 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as available for sale

 

$

 96,374 

 

$

 1,375 

 

$

 (608)

 

$

 97,141 



 

 

 

 

 

 

 

 

 

 

 

 

Held to Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$

 1,617 

 

$

 6 

 

$

 (39)

 

$

 1,584 



 

 

 

 

 

 

 

 

 

 

 

 

Total securities designated as held to maturity

 

$

 1,617 

 

$

 6 

 

$

 (39)

 

$

 1,584 







Available for sale securities with a total fair value of $98.4 million and $86.0 million at March  31, 2016 and December 31, 2015, respectively, were pledged as collateral to secure public deposits and for other purposes required or permitted by law.



The Company uses the Federal Home Loan Bank of New York (“FHLBNY”) as its primary source of overnight funds and also has several long-term advances with FHLBNY.  The Company had $10.0 million in borrowed funds at FHLBNY at each of March 31, 2016 and December 31, 2015.  The Company has placed sufficient collateral in the form of residential and commercial real estate loans at FHLBNY that meet FHLB collateral requirements.  As a member of the Federal Home Loan Bank (“FHLB”) System, the Bank is required to hold stock in FHLBNY.  The Bank held $1.3 million in FHLBNY stock at each of March  31, 2016 and December 31, 2015 at cost.  The Company regularly evaluates investments in FHLBNY for impairment, considering liquidity, operating performance, capital position, stock repurchase and dividend history.  As of March 31, 2016, the Bank’s investment in FHLBNY stock was not impaired.



The Bank, as a member of the Federal Reserve Bank (“FRB”) system, is currently required to purchase and hold shares of capital stock in the FRB in an amount equal to 6% of its capital and surplus. The Bank’s investment in FRB capital stock totaled $1.5 million at each of March 31, 2016 and December 31, 2015, at cost.   Based on the current capital adequacy and liquidity position of the FRB, management believes there is no impairment in the Company’s investment at March 31, 2016 and the cost of the investment approximates fair value.



The scheduled maturities of debt and mortgage-backed securities at March  31, 2016 and December 31, 2015 are summarized below.  All maturity amounts are contractual maturities.  Actual maturities may differ from contractual maturities because certain issuers have the right to call or prepay obligations with or without call premiums.









 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

March 31, 2016

 

December 31, 2015



 

Amortized

 

Estimated

 

Amortized

 

Estimated



 

cost

 

fair value

 

cost

 

fair value



 

 

(in thousands)

 

 

(in thousands)



 

 

 

 

 

 

 

 

 

 

 

 

Debt securities available for sale:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$

 4,377 

 

$

 4,428 

 

$

 4,082 

 

$

 4,142 

Due after one year through five years

 

 

 29,114 

 

 

 29,716 

 

 

 29,113 

 

 

 29,448 

Due after five years through ten years

 

 

 21,802 

 

 

 22,341 

 

 

 19,356 

 

 

 19,615 

Due after ten years

 

 

 6,201 

 

 

 6,404 

 

 

 6,201 

 

 

 6,324 



 

 

 61,494 

 

 

 62,889 

 

 

 58,752 

 

 

 59,529 



 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

available for sale

 

 

 51,380 

 

 

 51,798 

 

 

 37,622 

 

 

 37,612 



 

 

 

 

 

 

 

 

 

 

 

 

Total available for sale securities

 

$

 112,874 

 

$

 114,687 

 

$

 96,374 

 

$

 97,141 



 

 

 

 

 

 

 

 

 

 

 

 

Debt securities held to maturity:

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

 

$

 315 

 

$

 314 

 

$

 309 

 

$

 308 

Due after one year through five years

 

 

 358 

 

 

 352 

 

 

 374 

 

 

 365 

Due after five years through ten years

 

 

 828 

 

 

 827 

 

 

 828 

 

 

 815 

Due after ten years

 

 

 106 

 

 

 102 

 

 

 106 

 

 

 96 



 

 

 1,607 

 

 

 1,595 

 

 

 1,617 

 

 

 1,584 



 

 

 

 

 

 

 

 

 

 

 

 

Total held to maturity securities

 

$

 1,607 

 

$

 1,595 

 

$

 1,617 

 

$

 1,584 







Information regarding unrealized losses within the Company’s available for sale securities at March  31, 2016 and December 31, 2015 is summarized below.  The securities are primarily U.S. government-guaranteed agency securities or municipal securities.  All unrealized losses are considered temporary and related to market interest rate fluctuations.











 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

March 31, 2016



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Less than 12 months

 

 

12 months or longer

 

 

Total



 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized



 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses



 

 

(in thousands)

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

 -

 

$

 -

 

$

 1,985 

 

$

 (15)

 

$

 1,985 

 

$

 (15)

States and political subdivisions

 

 

 1,196 

 

 

 (1)

 

 

 1,115 

 

 

 (22)

 

 

 2,311 

 

 

 (23)

Total debt securities

 

$

 1,196 

 

$

 (1)

 

$

 3,100 

 

$

 (37)

 

$

 4,296 

 

$

 (38)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$

 6,581 

 

$

 (26)

 

$

 -

 

$

 -

 

$

 6,581 

 

$

 (26)

FHLMC

 

 

 -

 

 

 -

 

 

 1,216 

 

 

 (32)

 

 

 1,216 

 

 

 (32)

GNMA

 

 

 4,427 

 

 

 (22)

 

 

 1,614 

 

 

 (8)

 

 

 6,041 

 

 

 (30)

CMO'S

 

 

 5,984 

 

 

 (81)

 

 

 3,637 

 

 

 (21)

 

 

 9,621 

 

 

 (102)

Total mortgage-backed securities

 

$

 16,992 

 

$

 (129)

 

$

 6,467 

 

$

 (61)

 

$

 23,459 

 

$

 (190)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held To Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$

 630 

 

$

 (7)

 

$

 426 

 

$

 (17)

 

$

 1,056 

 

$

 (24)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities

 

$

 18,818 

 

$

 (137)

 

$

 9,993 

 

$

 (115)

 

$

 28,811 

 

$

 (252)













 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

December 31, 2015



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

Less than 12 months

 

 

12 months or longer

 

 

Total



 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized

 

 

Fair

 

 

Unrealized



 

 

Value

 

 

Losses

 

 

Value

 

 

Losses

 

 

Value

 

 

Losses



 

 

(in thousands)

Available for Sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

 4,531 

 

$

 (89)

 

$

 5,855 

 

$

 (145)

 

$

 10,386 

 

$

 (234)

States and political subdivisions

 

 

 3,133 

 

 

 (6)

 

 

 1,117 

 

 

 (23)

 

 

 4,250 

 

 

 (29)

Total debt securities

 

$

 7,664 

 

$

 (95)

 

$

 6,972 

 

$

 (168)

 

$

 14,636 

 

$

 (263)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FNMA

 

$

 3,856 

 

$

 (25)

 

$

 -

 

$

 -

 

$

 3,856 

 

$

 (25)

FHLMC

 

 

 -

 

 

 -

 

 

 1,234 

 

 

 (56)

 

 

 1,234 

 

 

 (56)

GNMA

 

 

 3,480 

 

 

 (55)

 

 

 471 

 

 

 (6)

 

 

 3,951 

 

 

 (61)

CMO'S

 

 

 6,677 

 

 

 (89)

 

 

 3,661 

 

 

 (114)

 

 

 10,338 

 

 

 (203)

Total mortgage-backed securities

 

$

 14,013 

 

$

 (169)

 

$

 5,366 

 

$

 (176)

 

$

 19,379 

 

$

 (345)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held To Maturity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

States and political subdivisions

 

$

 626 

 

$

 (11)

 

$

 495 

 

$

 (28)

 

$

 1,121 

 

$

 (39)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total temporarily impaired

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

securities

 

$

 22,303 

 

$

 (275)

 

$

 12,833 

 

$

 (372)

 

$

 35,136 

 

$

 (647)







Management has assessed the securities available for sale in an unrealized loss position at March  31, 2016 and December 31, 2015 and determined the decline in fair value below amortized cost to be temporary.  In making this determination, management considered the period of time the securities were in a loss position, the percentage decline in comparison to the securities’ amortized cost, and the financial condition of the issuer (primarily government or government-sponsored enterprises).  In addition, management does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost.  Management believes the decline in fair value is primarily related to market interest rate fluctuations and not to the credit deterioration of the individual issuers.



The Company had not recorded any other-than-temporary impairment (“OTTI”) charges as of March  31, 2016 and did not record any OTTI charges during 2015.  Nevertheless, it remains possible that there could be deterioration in the asset quality of the securities portfolio in the future.  The credit worthiness of the Company’s portfolio is largely reliant on the ability of U.S. government sponsored agencies such as FHLB, Federal National Mortgage Association (“FNMA”), Government National Mortgage Association (“GNMA”), and Federal Home Loan Mortgage Corporation (“FHLMC”), and municipalities throughout New York State to meet their obligations.  In addition, dysfunctional markets could materially alter the liquidity, interest rate, and pricing risk of the portfolio.  The relatively stable past performance is not a guarantee for similar performance of the Company’s securities portfolio going forward.